Exhibit 10.2




 





 


 


LEASE


 


 


dated January 9, 2006


 


between


 


NORTH STREET ASSOCIATES LLC


 


as Lessor


 


and


 


 


ATLANTIC EXPRESS TRANSPORTATION CORP.


 


as Lessee


 


Affecting
premises commonly known as 7 NORTH STREET, 3 NORTH STREET,

2153 RICHMOND TERRACE, in Staten Island, New York.




 





 





















 


 


	
  1 — Demised Premises and
  Lease Term

  	
   

  
	
  2 — Rent

  	
   

  
	
  3 — No Counterclaim or
  Abatement

  	
   

  
	
  4 — Use of Demised
  Premises

  	
   

  
	
  5 — Condition of Demised
  Premises

  	
   

  
	
  6 — Maintenance and Repair

  	
   

  
	
  7 — Alterations and
  Additions

  	
   

  
	
  8 — Impositions

  	
   

  
	
  9 — Compliance With
  Requirements

  	
   

  
	
   10 — Liens

  	
   

  
	
   11 — Permitted Contests

  	
   

  
	
   12 — Utility Services

  	
   

  
	
   13 — Insurance

  	
   

  
	
   14 — Indemnification By Lessee

  	
   

  
	
   15 — Damage or Destruction

  	
   

  
	
   16 — Taking of the Demised Premises

  	
   

  
	
   17 — Quiet Enjoyment

  	
   

  
	
   18 — Right to Cure Lessee’s Default

  	
   

  
	
   19 — Events of Default and Termination

  	
   

  
	
   20 — Repossession

  	
   

  
	
   21 — Reletting

  	
   

  
	
   22 — Assignment of Subrents

  	
   

  
	
   23 — Lessee’s Equipment

  	
   

  
	
   24 — Security Deposit

  	
   

  
	
   25 — Survival of Obligations; Damages

  	
   

  
	
   26 — Injunction

  	
   

  
	
   27 — Waivers

  	
   

  
	
   28 — Lessor’s Remedies Cumulative

  	
   

  
	
   29 — Assignment and Subletting

  	
   

  
	
   30 — Subordination and Attornment

  	
   

  
	
   31 — Entry by Lessor

  	
   

  
	
   32 — Conveyance by Lessor

  	
   

  
	
   33 — No Merger of Title

  	
   

  
	
   34 — Acceptance of Surrender

  	
   

  
	
   35 – Holdover Tenancy

  	
   

  
	
   36 — End of Lease Term

  	
   

  
	
   37 — Option to Extend Lease Term

  	
   

  
	
   38 — Brokerage

  	
   

  
	
   39 — Definitions

  	
   

  
	
   40 — Notices

  	
   

  
	
   41 – Communications Tower

  	
   

  
	
   42 – Miscellaneous

  	
   

  
	
   Exhibit A — Description of Land

  	
   

  



 





















 


LEASE


 


LEASE,
dated January 9, 2006, between NORTH STREET ASSOCIATES LLC, a NEW YORK
limited liability company, having an address at 55 West 47th Street,
New York, New York 10036 (“Lessor”), and ATLANTIC EXPRESS TRANSPORTATION CORP.,
a NEW YORK corporation, having an address at 7 NORTH STREET, STATEN ISLAND, NEW
YORK 10302 (“Lessee”).


 


1.  The Demised
Premises and Lease Term


 


In
consideration of the Rent hereinafter reserved and the terms, covenants and
conditions set forth in this Lease to be observed and performed by Lessee,
Lessor hereby demises and leases to Lessee, and Lessee hereby rents and takes
from Lessor, the following property (collectively hereinafter referred to as
the “Demised Premises”):  (a) all
the land (the “Land”) described in Exhibit A hereto and designated as Section 5,
Block 1070, Lots 1, 31 and 20 ; (b) all buildings, structures and other
improvements (the “Improvements”) now or hereafter located on the Land, other
than Lessee’s Equipment as hereinafter defined; and (c) all rights of way
or of use, servitudes, licenses, tenements, appurtenances and easements now or
hereafter belonging or pertaining to any of the foregoing; TO HAVE AND TO HOLD the Demised Premises
unto Lessee, and the permitted successors and assigns of Lessee, upon and
subject to all of the terms, covenants and conditions herein contained, for a
term (the “Lease Term”) of TEN YEARS, commencing on January 9, 2006 and
expiring on December 31, 2015, unless the Lease Term shall sooner
terminate pursuant to any of the conditional limitations or other provisions of
this Lease.


 


2.  Rent


 


Lessee
covenants to pay to Lessor as a net minimum rent (the “Fixed Rent”) during the
Lease Term $357,000.00 per annum for the principal of the Lease Term which
precedes December 31, 2006, and $364,140.00 per annum from January 1,
2007 until December 31, 2007, and $371,422.80 per annum from January 1,
2008 until December 31, 2008, and $378,851.26 per annum from January 1,
2009 until December 31, 2009, and $386,428.29 per annum from January 1,
2010 until December 31, 2010, and $394,156.86 per annum from January 1,
2011 until December 31, 2011, and $402,039.99 per annum from January 1,
2012 until December 31, 2012, and $410,080.80 per annum from January 1,
2013 until December 31, 2013, and $418,282.41 per annum from January 1,
2014 until December 31, 2014, and $426,648.06 per annum from January 1,
2015 until December 31, 2015.


 


The
Fixed Rent shall be payable in advance in equal monthly installments on the
first day of each calendar month.  If the
Lease Term does not commence on the first day of a


 





















 


month, the Fixed Rent for
the month in which the Lease Term commences shall be appropriately
apportioned.  The first installment of
Fixed Rent shall be paid simultaneously with the execution of this Lease.  Each date on which Fixed Rent is payable
hereunder is hereinafter referred to as a “Rent Payment Date”.


 


Lessee
also covenants to pay, from time to time as provided in this Lease, as
Additional Rent:  all other amounts and
obligations which Lessee assumes or agrees to pay under this Lease; interest at
the rate of ten percent per annum on such of the foregoing amounts and
obligations as are payable to Lessor and are not paid within ten days after the
due date (or, if a demand therefor is required by the terms of this Lease,
within ten days after such demand), from the due date or such demand, as the
case may be, until the payment thereof; and interest at the rate of ten percent
per annum on all installments of Fixed Rent not paid on the due date, from the
due date until paid.  If Lessee fails to
pay any such Additional Rent, Lessor shall have all the rights, powers and
remedies provided for in this Lease or at law or in equity or otherwise in the
case of nonpayment of rent. Additional Rent shall specifically include any and
all utilities, whether paid directly to the providers or to Landlord, full
amount of real estate taxes and any and all expenses incurred in connection
with environmental issues relating to the Premises.


 


All
Fixed Rent and Additional Rent (collectively hereinafter referred to as “Rent”)
shall be paid in such coin or currency (or, subject to collection, by good
check payable in such coin or currency) of the United States of America as at
the time shall be legal tender for the payment of public and private debts, at
the office of Lessor as set forth above, or at such place and to such person as
Lessor from time to time may designate.


 


3.  No
Counterclaim or Abatement


 


All
Rent shall be absolutely net to Lessor so that this Lease shall yield to Lessor
the full amount of the installments thereof throughout the Lease Term without
deduction.  All Rent shall be paid to
Lessor without notice, demand, counterclaim, setoff, deduction or defense, and
nothing shall suspend, defer, diminish, abate or reduce any Rent, except as
otherwise specifically provided in this Lease.


 


The
obligations and liabilities of Lessee hereunder in no way shall be released,
discharged or otherwise affected (except as expressly provided herein) by
reason of:  any damage to or destruction
of or any Taking of the Demised Premises or any part thereof; any restriction
or prevention of or interference with any use of the Demised Premises or any
part thereof; any title defect or encumbrance or any eviction from the Demised
Premises or any part thereof by title paramount or otherwise; any bankruptcy,
insolvency, reorganization, composition, adjustment, dissolution, liquidation
or other like proceeding relating to Lessor, or any action taken with respect
to this Lease by any trustee or receiver of Lessor, or by any court, in any
such proceeding; any claim which Lessee has or might have against Lessor; any
failure on the part of Lessor to comply with or perform any of the terms hereof
or of any other agreement with Lessee; or any other occurrence whatsoever,
whether similar or dissimilar to the foregoing, whether or not Lessee shall
have notice or knowledge of any of the foregoing.  Except as expressly provided herein, Lessee
waives all rights now or hereafter conferred by statute or otherwise to quit,


 


2





















 


terminate or surrender this
Lease or the Demised Premises or any part thereof, or to receive any abatement,
suspension, deferment, diminution or reduction of any Rent payable by Lessee
hereunder.


 


4.  Use of
Demised Premises


 


Lessee
covenants that the Demised Premises shall be used solely for VEHICLE AND BUS
PARKING, MAINTENANCE AND REPAIR, administrative offices, lodging with respect
to 3 North Street and for no other purpose, unless approved in writing by
Lessor.


 


Lessee
shall not do or permit any act or thing which is contrary to any Legal
Requirements or Insurance Requirements, or which might impair the value or
usefulness of the Demised Premises or any part thereof.  Lessee shall not use, or allow the Demised
Premises or any part thereof or any Improvements now or hereafter erected
thereon or any appurtenances thereto to be used or occupied, for any unlawful
purpose or in violation of any certificate of occupancy, and shall not suffer
any act to be done or any condition to exist within the Demised Premises or any
part thereof, or in any Improvements now or hereafter erected thereon, or on
any appurtenance to the Demised Premises, or permit any article to be
brought therein, which may be dangerous, unless safeguarded as required by law,
or which may constitute a nuisance, public or private, or which may make void
or voidable any insurance in force with respect thereto.


 


Lessee
shall not do or suffer any waste, damage, disfigurement or injury to the
Demised Premises.


 


Lessee
shall not permit the spilling, discharge, release, deposit or placement on the
Demised Premises or any part thereof, whether in containers or other
impoundments, of any substance which is a hazardous or toxic substance within
the meaning of any applicable environmental law.


 


Landlord
shall be authorized to build a dock on the Premises and utilize it in a way to
receive income.


 


5.  Condition of
Demised Premises


 


Lessee
represents that Lessee has examined and is fully familiar with the physical
condition of the Demised Premises, the Improvements thereon, the sidewalks and
structures adjoining the same, subsurface conditions, and uses thereof.  Lessee accepts the same, without recourse to
Lessor, in the condition and state in which they now are, and agrees that the
Demised Premises complies in all respects with all requirements of this
Lease.  Lessor makes no representation or
warranty, express or implied in fact or by law, as to the nature or condition
of the Demised Premises, or its fitness or availability for any particular use,
or the income from or expenses of operation of the Demised Premises.  Lessor shall not be liable for any latent or
patent defect therein.


 


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6.  Maintenance
and Repair


 


Lessee,
at all times during the Lease Term and at Lessee’s expense, shall keep the
Demised Premises, and all Improvements now or hereafter located thereon, and
all facilities and equipment thereon, and the adjoining sidewalks, curbs,
vaults and vault space, if any, streets and ways, and all appurtenances to the
Demised Premises, in a good and clean order and condition and in such condition
as may be required by all Legal Requirements and Insurance Requirements, and
promptly shall make all necessary or appropriate repairs, replacements and
renewals thereof, whether interior or exterior, structural or nonstructural,
ordinary or extraordinary, or foreseen or unforeseen.  All repairs, replacements and renewals shall
be equal in quality and class to the original work.  Lessee waives any right created by any law
now or hereafter in force to make repairs to the Demised Premises at Lessor’s
expense.


 


Lessee,
at Lessee’s expense, shall do or cause others to do every act necessary or
appropriate for the preservation and safety of the Demised Premises by reason
of or in connection with any excavation or other building operation upon the
Demised Premises or any adjoining property, including without limitation all
shoring of foundations and walls of the Improvements or of the ground adjacent
thereto, whether or not the owner of the Demised Premises shall be required by
any Legal Requirement to take such action or shall be liable for failure to do
so.


 


7.  Alterations
and Additions


 


Lessee
shall not be entitled to make any alterations of or additions to the Demised
Premises without the prior written consent of Lessor in each instance.


 


The
title to all additions, repairs and replacements to any Improvements made
during the Lease Term and any renewal thereof, forthwith shall vest in Lessor,
and said Improvements, additions, repairs and replacements shall be and become
the sole and absolute property of Lessor, without any obligation of payment by
Lessor therefor.


 


8.  Impositions


 


Subject
to Article 11 relating to contests, Lessee, at Lessee’s expense, shall bear,
pay and discharge all Impositions at least twenty days prior to the last day
upon which the same may be paid without any interest, penalty, fine or cost
being added for the late payment thereof, and shall furnish to Lessor for
inspection within thirty days after request, official receipts of the
appropriate taxing authority or other proof satisfactory to Lessor evidencing
such payment.  If by law any Imposition
may be paid in installments, Lessee shall be obligated to pay only those
installments as they become due from time to time before any interest, penalty,
fine or cost may be added thereto.  Any
Imposition relating to the fiscal period of the taxing authority, part of which
is included within the Lease Term and a part of which precedes or extends beyond
the Lease Term, shall, if Lessee shall not be in default hereunder, be
apportioned between Lessor


 


4





















 


and Lessee as of the
commencement or expiration, as the case may be, of the Lease Term.  An official certificate or statement issued
or given by any sovereign or governmental authority or agency, or any public
utility, showing the existence of any Imposition, or interest or penalties
thereof, the payment of which is the obligation of Lessee as provided herein,
shall be prima facia evidence for all purposes of this Lease of the
existence, amount and validity of such Imposition.


 


Upon
the occurrence and continuance of an event of default, at the option of Lessor,
which may be exercised by written notice to Lessee, Lessee shall pay to Lessor,
on each Rent Payment Date during the Lease Term, an amount equal to one twelfth
(1/12th) of all Impositions becoming due within the ensuing twelve months, as
reasonably estimated by Lessor.  Such
estimate, and consequently the monthly installments, may be adjusted at any
time by Lessor.  Each year Lessor shall
provide to Lessee an accounting, and if such accounting shows that the total of
the monies received hereunder exceeds the amounts paid by Lessor for all
Imposition, Lessee shall be credited for the difference against the next
installments becoming due hereunder.  If
immediately prior to any Rent Payment Date any Imposition is due, in whole or
in part, or if on the rendering of an accounting as aforesaid a deficiency
exists or may reasonably be expected, Lessee shall pay the same to Lessor on
demand.  The obligations of the parties
hereunder shall survive the expiration or termination of the Lease Term.


 


9.  Compliance
With Requirements


 


Subject
to Article 11 relating to contests, Lessee, at all times during the Lease
Term and at Lessee’s expense, promptly and diligently shall:  comply with all Legal Requirements and
Insurance Requirements, whether or not compliance therewith shall require
structural changes in the Improvements or interfere with the use and enjoyment
of the Demised Premises or any part thereof; comply with any instruments of
record at the time affecting the Demised Premises or any part thereof;  and procure, maintain and comply with all
permits, licenses, franchises and other authorizations required for any use of
the Demised Premises or any part thereof then being made, including without
limitation all permits, licenses, and franchises which Lessee is required to
obtain for the proper erection, installation, operation or maintenance of the
Improvements or Lessee’s Equipment or any part thereof.


 


From
time to time at the request of Lessor, Lessee at Lessee’s expense shall
execute, file and record such certificates of compliance, continuation
statements, and other documents and certificates, and shall pay such fees and
comply with such laws and regulations, as are necessary or appropriate to
preserve and protect any right of Lessor under this Lease.  Lessee shall furnish to Lessor an opinion
satisfactory to Lessor, of counsel satisfactory to Lessor, with respect to the
adequacy of such filings and recording.


 


If
Lessee’s use of the Demised Premises is or becomes a legal nonconforming use
under any Legal Requirement, Lessee shall continually occupy and use the
Demised Premises without interruption and comply with such other requirements
as may be necessary or appropriate so that such use does not become illegal and
may be continued by future occupants of the Demised Premises following the
expiration or termination of the Lease Term.


 


5





















 


Lessee
shall not permit all or any part of the Demised Premises to be availed of to
qualify for fulfillment of any municipal or governmental requirements for the
construction or maintenance of any buildings or other improvements on property
other than the Demised Premises, and no building or other improvement
constructed on the Demised Premises shall rely on other property not demised
hereunder in order to qualify for fulfillment of any governmental
requirements.  Lessee shall not by act or
omission impair the integrity of the Demised Premises as a zoning lot or lots
separate and apart from all other property. 
Any attempt by Lessee to take any action which would violate any
provision of this paragraph shall be null and void.


 


During
any period of the Lease Term when any perimeter portion of the Demised Premises
shall be unimproved by any structure, wall, fence or gate, Lessee shall prevent
the same from being used by the public, as such, without restriction or in such
manner as might tend to impair Lessor’s title to the Demised Premises or any
part thereof, or in such manner as might create an enforceable claim or claims
of adverse use or possession by the public, or of implied dedication, of the
Demised Premises or any part thereof. 
Such perimeter portion of the Demised Premises so unimproved at all
times shall be subject to such rules or directions as Lessor from time to
time may make or give in writing with respect to the maintenance and use
thereof, consistent with Lessor’s protection against a claim or claims of the
public.  All such rules and
directions so made or given shall be deemed to be and become incorporated in
this Lease by reference and shall be complied with and performed fully and
promptly by Lessee at Lessee’s expense. 
Lessee hereby acknowledges that Lessor does not hereby consent,
expressly or by implication, to the unrestricted use or possession of any
portion of the Demised Premises by the public.


 


10.  Liens


 


Lessee
shall not directly or indirectly create or permit to be created or to remain,
and shall discharge, any mortgage, lien, security interest, encumbrance or
charge on, pledge of or conditional sale or other retention agreement with
respect to the Demised Premises or any part thereof, Lessee’s interest therein,
or any Fixed Rent or other Rent payable under this Lease, other than:  liens for Impositions not yet payable, or
payable without the addition of any fine, penalty, interest or cost for
nonpayment, or being contested as permitted in Article 11 hereof; and the
liens of mechanics, materialmen, suppliers or vendors, or right thereto,
incurred in the ordinary course of business for sums which under the terms of
the related contract are not at the time due, provided that adequate provision
for the payment thereof shall have been made and provisions of the following
paragraph are complied with.


 


If,
in connection with any work being performed by or for Lessee or any subtenant
or in connection with any materials being furnished to Lessee or any subtenant,
any mechanic’s lien or other lien or charge shall be filed or made against the
Demised Premises or any part thereof, or if any such lien or charge shall be
filed or made against Lessor, then Lessee, at Lessee’s expense, within thirty
days after such lien or charge shall have been filed or made, shall cause the
same to be canceled and discharged of record by payment thereof or filing a
bond or otherwise.  Lessee promptly and
diligently shall defend any suit, action or proceeding which may be brought for
the enforcement of such lien or charge; shall satisfy and discharge any


 


6





















 


judgment entered therein
within thirty days from the entering of such judgment by payment thereof or
filing a bond or otherwise; and on demand shall pay all damages, costs and
expenses, including reasonable attorneys’ fees, suffered or incurred by Lessor
in connection therewith.


 


Nothing
contained in this Lease shall constitute any consent or request by Lessor,
express or implied, for the performance of any labor or services or the
furnishing of any materials or other property in respect of the Demised
Premises or any part thereof, nor as giving Lessee any right, power or
authority to contract for or permit the performance of any labor or services or
the furnishing of any materials or other property in any fashion that would
permit the filing or making of any lien or claim against Lessor or the Demised
Premises.  Lessor shall have the right,
from time to time, to place upon the Demised Premises in a conspicuous place
such sign or other notice as Lessor may deem necessary so as to give notice to
others of the provisions of the preceding sentence.


 


11.  Permitted
Contests


 


Lessee,
at Lessee’s expense, after prior written notice to Lessor, may contest, by
appropriate legal proceedings conducted in good faith and with due diligence,
the amount or validity or application, in whole or in part, of any Imposition
or any Legal Requirement, or the application of any instrument of record
referred to in Article 9 hereof, provided that:  Lessee shall first make all contested
payments, under protest if Lessee desires, unless such proceedings shall
suspend the collection thereof from Lessor, from any Rent and from the Demised
Premises; neither the Demised Premises, nor any part thereof or interest
therein, nor any Rent would be in any danger of being sold, forfeited, lost or
interfered with; in the case of a Legal Requirement, Lessor would not be in any
danger of any additional civil or criminal liability for failure to comply
therewith and the Demised Premises would not be subject to the imposition of
any lien as a result of such failure; and Lessee shall have furnished such
security, if any, as may be reasonably requested by Lessor.


 


Prior
to any Imposition being contested becoming due, and from time to time
thereafter until payment thereof shall be made or shall be determined not to be
payable by the appropriate body having jurisdiction, Lessee shall deposit and
maintain with Lessor an amount of money, or other security satisfactory to
Lessor, sufficient to pay the items so contested or intended to be contested
together with the interest and penalties thereon which may accrue during such
contest, which amount shall be held by Lessor and may be applied by Lessor to
the payment of such items, interest and penalties, when finally fixed and
determined.  If the amount deposited with
Lessor shall exceed the amount of such items, and any interest and penalties,
any excess remaining in Lessor’s hands after the payment thereof shall be
returned to Lessee.  At any time, prior
to or during any such contest, Lessor, after written notice to Lessee, may pay
and apply said money, or so much thereof as may be required, to the payment of
any Impositions, interest and penalties which, in Lessor’s judgment, should be
paid to prevent the sale of the Demised Premises or any part thereof or of the
lien created thereby, or to prevent the commencement of any action of
foreclosure or otherwise, by the holder of any such lien.  To the extent that the amount of money so
deposited with Lessor shall be insufficient fully to satisfy and discharge any
such Imposition, and interest and penalties thereon, Lessor may pay the same
and


 


7





















 


the deficiency so paid by
Lessor shall be and become immediately due and payable by Lessee to Lessor.


 


12.  Utility
Services


 


Lessee
shall pay all charges for all public or private utility services and all
sprinkler systems and protection services at any time rendered to or in
connection with the Demised Premises or any part thereof; shall comply with all
contracts relating to any such services; and shall do all other things required
for the maintenance and continuance of all such services.


 


13.  Insurance


 


Lessee,
at all times during the Lease Term and at Lessee’s expense, shall provide and
maintain in full force and effect with insurers approved by Lessor:  (a) insurance with respect to the
Improvements against loss or damage by fire, lightning, windstorm, hail,
explosion, riot, riot attending strike, civil commotion, aircraft, vehicles,
smoke and other risks from time to time included under “extended coverage”
policies, in an amount equal to at least 100% of the full replacement value of
the Improvements, and in any event in an amount sufficient to prevent Lessor or
Lessee from becoming a coinsurer of any loss under applicable policies, which
shall be written on a replacement cost basis; (b) public liability and
property damage insurance protecting Lessor against any and all liability
occasioned by negligence, occurrence, accident or disaster in or about the
Demised Premises or any part thereof, or the Improvements now or hereafter
erected thereon, or adjoining sidewalks, curbs, vaults and vault space, if any,
streets or ways, or any appurtenances thereto, in amounts approved from time to
time by Lessor, which amounts at the date hereof shall be, in the case of
public liability, $1,000,000 per person and $3,000,000 per accident, and in the
case of property damage, $500,000; (c) explosion insurance in respect of
any steam and pressure boilers and similar apparatus located on the Demised
Premises in amounts approved by Lessor, which amount at the date hereof shall
be $500,000; (d) war risk insurance when and to the extent obtainable from
the Federal government or any agency thereof; (e) appropriate workers’
compensation or other insurance against liability arising from claims of
workers in respect of and during the period of any work on or about the Demised
Premises; (f) if the Demised Premises are located in an area which has
been identified by the Secretary of Housing and Urban Development as a flood
hazard area, flood insurance in an amount at least equal to the maximum limit
of coverage available for the Demised Premises under the National Flood
Insurance Act of 1968; and (g) insurance against such other hazards and in
such amounts as is customarily carried by prudent owners and operators of
similar properties, and as Lessor reasonably may request.  Lessee shall comply with such other
requirements as Lessor from time to time reasonably may request for the
protection by insurance of Lessor’s interests.


 


All
insurance maintained by Lessee pursuant to this Article 13:  (a) shall, except for workers’
compensation insurance, name Lessor and Lessee as insureds, as their respective
interests may appear, and shall include an effective waiver by the issuer of
all rights of subrogation against any named insured or such insured’s interest
in the Demised Premises or any income derived therefrom; (b) shall provide
that all insurance claims for losses of less than


 


8





















 


$50,000 shall be adjusted by
Lessee, and all insurance claims for losses of such amount or more, except for
workers’ compensation insurance which shall be adjusted by Lessee, shall be
adjusted by Lessor; (c) shall provide, except in the case of public
liability and workers’ compensation insurance, that insurance proceeds shall be
payable to Lessor for the benefit of Lessor and Lessee, as their respective
interests may appear; (d) shall provide that any losses shall be payable
notwithstanding any act or failure to act or negligence of Lessor or Lessee or
any other person; (e) shall provide that no cancellation, reduction in
amount or material change in coverage thereof shall be effective until at least
ten days after receipt by Lessor and Lessee of written notice thereof; and (f) shall
be satisfactory in all other respects to Lessor acting reasonably.  Any such insurance, at Lessee’s option, may
be provided through a blanket policy or policies in form and substance
satisfactory to Lessor, provided such policies shall provide in a manner
satisfactory to Lessor for specific allocation to the Demised Premises of the
coverage afforded by such blanket policy or policies, and provided further that
such blanket policy or policies give to Lessor no less protection than that
which would be afforded by separate policies.


 


Upon
the execution of this Lease and thereafter not less than fifteen days prior to
the expiration date of any policy delivered pursuant to this Article 13,
Lessee shall deliver to Lessor certificates of the insurer, in form and
substance satisfactory to Lessor, as to the issuance and effectiveness of such
policies and the amounts of coverage afforded thereby, accompanied by copies of
such policies.


 


If
at any time Lessee shall neglect or fail to provide or maintain insurance or to
deliver insurance policies in accordance with this Article 13, Lessor may
effect such insurance as agent for Lessee, by taking out policies in companies
selected by Lessor, and the amount of the premiums paid for such insurance
shall be paid by Lessee to Lessor on demand. 
Lessor, in addition to Lessor’s other rights and remedies, shall be
entitled to recover as damages for any breach of this Article 13 the
uninsured amount of any loss, liability, damage, claim, costs and expenses
suffered or incurred by Lessor, and shall not be limited in the proof of damages
to the amount of the insurance premium not paid by Lessee for such insurance.


 


14. 
Indemnification By Lessee


 


Lessee
shall indemnify and hold Lessor harmless from and against all liabilities,
obligations, claims, damages, fines, penalties, interest, causes of action,
costs and expenses, including reasonable attorneys’ fees (but excluding any
income or excess profits or franchise taxes of Lessor determined on the basis
of general income or revenue or any interest or penalties in respect thereof),
imposed upon or incurred by or asserted against Lessor or the Demised Premises
by reason of the occurrence or existence of any of the following, whether or
not resulting from any negligent act or omission of Lessor:  Lessee’s use and operation of the Demised
Premises or any interest therein, or Lessee’s receipt of any rent or other sum
therefrom; any accident, injury to or death of persons (including workers) or
loss of or damage to property occurring, or claimed to have occurred, on or
about the Demised Premises or any part thereof, or any Improvements now or
hereafter erected thereon, or the adjoining sidewalks, curbs, vaults or vault
spaces, if any, streets or ways, or appurtenances thereto; any use or condition
of the Demised Premises or any part thereof, or any Improvements now or
hereafter erect thereon, or


 


9





















 


the adjoining sidewalks,
curbs, vaults and vault spaces, if any, streets or ways, or appurtenances
thereto; any failure on the part of Lessee promptly and fully to comply with or
perform any of the terms, covenants or conditions of this Lease; or performance
of any labor or services or the furnishing of any materials or other property
in respect of the Demised Premises or any part thereof.  In the case any suit, action or proceeding is
brought against Lessor or filed against the Demised Premises or any part
thereof by reason of any such occurrence, Lessee, upon Lessor’s request and at
Lessee’s expense, shall resist and defend such suit, action or proceeding, or
cause the same to be resisted and defended by counsel designated by Lessee
subject to Lessor’s approval which approval shall not be unreasonably withheld.


 


Tenant
shall indemnify and hold harmless Landlord and its successors and assigns from
all costs, damages, expenses, liability and harm resulting from any spill,
release or presence of toxic or hazardous materials (hereinafter an “Environmental
Conditions”) and the violation of any federal, state or local laws addressing
environmental matters (hereinafter “Environmental Law”) occurring or existing
with respect to any portion of the demised premises, prior to the date on which
the Tenant first commenced occupancy of such Premises.


 


The
obligations of Lessee under this Article 14 shall survive the expiration
or termination of the Lease Term.


 


15.  Damage to
or Destruction of the Demised Premises


 


If
there is any material damage to or destruction of the Demised Premises or any
part thereof, Lessee promptly shall give written notice thereof to Lessor,
generally describing the nature and extent of such damage or destruction.


 


If
there is any damage to or destruction of the Demised Premises or any part
thereof, Lessee, at Lessee’s expense whether or not the insurance proceeds, if
any, on account of such damage or destruction shall be sufficient for the
purpose, promptly shall commence and complete, subject to Unavoidable Delays,
the restoration, replacement or rebuilding of the Demised Premises as nearly as
possible to its value, condition and character immediately prior to such damage
or destruction, with such alterations and additions as may be made at Lessee’s
election pursuant to and subject to the terms, covenants and conditions of Article 7.  Pending the completion of such Restoration,
Lessee shall perform all temporary work and take all such actions as may be
necessary or desirable to protect and preserve the Demised Premises.


 


Insurance
proceeds received by Lessor on account of any damage to or destruction of the
Demised Premises or any part thereof, less the costs and expenses incurred by
Lessor or Lessee in the collection thereof, including without limitation fees
and expenses of adjusters and attorneys, shall be applied as hereinafter
provided.


 


Net
insurance proceeds received on account of any damage to or destruction of the
Demised Premises or any part thereof, unless Lessee is in default under this
Lease, shall be paid to Lessee or as Lessee may direct, from time to time as
Restoration progresses, to pay or to reimburse Lessee for the cost of Restoration,
upon written request of Lessee accompanied by


 


10





















 


evidence, satisfactory to
Lessor that the amount requested has been paid or is then due and payable and
is properly a part of such cost, that there are no mechanics’ or similar liens
for labor or materials theretofore supplied in connection with the Restoration,
and that the balance of said proceeds after making the payment requested will
be sufficient to pay the balance of the cost of Restoration.  Upon receipt by Lessor of evidence
satisfactory to Lessor that the Restoration has been completed and the cost
thereof has been paid in full, and that there are no mechanics’ or similar
liens for labor or materials supplied in connection therewith, the balance, if
any, of such proceeds shall be paid to Lessor.


 


Any
insurance proceeds held by Lessor on any termination of this Lease and not
required to be paid to Lessee pursuant to this Article 15, shall be paid
to and retained by Lessor.


 


16.  Taking of
the Demised Premises


 


If
there is a Taking of the fee of the entire Demised Premises, other than for a
temporary use, this Lease shall terminate as of the date of such Taking.  In case of a Taking, other than for temporary
use, of such perpetual easement on the entire Demised Premises, or of such a
substantial part of the Demised Premises, as shall result, in the good faith
judgment of Lessor, in the Demised Premises remaining after such Taking (even
after Restoration where made) being unsuitable for the use contemplated in this
Lease, Lessee may terminate this Lease by written notice to Lessor given within
sixty days after such Taking, as of a date specified in such notice within
ninety days after such Taking.  Any
Taking of the Demised Premises of the character referred to in this Article 16,
which results in the termination of this Lease, is referred to herein as a “Total
Taking”.


 


If
there is a Taking of the Demised Premises other than a Total Taking, this Lease
shall remain in full force and effect as to the principal of the Demised
Premises remaining immediately after such Taking, without any abatement or
reduction of Rent, except as may be expressly provided in this Article 16,
and Lessee, at Lessee’s expense whether or not the awards or payments, if any,
on account of such Taking will be sufficient for the purpose, promptly shall
commence and complete, subject to Unavoidable Delays, Restoration of the
Demised Premises as nearly as possible to its value, condition and character
immediately prior to such Taking, except for any reduction in area caused
thereby, provided that in case of a Taking for temporary use Lessee shall not
be required to effect Restoration (other than temporary work and actions
necessary or desirable for the protection of the Demised Premises) until such
Taking for a temporary use is terminated.


 


Awards
and other payments on account of a Taking, less fees, costs and expenses
incurred in connection therewith, shall be applied as follows:


 


(a) 
Net awards and payments received on account of a Taking, other than a Taking
for temporary use or a Total Taking, shall be held and applied from time to
time as Restoration progresses, to pay or to reimburse Lessee for the cost of
Restoration, upon written request of Lessee accompanied by evidence, satisfactory
to Lessor, that the amount requested has been paid or is then due and


 


11





















 


payable
and is properly a part of such cost, that there are no mechanics’ or similar
liens for labor or materials theretofore supplied in connection with the
Restoration, and that the balance of said proceeds after making the payment
requested will be sufficient to pay the balance of the cost of
Restoration.  Upon the completion of the
Restoration, the balance, if any, of such awards and payments shall be paid to
and retained by Lessor.


 


(b) 
Net awards and payments received on account of a Taking for temporary use shall
be held and applied to the payment of Rent until such Taking for temporary use
is terminated and Restoration, if any, has been completed, provided that, if
any portion of such award or payment is made by reason of any damage to or
destruction of the Demised Premises, such portion shall be held and applied as
provided in the first sentence of clause (a) of this Article 16.  The balance, if any, of such awards and
payments, unless Lessee is in default hereunder, shall be paid to Lessee.


 


(c) 
All awards and payments received on account of a Total Taking shall be paid to
Lessor.


 


Notwithstanding
the foregoing, if at the time of any Taking or at any time thereafter, Lessee
shall be in default under this Lease and such default shall be continuing,
Lessor is hereby authorized and empowered, in the name and on behalf of Lessee
and otherwise, to file and prosecute Lessee’s claim, if any, for an award on
account of any Taking and to collect such award and apply the same, after
deducting all fees, costs and expenses incident to the collection thereof, to
the curing of any then existing default under this Lease.


 


If
any portion of an award or other payment received on account of a Taking shall
be paid to Lessor pursuant to the second sentence of clause (a) of this Article 16,
each installment of Fixed Rent hereunder shall be reduced, commencing with the
first Rent Payment Date following the date of such payment, by an amount to be
computed by multiplying such installment in effect prior to such date by a
fraction, the numerator of which is the amount of the award or payment made to
Lessor in connection with such Taking after deduction of Lessor’s expenses in
the collection of such awards and payments, including without limitation fees
and expenses of appraisers and attorneys, and the denominator of which is the
fair market value of the Demised Premises as of the commencement date of this
Lease as determined by Lessor, acting reasonably, as reduced by the amount of
any other such award or payment previously made to Lessor pursuant to the
second sentence of clause (a) of this Article 16.


 


Revocation
by any public authority of any license or permit to maintain or use any vault
or other area within the streets adjoining the Demised Premises, shall not
affect this Lease, or diminish any Rent payable by Lessee hereunder, or
diminish any of Lessee’s other obligations hereunder.  Lessee shall comply with and perform all
laws, rules, orders, ordinances, regulations and requirements relating to said
vaults and other street areas.  Lessee
shall pay all fees, charges, taxes and other amounts imposed by reason of the
existence or use of said vaults or other street areas.


 


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17.  Quiet
Enjoyment


 


Lessor
covenants that so long as Lessee is not in default hereunder in the payment of
any Rent or compliance with or the performance of any of the terms, covenants
or conditions of this Lease on Lessee’s part to be complied with or performed,
Lessee shall not be hindered or molested by Lessor in Lessee’s enjoyment of the
Demised Premises.


 


18.  Right to
Cure Lessee’s Default


 


If
Lessee fails to make any payment or to comply with or perform any term,
covenant or condition of this Lease to be complied with or performed by Lessee,
Lessor may, but shall be under no obligation to, after thirty days’ notice to
Lessee (or upon shorter notice, or without notice, if necessary to meet an
emergency situation or time limitation of a Legal Requirement), make such
payment or perform or cause to be performed such work, labor, services, acts or
things, and take such other steps as Lessor may deem advisable, to comply with
any such term, covenant or condition which is in default.  Entry by Lessor upon the Demised Premises for
such purpose shall not waive or release Lessee from any obligation or default
hereunder.  Lessee shall reimburse Lessor
(with interest at the rate of ten percent per annum) for all sums so paid by
Lessor and all costs and expenses incurred by Lessor in connection with the
making of any payments, the performance of any act or other steps taken by
Lessor pursuant to this Article 18.


 


19.  Events of
Default and Termination


 


If
any one or more of the following events (“Events of Default”) shall occur:


 


(a) 
if Lessee shall fail to pay any Fixed Rent when as the same becomes due and
payable and such failure shall continue for more than five days after notice to
Lessee; or


 


(b) 
if Lessee shall fail to pay any Rent, other than Fixed Rent, when and as the
same becomes due and payable and such failure shall continue for more than ten
days after notice to Lessee; or


 


(c) 
if Lessee shall fail to comply with or perform any term, covenant or condition
of Articles 8, 9, 10 or 13, and such failure shall continue for more than
thirty days after Lessee receives notice of such failure, regardless of the
source of such notice; or


 


(d) 
if Lessee shall fail to comply with or perform any other term, covenant or
condition hereof, and such failure shall continue for more than thirty days
after notice thereof from Lessor, and Lessee within said period, subject to
Unavoidable 


 


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Delays,
shall not commence with due diligence and dispatch the curing of such default,
or, having so commenced, thereafter shall fail or neglect to prosecute or
complete with due diligence and dispatch the curing of such default for reasons
other than Unavoidable Delays; or


 


(e) 
if Lessee shall make a general assignment for the benefit of creditors, or
shall admit in writing Lessee’s inability to pay Lessee’s debts as they become
due, or shall file a petition in bankruptcy, or shall be adjudicated a bankrupt
or insolvent, or shall file a petition seeking any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any
present or future statute, law or regulation, or shall file an answer
admitting, or shall fail to contest, the material allegations of a petition
filed against Lessee in any such proceeding, or shall seek or consent to or
acquiesce in the appointment of any trustee, receiver or liquidator of Lessee
or any material part of Lessee’s properties; or


 


(f) 
if, within ninety days after the commencement of any proceeding against Lessee
seeking any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any present or future statute,
law or regulation, such proceeding shall not have been dismissed, or if, within
ninety days after the appointment without the consent of acquiescence of
Lessee, of any trustee, receiver or liquidator of Lessee or of any material
part of Lessee’s properties, such appointment shall not have been vacated; or


 


(g) 
if a final judgment for the payment of money in excess of $50,000 shall be
rendered against Lessee and, within sixty days after the entry thereof, such
judgment shall not have been discharged or execution thereof stayed pending appeal,
or if, within sixty days after the expiration of any such stay, such judgment
shall not have been discharged;


 


then, and in any such Event of Default, regardless
of the pendency of any proceeding which has or might have the effect of
preventing Lessee from complying with the terms, covenants or conditions of
this Lease, Lessor, at any time thereafter may give a written termination
notice to Lessee, and on the date specified in such notice (which shall be not
less than 15 days after such notice) this Lease shall terminate and, subject to
Article 25, the Lease Term shall expire and terminate by limitation, and
all rights of Lessee under this Lease shall cease, unless before such date (i) all
arrears of Rent (with interest at the rate of ten percent per annum) and all
costs and expenses, including reasonable attorneys’ fees, incurred by or on
behalf of Lessor hereunder, shall have been paid by Lessee, and (ii) all
other defaults at the time existing under this Lease shall have been fully
remedied to the satisfaction of Lessor. 
Lessee shall reimburse Lessor for all costs and expenses, including
reasonable attorneys’ fees, incurred by or on behalf of Lessor occasioned by or
in connection with any default by Lessee under this Lease.


 


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20. 
Repossession


 


If
an Event of Default shall have occurred and be continuing, Lessor, whether or
not the Lease Term shall have been terminated pursuant to Article 19, may
enter upon and repossess the Demised Premises or any part thereof by force,
summary proceedings, ejectment or otherwise, and may remove Lessee and all
other persons and any and all property therefrom.


 


21.  Reletting


 


At
any time or from time to time after the repossession of the Demised Premises or
any part thereof pursuant to Article 20, whether or not the Lease Term
shall have been terminated pursuant to Article 19, Lessor may (but shall
be under no obligation to) relet the Demised Premises or any part thereof for
the account of Lessee, for such term or terms (which may be greater than or
less than the period which would otherwise have constituted the balance of the
Lease Term) and on such conditions (which may include concessions or free rent)
and for such uses as Lessor, in Lessor’s absolute discretion, may determine,
and may collect and receive the rents therefrom.  Lessor, at Lessor’s option, may make such
alterations and decorations in the Demised Premises as Lessor, in Lessor’s sole
judgment, considers necessary or advisable for the purpose of reletting the
Demised Premises or any part thereof, and the making of such alterations and
decorations shall not operate or be construed to release Lessee from any
liability under this Lease.  Lessor shall
not be responsible or liable for any failure to relet the Demised Premises or
any part thereof or for any failure to collect any rent due upon any such
reletting.


 


22.  Assignment
of Subrents


 


Lessee
hereby irrevocably assigns to Lessor all rents due or to become due from any
assignee of Lessee’s interest hereunder and any sublessee or any tenant or
occupant of the Demised Premises or any part thereof, together with the right
to collect and receive such rents, provided that, so long as Lessee is not in
default under this Lease, such assignment shall not become effective and Lessee
shall have the right to collect such rents for Lessee’s own use and
purposes.  Upon any default by Lessee
under this Lease, Lessor shall have absolute title to such rents and the
absolute right to collect the same. 
Lessor shall apply to the Rent due under this Lease the net amount
(after deducting all costs and expenses incident to the collection thereof and
the operation and maintenance, including repairs, of the Demised Premises) of
any rents so collected and received by Lessor. 
Lessee shall not demand or accept from any sublessee, tenant or occupant
of the Demised Premises or any part thereof, any payment, prepayment or advance
payment in respect of more than one rental period under the applicable sublease
and in no event shall Lessee demand or accept any payment, prepayment or
advance payment for a period exceeding one month.


 


23.  Lessee’s
Equipment


 


All
Lessee’s Equipment shall be the property of Lessee.


 


Any
Lessee’s Equipment not removed by Lessee, at Lessee’s expense, within thirty days
after any repossession of the Demised Premises, whether or not this Lease has
been


 


15





















 


terminated, shall be
considered abandoned by Lessee and may be appropriated, sold, destroyed or
otherwise disposed of by Lessor without notice to Lessee and without obligation
to account therefor; and Lessee shall pay Lessor, on demand, all costs and
expenses incurred by Lessor in removing, storing or disposing of any of Lessee’s
Equipment.  Lessee shall immediately repair
at Lessee’s expense all damage to the Demised Premises caused by any removal of
Lessee’s Equipment therefrom, whether effected by Lessee or by any other
person.  Lessor shall not be responsible
for any loss or damage to Lessee’s Equipment.


 


24.  Security
Deposit


 


Lessee
has deposited with Lessor the sum of $59,500.00 as security for the full and
faithful observance and performance by Lessee of the terms, covenants and
conditions of this Lease.  If Lessee
defaults in the observance or performance of any term, covenant or condition of
this Lease, including without limitation the payment of Rent, Lessor may use,
apply or retain the whole or any part of the security so deposited to the
extent required for the payment of any Rent or any other sum as to which Lessee
is in default or for any sum which Lessor may expend or may be required to
expend by reason of Lessee’s default, including without limitation any damages
or deficiency accrued before or after summary proceedings or other reentry by
Lessor.  If Lessee shall fully and
faithfully observe and perform all of the terms, covenants and conditions of
this Lease, the security, without interest, shall be returned to Lessee after
the end of the Lease Term and after delivery of entire possession of the
Demised Premises to Lessor.


 


In
the event of a sale, transfer or leasing of the Demised Premises by Lessor,
Lessor shall have the right to transfer the security to the vendee, transferee
or lessee, and Lessor thereupon shall be released by Lessee from all liability for
the return of such security.  Lessee
agrees to look solely to such new owner or landlord for the return of said
security.  The provisions of this
paragraph shall apply to every transfer or assignment of the security to a new
owner or landlord.  Lessee shall not
assign or encumber or attempt to assign or encumber the security, and neither
Lessor nor the successors or assigns of Lessee shall be bound by any such
assignment, encumbrance, or attempted assignment or encumbrance.


 


If
Lessor applies or retains all or any portion of the security, Lessee on demand
shall pay to Lessor the amount so applied or retained which shall be added to
the security so that the same shall be replenished to its former amount and so
that at all times the amount deposited shall be $59,500.00.


 


25.  Survival of
Lessee’s Obligations and Damages


 


No
expiration or termination of the Lease Term pursuant to this Lease, by
operation of law or otherwise (except as expressly provided herein), and no
repossession of the Demised Premises or any part thereof pursuant to this Lease
or otherwise, shall relieve Lessee of Lessee’s obligations or liabilities
hereunder, all of which shall survive such expiration, termination or
repossession.


 


16





















 


In
the event of any such expiration, termination or repossession, Lessee shall pay
to Lessor all Rent up to the time of such expiration, termination or
repossession, together with all costs and expenses incurred by Lessor in
connection with such termination or repossession including attorneys’ fees, and
thereafter Lessee, until the end of what would have been the Lease Term in the
absence of such expiration, termination or repossession, and whether or not the
Demised Premises or any part thereof shall have been relet, shall be liable to
Lessor for, and shall pay to Lessor, as liquidated and agreed and current
damages for Lessee’s default, (a) all Rent which would be payable under
this Lease by Lessee in the absence of such expiration, termination or
repossession, less (b) all net rents collected by Lessor from the tenants
or subtenants of the Demised Premises, if any, and the net proceeds, if any, of
any reletting affected for the account of Lessee pursuant to Article 21
after deducting from such proceeds all Lessor’s expenses in connection with
such reletting and other sums owed Lessor, including without limitation all
repossession costs, brokerage commissions, legal and accounting expenses,
attorneys’ fees, employees’ expenses, promotional expenses, reasonable alteration
costs, and expenses of preparation for such reletting.  Lessee shall pay such current damages monthly
on the Rent Payment Dates applicable in the absence of such expiration,
termination or repossession, and Lessor shall be entitled to recover the same
from Lessee on each such date.  Any suit
brought to collect said amounts for any month or months shall not prejudice in
any way the rights of Lessor to collect the deficiency for any subsequent month
by similar action or proceeding.


 


At
any time after such expiration, termination or repossession, whether or not
Lessor shall have collected any current damages as aforesaid, Lessor shall be
entitled to recover from Lessee, and Lessee shall pay to Lessor on demand, as
and for liquidated and agreed final damages for Lessee’s default and in lieu of
all current damages beyond the date of such demand, an amount equal to the
excess, if any, of (a) all Rent which would be payable under this Lease
from the date of such demand (or, if it be earlier, the date to which Lessee
shall have satisfied in full Lessee’s obligation under the preceding paragraph
of this Article 25 to pay current damages) until what would be the then
unexpired Lease Term in the absence of such expiration, termination or
repossession, over (b) the then fair net rental value of the Demised
Premises for the same period.  In
determining said fair net rental value, the rent realized by any reletting of
the Demised Premises, if such reletting is upon terms (other than rental
amounts) generally comparable to the terms of this Lease, shall be deemed to be
said fair net rental value.  Upon the
payment of such final damages, this Lease, if not already terminated, shall be
deemed terminated.  If any statute or rule of
law shall validly limit the amount of such liquidated final damages to less
than the amount above agreed upon, Lessor shall be entitled to the maximum
amount allowable under such statute or rule of law.


 


26.  Injunction


 


Lessor,
in addition to all other rights, powers and remedies and notwithstanding the
concurrent pendency of summary or other dispossess proceedings, at Lessor’s
option, shall have the right at all times during the Lease Term to restrain by
injunction any violation or attempted violation by Lessee of any of the terms,
covenants or conditions of this Lease, and to enforce by injunction any of such
terms, covenants or conditions.


 


17





















 


27.  Waivers


 


To
the extent permitted by law, Lessee waives: 
any notice of reentry or of the institution of legal proceedings to that
end; any right of redemption, reentry or repossession; any right to trial by
jury in any action or proceeding or in any matter in any way connected with
this Lease or the Demised Premises; and the benefit of any laws now or
hereafter in force exempting property for rent or for debt.


 


No
failure by Lessor or Lessee to insist upon the strict performance of and
compliance with any term, covenant or condition hereof or to exercise or
enforce any right, power or remedy consequent upon a breach thereof, and no
submission by Lessee or acceptance by Lessor of full or partial Rent during the
continuance of any such breach, shall constitute a waiver of any such breach or
of any such term, covenant or condition. 
No waiver of any breach of any term, covenant or condition of this Lease
shall affect or alter this Lease, which shall continue in full force and
effect, or the respective rights, powers or remedies of Lessor or Lessee with
respect to any other then existing or subsequent breach.


 


28.  Lessor’s
Remedies Cumulative


 


All
of the rights, powers and remedies of Lessor provided for in this Lease or now
or hereafter existing at law or in equity, or by statute or otherwise, shall be
deemed to be separate, distinct, cumulative and concurrent.  No one or more of such rights, powers or
remedies, nor any mention of reference to any one or more of them in this
Lease, shall be deemed to be in the exclusion of, or a waiver of, any other
rights, powers or remedies provided for in this Lease, or now or hereafter
existing at law or in equity, or by statute or otherwise.  The exercise or enforcement by Lessor of any
one or more of such rights, powers or remedies shall not preclude the
simultaneous or later exercise or enforcement by Lessor of any or all of such
other rights, powers or remedies.


 


29.  Assignment,
Subletting and Mortgages


 


Lessee
expressly covenants that Lessee shall not voluntarily or involuntarily assign,
encumber, mortgage or otherwise transfer this Lease, or sublet the Demised Premises
or any part thereof, or suffer or permit the Demised Premises or any part
thereof to be used or occupied by others (other than to an affiliate of the
Lessee and to a residential sub-tenant of 3 North Street), by operation of law
or otherwise, without the prior written consent of Lessor in each instance
which consent shall not be unreasonably withheld.  Absent such consent, any act or instrument
purporting to do any of the foregoing shall be null and void.


 


If
this Lease is assigned, whether or not in violation of the terms of this Article 29,
Lessor may collect Rent from the assignee. 
If the Demised Premises or any part thereof are sublet or occupied by
anybody other than Lessee, Lessor, after any default by Lessee, may


 


18





















 


collect rent from the
subtenant or occupant, and apply the net amount collected to the Rent due
hereunder.  Such collection of rent by
Lessor shall not be deemed a waiver of the provisions hereof, the acceptance of
the assignee, subtenant or occupant as a tenant, or a release of Lessee from
the further observance and performance by Lessee of the terms, covenants and
conditions of this Lease.


 


The
consent by Lessor to an assignment, encumbrance, transfer or subletting shall
not in any way be deemed consent to any further assignment, encumbrance,
transfer or subletting.  In no event
shall any permitted sublessee assign or encumber its sublease or further sublet
all or any portion of its sublet space, or otherwise suffer or permit the sublet
space or any part thereof to be used or occupied by others, without the prior
written consent of Lessor in each instance, and each permitted sublease shall
so provide in its terms.


 


If
Lessee requests Lessor’s consent to a specific assignment or subletting, Lessee
shall first submit to Lessor in writing: 
the name and address of the proposed assignee or sublessee; a
counterpart of the proposed agreement of assignment or sublease and all other
instruments or agreements pertaining thereto; such information as to the nature
and character of the business of the proposed assignee or sublessee and as to
the nature of its proposed use of the space, as Lessor reasonably may request;
banking, financial or other credit information relating to the proposed
assignee or sublessee sufficient to enable Lessor to determine the financial
responsibility and character of the proposed assignee or sublessee; and a
statement of all sums or other consideration paid or to be paid to Lessee by or
for the account of the assignee or sublessee for or in connection with such
assignment or sublease, including without limitation sums paid or to be paid
for the sale or rental of Lessee’s fixtures, leasehold improvements, equipment,
furniture, furnishings or other personal property.


 


Any
such consent of Lessor shall be subject to the terms of this Lease and
conditional upon there being no default by Lessee, beyond any grace period,
under any term, covenant or condition of this Lease at the time that Lessor’s
consent is requested and on the date of the commencement of the term of any
such proposed sublease or the effective date of any such proposed assignment.


 


Upon
receiving Lessor’s written consent, a duly executed copy of the sublease or
assignment shall be delivered to Lessor within thirty days after execution
thereof.  Any such sublease shall provide
that the sublessee shall comply with all applicable terms, covenants and
conditions of this Lease to be observed or performed by Lessee hereunder.  Any such assignment shall contain an assumption
by the assignee of all of the terms, covenants and conditions of this Lease to
be observed or performed by Lessee.


 


The
transfer of a majority of the issued and outstanding capital stock of any
corporate tenant or subtenant of this Lease or of a majority of the total
interest in any partnership tenant or subtenant, however accomplished, and
whether in a single transaction or in a series of related or unrelated
transactions, shall be deemed an assignment of this Lease or of such sublease.  The transfer of outstanding capital stock of
any corporate tenant or subtenant, for purposes of this Article 29, shall
not include a sale of such stock by persons other than those


 


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deemed “insiders” within the
meaning of the Securities Exchange Act of 1934 as amended, effected through any
“over the counter” market or recognized stock exchange.


 


30. 
Subordination and Attornment


 


This
Lease, and all rights of Lessee hereunder, are and shall be subject and
subordinate in all respects to all mortgages which may now or hereafter affect
the Demised Premises, whether or not such mortgages shall also cover other
lands or buildings, to each and every advance made or hereafter to be made
under such mortgages and to all renewals, modifications, replacements,
spreaders, consolidations and extensions of such mortgages provided such
mortgage shall include a non disturbance provision with respect to this
Lease.  In the event of any sale of the
Demised Premises in a foreclosure of any such mortgage or the exercise by the
holder of any such mortgages of any other remedies provided for by law or in
such mortgage, Lessee, upon written request of the holder of the mortgage or
the purchaser at such foreclosure or any person succeeding to the interest of
the holder of the mortgage, shall attorn to such holder, purchaser or successor
in interest, as the case may be, without change in the terms, covenants or
conditions of this Lease.  This Lease
shall not be deemed to be terminated by any foreclosure proceedings or other
remedies for the enforcement of the mortgage by such holder, purchaser or
successor in interest.  The provisions of
this Article 30 shall be self-operative and no further instrument of
subordination and/or attornment shall be required.  In confirmation of such subordination and/or
attornment, Lessee promptly shall execute and deliver at Lessee’s expense any
instrument that Lessor or the holder of any such mortgage may reasonably
request to evidence such subordination and/or attornment; and Lessee hereby
irrevocably constitutes and appoints Lessor as Lessee’s attorney-in-fact,
coupled with an interest, to execute, acknowledge and deliver any such
instruments for and on behalf of Lessee.


 


31.  Entry by
Lessor


 


Lessor
and the authorized representatives of Lessor shall have the right to enter the
Demised Premises at all reasonable times for the purpose of inspecting the same
or for the purpose of doing any work permitted to be done by Lessor under this
Lease, and to take all such actions thereon as may be necessary or appropriate
for any other purpose.  Nothing contained
in this Lease shall create or imply any duty on the part of Lessor to make any
such inspection or do any such act. 
Lessor and representatives of Lessor shall have the right to enter the
Demised Premises at all reasonable times for the purpose of showing the Demised
Premises to prospective purchasers or mortgagees, and at any time during the
twelve month period preceding the expiration or termination of this Lease for
the purpose of showing the same to prospective tenants, and within said period
to display on the Demised Premises advertisements for sale or letting if such
advertisements do not interfere unreasonably with the business then conducted
on the Demised Premises.  No such entry
shall constitute an eviction of Lessee.


 


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32.  Conveyance
by Lessor


 


If
the original or any successor Lessor shall convey or otherwise dispose of the
Land and Improvements, Lessor shall thereupon be released from all obligations
and liabilities of Lessor under this Lease (except those accruing prior to such
conveyance or other disposition), and such obligations and liabilities shall be
binding solely on the then owner of the Land and Improvements.


 


In
any action brought to enforce the obligations or liabilities of Lessor under
this Lease, any judgment or decree shall be enforceable against Lessor only to
the extent of Lessor’s interest in the Land and Improvements, and no such
judgment shall be the basis of execution on, or be a lien on, assets of Lessor
other that Lessor’s interest in the Land and Improvements.


 


33.  No Merger
of Title


 


There
shall be no merger of the leasehold estate created by this Lease with the fee
estate in the Demised Premises by reason of the fact that the same person may
own or hold (a) the leasehold estate created by this Lease or any interest
therein, and (b) the fee estate in the Demised Premises or any interest in
such fee estate.  No such merger shall
occur unless and until all persons having any interest in the leasehold estate
created by this Lease, and in the fee estate in the Demised Premises, shall
join in a written instrument effecting such merger and shall duly record the
same.


 


34.  Acceptance
of Surrender


 


No
modification, termination or surrender of this Lease or surrender of the
Demised Premises or any part thereof or of any interest therein by Lessee shall
be valid or effective unless agreed to and accepted in writing by Lessor, and
no act by any representative or agent of Lessor, other than such a written
agreement and acceptance, shall constitute an acceptance thereof.


 


35.  Holdover
Tenancy


 


If
Tenant holds possession of the Premises after the term of this Lease, Tenant
shall become a tenant from month to month under the provisions herein provided,
but at a monthly rental of One Hundred Fifty Percent (150%) of the rent for the
last month of the expired term without the requirement for demand or notice by
Landlord to Tenant demanding delivery of possession of said Premises which sum
shall be payable in advance on the first day of each month, and such tenancy
shall continue until terminated by Landlord, or until Tenant shall have vacated
the Premises.


 


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36.  End of
Lease Term


 


Upon
the expiration or termination of the Lease Term, Lessee shall quit, surrender
and deliver to Lessor the Demised Premises with the Improvements thereon in
good order and condition, ordinary wear and tear excepted, and shall remove all
Lessee’s Equipment therefrom.


 


If
Lessee vacates the Demised Premises at any time prior to the expiration or
termination of this Lease, Lessee shall cause the Demised Premises to be
patrolled by armed guards on a 24 hour basis so as to prevent vandalism or
other damage to the Demised Premises.


 


37.  Options to
Extend Lease Term


 


Lessee
shall have two options to extend the Lease Term each for an additional FIVE
YEARS, subject to all of the terms, covenants and conditions of this
Lease.  During the first such five year
extension period, Lessee shall pay fixed rent at the rate of $450,000 per annum
and shall pay all other items of Rent during the first extension period.


 


If
the aforesaid first option has been duly exercised, Lessee shall have a second
option to extend the Lease Term for an additional FIVE YEARS, subject to all of
the terms, covenants and conditions of this Lease.  During said second extension of the Lease
Term, Lessee shall pay Fixed Rent at the greater of (i) the Fixed Rent in
effect on the last day of the first extension period or (ii) the fair
market value rent at the time of the exercise of the second option and shall
pay all other items of Rent during the second extension period.


 


To
be effective, Lessee must give Lessor written notice of Lessee’s election to
extend the Lease Term not less than 180 DAYS prior to the expiration of the
then existing Lease Term.  Lessee’s right
to extend the Lease Term pursuant to this Article 36 shall be conditioned
upon there being no default by Lessee in the observance or performance of any
of the terms, covenants and conditions of this Lease either at the time of the
exercise of the option or on the expiration of the then existing Lease Term.


 


38.  Brokerage


 


Lessor
and Lessee each represents and warrants to the other that such party has not
dealt with any broker or finder in connection with the Demised Premises or this
Lease.  Lessor and Lessee each agrees to
indemnify and hold the other harmless from and against any and all commission,
liability, claim, loss, damage or expense, including reasonable attorneys’
fees, arising from any claims for brokerage or any other fee or commission by
any person with whom such party has dealt.


 


39.  Definitions


 


As
used in this Lease, the following terms have the following respective meanings:


 


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“default”
— any condition or event which constitutes, or which after notice or lapse of
time or both would constitute, an Event of Default.


 


“Demised
Premises” — as defined in Article 1.


 


“Event
of Default” — as defined in Article 19.


 


“Fixed
Rent” — as defined in Article 2.


 


“Impositions”
— all taxes, assessments (including without limitation all assessments for
public improvements or benefits, whether or not commenced or completed prior to
the date hereof and whether or not to be completed within the Lease Term),
water and sewer rents and charges, charges for public utilities, excises,
levies, license fees, permit fees, inspection fees and other authorization fees
and other charges of every nature and kind whatsoever (including all interest
and penalties thereon), in each case, whether general or special, ordinary or
extraordinary, foreseen or unforeseen, of every character, which at any time
during or in respect of the Lease Term may be assessed, levied, charged,
confirmed or imposed on or in respect of or be a lien upon (a) the Demised
Premises or any part thereof or any rent therefrom or any estate, right or
interest therein, or (b) any occupancy, use or possession of or activity
conducted on the Demised Premises or any part thereof.  The term “Impositions” shall exclude,
however, any income taxes assessed against Lessor, franchise, estate,
inheritance or transfer taxes of Lessor, or any tax or charge in replacement or
substitution of the foregoing or of a similar character; provided, however,
that if at any time during the Lease Term the then prevailing method of
taxation or assessment shall be changed so that the whole or any part of the
Impositions theretofore payable by Lessee as above provided, shall instead be
levied, charged, assessed or imposed whole or partially on the rents received
by Lessor from the Demised Premises, or shall otherwise be imposed against
Lessor in the form of a franchise tax or otherwise, then Lessee shall pay the
same (and the same shall be deemed Impositions) at least twenty days prior to
the last day upon which the same may be paid without interest or penalty for
the late payment thereof.


 


“Improvements”
— as defined in Article 1.  The term
“Improvements” shall include all fixtures, equipment and machinery now situate
on or appurtenant to the Improvements referred to in Article 1, other than
Lessee’s Equipment.


 


“Insurance
Requirements” — all terms of any insurance policy covering or applicable to the
Demised Premises or any part thereof, all requirements of the issuer of any
such policy, and all orders, rules, regulations and other requirements of the
National Board of Fire Underwriters, or its successor or any other body
exercising similar functions, applicable to or affecting the Demised Premises
or any part thereof or any use or condition of the Demised Premises or any part
thereof.


 


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“Land”
— as defined in Article 1.


 


“Lease”
— this Lease, as at the time amended, modified or supplemented.


 


“Lease
Term” — as defined in Article 1, as the same may be extended or renewed.


 


“Legal
Requirements” — all laws, statutes, codes, acts, ordinances, orders, judgments,
decrees, injunctions, rules, regulations, permits, licenses, authorizations,
directions and requirements of all governments, departments, commissions,
boards, courts, authorities, agencies, officials and officers, foreseen or
unforeseen, ordinary or extraordinary, which now or at any time hereafter may
be applicable to the Demised Premises or any part thereof, or the Improvements
now or hereafter located thereon, or the facilities or equipment therein, or
any of the adjoining sidewalks, curbs, vaults or vault space, if any, streets
or ways, or the appurtenances to the Demised Premises or the franchises and
privileges connected therewith, or any use or condition of the Demised Premises
or any part thereof.  Legal Requirements
shall include the Comprehensive Environmental Response Compensation and
Liability Act, 42 U.S.C. Section 9601 et seq., the Resource Conservation
and Recovery Act, 42 U.S.C. Section 6901 et seq., and all other applicable
environmental laws and regulations, and all requirements to be complied with
pursuant to any certificate of occupancy affecting the Demised Premises.


 


“Lessee’s
Equipment” — all fixtures, machinery, apparatus, furniture, furnishings and
other equipment and all temporary or auxiliary structures installed by or at
the request of Lessee in or about the Demised Premises or any part thereof,
which (a) are not used and are not procured for use, in whole or in part,
in connection with the operation, maintenance or protection of the Demised
Premises, and (b) are removable provided any damage to the Demised
Premises caused by such removal shall be repaired at Lessee’s expense.


 


“person”
— an individual, a corporation, an association, a partnership, a joint venture,
an organization, or other business entity, or a governmental or political unit
or agency.


 


“Rent
Payment Date” — as defined in Article 2.


 


“Restoration”
— all restorations, replacements, rebuildings, alterations, additions,
temporary repairs and property protection to be performed in connection with a
Taking of the Demised Premises or the damage to or destruction of the Demised
Premises.


 


“Taking”
— a taking during the Lease Term of all or any part of the Demised Premises, or
any leasehold or other interest therein or right accruing thereto, as the
result of the exercise of the right of condemnation or eminent domain or a sale


 


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in
lieu or in anticipation of such exercise or a change or grade affecting the
Demised Premises or any part thereof.


 


“Total
Taking” — as defined in Article 16.


 


“Unavoidable
Delays” — delays due to strikes, acts of God, governmental restrictions, enemy
action, riot, civil commotion, fire, unavoidable casualty or other causes
beyond the control of Lessee, provided that no delay shall be deemed an
Unavoidable Delay if the Demised Premises or any part thereof or interest
therein or any Rent would be in any danger of being sold, forfeited, lost or
interfered with, or if Lessor or Lessee would be in danger of incurring any
civil or criminal liability for failure to perform the required act.  Lack of funds shall not be deemed a cause
beyond the control of Lessee.


 


40.  Notices


 


All
notices, demands, elections and other communications desired or required to be
delivered or given under this Lease shall be in writing, and shall be deemed to
have been delivered and given when delivered by hand, or on the third business
day after the same have been mailed by first class registered or certified
mail, postage prepaid, enclosed in a securely sealed envelop addressed to the
party to which the same is to be delivered or given at such party’s address as
set forth in this Lease or at such other address as said party shall have
designated in writing in accordance with this Article 39.


 


41. 
Communications Tower


 


Landlord
shall have the right to locate communication tower or towers on the Premises
provided structure and related equipment housing and related constructions does
not materially interfere with Tenant’s business. Landlord reserves the right
for reasonable access for itself and other in connection with such Tower(s).


 


41. 
Miscellaneous


 


All
rights, powers and remedies provided herein may be exercised only to the extent
that the exercise thereof does not violate any applicable law, and are intended
to be limited to the extent necessary so that they will not render this Lease
invalid, unenforceable or not entitled to be recorded under any applicable
law.  If any term, covenant or condition
of this Lease shall be held to be invalid, illegal or unenforceable, the
validity of the other terms, covenants and conditions of this Lease shall in no
way be affected thereby.  If any interest
provided for herein shall be deemed to be in excess of the maximum amount
permitted under applicable law, Lessee shall be deemed to be entitled to the
maximum amount permitted under applicable law.


 


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Lessor
and Lessee agree that a memorandum of this Lease, but not this Lease, may be
recorded by Lessee, at Lessee’s expense.


 


The
headings in this Lease are for purposes of reference only and shall not limit
or define the meaning hereof.  This Lease
may be executed in any number of counterparts, each of which is an original,
but all of which shall constitute one instrument.


 


This
Lease may be changed or modified only by an instrument in writing signed by the
party against which enforcement of such change or modification is sought.


 


Subject
to Articles 29 and 32, this Lease shall be binding upon and inure to the
benefit of and be enforceable by the respective successors and assigns of the
parties hereto.


 


IN WITNESS WHEREOF, Lessor and Lessee have executed this Lease on the date first above
written.


 


 


	
   

  	
  NORTH STREET ASSOCIATES
  LLC

  
	
  ATTEST:

  	
  By: Hempstead LLC

  
	
   

  	
   

  
	
   

  	
  By

  	
    /s/ Simon
  Alishayev

  	
   

  
	
   

  	
   

  	
  President

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Secretary

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ATLANTIC EXPRESS
  TRANSPORTATION

  
	
   

  	
  CORP.

  
	
   

  	
   

  
	
   

  	
  By

  	
    /s/ Domenic
  Gatto

  	
   

  
	
   

  	
   

  	
  President

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Secretary

  	
   

  	
   

  	
   

  



 


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