AGREEMENT OF LEASE

AGREEMENT OF LEASE made as of the 18th day of January, 1996 between RECKSON OPERATING PARTNERSHIP, L. P., a limited partnership having its principal office at 225 Broad hollow Road, Suite 212 West, Melville, New York 11747 (hereinafter referred to as Landlord"), and AMERICAN TISSUE CORPORATION, a corporation organized under the laws of the State of New York, having its principal office at 35 Engle Street, Hicksville, New York 11801 (hereinafter referred to as "Tenant")

RECITAL

Landlord has agreed to demise and lease unto Tenant and Tenant has agreed to hire and take from Landlord the real property and the building and other improvements thereon known as and located at 85 Nicon Court, Hauppauge, New York, as shown on Exhibit A annexed hereto (such real property, building and improvements being hereinafter referred to as the "Premises" and such building being hereinafter referred to as the "Building"). Now, therefore, inconsideration of the terms, conditions and covenants of this Lease, it is hereby agreed as follows:

TERM

1. Landlord hereby leases the Premises to Tenant and Tenant hereby hires the Premises from Landlord for a term of five (5) years which shall commence on February 1, 1996 (the "Commencement Date") and shall end on January 31, 2001 (the "Expiration Date") unless such term shall sooner cease or expire as hereinafter provided. If on the foregoing date specified for the Commencement Date the Landlord's Work, as hereinafter described in Paragraph 6 hereof, is not "Substantially Completed" (hereinafter defined), then the Term Commencement Dates hall be postponed until the sooner to occur of (a) Tenant's occupancy for the conduct of its business, or (b) the date on which Landlord's Work shall be Substantially Completed and the term of this Lease shall be extended so that the expiration date shall be five (5) years after the last day of the month in which the Commencement Date occurs. "Substantially Completed", as used herein, is defined to mean when:

(a) The only items of Landlord's Work to be completed are those which do not materially interfere with Tenant's use and occupancy of the Demised Premises. If Landlord shall be delayed from achieving Substantial Completion of Landlord's Work as a result of the performance or completion of any work, labor or services by Tenant or a party employed by Tenant, then the commencement of the Term of this lease and the payment of rent hereunder shall be accelerated by the number of days of such delay. Tenant waives any right to rescind this Lease under Section 223-a of the New York Real Property Law or any successor statute of similar import then in force and further waives the right to recover any damages which may result from Landlord's failure to deliver possession of the Premises on the Commencement Date.

TITLE

2. The Premises are-let subject to covenants, restrictions and easements of record ("Permitted Encumbrances"), governmental laws, rules, regulations and orders, and the reservation by Landlord of all air rights above, around and about the Premises and all rights to increase the sizes of surrounding buildings based on the air rights appurtenant to the Premises, as, if and when permitted by any present or future zoning laws, ordinances, orders or regulations. Landlord represents that the above-referenced covenants, restrictions and easements of record shall not materially impair Tenant's permitted use of the Premises. Tenant shall not be required to incur a financial obligation in complying with the above Permitted Encumbrances except to the extent such obligations are due to the acts of Tenant, it's employees, agents, invitees or permitted licensees or permitted assigns.

RENT

3. (a) Tenant covenants to pay to Landlord at its principal office, or at such place as Landlord shall from time to time direct in writing, the minimum annual rent set forth below, and the additional rent required to be paid pursuant to the terms of this Lease. Minimum annual rent and such other additional rent and charges which Tenant shall be required to pay are hereinafter sometimes referred to as "Rent". Minimum annual rent shall be as follows:

During the period February 1, 1996 through January 31, 1997, the minimum annual rent shall be $446,579.52, payable $in equal monthly installments of$37,214.96.

During the period February 1, 1997 through January 31, 1998, the minimum annual rent shall be $459,976.92, payable in equal monthly installments of$38,331.41.

During the period February 1, 1998 through January 31, 1999, the minimum annual rent shall be $473,776.20, payable in monthly installments of$39,481.35.

During the period February 1, 1999 through January 31, 2000, the minimum annual rent shall be $487,989.48, payable in equal monthly installments of$40,665.79.

During the period February 1, 2000 through January 31, 2001, the minimum annual rent shall be $502,629.12, payable in monthly installments of$41,885.76.

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