Document:

Exhibit 10.16

                          L E A S E    A G R E E M E N T

                                 BY AND BETWEEN:

                            MAURICE M. WEILL, TRUSTEE
                             FOR RUTHERFORD PROPERTY

                                   "Landlord"

                                      -and-

                                LOEHMANN'S, INC.
                             a Delaware corporation,

                                    "Tenant"

                           PREMISES:     299 Howmedica Way
                                         Rutherford, New Jersey

                           DATED:

                           PREPARED BY:  ROBERT K. BROWN, ESQ.
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                                TABLE OF CONTENTS

1.    LEASED PREMISES..................................................2

2.    TERM OF LEASE....................................................2

3.    RENT.............................................................3

4.    CONDITION OF LEASED PREMISES.....................................4

5.    USE..............................................................6

6.    REPAIRS AND MAINTENANCE..........................................6

7.    UTILITIES........................................................8

8.    TAXES............................................................8

9.    INSURANCE.......................................................10

10.   SIGNS...........................................................12

11.   FIXTURES........................................................12

12.   GLASS...........................................................13

13.   ASSIGNMENT AND SUBLETTING.......................................13

14.   FIRE AND CASUALTY...............................................15

15.   COMPLIANCE WITH LAWS, RULES AND REGULATIONS.....................17

16.   INSPECTION BY LANDLORD..........................................21

17.   DEFAULT BY TENANT...............................................21

18.   LIABILITY OF TENANT FOR DEFICIENCY..............................25

19.   NOTICES.........................................................26

20.   NON-WAIVER BY LANDLORD..........................................26

21.   RIGHT OF TENANT TO MAKE ALTERATIONS AND
      IMPROVEMENTS....................................................27

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22.   NON-LIABILITY OF LANDLORD.......................................28

24.   RESERVATION OF EASEMENT.........................................29

25.   AIR, GROUND AND WATER POLLUTION.................................29

26.   STATEMENT OF ACCEPTANCE.........................................29

27.   FORCE MAJEURE...................................................30

28.   STATEMENTS BY LANDLORD AND TENANT...............................30

29.   CONDEMNATION....................................................31

30.   QUIET ENJOYMENT.................................................32

31.   SURRENDER OF LEASED PREMISES....................................32

32.   INDEMNITY.......................................................33

33.   SHORT FORM LEASE................................................34

34.   LEASE CONSTRUCTION..............................................35

35.   BIND AND INURE CLAUSE...........................................35

36.   DEFINITIONS.....................................................35

37.   NET RENT........................................................35

38.   DEFINITION OF TERM OF "LANDLORD"................................36

39.   INTENTIONALLY OMITTED...........................................36

40.   LANDLORD'S REMEDIES.............................................36

41.   COVENANT AGAINST LIENS..........................................37

42.   BROKERAGE.......................................................38

43.   SUBORDINATION OF LEASE..........................................38

44.   PARKING.........................................................39

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45.   SECURITY........................................................39

46.   OPTION TO RENEW.................................................40

47.   SURVIVAL OF OBLIGATION..........................................41

48.   LOSS OF OPTION RIGHTS...........................................41

SCHEDULE "A"     -    PROPERTY DESCRIPTION
SCHEDULE "A-1"   -    SITE PLAN
SCHEDULE "B"     -    PARKING AREA
SCHEDULE "C"     -    DEMOLITION PLAN

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            THIS AGREEMENT, made the 6th day of October, 1998, by and between
MAURICE M. WEILL, TRUSTEE FOR RUTHERFORD PROPERTY, having an office at 51
Commerce Street, Springfield, New Jersey 07081, hereinafter called the
"Landlord"; and LOEHMANN'S, INC., a Delaware corporation, having an office at
2500 Halsey Street, Bronx, New York 10461, hereinafter called the "Tenant."

                              W I T N E S S E T H:

            WHEREAS, the Landlord owns certain lands and premises in the Borough
of Rutherford, County of Bergen and State of New Jersey, which said lands and
premises are located at 299 Howmedica Way, and are more particularly referred to
and described by metes and bounds on Schedule "A" annexed hereto and made a part
hereof (the "Property"); and

            WHEREAS, the Landlord has erected a one-story industrial-type
building containing approximately 404,000 square feet (hereinafter called the
"Building") on the Property, of which Building the Tenant shall occupy
approximately 272,000 square feet, outside outside dimensions to center line of
common wall (hereinafter called the "Leased Premises"), all in accordance with
the terms and conditions hereinafter mentioned and the considerations herein
expressed,

            NOW, THEREFORE, KNOW ALL MEN BY THESE PRESENTS, that for
the rents reserved, the mutual considerations herein and the parties mutually
intending to be legally bound hereby, the Landlord does demise, lease and let
unto the Tenant and the Tenant does rent and take from the Landlord the Leased
Premises as described in
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Paragraph #1, and the Landlord and Tenant do hereby mutually covenant and agree
as follows:

            1.    LEASED PREMISES

                  1.1 The Leased Premises shall consist of approximately 272,000
square feet of the Building, based on outside outside dimensions to center line
of common wall, as said Building is located on the lands described on Schedule
"A," and as shown on the site plan annexed hereto as Schedule "A-1," together
with all improvements therein to be constructed by the Landlord for the use of
the Tenant, together with all easements, improvements, tenements, appurtenances,
hereditaments, fixtures and rights and privileges appurtenant thereto.

                  1.2 "Tenant's Percentage" for all lease purposes is hereby
deemed to be 67.33%.

            2.    TERM OF LEASE

                  2.1 The Landlord leases unto the Tenant and the Tenant hires
the aforementioned Leased Premises for the term of three (3) years, to commence
on or about January 1, 1999, subject to the provisions of Article 2.2 hereof.

                  2.2 Subject to the terms and conditions of this lease, in the
event the Leased Premises are delivered to the Tenant prior to or after January
1, 1999, the lease term of three (3) years shall commence on the first day of
the next succeeding month following delivery of possession to the Tenant
(hereinafter called the "Commencement Date") and shall continue for a term of
three (3) years thereafter. The Tenant shall, however, pay to the Landlord a sum
equal to the pro rata share of one (1) month's rent for that portion of the
month from the date of delivery of the Leased Premises through the Commencement

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Date. During said period of partial monthly occupancy, if any, all other terms
and conditions of this lease shall be applicable to the occupancy of the Leased
Premises by the Tenant.

            3.    RENT

                  3.1 The Tenant covenants and agrees to pay, in good and
useable funds, the annual rent ("Base Rent") of ONE MILLION TWO HUNDRED FIFTY
ONE THOUSAND TWO HUNDRED AND 00/100 ($1,251,200.00) DOLLARS per annum, payable
in equal installments in the sum of ONE HUNDRED FOUR THOUSAND TWO HUNDRED SIXTY
SIX AND 67/100 ($104,266.67) DOLLARS per month, which monthly payments shall be
made promptly in advance on the first day of each and every month during the
term of the lease without demand and without offset or deduction, together with
such additional rent and other charges required to be paid by Tenant as are
hereinafter set forth.

                  3.2 Any installment of Base Rent or additional rent accruing
hereunder, and any other sum payable hereunder by Tenant to Landlord which is
not paid prior to the fifth (5th) business day of any lease month, and which is
not thereafter paid within seven (7) days following notice to Tenant that such
payment is late, shall bear a late charge of five (5%) percent of such Base Rent
or additional rent, to be paid therewith, and the failure to pay such charge
shall be a default. Such late charge shall be deemed to be additional rent
hereunder. It is expressly understood and agreed that the foregoing late charge
is not a penalty, but agreed upon compensation to the Landlord for
administrative costs incurred by Landlord in connection with any such late
payment. In addition, any payment of Base Rent or additional rent, which is not
paid within thirty (30) days of the date upon which it is due shall require the
payment of interest at the prime rate established by

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Chase Bank, N.A., from time to time, plus four (4%) percent, calculated from the
date that such payment was due through the date that any such payment is
actually made.

                  3.3 Receipt and acceptance by Landlord of any Base Rent,
additional rent (collectively, "Rent") and any other charge with knowledge of
Tenant's default in any covenant or condition of this lease shall not be deemed
a waiver of such default.

                  3.4 Simultaneously with the execution hereof, the Tenant has
delivered to the Landlord the first monthly installment of Base Rent payable
hereunder, together with the security deposit referred to herein.

                  3.5 Notwithstanding anything hereinabove contained to the
contrary, it is understood and agreed that Tenant shall be responsible to pay
for all utilities services. to the Leased Premises, and all real estate taxes
attributable thereto, commencing on November 1, 1998. It is further understood
and agreed that, provided the Leased Premises are delivered to the Tenant for
the purpose of the installation by Tenant of its property equipment and
fixtures, on or before October 1, 1998, Tenant shall commence the payment of
Base Rent on January 1, 1999.

            4.    CONDITION OF LEASED PREMISES

                  It is expressly understood and agreed that the Leased Premises
shall be delivered to Tenant in an "as is" condition, except that Landlord
shall:

                  1) Landlord shall deliver the Leased Premises with all
building systems (including mechanical doors and dock plates) in good working
order and condition and with the roof free of leaks;

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                  2) Repaint and recarpet the upstairs and downstairs office
space contained within the Leased Premises (including the cafeteria area) and
install new ceiling tiles therein;

                  3) Clean and/or replace light fixtures within the upstairs and
downstairs office areas, where necessary;

                  4) Deliver all bathroom facilities in clean, good working
order;

                  5) Demolish the existing battery charging area located in the
warehouse portion of the Leased Premises;

                  6) Construct a new, non-enclosed battery charging area at a
location, and in accordance with specifications, to be mutually agreed upon by
Landlord and Tenant;

                  7) Landlord shall demolish certain walls between the warehouse
and loading areas of the Leased Premises, it being understood and agreed that
the walls to be demolished are shown on the plan which is annexed hereto and
made a part hereof as Schedule "C"; and

                  8) Stripe and mark 150 parking spaces for the exclusive use of
Tenant.

                  9) Regrade the parking area as shown in the Plan annexed
hereto and made a part hereof as Schedule "B."

                  10) Replace light bulbs In the warehouse area of the Leased
Premises, as required.

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            5.    USE

                  The Tenant covenants and agrees to use and occupy the Leased
Premises for offices and warehousing purposes only (but including warehouse
sales, as permitted by the municipality), which use by Tenant, however, is and
shall be expressly subject to all applicable zoning ordinances, rules and
regulations of any governmental boards or bureaus having jurisdiction thereof.

            6.    REPAIRS AND MAINTENANCE

                  6.1 The Landlord shall, with due diligence, at its own cost
and expense, maintain and make all repairs to the exterior bearing walls and
metal panels and foundation of the Leased Premises, correct any structural
problem with the floor of the Leased Premises, provided the same was caused by
the design or the construction of the same, and Landlord shall be responsible
for any required replacement of the roof of the building, provided that any
damage to the foregoing is not caused by the negligence of the Tenant, its
servants, employees, invitees or agents. The Landlord shall, subject to
reimbursement by Tenant of Tenant's Percentage of the cost thereof, undertake
the maintenance and repair of the roof of the building, and the maintenance,
repair and replacement of the roof leaders, flashings, metal gravel stops,
gutters and drains. Tenant shall reimburse Landlord within thirty (30) days
after written demand for any cost attributable to Tenant's Percentage with
respect to the foregoing, provided that Landlord shall furnish to Tenant a
breakdown of such cost and computation of Tenant's pro rata obligation with
respect thereto.

                  6.2 The Tenant shall, except as provided in Article 6.1 above,
take good care of the Leased Premises and, at its cost and expense, keep and
maintain in good

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repair the interior and the exterior loading docks of the Leased Premises,
including, but not limited to the floor, loading dock, windows and doors, the
air-conditioning and heating plant, the plumbing, pipes and fixtures belonging
thereto; and shall replace all mechanical systems and working parts used in
connection with the air-conditioning, electrical, heating and plumbing plants,
fixtures and systems, including ballasts and fluorescent fixtures; and shall
keep the water and sewer pipes serving only the Leased Premises and connections
free from ice and other obstructions, and shall generally maintain and repair
the interior and the exterior loading docks of the Leased Premises (except as
provided in Articles 6.1 and 6.3) and shall, at the end of the expiration of the
term, deliver up the Leased Premises in good order and condition, damages by the
elements, ordinary wear and tear excepted. Tenant shall enter into a maintenance
contract in connection with the maintenance and repair of all mechanical systems
serving the Building. Said contract shall be with a reputable, recognized
contractor who is reasonably acceptable to Landlord, and said contract shall
provide for inspection and service every two (2) months during the term of this
lease. Tenant shall promptly forward a copy of such contract, promptly upon
Tenant's receipt of same. Notwithstanding anything hereinabove contained to the
contrary, Landlord shall be responsible for any required full replacement of the
heating, ventilating and air conditioning system serving the Leased Premises.
The Tenant covenants and agrees that it shall not cause or permit any waste
(other than reasonable wear and tear), damage or disfigurement to the Leased
Premises, or any overloading of the floors of the Building.

                  6.3 The Tenant shall reimburse the Landlord for Tenant's
Percentage of the Landlord's total expense in maintaining and repairing the
lawns, shrubbery, driveways and parking areas of the entire Property, which said
sum shall be paid by the

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Tenant to the Landlord within thirty (30) days from the date of billing and the
Landlord shall supply to the Tenant, at its request, a complete breakdown of the
cost items. The Landlord shall, subject to reimbursement by Tenant of Tenant's
Percentage of the cost thereof, keep the walks and parking areas of the Property
free and clear of ice, snow and debris.

                  6.4 The cost of all of the work to be performed by Landlord
pursuant to this Article 6 shall be customary and reasonable and all invoices
delivered to Tenant shall be accompanied by supporting documentation.

            7.    UTILITIES

                  The Tenant shall, at its own cost and expense, pay all utility
meter and service charges applicable to the Leased Premises, including gas,
sewer, electric, water and pro rata standby sprinkler charges, if any,
janitorial and garbage disposal service.

            8.    TAXES

                  8.1 The Tenant shall, during the term of the lease, promptly
pay monthly, as additional rent, together with the Base Rent to be paid pursuant
to Article 3, one- twelfth (1/12th) of Tenant's Percentage of all real estate
and personal property taxes assessed against the Property for land; Building and
improvements, including such added assessment or omitted assessment which may be
levied against the premises for the year 1999, et seq., by the applicable
governmental taxing authority, said obligation to be prorated as of the
Commencement Date and as of the date of expiration hereunder as applicable. In
addition to the obligation to pay Tenant's Percentage of real estate taxes as
herein set forth, the Tenant shall, during the term of this lease, pay Tenant's
Percentage of any levy for the installation of local improvements affecting the
Property as may be assessed by any governmental boards or bureaus having
jurisdiction thereof. Any assessment or impositions for capital or

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public improvements which may be payable by law at the option of the taxpayer in
installments, may be so paid by the Tenant in installments, as to Tenant's
Percentage thereof, together with any required interest, which obligation shall
be prorated as of the Commencement Date and as of the date of expiration
hereunder, as applicable. The real estate tax obligation of the Tenant
hereinabove set forth shall include Tenant's Percentage, if levied, of any tax
or imposition which may be levied by any governmental authority, agency or
subdivision thereof having jurisdiction applicable to parking lot usage. The
Landlord shall furnish to Tenant annually a copy of the annual real estate tax
bill and a breakdown of Tenant's portion thereof. In the event of any change in
tax rate which shall require an adjustment of increase or decrease in Tenant's
annual tax obligation, such difference shall be adjusted by Landlord and Tenant
annually during the month of August of each lease year, or as soon thereafter as
is possible.

                  8.2 If at any time during the term of this lease the method or
scope of taxation prevailing at the commencement of the lease term shall be
altered, modified or enlarged so as to cause the method of taxation to be
changed, in whole or in part, so that in substitution for the real estate taxes
now assessed there may be, in whole or in part, a capital levy or other
imposition based on the value of the Property or the rents received therefrom,
or some other form of assessment based in whole or in part on some other
valuation of Property, then and in such event, such substituted tax or
imposition shall be payable and discharged by the Tenant pro rata in the manner
required pursuant to such law promulgated which shall authorize such change in
the scope of taxation, and as required by the terms and conditions of the within
lease.

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                  8.3 Nothing in this lease contained shall require the Tenant
to pay any franchise, estate, inheritance, succession, capital levy or transfer
tax of the Landlord, or Federal Income Tax, State Income Tax, or excess profits
or revenue tax, unless such taxes are in substitution for real property taxes as
a result of such change in the manner and scope of taxation as hereinbefore
provided in Article 8.2.

                  8.4 In the event Landlord contests any assessment or levy of
taxes on the Property, Tenant shall be credited with Tenant's Percentage of any
refund or rebate received by Landlord, to the extent that Tenant has paid any
portion of the taxes being refunded or rebated, after first deducting the
reasonable costs and expenses incurred by Landlord in contesting or litigating
said assessment. Tenant shall have no right to file any tax appeal affecting the
Property.

            9.    INSURANCE

                  9.1 The Landlord will, subject to reimbursement by Tenant of
Tenant's Percentage of the cost thereof, obtain for the benefit of the Landlord,
wherein the Landlord shall be the named insured, fire insurance with full
extended coverage, including flood insurance if required by Landlord, insuring
the real property of which the Leased Premises are a part in an amount and value
equivalent to the full replacement value of all the insurable improvements on
the Property, without any deductible clause, which policy of insurance shall
include broad form boiler and machinery coverage (inclusive of air- conditioning
system, if any), together with insurance coverage against sprinkler damage to
the Building and its improvements. Said insurance, in any event, shall not be
less than the amount of any first mortgage which may be placed on the Property
by the Landlord and shall be in such form as any such bona fide mortgagee may
reasonably require. The Landlord

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shall have the right from time to time to determine the full replacement value
as may be required to comply with full replacement insurance requirements. The
insurance to be obtained by Landlord shall include casualty rent insurance
payable to and insuring the interest of the Landlord as to the value of the
rental obligation hereunder to the extent of one (1) year's gross rental value
(inclusive of real estate taxes and applicable insurance premiums). The cost of
the insurance to be obtained by Landlord shall be customary and reasonable and
the limits of insurance shall be customary for similar properties located in the
immediate geographical area of the Property.

                  9.2 The Tenant covenants and agrees that it will, at its sole
cost and expense, carry liability insurance covering the Leased Premises in the
minimum amount of THREE MILLION ($3,000,000.00) DOLLARS. Said policy shall be a
single limit policy. The Tenant further covenants and agrees that it will add as
a party insured by such policy the interest of the Landlord and will furnish
Landlord with a certificate of said liability insurance prior to the
commencement of the term of this lease. The Tenant agrees that such insurance
coverage will be maintained in full force and effect during the term of the
lease.

                  9.3 Tenant hereby agrees to reimburse Landlord for Tenant's
Percentage of the cost of excess liability coverage in the amount of up to SIXTY
MILLION ($60,000,000.00) DOLLARS, pursuant to an "umbrella policy" to be
obtained by Landlord, with respect to any premium or portion thereof applicable
solely to the Property. The Tenant's obligation under this Article 9.3 shall not
exceed the sum of ONE THOUSAND FIVE HUNDRED ($1,500.00) DOLLARS per annum.

                  9.4 The Landlord and Tenant mutually waive all right of
recovery against each other, their agents, servants or employees, for any loss,
damage or injury of any

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nature whatsoever to property or person for which either party is insured. Each
party shall obtain from its insurance carrier waivers of subrogation rights
under their respective policies which shall be included within the terms of the
policies and will furnish evidence of such waiver upon request.

            10.   SIGNS

                  The Tenant shall have the right and privilege of erecting on
and at the Leased Premises only such signs as are required by Tenant for the
purpose of identifying the Tenant, subject to the prior written approval thereof
by Landlord, which approval shall not be unreasonably withheld. The said signs
shall comply with the applicable rules and regulations of the applicable
governmental boards and bureaus having jurisdiction thereof. The erection of
such signs shall not cause any structural damage to the Building. It is
expressly understood and agreed that the Tenant shall not erect roof signs.

            11.   FIXTURES

                  11.1 The Tenant is given the right and privilege of installing
and removing property, equipment and fixtures in the Leased Premises during the
term of the lease. However, if the Tenant is in default and moves out, or is
dispossessed, and fails to remove any property, equipment and fixtures or other
property prior to any such dispossess or removal, then and in that event, the
said property, equipment and fixtures or other property shall be deemed at the
option of the Landlord to be abandoned; or in lieu thereof, at the Landlord's
option, the Landlord may remove such property and charge the reasonable cost and
expense of removal, storage and disposal to the Tenant.

                  11.2 Anything to the contrary contained herein
notwithstanding, it is expressly understood and agreed that the Tenant may
install, connect and operate

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equipment as may be deemed necessary by the Tenant for its business, subject to
compliance with applicable rules and regulations of governmental boards and
bureaus having jurisdiction thereof. Subject to the terms and conditions of this
lease, the machinery, fixtures and equipment belonging to the Tenant shall at
all times be considered and intended to be personal property of the Tenant, and
not part of the realty, and subject to removal by the Tenant, provided at the
time of such removal, that the Tenant is not in default pursuant to the terms
and conditions of this lease, and that the Tenant, at its own cost and expense,
pays for any damage to the Building caused by such removal.

            12.   GLASS

                  The Tenant expressly covenants and agrees to replace any
broken glass in the windows or other apertures of the Leased Premises which may
become damaged or destroyed at Tenant's cost and expense.

            13.   ASSIGNMENT AND SUBLETTING

                  13.1 The Tenant may not assign this lease or sublet the Leased
Premises, or any part thereof, unless it shall first advise the Landlord in
writing, by certified mail, return receipt requested, of its intention to assign
or sublease. In such event, the Landlord shall have ninety (90) days from
receipt of such notice to elect to recapture the Leased Premises and terminate
the within lease or to consent to the assignment of the lease or the sublease of
the Leased Premises, which consent shall not be unreasonably withheld, providing
the proposed assignee or subtenant is financially responsible, and shall assume
in writing the terms and conditions of the within lease on the part of the
Tenant to be performed. In connection with any permitted assignment or
subletting, the Tenant shall pay

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to the Landlord one half of any increment in rent, or other consideration
received by Tenant in lieu thereof, per square foot per annum over the annual
Base Rent then in effect.

                  13.2 The Landlord's consent shall not be required and the
terms and conditions of Article 13.1 shall not apply as to Landlord's right of
first refusal to recapture if the Tenant assigns or subleases the Leased
Premises to a parent, subsidiary, affiliate or a company into which Tenant is
merged or with which Tenant is consolidated, or to the purchaser of all or
substantially all of the assets of Tenant.

                  13.3 In the event of any assignment or subletting permitted by
the Landlord, the Tenant shall remain and be directly and primarily responsible
for payment and performance of the within lease obligations, and the Landlord
reserves the right, at all times, to require and demand that the Tenant pay and
perform the terms and conditions of this lease. No such assignment or subletting
shall be made to any Tenant who shall occupy the Leased Premises for any use
other than that which is permitted to the Tenant, or for any use which may be
deemed by the Landlord to be disreputable or extra hazardous, which would
subject the Property to the provisions of ISRA, or which would in any way
violate applicable laws, ordinances or rules and regulations of governmental
boards and bodies having jurisdiction.

            14.   FIRE AND CASUALTY

                  14.1 In case of any damage to or destruction of the Building
by fire or other casualty occurring during the term of this lease which is not
covered by the insurance required to be carried by Article 9.1, or in the case
of damage to or destruction of the Leased Premises which cannot be repaired
within one hundred eighty (180) days from the happening of such casualty, then,
in such event, the term hereby created shall, at the

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option of either party, upon written notice to the other by certified mail,
return receipt requested, within thirty (30) days of such fire or casualty,
cease and become null and void from the date of such destruction or damage.
However, if neither party shall elect to cancel this lease within the thirty
(30) day period hereinabove provided, the Landlord shall thereupon repair and
restore the Leased Premises with reasonable speed and dispatch, and the rent
shall not be accrued after said damage or while the repairs and restorations are
being made, but shall recommence immediately after said Leased Premises are
restored. Landlord, in any event, shall advise Tenant in writing as to whether
or not the Leased Premises can be restored within the one hundred eighty (180)
day period from the date of such casualty. Anything in this Article 14 to the
contrary notwithstanding, it is expressly understood and agreed that the
Landlord shall be obligated to restore the Leased Premises only to the extent of
such cost as will be equivalent to the proceeds received by Landlord pursuant to
the fire insurance coverage to be provided to Landlord as in Article 9 provided.
If the insurance proceeds are not sufficient to restore the Leased Premises to
substantially the same condition which they were in prior to the casualty, then
the Landlord shall have a period of thirty (30) days within which to determine
whether to terminate the term hereby created unless the Landlord and Tenant
shall mutually agree to the funding of any such excess construction costs. In
the event of cancellation in accordance with this Article, the Tenant shall
immediately surrender the Leased Premises and the Tenant's interest in said
lease to the Landlord, and the Tenant shall only pay rent to the time of such
destruction or damage, in which event, the Landlord may re-enter and repossess
the Leased Premises thus discharged from this lease and may remove all parties
therefrom.

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                  14.2 In the event of any other insured casualty, which shall
be repairable within one hundred eighty (180) days from the happening of such
damage or casualty, the Landlord shall repair and restore the Leased Premises
with reasonable speed and dispatch, and the rent shall abate and be equitably
apportioned as the case may be as to any portion of the Leased Premises which
shall be unfit for occupancy by the Tenant, or which cannot be used by the
Tenant so as to conduct its business. The rent, however, shall accrue and
recommence immediately upon restoration of the Leased Premises.

                  14.3 Nothing hereinabove contained with respect to the
Tenant's right to abate rent under proper conditions shall be construed to limit
or affect the Landlord's right to payment under any claim for damages covered by
the rent insurance policy pursuant to the contract therefor required to be
provided pursuant to Article 9 of this lease.

                  14.4 For the purposes of this Article 14, in determining what
constitutes reasonable speed and dispatch, consideration shall be given for
delays which would be excuses for non-performance as in Article 27 hereinafter
provided (Force Majeure).

                  14.5 In the event of such fire or casualty as above provided,
wherein the Landlord shall rebuild, the Tenant agrees, at its cost and expense,
to forthwith remove any and all of its equipment, fixtures, stock and personal
property as the same may be required to permit Landlord to expedite rebuilding
and/or repair. In any event, the Tenant shall assume at its sole risk the
responsibility for damage or security with respect to such fixtures and
equipment in the event the Building area where the same may be located has been
damaged, until the Building shall be restored and made secure.

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                  14.6 Anything in this Article 14 to the contrary
notwithstanding, it is expressly understood and agreed that wherever
reconstruction shall be undertaken, in the event of damage or casualty as in
this Article 14 provided, the Landlord shall prosecute such reconstruction with
reasonable speed and dispatch. In the event, however, such reconstruction or
repair shall not be completed within seven (7) months from the date of such
damage or casualty, then, in that event, the Tenant shall have the option at the
expiration of the seven (7) month period to terminate the lease by notice in
writing by Tenant to Landlord by certified mail, return receipt requested. In
the event of such termination, neither party shall thereafter have any further
liability, one to the other, in accordance with the terms and conditions of the
lease. The Landlord during such period of reconstruction shall give the Tenant
reasonable notice at least thirty (30) days in advance of the date on which the
Building shall be ready for reoccupancy.

            15.   COMPLIANCE WITH LAWS, RULES AND REGULATIONS

                  15.1 (i) The Tenant covenants and agrees that upon acceptance
and occupancy of the Leased Premises, it will, during the lease term, promptly,
at Tenant's cost and expense, execute and comply with all statutes, ordinances,
rules, orders, regulations and requirements of the Federal, State and City
Government and of any and all their departments and bureaus, applicable to the
Leased Premises, as the same may require correction, prevention and abatement of
nuisances, violations or other grievances, in, upon or connected with the Leased
Premises, arising from the operations of the Tenant therein.

                       (ii) The Tenant covenants and agrees, at its own cost and
expense, to comply with such regulations or requests as may be required by the
fire or liability insurance carriers providing insurance for the Leased
Premises, and will further

                                       17
<PAGE>

comply with such other requirements that may be promulgated by the Board of Fire
Underwriters, in connection with the use and occupancy by the Tenant of the
Leased Premises in the conduct of its business.

                       (iii) The Tenant covenants and agrees that it will not
commit any nuisance, nor permit the emission of any objectionable sound, noise
or odors which would be violative of any applicable governmental rule or
regulation or would per se create a nuisance. The Tenant further covenants and
agrees that it will handle and dispose of all rubbish, garbage and waste in
connection with the Tenant's operations in the Leased Premises in accordance
with reasonable regulations established by the Landlord from time to time in
order to keep the Leased Premises in an orderly condition and in order to avoid
unreasonable emission of dirt, fumes, odors or debris which may constitute a
nuisance or induce pests or vermin.

                  15.2 In case the Tenant shall fail or neglect to comply with
the aforesaid statutes, ordinances, rules, orders, regulations and requirements
or any of them, or in case the Tenant shall neglect or fail to make any
necessary repairs, then the Landlord or the Landlord's agents may after thirty
(30) days' notice (except for emergency repairs, which may be made immediately)
enter said Leased Premises and make said repairs and comply with any and all of
the said statutes, ordinances, rules, orders, regulations or requirements, at
the cost and expense of the Tenant and in case of the Tenant's failure to pay
therefor, the said cost and expense shall be added to the next month's rent and
be due and payable as such, or the Landlord may deduct the same from the balance
of any sum remaining in the Landlord's hands. This provision is in addition to
the right of the Landlord to terminate this

                                       18
<PAGE>

lease by reason of any default on the part of the Tenant, subject to the rights
of the Tenant as hereinabove mentioned in the manner as in this lease otherwise
provided.

                  15.3 Without limiting anything hereinabove contained in this
Article 15, Tenant expressly covenants and agrees to fully comply with the
provisions of the New Jersey Industrial Site Recovery Act (N.J.S.A. 13:1K-6, et
seq.) hereinafter referred to as "ISRA," and all regulations promulgated thereto
(or under its predecessor statute, the New Jersey Environmental Cleanup
Responsibility Act) prior to the expiration or earlier termination of the within
lease, or at any time that any action of the Tenant triggers the applicability
of ISRA. In particular, the Tenant agrees that it shall comply with the
provisions of ISRA in the event of any "closing, terminating or transferring" of
Tenant's operations, as defined by and in accordance with the regulations which
have been promulgated pursuant to ISRA. In the event evidence of such compliance
is not delivered to the Landlord prior to surrender of the Leased Premises by
the Tenant to the Landlord, it is understood and agreed that the Tenant shall be
liable to pay to the Landlord an amount equal to two times the annual Base Rent
then in effect, prorated on a monthly basis, together with all applicable
additional rent from the date of such surrender until such time as evidence of
compliance with ISRA has been delivered to the Landlord, and together with any
costs and expenses incurred by Landlord in enforcing Tenant's obligations under
this Article 15.3. Evidence of compliance, as used herein, shall mean a "letter
of non-applicability" issued by the New Jersey Department of Environmental
Protection, hereinafter referred to as "NJDEP," or an approved "negative
declaration," "no further action letter" or a "remediation action workplan"
which has been fully implemented and approved by NJDEP. Evidence of compliance
shall be delivered to the Landlord, together with copies of all submissions made

                                       19
<PAGE>

to, and received from, the NJDEP, including all environmental reports, test
results and other supporting documentation. In addition to the above, Tenant
hereby agrees that it shall cooperate with Landlord in the event of the
termination or expiration of any other lease affecting the Property, or a
transfer of any portion of the property indicated on Schedule "A," or any
interest therein, which triggers the provisions of ISRA. In such case, Tenant
agrees that it shall fully cooperate with Landlord in connection with any
information or documentation which may be requested by the NJDEP. In the event
that any-remediation of the Property is required in connection with the conduct
by Tenant of its business in the Leased Premises, Tenant expressly covenants and
agrees that it shall be responsible for that portion of said remediation which
is caused solely by Tenant through its use and occupancy of the Leased Premises
in connection with the operation of its business. Tenant hereby represents and
warrants that its Standard Industrial Classification No. is 5621, and that
Tenant shall not generate, manufacture, refine, transport, treat, store, handle
or dispose of "hazardous substances" as the same are defined under ISRA and the
regulations promulgated pursuant thereto. Tenant hereby agrees that it shall
promptly inform Landlord of any change in its SIC number or the nature of the
business to be conducted in the Leased Premises. The within covenants shall
survive the expiration or earlier termination of the lease term.

            16.   INSPECTION BY LANDLORD

                  The Tenant agrees that the Landlord's agents, and other
representatives, shall have the right, during normal business hours, to enter
into and upon the Leased Premises, or any part thereof, at all reasonable hours
for the purpose of examining the same. or for exhibiting the same to prospective
tenants and purchasers in the presence of a representative of Tenant (except in
the event of emergency) or making such

                                       20
<PAGE>

repairs or alterations therein as may be necessary for the safety and
preservation thereof, without unduly or unreasonably disturbing the operations
of the Tenant (except in the event of emergency).

            17.   DEFAULT BY TENANT

                  17.1 Each of the following shall be deemed a default by Tenant
and breach of this lease:

                           (1)(i) filing of a petition by the Tenant for
      adjudication as a bankrupt, or for reorganization, or for an arrangement
      under any federal or state statute;
                              (ii) dissolution or liquidation of the Tenant;
                              (iii) appointment of a permanent receiver or a
      permanent. trustee of all or substantially all the Property of the Tenant;
                              (iv) taking possession of the property of the
      Tenant by a governmental officer or agency pursuant to statutory authority
      for dissolution, rehabilitation, reorganization or liquidation of the
      Tenant;
                              (v) making by the Tenant of an assignment for the
      benefit of creditors; or
                              (vi)  abandonment, desertion or vacation of the
      Leased Premises by Tenant.

                  If any event mentioned in this subdivision (1) shall occur,
      Landlord may thereupon or at any time thereafter elect to cancel this
      lease by ten (10) days' notice to the Tenant, and this lease shall
      terminate on the day in such notice specified

                                       21
<PAGE>

      with the same force and effect as if that date were the date herein fixed
      for the expiration of the term of the lease.

                          (2) (i) Default in the payment of the Base Rent or
      additional rent herein reserved or any part thereof for a period of seven
      (7) days after the same is due and payable as in this lease required.

                              (ii) A default in the performance of any other
      covenant or condition of this lease on the part of the Tenant to be
      performed for a period of thirty (30) days after notice. For purposes of
      this subdivision (2)(ii) hereof, no default on the part of Tenant in
      performance of work required to be performed or acts to be done or
      conditions to be modified shall be deemed to exist if steps shall have
      been commenced by Tenant diligently after notice to rectify the same and
      shall be prosecuted to completion with reasonable diligence, subject,
      however, to unavoidable delays.

                  17.2 In case of any such default under Article 17.1(2) and at
any time thereafter following the expiration of the respective grace periods
above mentioned, Landlord may serve a notice upon the Tenant electing to
terminate this lease upon a specified date not less than seven (7) days after
the date of serving such notice and this lease shall then expire on the date so
specified as if that date has been originally fixed as the expiration date of
the term herein granted; however, a default under Article 17.1(2) hereof shall
be deemed waived if such default is made good before the date specified for
termination in the notice of termination served on Tenant. In addition, Landlord
shall have the right to terminate this Lease in the event that Tenant is
consistently late in the punctual payment of Base Rent and/or Additional Rent
required to be paid under this Lease as shall be evidenced by late

                                       22
<PAGE>

payments made during any period of four (4) month's during any twelve (12) month
period, measured from the date of the first late payment. "Late payment," as
used herein, shall be deemed to mean any payment not made within seven (7) days
following written notice from Landlord to Tenant that the same is past due.

                  17.3 In case this lease shall be terminated as hereinbefore
provided, or by summary proceedings or otherwise, Landlord or its agents may,
immediately or any time thereafter, reenter and resume possession of the Leased
Premises, and remove all persons and property therefrom, either by summary
proceedings or by a suitable action or proceeding at law without being liable
for any damages, provided any entry pursuant to the foregoing shall be in
accordance with law. No re-entry by Landlord shall be deemed an acceptance of a
surrender of this lease.

                  17.4 In case this lease shall be terminated as hereinafter
provided, or by summary proceedings or otherwise, Landlord may, in its own name
and in its own behalf, relet the whole or any portion of the Leased Premises,
for any period equal to or greater or less than the remainder of the then
current term,. for any sum which it may deem reasonable, to any tenant which it
may deem suitable and satisfactory, and for any use and purpose which it may
deem appropriate, and in connection with any such lease Landlord may make such
changes in the character of the improvements on the Leased Premises as Landlord
may determine to be appropriate or helpful in effecting such lease and may grant
concessions or free rent. Landlord agrees that it will take reasonable steps to
mitigate Tenant's damages. Landlord shall not in any event be required to pay
Tenant any surplus of any sums received by Landlord on a reletting of the Leased
Premises in excess of the Rent reserved in this lease.

                                       23
<PAGE>

                  17.5 (1) In case this lease be terminated by summary
proceedings, or otherwise, as provided in this Article 17, and whether or not
the Leased Premises be relet, Landlord shall be entitled to recover from the
Tenant, the following:

                              (i) a sum equal to all expenses, if any, including
      reasonable counsel fees, incurred by Landlord in recovering possession of
      the Leased Premises, and all reasonable costs and charges for the care of
      said Leased Premises while vacant, which damages shall be due and payable
      by Tenant to Landlord at such time or times as such expenses shall have
      been incurred by Landlord; and

                              (ii) A sum equal to all damages set forth in this
      Article 17 and in Article 18 hereinafter referred to.

                        (2) Without any previous notice or demand, separate
actions may be maintained by Landlord against Tenant from time to time to
recover any damages which, at the commencement of any such action, have then or
theretofore become due and payable to the Landlord under this Article 17 and
subsections hereof without waiting until the end of the then current term.

                        (3) All sums which Tenant has agreed to pay by way of
taxes, sewer charges, water rents or water meter charges, insurance premiums and
other similar items becoming due from time to time under the terms of this
lease, shall be deemed additional rent reserved in this lease within the meaning
of this Article 17 and subsections hereof.

                        (4) Notwithstanding anything in this lease to the
contrary, all amounts payable by Tenant to or on behalf of Landlord under this
lease, whether or not

                                       24
<PAGE>

expressly denominated as rent, shall constitute rent for the purposes of section
502(b)(6) of the Bankruptcy Code, 11 U. S. C. Section 502(b)(6), or any
successor statute.

            18.   LIABILITY OF TENANT FOR DEFICIENCY

                  In the event that the relation of the Landlord and Tenant may
cease or terminate by reason of the default by the Tenant and the re-entry of
the Landlord as permitted by the terms and conditions contained in this lease or
by the ejectment of the Tenant by summary proceedings or other judicial
proceedings, or after the abandonment of the Leased Premises by the Tenant, it
is hereby agreed that the Tenant shall remain liable to pay in monthly payments
the rent which shall accrue subsequent to the re-entry by the Landlord, and the
Tenant expressly agrees to pay as damages for the breach of the covenants herein
contained the difference between the Rent reserved and the rent collected and
received, if any, by the Landlord, during the remainder of the unexpired term,
as the amount of such difference or deficiency shall from time to time be
ascertained. Anything herein contained to the contrary notwithstanding, the rent
referred to shall include the stated reserved Base Rent together with all
additional rent and charges required to be paid by the Tenant under the lease
including but not limited to taxes and insurance costs, and the costs of
re-renting.

            19.   NOTICES

                  All notices required or permitted to be given to the Landlord
shall be given by certified mail, return receipt requested, at the address
hereinbefore set forth on the first page of this lease, and/or such other place
as the Landlord may designate in writing.

                  All notices required or permitted to be given to the Tenant
shall be given by certified mail, return receipt requested, at the address
hereinbefore set forth on the

                                       25
<PAGE>

first page of this lease, Attention: President and/or such other place as the
Tenant shall designate in writing.

            20.   NON-WAIVER BY LANDLORD

                  The failure of the Landlord to insist upon strict performance
of any of the covenants or conditions of this lease, or to exercise any option
of the Landlord herein conferred in any one or more instances, shall not be
construed as a waiver by the Landlord of any of its rights or remedies in this
lease, and shall not be construed as a waiver, relinquishment or failure of any
such covenants, conditions, or options, but the same shall be and remain in full
force and effect.

            21.   RIGHT OF TENANT TO MAKE ALTERATIONS AND
                  IMPROVEMENTS

                  21.1 The Tenant may make alterations, additions or
improvements to the Leased Premises only with the prior written consent of the
Landlord, which consent shall not be unreasonably withheld, provided such
alterations, additions or improvements do not require structural changes in the
Leased Premises, or in the mechanical systems serving said Leased Premises, or
do not lessen the value of the Leased Premises or the Building. Any consent
which Landlord may give shall be conditioned upon Tenant furnishing to Landlord,
detailed plans and specifications with respect to any such changes, to be
approved by Landlord in writing. As a condition of such consent, Landlord
reserves the right to require Tenant to remove, at Tenant's sole cost and
expense, any such alterations or additions prior to the expiration of the lease
term. If Landlord does not require such removal, any such alterations or
additions shall be deemed to be part of the realty upon installation. All such
alterations, additions or improvements shall be only in conformity with

                                       26
<PAGE>

applicable governmental and insurance company requirements and regulations
applicable to the Leased Premises. Tenant shall hold and save Landlord harmless
and indemnify Landlord against any claim for damage or injury in connection with
any of the foregoing work which Tenant may make as hereinabove provided.

                  21.2 Nothing herein contained shall be construed as a consent
on the part of the Landlord to subject the estate of the Landlord to liability
under the Construction Lien Law of the State of New Jersey, it being expressly
understood that the Landlord's estate shall not be subject to such liability.

                  21.3 It is expressly understood and agreed that in the event
alterations or improvements required by Tenant are performed by Landlord's
designated contractor, Tenant shall make payments to said contractor strictly in
accordance with the agreement entered into between said parties. Default in
payment by Tenant under said construction contract shall be deemed to be a
default under this lease for which Landlord shall have the right of termination
as hereinbefore set forth in Article 17.

            22.   NON-LIABILITY OF LANDLORD

                  22.1 It is expressly understood and agreed by and between the
parties to this agreement that the Tenant shall assume all risk of damage to its
property, equipment and fixtures occurring in or about the Leased Premises,
whatever the cause of such damage or casualty.

                  22.2 It is expressly understood and agreed that in any event,
the Landlord shall not be liable for any damage or injury to property or person
caused by or resulting from steam, electricity, gas, water, rain, ice or snow,
or any leak or flow from or into any part of the Building, or from any damage or
injury resulting or arising from any

                                       27
<PAGE>

other cause or happening whatsoever, except for the negligence or willful
misconduct of the Landlord or the Landlord's agents, servants, or employees.

            23.   WARRANTY OF TITLE

                  Landlord represents that it has title to the Property,
Building and Leased Premises which are the subject of this lease and that it has
the full right, capacity and authority to enter into the within lease agreement.

            24.   RESERVATION OF EASEMENT

                  The Landlord reserves the right, easement and privilege to
enter on the Leased Premises in order to install, at its own cost and expense,
any storm drains and sewers and/or utility lines in connection therewith as may
be required by the Landlord. It is understood and agreed that if such work as
may be required by Landlord requires an installation which may displace any
paving, lawn, seeded area or shrubs, the Landlord, shall, at its own cost and
expense, restore said paving, lawn, seeded area or shrubs. The Landlord
covenants that the foregoing work shall not unreasonably interfere with the
normal operation of Tenant's business, and the Landlord shall indemnify and save
the Tenant harmless in connection with such installations.

            25.   AIR, GROUND AND WATER POLLUTION

                  The Tenant expressly covenants and agrees to indemnify,
defend, and save the Landlord harmless against any claim, damage, liability,
costs, penalties, or fines which the Landlord may suffer as a result of air,
ground or water pollution caused by the Tenant in its use of the Leased
Premises. The Tenant covenants and agrees to notify the Landlord immediately of
any claim or notice served upon it with respect to any such claim the Tenant is
causing water, ground or air pollution; and the Tenant, in any event, will take

                                       28
<PAGE>

immediate steps to halt, remedy or cure any pollution of air, ground or water
caused by the Tenant by its use of the Leased Premises. This covenant shall
survive the expiration or earlier termination of this lease.

            26.   STATEMENT OF ACCEPTANCE

                  During the term of this lease, the Tenant agrees that it will
furnish to the Landlord a statement that the lease is in full force and effect
in accordance with its terms, together with such other affirmative covenants as
may be required by Landlord's mortgagee or for other business purposes, so as to
provide for Landlord's benefit, an estoppel certificate as the same may be
required from time to time for legitimate business purposes of Landlord. Said
statement shall set forth the Commencement Date and the date of expiration of
the lease term.

            27.   FORCE MAJEURE

                  Except for the obligation of the Tenant to pay rent and other
charges as in this lease provided, the period of time during which the Landlord
or Tenant is prevented from performing any act required to be performed under
this lease by reason of fire, catastrophe, strikes, lockouts, civil commotion,
acts of God or the public enemy, government prohibitions or preemptions,
embargoes, inability to obtain material or labor by reason of governmental
regulations or prohibitions, the act or default of the other party, or other
events beyond the reasonable control of Landlord or Tenant, as the case may be,
shall be added to the time for performance of such act.

            28.   STATEMENTS BY LANDLORD AND TENANT

                  Landlord and Tenant agree at any time and from time to time
upon not less than ten (10) days' prior notice from the other to execute,
acknowledge and deliver to

                                       29
<PAGE>

the party requesting same, a statement in writing, 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), that it is not in default (or if claimed to be in default,
stating the amount and nature of the default) and specifying the dates to which
the Base Rent and other charges have been paid in advance, if any; it being
intended that any such statement delivered pursuant to this paragraph may be
relied upon as to the facts contained therein.

            29.   CONDEMNATION

                  29.1 If due to condemnation or taking or seizure by any
authority having the right of eminent domain, (i) more than ten (10%) per cent
of Tenant's Leased Premises is taken, or (ii) in the event that more than
twenty-five (25%) per cent of the ground is taken (including the parking areas,
but exclusive of front, side and rear set back areas), or (iii) if access to the
Leased Premises be denied, which taking in the manner hereinabove referred to
and in excess of the foregoing percentage amounts shall unreasonably or unduly
interfere with the use of the Building, ground area, parking area, or deny
access to these Leased Premises, then and in either of such events as
hereinabove provided, the lease term created shall, at the option of the Tenant,
terminate, cease and become null and void from the date when the authority
exercising the power of eminent domain takes or interferes with the use of the
Leased Premises, its use of the ground area, parking area, or area of access to
the Leased Premises. The Tenant shall only be responsible for the payment of
rent until the time of surrender. In any event, no part of the Landlord's
condemnation award shall belong to or be claimed by the Tenant. Without
diminishing Landlord's award, the Tenant shall have the right to make a claim
against the condemning

                                       30
<PAGE>

authority for such independent claim which it may have and as may be allowed by
law, for costs and damages due to relocating, moving and other similar costs and
charges directly incurred by the Tenant and resulting from such condemnation.

                  29.2 In the event of any partial taking which would not be
cause for termination of the within lease or in the event of any partial taking
in excess of the percentages provided in Article 29.1, and in which event the
Tenant shall elect to retain the balance of the Leased Premises remaining after
such taking, then and in either event, the rent shall abate in an amount
mutually to be agreed upon between the Landlord and Tenant based on the
relationship that the character of the property taken bears to the property
which shall remain after such condemnation. In any event, no part of the
Landlord's condemnation award shall belong to or be claimed by the Tenant.
However, the Landlord shall, to the extent permitted by applicable law and as
the same may be practicable on the site of the Leased Premises, at the
Landlord's sole cost and expense, promptly make such repairs and alterations in
order to restore the Building and/or improvements to the extent of the
condemnation award.

            30.   QUIET ENJOYMENT

                  The Landlord further covenants that the Tenant, on paying the
rental and performing the covenants and conditions contained in this lease,
shall and may peaceably and quietly have, hold and enjoy the Leased Premises for
the term aforesaid.

            31.   SURRENDER OF LEASED PREMISES

                  On the last day, or earlier permitted termination of the lease
term, Tenant shall quit and surrender the Leased Premises in good and orderly
condition and repair (reasonable wear and tear, and damage by fire or other
casualty excepted) and shall deliver

                                       31
<PAGE>

and surrender the Leased Premises to the Landlord peaceably, together with all
alterations, additions and improvements in, to or on the Leased Promises made by
Tenant as permitted under the lease. The Landlord reserves the right, however,
to require the Tenant at its cost and expense to remove any alterations or
improvements installed by the Tenant and not permitted or consented to by the
Landlord pursuant to the terms and conditions of the lease, which covenant shall
survive the surrender and the delivery of the Leased Premises as provided
hereunder. Prior to the expiration of the lease term the Tenant shall remove all
of its property, fixtures, equipment and trade fixtures from the Leased
Premises. All property not removed by Tenant shall be deemed abandoned by
Tenant, and Landlord reserves the right to charge the reasonable cost of such
removal to the Tenant, which obligation shall survive the lease termination and
surrender hereinabove provided. If the Leased Premises are not surrendered at
the end of the lease term, Tenant shall be responsible to pay Landlord, monthly,
an amount equal to twice the monthly installment of Base Rent payable by Tenant
prior to the expiration or earlier termination of this lease for each month or
part thereof that Tenant holds over in the Leased Premises.

            32.   INDEMNITY

                  Anything in this lease to the contrary notwithstanding, and
without limiting the Tenant's obligation to provide insurance pursuant to
Article 9 hereunder, the Tenant covenants and agrees that it will indemnify,
defend and save harmless the Landlord against and from all liabilities,
obligations, damages, penalties, claims, costs, charges and expenses, including
without limitation reasonable attorney's fees, which may be imposed upon or
incurred by Landlord by reason of any of the following occurring during the term
of this lease:

                                       32
<PAGE>

                        (i) Any matter, cause or thing arising out of Tenant's
      use, occupancy, control or management of the Leased Premises and any part
      thereof;

                        (ii) Any negligence on the part of the Tenant or any of
      its agents, contractors, servants, employees, licensees or invitees;

                        (iii) Any accident, injury, damage to any person or
      property occurring in, or about the Leased Premises;

                        (iv) Any failure on the part of Tenant to perform or
      comply with any of the covenants, agreements, terms or conditions
      contained in this lease on its part to be performed or complied with.

                        (v) Subject to the exception set forth in Article 22.1,
      the foregoing shall not require indemnity by Tenant in the event of damage
      or injury occasioned by the negligence or acts of commission or omission
      of the Landlord, its agents, servants or employees, it being understood
      and agreed that Landlord shall be fully responsible to indemnify, defend
      and save harmless the Tenant against and from all liabilities,
      obligations, damages, penalties, claims, costs, charges and expenses,
      including without limitation reasonable attorneys' fees, which may be
      imposed upon or incurred by Tenant by reason of such matters.

            Landlord shall promptly notify Tenant of any such claim asserted
against it and shall promptly send to Tenant copies of all papers or legal
process served upon it in connection with any action or proceeding brought
against Landlord by reason of any such claim.

                                       33
<PAGE>

            33.   SHORT FORM LEASE

                  It is understood between the parties hereto that this lease
will not be recorded, but that a short form lease, describing the property
leased hereby, giving the term of this lease, and making particular mention of
any special clauses as herein contained, may be recorded by Landlord in
accordance with the laws governing and regulating the recording of such
documents in the State of New Jersey.

            34.   LEASE CONSTRUCTION

                  This lease shall be construed pursuant to the laws of the
State of New Jersey.

            35.   BIND AND INURE CLAUSE

                  The terms, covenants and conditions of the within lease shall
be binding upon and inure to the benefit of each of the parties hereto, their
respective executors, administrators, heirs, successors and assigns, as the case
may be.

            36.   DEFINITIONS

                  The neuter gender, when used herein and in the acknowledgment
hereafter set forth, shall include all persons and corporations, and words used
in the singular shall include words in the plural where the text of the
instrument so requires.

            37.   NET RENT

                  It is the purpose and intent of the Landlord and Tenant that
the rent shall be absolutely net to Landlord, so that this lease shall yield,
net, to Landlord, the rent specified in Article 3 hereof in each month during
the term of the lease, and that all costs, expenses and obligations of every
kind and nature whatsoever relating to the Leased Premises which may arise or
become due during or out of the term of this lease, shall be paid

                                       34
<PAGE>

by the Tenant, except for such obligations and charges as have otherwise
expressly been assumed by the Landlord in accordance with the terms and
conditions of the lease. Nothing herein shall require the Tenant to undertake
obligations in connection with the sale or mortgaging of the Leased Premises,
unless otherwise expressly provided in accordance with the terms and conditions
of this lease.

            38.   DEFINITION OF TERM OF "LANDLORD"

                  When the term "Landlord" is used in this lease it shall be
construed to mean and include only the owner of the fee title of the Leased
Premises. Upon the transfer by the Landlord of the fee title hereunder, the
Landlord shall advise the Tenant in writing by certified mail, return receipt
requested of the name of the Landlord's transferee. In such event, the then
Landlord shall. be automatically freed and relieved from and after the date of
such transfer of title of all liability with respect to the performance of any
of the covenants and obligations on the part of the Landlord herein contained to
be performed, provided any such transfer and conveyance by the Landlord is
expressly subject to the assumption by the grantee or transferee of the
obligations of the Landlord to be performed pursuant to the terms and conditions
of the within lease.

            39.   INTENTIONALLY OMITTED

            40.   LANDLORD'S REMEDIES

                  40.1 The rights and remedies given to the Landlord in this
lease are distinct, separate and cumulative remedies, and no one of them,
whether or not exercised by the Landlord, shall be deemed to be in exclusion of
any of the others.

                                       35
<PAGE>

                  40.2 In addition to any other legal remedies for violation or
breach by or on the part of the Tenant or by any undertenant or by anyone
holding or claiming under the Tenant or any one of then, of the restrictions,
agreements or covenants of this lease on the part of the Tenant to be performed
or fulfilled, such violation or breach shall be restrainable by injunction at
the suit of the Landlord.

                  40.3 No receipt of money by the Landlord from any receiver,
trustee or custodian, debtor in possession, or any permitted subtenant, shall
reinstate, continue or extend the term of this lease or affect any notice
theretofore given to the Tenant, or to any such receiver, trustee or custodian,
debtor in possession, or any permitted subtenant, or operate as a waiver or
estoppel of the right of the Landlord to recover possession of the Leased
Premises for any of the causes therein enumerated by any lawful remedy; and the
failure of the Landlord to enforce any covenant or condition by reason of its
breach by the Tenant shall not be deemed to void or affect the right of the
Landlord to enforce the same covenant or condition on the occasion of any
subsequent default or breach.

                  40.4 The prevailing party in a suitable action at law, or in
equity, shall be entitled to reimbursement from the other party of such
prevailing party's reasonable attorney's fees and costs incurred in enforcing
the terms and conditions of this Lease on the part of the other party to be
performed. Tenant further agrees to reimburse Landlord for Landlord's attorney's
fees incurred in connection with the review by Landlord of any Landlord's
waiver, assignment or sublet agreement or any other documentation reviewed by
Landlord at Tenant's request. Such amounts shall be deemed to be additional rent
payable hereunder and shall be paid to Landlord upon demand.

                                       36
<PAGE>

            41.   COVENANT AGAINST LIENS

                  Tenant agrees that it shall not knowingly encumber, or suffer
or permit to be encumbered, the Leased Premises or the fee thereof by any lien,
charge or encumbrance, and Tenant shall have no authority to mortgage or
hypothecate this lease in any way whatsoever. The violations of this Article
shall be considered a breach of this lease.

            42.   BROKERAGE

                  The parties mutually represent to each other that GENET
REALTY, is the sole broker who negotiated and consummated the within
transaction, and that neither party dealt with any other broker in connection
with the within lease, it being understood and agreed that the Landlord shall be
responsible, at its sole cost and expense, to pay the real estate brokerage in
connection with this lease transaction. Landlord agrees to indemnify, defend and
save harmless Tenant in connection with the claims of any other real estate
brokers claiming commissions in connection with the within transaction and
claiming authority from Landlord. Tenant agrees to indemnify, defend and save
harmless Landlord in connection with the claims of any other real estate brokers
claiming commissions in connection with the within transaction and claiming
authority from Tenant.

            43.   SUBORDINATION OF LEASE

                  This lease shall be subject and subordinate at all times to
the lien of any bona fide mortgages now or hereafter placed on the land and
Building and Leased Premises without the necessity of any further instrument or
act on the part of Tenant to effectuate such subordination, but Tenant covenants
and agrees to execute and deliver upon demand such further instrument or
instruments evidencing such subordination of the lease to the lien of any such
mortgage or ground rent or other encumbrances as shall be desired

                                       37
<PAGE>

by a mortgagee or proposed mortgagee or by any person. Landlord hereby agrees
that it shall obtain, for the benefit of Tenant, a Subordination,
Non-Disturbance and Attornment Agreement from Landlord's current mortgagee and
from all future mortgagees of the Property. Any such Subordination,
Non-Disturbance and Attornment Agreement shall be written on the applicable
mortgagee's customary form, provided that such form cannot materially change the
terms and conditions of this Lease.

            44.   PARKING

                  Landlord shall provide 150 parking spaces for the exclusive
use of Tenant, and Tenant's agents, servants, employees and invitees, as shown
on the site plan which is annexed hereto and made a part hereof as Schedule
"A-1." Tenant shall not have the right to utilize any other parking spaces
located on the Property. The parties agree that they will not permit the access
driveways to be blocked so as to unreasonably interfere with the use of said
access driveways and the parking area.

            45.   SECURITY

                  Upon execution of this lease, the Tenant shall deposit with
the Landlord the sum of ONE HUNDRED FOUR THOUSAND TWO HUNDRED SIXTY SIX AND
67/100 ($104,266.67) DOLLARS as security for the full and faithful performance
of this lease upon the part of the Tenant to be performed. Upon termination of
this lease, and providing the Tenant is not in default hereunder and has
performed all of the conditions of this lease, the Landlord shall return the
said sum of ONE HUNDRED FOUR THOUSAND TWO HUNDRED SIXTY SIX AND 67/100
($104,266.67) DOLLARS to the Tenant. Anything herein contained to the contrary
notwithstanding, it is expressly understood and agreed that the said security
deposit shall not bear interest. Tenant covenants and agrees that

                                       38
<PAGE>

it will not assign, pledge, hypothecate, mortgage or otherwise encumber the
aforementioned security during the term of this lease. It is expressly
understood and agreed that the Landlord shall have the right to co-mingle the
security funds with its general funds and said security shall not be required to
be segregated.

            46.   OPTION TO RENEW

                  (1) Provided the Tenant is not in default pursuant to the
terms and conditions of this Lease, the Tenant is hereby given the right and
privilege to renew the within Lease, for one (1) renewal period to commence at
end of the initial term of this Lease, which renewal period shall be for a term
of either (a) one (1) year or (b) five (5) years. In the event Tenant elects to
exercise this option to renew, Tenant shall specify the term of the renewal
period in the notice to be given to Landlord exercising the option to renew.
said renewal shall be upon the same terms and conditions as in this Lease
contained, except that Tenant shall pay Base Rent during the renewal period in
the amount of ONE MILLION FOUR HUNDRED SIXTY EIGHT THOUSAND EIGHT HUNDRED AND
00/100 ($1,468,800.00) DOLLARS per annum, payable in equal installments in the
amount of ONE HUNDRED TWENTY TWO THOUSAND FOUR HUNDRED AND 00/100 ($122,400.00)
DOLLARS per month.

                  (2) In the event that Tenant exercises its option to extend
the term of this Lease for a period of five (5) years, pursuant to the
provisions of Article 46(1) above, Tenant shall have the right and privilege to
renew the within Lease for an additional period of five (5) years, to commence
at the end of the first-renewal period, upon the same terms and conditions as in
this Lease contained, except that Tenant shall pay Base Rent during said second
renewal period in the amount of ONE MILLION SEVEN HUNDRED SIXTY

                                       39
<PAGE>

EIGHT THOUSAND AND 00/100 ($1,768,000.00) DOLLARS per annum, payable in equal
installments in the amount of ONE HUNDRED FORTY SEVEN THOUSAND THREE HUNDRED
THIRTY THREE AND 33/100 ($147,333.33) DOLLARS per month.

                  (3) The right, option, and privilege of the Tenant to renew
this lease as hereinabove set forth is expressly conditioned upon the Tenant
delivering to the Landlord, in writing, by certified mail, return receipt
requested, twelve (12) months' prior notice of its intention to renew, which
notice shall be given to the Landlord by the Tenant no later than twelve (12)
months prior to the date fixed for termination of the original term or first
renewal term of this lease, as applicable.

                  (4) The obligation to pay the Base Rent as adjusted
hereinabove provided shall be in addition to the obligation to pay all
additional rent and other charges required by the terms and conditions of this
lease.

            47.   SURVIVAL OF OBLIGATION

                  It is expressly understood and agreed that in the event there
are any obligations of Tenant with respect to payment or performance as required
under the terms and conditions of this lease that shall have not been performed
prior to the expiration or termination of the lease in accordance with its
terms, such obligation, including the obligation to make rent adjustments and
other lease adjustments, shall survive the expiration or termination of the
lease term and surrender of the Leased Premises by the Tenant to the Landlord.

            48.   LOSS OF OPTION RIGHTS

                  Anything in this lease to the contrary notwithstanding, it is
expressly understood and agreed that the Option to Renew as provided in Article
46 shall be deemed

                                       40
<PAGE>

null and void and of no further force and effect upon notice by Landlord to
Tenant in the event (i) Landlord has previously instituted litigation to enforce
payment and performance as required under this lease, provided Landlord is
successful and prevails in such action; or (ii) Tenant is consistently late in
the punctual payment of annual Base Rent and/or additional rent required to be
paid under this lease as shall be evidenced by four (4) episodes of late payment
made during any twelve (12) month period measured from the date of the first
late payment. "Late Payment" is hereby deemed to mean any payment not made
within seven (7) days following written notice from Landlord to Tenant that the
same is past due.

            49.   LIMIT OF LANDLORD'S LIABILITY

                  In case the Landlord shall be a joint venture, partnership,
tenancy in common, association or other form of joint ownership, the individual
members thereof shall have absolutely no personal liability or obligation with
respect to any provision of this lease, or any obligation or liability arising
therefrom or in connection therewith, except to the extent of any individual
member's equity ownership of the land, Building and improvements comprising the
Property, which covenant hereinabove referred to, shall be deemed effective as
of the date Landlord completes and delivers the leased premises in accordance
with the terms and conditions of the lease and the specifications herein
provided.

            IN WITNESS WHEREOF, the parties have hereunto set their hands and
seals or caused these presents to be signed by its proper corporate officers and
caused its proper corporate seal to be hereunto affixed, the day and year first
above written.

                                                                      (L.S.)
-------------------------------------- -------------------------------------
                                       MAURICE M. WEILL, TRUSTEE
                                       FOR RUTHERFORD PROPERTY

                                       41
<PAGE>

ATTEST:                                LOEHMANN'S, INC.

                                       By:
--------------------------------------    --------------------------------------

                                       42
<PAGE>

STATE OF NEW JERSEY     )
                        ) SS.:
COUNTY OF               )

            BE IT REMEMBERED, that on this    day of      , 1998, before me, the
subscriber, a                  personally appeared MAURICE M. WEILL, TRUSTEE FOR
RUTHERFORD PROPERTY, who, I am satisfied, is the Landlord mentioned in the
within Instrument, and thereupon he acknowledged that he signed, sealed and
delivered the same as his act and deed, for the uses and purposes therein
expressed.

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

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

            BE IT REMEMBERED, that on this    day of      , 1998, before me, the
subscriber,                    personally appeared who, I am satisfied, is the
person who signed the within Instrument as of LOEHMANN'S, INC., a corporation,
the Tenant named therein, and he thereupon acknowledged that the said instrument
made by the corporation and sealed with its corporate seal, was signed, sealed
with the corporate seal and delivered by him as such officer and is the
voluntary act and deed of the corporation, made by virtue of authority from its
Board of Directors.

                                          --------------------------------------
<PAGE>

                                  SCHEDULE "A"

            All that certain tract or parcel of land and premises, hereinafter
particularly described, situate, lying and being in the Borough of Rutherford,
County of Bergen and State of New Jersey, being more particularly described as
follows:

BEGINNING at a point on the southwesterly side line of Altman Drive distant
417.20 feet from the intersection of said side line of Altman Drive with the
southeasterly line of Veterans Boulevard and running thence

1)  South 44 degrees 34 minutes 00 seconds East along Altman Drive 28.46 feet to
    a point; thence

2)  Easterly 115.63 feet along a circular arc curving to the left with a radius
    of 50 feet and a central angle of 132 degrees 30 minutes 00 seconds to a
    point; thence;

3)  South 60 degrees 13 minutes 00 seconds East 620.40 feet to a point; thence

4)  North 23 degrees 48 minutes 20 seconds East 281.84 feet to a point; thence

5)  South 56 degrees 16 minutes 30 seconds East 92.10 feet to the westerly
    right-of-way line of the Erie-Lackawanna Railroad; thence

6)  South 9 degrees 59 minutes 09.7 seconds East 13.20 feet along the
    right-of-way line of the Erie-Lackawanna Railroad to a point; thence

7)  South 89 degrees 58 minutes 30 seconds West 29.04 feet along the
    right-of-way line of the Erie-Lackawanna Railroad to a point; thence

8)  South 9 degrees 59 minutes 09.7 seconds East 90.42 feet still along the
    right-of-way line of the Erie-Lackawanna railroad to a point; thence

9)  North 89 degrees 58 minutes 30 seconds East 29.04 feet still along the
    right-of-way line of the Erie-Lackawanna Railroad to a point; thence

10) Still along the said right-of-way line South 9 degrees 59 minutes 09.2
    seconds East 1042.88 feet to a point; thence

11) North 88 degrees 37 minutes 30 seconds West 97.80 feet to the north line of
    the North Service Road Route 3 and 17; thence
<PAGE>

12) Northwesterly along the said north line of the North Service Road Route 3
    and 17, 488.62 feet along a circular arc curving to the left with a radius
    of 482 feet and a central angle of 58 degrees 04 minutes 56 seconds; thence

13) Still along the said northerly right-of-way line South 86 degrees, 24
    minutes 22 seconds West 332.84 feet to a point; thence

14) Northwesterly and still along the said northerly right-of-way line 649.57
    feet along a circular arc curving to the right with a radius of 718.00 feet
    and a central angle of 51 degrees 50 minutes 06 seconds to a point, thence

15) Still along the said right-of-way line of North 41 degrees 45 minutes 32
    seconds West 51.58 feet to a point; and thence

16) North 29 degrees 47 minutes 00 seconds East and parallel with the said
    southeasterly line of Veterans Boulevard 874.38 feet to the southwesterly
    side of Altman Drive and the point or place of BEGINNING.

Title to the above property was acquired by B. Altman & Co., a New York
Corporation, under Two (2) Deeds from the Bellemead Development corporation,
dated November 29, 1965, recorded December 10, 1965, in Book 4864, Page 205, and
dated May 29, 1967, recorded June 7, 1967, in Deed Book 5049, Page 195, in the
Bergen County Clerk's Office.

The above description is drawn in accordance with a survey prepared by Charles
H. Sells, Inc. dated September, 1977 and revised on September 23, 1985.

The above property is known as Lots 79, 82 and 83 in Block 219-B on the tax map
of the Borough of Rutherford.<PAGE>   1

EXHIBIT 10.36  Employment Agreement with Michael Rich Dated August 29, 1999

                                 August 26, 1999

Michael Rich
2825 S.W. 132 Way
Davie, FL  33330

Dear Michael:

We at Oriole Homes ("Oriole") are pleased to extend you an offer and confirm
your acceptance of employment as our Vice President of Sales and Marketing for
Oriole at our Delray Beach Corporate Headquarters. This letter outlines the
principal terms of our relationship. Please verify that all issues have been
addressed to your satisfaction so that an announcement may be made (handwritten)
(as soon as appropriate).

START DATE:                October 4, 1999

BASE SALARY:               An annualized base salary of $175,000 for the period
                           of October 4, 1999 to October 3, 2000. Effective
                           October 4, 2000, your annualized base salary will be
                           reduced to $150,000. Salary is paid every other week
                           and is subject to the customary withholding.

BONUS:                     Assuming that you are an employee in good standing,
                           on October 4, 2000 you will receive a $25,000 bonus.
                           Thereafter, you will be eligible to receive an annual
                           bonus based upon the achievement of objective
                           targeted performance goals (the "Target Goals")
                           determined each calendar year by the President of
                           Oriole in consultation with you. The Target Goals may
                           be comprised of fixed financial criteria and
                           subjective non-financial criteria.

STOCK OPTIONS:             Upon starting, you will be granted 10,000 options
                           pursuant to the Employee Stock Option Plan ("The
                           Plan") to purchase Oriole Homes stock. The option
                           price of the stock options will be the market price
                           on October 4, 1999. These options will vest provided
                           that you are an employee in good standing on October
                           5, 2001. An additional 10,000 stock options may be
                           earned through the achievement of mutually agreed
                           upon goals. Should there be a change in control as
                           defined in Paragraph 8(b) of The Plan, prior to
                           October 5, 2001, and you are an employee in good
                           standing at the time, the stock options will
                           immediately vest. Thereafter, the stock options will
                           vest only in accordance with their terms.

TERM:                      Nothing in this Agreement shall be deemed to prohibit
                           Oriole from terminating your employment at any time
                           with or without notice for any reason whatsoever,
                           provided however, if Oriole should terminate your
                           employment for any reason other than Cause (as
                           defined below) prior to October 3, 2001, Oriole Homes
                           will pay

<PAGE>   2
Michael Rich
August 26, 1999

                           you one times your then current annual base salary.
                           Subject to your signing a release and cooperation
                           agreement with Oriole. For "Cause", is defined as (A)
                           willful acts or willful failures to act constituting
                           gross neglect or material insubordination regarding
                           your duties, responsibilities and limitations; (B)
                           your conviction of a felony; (C) a good faith finding
                           by the Board of Directors of Oriole of any act of
                           fraud or malicious action by you; (D) any other
                           material breach of your duties and responsibilities,
                           but only if, such breach has not been cured or
                           effectively commenced, in Oriole's discretion, within
                           15 days of written notice to you or (E) failure on
                           your part to initially pass drug testing and to
                           comply with Oriole's drug and alcohol free workplace
                           policy.

BENEFITS:                  You will receive a $500 per month car allowance, a
                           $100 per month cell phone allowance and two weeks
                           vacation. Oriole will pay your COBRA costs for
                           insurance until you are eligible to enroll in
                           Oriole's plan. All other benefits information will be
                           provided to you upon starting and will be on the same
                           basis and subject to the same qualifications as other
                           employees of Oriole.

If you have any questions, please do not hesitate to call. We would appreciate
it if after reading this document you would execute the attached, indicating
your agreement with the terms and conditions stated herein and return it in the
enclosed envelope. There is an original enclosed for your records as well.

Sincerely,

/s/ Mark levy
-------------------------
Mark Levy
President

Agreed:

/s/ Michael Rich
-------------------------
Michael Rich

Date: 08/29/99

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