LEASE
        OF REAL PROPERTY
 
 FROM
 
 **JOSEPH
        E. ROYCE, Landlord**
 
 **to**
 
 **TBS
        SHIPPING SERVICES INC., Tenant**
 **_______________________________________________________________________**
 
 
 
 DATED:  January
        1, 2005
 
 PREMISES:  612
        East
        Grassy Sprain Road
 Yonkers,
        New York 10710
 
 
  
 
 CITY
        OF
        YONKERS
 COUNTY
        OF
        WESTCHESTER
 SECTION:
 BLOCK:
 LOT:








1.  Property


1.1.
      Tenant’s Due Diligence Contingency


1.2.  Lease
      Term


3.  Rent


3.1.1  Fixed
      Rent


3.1.2  Additional
      Rent


3.1.3  Rent
      Abatement


4.  Condition
      of Property.


4.1
      Readying the Property and Building for the Tenant


4.2
      Tenant’s Work


5.  Landlord
      Representations as Inducement To Tenant to Sign This Lease


5.1
      Formation


5.2
      Power and Authority


5.3
      Due Authorization


5.4
      Consent and Compliance


5.5
      Solvency


5.6
      Record Title


5.7
      Condition of Title


5.8
      Matters of Survey


5.9
      Separate Parcels


5.10.
      Public Access


5.11  Condition
      of Building and Improvements


5.12  Public
      Utilities


5.13
      Compliance Issues


5.14
      Zoning


5.15  Flood
      and Inland Wetland Zones


5.16  Legal
      Compliance


5.17  Litigation


5.18
      Compliance


5.19  Hazardous
      Materials/Underground Tanks


6.  Transfer
      of Interest


7.  Maintenance
      and Repair Obligations


8.  Insurance


9.  Services
      and Utilities


10.  Casualty


11.  Condemnation


12.  Compliance
      with Law


13.  Use


14.  Mechanics
      Liens


15.  Signage


16.  Communications


17.  Dumpster


18.  Surrender


19.  Landlord’s
      Lien


20.  Subordination
      of Lease


21.  Estoppels


22.  Quiet
      Enjoyment


23.  Hazardous
      Materials


24.  Tenant
      Default


25.  Landlord Default


26.  Notices


27.  Holding
      Over


28.  Broker


29.  Notice
      of Lease


30.  Waiver
      of Jury Trial


31.  Assignment
      and Subletting


32.  Leasehold
      Mortgages


33.  Miscellaneous








**LEASE**





**THIS
      LEASE** (" **Lease** ")
      has
      been entered into as of Januar 1, 2005, between Joseph E. Royce, an individual
      whose address is 52 Old Orchard Lane, Scarsdale, New York, (" **Landlord** "),
      and
      TBS Shipping Services, Inc., chartered under the laws of the State of New York
      with offices at 612 East Grassy Sprain Road, Yonkers, New York 10710
      (" **Tenant** ").





**W
      I T N E S S E T H** **:**





**WHEREAS** ,
      Landlord is the owner of that certain piece or parcel of land located at 612
      East Grassy Sprain Road, Yonkers, New York 10710 also known as "Treetops" which
      consists of approximately six (6) ± acres
      including parking lots, roadways, lawns and landscaping (“ **Property** ”)
      more
      particularly described on **Exhibit
      A** ;
      and





**WHEREAS** ,
      The
      Property consists of (i) a Main Building containing three (3) stories of
      approximately 10,000 square feet and (ii) a Carriage House containing 1.5
      stories of approximately 5,000 square feet and Tenant desires to lease one
      hundred (100%) percent of the space in said building (“ **Building** ”).





**NOW
      THEREFORE** ,
      in
      consideration of the promises and covenants contained herein, and for other
      good
      and valuable consideration, the sufficiency and receipt of which are hereby
      acknowledged, Landlord and Tenant do hereby agree as follows:





**1.**  **Property** **.**   Landlord
      hereby leases the Property and appurtenances thereto, to the Tenant, and Tenant
      hereby rents the Property and appurtenances thereto, from the Landlord, all
      on
      the terms and conditions of this Lease. Landlord represents to Tenant that
      the
      Property is vacant, contiguous to and with direct legal access through a legal
      curb cut to a publicly accepted street known as East Grassy Sprain Road and
      a
      separate, distinct and legal tax and subdivision lot. It is the intention of
      the
      parties that Landlord shall lease the Property and all appurtenances thereto,
      to
      Tenant and that Tenant may thereafter, during the Term, at Tenant’s cost and
      expense, perform any work, alterations, decorations, installations, additions,
      improvements, repairs or restorations to the Property (“ **Tenant’s
      Work”** )
      for
      Tenant’s purposes. At Tenant’s sole cost, Landlord agrees to cooperate with
      Tenant (including signing applications) in obtaining any necessary permits
      for
      any Tenant’s Work that Tenant is permitted to make hereunder. The Property is to
      be leased to Tenant at a Fixed Rent (subject to escalation) which is intended
      to
      be a net rent to Landlord, subject, however, to certain obligations of Landlord
      more particularly set forth herein.





**1.1.** **Tenant’s
      Due Diligence Contingency** **.** **** INTENTIONALLY
      OMITTED.





**2.**  **Lease
      Term** .
      The
      " **Term** "
      of the
      Lease is for three (3) years commencing as of January 1, 2005 (" **Commencement
      Date** ")
      and
      terminating December 31, 2008 (" **Termination
      Date** ").
      Provided that Tenant is not in default at the time of exercise following the
      receipt of notice and expiration of any applicable cure periods, Tenant shall
      have five (5) renewal option periods of three (3) years each, all on the same
      terms and conditions contained herein, except that Rent shall be as set forth
      hereinbelow for each of such renewal terms. If Tenant shall elect to exercise
      its right to renew the Term, Tenant shall give notice to Landlord of such
      election not later than that date which is nine (9) months preceding the
      Termination Date of the Term as then in effect. Upon the giving of such notice
      in a timely fashion, the Term shall be deemed renewed, such renewal Term to
      begin immediately upon the occurrence of the Termination Date as then in effect.
      Notwithstanding the preceding, if Tenant shall fail to give notice of renewal
      as
      and when required herein, Landlord shall give a notice to Tenant advising that
      Tenant has failed to exercise its renewal rights herein, and Tenant shall
      thereafter have an additional thirty (30) days following receipt of Landlord’s
      notice in which to exercise the renewal rights. The “Term” as used herein shall
      include, as the context may require, any and all renewal option
      periods.





**3.**  **Rent** **.** **** The
      obligation to pay Rent and the commencement of the Term of the Lease shall
      be as
      of the date of this Lease. Rent for any partial month at the beginning or end
      of
      the Term shall be apportioned based upon the number of days elapsed versus
      the
      number of days in the applicable month. Tenant will pay the following two types
      of Rent:





**3.1.1**  **Fixed
      Rent** .
      Tenant
      shall pay " **Fixed
      Rent** "
      to the
      Landlord in equal monthly installments, on the first day of each month, in
      advance, at the address first set forth above for the Landlord as
      follows:





(a)
      during the and in respect of the period from the Commencement Date of this
      Lease
      and continuing for the following Calendar Year, a yearly amount equal to Two
      Hundred Forty Thousand and 00/100 ($240,000.00) Dollars payable in equal monthly
      installments of Twenty Thousand and 00/100 ($20,000.00) Dollars;





(b)
      the
      monthly installments of Rent of any succeeding Calendar Year shall be determined
      by multiplying the amount of the monthly installment of Rent for the prior
      Calendar Year by the average CPI for the twelve (12) months of the prior
      Calendar Year. The term **"CPI"** as used
      in this Lease shall mean the Consumer Price Index for All Urban Customers -
      All
      Items - U.S. City Average published by the United States Department of Labor,
      Bureau of Statistics. If the issuance of the CPI by the federal government
      is
      discontinued, the Landlord shall use for the CPI the official index published
      by
      a federal governmental agency which is most nearly equivalent to the CPI. If
      no
      such index is available, then Landlord shall use such index or procedure which
      reasonably reflects increases or decreases in consumer prices in the United
      States. If the Rent payments determined by this Article 3 exceed that allowed
      by
      the terms of any valid government restriction which limits the amount of rent
      or
      if the Rent payments described pursuant to this Article 3 exceed any limitation
      otherwise imposed by this Lease, the amount of Rent or other payments shall
      be
      the maximum permitted by such governmental restriction and by such limitation;
      however, all increases or decreases in Rent or other payments provided in this
      Lease shall be calculated thereafter based upon the amount of Rent which would
      have been payable under the Lease as if such government restriction or other
      limitation had not limited the Rent payable under the terms of this Lease. As
      used
      herein a **"Calendar
      Year"** shall be
      each twelve (12) consecutive month period from the date of this Lease.


**3.1.2**  **Additional
      Rent** .
      All
      other sums Tenant must pay to Landlord under this Lease are, in the aggregate,
      the " **Additional
      Rent** ,"
      which
      will be due and payable as provided throughout this Lease. Tenant will pay
      promptly when due and payable, one hundred percent (100%) of the Operating
      Expenses and Taxes of the Property which are applicable at any time during
      the
      Term of this Lease as Additional Rent. All such Operating Expenses and Taxes
      shall be pro-rated for the partial month in which the Commencement Date and
      Termination Date occur, if applicable.





For
      purposes hereof, " **Operating
      Expenses** "
      will
      mean (i) all utilities consumed by Tenant at the Property, including without
      limitation, those for sewer, water, heat, gas, oil, electricity, power and
      air
      conditioning (to the extent present at the Property); (ii) Tenant’s maintenance
      and repair of the Building and improvements at the Property, including but
      not
      limited to all regular and seasonal Property landscape and maintenance costs,
      snow plowing, parking lot maintenance and similar Property maintenance repair
      costs; (iii) the insurance of the Property carried by Tenant; (iv) ADT or
      similar security/alarm system service for the Building; (v) sprinkler monitoring
      service for the Building; and (vi) private garbage removal service. Tenant
      shall
      pay all Operating Expenses directly to the entity providing or charging for
      the
      same, and with respect to those incurred by Landlord pursuant to the terms
      hereof, directly to Landlord. Landlord represents and agrees that no party
      other
      than the Tenant shall have rights to or use of the Property or any of the
      utility or other systems thereon, thus resulting in all Operating Expenses
      being
      incurred for the sole benefit of the Tenant.





For
      purposes hereof, " **Taxes** "
      will
      mean all real property taxes, assessments, sewer and water use charges imposed
      upon the Property by the City of Yonkers and County of Westchester. Excluded
      from the definition of Taxes are income, inheritance, succession, estate, gift,
      franchise or transfer taxes, and any and all special assessments attributable
      to
      the initial improvements of the Property (i.e. any special assessments for
      utility lines or sidewalks associated with the initial improvement of the
      Property by Landlord). Landlord shall deliver all Tax bills directly to Tenant
      no later than ten (10) days after receipt thereof by Landlord, or Tenant may
      have Tax bills sent directly to Tenant for payment and Tenant shall pay the
      same
      directly to the assessing authority. If Landlord shall fail to deliver such
      Tax
      bills to Tenant as and when required, Landlord shall pay all penalties and
      other
      costs resulting from the late payment thereof by Tenant. Tenant agrees that
      it
      shall pay such Tax bills timely given to Tenant on or before the due date
      therefor. Notwithstanding the above, Tenant shall have the right to contest
      Taxes imposed pursuant to the terms hereof, and to not pay such Taxes or to
      only
      pay a portion thereof during the pendency of such challenge, provided Tenant
      pays any costs, interest and/or penalties imposed by the taxing authority and
      indemnifies Landlord against any loss, cost or expenses incurred by Landlord
      in
      connection therewith.





**3.1.3**  **Rent
      Abatement** .
      INTENTIONALLY OMITTED





**4.**  **Condition
      of Property.** ****





**4.1** **Readying
      the Property and Building for the Tenant** .
      Tenant
      has inspected the Property and takes the Property in “as is” condition.




**4.2** **Tenant’s Work** **.** **** During
      the Term Tenant may not perform any work, alterations, installations, additions,
      improvements, structural repairs or restorations to the Property (“ **Tenant’s
      Work”** )
      without
      the prior written consent of Landlord which (i) in the case of alterations,
      additions, installations or improvements of a structural nature or involving
      the
      Building systems, may be granted or withheld by Landlord in its sole and
      absolute discretion and (ii) in the case of alterations or improvements of
      a
      non-structural nature or not involving Building systems, shall not be
      unreasonably withheld or delayed. In connection with such consent, Tenant shall
      submit to Landlord such detailed plans, specifications, drawings and other
      materials reasonably requested by Landlord. Tenant may make such non-structural
      alterations and perform work of a decorative nature without Landlord’s prior
      written consent. At Tenant’s sole cost, Landlord agrees to cooperate with Tenant
      (including signing applications) in obtaining any necessary permits for any
      Tenant’s Work that Tenant is permitted to make hereunder. In all cases the
      Tenant’s Work shall be performed at Tenant’s sole cost and expense and by
      contractors selected by Tenant. Tenant agrees that the Tenant’s plans and
      specifications shall be in compliance with applicable laws, rules and
      regulations, that Tenant shall not commence construction until it obtains (if
      required) a building permit for Tenant’s Work, and that such Tenant’s Work shall
      be performed in accordance with the building permit, in compliance with
      applicable law and in accordance with the Tenant’s plans and specifications. As
      a condition of approving such Tenant's Work the Landlord may require the Tenant
      to maintain such additional insurance coverages (in addition to those required
      in Article 8 hereof) as the Landlord may reasonably require.








**5.**  **Landlord
      Representations as Inducement To Tenant to Sign This
      Lease** .
      In
      order to induce Tenant to enter into this Lease and to perform the Tenant’s
      Work, Landlord represents and warrants to Tenant that:





With
      Respect to Landlord and the Transaction.





**5.1** **** **Formation** .
      Landlord is an individual and has not been involved as a debtor in a loan
      default or credit workout scenario with Tenant.





**5.2
      Power and Authority** .
      Landlord has full power and authority to execute and deliver this Lease and
      to
      perform all of its obligations hereunder.





**5.3
      Due Authorization** .
      This
      Lease has been duly authorized, executed and delivered by Landlord and
      constitutes a legal, valid and binding agreement of Landlord, enforceable
      against Landlord in accordance with its terms.





**5.4
      Consent and Compliance** .
      All
      regulatory consents, authorizations, approvals and filings required of Landlord
      by any federal, state or local law, rule or regulation for the execution and
      delivery of this Lease and the performance of Landlord’s obligations herein have
      been obtained or made except for the land use permits and approvals expressly
      set forth herein as being required to be obtained or performed subsequent to
      the
      execution and delivery of this Lease; and the execution and delivery of this
      Lease by Landlord and the performance by Landlord of its obligations herein
      and
      contemplated hereby do not violate any present Federal, State or local law,
      rule
      or regulation, or conflict with or result in a breach of the provisions of,
      or
      constitute a default under any indenture, franchise, permit, license, note,
      agreement or other instrument to which Landlord is a party or by which
      Landlord.





**5.5
      Solvency** .
      Landlord is solvent, and there has been no petition in bankruptcy, whether
      voluntary or involuntary, nor has there been any assignment for the benefit
      of
      creditors filed under the bankruptcy or insolvency laws of the United States
      or
      any state thereof or any action brought under the aforesaid bankruptcy or
      insolvency being against or with respect to Landlord, and Landlord represents
      and warrants that it has sufficient funds to perform its obligations
      hereunder.





With
      Respect to Title .





**5.6
      Record Title** .
      Landlord is the sole owner of the Property.





**5.7
      Condition of Title** .
      Except
      for the matters set forth on **Exhibit
      B** hereto
      (" **Permitted
      Title Exceptions** "),
      Landlord has good and marketable, indefeasible, absolute fee simple title to
      the
      Property free and clear of all defects, mortgages, deeds of trust, security
      interests, liens, encumbrances, easements, covenants, restrictions,
      reservations, conditions, encroachments, and any other matters or defects
      whatsoever.





**5.8
      Matters of Survey** . No
      state
      of facts exist which would be revealed by a careful inspection or survey of
      the
      Property would cause the condition of title not to be as described above. If
      in
      the possession of Landlord or its agents, Landlord shall deliver to Tenant,
      at
      time of execution of this lease, an “as built” survey of the Property showing
      all improvements thereon and the location of all parking spaces and utility
      lines.





**5.9
      Separate Parcels** .
      The
      parcel of land that constitutes the Property is a separately assessed and
      identified parcel for purposes of real estate taxation and land use laws
      (including, without limitation, subdivision and zoning laws), and receives
      a
      separate tax bill. Landlord agrees that (a) the Property shall at all times
      remain a separate and distinct parcel and at no time in the future shall the
      Property be included with any other parcels; and (b) that no other property
      surrounding the Property shall have any rights to use any portion of the
      Property for any purpose.





**5.10.
      Public Access** .
      The
      Property has unlimited contiguous access to and from East Grassy Sprain Road,
      a
      publicly dedicated and accepted City of Yonkers maintained street, without
      crossing any other lands and Landlord and Tenant have no responsibility for
      maintenance of such street, but Tenant shall have the obligation to maintain
      the
      parking lot located on of the Property. Landlord has no knowledge of any pending
      changes to such street, including, without limitation, modification to size,
      location, grading and paving, expansion or extension.





With
      Respect to the Condition of the Property





**5.11**  **Condition
      of Building and Improvements** .
      To the
      best knowledge of landlord, the Building and other improvements are structurally
      sound and good and fully operating condition, fit for the purposes for which
      the
      same were constructed, subject, however, to any improvements to be performed
      by
      the Tenant.





**5.12**  **Public
      Utilities** .
      Adequate supplies of all public utilities, including without limitation water,
      sewer, gas, electric, telephone, and drainage facilities and other utilities
      required by law or by the normal use and operation of the Property are installed
      and connected with the Building pursuant to valid permits and without cost
      to
      Tenant, and will be adequate to serve the Property and Building and to permit
      full compliance with all requirements of law and normal usage of the Property
      and Building by the occupants thereof and their licensees and invitees. With
      the
      possible exception of water, which may enter the Property and connect to the
      Building from the municipal parking lot at the rear of the Property, no such
      utilities cross other property, and all such utilities enter the Property
      directly from Purchase Street. All such utilities are “live” to the Building and
      ready for Tenant to hook into from a utility cabinet within the
      Building.





**5.13
      Compliance Issues** .
      No
      proceeding is pending or, to the best of Landlord’s knowledge, is threatened,
      nor do any state of facts exist which could, with the passage of time, result
      in
      the revocation or a limitation of any licenses, qualifications, permits,
      franchises, zoning variances and other governmental approvals and authorizations
      associated with the Property.





**5.14
      Zoning** .
      The
      applicable Zoning Regulations permit the property to be used for commercial
      office space .





**5.15**  **Flood
      and Inland Wetland Zones** .
      The
      Property is not located in a flood zone or inland wetland area. Attached hereto
      is a FNIS Flood Services flood hazard determination.





**5.16**  **Legal
      Compliance** .
      To the
      best knowledge of Landlord, the Property and the present and past uses thereof
      and all present and past operations therein are and were in full compliance
      with
      all local, state and federal laws, rules and regulations applicable to the
      Property or the uses thereof. Landlord has no knowledge of any condemnation,
      environmental, zoning, land use, or other proceedings, either instituted or
      planned to be instituted, which would affect the use and operation of the
      Property for Tenant’s intended purpose or the value of the Property, nor has
      Landlord received any notice of any special assessment proceedings affecting
      the
      Property. Landlord has no notice of any governmental body, or other party
      claiming or requiring, or calling attention to the need for, any work, repairs,
      construction, alterations or installation on or in connection with the Property,
      which has not been complied with.





**5.17**  **Litigation** .
      There
      is no (i) action, dispute, claim, litigation, proceeding, labor dispute,
      arbitration, investigation or other proceeding at law or in equity pending
      or,
      to the best of Landlord’s knowledge, threatened against Landlord with respect to
      the Property or otherwise relating to the transactions contemplated by this
      Lease, and Landlord knows of no basis for any such action relative to the
      Property or such transactions; and (ii) there are no decrees, injunctions or
      orders of any court or governmental department or agency outstanding against
      Landlord with respect to the Property or the Property.





With
      Respect to Environmental Matters .





**5.18
      Compliance** .
      The
      Property is in compliance with and has no liability or obligation arising under
      applicable federal, state and local laws pertaining to air and water quality,
      solid waste, hazardous materials, worker and community right-to-know, hazardous
      materials, toxic substance control, radioactive material management and disposal
      and any other environmental laws, and the Landlord has not received any notice
      from any applicable governmental agency seeking any information or alleging
      any
      violation of such environmental laws.





**5.19**  **Hazardous
      Materials/Underground Tanks** .
      Landlord has not caused or permitted any uses of the Property (or any other
      real
      property of which the Property has been a part within the preceding three (3)
      years, to generate, manufacture, refine, transport, treat, store, handle,
      dispose, transfer, produce or process any hazardous materials or solid waste
      and
      has not caused or permitted and has no knowledge of the release of any such
      hazardous materials on-site or off site of the Property. The Property does
      not,
      to the best of Landlord’s knowledge, contain any hazardous materials and no such
      materials are located on, in or under the Property. No underground storage
      tanks
      exist on the Property. No condition, circumstance, or set of facts exists with
      respect to the Property which constitutes a significant hazard to health,
      safety, property or the environment.





**6.**  **Transfer
      of Interest** **.**  **(a)** Landlord
      shall promptly notify Tenant in writing if Landlord shall convey the title
      to
      the Property to a new owner, giving the name and address of the new owner and
      instructions regarding the payment of rent. If Landlord does not so notify
      Tenant of a conveyance, Tenant may continue to pay Rent and other amounts due
      hereunder to the party to whom Tenant has been making payment and such payments
      shall be deemed to have been properly made to the correct party. In the event
      of
      any such transfer of title of Landlord in and to the Property or any part
      thereof, whether voluntary or involuntary, or by act of Landlord or by operation
      of law, Tenant shall be under no obligation to pay Rents or other charges
      thereafter accruing until Tenant shall have been notified in writing by Landlord
      of such change in title, at which time any Rents not so paid shall be
      immediately due and payable.





**(b)** If
      during the term hereof Landlord's interest in this Lease shall be acquired
      by
      more than one person, firm, corporation, or other entity, whether by conveyance,
      operation of law or otherwise, Landlord shall by notice to Tenant signed by
      all
      of the then Landlords hereunder appoint one such Landlord to whom Rent and
      all
      charges hereunder may be paid by Tenant and upon whom all notices which Tenant
      may give hereunder may be served. Until such appointment shall be made, Tenant
      shall be authorized from time to time to select any one of such Landlords and
      to
      pay all Rent and all charges coming due hereunder to, and serve all notices
      upon, the Landlord so selected until such time as such appointment shall have
      been made as aforesaid. The service of any notice upon and the payment of any
      Rent or other charges to the appointed or selected lessor as herein provided
      shall constitute service of notice upon, and payment of Rent or other charges
      to, Landlord.





**7.**  **Maintenance
      and Repair Obligations** .  Tenant
      shall take good care of the Property, and at Tenant's cost and expense, shall
      make all repairs to preserve the Property in good working order and in a clean,
      safe and sanitary condition, and will suffer no waste. If Tenant does not make
      such repairs to the Building as the same may be reasonably required, Landlord
      may, but need not, make such repairs following notice to Tenant and 90 days
      opportunity to cure, and Tenant shall pay the cost thereof. If Tenant shall
      dispute Landlord’s demand that repairs are so required, Tenant shall have the
      right to submit the matter to the binding arbitration of the American
      Arbitration Association in Westchester County, New York, and the decision
      thereof shall be binding on Landlord and Tenant, and enforceable in a court
      of
      competent jurisdiction. Landlord shall maintain and replace as necessary, the
      Building structure, including without limitation the footings, foundation,
      walls, load bearing columns, and roof and roof covering and tenant shall
      maintain the all other parts of the Building and Property. All repairs and
      replacements made by Tenant shall be made and performed (a) at Tenant's cost
      and
      expense, (b) so that same shall be at least equal in quality, value, and utility
      to the original work or installation, and (c) in accordance with all applicable
      laws and regulations of governmental authorities having jurisdiction over the
      Property. All repairs and replacements made by Landlord shall be made and
      performed (a) at Landlord’s cost and expense, (b) so that same shall be at least
      equal in quality, value, and utility to the original work or installation,
      and
      (c) in accordance with all applicable laws and regulations of governmental
      authorities having jurisdiction over the Property.





**8.**  **Insurance** **.**   During
      the entire Term of this Lease, Tenant, at its expense, will carry the following
      insurance coverages with respect to the Property and its activities related
      thereto: (1) Fire and extended coverage, vandalism and malicious mischief
      insurance covering the full insurable replacement cost of the Property; (2)
      Glass insurance for all exterior glass surrounding the buildings on the Property
      covering full replacement cost, (3) Machine and Boiler insurance, (4) Public
      liability insurance in an amount not less than $2,000,000 combined, single
      limit
      for death, injury or property damage, and (5) Worker's compensation insurance
      as
      required by law; but as to each of the above, with such deductibles as Tenant
      shall elect provided that Tenant shall be responsible for the payment of any
      such deductible.





Each
      policy of insurance shall name Landlord (and any Permitted Mortgagee who
      requests it) as an additional insured party, as its interests may appear, but
      loss payable shall be in favor of Tenant only. Tenant agrees, however, to hold
      all such insurance proceeds and disburse the same in accordance with the terms
      hereof. Tenant's policy of casualty insurance shall contain an agreement by
      the
      insurance company waiving its rights to recover against Landlord (and any
      Permitted Mortgagee who requests it) or its and their agents or employees for
      any claim thereunder. Landlord and Tenant hereby waive all rights and claims
      against one another as to any matter of a kind covered by the insurance
      described herein. Tenant will give Landlord reasonable evidence that the
      insurance required under this Lease is in effect and fully paid within 30 days
      of Landlord’s request therefor.





**9.**  **Services
      and Utilities** .
      Landlord represents to Tenant that there presently exists at and for the benefit
      of the Building, and Tenant shall hereafter pay all usage charges for (but
      shall
      not pay the cost of installing if not already connected to the Building), phone,
      cable, electricity, water, gas, sewage and all other utilities, each separately
      metered to the Property. Tenant shall be responsible for interior Building
      distribution of such utilities. Without limitation to the preceding, Tenant
      shall have the right to purchase its own utilities in any manner it wishes
      and
      from any provider.





**10.**  **Casualty** **.**  **(a)(i)** If, at
      any time during the Term, the Building shall be damaged in whole or in part
      by
      fire, the elements or other casualty (“ **Casualty** ”),
      Tenant, at Tenant's sole cost, shall repair said damage and restore the Building
      to substantially the same condition which existed immediately prior to the
      occurrence of such damage, subject, however, to the requirements of applicable
      and, to the extent the same does not unreasonably diminish the appraised value
      of the Property, the changing needs of the Tenant. As long as Tenant has
      complied with its insurance obligations hereunder, Tenant shall have no
      obligation to expend any sums greater than the amount of insurance proceeds
      actually received by Tenant plus the amount of any deductible under the policies
      of insurance. If tenant elects to self insure, Tenant shall make the money
      available for restoration on the same basis as if an insurance policy was in
      effect.





**(ii)**  In
      the
      case of a casualty impacting parking and/or access, the parties shall agree
      on a
      reasonable abatement, and if no agreement can be reached, either party may
      submit the matter to binding arbitration as permitted herein.





**(iii)**  The
      foregoing subparagraphs (i) and (ii) notwithstanding, if the
      Building, or any portion of the Property which Tenant, in its reasonable
      discretion, deems material, shall be partially or totally destroyed during
      the
      last 2 years of the initial term or during the last 2 years of any extension
      period, then, within thirty (30) days after such casualty, Tenant may terminate
      this Lease upon no fewer than 45 days prior written notice to Landlord, in
      which
      event this Lease shall terminate on the date specified in such notice.





**(b)**   In
      the
      event of a Lease termination as a result of a casualty, or should a “taking” (as
      defined below) occur, Tenant shall be entitled to recover the value of
      relocation and moving costs, any other costs and expenses incurred by Tenant,
      and the unamortized costs of its Tenant improvements (“ **Tenant
      Improvements** ”)
      calculated as follows: Tenant shall be entitled to the actual cost of said
      Tenant Improvements multiplied by a fraction, the numerator of which is the
      number of years remaining on the then current Term of the Lease and the
      denominator of which shall be the number of years remaining under the then
      current Term of the Lease at the time the Tenant Improvements were purchased.
      [For example, if the Tenant Improvements cost $1000.00, there are 10 years
      left
      in the Term of the Lease and there were 15 years left in the Term of the Lease
      when the Tenant Improvements were purchased and installed, Tenant would be
      entitled to $667.00 ($1000.00 multiplied by a fraction, the numerator of which
      is 10 and the denominator of which is 15).] For purposes hereof, “Tenant
      Improvements” shall mean any improvements made to the Property by the Tenant.





**11.**  **** **Condemnation** **.**  **(a)** If the
      entire (or a material portion thereof as determined by Tenant) Property, or
      the
      use or possession thereof, is taken in condemnation proceedings, or by any
      right
      of eminent domain, or for any public or quasi-public use, or if Landlord shall
      deliver to a governmental authority a deed in lieu of condemnation or eminent
      domain (individually or collectively, a " **taking** "
      or
“ **taken** ”),
      then,
      this Lease shall terminate on the date when possession shall be taken by the
      condemnor or if earlier, upon Tenant’s notice to Landlord that it is terminating
      as a result of said taking, and Rent, Additional Rent and all other charges
      payable hereunder shall be apportioned and paid in full up to that date, and
      all
      prepaid unearned Fixed Rent, Additional Rent, and all other charges prepaid
      hereunder, shall promptly be repaid by Landlord to Tenant (including, for
      example, Taxes).





If
      only a
      part of the Property shall be so taken, then Tenant may only terminate this
      Lease if in Tenant’s reasonable discretion, the loss of the taken portion shall
      interfere with Tenant’s use and occupancy for Tenant’s intended purpose, and
      further provided that Tenant shall so notify Landlord of its election to
      terminate. If Tenant shall not so terminate this Lease, then this Lease shall
      continue in full force and effect, except that Fixed Rent, Additional Rent
      and
      all other charges payable hereunder shall, subject to the provisions below
      regarding parking only, be equitably abated (and if the parties cannot agree
      on
      the appropriate abatement, then either may submit the matter to binding
      arbitration as permitted by this Lease). In such case, Tenant, at Tenant's
      own
      expense not in excess of any condemnation proceeds, shall repair all damage
      to
      the Property as shall have been caused by such partial taking, and shall restore
      the Property to a complete architectural unit. All proceeds of condemnation
      shall be applied first to such restoration, and then allocated between Landlord
      and Tenant as contemplated hereby. Fixed Rent, Additional Rent and other charges
      payable hereunder shall abate until the Property shall have been restored to
      a
      tenantable condition, including a reasonable additional period, not to exceed
      90
      days, for Tenant to refixture. During
      the restoration, Tenant may operate its business out of a temporary structure
      such as a trailer, subject to compliance with Laws. Tenant shall not be
      obligated to pay Fixed Rent, Additional Rent or other charges for the use of
      or
      attributable to Tenant’s temporary structure.





**(b)** For the
      purposes of this subdivision (b), in addition to the meaning set forth above,
      a
      " **taking** "
      shall
      mean any impediment to Tenant’s full and unencumbered use of the Property which
      shall not be within Landlord's or Tenant’s reasonable control.





If,
      due
      to a taking or otherwise, there shall be an impediment, which impediment shall
      materially adversely affect any means of ingress or egress between the Property
      and any abutting street, then, Tenant shall notify Landlord thereof. If, within
      30 days after Landlord’s receipt of such notice, such impediment shall not be
      cured, then Tenant may, upon 10 days' written notice to Landlord terminate
      this
      Lease. If Tenant shall elect to so pay reduced rent, Tenant shall remain
      obligated for any other charges due under this Lease. Tenant's Fixed Rent shall
      be so reduced until such time as said impediment shall be removed.





**12.**  **Compliance
      with Law** **.**  Subject
      to Landlord having complied with its obligations hereunder, Tenant shall comply
      with all laws, statutes, ordinances, and regulations (collectively,
      " **Laws** ")
      relating to the physical condition of the Property but excluding therefrom,
      any
      obligations in connection with environmental conditions not caused by the
      Tenant. Landlord shall remain, throughout the Term of this Lease, fully
      responsible for all obligations associated with environmental contamination
      not
      caused by the Tenant.





**13.**  **Use** **.**   The
      Property may be used for any legal purpose. Tenant will not use the Property
      for
      illegal purposes. Tenant shall not commit waste. Except as otherwise expressly
      provided herein, Tenant shall have exclusive dominion and control over the
      Property.


Landlord
      represents, warrants and covenants that the Property shall never be merged,
      joined or consolidated with any other property of the Landlord and shall, during
      the term of this Lease, remain a single, stand alone parcel. Landlord
      represents, warrants and covenants that Landlord shall not initiate or consent
      to any change of zone or position of the Building, parking areas, curbcuts,
      traffic patterns, and roadways and passageways on the Property, Municipal
      Property or abutting the Property without the prior written consent of Tenant
      which consent shall be in Tenant’s sole and absolute judgment and discretion.





**14.**  **Mechanics
      Liens** **.** ****  Tenant
      will promptly remove any mechanic's lien or other lien filed against the
      Property for work or materials by or on account of Tenant in connection with
      any
      Tenant alteration (exclusive of work by or for the Landlord). It will do this
      within ninety (90) days after the lien is filed. At Tenant’s sole cost, Landlord
      agrees to cooperate with Tenant (including signing applications) in obtaining
      any necessary permits for any alterations that Tenant is permitted to make
      hereunder.





**15.**  **Signage** **.** At
      Tenant’s sole cost, Tenant may, after obtaining all necessary municipal
      approvals, install, replace and relocate on the Property and Building interior
      and exterior, such signs, awnings, lighting effects and fixtures as may be
      used
      from time to time by Tenant (collectively, " **Signs** ").
      Tenant shall maintain and repair such Signs. At Tenant’s sole cost, Landlord
      agrees to cooperate with Tenant (including signing applications) in obtaining
      any necessary permits for Tenant’s Signs.





**16.**  **Communications** **.** Notwithstanding anything to the contrary in this Lease, Tenant may install,
      maintain, and replace, on the roof of the Building or in the Property, a
      satellite communications dish and related equipment. Tenant shall do so at
      its
      sole cost and in accordance with all Laws; and shall defend, indemnify and
      hold
      Landlord harmless from and against any claims, costs or expenses incurred by
      Landlord as a result of such installation, maintenance or replacement by Tenant.
      At Landlord's request, Tenant shall coordinate any roof installation hereunder
      with Landlord's roofing contractor.





**17.**  **Dumpster** **.** Tenant
      may, at its cost, maintain a dumpster or similar refuse container on the
      Property if permitted by municipal authorities.





**18.**  **Surrender** **.** At
      the
      expiration or other termination of this Lease, Tenant shall surrender the
      Property to Landlord in as good order and condition as they were at the
      commencement of the Term or may be put in thereafter, reasonable wear and tear
      and damage by casualty and/or the elements and condemnation excepted. All
      alterations, additions, and improvements in or upon the Property made by either
      party (except Tenant's furniture, trade fixtures, satellite communications
      dish
      and equipment, computer and other equipment), shall become the property of
      Landlord and shall remain upon and be surrendered with the Property as a part
      thereof at the termination or other expiration of the Term. At the expiration
      or
      termination of the Term, Tenant shall remove such items enumerated in the
      parenthetical above as it desires, as well as its signs and identification
      marks, from the Property. If Tenant has installed a vault, Tenant may remove
      the
      vault or vault door. Landlord agrees that should it find any personal property
      at the Property following Tenant vacating the same, such as, without limitation,
      any negotiable instruments, cash or personal belongings in the vault, Landlord
      shall promptly deliver the same to the Tenant. At any time during the Term,
      Tenant may remove the items enumerated in the parenthetical above, as well
      as
      its signs and identification marks, from the Property and the Property. Damage
      done to the Building by such removal shall be promptly repaired by
      Tenant.


**19.**  **Landlord’s
      Lien** **.** Landlord
      hereby waives in favor of Tenant its landlord's lien against any and all of
      the
      property of Tenant to the extent provided in the applicable laws, regulations
      or
      ordinances, of the State of New York.





**20.**  **Subordination
      of Lease** **.**  This
      Lease shall be subject and subordinate to the lien of any bank or institutional
      mortgage or mortgages now or hereafter in force against the Property or
      Building, and to all advances made upon the security thereof, provided that
      the
      holder of any such mortgage shall execute and deliver to Tenant an agreement
      (" **SNDA** ”),
      in
      form satisfactory to Tenant in Tenant’s absolute judgment, providing that such
      holder will recognize this Lease and not disturb Tenant's possession of the
      Property in the event of foreclosure, sale or deed in lieu of foreclosure if
      Tenant is not then in default hereunder beyond any applicable cure period.
      Landlord agrees to pay Tenant’s expenses, including without limitation
      reasonable attorneys’ fees incurred by Tenant for the negotiation and
      preparation of any SNDA.





**21.**  **** **Estoppels** **.** Landlord
      and Tenant agree to deliver to each other, from time to time as reasonably
      requested in writing, and within a reasonable period of time after receipt
      of
      such request, an estoppel certificate certifying that this Lease is unmodified
      and in full force and effect (or if there have been modifications, that the
      Lease is in full force and effect as modified and stating the modifications),
      and the dates to which any rent due hereunder has been paid in advance, if
      any,
      together with such other information as Landlord or Tenant may reasonably
      require with respect to the status of the Lease and Tenant's use and occupancy
      of the Property.





**22.**  **** **Quiet
      Enjoyment** **.** Landlord
      warrants and agrees that Tenant, on paying the rent and other charges due
      hereunder and performing all of Tenant’s other obligations pursuant to this
      Lease, shall and may peaceably and quietly have, hold, and enjoy the Property
      for the full Term, free from claims, interference, molestation, eviction, or
      disturbance subject, nevertheless, to the terms of this Lease.





**23.**  **Hazardous
      Materials** .
      (a) For
      the purposes hereof, the term " **Hazardous
      Materials** "
      shall
      include, without limitation, hazardous or toxic substances, materials that
      may
      be deemed hazardous to human or animal health, including without limitation,
      oil
      and petroleum derivatives and products, asbestos, lead paint and radon.





**(b)** Tenant
      represents and warrants that, except as herein set forth, it will not use,
      store
      or dispose of any Hazardous Materials in the Building or Property. Landlord
      agrees that Tenant may use such commercial or household type cleaners and
      chemicals to maintain the Building or Property. Storage of such chemicals is
      also permitted. Landlord and Tenant acknowledge that any or all of the cleaners
      and chemicals described in this paragraph may constitute Hazardous Materials.
      Notwithstanding any other provision of this Lease, Tenant may, use, store and
      dispose of same as herein set forth, provided that in doing so, Tenant complies
      with Laws.





**(c)** Landlord
      represents and warrants to Tenant that, as of the date on which Landlord shall
      deliver possession of the Property to Tenant, the Building and Property shall
      be
      free from contamination by Hazardous Materials. Notwithstanding anything in
      this
      Lease to the contrary, Tenant shall not be obligated to accept possession of
      the
      Building and Property until any Hazardous Materials found in or on the Building
      or Property have been removed, and Landlord has supplied Tenant with a
      certificate from the appropriate governmental authority that such removal has
      been completed, and Landlord has restored the Building and Property to the
      condition which existed immediately prior to such removal and/or otherwise
      in
      conformance with the terms of this Lease.





**(d)** If, at
      any time during the Term, Hazardous Materials shall be found in or on the
      Building or Property, then:





**(i)** with
      regard to the presence or release of any Hazardous Materials that Tenant shall
      not have caused, Landlord shall, with diligence, remove or remediate or cause
      the remediation or removal of same to the extent required by Laws, and in
      compliance with Laws, and at Landlord's sole cost; and Landlord agrees to
      defend, indemnify, and hold Tenant harmless from and against any and all costs,
      damages, expenses, and/or liabilities (including reasonable attorneys' fees)
      which Tenant may suffer as a result of any claim, suit, or action regarding
      any
      such Hazardous Materials (whether alleged or real), and/or regarding the removal
      and remediation of same. Landlord shall diligently commence or cause the
      commencement of such remediation within thirty (30) days of knowledge of such
      presence or release. If
      Landlord shall fail to commence or cause the commencement to remediate in the
      manner specified in this Section, within the specified time periods, then,
      Tenant may give Landlord 10 days' prior written notice of Tenant’s election to
      remove or remediate the Hazardous materials on Landlord’s behalf. If Tenant
      shall so remove or remediate the Hazardous Materials, Tenant may deduct the
      costs for such removal and remediation (including without limitation, testing
      and professional costs) from Fixed Rent and other amounts payable by Tenant
      to
      Landlord under this Lease.





**(ii)** with
      regard to the presence or release of any Hazardous Materials caused by Tenant,
      Tenant shall remove or remediate same to the extent required by Laws, and in
      compliance with Laws, and at Tenant's sole cost; and Tenant agrees to defend,
      indemnify and hold Landlord harmless from and against any and all costs,
      damages, expenses, and/or liabilities (including reasonable attorneys' fees)
      which Landlord may suffer as a result of any claim, suit, or action regarding
      any such Hazardous Materials (whether alleged or real), and/or regarding the
      removal and remediation of same.





**(e)** INTENTIONALLY OMITTED





**(f)** INTENTIONALLY
      OMITTED





**(g)** Each of
      Landlord's and Tenant's obligations pursuant to this Article shall survive
      any
      expiration and/or termination of this Lease.





**(h)** Landlord
      has no knowledge of the presence of lead paint or asbestos containing materials
      in the Building.





**24.**  **Tenant
      Default** **.**  **(a)** It
      shall
      be a “ **Tenant
      Default** ”
if:
      (i)
      Tenant shall default in the payment of Fixed Rent or any other amount payable
      to
      Landlord hereunder, and such default shall continue for more than fifteen (15)
      days after written notice to Tenant; or (ii) Tenant shall default in fulfilling
      any of the other covenants of this Lease, and such default shall continue for
      more than 30 days after written notice thereof from Landlord, specifying such
      default (provided that if Tenant has commenced to cure within said 30 days,
      and
      thereafter is prosecuting same to completion, said 30 day period shall be
      extended for a reasonable period of time under the circumstances, where, due
      to
      the nature of the default, it is unable to be completely cured within 30 days);
      then, in any such event, Landlord may give to Tenant notice of intention to
      end
      the Term hereof, and if Landlord shall do so, the Term shall expire as if that
      day were the day herein fixed for the expiration of the Term, and Tenant shall
      then quit the Property and surrender the same, but shall remain liable as
      hereinafter provided.





**(b)** If the
      notices provided in subdivision (a) of this Section shall have been given and
      the Term shall expire as aforesaid, then Landlord shall (unless otherwise agreed
      by the parties), re-enter the Property, by legal process, and dispossess Tenant
      by summary proceedings.





**(c)** In case
      of any such default, re-entry, expiration and/or dispossession by summary
      proceedings or otherwise (i) the rent shall become due and shall be paid up
      to
      the time of such re-entry, dispossession and/or expiration; (ii) Landlord shall
      make reasonable efforts to re-let the Property or any part or parts thereof,
      either in its own name or otherwise, for a term or terms which may, at its
      option, be shorter or longer than the period which would otherwise have
      constituted the remainder of the Term, and may grant concessions or free rent,
      but only to such extent as Landlord, in Landlord's reasonable judgment,
      considers advisable and necessary to re-let the same; and, (iii) Tenant, or
      its
      successors, shall also pay to Landlord, as Landlord’s sole damages, liquidated
      damages for the failure of Tenant to observe and perform its covenants herein
      contained, any deficiency between the Fixed Rent herein reserved and the net
      amount, if any, of the rents collected on account of the re-letting of the
      Property for each month of the period which would otherwise have constituted
      the
      remainder of the then-current term. In computing such liquidated damages, there
      shall be added to said deficiency such reasonable expenses as Landlord may
      incur
      in connection with re-letting, such as legal expenses, attorney and broker
      fees,
      but excluding renovations. Any such liquidated damages shall be paid in monthly
      installments on the rent day specified in this Lease and any suit brought to
      collect the amount of the deficiency for any month shall not prejudice, in
      any
      way, the right of the Landlord to collect the deficiency for any subsequent
      month by a similar proceeding. However, if Tenant shall default on any such
      monthly installment, then, at Landlord's option, such liquidated damages shall
      be accelerated and paid immediately by Tenant, but discounted to their present
      value, using as the time remaining, the number of full calendar months remaining
      in the term of this Lease following default (beyond applicable cure periods),
      and using as the interest rate, the lesser of the following: (x) the rate (or
      the average of rates, if more than one rate appears) inserted in the blank
      of
      the "Money Rates" section of "The Wall Street Journal" (Eastern Edition) in
      the
      section reading "Prime Rate: _____%", or (y) the base rate on corporate loans
      posted by at least 75% of the nation's 30 largest banks. (If neither rate is
      available for any reason, then a reasonably equivalent rate shall be used).
      In
      the event of a Tenant Default, Landlord shall mitigate damages and/or loss.
      Such
      obligation shall survive the Term.





**25.**  **** **Landlord
      Default** **.** In the
      event of any default by Landlord under this Lease (" **Landlord
      Default** "),
      Tenant may give Landlord written notice specifying such Landlord Default and,
      if
      Tenant shall do so, then Landlord shall have 30 days in which to cure any such
      Landlord Default; provided, however, that if the nature of the Landlord Default
      is such that more than 30 days are required for its cure, then Landlord shall
      not be in default if Landlord commences to cure within said 30 days and
      thereafter diligently prosecutes the same to completion within a reasonable
      time
      thereafter. In the event that Landlord shall remain in default following its
      said right to cure, then, in addition to all other rights and remedies available
      to Tenant at law and in equity, Tenant may cure such Landlord Default on behalf
      of Landlord by doing the necessary work and/or making the necessary payments,
      and billing Landlord for the reasonable costs thereof, which Landlord agrees
      to
      pay to Tenant within 30 days of receipt of Tenant's demand therefor and
      reasonable evidence of the cost of the same. If Landlord shall fail to pay
      within said 30 day period, Tenant may deduct the entire cost from any Fixed
      Rent, Additional Rent and other charges due hereunder. In the event of a
      Landlord Default, Tenant shall mitigate damages and/or loss. Such obligation
      shall survive the Term.





**26.**  **Notices** **.** Whenever, pursuant to this Lease, notice or demand shall or may be given to
      either of the parties by the other, and whenever either of the parties shall
      desire to give to the other any notice or demand with respect to this Lease
      or
      the Property, each such notice or demand shall be in writing, and any laws
      to
      the contrary notwithstanding, shall not be effective for any purpose unless
      the
      same shall be given or served as follows: by
      hand,
      by registered or certified mail, or by overnight express mail such as "Federal
      Express", postage or charges prepaid and proof of delivery requested, to the
      other party's address set forth above, or to such other address or addresses
      or
      parties as may be designated in writing by notice from a party, and if to a
      mortgagee, to such address as the mortgagee shall designate in a notice to
      the
      parties. Notices may be given by an agent or attorney acting on behalf of
      Landlord or Tenant. Notices shall be deemed given upon receipt or rejection.
      If
      notices are not received by the applicable party (as opposed to such notices
      having been rejected), then the notice party shall send a second notice which
      shall be deemed given three business days after being sent as
      aforesaid.





**27.**  **Holding
      Over** **.** If
      Tenant shall hold over after the Termination Date of the Term, then, Tenant
      shall be a month-to-month Tenant on the same terms as herein provided, except
      that Fixed rent shall be 105% of the Fixed rent due and payable as of the
      Termination date.





**28.**  **Broker** **.** Landlord
      and Tenant each represent and warrant that it has had no dealings or
      conversations with any real estate broker in connection with the negotiation
      and
      execution of this Lease.





**29.**  **Notice
      of Lease** **.** Upon the
      request of either party hereto, Landlord and Tenant agree to execute a
      memorandum or notice of lease in recordable form and in compliance with New
      York
      law. Either Tenant or Landlord may record such memorandum or notice of lease.


**30.**  **Waiver
      of Jury Trial** **.** **LANDLORD
      AND TENANT AGREE THAT ANY SUIT, ACTION OR PROCEEDING, WHETHER CLAIM OR
      COUNTERCLAIM, BROUGHT BY LANDLORD OR TENANT ON OR WITH RESPECT TO THIS LEASE
      OR
      THE DEALINGS OF THE PARTIES WITH RESPECT HERETO, SHALL BE TRIED ONLY BY A COURT
      AND NOT BY A JURY. LANDLORD AND TENANT EACH HEREBY KNOWINGLY, VOLUNTARILY AND
      INTENTIONALLY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH SUIT, ACTION OR
      PROCEEDING, FURTHER, LANDLORD AND TENANT EACH WAIVE ANY RIGHT IT MAY HAVE TO
      CLAIM OR RECOVER, IN ANY SUCH SUIT, ACTION OR PROCEEDING, ANY SPECIAL,
      EXEMPLARY, PUNITIVE, CONSEQUENTIAL OR OTHER DAMAGES OTHER THAN, OR IN ADDITION
      TO, ACTUAL DAMAGES. LANDLORD ACKNOWLEDGES AND AGREES THAT THIS SECTION IS A
      SPECIFIC AND MATERIAL ASPECT OF THIS LEASE AND THAT TENENT WOULD NOT ENTER
      INTO
      THIS LEASE IF THE WAIVERS SET FORTH IN THIS SECTION WERE NOT A PART OF THIS
      LEASE.**





**31.**  **Assignment
      and Subletting** **.**  Tenant
      shall have the right to assign and, sublease provided that Tenant shall give
      Landlord written notice thereof. Landlord agrees to provide any such actual
      or
      proposed assignee, or sublessee with an estoppel certificate in form and
      substance reasonably satisfactory to Tenant and Landlord upon the request of
      the
      Tenant. No such assignment or sublet shall release Tenant of its obligations
      hereunder which shall be deemed joint and several with any such assignee or
      sublessee.








**32.**  **Leasehold
      Mortgages** **.**  INTENTIONALLY
      OMITTED.





**33.**  **Miscellaneous** **.**  **(a)**  This
      Lease shall be governed and construed in accordance with the laws of the state
      of New York.





**(b)** The
      headings of the sections of this Lease are for convenient reference only, and
      are not to be construed as part of this Lease.





**(c)** The
      language of this Lease shall be construed according to its plain meaning, and
      not strictly for or against Landlord or Tenant; and the construction of this
      Lease and of any of its provisions shall be unaffected by any argument or claim
      that this Lease has been prepared, wholly or in substantial part, by or on
      behalf of Tenant.





**(d)** Landlord
      and Tenant each warrant and represent to the other, that each has full right
      to
      enter into this Lease and that there are no impediments, contractual or
      otherwise, to full performance hereunder.





**(e)** This
      Lease shall be binding upon the parties hereto and shall inure to the benefit
      of
      and be binding upon the heirs, executors, administrators, successors and assigns
      of Landlord and the successors and assigns of Tenant.





**(f)** In the
      event of any suit, action, or other proceeding at law or in equity
      (collectively, " **Action** "),
      by
      either party hereto against the other, by reason of any matter arising out
      of
      this Lease, the prevailing party shall recover, not only its legal costs, but
      also reasonable attorneys' fees (to be fixed by the Court) for the maintenance
      or defense of said Action, as the case may be.





**(g)** A waiver
      by either party of any breach by the other of any one or more of the covenants,
      agreements, or conditions of this Lease, shall not bar the enforcement of any
      rights or remedies for either that breach or any subsequent breach of any of
      the
      same or other covenants, agreements, or conditions.





**(h)** All of
      the exhibits and schedules attached to this Lease are incorporated into this
      Lease and made a part of this lease.





**(i)** This
      Lease and the referenced exhibits set forth the entire agreement between the
      parties hereto and may not be changed or terminated orally or by any agreement
      unless such agreement shall be in writing and signed by the party against whom
      enforcement of such change or termination is sought





**(j)** If any
      provision of this Lease or the application thereof to any persons or
      circumstances shall to any extent be invalid or unenforceable, the remainder
      of
      this Lease or the application of such provision to persons or circumstances
      other than those to which it is held invalid or unenforceable shall not be
      affected thereby, and each provision of this Lease shall be valid and
      enforceable to the fullest extent permitted by law.





**(k)** The
      submission of this Lease for examination does not constitute a reservation
      of or
      agreement to lease the Property; and this Lease shall become effective and
      binding only upon proper execution and unconditional delivery thereof by
      Landlord and Tenant.





**(l)** This
      Lease may be executed in separate counterparts, each of which shall be an
      original and all of which shall be deemed to be one and the same
      instrument.





**(n)** Landlord
      agrees to cooperate with Tenant (including, without limitation, signing
      applications) in obtaining any necessary permits for any changes to the Property
      or use of the Property (including, without limitation, signage).





**(o)** Any
      controversy or claim which, pursuant to the terms of this Lease, is to be
      resolved by arbitration, shall be settled by arbitration in accordance with
      the
      Commercial Arbitration Rules of the American Arbitration Association. The
      arbitrator’s decision shall be final and binding upon the parties hereto and
      judgment upon the award rendered by the arbitrator(s) may be entered in any
      court having jurisdiction thereof.





**(p)** Landlord
      covenants that it will not do anything which would be detrimental to any land
      use variance which not benefits the Property and/or the Tenant's beneficial
      interests in same.














SIGNATURES
      FOLLOW














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


**LANDLORD** :


Witnessed
      by:





_____/s/
      Tara DeMakes___________   __/s/
      Joseph E. Royce_______________


NAME:
      Joseph E. Royce


_____/s/
      Eileen Pellegrini___________








**TENANT** :


TBS
      SHIPPING SERVICES INC.








_____/s/
      Tara DeMakes___________ BY:__/s/
      Ferdinand V. Lepere___  _______


NAME:
      Ferdinand V. Lepere


TITLE:
      Executive Vice President Finance


____/s/
      Mary Ann Cognatello_______














**EXHIBIT
      A**





**Legal
      Description**








**EXHIBIT
      B**





**Permitted
      Title Exceptions**