Document:

Exhibit 10.2

 

 

LEASE

 

 

 

 

DATED
AS OF APRIL 21, 2005

BETWEEN

399
EXTERIOR STREET ASSOCIATES LLC, as Lessor

 

AND

AMBOY
BUS CO., INC. as Lessee

 

 

 

 

 

LEASE

 

This Lease
(this “Lease”) dated as of April 21, 2005 by and between 399 Exterior
Street Associates LLC, a Delaware Jersey limited liability company with offices
at 119 West 57th Street, Penthouse South, New York, New York 10019 (the “Lessor”)
and Amboy Bus Co., Inc., a New York corporation with offices at 399
Exterior Street, Bronx, New York 10451 (the “Lessee”).

 

In
consideration of the terms and provisions set forth herein, and other good and
valuable consideration, Lessor and Lessee hereby covenant and agree as follows:

 

ARTICLE ONE

LEASE PROPER; DEMISED PREMISES

 

Section 1.01.          Lessor hereby leases and demises unto Lessee, and Lessee
hereby takes and hires from Lessor, the premises described in Schedule A
attached hereto and made a part hereof, together with all easements, rights and
appurtenances thereto (collectively the “Demised Premises”) including the
buildings, structures, fixtures and improvements constructed thereon (the “Improvement”
or “Improvements”).

 

Section 1.02.          This Lease shall commence on the date hereof and shall
continue until the last day of the month of May, 2025 (the “Demised Term”).

 

Section 1.03.          The Demised Premises are leased subject to all existing
liens, encumbrances, covenants, restrictions, easements, agreements, leases
(including the Billboard Lease referred to in Section 32.01 hereof) and
reservations, if any, any state of facts an accurate survey might show, and
zoning rules, restrictions and regulations now in effect or hereafter adopted
by a governmental authority having jurisdiction which relate to the Demised
Premises.

 

ARTICLE TWO

RENT DURING DEMISED TERM

 

Section 2.01.          Lessee covenants and agrees to pay to Lessor promptly when
due without notice or demand fixed rent for the Demised Term which shall be
payable in advance in equal monthly installments commencing on May 1, 2005
and continuing thereafter on the first day of each month during the Demised
Term as more particularly set forth in Schedule B hereto. If any rent date
shall fall on a Saturday, Sunday or holiday, the rental payment will be made on
the next succeeding business day.  If the
Demised Term shall commence on any day other than the first day of a calendar
month, the rent for such month shall be prorated on a daily basis based upon
the actual number of days in the month and shall be payable on the date hereof.

 

Section 2.02.          All amounts payable under Section 2.01 of this Article,
as well as all other amounts payable by Lessee to Lessor under the terms of
this Lease, shall be deemed to be rent and shall be payable in lawful money of
the United States which shall be legal tender, each payment of fixed rent to be
paid to Lessor at the Lessor’s address set forth in this Lease, or at such
other place within the continental limits of the United States as Lessor shall
from time to

 

 

time designate by
notice to Lessee.  All rent shall be
payable without counterclaim, set-off or deductions.

 

Section 2.03.          It is intended that the rent provided for in this Lease
shall be absolutely net to Lessor throughout the Demised Term, free of any
taxes (except as provided in Section 3.07) costs, expenses, liabilities,
charges or other deductions whatsoever with respect to the Demised Premises or
Improvements and/or the ownership, leasing, operation, maintenance, repair,
rebuilding, use or occupation thereof, or with respect to any interest of
Lessor therein, it being the intention of the parties hereto that by the
execution and delivery of this Lease, Lessee shall assume, and timely pay, with
respect to the Demised Premises every obligation relating thereto which the
ownership thereof entails and which, but for this Lease, would be borne by
Lessor.

 

Section 2.04.          All installments of rent which shall not be paid within ten
days after the same shall have become due and payable shall earn interest at 2%
above the prime rate then in effect of Citibank, N.A., or its successors but in
no event more than the maximum legal rate of the jurisdiction in which the
Demised Premises are located for an entity of the character of the Lessee (the “Involuntary
Rate”), from the dates that the same become due and payable until paid, whether
or not demand be made therefor.

 

Section 2.05.          Lessee shall deposit with Lessor upon execution hereof, the
sum of Seventy-Five Thousand ($75,000.00) Dollars as security for Lessee’s
faithful performance of Lessee’s obligations hereunder (the “Deposit”). Lessee
shall not mortgage, pledge, encumber or assign the Deposit or any rights in or
to the Deposit. If Lessee fails to pay rent due hereunder, or otherwise
defaults with respect to any provision of this Lease, Lessor may use, apply or
retain all or any portion of the Deposit for the payment of any rent or for the
payment of any other sums to which Lessee is obligated by reason of its
default. If Lessor so uses or applies all or any portion of the Deposit, Lessee
shall within ten (10) days after written demand therefore deposit cash
with Lessor in an amount sufficient to restore the Deposit to the full
amount.  The Deposit shall bear interest
at the rate of 2% per annum which shall be payable annually to Lessee.  If Lessee performs all of Lessee’s
obligations hereunder, the Deposit shall be returned to Lessee without payment
of interest or other increment for its use at the expiration of the term
hereof, and only after Lessee has vacated the Demised Premises, paid all sums
due to Lessor and fulfilled all of Lessee’s obligations under this Lease.

 

ARTICLE THREE

EXPENSES, TAXES AND OTHER CHARGES AND OBLIGATIONS

 

Section 3.01.          Lessee agrees that it will pay and discharge, as additional
rent, punctually as and when the same shall become due and payable, each and
every cost and expense of every kind and nature whatsoever, for the payment of
which Lessor is, or shall or may be or become, liable by reason of any rights
or interest of Lessor in or under this Lease or the Demised Premises or
Improvements, or by reason of or in any manner connected with or arising out of
the operation, maintenance, alteration, repair, rebuilding, use or occupancy of
the Demised Premises or Improvements, or for any other reason whether similar
or dissimilar to the foregoing, foreseen or unforeseen, connected with or
arising out of the Demised Premises, the Improvements or this

 

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Lease. Subject to
the provisions of Section 3.04 hereof, Lessee further agrees that it will
pay and discharge, as additional rent during the period in which the same shall
be payable without penalty, all real estate taxes, taxes upon or measured by
rents, personal property taxes, utility charges (including, but not limited to,
water and sewer charges), assessments (including, but not limited to,
assessments for public improvements or benefits) and all other governmental
taxes, impositions and charges of every kind and nature whatsoever, whether or
not now customary or within the contemplation of the parties hereto and regardless
of whether the same shall be extraordinary or ordinary, general or special,
unforeseen or foreseen (each such tax, utility charge, water charge, sewer
charge, assessment and other governmental imposition and charge which Lessee is
obligated to pay hereunder being herein sometimes termed a “Tax”), which, at
any time during the Demised Term shall be or become due and payable by Lessor
and which shall be levied, assessed or imposed:

 

(i)            upon
or with respect to, or shall be or become liens upon, the Demised Premises or
Improvements, or any portion thereof or any interest of Lessor therein or under
this Lease; or

 

(ii)           upon
or with respect to Lessor by reason of any actual or asserted engagement by
Lessor, directly or indirectly, in any business, occupation or other activity
in connection with the Demised Premises or Improvements, or any portion
thereof; or

 

(iii)          upon
or against, or which shall be measured by, or shall be or become liens upon,
any rents or rental income, as such, payable to or on behalf of Lessor, in
connection with the Demised Premises or Improvements, or any portion thereof,
or any interest of Lessor therein; or

 

(iv)          upon
or with respect to the ownership, possession, leasing, operation, management,
maintenance, alteration, repair, rebuilding, use or occupancy of the Demised
Premises or Improvements, or any portion thereof; or

 

(v)           upon
this transaction or any document to which Lessee is a party creating or
transferring an interest or an estate in the Demised Premises or Improvements;
or

 

(vi)          upon
or against Lessor or any interest of Lessor in the Demised Premises or
Improvements, in any manner and for any reason whether similar or dissimilar to
the foregoing;

 

under or by
virtue of any present or future law, statute, ordinance, regulation, order or
other requirement of any governmental authority whatsoever, whether federal,
state, county, city, municipal or otherwise (hereinafter sometimes referred to
as a “Law” or “Laws”), it being the intention of the parties hereto that, in so
far as the same may lawfully be done, Lessor shall be free from all such costs
and expenses, and all the Taxes, and that this Lease shall yield to Lessor not
less than the annual rent reserved hereunder throughout the Demised Term. Taxes
shall be not prorated as of the date of commencement of the Demised Term and
Lessee shall pay Taxes for the current fiscal period as they become due and
payable.

 

3

 

Section 3.02.          If by Law any assessment for a public improvement with respect
to the Demised Premises is payable, or any at the option of the taxpayer be
paid, in installments, Lessee may, whether or not interest shall accrue on the
unpaid balance thereof, pay the same, and any accrued interest or any unpaid
balance thereof, in installments as each installment becomes due and payable,
but in any event before any fine, penalty, interest or cost may be added
thereto for non-payment of any installment or interest; provided, however, that Lessee shall not be required to pay any such
installment which becomes due and payable after the expiration of the Demised
Term.

 

Upon the
expiration or earlier termination of this Lease (except for a termination
pursuant to the provisions of Article Thirteen hereof) Taxes, and other
charges which shall be levied, assessed or become due upon the Demised Premises
or Improvements, or any part thereof shall be prorated to the date of such
expiration or earlier termination.

 

Section 3.03.          Intentionally Omitted.

 

Section 3.04.          Notwithstanding anything to the contrary herein contained,
if Lessee deems any Tax relating to the Demised Premises or Improvements,
excessive or illegal, Lessee may defer payment thereof so long as the validity
or the amount thereof is contested by Lessee with diligence and in good faith; provided, however, that Lessee, upon request by Lessor, shall furnish to
Lessor a bond in form, and issued by a surety company, reasonably satisfactory
to Lessor, in an amount equal to the amount of the Tax so contested, which bond
shall guarantee the payment thereof with interest and penalties thereon; and
provided further, that if at any time payment of the whole of such Tax shall
become necessary to prevent the delivery of a tax deed conveying the Demised
Premises or Improvements, or any portion thereof, because of non-payment, or
shall be necessary to prevent a default under any mortgage on the Demised
Premises, then Lessee shall pay the same in sufficient time to prevent the
delivery of such tax deed or default under such mortgage.

 

Section 3.05.          Lessee may contest by appropriate proceedings the validity
or amount of any Tax, whether before or after payment, in the name of Lessor or
of Lessee, or both, as Lessee shall determine, and Lessor agrees that it will,
cooperate with Lessee in any such contest to such extent as Lessee may
reasonably request. It is understood, however, that Lessor shall not be subject
to any liability for the payment of any costs or expenses in connection with
any such proceeding brought by Lessee, and Lessee covenants to pay, and to
indemnify and save harmless Lessor from, any such costs or expenses. In
addition, Lessee shall hold Lessor harmless from any increase in Taxes
resulting solely from Lessee’s proceedings which may extend beyond the Demised
Term.  Lessee shall be entitled to any
refund of any such Tax and penalties or interest thereon which have been paid
by Lessee or which have been paid by Lessor and reimbursed to Lessor by Lessee.

 

Section 3.06.          The certificate, advice or bill of the appropriate official
designated by Law to make or issue the same or to receive payment of any such
Tax, of the non-payment of any such Tax, shall be prima facie evidence
that such Tax was due and unpaid at the time of the making or issuance of such
certificate, advice or bill.

 

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Section 3.07.          It is expressly understood and agreed that Lessee shall not
be required to pay, or reimburse Lessor for (i) any federal capital levy,
franchise tax, revenue tax, income tax or profits tax of Lessor, or any such
tax imposed after the date hereof, by the state in which the Demised Premises
are located, or (ii) any estate, inheritance, devolution, succession,
transfer, stamp, legacy or gift tax which may be imposed upon or with respect
to any transfer (other than stamp taxes in connection with a conveyance by
Lessor to Lessee) of Lessor’s interest in the Demised Premises and
Improvements.

 

Section 3.08.          In the event that Lessee shall fail to pay Taxes as they
become due and payable and before any penalties or interest may accrue on more
than three occasions during any five year period of the Demised Term, Lessor
may require that Lessee pay to Lessor on each date that a regularly scheduled
payment of rent is due a sum equal to one-twelfth of the amount which would be
sufficient to pay the Taxes payable during the next ensuing payment period
which shall be deposited into an escrow fund (“Escrow Fund”) by Lessor.  Lessee agrees to notify Lessor of any changes
to the amounts, schedules and instructions for payment of any Taxes of which it
has obtained knowledge and authorizes Lessor or its agent to obtain the bills
for Taxes directly from the appropriate taxing authority.  Lessor will apply the Escrow Fund to payments
of Taxes required to be made by Lessee pursuant to Article 3 hereof.  If the amount of the Escrow Fund shall exceed
the amounts due for Taxes, Lessor shall return any excess to Lessee or credit
such excess against future payments to be made to the Escrow Fund.  If the Escrow Fund is not sufficient to pay
Taxes, Lessee shall promptly pay to Lessor, upon demand, an amount which shall
be sufficient to make up the deficiency.

 

ARTICLE FOUR

USE AND COMPLIANCE WITH LAWS, ETC.

 

Section 4.01.          Lessor agrees that Lessee may use the Demised Premises and Improvements
for (i) a bus storage and transportation terminal and facilities and
related uses, and (ii) with the prior written consent of Lessor, which
consent shall not be unreasonably withheld or delayed, any other lawful
purpose, as permitted or restricted by Law pursuant to federal, state and local
governmental authority having jurisdiction over the Demised Premises.  Nothing contained in this Lease shall be
construed as a representation or warranty by the Lessor that the Demised
Premises or Improvements, or any portion thereof, may lawfully be used for any
such use.

 

Section 4.02.          Lessee shall, throughout the Demised Term, and at no expense
whatsoever to Lessor, promptly comply or cause compliance, with all laws,
ordinances, orders, rules, regulations and requirements of duly constituted
public authorities, foreseen or unforeseen, ordinary as well as extraordinary,
and whether or not the same shall presently be within the contemplation of the
parties hereto or shall involve any change of governmental policy or require
structural or extraordinary repairs, alterations or additions and irrespective
of the cost thereof, which may be applicable to the Demised Premises or
Improvements, and the repair and alteration thereof including, without
limitation, the fixtures and equipment therein and the sidewalks, curbs and
vaults, if any, adjoining the Demised Premises or the use or manner of use of
the Demised Premises or Improvements; provided, however, if as a result of any
change in laws, ordinances, orders, rules, regulations or requirements of any
duly constituted public authority which occur

 

5

 

during the last
twenty-four (24) months of the Demised Term and which require capital
expenditures for repairs, alterations or additions to the Demised Premises or
Improvements, the cost thereof shall be shared equitably by Lessor and
Lessee.  Lessee acknowledges that Lessee
is an affiliate of the former owner of the Demised Premises and is also a
former occupant of the Demised Premises and that Lessee accepts the Demised
Premises and Improvements in the actual “as is” condition in which the same are
as of the date of this Lease, and as contemplated by the contract of sale
between such affiliates and Lessor (the “Contract of Sale”), and Lessee assumes
all risks, if any, resulting from any present or future latent or patent
defects therein or from the failure thereof to comply with all legal
requirements applicable thereto, and Lessee acknowledges that neither Lessor
nor any agent or representative of Lessor has made no representations, either
express or implied, as to the condition or manner of construction of the
Improvements on the Demised Premises. Lessee further agrees that it will, at
its own cost and expense, fully and faithfully perform and observe all
requirements and conditions of all instruments recorded at the date of the
commencement of the Demised Term and in any instrument recorded thereafter with
the consent of Lessee, in so far as the same shall affect or be applicable to
the Demised Premises or any portion thereof or any easement appurtenant thereto
and also in so far as the same shall impose any obligation upon Lessor as owner
of the Demised Premises.

 

Section 4.03.          Lessee shall have the right to contest by appropriate legal
proceedings, without cost or expense to Lessor, the validity of any law,
ordinance, order, rule, regulation or requirement of the nature herein referred
to and to postpone compliance with the same, provided such contest shall be
promptly and diligently prosecuted by and at the expense of Lessee, that Lessor
shall not thereby suffer any civil, or be subjected to any criminal, penalties
or sanctions, and that Lessee shall properly protect and save harmless Lessor
against any liability and claims for any such noncompliance or postponement of
compliance, and provided,
further, that, if requested so to do by
Lessor, Lessee shall first furnish to Lessor a bond, in form and amount, and
issued by a surety company reasonably satisfactory to Lessor and its first
mortgagee, guaranteeing to Lessor compliance by Lessee with such law,
ordinance, order, rule, regulation or requirement, and indemnifying Lessor
against any and all liability, loss and damage which Lessor may sustain by
reason of Lessee’s failure or delay in complying therewith. Lessor shall have
the right, but shall be under no obligation, to contest by appropriate legal
proceedings, at Lessor’s expense, any such law, ordinance, rule, regulation or
requirement.

 

Section 4.04.          Except to the extent otherwise provided in Sections 10.06
and 11.01, this Lease shall not terminate, nor shall Lessee be entitled to any
abatement of rent or reduction thereof, nor shall the respective obligations of
Lessor and Lessee be otherwise affected, by reason of damage to or destruction
of all or any part of the Demised Premises or Improvements from whatever cause,
the taking of the Demised Premises or Improvements or any portion thereof, by
expropriation or otherwise, the lawful prohibition of Lessee’s use of the
Demised Premises or Improvements, the interference with such use by any private
person or corporation, or by reason of any eviction by paramount title, or for
any other cause whether similar or dissimilar to the foregoing, any present or
future Law to the contrary notwithstanding, it being the intention of the
parties hereto that the annual rent and additional rent and charges payable by
Lessee shall continue to be payable in all events unless the obligation to pay
the same shall be terminated pursuant to the express provisions of this Lease.

 

6

 

Section 4.05.          Lessee is fully familiar with, and accepts, the state of the
title of the Demised Premises.

 

Section 4.06.          Should any Improvement (except a party wall which may
legally be maintained for the life of the wall, but the existence of which is
nevertheless considered an encroachment) encroach upon any adjoining property,
Lessee will, upon Lessor’s demand, at Lessee’s expense, remove the encroaching
portion of the Improvement and restore the Improvement as nearly as practicable
to its original condition.

 

ARTICLE FIVE

PERMITS, LICENSES, ETC.

 

Section 5.01.          Lessee shall at its sole cost and expense procure or cause
to be procured any and all necessary permits, licenses or other authorizations
required for the lawful and proper use, occupation, operation and management of
the Demised Premises and Improvements. Lessee expressly agrees that Lessor is
not, nor shall it be, required to furnish to Lessee or any other occupant of
the Demised Premises or Improvements, during the Demised Term, any water,
sewer, gas, heat electricity, light, power or any other facilities, equipment,
labor, materials or services of any kind whatsoever, and Lessor has made no
representation as to the availability of any of the foregoing at the Demised
Premises.

 

ARTICLE SIX

INDEMNIFICATION AND NON-LIABILITY OF LESSOR

 

Section 6.01.          Lessee covenants and agrees, at its sole cost and expense,
to indemnify and save harmless Lessor against and from any and all claims and
actions by or on behalf of any person, firm, corporation or governmental
authority, as well as losses, damages, liabilities, costs and expenses incurred
by Lessor arising from the occupation, use, possession, conduct or management
of or from any work or thing whatsoever done in or about the Demised Premises
or Improvements during the Demised Term, or the subletting of any part thereof,
and further to indemnify and save Lessor harmless against and from any and all
claims and actions, as well as losses, damages, liabilities, costs and expenses
incurred by Lessor, arising from any condition of any Improvement, or of any
vaults, passageways, or spaces therein or appurtenant thereto, or arising from
any breach or default on the part of Lessee in the performance of any covenant
or agreement on the part of Lessee to be performed, pursuant to the terms of
this Lease, or arising from any act or negligence of Lessee or Lessor, or any
of their respective agents, contractors, servants, employees or licensees, or
arising from any accident, injury or damage whatsoever caused to any person,
firm or corporation, including any subtenant of the Lessee, occurring during
the Demised Term, in or about the Demised Premises or Improvements or upon or
under the sidewalks and the land adjacent thereto, and from and against all
costs, reasonable counsel and expert witness fees, expense and liabilities
incurred in or about any such claim, action or proceeding brought thereon
except that Lessee shall be relieved of its obligation of indemnity herein to
the extent of amounts actually recovered by Lessor from one or more insurance
companies by reason of the injury or damage or loss sustained on the Demised
Premises or Improvements.  In case any
action or proceeding be brought against Lessor by reason of any

 

7

 

such claim, Lessee
upon notice from Lessor covenants to resist or defend such action or proceeding
by counsel satisfactory to Lessor, unless such action or proceeding is resisted
or defended by counsel for any carrier of public liability insurance referred
to in Section 10.04 hereof as authorized by the provisions of any policy
of public liability insurance maintained pursuant to said Section 10.04.
In the construction of the foregoing indemnity, the term Demised Premises shall
mean the Demised Premises including all rights and easements appurtenant
thereto as affected by any covenants, agreements, easements, licenses or
restrictions, express or implied, to which this letting is subject or may
become or be found to be subject whether with or without the consent or
knowledge of the Lessee to the end that the intent of the parties as expressed
in Section 2.03 hereof shall be effectuated, provided, however, Lessee shall not be responsible to indemnify Lessor
against any matters arising under the interests or instruments enumerated in
this sentence caused to be imposed by the affirmative action of Lessor without
Lessee’s consent.

 

Section 6.02.          Lessee further covenants and agrees that Lessor shall not be
responsible or liable to Lessee, or any person, firm or corporation claiming
by, through or under Lessee for, or by reason of, any defect in any
Improvement, or in any engines, boilers, elevators, machinery, electric wiring
or fixtures, or other equipment or apparatus or appliances in any such
Improvement, or for any failure or defect of water, heat, electric light or
power supply, or of any apparatus or appliance in connection therewith, or from
any injury or loss or damage to person or property resulting therefrom, and
Lessor shall not be responsible or liable to Lessee, or any person, firm or
corporation claiming by, through or under Lessee, for any injury, loss or
damage to any person or to the Demised Premises or Improvements, or to any
property of Lessee, or of any other person, contained in or upon the Demised
Premises, caused by or arising or resulting from electric wiring, or plumbing,
water, steam, sewerage, or other pipes, or by or from any machinery or
apparatus, or by or from any defect in or leakage, bursting or breaking of the
same, or by or from any leakage, running or overflow of water or sewage in any
part of the Demised Premises, or by or from any other defect whatsoever, or by
or from any injury or damage caused by, arising or resulting from lightning,
wind, tempest, water, snow or ice, in, upon or coming through or falling from
the roof, skylight, trap-doors, windows, marquees, metal or glass, awnings over
the sidewalk or otherwise, or by or from other actions of the elements, or from
any injury or damage caused by or arising or resulting from acts or negligence
of any occupant or occupants of adjacent, contiguous or neighboring premises,
or any other cause whatsoever.

 

ARTICLE SEVEN

MAINTENANCE AND REPAIRS, COVENANT AGAINST WASTE

AND RIGHT OF INSPECTION

 

Section 7.01.          Lessee shall, throughout the Demised Term, at no expense
whatsoever to Lessor, take good care or cause good care to be taken of the
Demised Premises, sidewalks, if any, adjacent to the Demised Premises and the
Improvements and, subject to the provisions of Article Ten hereof, shall
promptly make or cause to be made all repairs, interior and exterior,
structural and non-structural, ordinary as well as extraordinary, foreseen as
well as unforeseen, necessary to keep said Demised Premises, and sidewalks, if
any, adjacent to the Demised Premises and Improvements in good and lawful order
and condition, wear and tear from reasonable use excepted. When used in this
Article, the term “repairs” shall include

 

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replacements,
restoration and/or renewals when necessary. The provisions and conditions of Article Nine
applicable to changes or alterations shall similarly apply to repairs required
to be done by Lessor under this Article. Lessee expressly waives the right to
make repairs at the expense of Lessor as provided for in any Law in effect at
the time of the execution of this Lease or any amendments thereof, or any other
Law which may be hereafter passed during the Demised Term. Lessor shall not be
required to make or supervise any expenditure whatsoever for the maintenance or
repair of the Demised Premises.

 

Section 7.02.          Lessee shall permit Lessor and the authorized
representatives of Lessor to enter the Demised Premises at all reasonable times
during usual business hours for the purpose of inspecting the same and in the
event Lessee has failed to commence work on any repair for a period of thirty
(30) days following written demand by Lessor (and without notice in an
emergency), for the purpose of making any necessary repairs to the Improvements
and performing any work therein that may be necessary to comply with any Laws,
or that may be necessary to prevent waste or deterioration of the Demised
Premises. The performance thereof by Lessor shall not constitute a waiver of
Lessee’s obligation to perform the same and Lessee shall pay to Lessor, as
additional rent, promptly after demand therefor, all reasonable expenses
incurred by Lessor in making such alterations or repairs. Lessor shall not in
any event be liable for inconvenience, annoyance, disturbance, loss of business
or other damages of Lessee or any other occupant of the Demised Premises, or
part thereof, by reason of making repairs or the performance of any work on the
Demised Premises or Improvements or on account of bringing materials, supplies
and equipment into or through the Demised Premises or Improvements during the
course thereof, and the obligations of Lessee under this Lease shall not
thereby be affected in any manner whatsoever.

 

Section 7.03.          Reference is made to Phase I Environmental Assessment dated March 28,
2005 (a copy of which has been provided to Lessee), and the existence of
certain Hazardous Substances in soil at the Demised Premises at the locations
where soil samples were collected, as shown on Figure 3 of the Report.  Without limiting the foregoing provisions of
this Section, but in addition thereto, Lessee shall, at Lessee’s own cost and
expense, semi-annually inspect all paved areas of the Demised Premises now or
hereafter existing, and deliver to Lessor promptly thereafter an inspection log
that describes the condition of the pavement, and all maintenance undertaken by
Lessee pursuant to this Section 7.03.

 

Section 7.04.          Lessor and Lessee hereby agree that Lessee shall, at Lessee’s
expense, (i) install an oil/water separator using a contractor of Lessee’s
choosing provided that the work is performed in accordance with specifications
as the EISCO-NJ proposal set forth in Schedule D attached hereto (the “oil/water
separator work”), and (ii) pave the cross-hatched/shaded area of the
Demised Premises shown on Schedule E attached hereto using a contractor of
Lessee’s choosing, to the minimum specification of 3 inches of stone and gravel
and 2 inches of top course bituminous material, pitched away from the existing
building (the “paving work”; the oil/water separator work and the paving work
being collectively referred to herein as the “Work”).  Lessor and Lessee agree that the Work shall
be completed by Lessee within four (4) months from the date hereof, in
accordance with the terms and conditions of this Lease, subject to extensions
of such date by reason of force  majeure.

 

9

 

ARTICLE EIGHT

LIENS

 

Section 8.01.          Lessee shall not suffer or permit any mechanic’s, laborer’s
or materialman’s liens to stand against the Demised Premises or Improvements,
or any part thereof, or against the interest of Lessee in the Demised Premises
by reason of any work, labor, services or materials done for, or supplied to,
or claimed to have been done for, or supplied to, Lessor’s grantor, Lessee or
anyone holding the Demised Premises or any part thereof through or under
Lessee. If any such lien shall at any time be filed against the Demised
Premises or Improvements, or any part thereof, or against the interest of
Lessee therein, Lessee shall cause the same to be discharged of record within
thirty (30) days after the date of filing the same, by either payment, deposit
or bond. If Lessee shall fail to discharge any such lien within such period,
then, in addition to any other right or remedy of Lessor, Lessor may, but shall
not be obligated to, procure the discharge of the same either by paying the
amount claimed to be due by deposit in court or bonding, and/or Lessor shall be
entitled, if Lessor so elects, to compel the prosecution of an action for the
foreclosure of such lien by the lienor and to pay the amount of the judgment,
if any, in favor of the lienor, with interest, costs and allowances. Any amount
paid or deposited by Lessor for any of the aforesaid purposes, and all costs
and other expenses of Lessor, including reasonable counsel fees, in defending
any such action or in or about procuring the discharge of such lien, with all
necessary disbursements in connection therewith, together with interest thereon
at the Involuntary Rate from the date of payment or deposit, shall be payable
by Lessee to Lessor as additional rent on the next succeeding rent payment
date.

 

Section 8.02.          Nothing in this Lease shall be deemed to be, or construed in
any way as constituting, the consent or request of Lessor, expressed or
implied, by inference or otherwise, to any person, firm or corporation for the
performance of any labor or the furnishing of any materials for any
construction, rebuilding, alteration or repair of or to the Demised Premises or
the Improvements, or any part thereof, nor as giving Lessee any right, power or
authority to contract for or permit the rendering of any services or the
furnishing of any materials, which might in any way give rise to the right to
file any lien against Lessor’s interest in the Demised Premises or the
Improvements. Lessor shall have the right to post and keep posted at all
reasonable times on the Demised Premises and the Improvements any notices which
Lessor shall be required so to post for the protection of Lessor and the
Demised Premises and Improvements from any such lien.

 

ARTICLE NINE

ALTERATIONS

 

Section 9.01.          Subject to the provisions of the next succeeding Section,
Lessee may alter or add to the Improvements as it may elect provided that the
alteration or addition does not change their general character or diminish
their fair market value or impair the usefulness thereof. All alterations and additions
shall be done in a good and workmanlike way and shall comply with all
applicable Laws relating to the Demised Premises, and any enforceable
restrictions relating to the setback or character of Improvements on the
Demised Premises. All alterations, additions or replacements shall be located
wholly within the perimeter of the property

 

10

 

comprising the
Demised Premises and shall be independent and not connected with improvements
erected on adjoining property without the prior written consent of Lessor.

 

Section 9.02.          Lessee shall have the right to make alternations and
additions to the Demised Premises and Improvements the cost of which shall not
exceed $25,000 and shall comply with the provisions of (c) and (d)(ii) and
(iii) with respect thereto.  Lessee’s
right to make alterations and additions shall, in the case of any such work
which may cost in excess of $25,000, be subject to the following:

 

(a)           if plans and specifications are necessary, or customarily
prepared, in the making the same, Lessee shall cause such plans and
specifications to be prepared and will furnish copies thereof to Lessor prior
to the commencement of such alterations. Lessee further agrees that, before the
commencement of any such alterations, it will file such plans and
specifications with, and obtain the approval thereof by, all municipal or other
governmental departments or authorities having jurisdiction thereof. The
originals of all such approvals or a certified copy thereof satisfactory to
Lessor shall be delivered to and retained by Lessor. Lessor shall execute and
deliver to Lessee such consents by Lessor as may be required by any such
departments or authorities, it being understood, however, that any such consent
or consents by Lessor shall not operate or be construed as a consent by Lessor
for the purpose of filing any lien or making any charge of any kind whatsoever
against Lessor, the Demised Premises or the Improvements and shall not be a
representation or warranty by Lessor as to the accuracy thereof but shall only
be a consent by Lessor in its capacity as owner of the Demised Premises;

 

(b)           Lessee shall procure and maintain such liability insurance,
workers compensation, performance and labor and material bonds as Lessor may
reasonably require in connection with such work with carriers, and upon such
terms, as Lessor may reasonably require;

 

(c)           Lessee shall promptly pay and discharge all costs, expenses,
damages and other liabilities which may arise in connection with or by reason
of such work; and

 

(d)           Lessee shall proceed with due diligence in completion of any
work and, promptly upon completion of any such alteration or addition, Lessee
shall give notice thereof to Lessor together with a certificate signed by a
responsible officer of Lessee, or an architect in the event one was used in
connection with the work, to the effect that (i) such alteration or
addition has been completed in accordance with the plans and specifications, if
any, and to the satisfaction of Lessee; (ii) all contractors,
subcontractors, materialmen and other suppliers who could otherwise claim a
lien on the Demised Premises or the Improvements by reason of having supplied
labor or materials in connection with such alteration or addition have been paid
in full or have duly and effectively waived or released all rights to any such
liens, or that any such liens filed by any of them are being duly contested and
have been bonded (unless Lessor shall have agreed to accept other security
reasonably satisfactory to it); and (iii) subject to any contest of
mechanics’ liens referred to in clause (ii), the Demised Premises and the
Improvements are free and clear of all liens and encumbrances that might or
could attach thereto by reason of such alteration-or addition.

 

11

 

Section 9.03.          All alterations, replacements, and additions made by Lessee
on the Demised Premises shall be and become part of the Improvements and shall,
upon termination of this Lease, belong to Lessor.

 

Section 9.04.          All material salvaged in connection with any work which
Lessee is permitted to do hereunder shall belong to Lessee.

 

ARTICLE TEN

INSURANCE AND DAMAGE

 

Section 10.01.        At all times, (a) Lessor shall keep the Improvements
insured for full replacement value, under a Property Insurance (Special Form)
policy of insurance (which may include, without limitation, rent insurance,
building ordinance coverage, water damage, war and terrorism insurance and in
the future shall include only such additional coverage as is generally carried
for properties of a character similar to the Demised Premises and Improvements
and similarly situated]) and (b) commercial
general liability insurance with a combined single limit of no less than
$10,000,000 per occurrence and aggregate whether as primary or in combination
with umbrella excess.  All insurance
obtained by Lessor shall be for the exclusive benefit of Lessor and Lessor’s
mortgagee, as applicable, except that policy(ies) described in (b) above
shall name Lessee as an additional insured, but not as a named insured.  All losses filed with respect to the Property
Insurance (Special Form) policy of insurance shall be adjusted by and paid to
Lessor.  All policies shall be issued by
insurance carriers approved to do business in the State of New York rated
A-/VIII or better by A.M. Best and Company.

 

All insurance
required by this Section 10.01 shall be evidenced by policies in form and
substance which are then standard in New York State.  Any such insurance policies shall contain to
the extent obtainable, at no additional cost unless the benefited party is
willing to pay such additional cost, an agreement by the insurer not to cancel
such policy or materially alter its coverage except upon at least ten (10) days’
prior written notice to Lessor and Lessee. It is the intention of the parties
hereto that Lessor shall procure and maintain in force at all times, the above
described insurance and that the Lessee will timely pay, as additional rent,
the premiums for such insurance annually or, if Lessee and such company(ies)
shall agree, in installments, and Lessee will provide proof of payment to
Lessor promptly upon making of any such payment.

 

Aggregate
annual premiums for the insurance to be carried pursuant to this Section 10.01
are currently $23,177 (the “Basic Premium Amount”) and cover the insurance
described in the first paragraph of this Section 10.01.  Prior to renewal or replacement of any of the
above insurance, Lessor shall give Lessee at least ten (10) business days
notice thereof accompanied by details of the insurance to be carried and a
premium quote for such insurance from the insurance company or companies which
are to furnish such insurance.  In the
event aggregate annual premiums for future insurance required hereby shall
exceed the Basic Premium Amount by more than $1,000, Lessee may obtain
insurance premium quotes from other insurance carriers which meet the
qualifications set for herein including, without limitation, the same coverage
that will be maintained as of the date of commencement of this Lease, except to
the extent insurance carriers are generally not offering such coverage, and
notify Lessor of the carriers and their premium amounts.  If the aggregate annual premiums for the
insurance which can be obtained by Lessee

 

12

 

shall be less
than the premiums for the insurance proposed by Lessor by $1,000 or more per
annum, Lessor shall either (i) accept the insurance coverage proposed by
Lessee, or (ii) continue coverage with the carriers proposed by Lessor
but, in the latter case, Lessee shall be responsible to pay premiums only on
the basis of the quotes for insurance proposed by Lessee and Lessor shall be
responsible for any balance of the aggregate annual premium amount (to be paid
pro rata in the case of installment payments). 
Lesssor and Lessee agree to cooperate with each other in placing the
insurance pursuant to the provisions of this paragraph.  Any insurance to be obtained by Lessee
hereunder shall (a) comply with the provisions of this Lease as to form of
policies and quality of insurance carrier, and (b) as to liability
insurance, be coverage on an occurrence basis.

 

Section 10.02.        Intentionally omitted.

 

Section 10.03.        Losses payable by reason of the rental value insurance shall
be paid to Lessor to be applied by Lessor first to the payment of rent and all
other charges to be paid hereunder.  Any
balance of such portion of the total proceeds remaining after payment of said
sums during the aforesaid period shall be paid to Lessee.

 

Section 10.04.        (a)  Lessee
further agrees that, throughout the Demised Term, it will maintain (i) commercial
general liability insurance on an occurrence form with contractual liability
endorsement covering the covenants set forth in Section 6.01 hereof,
protecting Lessee and Lessor against claims of any and all persons, firms and
corporations for personal injury, death or property damage occurring upon, in
or about the Demised Premises or Improvements, or any elevators or escalators
therein or thereon, or in or about the adjoining streets, sidewalks and
passageways, such insurance with a combined single limit of no less than
$10,000,000 per occurrence and aggregate, whether as primary or in combination
with umbrella excess for bodily injury and property damage and (ii) with
respect to an construction or other work on or about the Demised Premises and
the Improvements, appropriate workmen’s compensation insurance. All policies
for such insurance as is provided for in this Section 10.04 shall list
Lessor as an additional insured and shall be obtained by Lessee with any
responsible carrier or carriers of Lessee’s selection rated A-/VIII or better
by A.M. Best and Company and approved to do business in New York
State.  Policies and endorsements
evidencing such insurance coverage shall be delivered by Lessee to Lessor
promptly after execution of this Lease, and certificates evidencing renewal of
such insurance shall be delivered to Lessor at least ten (10) days prior
to the expiration of any policy of such insurance followed by copies of
policies and endorsements with reasonable promptness. Any such policies shall
contain, to the extent obtainable, an agreement by the insurers not to cancel
such policies or materially alter their respective coverages except upon at
least ten (10) days’ prior written notice to Lessor.

 

(b)   Lessee shall be responsible, at
Lessee’s own cost and expense, throughout the term of this Lease, to maintain,
and keep in full force and effect, insurance coverage for all vehicles,
furniture, fixtures, machinery (including, without limitation, communication
systems and computer systems), goods, supplies, product and other personalty of
Lessee or others (collectively “Lessee’s Property”) at or about the Demised
Premises.

 

13

 

Section 10.05.        Intentionally omitted.

 

Section 10.06.        If the Improvements shall be damaged or destroyed by fire or
any other casualty whatsoever, Lessor shall repair the damage and restore the
Improvements, at its expense, with reasonable promptness after notice of the
damage or destruction.  In the event that
any of the insurance proceeds with respect to the Demised Premises and
Improvements, shall remain after the completion of such restoration, the excess
shall be paid to Lessee or as it may direct for Lessee’s account.  Lessee’s obligations hereunder are subject to
the following further understandings and agreements:

 

If such fire
or other casualty occurs during the last eighteen (18) months of the Demised
Term or any extension thereof and the Improvements shall be damaged to the
extent of 50% or more of the cost of replacement thereof, either party may
terminate this Lease by giving notice to the other party of its intention to so
terminate, said notice shall be delivered at least sixty (60) days prior to the
effective date of such termination and within forty-five (45) days of delivery
to Lessor of notice of the casualty, which shall be accompanied by the
estimated cost of restoration from a licensed architect or engineer with at
least ten (10) years experience in the New York metropolitan area to the
effect that the Improvements have been damaged to the extent provided in this
paragraph and that Lessee has determined that the Improvements will not be
rebuilt, replaced or repaired. In the event of such termination, all insurance
policies and proceeds shall be assigned and paid to the Lessor.

 

Subject to the
provisions of the preceding paragraph, in the event of any such damage or
destruction by fire or other casualty, the provisions of this Lease shall be
unaffected and Lessee shall remain and continue liable for the payment of all
installments of rent, additional rent, taxes and all other charges and
impositions required hereunder to be paid by Lessee, as though no damage or
destruction by fire or other casualty had occurred, until the Lease terminates
as provided above or otherwise in accordance with the terms of this Lease.

 

Section 10.07.        Lessor and Lessee each agree that it will cooperate with the
other, to such extent as such other party may reasonably require, in connection
with the prosecution or defense of any action or proceeding arising out of, or
for the collection of, any insurance moneys that may be due in the event of any
loss or damage, and that it will execute and deliver to such other party such
instruments as may be required to facilitate the recovery of any insurance
moneys, but the costs and expenses of all such actions and proceedings shall be
paid by Lessee.

 

Section 10.08.        Lessee agrees to give prompt notice to Lessor with respect
to all fires or other casualties occurring upon the Demised Premises.

 

Section 10.09.        Lessor and Lessee acknowledge that under certain
circumstances, damage may have occurred with respect to the Demised Premises
and/or Improvements prior to the date hereof which did not result in the
termination of the Contract of Sale pursuant to its terms.  Lessee shall restore and repair the damaged
portion of the Demised Premises and/or Improvements to essentially the same
condition as existed prior to the occurrence of the casualty causing such
damage at Lessee’s expense and from proceeds of any insurance carried by Lessee
or its affiliates on the Demised Premises and Improvements prior to the date
hereof and the parties agree that Lessor shall have no interest in such
insurance proceeds.  All work shall be
done in accordance with the provisions of Article IX hereof.

 

14

 

Section 10.10.        (a)           Lessor and Lessee shall each
endeavor to secure an appropriate clause in, or an endorsement upon, each
insurance policy obtained by it under this Lease pursuant to which the
respective insurance companies waive their rights of subrogation.  The waiver of subrogation shall extend to the
agents of each party and its employees and, in the case of Lessee, shall also
extend to all other persons and entities occupying or using the Demised
Premises and Improvements in accordance with the terms of this Lease.  If and to the extent that such waiver can be
obtained only upon payment of an additional charge then the party benefiting
from the wavier shall pay such charge upon demand, or shall be deemed to have
agreed that the party obtaining the insurance coverage in question shall be free
of any further obligations under the provisions hereof relating to such waiver.

 

(b)           Each party hereby
releases the other with respect to any claim (including a claim for negligence)
which it might otherwise have against the other party for loss, damages or
destruction with respect to its property by fire or other casualty (including
rental value or business interruption, as the case may be) occurring during the
term of this Lease.

 

ARTICLE ELEVEN

CONDEMNATION

 

Section 11.01.        If, during the Demised Term the whole of the Demised
Premises shall be taken or condemned in eminent domain proceedings for any
public or quasi-public use, or in the event of conveyance in lieu thereof or if
less than the whole is so taken or condemned with the result that the remainder
of the Demised Premises is insufficient to permit the use thereof by Lessee as
permitted by this Lease, as determined to the reasonable satisfaction of the
Lessor (hereinafter termed total condemnation or constructive total
condemnation respectively), this Lease shall cease and terminate on the date on
which the Lessee loses possession of the Demised Premises or the portion
thereof due to such condemnation. Rent, Taxes and other charges herein provided
shall be prorated as of the date of termination.

 

Section 11.02.        If, during the Demised Term, a portion of any of the
property comprising the Demised Premises shall be taken or condemned under the
right of eminent domain, which does not result in the termination of this Lease
(hereinafter termed a partial condemnation), then Lessor shall, at Lessor’s
expense, restore the Improvements on the property remaining so that they will
constitute an architectural unit of the same general character and condition
(as nearly as may be possible in the circumstances) as the previous
Improvements and this Lease will remain in full force and effect with regard to
the remaining portion of such property. 
Any amount of the award remaining after completion of restoration shall
be the property of Lessor as provided in Section 11.03.  Lessor and Lessee acknowledge that under
certain circumstances, damage may have occurred with respect to the Demised
Premises and/or Improvements arising from a condemnation prior to the date
hereof which did not result in the termination of the Contract of Sale pursuant
to its terms.  Lessee shall restore and
repair the damaged portion of the Demised Premises and/or Improvements to
essentially the same condition as existed prior to the condemnation causing
such damage and the parties agree that

 

15

 

any condemnation
award relating thereto shall be paid to Lessee for such purposes with any
balance remaining after completion of restoration and repair to be shared
equally by Lessor and Lessee.  All work
shall be done in accordance with the provisions of Article IX hereof.

 

Section 11.03.        All compensation awarded for any taking or conveyance
arising from a total or constructive total condemnation and, except as provided
in Section 11.02, a partial condemnation, whether for the whole or a part
of the Demised Premises or otherwise, shall be shared by Lessor and Lessee as
may be agreed by the parties or as determined by a court of competent
jurisdiction and in any court proceeding Lessor shall be entitled to make claims
for the residual value of the fee interest in the Demised Premises and
Improvements and Lessee shall be entitled to make claims for the value of its
leasehold estate in this Lease if there is a total or constructive total
condemnation and for the value of the portion of the leasehold estate in this
Lease taken in the event of a partial condemnation and such awards as may be
allowed for trade fixtures or for loss of business.  If a court of competent jurisdiction shall
have conclusively determined that unpaid rent or additional rent under this
Lease shall be due and owing by Lessee to Lessor, the amount thereof shall be
paid from Lessee’s award hereunder if such rent is unpaid at such time.

 

Section 11.04.        In the case of any one or more partial condemnations, the
annual rent thereafter payable under this Lease shall be reduced in the same
proportion as the amount of land originally subject hereto shall have been
reduced by such taking.

 

Section 11.05.        If, at any time after the date hereof, the whole or any part
of the Demised Premises or Improvements or of Lessee’s interest under this
Lease shall be taken or condemned by any governmental body or officer or other
competent authority for its or their temporary use or occupancy, the foregoing
provisions of this Article shall not apply and Lessee shall continue to
pay, in the manner and at the times herein specified, the full amounts of the
annual rent and all additional rent and other charges payable by Lessee
hereunder, and, except only to the extent that Lessee may be prevented from so
doing pursuant to the terms of the order of the condemning authority, to
perform and observe all of the other terms, covenants, conditions and
obligations hereof upon the part of Lessee to be performed and observed, as
though such taking had not occurred. In the event of any such taking as in this
Section 11.05 referred to, Lessee shall be entitled to receive the entire
amount of any award made for such taking, whether paid by way of damages, rent
or otherwise, unless such period of temporary use or occupancy shall extend
beyond the Demised Term in which case such award shall be apportioned between
Lessor and Lessee as of such date of expiration. Lessee covenants that, upon
the termination of any such period of temporary use or occupancy (whether prior
to or subsequent to the termination of this Lease), it will, at its sole cost
and expense, restore the Demised Premises and the Improvements, as nearly as
may be reasonably possible, to the condition in which the same were immediately
prior to such taking. To the extent that Lessor receives, by way of such
apportionment or otherwise, any award or payment to pay or compensate for the
restoration of the Premises, Lessor will pay such sum to Lessee.

 

16

 

ARTICLE TWELVE

LESSOR’S RIGHTS TO PERFORM LESSEE’S COVENANTS

 

Section 12.01.        Lessee covenants and agrees that if it shall at any time
fail to pay, or cause to be paid, an expense, Tax, charge or obligation
pursuant to the provisions of Article Three hereof, or to take out, pay
for, maintain or deliver or cause to be taken out, paid for, maintained or
delivered any of the insurance policies provided for in Article Ten
hereof, or shall fail to make any other payment or perform any other act which
Lessee is obligated to make or perform under this Lease, or cause such to be
done, then Lessor may, but shall not be obligated so to do, after ten (10) days’
notice to Lessee (but without notice in the event of an emergency) and without
waiving, or releasing Lessee from, any obligation of Lessee in this Lease
contained, pay any such expense, Tax, charge or obligation or effect such
insurance coverage and pay premiums therefor, and may make any other payment or
perform any other act which Lessee is obligated to perform under this Lease, in
such manner and to such extent as shall be necessary, and, in exercising any
such rights, pay necessary and incidental costs and expenses, employ counsel
and incur and pay reasonable attorneys’ fees and expenses. All sums so paid by
Lessor and all necessary and incidental costs and expenses in connection with
the performance of any such act by Lessor, together with interest thereon at
the Involuntary Rate from the date of the making of such expenditure by Lessor,
shall be deemed additional rent hereunder and, except as otherwise in this
Lease expressly provided, shall be payable to Lessor as additional rent on the
next rent payment date, and Lessee covenants to pay any such sum or sums with
interest as aforesaid and Lessor shall have the same rights and remedies in the
event of the non-payment thereof by Lessee as in the case of default by Lessee
in the payment of the rent.

 

ARTICLE THIRTEEN

CONDITIONAL LIMITATIONS-DEFAULT PROVISIONS

 

Section 13.01.        This Lease and the Demised Term are subject to the
limitation that if, at any time during the Demised Term, any one or more of the
following events (herein called an “event of default”) shall occur, that is to
say:

 

(i)            if
Lessee shall make an assignment for the benefit of its creditors; or

 

(ii)           if
any petition shall be filed against Lessee in any court, whether or not
pursuant to any statute of the United States or of any State, in any
bankruptcy, reorganization, composition, extension, arrangement or insolvency
proceedings, and Lessee shall thereafter be adjudicated bankrupt, or if such
proceedings shall not be dismissed within sixty (60) days after the institution
of the same; or if any such petition shall be so filed by Lessee or liquidator;
or

 

(iii)          if,
in any proceeding, a receiver, receiver and manager, trustee or liquidator be
appointed for all or any portion of Lessee’s property, and such receiver,
receiver and manager, trustee or liquidator shall not be discharged within
sixty (60) days after the appointment of such receiver, receiver and manager,
trustee or liquidator; or

 

17

 

(iv)          if
Lessee shall fail to pay any installment of the rent provided for herein, or
any part thereof, when the same shall become due and payable, and such failure
shall continue for ten (10) days after notice thereof from Lessor to
Lessee provided, however, that such notices shall be required by Lessor to
Lessee only four (4) times in any calendar year; or

 

(v)           if
Lessee shall fail to pay any item of additional rent or any other charge or sum
required to be paid by Lessee hereunder, and such failure shall continue for
thirty (30) days after notice thereof from Lessor to Lessee after notice
thereof from Lessor to Lessee provided, however, that such notices shall be
required by Lessor to Lessee only four (4) times in any calendar year; or

 

(vi)          if
Lessee shall fail to perform or observe any other requirement of this Lease
(not hereinbefore in this Section 13.01 specified) on the part of the
Lessee to be performed or observed, and such failure shall continue for thirty
(30) days after notice thereof from Lessor to Lessee after notice thereof from
Lessor to Lessee provided, however, that such notices shall be required by
Lessor only four (4) times in any calendar year;

 

then upon the
happening of any one or more of the aforementioned events of default, and the
expiration of the period of time prescribed in any such notice, Lessor shall
have the right, then or at any time thereafter, and while such default or
defaults shall continue, to give Lessee written notice of Lessor’s intention to
terminate this Lease on a date specified in such notice, which date shall not
be less than ten (10) days after the date of giving of such notice, and on
the date specified in such notice Lessee’s right to possession of the Demised
Premises shall cease and Lessee shall peaceably and quietly yield to and
surrender to Lessor the Demised Premises and Improvements located thereon and
this Lease shall thereupon be terminated and all of the right, title and
interest of the Lessee hereunder and in the Demised Premises and Improvements
shall wholly cease and expire in the same manner and with the same force and
effect as if the date of expiration of such ten (10) day period were the date
originally specified herein for the expiration of this Lease and the Demised
Term, and the Lessee shall then quit and surrender the Demised Premises and
Improvements to the Lessor, but the Lessee shall remain liable as hereinafter
provided.

 

Section 13.02.        In the event of any termination of this Lease as in Section 13.01
above provided or as otherwise permitted by Law, or if an event of default
shall continue beyond the expiration of any grace period above provided for,
Lessor may avail itself of any and all remedies available at Law including, but
not limited to entering upon the Demised Premises and Improvements, and having,
repossessing and enjoying the same by summary proceedings, ejectment or
otherwise, and in any such event neither Lessee nor any person claiming through
or under Lessee by virtue of any statute or of an order of any court shall be
entitled to possession or to remain in possession of the Demised Premises but
shall forthwith quit and surrender the Demised Premises and Improvements. Lessor
shall incur no liability to any person for or by reason of any such entry,
repossession or removal of Lessee or any person claiming through or under
Lessee.

 

18

 

Section 13.03.        In case of any such termination, re-entry, or dispossess by
summary proceedings, ejectment or otherwise, the rent and all other charges
required to be paid by Lessee hereunder shall thereupon become due and payable
up to the time of such termination, re-entry or dispossess, and Lessee shall
also pay to Lessor all expenses, reasonable attorneys’ fees, brokerage
commissions, and all other costs paid or incurred by Lessor for obtaining
possession of the Demised Premises, for restoring the Demised Premises and
Improvements to good order and condition, for altering, decorating, repairing
and otherwise preparing the same for reletting, for maintaining the Demised
Premises and Improvements and for reletting the same, and for damages for loss
of rentals from the Demised Premises and Improvements through the Demised Term.

 

Section 13.04.        The right of Lessor to recover from Lessee the amounts
hereinabove provided for shall survive the issuance of any order for possession
or other cancellation or termination hereof, and Lessee hereby expressly waives
any defense that might be predicated upon the issuance of such order for
possession or other cancellation or termination hereof. Lessee hereby expressly
waives service of any notice of intention to re-enter that may be required by
law. Lessee, for itself and any and all persons claiming through or under
Lessee, including its creditors, upon the termination of this Lease and of the
Demised Term in accordance with the terms hereof, or in the event of entry of
judgment for the recovery of the possession of the Demised Premises and the
Improvements in any action or proceeding, or if Lessor shall enter the Demised
Premises and the Improvements by process of law or otherwise, hereby waives any
right of redemption provided or permitted by any Law or decision now or
hereafter in force, and does hereby waive, surrender and give up all rights or
privileges which Lessee may or might have under and by reason of any present or
future statute, law or decision, to redeem the Demised Premises and the
Improvements or for a continuation of this Lease for the term hereby demised
after having been dispossessed or ejected therefrom by process of law, or
otherwise. Lessee waives all right to trial by jury in any summary or other
judicial proceedings hereafter instituted by Lessor against Lessee in respect
to the Demised Premises and the Improvements. The words “reentry” and “re-enter”
as used in this Lease shall not be construed as limited to their strict legal
meaning.

 

Section 13.05.        Anything in this Article Thirteen to the contrary
notwithstanding, it is expressly understood that, with respect to any event of
default within the purview of subdivision (vi) of Section 13.01
hereof, if such event of default is of such a nature that it cannot, with due
diligence, be cured within a period of thirty (30) days, Lessor shall not be
entitled to re-enter the Demised Premises and the Improvements or serve a
notice of termination upon Lessee, as provided in said Section 13.01, nor
shall the same be regarded as an event of default for any of the purposes of
this Lease, if Lessee shall have commenced the curing of such default within
the period of thirty (30) days referred to in said subdivision (vi), and so
long as Lessee shall thereafter proceed with all due diligence to complete the
curing of such default not susceptible of being cured with due diligence within
thirty (30) days, and the time of Lessee within which to cure the same shall be
extended for such period as may be necessary to complete the same with all due
diligence.

 

19

 

ARTICLE FOURTEEN

CUMULATIVE REMEDIES-WAIVER-ORAL CHANGE

 

Section 14.01.        The specified remedies to which Lessor may resort under the
terms of this Lease are cumulative and are not intended to be exclusive of any
other remedies or means of redress to which Lessor may be lawfully entitled in
case of any breach or threatened breach by Lessee of any provision of this
Lease.

 

Section 14.02.        The failure of Lessor to insist in any one or more cases
upon the strict performance of any of the terms, covenants, conditions,
provisions or agreements of this Lease or to exercise any option herein
contained shall not be construed as a waiver or a relinquishment for the future
of any such term, covenant, condition, provision, agreement or option. A
receipt and acceptance by Lessor of rent or any other payment, or the
acceptance of performance of any thing required by this Lease to be performed,
with knowledge of the breach of any term, covenant, condition, provision or
agreement of this Lease, shall not be deemed a waiver of such breach, nor shall
any such acceptance of rent in a lesser amount than is herein provided for
(regardless of any endorsement on any check, or any statement in any letter
accompanying any payment of rent) operate or be construed either as an accord
and satisfaction or in any manner other than as payment on account of the
earliest rent then unpaid by Lessee, and no waiver by Lessor of any term,
covenant, condition, provision or agreement of this Lease shall be deemed to
have been made unless expressed in writing and signed by Lessor.

 

Section 14.03.        In addition to the other remedies in this Lease provided,
Lessor shall be entitled to the restraint by injunction of any violation or
attempted or threatened violation, of any of the terms, covenants, conditions,
provisions or agreements of this Lease.

 

Section 14.04.        This Lease shall not be affected by any laws, ordinances or
regulations, whether federal, state, county, city, municipal or otherwise,
which may be enacted or become effective from and after the date of this Lease
affecting or regulating or attempting to affect or regulate the rent herein
reserved or continuing in occupancy Lessee or any sublessees or assignees of
Lessee’s interest in the Demised Premises and Improvements beyond the dates of
termination of their respective leases, or otherwise.

 

Section 14.05.        This Lease may not be changed orally, but only by agreement
in writing signed by the party against whom enforcement of the change,
modification or discharge is sought or by its agent.

 

ARTICLE FIFTEEN

QUIET ENJOYMENT

 

Section 15.01.        Lessor covenants that so long as Lessee shall pay the rent
provided for herein and shall keep, observe and perform all of the other
covenants of this Lease, and subject to the provisions of Sections 4.05 and
4.06, Lessee shall and may peaceably and quietly have, hold and enjoy the
Demised Premises and Improvements for the Demised Term aforesaid free of
interference from Lessor or those claiming through or under Lessor. This
covenant shall be

 

20

 

construed as running
with the land to and against subsequent owners and successors in interest, and
is not, nor shall it operate or be construed as, a personal covenant of Lessor,
except to the extent of Lessor’s interest in said Demised Premises and only so
long as such interest shall continue, and thereafter this covenant shall be
binding only upon such subsequent owners and successors in interest, to the
extent of their respective interests, as and when they shall acquire the same,
and only so long as they shall retain such interest.

 

ARTICLE SIXTEEN

SURRENDER OF DEMISED PREMISES

 

Section 16.01.        Except as otherwise provided in this Lease, Lessee shall,
upon the expiration or termination of this Lease for any reason whatsoever,
surrender to Lessor the Demised Premises and the Improvements, together with
all alterations and replacements thereof then on the Demised Premises, in good
order, condition and repair, except for reasonable wear and tear. Title to all
trade fixtures, furniture and equipment (other than building equipment) of
Lessee and its permitted sublessees installed in the Demised Premises shall
remain in Lessee and in such sublessee, and, upon the expiration or other termination
of this Lease, the same may and, upon demand of Lessor, shall be removed and
any resultant damage to the Demised Premises or the Improvements shall be
repaired, by and at the expense of Lessee. 
Any of the foregoing which shall remain on the Demised Premises at the
end of the Demised Term shall be deemed to be abandoned property.  Lessor or Lessor’s agents shall have the
right to place notices on the Demised Premises at any time prior to six months
of the expiration of the Term of offering the Demised Premises for lease or for
sale.

 

ARTICLE SEVENTEEN

ASSIGNMENT AND SUBLETTING

 

Section 17.01.        Lessee shall not assign, sublet, mortgage, pledge or
otherwise encumber this Lease, without the prior written consent of Lessor in
each instance.  If this Lease shall be
assigned, or if the Demised Premises or any part thereof shall be underlet or
occupied by anybody other than Lessee, Lessor may, but shall not be obligated
to, after default by Lessee beyond applicable grace or cure periods, collect
rents from the assignee, undertenant or occupant, and apply the net amount
collected to the rents herein reserved, but no assignment, underletting,
occupancy or collection shall be deemed a waiver of the provisions hereof, the
acceptance of the assignee, undertenant or occupant as lessee under this Lease
or a release of Lessee, from obtaining the express consent in writing of Lessor
to any further assignment or underletting. 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 Lessor’s prior written
consent in each instance.

 

Section 17.02.        If Lessee shall desire to assign this Lease or to sublet all
or part of the Demised Premises, Lessee shall give notice (“Tenant’s Notice”)
thereof to Lessor, which Tenant’s Notice shall set forth: (a) with respect
to an assignment of this Lease, the approximate date upon which Lessee desires
the assignment to be effective and any consideration Lessee

 

21

 

would receive under
such assignment, (b) with respect to a sublet of all or part of the
Demised Premises: (i) the approximate dates upon which Lessee desires the
sublease term to commence and expire, (ii) the rental rate and other
material business terms upon which Lessee would sublet such premises, and (iii) a
description of the Demised Premises showing the portion to be sublet (the “Sublease
Space”), (c) to the extent known, the name and address of the proposed
assignee or subtenant, and the nature of its business and its proposed use of
the Demised Premises (it being understood that Lessee need not have identified
a proposed assignee or subtenant at the time of the giving of Tenant’s Notice),
(d) a copy of the proposed form of assignment or sublease and any other
agreements relating thereto, and if the proposed transaction is an assignment
of this Lease, Tenant’s Notice shall be deemed an offer from Lessee to Lessor
whereby Lessor may, at its option terminate this Lease. Said option may be
exercised by Lessor by notice given to Lessee at any time within twenty (20)
says after Tenant’s Notice has been given by Lessee to Lessor, and during such
twenty-day period, Lessor shall not assign this Lease nor sublet the Sublease
space to any person other than Lessor.

 

Section 17.03.        If Lessor exercises its option to terminate this Lease
pursuant to Section 17.02 hereof, this Lease shall end and expire on the
date that such assignment was to be effective, as if such date were the
scheduled termination date of this Lease, and rent and additional rent due
hereunder shall be paid and apportioned to such date. In such event, Lessor and
Lessee, upon request of either party, shall enter into an agreement ratifying
and confirming such termination.

 

Section 17.04.        In the event Lessor does not exercise its option to
terminate pursuant to Section 17.02 above, then, as a condition to Lessor’s
agreement to consider Lessee’s proposed assignment or subletting, Lessee shall
furnish to Lessor, to the extent not previously delivered: (i) a statement
setting forth in reasonable detail the identity of the proposed assignee or
subtenant, the nature of its business and its proposed use of the Demised
Premises, and (ii) current financial information with respect to the
proposed assignee or subtenant, including, without limitation, its most recent
financial report. Lessor’s consent to the proposed assignment or sublease shall
not be unreasonably withheld or delayed, provided and upon condition that:

 

(a)           The proposed assignee or subtenant is a reputable person or
entity of good character and with sufficient financial net worth considering
the responsibility involved, which financial net worth shall not be less than
that of Lessee as of the date hereof, and Lessor has been furnished with
reasonable proof thereof;

 

(b)           The form of the proposed sublease or instrument of
assignment shall be reasonably satisfactory to Lessor and shall comply with the
applicable provisions of this Article 17, and Lessee shall deliver a true
and complete original, fully executed counterpart of such sublease or
instrument of assignment and assumption to Lessor promptly upon the execution
and delivery thereof;

 

(c)           The rental and other material terms and conditions of the
assignment or sublease are substantially the same as those contained in Tenant’s
Notice (with no variance in basic economic terms of greater than 3% from those
set forth in the Tenant’s Notice and in the event of such a greater variance,
Lessor shall have a renewed right to terminate this Lease as provided in Section 17.02
above); and

 

22

 

(d)           Lessee and its proposed subtenant or assignee, as the case
may be, shall execute and deliver to Landlord an agreement, in form and
substance reasonably satisfactory to Lessor, setting forth the terms and
conditions upon which Lessor shall have granted its consent to such assignment
and assumption or subletting, and the agreement of Lessee and such subtenant or
assignee, as the case may be, to be bound by the provisions of this Article 17.

 

Section 17.05.        Each subletting pursuant to this Article shall be
subject to all of the covenants, agreements, terms, provisions and conditions
contained in this Lease.  Notwithstanding
any such subletting to any other subtenant and/or acceptance of rent or
additional rent by Lessor from any sublessee, Lessee shall and will remain
fully liable for the payment of rent and additional rent due and to become due
hereunder and for the performance of all the covenants, agreements, terms,
provisions and conditions contained in this Lease on the part of Lessee to be
performed and all acts and omissions of any subtenant permitted hereunder which
shall be in violation of any of the obligations of this Lease, and any such
violation shall be deemed to be a violation by Lessee.

 

Section 17.06.        After an assignment or subletting permitted under this
Lease, no other and further assignment or subletting of the Demised Premises by
any person claiming through or under Lessee shall or will be made except upon
compliance with and subject to the provisions of this Article.

 

Section 17.07.        In the event that (a) Lessor fails to exercise its
option under Section 17.02 hereof and consents to a proposed assignment or
sublease, and (b) Lessee fails to execute and deliver the assignment or
sublease to which Lessor consented within one hundred twenty (120) days after
the giving of such consent, then, Lessee shall again comply with all the
provisions and conditions of Section 17.02 hereof before assigning this
Lease or subletting all or part of the Demised Premises.

 

Section 17.08.        With respect to each and every sublease or subletting
authorized by Lessor under the provisions of this Lease it is further agreed:

 

(a)           No sublease shall be valid, and no subtenant shall take
possession of the Demised Premises or any part thereof, until an executed
counterpart of such sublease has been delivered to Lessor and approved in
writing by Lessor; and

 

(b)           Each sublease shall be subject and subordinate to this Lease
and to the matters to which this Lease is or shall be subordinate, and each
subtenant by entering into a sublease is deemed to have agreed that in the
event of termination, re-entry or dispossession by Lessor under Article 13
of this Lease or applicable law, Lessor may, at its option, take over all of
the right, title and interest of Lessee, as sublandlord, under such sublease,
and such subtenant shall attorn to Lessor pursuant to the then executory
provisions of such sublease, except that Lessor shall not (i) be liable
for any previous act or omission of Lessee under such sublease, (ii) be
subject to any counterclaim, offset or defense, not expressly provided in such
sublease, which theretofore accrued to such subtenant against Lessee, (iii) be
bound by any previous prepayment of more than one month’s rent or additional
rent, or (iv) be obligated to perform any work in the subleased

 

23

 

space, and the
subtenant shall execute and confirm such attornment. The provisions of this Article 17
shall be self-operation and no further instrument shall be required to give
effect to this provision.

 

Section 17.09.        For the purposes of this Lease, the term “Profit”
means any rents, additional charges or other consideration paid under the
sublease to Lessee by the sublessee which is in excess of rent and additional
rent accruing during the term of the sublease in respect of the subleased space
(at the rate per square foot payable by Lessee hereunder) pursuant to the terms
hereof (including, but not limited to, sums paid for the sale or rental of
Lessee’s fixtures, leasehold improvements, equipment, furniture or other
personal property, which are in excess of, in the case of the sale or lease of
equipment, furniture and furnishings, the then fair market value thereof, which
shall be presumed to be the net unamortized or undepreciated cost thereof
determined on the basis of Lessee’s federal income tax returns), less expenses
reasonably and actually incurred by Lessee on account of brokerage commissions,
out-of-pocket legal fees and disbursements paid to third parties, architectural
fees, alteration expenses, advertising costs and free rent or other concessions
in connection with such sublease.  As
further consideration for any subletting or assignment approved by Lessor,
fifty percent (50%) of all Profit shall be paid to Lessor when paid by the
sublessee or assigneee to the Lessee. 
Lessee shall furnish to Lessor, upon request, a statement setting forth
the basis on which Profit is calculated and shall grant Lessor the right to
inspect books and records relating to Profit.

 

Section 17.10.        Notwithstanding anything to the contrary set forth in this Article 17:

 

(i)            Tenant
shall have the right to permit parties and entities which are affiliated with,
or related to Lessee to occupy and use portions of the Demised Premises for the
uses contemplated by this Lease without Lessor’s consent.  A list of current affiliated parties or
entities is set forth in Schedule C hereto although additional parties or
entities may be added which are bona fide affiliates of Lessee or otherwise
related thereto; and

 

(ii)           a
sale or transfer of all, or substantially all, of the stock of the Lessee or
all, or substantially all, of the assets of Lessee in connection with, in
either case, a transfer, sale or merger of the business activities of Lessee
shall not constitute a transfer subject to the provisions of this Article 17.

 

Section 17.11.        Any assignment or transfer permitted hereunder shall be made
only if, and shall not be effective until, the assignee shall execute,
acknowledge and deliver to Lessor an agreement, in form and substance
reasonably satisfactory to Lessor, whereby the assignee shall assume the
obligations of this Lease on the part of the Lessee to be performed or
observed.  Section 17.06 shall
continue in effect as to any such assignee.

 

ARTICLE EIGHTEEN

ENTIRE AGREEMENT

 

Section 18.01.        It is expressly understood and agreed by and between the
parties hereto that this Lease sets forth all the promises, agreements,
conditions and understandings between

 

24

 

Lessor and Lessee
with respect to the Demised Premises, and that there are no promises,
agreements, conditions or understandings, either oral or written, between them
other than as are herein set forth. It is further understood and agreed that no
subsequent alteration, amendment, change or addition to this Lease shall be binding
upon Lessor or Lessee unless reduced to writing and signed by them.

 

ARTICLE NINETEEN

EXCAVATIONS ON ADJOINING PROPERTY

 

Section 19.01.        If any excavation or other building operation shall be about
to be made or shall be made upon any adjoining premises or streets, Lessee
shall permit any third persons obligated by Law to protect the Demised Premises
and Improvements, and their respective representatives, to enter upon the
Demised Premises and Improvements and shore the foundations and walls thereof and
to do any other act or thing necessary for the safety or preservation of the
Demised Premises and Improvements, subject to such reasonable conditions,
including insurance and indemnities, as Lessee shall impose upon such third
persons and Lessor shall receive copies of all of the foregoing.

 

ARTICLE TWENTY

INTENTIONALLY OMMITTED

 

ARTICLE TWENTY-ONE

ESTOPPEL CERTIFICATES

 

Section 21.01.        Lessee agrees at any time and from time to time, but not
more frequently than twice each calendar year, upon not less than ten (10) days’
prior request by either, to execute, acknowledge and deliver to the party
requesting the same a statement in writing certifying that this Lease is
unmodified and is in full force and effect (or if there have been modifications
that the same is in full force and effect as modified and stating the
modifications), and the dates to which the rent and other charges have been
paid in advance, if any, it being intended that any such statement delivered
pursuant to this Article may be relied upon by any prospective purchaser
or mortgagee of the Demised Premises.

 

ARTICLE TWENTY-TWO

INTENTIONALLY OMMITTED

 

ARTICLE TWENTY-THREE

NOTICES

 

Section 23.01.        NOTICES.  All notices or other written communications
hereunder shall be deemed to have been properly given: (i) upon delivery,
if delivered in person, (ii) one (1) Business Day (defined below)
after having been deposited for overnight delivery with any reputable overnight
courier service, or (iii) three (3) Business Days after having been
deposited

 

25

 

in any post office
or mail depository regularly maintained by the U.S. Postal Service and sent by
registered or certified mail, postage prepaid, return receipt requested,
addressed to Lessor or Lessee at their respective addresses stated in this
Lease, or at such other place as Lessor or Lessee may from time to time
designate by a written notice to the other. 
Copies of all notices or other communications to Lessor and Lessee shall
also be given, in the manner provided above, as follows:

 

	
  If to Lessor, a copy to:

  	
  Farer Fersko, a Professional Association

  
	
   

  	
  600 South Avenue 

  
	
   

  	
  P.O. Box 580

  Westfield, New Jersey 07091

  
	
   

  	
  Attention:  Jack Fersko, Esq.

  
	
   

  	
  Facsimile:  (908) 789-8660

  
	
   

  	
  Telephone: (908) 789-8550

  

 

	
  If to
  Lessee, a copy to:

  	
  Stroock &
  Stroock & Lavan LLP

  
	
   

  	
  180 Maiden
  Lane

  
	
   

  	
  New York,
  New York 10038-4982

  
	
   

  	
  Attention:  Real Estate Department

  
	
   

  	
  Facsimile:  212-806-6006

  
	
   

  	
  Telephone:
  212-806-5400

  

 

For purposes hereof, “Business Day” shall mean a day on which
commercial banks are not authorized or required by law to close in New York,
New York.

 

ARTICLE TWENTY-FOUR

INVALIDITY OF PARTICULAR PROVISIONS

 

Section 24.01.        If any term or provision of this Lease or the application
thereof to any person or circumstance shall to any extent be invalid or
unenforceable, the remainder of this Lease, or the application of such term or
provision to persons or circumstances other than those as to which it is
invalid or unenforceable, shall not be affected thereby, and each term of this
Lease shall be valid and be enforced to the fullest extent permitted by law.

 

ARTICLE TWENTY-FIVE

INTENTIONALLY OMMITTED

 

ARTICLE TWENTY-SIX

HAZARDOUS SUBSTANCES

 

Section 26.01.        In addition to the provisions of Article 4 hereof,
Lessee covenants and agrees that: (a) all uses and operations on or of the
Demised Premises and Improvements (including, without limitation, the Tanks
(defined below)), by Lessee or any other person or

 

26

 

entity, shall be in
compliance with all Environmental Laws (defined below) and permits issued
pursuant thereto; (b) there shall be no Releases (defined below) of
Hazardous Substances (defined below) in, on, under or from the Demised Premises
or Improvements by Lessee or anyone controlled by, controlling or under common
control with Lessee; and (c) Lessee shall keep the Demised Premises free
and clear of all liens and other encumbrances imposed pursuant to any
Environmental Laws, whether due to any act or omission of Lessee or any other
person or entity.  Lessee shall notify
Lessor in writing of (i) any Releases or threatened Releases of Hazardous
Substances in, on, under, from or migrating towards the Demised Premises or
Improvements; (ii) any non-compliance with any Environmental Laws related
in any way to the Demised Premises or Improvements; (iii) any required or
proposed Remediation (defined below) of Hazardous Substances relating to the
Demised Premises or Improvements; and (iv) any written or oral notice or
other communication of which any Lessee becomes aware from any source
whatsoever (including but not limited to a governmental authority) relating in
any way to Hazardous Substances or Remediation thereof, possible liability of
any person or entity pursuant to any Environmental Law, other environmental
conditions in connection with the Demised Premises or Improvements, or any
actual or potential administrative or judicial proceedings in connection with
anything referred to in this Lease. 
Lesseee shall not commence Remediation actions at the Demised Premises
(except in an emergency) prior to (i) obtaining all necessary permits,
registrations, licenses, certificates and approvals from all governmental
authorities required pursuant to Law, including without limitation if
necessary, air pollution control permits and water pollution discharge
elimination system permits; and (ii) delivering a copy of each to
Lessor.  Remediation shall not include
any engineering or institutional controls (other than an existing building or a
parking lot paving as a cap), use restrictions or signage; provided, however,
that any required Remediation shall be only to the extent required for
commercial use.  Lessor agrees to advise
Lessor of any meetings scheduled with any governmental authorities relating to
Environmental Laws and to afford Lessor the opportunity to attend any such
meeting.

 

Section 26.02.        Lessee covenants and agrees at its sole cost and expense, to
protect, defend, indemnify, release and hold Lessor harmless from and against
any and all Losses (defined below) imposed upon or incurred by or asserted
against any Lessor and directly or indirectly arising out of or in any way
relating to any one or more of the following (except to the extent the same
relate solely to Hazardous Substances first introduced to the Demised Premises
by anyone other than Lessee or its respective agents or employees following the
expiration of the term of this Lease); (a) the past, present or future
Release of any Hazardous Substances in, on, above, or under the Demised
Premises; (b) any past, present or threatened non-compliance or violations
of any Environmental Laws (or permits issued pursuant to any Environmental Law)
in connection with the Demised Premises or operations thereon; and (c) any
legal or administrative processes or proceedings or judicial proceedings in any
way connected with any matter addressed in this Lease.

 

Section 26.03.        As used in this Lease, the following terms shall have the
following meanings:

 

The term “Hazardous
Substances” includes but is not limited to any and all substances (whether
solid, liquid or gas) defined, listed, or otherwise classified as pollutants,
hazardous wastes, hazardous substances, hazardous materials, extremely
hazardous wastes, or words of similar meaning or regulatory effect under any
present or future Environmental Laws or that may

 

27

 

have a
negative impact on human health or the environment, including but not limited
to petroleum and petroleum products, asbestos and asbestos-containing
materials, mold, polychlorinated biphenyls, lead, radon, radioactive materials,
flammables and explosives.

 

The term “Environmental
Law or Laws” means any present and future federal, state and local laws,
statutes, ordinances, rules, regulations and the like, as well as common law,
relating to protection of human health or the environment, relating to
Hazardous Substances, relating to liability for or costs of Remediation or
prevention of Releases of Hazardous Substances or relating to liability for or
costs of other actual or threatened danger to human health or the
environment.  The term includes, but is
not limited to, the following statutes, as amended, any successor thereto, and
any regulations promulgated pursuant thereto, and any state or local statutes,
ordinances, rules, regulations and the like addressing similar issues:  the Comprehensive Environmental Response,
Compensation and Liability Act; the Emergency Planning and Community Right-to-Know
Act; the Hazardous Substances Transportation Act; the Resource Conservation and
Recovery Act (including but not limited to Subtitle I relating to underground
storage tanks); the Solid Waste Disposal Act; the Clean Water Act; the Clean
Air Act; the Toxic Substances Control Act; the Safe Drinking Water Act; the
Occupational Safety and Health Act; the Federal Water Pollution Control Act;
the Federal Insecticide, Fungicide and Rodenticide Act; the Endangered Species
Act; the National Environmental Policy Act; and the River and Harbors Appropriation
Act.

 

The term “Losses”
includes any losses, damages, costs, fees, expenses, claims, suits, judgments,
awards, liabilities (including but not limited to strict liability),
obligations, debts, diminutions in value, fines, penalties, charges, costs of
Remediation (whether or not performed voluntarily), amounts paid in settlement,
litigation costs, attorneys’ fees, engineers’ fees, environmental consultants’
fees, and investigation costs (including but not limited to costs for sampling,
testing and analysis of soil, water, air, building materials, and other
materials and substances whether solid, liquid or gas), whether or not incurred
in connection with any judicial or administrative proceedings, actions, claims,
suits, judgments or awards.

 

The term “Release”
or “Releases” with respect to any Hazardous Substance includes but is not
limited to any release, deposit, discharge, emission, leaking, leaching,
spilling, seeping, migrating, injecting, pumping, pouring, emptying, escaping,
dumping, disposing or other movement of Hazardous Substances.

 

The term “Remediation”
includes but is not limited to any response, remedial, removal, or corrective
action; any activity to clean up, detoxify, decontaminate, contain or otherwise
remediate any Hazardous Substance; any actions to prevent, cure or mitigate any
Release of any Hazardous Substance; any action to comply with any Environmental
Laws or with any permits issued pursuant thereto; any inspection,
investigation, study, monitoring, assessment, audit, sampling and testing,
laboratory or other analysis, or evaluation relating to any Hazardous
Substances.

 

Section 26.04.        Lessee shall permit Lessor, and the authorized
representatives of Lessor, to enter the Demised Premises during business hours
at reasonable times upon reasonable advance notice for the purpose of
confirming compliance with Section 26.01 above.  Lessor may, at Lessor’s sole cost and
expense, conduct a new or updated environmental inspection or

 

28

 

assessment provided
that the investigations for such inspection or assessment shall not
unreasonably interfere with the conduct of Lessee’s business on the Demised
Premises.  Any such inspection or
assessment, including any report or summary thereof, shall be at Lessor’s sole
cost and expense unless the inspection or assessment shall reveal a Release
that is required to be reported to a government authority under applicable Law
in which case the cost and expense shall be paid by Lessee.  Upon completion of Lessor’s inspection or
assessment, Lessor shall repair and restore any affected area(s) of the Demised
Premises from any damage caused by the reason of the entry by Lessor or Lessor’s
agents onto the Demised Premises pursuant hereto.

 

Section 26.05.        Lessee and Lessor acknowledge that there are two (2) approximately
4000 thousand gallon underground storage tanks and four (4) above ground
gasoline tanks on the Demised Premises (the “Tanks”).  Lessee accepts the Tanks “as is”, shall
register the Tanks with any governmental agency and shall keep, maintain,
repair and replace (if necessary) the Tanks, all as may be required by
Environmental Law and Law and Lessee shall be regarded as the owner and
operator of the Tanks for the purposes of this Lease. Lessor shall not be
liable or bound in any manner by any verbal or written statements or
representations relating to the Tanks, or their operation, condition, character
or quality, or whether the Tanks are in compliance with Environmental Laws.  Lessee shall not install any additional
underground storage tanks at the Demised Premises without the prior written
consent of Lessor, which Lessor may grant or withhold in Lessor’s sole and
absolute discretion.

 

ARTICLE TWENTY-SEVEN

NO BROKERS OR AGENTS

 

Section 27.01.        Lessor and Lessee represent and warrant that no broker or
agent was involved in any negotiations leading up to, or in connection with,
the execution and delivery of this Lease. 
Lessor and Lessee agree to indemnify and hold the other harmless from
and against any loss or damage suffered by the other by reason of any breach of
their respective representation and warranties hereunder.

 

ARTICLE TWENTY-EIGHT

MEMORANDUM OF LEASE

 

Section 28.01.        Lessor and Lessee agree, upon the request of either party,
to execute and deliver, in proper form for recording, a memorandum of this
Lease and any amendment or supplement thereto, as may be sufficient for
purposes of recording or filing in the appropriate recorder’s or register’s
office to provide public notice of this Lease or any amendments or supplement
thereto.  As a condition of the delivery
of such memorandum, Lessee shall deliver to Lessor’s counsel, in proper form
for recording, an executed termination of such memorandum of lease, which shall
be held in escrow until such time as this Lease shall terminate.

 

29

 

ARTICLE TWENTY-NINE

COVENANTS TO BIND AND BENEFIT RESPECTIVE PARTIES

 

Section 29.01.        The terms, conditions, covenants, provisions and agreements
herein contained shall be binding upon and inure to the benefit of Lessor,
their successors and assigns, and Lessee, it successors and assigns.

 

ARTICLE THIRTY

LEGAL FEES

 

Section 30.01.        Each party shall pay its own attorneys’ fees in connection
with the preparation and negotiation of this Lease; however, if any legal
action is instituted in connection with this Lease, the prevailing party in
such action shall be entitled to recover from the other party reasonable
attorneys’ fees, costs and expenses related to such legal action, including
reasonable attorneys’ fees, costs and expenses in all trial, appellate,
post-judgment and bankruptcy proceedings.

 

ARTICLE THIRTY-ONE

CHOICE OF LAW

 

Section 31.01.        This Lease shall be governed by the laws of the State of New
York.

 

ARTICLE THIRTY-TWO

BILLBOARD LEASE

 

Section 32.01.        Lessor and Lessee acknowledge the existence of the Lease
Agreement (the “Billboard Lease”) dated August 5, 1999 between Metro
Affiliates Inc., as lessor, and Outer Limits, LLC, as lessee, which leases to
such lessee a portion of the Demised Premises for the purpose of the
constructing and maintaining a two sided billboard advertising structure.  Lessee has accepted this Lease subject to the
Billboard Lease and Lessor and Lessee further agree as follows: :

 

(i)            Lessor
shall be responsible, at Lessor’s sole cost and expense, for performance of all
obligations of the “Lessor” under the Billboard Lease except that Lessee shall
permit Lessor and/or the tenant under the Billboard Lease to have access to,
and use of, the Demised Premises and Improvements to the extent necessary to
accomplish the foregoing.

 

(ii)           Lessor
shall be entitled to receive and retain all rent and other payments due and
payable by the “Lessor” under the Billboard Lease, which shall continue to be
paid directly to Lessor, and Lessor shall also receive, and shall be
responsible for the return of, the security deposit made pursuant to the
Billboard Lease.  Upon request of the
Lessor, Lessee shall execute and deliver a written confirmation of the foregoing
directed to the tenant under the Billboard Lease.

 

30

 

(iii)          Upon
the termination of the Billboard Lease, Lessor shall be free to deal with the
billboard improvements in any manner it may elect including, without
limitation, the replacement thereof with a substantially similar
billboard.  Lessor may also replace the
Billboard Lease with a replacement or substitute lease for a similar use and a
similar billboard provided that the terms and conditions thereof shall not (a),
as to Lessee, be more onerous than the Billboard Lease and shall not impose
upon Lessee any obligations or responsibilities not contemplated by the
Billboard Lease; or (b) interfere with the Lessee’s use and enjoyment of
the Demised Premises other than as presently contemplated by the Billboard
Lease.

 

(iv)          Lessor
shall indemnify and hold Lessee harmless from and against any and all claims
and actions by or on behalf of any person, firm, corporation or governmental
authority, as well as losses, damages, liabilities, costs and expenses incurred
by Lessee arising from the occupation, use, possession, conduct or management
of or from any work or thing whatsoever done in or about the Demised Premises
or Improvements during the Demised Term arising from under the Billboard Lease
or any replacement lease for the Billboard Lease, except that Lessor shall be
relieved of its obligation of indemnity herein to the extent of amounts
actually recovered by Lessee from one or more insurance companies by reason of
the injury or damage or loss sustained on the Demised Premises or Improvements.

 

ARTICLE THIRTY-THREE

SUBORDINATION AND NON-DISTURBANCE AGREEMENT

 

Section 33.01.        Lessee agrees that this Lease shall be subject and
subordinate to any mortgage on the Demised Premises provided that the holder of
such mortgage shall to enter into an agreement in writing with Lessee, which
agreement shall be reasonably acceptable to Lessee and such mortgagee, which
shall provide that the mortgagee thereunder shall agree that the mortgagee, and
its successor and assigns, shall not evict Lessee or disturb Lessee’s
possession under this Lease, or join Lessee as a named party defendant in any
foreclosure proceeding pursuant to the mortgage (except to the extent required
by law) provided no event of default shall have occurred and be continuing
under this Lease, and, if required by such mortgagee, shall confirm the
subordination provided for above.  A form
of agreement shall be deemed acceptable if the terms and provisions do not
change the terms and conditions of this Lease or the Lessee’s rights hereunder,
do not affect Lessee’s use and occupancy of the Demised Premises and
Improvements or otherwise materially adversely affect the rights of Lessee.

 

ARTICLE THIRTY-FOUR

 

POSSIBLE
RELOCATION

 

Section 34.01.        Lessor and Lessee have had discussions concerning the
possible relocation of the Lessee’s business activities to a site other than
the Demised Premises.  No agreement was
reached with respect to this issue although Lessor and Lessee may have future

 

31

 

discussions relating
thereto.  No agreement relating to a
possible relocation shall be binding on Lessee without Lessee’s prior written
consent.

 

 

[No further
material on this page; the execution page follows immediately hereafter]

 

32

 

IN WITNESS
WHEREOF, Lessor and Lessee have signed, or have caused this instrument to be
signed, and delivered, as of the date first set forth above.

 

 

	
   

  	
  399 EXTERIOR STREET ASSOCIATES LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kenneth Cohen

  	
   

  
	
   

  	
   

  	
  Name: Kenneth Cohen

  
	
   

  	
   

  	
  Title: Managing Member

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AMBOY BUS CO., INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Neil Abitabilo

  	
   

  
	
   

  	
   

  	
  Name: Neil Abitabilo

  
	
   

  	
   

  	
  Title: Chief Financial Officer

  

 

33

 

SCHEDULE A

 

[Property
Description]

 

A-1

 

SCHEDULE B

 

[Basic
Rent Schedule]

 

Note:      Dates to be adjusted to reflect commencement of Demised
Term.

 

B-1

 

SCHEDULE C

 

[Affiliates]

 

Atlantic Express Transportation Corp.

 

Atlantic-Hudson, Inc.

 

Atlantic Queens Bus Corp.

 

Metropolitan Escort Service, Inc.

 

Staten Island Bus, Inc.

 

C-1Exhibit 10.3

 

	
  

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  STANDARD
  OFFER, AGREEMENT AND ESCROW

  
	
  INSTRUCTIONS FOR PURCHASE OF REAL ESTATE

  
	
  (Non-Residential)

  
	
  AIR Commercial Real Estate Association

  

 

	
   

  	
   

  	
   

  	
  April 12, 2005

  
	
   

  	
   

  	
   

  	
  (Date for Reference Purposes)

  

 

1.              Buyer.

 

1.1
 S.R. Partners, a California general partnership, (“Buyer”)
hereby offers to purchase the real property, hereinafter described, from the
owner thereof (“Seller”)
(collectively, the “Parties” or
individually, a “Party”), through
an escrow (“Escrow”) to close 30 or 120 days after the waiver or expiration of the
Buyer’s Contingencies, or sooner if Buyer so elects (“Expected Closing Date”) to be held by Commerce Escrow Company (“Escrow Holder”)
whose address is 1545 Wilshire
Boulevard, Suite 600, Los Angeles, California 90017, Attn: Khanh Doan, Phone No. (213) 484-0855, Facsimile
No. (213) 484-0417 upon the terms and conditions set forth in
this agreement (“Agreement”).
Buyer shall have the right to assign Buyer’s rights hereunder, but any such assignment
shall not relieve Buyer of Buyer’s obligations herein unless Seller expressly
releases Buyer.

 

1.2
 The term “Date of Agreement” as used herein shall be the date when by
execution and delivery (as defined in paragraph 20.2) of this document or a
subsequent counteroffer thereto, Buyer and Seller have reached agreement in
writing whereby Seller agrees to sell, and Buyer agrees to purchase, the
Property upon terms accepted by both Parties.

 

2.              Property.

 

2.1
 The real property (“Property”) that is the subject of this
offer consists of (insert a brief physical description) approximately 158,756 square feet of land and
improvements thereon is located
in the City of Los Angeles, County of Los Angeles, State of California, is commonly known by the street address of 201 Sotello Street and is legally described as: (Legal description shall be furnished through
escrow and shall be subject to Buyer’s approval as part of Buyer’s approval of
condition of title under Paragraph 9.1(f) below.) (APN: 5409-3-26,28,29).

 

2.2
 If the legal description of the Property
is not complete or is inaccurate, this Agreement shall not be invalid and the
legal description shall be completed or corrected to meet the requirements of Fidelity National Title Company (Attn: Jeff
Dasse) (“Title Company”), which shall issue the
title policy hereinafter described.

 

2.3
 The Property includes, at no additional
cost to Buyer, the permanent improvements thereon, including those items which
pursuant to applicable law are a part of the property, as well as the following
items, if any, owned by Seller and at present located on the Property:
electrical distribution systems (power panel, bus ducting, conduits,
disconnects, lighting fixtures); telephone distribution systems (lines, jacks
and connections only); space heaters; heating, ventilating, air conditioning
equipment (“HVAC”); air lines;
fire sprinkler systems; security and fire detection systems; carpets; window
coverings; wall coverings; and those other items set forth in Paragraph 28 of the addendum (collectively, the “Improvements”).

 

2.4  The fire
sprinkler monitor: o is owned by Seller and included in the Purchase Price, o is leased by Seller, and Buyer will need to
negotiate a new lease with the fire monitoring company, or o ownership will be detemined during Escrow and
shall be subject to Buyer’s approval as part of Buyer’s approval of the
condition of title of personal property as set forth in Paragraph 9.1(l) below.

 

2.5
 Except as provided in Paragraph 2.3, the
Purchase Price does not include Seller’s personal property, furniture and
furnishings, and                                                                                                                                                   all
of which shall be removed by Seller prior to Closing in compliance with all
applicable laws, except to the extent that such items are sold or leased by
Seller to the tenant under the new lease described in Paragraph 32, in which
case they shall be removed in compliance with all applicable laws upon the
expiration of termination of such lease.

 

 

	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
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  ©2003 - AIR COMMERCIAL REAL ESTATE ASSOCIATION

  	
  FORM OF A-5-3/04E

  

 

1

 

3.              Purchase Price.

 

3.1
 The purchase price (“Purchase Price”) to be paid by Buyer to
Seller for the Property shall be $4,850,000.00, conditionally subject to
increase by up to an additional $150,000 as described in Paragraph 33, to a
total of $5,000,000.00, payable as follows:

 

	
   

  	
   

  	
  (a)          Cash down payment,
  including the Deposit as defined in paragraph 4.3 (or if an all cash
  transaction, the Purchase Price):

  	
   

  	
  $

  	
  4,850,000.00

  	
   

  
	
  (Strike if not applicable)

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b)         Cash held in escrow for
  conditional payments under Paragraph 33.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Amount of “New Loan” as defined in paragraph 5.1,
  if any:

  	
   

  	
  $

  	
  150,000.00

  	
   

  
	
   

  	
   

  	
  (c)   Buyer shall take title to the Property subject to and/or assume
  the following existing deed(s) of trust (“Existing
  Deed(s) of Trust”) securing the existing promissory note(s) (“Existing Note(s)”):

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)    An Existing Note (“First Note”)
  with an unpaid principal balance as of the Closing of approximately:

  	
   

  	
  $

  	
   

  	
   

  
	
  (Strike if not applicable)

  	
   

  	
  Said First Note is payable at $                                                            per
  month, including interest at the rate of                     %
  per annum until paid (and/or the entire
  unpaid balance is due on                                                                           ).

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)   An Existing Note (“Second
  Note”) with an unpaid principal balance as of the Closing of
  approximately:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
  Said Second Note is payable at $                                                        per
  month, including interest at the rate of                     %
  per annum until paid (and/or the entire unpaid balance is due on                                                                           ).

  	
   

  	
   

  	
   

  
	
  (Strike if not applicable)

  	
   

  	
  (d)   Buyer
  shall give Seller a deed of trust (“Purchase Money Deed of
  Trust”) on the roperty, to secure the promissory note of Buyer to
  Seller described in paragraph 6

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (“Purchase
  Money Note”) in the amount of:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Purchase Price (subject to condition
  in Paragraph 33):

  	
   

  	
  $

  	
  5,000,000.00

  	
   

  
										

 

3.2
 If Buyer is taking title to the Property subject to, or assuming, an
Existing Deed of Trust and such deed of trust permits the beneficiary to demand
payment of fees including, but not limited to, points, processing fees, and
appraisal fees as a condition to the transfer of the Property, Buyer agrees to
pay such fees up to a maximum of 1.5% of the unpaid principal balance of the
applicable Existing Note.

 

4.              Deposits.

 

4.1  o Buyer
has delivered to Broker a check in the sum of $                                  ,
payable to Escrow Holder, to be held by Broker until both Parties have executed
this Agreement and the executed Agreement has been delivered to Escrow Holder, orý Buyer shall deliver to Escrow Holder a check
in the sum of $100,000.00 when both Parties have executed this Agreement
and the executed Agreement has been delivered to Escrow Holder.  When cashed, the check shall be deposited into
the Escrow’s trust acount to be applied toward the Purchase Price of the
Property at the Closing.  Should Buyer
and Seller not enter into an agreement for purchase and sale, Buyer’s check or
funds shall, upon request by Buyer, be promptly returned to Buyer.

 

4.2
 Additional deposits:

 

(a)
Within 5 business days after the Date of Agreement, Buyer shall deposit with
Escrow Holder the additional sum of $ N/A to be applied to the
Purchase Price at the Closing.

 

(b)
Within 5 business days after the contingencies discussed in paragraph 9.1(a)
through (k), and (q) are approved or waived, Buyer shall deposit with Escrow
Holder the additional sum of $ N/A to be applied to the
Purchase Price at the Closing.

 

4.3
 Escrow Holder shall deposit the funds
deposited with it by Buyer pursuant to paragraphs 4.1 and 4.2 (collectively the
“Deposit”), in a State or Federally
chartered bank in an interest bearing account whose term is appropriate and
consistent with the timing requirements of this transaction.  The interest therefrom shall accrue to the
benefit of Buyer, who hereby acknowledges that there may be penalties or
interest forfeitures if the applicable instrument is redeemed prior to its
specified maturity.  Buyer’s Federal Tax
Identification Number is                                   .
NOTE: Such interest bearing account cannot be opened until Buyer’s Federal Tax
Identification Number is provided.

 

5.              Financing Contingency. (Strike if not applicable)

 

5.1
 This offer is contingent upon Buyer
obtaining from an insurance company, financial institution or other lender, a
commitment to lend to Buyer a sum equal to at least                    %
of the Purchase Price, at terms reasonably acceptable to Buyer.  Such loan (“New
Loan”) shall be secured by a first deed of trust or mortgage on the
Property.  If this Agreement provides for
Seller to carry back junior financing, then Seller shall have the right to approve
the terms of the New Loan.  Seller shall
have 7 days from receipt of the commitment setting forth the proposed terms of
the New Loan to approve or disapprove of such proposed terms.  If Seller fails to notify Escrow Holder, in
writing, of the disapproval within said 7 days it shall be conclusively presumed
that Seller has approved the terms of the New Loan.

 

5.2
 Buyer hereby agrees to diligently pursue
obtaining the New Loan.  If Buyer shall fail to notify its Broker, Escrow
Holder and Seller, in writing within                      days
following the Date of Agreement, that the New Loan has not been obtained, it
shall be conclusively presumed that Buyer has either obtained said New Loan or
has waived this New Loan contingency.

 

5.3
 If, after due diligence, Buyer shall
notify its Broker, Escrow Holder and Seller, in writing, within the time
specified in paragraph 5.2 hereof, that Buyer has not obtained said New Loan,
this Agreement shall be terminated, and Buyer shall be entitled to the prompt
return of the Deposit, plus any interest earned thereon, less only Escrow
Holder and Title Company cancellation fees and costs, which Buyer shall pay.

 

6.              Seller Financing (Purchase Money Note). (Strike if not
applicable)

 

6.1
 The Purchase Money Note shall provide
for interest on unpaid principal at the rate of                        %
per annum, with principal and

 

 

	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
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2

 

interest paid as follows:

 

	
   

  
	
   

  
	
   

  

 

The Purchase Money Note and
Purchase Money Deed of Trust shall be on the current forms commonly used by
Escrow Holder, and be junior and subordinate only to the Existing Note(s)
and/or the New Loan expressly called for by this Agreement.

 

6.2
 The Purchase Money Note and/or the
Purchase Money Deed of Trust shall contain provisions regarding the following
(see also paragraph 10.3 (b)):

 

(a)
 Prepayment.  Principal may be prepaid in whole or in part
at any time without penalty, at the option of the Buyer.

 

(b)
 Late Charge.  A late charge of 6% shall be payable with
respect to any payment of principal, interest, or other charges, not made
within 10 days after it is due.

 

(c)
 Due On Sale.  In the event the Buyer sells or transfers
title to the Property or any portion thereof, then the Seller may, at Seller’s
option, require the entire unpaid balance of said Note to be paid in full.

 

6.3
 If the Purchase Money Deed of Trust is
to be subordinate to other financing, Escrow Holder shall, at Buyer’s expense
prepare and record on Seller’s behalf a request for notice of default and/or
sale with regard to each mortgage or deed of trust to which it will be
subordinate.

 

6.4
 WARNING:
CALIFORNIA LAW DOES NOT ALLOW DEFICIENCY JUDGEMENTS ON SELLER FINANCING.  IF BUYER ULTIMATELY DEFAULTS ON THE LOAN,
SELLER’S SOLE REMEDY IS TO FORECLOSE ON THE PROPERTY.

 

7.              Real Estate Brokers.

 

7.1
 The following No
real estate broker(s) (“Brokers”)
and brokerage relationships exist in this transaction . and are consented to
by the Parties (check the applicable boxes):

 

	
  o

  	
   

  	
                                                                                                                      represents
  Seller exclusively (“Seller’s Broker”);

  
	
   

  	
   

  	
   

  	
   

  
	
  o

  	
   

  	
                                                                                                                      represents
  Buyer exclusively (“Buyer’s Broker”);
  or

  
	
   

  	
   

  	
   

  	
   

  
	
  o

  	
   

  	
                                                                                                                      represents
  both Seller and Buyer (“Dual Agency”).

  

 

The Parties acknowledge that
Brokers are the procuring cause of this Agreement.  See paragraph 24 regarding the nature of a
real estate agency relationship.  Buyer
shall use the services of Buyer’s Broker exclusively in connection with any and
all negotiations and offers with respect to the Property for a period of 1 year
from the date inserted for reference purposes at the tope of page 1.

 

7.2
 Buyer and Seller each represent and
warrant to the other that he/she/it has had no dealings with any person, firm,
broker or finder in connection with the negotiation of this Agreement and/or
the consummation of the purchase and sale contemplated herein, other than the
Brokers named in paragraph 7.1, and no broker or other person, firm or entity,
other than said Brokers is/are entitled to any commission or finder’s fee in connection
with this transaction as the result of any dealings or acts of such Party.  Buyer and Seller do each hereby agree to
indemnify, defend, protect and hold the other harmless from and against any
costs, expenses or liability for compensation, commission or charges which may
be claimed by any broker, finder or other similar party, other than said named
Brokers by reason of any dealings or act of the indemnifying Party.

 

8.              Escrow and Closing.

 

8.1
 Upon acceptance hereof by Seller, this
Agreement, including any counteroffers incorporated herein by the Parties,
shall constitute not only the agreement of purchase and sale between Buyer and
Seller, but also instructions to Escrow Holder for the consummation of the
Agreement through the Escrow.  Escrow
Holder shall not prepare any further escrow instructions restating or amending
the Agreement unless specifically so instructed by the Parties or a Broker
herein.  Subject to the reasonable
approval of the Parties, Escrow Holder may, however, include its standard
general escrow provisions.

 

8.2
 As soon as practical after the receipt
of this Agreement and any relevant counteroffers, Escrow Holder shall ascertain
the Date of Agreement as defined in paragraphs 1.2 and 20.2 and advise the
Parties and Brokers, in writing, of the date ascertained.

 

8.3
 Escrow Holder is hereby authorized and
instructed to conduct the Escrow in accordance with this Agreement, applicable
law and custom and practice of the community in which Escrow Holder is located,
including any reporting requirements of the Internal Revenue Code.  In the event of a conflict between the law of
the state where the Property is located and the law of the state where the
Escrow Holder is located, the law of the state where the Property is located
shall prevail.

 

8.4
 Subject to satisfaction of the
contingencies herein described, Escrow Holder shall close this escrow (the “Closing”) by recording a general warranty
deed (a grant deed in California) and the other documents required to be recorded,
and by disbursing the funds and documents in accordance with this Agreement.

 

8.5
 Buyer and Seller shall each pay one-half
of the Escrow Holder’s charges and Seller shall pay the usual recording fees
and any required documentary transfer taxes.  Seller shall pay the premium for a standard
coverage owner’s or joint protection policy of title insurance.

 

8.6
 Escrow Holder shall verify that all of
Buyer’s contingencies have been satisfied or waived prior to Closing.  The matters contained in paragraphs 9.1
subparagraphs (b), (c), (d), (e), (g), (i), (n), and (o), and (q), 9.4, 9.5, 12, 13, 14, 16, 18, 20, 21, 22, and 24 are,
however, matters of agreement between the Parties only and are not instructions
to Escrow Holder.

 

8.7
 If this transaction is terminated for
non-satisfaction and non-waiver of a Buyer’s Contingency, as defined in
paragraph 9.2, then neither of the Parties shall thereafter have any liability
to the other under this Agreement, except to the extent of a breach of any
affirmative covenant or warranty in this Agreement.  In the event of such termination, Buyer shall
be promptly refunded all funds deposited by Buyer with Escrow Holder, less only
Title Company and Escrow Holder cancellation fees and costs, all of which shall
be Buyer’s obligation.

 

8.8
 The Closing shall occur on the Expected
Closing Date, or as soon thereafter as the Escrow is in condition for Closing;
provided, however, that  if
the Closing does not occur by the Expected Closing Date and said Date is not
extended by mutual instructions of the Parties, a Party not then in default under this Agreement may notify the
other Party, Escrow Holder, and Brokers, in writing that, unless the Closing
occurs within 5 business days following
said notice, the Escrow shall be deemed terminated without further notice or
instructions.

 

8.9
 Except as otherwise provided herein, the
termination of Escrow shall not relieve or release either Party from any
obligation to pay Escrow Holder’s fees and costs or constitute a waiver,
release or discharge of any breach or default that has occurred in the
performance of the obligations, agreements, covenants or warranties contained
therein.

 

8.10
 If this Escrow is terminated for any
reason other than Seller’s breach or default, then at Seller’s request, and as
a condition to the return of Buyer’s deposit, Buyer shall within 5 days after
written request deliver to Seller, at no charge, copies of all surveys,
engineering studies, soil reports, maps, master plans, feasibility studies and
other similar items prepared by or for Buyer that pertain to the Property.  Provided, however, that Buyer shall

 

 

	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
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3

 

not be required to deliver
any such report if the written contract which Buyer entered into with the
consultant who prepared such report specifically forbids the dissemination of
the report to others.

 

9.              Contingencies to Closing.

 

9.1
 The Closing of this transaction is
contingent upon the satisfaction or waiver of the following contingencies.  IF BUYER
FAILS TO NOTIFY ESCROW HOLDER, IN WRITING, OF THE DISAPPROVAL OF ANY OF SAID
CONTINGENCIES WITHIN THE TIME SPECIFIED THEREIN, IT SHALL BE CONCLUSIVELY
PRESUMED THAT BUYER HAS APPROVED SUCH ITEM, MATTER OR DOCUMENT.  Buyer’s conditional approval shall constitute
disapproval, unless provision is made by the Seller within the time specified
therefore by the Buyer in such conditional approval or by this Agreement,
whichever is later, for the satisfaction of the condition imposed by the Buyer.
 Escrow Holder shall promptly provide all
Parties with copies of any written disapproval or conditional approval which it
receives.  With regard to subparagraphs
(a) through (l) the pre-printed time periods shall control unless a different
number of days is inserted in the spaces provided or otherwise specified in the
addendum attached hereto.  See Paragraph
29 of the addendum regarding any time periods applicable to Buyer’s
Contingencies, as defined in Paragraph 9.2 below.

 

(a)
Disclosure.  Seller shall make to Buyer, through escrow,
all of the applicable disclosures required by law (See AIR Commercial Real
Estate  Association (“AIR”)
standard form entitled “Seller’s Mandatory Disclosure Statement”) and provide
Buyer with a completed Property Information Sheet (“Property
Information Sheet”)
concerning the Property, duly executed by or on behalf of Seller in the current
form or equivalent to that published by the AIR within 10 or                days
following the Date of Agreement.  Buyer
has 10 days from the receipt of said disclosures, or 60 days from the Date ofAgreement, whichever is later, to
approve or disapprove the matters disclosed.

 

(b)
Physical Inspection.  Buyer has 10 or                days
from the receipt of the Property Information Sheet or 60 days from the Date of
Agreement, whichever is later, to
satisfy itself with regard to the physical aspects and size of the Property.

 

(c)
Hazardous Substance Conditions Report.
 Buyer has 30 or                days
from the receipt of the Property Information Sheet or 60 days  from the Date of Agreement, whichever is
later, to satisfy itself with regard to the environmental aspects of the
Property.  Seller recommends that Buyerobtain a Hazardous Substance Conditions
Report concerning the Property and relevant adjoining properties.  Any such report shall be paid for by Buyer.  A “Hazardous
Substance” for purposes of this Agreement is defined as any
substance whose nature and/or quantity of existence, use, manufacture, disposal
or effect, render it subject to Federal, state or local regulation,
investigation, remediation or removal as potentially injurious to public health
or welfare.  A “Hazardous Substance Condition” for purposes of this Agreement is
defined as the existence on, under or relevantly adjacent to the Property of a
Hazardous Substance that would require remediation and/or removal under
applicable Federal, state or local law.

 

(d)
Soil Inspection.  Subject to Paragraph 14, Buyer has 30 or                days
from the receipt of the Property Information Sheet or 60 days from the Date of
Agreement, whichever is later, to satisfy itself with regard to the condition
of the soils on the Property.  Seller
recommends that Buyer obtain a soil test report.  Any such report shall be paid for by Buyer.  Seller shall provide Buyer copies of any soils
report that Seller may have within 10 days of the Date of Agreement.

 

(e)
Governmental Approvals.  Buyer has 30 or 60 days from the Date of Agreement to satisfy
itself with regard to approvals and permits from governmental agencies or
departments which have or may have jurisdiction over the Property and which
Buyer deems necessary or desirable in connection with its intended use of the
Property, including, but not limited to, permits and approvals required with
respect to zoning, planning, building and safety, fire, police, handicapped and
Americans with Disabilities Act requirements, transportation and environmental
matters.

 

(f)
Conditions of Title.  Escrow Holder shall cause a current commitment
for title insurance (“Title Commitment”)
concerning the Property  issued
by the Title Company, as well as legible copies of all documents referred to in
the Title Commitment (“Underlying Documents”)
to be delivered to Buyer within
10 or                days
following the Date of Agreement.  Buyer
has 60 days from the Date of Agreement, but not less than 10 days from thereceipt of the Title Commitment and
Underlying Documents to satisfy itself with regard to the condition of title.  The disapproval of Buyer of any monetary encumbrance, which by the terms of
this Agreement is not to remain against the Property after the Closing, shall
not be considered a failure of
this contingency, as Seller shall have the obligation, at Seller’s expense, to
satisfy and remove such disapproved monetary encumbrance at or before the Closing.

 

(g)
Survey.  Buyer has 60 days from the Date of Agreement,
but not less than 30 or                days
from the receipt of the Title Commitment and  Underlying Documents to satisfy itself with
regard to any ALTA title supplement based upon a survey prepared to American
Land Title Association (“ALTA”) standards for an owner’s policy by a
licensed surveyor, showing the legal description and boundary lines of the
Property, any easements of record,
and any improvements, poles, structures and things located within 10 feet of
either side of the Property boundary lines.  Any such survey shall be prepared at Buyer’s direction and expense.  If Buyer has obtained a survey and approved
the ALTA title supplement, Buyer may elect within the period allowed for Buyer’s approval of a
survey to have an ALTA extended coverage owner’s form of title policy, in which
event Buyer shall pay any additional
premium attributable thereto.

 

(h)
Existing Leases and Tenancy Statements.
 Seller shall within 10 or             days
of the Date of Agreement provide both Buyer and  Escrow Holder with legible copies of all
leases, subleases or rental arrangements (collectively, “Existing Leases”) affecting the Property,
and with a tenancy statement (“Estoppel Certificate”) in the latest form or equivalent to that published by the AIR,
executed by Seller and/or each tenant and subtenant of the Property.  Seller
shall use its best efforts to have each tenant complete and execute an Estoppel
Certificate.  If any tenant fails orrefuses to provide an Estoppel
Certificate then Seller shall complete and execute an Estoppel Certificate for
that tenancy.  Buyer has 10 days from thereceipt of said Existing Leases and
Estoppel Certificates or 60 days from the Date of Agreement, whichver is later,
to satisfy itself with regard to the Existing Leases and any other tenancy issues.  Without limiting the foregoing, Seller agrees
to cause any lease of the property or any portion thereof to be terminated asof the Closing, so that Buyer can lease
the entire property under the new lease described in Paragraph 32.

 

(i)
Other Agreements.  Seller shall within 10 or                days
of the Date of Agreement provide Buyer with legible copies of all other  agreements (“Other
Agreements”) known to Seller that will affect the
Property.  after Closing.  Buyer
has 60 days from the Date of Agreement, but not less than 10 days from the receipt of said Other
Agreements to satisfy itself with regard to such Agreements.

 

(j)
Financing.  If paragraph 5 hereof dealing
with a financing contingency has not been stricken, the satisfaction or waiver
of such New Loan contingency.

 

(k)
Existing Notes.  If paragraph 3.1(c) has
not been stricken, Seller shall within 10 or                days
of the Date of Agreement provide Buyer with legible copies of the Existing
Notes, Existing Deeds of Trust and related agreements (collectively, “Loan Documents”) to which the Property will
remain subject after the Closing.  Escrow
Holder shall promptly request from the holders of the Existing Notes a
beneficiary statement (“Beneficiary
Statement”) confirming: (1) the
amount of the unpaid principal balance, the current interest rate, and the date
to which interest is paid, and (2) the nature and amount of any impounds held
by the beneficiary in connection with such loan.  Buyer has 10 or                days
from the receipt of the Loan Documents and Beneficiary Statements to satisfy
itself with regard to such financing.  Buyer’s
obligation to close is conditioned upon Buyer being able to purchase the
Property without acceleration or change in the terms of any Existing Notes or
charges to Buyer except as otherwise provided in this

 

 

	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
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Agreement or approved by
Buyer, provided, however, Buyer shall pay the transfer fee referred to in
paragraph 3.2 hereof.

 

(l)
Personal Property.  In the event that any personal property is
included in the Purchase Price, Buyer has 10 or 60 days from the Date of Agreement to satisfy itself with regard to the title condition
of such personal property.  Seller
recommends that Buyer obtain a UCC-1 report.  Any such report shall be paid for by Buyer.  Seller shall provide Buyer copies of any liens
or encumbrances affecting such personal property that it is aware of within 10 or                days
of the Date of Agreement.

 

(m)
Destruction, Damage or Loss.  There shall not have occurred prior to the
Closing, a destruction of, or damage or loss to, the Property or  any portion thereof, from any cause
whatsoever, which would cost more than $ 50,000.00 10,000.00 to repair or cure.  If the cost
of repair or cure is $50,000.00 10,000.00 or less, Seller shall repair or cure the loss prior to the Closing.  Buyer shall have the option, within 10 days
after receipt of written notice
of a loss costing more than $ 50,000.00 10,000.00 to repair
or cure, to either terminate this transaction or to purchase the Propertynotwithstanding such loss, but without with deduction or offset against the Purchase Price.  If the cost to repair or cure is more than $
50,000.00  10,000.00, and Buyer does not elect to terminate this
transaction, Buyer shall be entitled to any insurance proceeds applicable to
such loss.  Unless otherwise notified in writing, Escrow Holder
shall assume no such destruction, damage or loss has occurred prior to Closing.
 Seller shall within 10 days of the Date of Agreement provide Buyer with
legible copies of any and all correspondence, documents, and/or files
(excepting Seller’s internally prepared confidential memoranda which have not been disclosed to any
third party) in Seller’s possession or control relating to any prior casualty
involving the Property for which Seller or any of Seller’s tenants of the Property made a claim against any
insurance policy insuring against casualty or damage to the Property caused by
fire, earthquake, flood, or other
natural hazard.

 

(n)
Material Change.  Buyer shall have 10 days following receipt of
written notice of a Material Change or 60 days after the Date of Agreement,
whichever is later, within which
to satisfy itself with regard to such change. “Material Change” shall mean a change in the status of the use,
occupancy, tenants, or condition
of the Property that occurs after the date of this offer and prior to the
Closing.  Unless otherwise notified in
writing, Escrow Holder shall
assume that no Material Change has occurred prior to the Closing.

 

(o)
Seller Performance.  The delivery of all documents and the due
performance by Seller of each and every undertaking and agreement to be performed
by Seller under this Agreement.

 

(p)
Warranties.  That each representation and warranty of
Seller herein be true and correct as of the Closing.  Escrow Holder shall assume that this condition
has been satisfied unless notified to the contrary in writing by any Party
prior to the Closing.

 

(q)
Feasibility Studies.  Buyer shall have 60
days after the Date of Agreement to satisfy itself with regard to the
feasibility of the Property for Buyer’s intended use based on any feasibility
studies or reports on the Property prepared by or for Buyer.  Any such feasibility study or report shall be
paid by Buyer.

 

(q)
Brokerage Fee.  Payment at the Closing of such brokerage fee
as is specified in this Agreement or later written instructions to Escrow Holder
executed by Seller and Brokers (“Brokerage
Fee”). It is agreed by the Parties and Escrow Holder that Brokers
are a third party beneficiary of this Agreement insofar as the Brokerage Fee is
concerned, and that no change shall be made with respect to the payment of the
Brokerage Fee specified in this Agreement, without the written consent of
Brokers.

 

9.2
 All of the contingencies specified in
subparagraphs (a) through (pq) of paragraph 9.1
are for the benefit of, and may be waived by, Buyer, and may be elsewhere
herein referred to as “Buyer’s Contingencies.”

 

9.3
 If any Buyer’s Contingency or any other
matter subject to Buyer’s approval is disapproved as provided for herein in a
timely manner  (“Disapproved Item”), Seller shall have the
right within 10 days following the receipt of notice of Buyer’s disapproval to
elect to cure such Disapproved Item
prior to the Expected Closing Date (“Seller’s
Election”). Seller’s failure to give to Buyer within such period,
written notice of Seller’s commitment to cure such Disapproved Item on or before the Expected Closing Date shall
be conclusively presumed to be Seller’s Election not to cure such Disapproved Item.  If Seller elects, either by written notice or
failure to give written notice, not to cure a Disapproved Item, Buyer shall
have the election, within 10 days
after Seller’s Election to either accept title to the Property subject to such
Disapproved Item, or to terminate this transaction.  Buyer’s failure to notify Seller in writing of Buyer’s election to accept title
to the Property subject to the Disapproved Item without deduction or offset
shall constitute Buyer’s election
to terminate this transaction.  Unless
expressly provided otherwise herein, Seller’s right to cure shall not apply to
the remediation of Hazardous
Substance Conditions or to the Financing Contingency.  Unless the Parties mutually instruct
otherwise, if the time periods for the
satisfaction of contingencies or for Seller’s and Buyer’s said Elections would
expire on a date after the Expected Closing Date, the Expected Closing Date shall be deemed extended for 3 business
days following the expiration of: (a) the applicable contingency period(s), (b)
the period within which the Seller
may elect to cure the Disapproved Item, or (c) if Seller elects not to cure,
the period within which Buyer may elect to proceed with this transaction, whichever is later.  See Paragraph 29. 

 

9.4
 Buyer understands and agrees that until
such time as all Buyer’s Contingencies have been satisfied or waived, Seller
and/or its agents may solicit, entertain and/or accept back-up offers to
purchase the Property.

 

9.5
 The Parties acknowledge that extensive
local, state and Federal legislation establish broad liability upon owners
and/or users of real property  for the investigation and remediation of Hazardous Substances.  The determination of the existence of a
Hazardous Substance Condition and the evaluation of the impact of such a condition are highly technical and beyond
the expertise of Brokers.  The Parties
acknowledge that they have been advised
by Brokers to consult their own technical and legal experts with respect to the
possible presence of Hazardous Substances on the Property or adjoining properties, and Buyer and Seller are
not relying upon any investigation by or statement of Brokers with respect
thereto.  The Parties hereby assume all responsibility for the impact of
such Hazardous Substances upon their respective interests herein. 

 

10.       Documents Required at or
before Closing:

 

10.1
Five days prior to the Closing date Escrow Holder shall obtain an updated Title
Commitment concerning the Property from the Title Company and provide copies
thereof to each of the Parties.

 

10.2
Seller shall deliver to Escrow Holder in time for delivery to Buyer at the
Closing:

 

(a)
Grant or general warranty deed, duly executed and in recordable form, conveying
fee title to the Property to Buyer.

 

(b)
If applicable, the Beneficiary Statements concerning Existing Note(s).

 

(c)
If applicable, the Existing
Leases and Other Agreements
together with duly executed assignments thereof by Seller and Buyer.  See also Paragraph 32. The assignment of Existing Leases shall be on
the most recent Assignment and Assumption of Lessor’s Interest in Lease form
published by the AIR or its equivalent.

 

(d)
If applicable, Estoppel Certificates executed by Seller and/or the tenant(s) of
the Property.

 

(e)
An affidavit executed by Seller to the effect that Seller is not a “foreign
person” within the meaning of Internal Revenue Code Section 1445  or successor statutes.  If Seller does not provide such affidavit in
form reasonably satisfactory to Buyer at least 3 business days prior to the
Closing, Escrow Holder shall at
the Closing deduct from Seller’s proceeds and remit to Internal Revenue Service
such sum as is required by applicable Federal law with respect to purchases from foreign sellers. 

 

(f)
If the Property is located in California, an affidavit executed by Seller to the effect that Seller is not a “nonresident” within the meaning of California Revenue and Tax Code Section 18662
or successor statutes.  If Seller does not provide such affidavit in
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at least 3 business days
prior to the Closing, Escrow
Holder shall at the Closing deduct from Seller’s proceeds and remit to the
Franchise Tax Board such sum as is required by such statute, if any.

 

(g)
If applicable, a bill of sale, duly executed, conveying title to any included
personal property to Buyer, in the form attached hereto as Exhibit A  (the “Bill of Sale”).

 

(h)
If the Seller is a corporation, a duly executed corporate resolution
authorizing the execution of this Agreement and the sale of the  Property.

 

10.3
 Buyer shall deliver to Seller through
Escrow:

 

(a)
The cash portion of the Purchase Price and such additional sums as are required
of Buyer under this Agreement shall be deposited by  Buyer with Escrow Holder, by federal funds
wire transfer, or any other method acceptable to Escrow Holder as immediately
collectable funds, no later than 2:00 P.M. on the business day prior to the
Expected Closing Date.

 

(b)
If a Purchase Money Note and Purchase Money Deed of Trust are called for by
this Agreement, the duly executed originals of those documents, the Purchase
Money Deed of Trust being in recordable form, together with evidence of fire
insurance on the improvements in the amount of the full replacement cost naming
Seller as a mortgage loss payee, and a real estate tax service contract (at
Buyer’s expense), assuring Seller of notice of the status of payment of real
property taxes during the life of the Purchase Money Note.

 

(c)
The Assignment and
Assumption of Lessor’s Interest in Lease form specified in paragraph 10.2(c)
above, duly executed by Buyer.  SeeParagraph 32.

 

(d)
Assumptions duly executed by Buyer of the obligations of Seller that accrue
after Closing under any Other Agreements.

 

(e)
If applicable, a written assumption duly executed by Buyer of the loan
documents with respect to Existing Notes.

 

(f)
If the Buyer is a corporation, a duly executed corporate resolution authorizing
the execution of this Agreement and the purchase of the Property.

 

10.4
 At Closing (and as a condition to the
Closing), Escrow Holder shall cause to be issued to Buyer a standard coverage
(or ALTA extended, if elected pursuant to 9.1(g)) owner’s form policy of title
insurance effective as of the Closing, issued by the Title Company in the full
amount of the Purchase Price, insuring title to the Property vested in Buyer,
subject only to the exceptions approved by Buyer and complying with Paragraph
30.  In the event there is a Purchase
Money Deed of Trust in this transaction, the policy of title insurance shall be
a joint protection policy insuring both Buyer and Seller.  See Paragraph 30.

 

IMPORTANT:
IN A PURCHASE OR EXCHANGE OF REAL PROPERTY, IT MAY BE ADVISABLE TO OBTAIN TITLE
INSURANCE IN CONNECTION WITH THE CLOSE OF ESCROW SINCE THERE MAY BE PRIOR
RECORDED LIENS AND ENCUMBRANCES WHICH AFFECT YOUR INTEREST IN THE PROPERTY
BEING ACQUIRED.  A NEW POLICY OF TITLE
INSURANCE SHOULD BE OBTAINED IN ORDER TO ENSURE YOUR INTEREST IN THE PROPERTY
THAT YOU ARE ACQUIRING.

 

11.       Prorations and Adjustments.

 

11.1
 Taxes.
 Applicable real property taxes and
special assessment bonds shall be prorated through Escrow as of the date of the
Closing, based  upon the
latest tax bill available.  The Parties
agree to prorate as of the Closing any taxes assessed against the Property by
supplemental bill levied by reason
of events occurring prior to the Closing.  Payment of the prorated amount shall be made
promptly in cash upon receipt of a copy of any supplemental bill.

 

11.2
 Insurance.
 WARNING:
Any insurance which Seller may have maintained will terminate on the Closing.  Buyer is advised to obtain appropriate
insurance to cover the Property.

 

11.3
 Rentals,
Interest and Expenses.  Scheduled rentals, interest on Existing Notes,
utilities, and operating expenses shall be prorated as of the date of Closing.  The Parties agree to promptly adjust between
themselves outside of Escrow any rents received after the Closing.

 

11.4
 Security
Deposit.  Security Deposits
held by Seller shall be given to Buyer as a credit to the cash required of
Buyer at the Closing.

 

11.5
 Post
Closing Matters.  Any item to
be prorated that is not determined or determinable at the Closing shall be
promptly adjusted by the Parties by appropriate cash payment outside of the
Escrow when the amount due is determined.

 

11.6
 Variations in Existing Note
Balances.  In the event that Buyer is purchasing the
Property subject to an Existing Deed of Trust(s), and in the event that a
Beneficiary Statement as to the applicable Existing Note(s) discloses that the
unpaid principal balance of such Existing Note(s) at the closing will be more
or less than the amount set forth in paragraph 3.1(c) hereof (“Existing Note Variation”), then the Purchase Money Note(s)
shall be reduced or increased by an amount equal to such Existing Note
Variation.  If there is to be no Purchase
Money Note, the cash required at the Closing per paragraph 3.1(a) shall be
reduced or increased by the amount of such Existing Note Variation.

 

11.7
 Variations in New Loan
Balance.  In the event Buyer is obtaining a New Loan and
the amount ultimately obtained exceeds the amount set forth in paragraph 5.1,
then the amount of the Purchase Money Note, if any, shall be reduced by the
amount of such excess.

 

12.       Representation and Warranties
of Seller and Disclaimers.

 

12.1
 Seller’s warranties and representations
shall survive the Closing and delivery of the deed for a period of 3 years,
and, are true, material and relied upon by Buyer and Brokers in all respects.  By closing this transaction, Seller will be deemed
to have reaffirmed Seller’s warranties and representations as of the Closing.  Seller hereby makes the following warranties
and representations to Buyer and Brokers:

 

(a)
Authority of Seller.  Seller is the owner of the Property and/or,
subject to the consent of Congress Financial Corporation and the Bank of New
York  (collectively “Lenders”),
which Seller shall use its best efforts to obtain, has the full right, power
and authority to sell, convey and transfer the Property to Buyer as provided herein, and to perform
Seller’s obligations hereunder.  If this
transaction is terminated due to Sellers’ failure to timely obtain the approvalof either or both of the Lenders, then
Seller shall promptly reimburse Buyer for Buyer’s actual, reasonable
out-of-pocket costs of entering this Agreement and investigating the Property, including but not
limited to costs of third party consultants and attorneys fees.

 

(b)
Maintenance During Escrow and Equipment
Condition At Closing.  Except
as otherwise provided in paragraph 9.1(m) hereof, Seller shall  maintain the Property until the Closing in its
present condition, ordinary wear and tear excepted.  The HVAC, plumbing, elevators, loading doors
and electrical systems shall be
in good operating order and condition at the time of Closing.

 

(c)
Hazardous Substances/Storage Tanks.
 Seller has no knowledge, except as
otherwise disclosed to Buyer in writing, of the existence or  prior existence on the Property of any
Hazardous Substance, nor of the existence or prior existence of any above or
below ground storage tank.

 

(d)
Compliance.  Seller has no knowledge of any aspect or
condition of the Property which violates applicable laws, rules, regulations,
codes or covenants, conditions or restrictions, or of improvements or alterations
made to the Property without a permit where one was required, or of any unfulfilled
order or directive of any applicable governmental agency or casualty insurance
company requiring any investigation, remediation, repair, maintenance or
improvement be performed on the Property.

 

(e)
Changes in Agreements.  Prior to the Closing, Seller will not violate
or modify any Existing Lease or Other Agreement, or create any new leases or
other agreements affecting the Property, without Buyer’s written approval, which
approval will not be unreasonably withheld.

 

(f)
Possessory Rights.  Seller has no knowledge that anyone will, at
the Closing, have any right to possession of the Property, except as

 

 

	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
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disclosed by this Agreement
or otherwise in writing to Buyer.

 

(g)
Mechanics’ Liens.  There are no unsatisfied mechanics’ or
materialmens’ lien rights concerning the Property.

 

(h)
Actions,
Suits or Proceedings.  Seller
has no knowledge of any actions, suits or proceedings pending or threatened
before any commission, board, bureau, agency, arbitrator, court or tribunal
that would affect the Property or the right to occupy or utilize same.

 

(i)
Notice of Changes.  Seller will promptly notify Buyer and Brokers
in writing of any Material Change (see paragraph 9.1(n)) affecting the Property
that becomes known to Seller prior to the Closing.

 

(j)
No Tenant Bankruptcy Proceedings.
 Seller has no notice or knowledge that
any tenant of the Property is the subject of a bankruptcy or insolvency
proceeding.

 

(k)
No Seller Bankruptcy Proceedings.
 Seller is not the subject of a
bankruptcy, insolvency or probate proceeding.

 

(l)
Personal Property.  Seller has no knowledge that anyone will, at
the Closing, have any right to possession of any personal property included in
the Purchase Price nor knowledge of any liens or encumbrances affecting such
personal property, except as disclosed by this Agreement or otherwise in
writing to Buyer.

 

(m)
True Copies.  All copies of all
documents, reports and records provided by Seller to Buyer are true and correct
copies.

 

12.2
 Buyer hereby acknowledges that, except
as otherwise stated in this Agreement, Buyer is purchasing the Property in its
existing condition and  will,
by the time called for herein, make or have waived all inspections of the
Property Buyer believes are necessary to protect its own interest in, and itscontemplated use of, the Property.  The Parties acknowledge that, except as
otherwise stated in this Agreement, no representations, inducements, promises, agreements, assurances, oral or
written, concerning the Property, or any aspect of the occupational safety and
health laws, Hazardous Substance
laws, or any other act, ordinance or law, have been made by either Party or
Brokers, or relied upon by either Party hereto.

 

12.3
 In the event that Buyer learns that a
Seller representation or warranty might be untrue prior to the Closing, and
Buyer elects to purchase the  Property anyway then, and in that event, Buyer waives any right that it
may have to bring an action or proceeding against Seller or Brokers regardingsaid representation or warranty.  However, if Buyer elects to terminate this
transaction prior to the Closing due to Buyer’s learning that a Seller
representation or warranty might
be untrue, Buyer shall be entitled to recover from Seller any out-of-pocket
costs incurred by Buyer in connection with negotiating and carrying out thistransaction, including but not limited
to costs incurred for Buyer’s inspection and other due diligence activities in
connection with this transaction.  In
such event buyer shall provide to
Seller commercially reasonable eveidence of such costs.

 

12.4
 Any environmental reports, soils
reports, surveys, and other similar documents which were prepared by third
party consultants and provided  to Buyer by Seller or Seller’s representatives, have been delivered as
an accommodation to Buyer and without any representation or warranty as to thesufficiency, accuracy, completeness, and/or
validity of said documents, all of which Buyer relies on at its own risk.  Seller believes said documents to be accurate, but Buyer is advised to retain
appropriate consultants to review said documents and investigate the Property.

 

13.       Possession.

 

Possession of the Property
shall be given to Buyer at the Closing subject to the rights of tenants under
Existing Leases.

 

14.       Buyer’s Entry.

 

At any time during the Escrow
period, Buyer, and its agents and representatives, shall have the right at
reasonable times and subject to rights of  tenants, to enter upon the Property for the purpose of making
inspections and tests specified in this Agreement.  No destructive testing shall be conducted, however, without Seller’s prior
approval which shall not be unreasonably withheld.  Following any such entry or work, unless
otherwise directed in writing by
Seller, Buyer shall return the Property to the condition it was in prior to
such entry or work, including the recompaction or removal of any disrupted soil or material as Seller
may reasonably direct.  All such
inspections and tests and any other work conducted or materials furnishedwith respect to the Property by or for
Buyer shall be paid for by Buyer as and when due and Buyer shall indemnify,
defend, protect and hold harmless Seller
and the Property of and from any and all claims, liabilities, losses, expenses
(including reasonable attorneys’ fees), damages, including those for injury to person or property, arising out of
or relating to any such work or materials or the acts or omissions of Buyer,
its agents or employees in connection
therewith.  Nothwithstanding anything to
the contrary herein, the Buyer shall not permit any borings, drillings or
samplings to be done without the prior written consent of the Seller, which Seller shall not withhold or delay
if Seller concludes that the findings will not have to be reported to any
governmental agency.  If Seller does not give such written consent
within 5 days after Buyer’s request, Buyer may cancel this Agreeement with no
further obligation by giving written notice of cancellation to Seller.

 

15.       Further Documents and
Assurances.

 

The Parties shall each,
diligently and in good faith, undertake all actions and procedures reasonably
required to place the Escrow in condition for  Closing as and when required by this
Agreement.  The Parties agree to provide
all further information, and to execute and deliver all further documents,reasonably required by Escrow Holder or
the Title Company.

 

16.       Attorneys’ Fees.

 

If any Party or Broker brings
an action or proceeding (including arbitration) involving the Property whether
founded in tort, contract or equity, or to  declare rights hereunder, the Prevailing Party
(as hereafter defined) in any such proceeding, action, or appeal thereon, shall
be entitled to reasonable attorneys’
fees.  Such fees may be awarded in the
same suit or recovered in a separate suit, whether or not such action or
proceeding is pursued to decision
or judgment.  The term “Prevailing Party” shall include, without
limitation, a Party or Broker who substantially obtains or defeats the reliefsought, as the case may be, whether by
compromise, settlement, judgment, or the abandonment by the other Party or
Broker of its claim or defense.  The attorneys’ fees award shall not be
computed in accordance with any court fee schedule, but shall be such as to
fully reimburse all attorneys’ fees reasonably incurred.

 

17.       Prior Agreements/Amendments.

 

17.1
 This Agreement supersedes any and all
prior agreements between Seller and Buyer regarding the Property.

 

17.2
 Amendments to this Agreement are
effective only if made in writing and executed by Buyer and Seller.

 

18.       Broker’s Rights.

 

18.1
 If this sale is not consummated due to
the default of either the Buyer or Seller, the defaulting Party shall be liable
to and shall pay to Brokers the Brokerage Fee that Brokers would have received
had the sale been consummated.  If Buyer
is the defaulting party, payment of said Brokerage Fee is in addition to any
obligation with respect to liquidated or other damages.

 

18.2
 Upon the Closing, Brokers are authorized
to publicize the facts of this transaction.

 

19.       Notices.

 

19.1
 Whenever any Party, Escrow Holder or
Brokers herein shall desire to give or serve any notice, demand, request, approval,
disapproval or  other
communication, each such communication shall be in writing and shall be
delivered personally, by messenger, by commercial overnight courier, or bycertified mail, return receipt
requested, postage prepaid, to the address set forth in this Agreement or by
facsimile transmission.

 

19.2
 Service of any such communication shall
be deemed made on the date of actual receipt if personally delivered.  Any such communication  sent by regular certified
mail, return receipt requested, shall be deemed given on the date of delivery
shown on the receipt card, or if no such delivery date is

 

 

	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
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7

 

shown, 2 business days after
mailing. 48 hours
after the same is mailed.  Communications sent by United States Express
Mail or overnight courier that guarantee
next day delivery shall be deemed delivered 24 hours after delivery of the same
to the Postal Service or courier.  Communications
transmitted by facsimile
transmission shall be deemed delivered upon telephonic confirmation of receipt
(confirmation report from fax machine is sufficient)., provided a copy is also delivered via
delivery or mail.  If such communication is received on a
Saturday, Sunday or legal holiday, it shall be deemed received on the next business day.

 

19.3
 Any Party or Broker hereto may from time
to time, by notice in writing, designate a different address to which, or a
different person or  additional
persons to whom, all communications are thereafter to be made.

 

20.       Duration of Offer.

 

20.1
 If this offer is not accepted by Seller
on or before 5:00 P.M. according to the time standard applicable to the city of
Los Angeles, California on the date of April 30, 2005,it shall be deemed automatically revoked.

 

20.2
 The acceptance of this offer, or of any
subsequent counteroffer hereto, that creates an agreement between the Parties
as described in paragraph 1.2, shall be deemed made upon delivery to the other
Party or either Broker herein of a duly executed writing unconditionally
accepting the last outstanding offer or counteroffer.

 

21.       LIQUIDATED DAMAGES. (This Liquidated Damages paragraph is
applicable only if initialed by both Parties).

 

THE PARTIES AGREE THAT IT
WOULD BE IMPRACTICABLE OR EXTREMELY DIFFICULT TO FIX, PRIOR TO SIGNING THIS
AGREEMENT, THE ACTUAL DAMAGES
WHICH WOULD BE SUFFERED BY SELLER IF BUYER FAILS TO PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT.  THEREFORE, IF, AFTER THE SATISFACTION OR
WAIVER OF ALL CONTINGENCIES
PROVIDED FOR THE BUYER’S BENEFIT, BUYER BREACHES THIS AGREEMENT, SELLER SHALL
BE ENTITLED TO LIQUIDATED DAMAGES
IN THE AMOUNT OF $100,000.00 . (SUCH $100,000 SHALL BE THE $100,000 DEPOSIT DESCRIBED IN PARAGRAPH
4.1.) UPON PAYMENT OF SAID SUM TO SELLER, BUYER SHALL BE RELEASED FROM ANY FURTHER LIABILITY TO SELLER,
AND ANY ESCROW CANCELLATION FEES AND TITLE COMPANY CHARGES SHALL BE PAID BY SELLER.

 

 

	
   

  	
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  Buyer Initials

  	
   

  	
  Seller Initials

  	
   

  

 

22.       ARBITRATION OF DISPUTES. (This Arbitration of
Disputes paragraph is applicable only if initialed by both Parties.)

 

22.1
 ANY CONTROVERSY AS TO WHETHER SELLER IS
ENTITLED TO THE LIQUIDATED DAMAGES AND/OR BUYER IS ENTITLED TO THE RETURN OF
DEPOSIT MONEY, SHALL BE DETERMINED BY BINDING ARBITRATION BY, AND UNDER THE COMMERCIAL
RULES OF THE AMERICAN ARBITRATION ASSOCIATION (“COMMERCIAL RULES”). ARBITRATION HEARINGS SHALL BE HELD IN THE
COUNTY WHERE THE PROPERTY IS LOCATED.  ANY
SUCH CONTROVERSY SHALL BE ARBITRATED  BY 3 ARBITRATORS WHO SHALL BE IMPARTIAL REAL ESTATE BROKERS WITH AT
LEAST 5 YEARS OF FULL TIME EXPERIENCE
IN BOTH THE AREA WHERE THE PROPERTY IS LOCATED AND THE TYPE OF REAL ESTATE THAT
IS THE SUBJECT OF THIS AGREEMENT.
 THEY SHALL BE APPOINTED UNDER THE
COMMERCIAL RULES.  THE ARBITRATORS SHALLHEAR AND DETERMINE SAID CONTROVERSY IN
ACCORDANCE WITH APPLICABLE LAW, THE INTENTION OF THE PARTIES AS EXPRESSED IN THIS AGREEMENT AND ANY
AMENDMENTS THERETO, AND UPON THE EVIDENCE PRODUCED AT AN ARBITRATION HEARING.  PRE-ARBITRATION DISCOVERY SHALL BE PERMITTED
IN ACCORDANCE WITH THE COMMERCIAL RULES
OR STATE LAW APPLICABLE TO ARBITRATION PROCEEDINGS.  THE AWARD SHALL BE EXECUTED BY AT LEAST 2OF THE 3 ARBITRATORS, BE RENDERED WITHIN
30 DAYS AFTER THE CONCLUSION OF THE HEARING, AND MAY INCLUDE ATTORNEYS’ FEES AND COSTS TO THE PREVAILING
PARTY PER PARAGRAPH 16 HEREOF.  JUDGMENT
MAY BE ENTERED ON THE AWARD IN
ANY COURT OF COMPETENT JURISDICTION NOTWITHSTANDING THE FAILURE OF A PARTY DULYNOTIFIED OF THE ARBITRATION HEARING TO
APPEAR THEREAT.

 

22.2
 BUYER’S RESORT TO OR PARTICIPATION IN
SUCH ARBITRATION PROCEEDINGS SHALL NOT BAR SUIT IN A  COURT OF COMPETENT JURISDICTION BY THE BUYER
FOR DAMAGES AND/OR SPECIFIC PERFORMANCE UNLESS AND UNTIL THE ARBITRATION RESULTS IN AN AWARD TO
THE SELLER OF LIQUIDATED DAMAGES, IN WHICH EVENT SUCH AWARD SHALL ACT AS A BAR AGAINST ANY ACTION BY
BUYER FOR DAMAGES AND/OR SPECIFIC PERFORMANCE.

 

22.3
 NOTICE: BY INITIALING IN THE SPACE BELOW
YOU ARE AGREEING TO HAVE ANY DISPUTE ARISING OUT OF THE  MATTERS INCLUDED IN THE “ARBITRATION OF
DISPUTES” PROVISION DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND YOU ARE GIVING UP ANY
RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR JURY TRIAL.  BY INITIALING IN THE SPACE BELOW YOU ARE
GIVING UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS SUCH RIGHTS ARE SPECIFICALLY INCLUDED IN THE “ARBITRATION
OF DISPUTES” PROVISION.  IF YOU REFUSE TO SUBMIT TO ARBITRATION AFTER
AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE UNDER THE AUTHORITY OF THE
CALIFORNIA CODE OF CIVIL PROCEDURE.  YOUR
AGREEMENT TO THIS ARBITRATION
PROVISION IS VOLUNTARY.

 

WE HAVE READ AND UNDERSTAND
THE FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING OUT OF THE MATTERS  INCLUDED IN THE “ARBITRATION OF DISPUTES”
PROVISION TO NEUTRAL ARBITRATION.

 

 

	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
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8

 

	
   

  	
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  Buyer Initials

  	
   

  	
  Seller Initials

  	
   

  

 

23.       Miscellaneous.

 

23.1
 Binding
Effect.  This Agreement shall
be binding on the Parties only
if without regard to whether or not paragraphs 21 and 22 are initialed by both of the Parties.  Paragraphs 21 and 22 are each incorporated into this Agreement only if
initialed by both Parties at the time that the Agreement is executed.  See
Paragraph 31.

 

23.2
 Applicable
Law.  This Agreement shall be
governed by, and paragraph 22.3 is amended to refer to, the laws of the state
in which the Property is located.

 

23.3
 Time
of Essence.  Time is of the
essence of this Agreement.

 

23.4
 Counterparts.
 This Agreement may be
executed by Buyer and Seller in counterparts, each of which shall be deemed an
original, and all of which together shall constitute one and the same
instrument.  Escrow Holder, after
verifying that the counterparts are identical except for the signatures, is
authorized and instructed to combine the signed signature pages on one of the
counterparts, which shall then constitute the Agreement.

 

23.5
 Waiver
of Jury Trial.  THE PARTIES HEREBY WAIVE
THEIR RESPECTIVE RIGHTS TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING INVOLVING
THE PROPERTY OR ARISING OUT OF THIS AGREEMENT.

 

23.6
 Conflict.
 Any conflict between the
printed provisions of this Agreement and the typewritten or handwritten
provisions shall be controlled by the typewritten or handwritten provisions.

 

23.7
 1031
Exchange.  Both Seller and
Buyer agree to cooperate with each other in the event that either or both wish
to participate in a tax-deferred exchange under Section 1031 of the
Internal Revnue Code (a “1031 exchange”). Any party initiating an 1031 exchange shall bear all costs of such exchange,. and shall hold the other party harmless from and against any costs,
expenses or liability which arise out of, are related to, or are in any way
connected with closing the transaction as a 1031 exchange rather than a sale.  In no event shall the Closing be delayed by
reason of either party’s initiation or participation in a 1031 exchange.

 

24.       Disclosures Regarding The
Nature of a Real Estate Agency Relationship.

 

24.1
 The Parties and Brokers agree that their
relationship(s) shall be governed by the principles set forth in the applicable
sections of the California Civil Code, as summarized in paragraph 24.2.

 

24.2
 When entering into a discussion with a
real estate agent regarding a real estate transaction, a Buyer or Seller should
from the outset  understand
what type of agency relationship or representation it has with the agent or
agents in the transaction.  Buyer and
Seller acknowledge being advised
by the Brokers in this transaction, as follows:

 

(a)
Seller’s Agent.  A Seller’s agent under a listing
agreement with the Seller acts as the agent for the Seller only.  A Seller’s agent or subagent  has the following affirmative obligations: (1)
To the Seller:
A fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings
with the Seller. (2)  To the Buyer and the Seller: a. Diligent exercise of reasonable skills and
care in performance of the agent’s duties. b. A duty of honest and fair dealingand good faith. c. A duty to disclose
all facts known to the agent materially affecting the value or desirability of
the property that are not known to, or within the diligent attention and observation of, the Parties.  An agent is not obligated to reveal to either
Party any confidential information obtained from the other Party which does not
involve the affirmative duties set forth above.

 

(b)
Buyer’s Agent.  A selling agent can, with a Buyer’s
consent, agree to act as agent for the Buyer only.  In these situations, the agent is not  the Seller’s agent, even if by agreement the
agent may receive compensation for services rendered, either in full or in part
from the Seller.  An agent acting only for a Buyer has the following
affirmative obligations. (1) To the Buyer: A
fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings with the Buyer. (2) To the Buyer and the Seller: a. Diligent exercise of reasonable skills and care in
performance of the agent’s duties.  b. Aduty of honest and fair dealing and good
faith.  c. A duty to disclose all facts
known to the agent materially affecting the value or desirability of theproperty that are not known to, or
within the diligent attention and observation of, the Parties.  An agent is not obligated to reveal to either
Party any confidential
information obtained from the other Party which does not involve the
affirmative duties set forth above.

 

(c)
Agent Representing Both Seller and Buyer.  A real estate agent, either acting
directly or through one or more associate licenses, can  legally be the agent of both the Seller and
the Buyer in a transaction, but only with the knowledge and consent of both the
Seller and the Buyer. (1) In a dual
agency situation, the agent has the following affirmative obligations to both
the Seller and the Buyer: a. A fiduciary duty of utmost care, integrity,honesty and loyalty in the dealings with
either Seller or the Buyer.  b. Other
duties to the Seller and the Buyer as stated above in their respective sections (a) or (b) of this paragraph 24.2.
(2) In representing both Seller and Buyer, the agent may not without the
express permission of the respective Party, disclose to the other Party that the Seller will accept a price
less than the listing price or that the Buyer will pay a price greater than the
price offered. (3) The above
duties of the agent in a real estate transaction do not relieve a Seller or
Buyer from the responsibility to protect their own interests.  Buyer and Seller should carefully read all
agreements to assure that they adequately express their understanding of the
transaction.  A real estate agent is a person qualified to advise
about real estate.  If legal or tax
advice is desired, consult a competent professional.

 

(d)
Further Disclosures.  Throughout this transaction Buyer
and Seller may receive more than one disclosure, depending upon the number of
agents assisting in the
transaction.  Buyer and Seller should
each read its contents each time it is presented, considering the relationship
between them and the real estate
agent in this transaction and that disclosure.  Brokers have no responsibility with respect to
any default or breach hereof by either Party.  The liability (including
court costs and attorneys’ fees), of any Broker with respect to any breach of
duty, error or omission relating to this Agreement shall not exceed the fee received by such Broker pursuant to
this Agreement; provided, however, that the foregoing limitation on eachBroker’s liability shall not be
applicable to any gross negligence or willful misconduct of such Broker.

 

24.3
 Confidential
Information: Buyer and Seller agree to identify to Brokers as “Confidential”
any communication or information given Brokers that is considered by such Party
to be confidential.

 

25.       Construction of Agreement.  In construing this Agreement, all headings and titles are for the
convenience of the parties only and shall not be considered a part of this
Agreement.  Whenever required by the
context, the singular shall include the plural and vice versa.  Unless otherwise specifically indicated to the
contrary, the word “days” as used in this Agreement shall mean and refer to
calendar days.  This Agreement shall not
be construed as if prepared by one of the parties, but rather according to its
fair meaning as a whole, as if both parties had prepared it.

 

26          Additional Provisions:

 

Additional provisions of this
offer, if any, are as follows or are attached hereto by an addendum consisting
of paragraphs 28 through 33 . (If there are no
additional provisions write “NONE”.)

 

	
   

  
	
   

  

 

 

	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
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9

 

	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  

 

ATTENTION:
NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AIR COMMERCIAL REAL ESTATE
ASSOCIATION OR BY ANY BROKER AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX
CONSEQUENCES OF THIS AGREEMENT OR THE TRANSACTION TO WHICH IT RELATES.  THE PARTIES ARE URGED TO:

 

1.                                      SEEK ADVICE OF COUNSEL AS TO
THE LEGAL AND TAX CONSEQUENCES OF THIS AGREEMENT.

2.                                      RETAIN APPROPRIATE
CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE PROPERTY.  SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE
LIMITED TO: THE POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING OF THE
PROPERTY, THE INTEGRITY AND CONDITION OF ANY STRUCTURES AND OPERATING SYSTEMS,
AND THE SUITABILITY OF THE PROPERTY FOR BUYER’S INTENDED USE.

 

WARNING: IF
THE PROPERTY IS LOCATED IN A STATE OTHER THAN CALIFORNIA, CERTAIN PROVISIONS OF
THIS AGREEMENT MAY NEED TO BE REVISED TO COMPLY WITH THE LAWS OF THE STATE IN
WHICH THE PROPERTY IS LOCATED.

 

NOTE:

1.                                      THIS FORM IS NOT FOR USE IN
CONNECTION WITH THE SALE OF RESIDENTIAL PROPERTY.

2.                                      IF THE BUYER IS A
CORPORATION, IT IS RECOMMENDED THAT THIS AGREEMENT BE SIGNED BY TWO CORPORATE OFFICERS.

 

The
undersigned Buyer offers and agrees to buy the Property on the terms and
conditions stated and acknowledges receipt of a copy hereof.

 

 

	
  BROKER:

  	
   

  	
  BUYER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  S.R. Partners,

  a California general Partnership

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attn:

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Steve
  Riboli

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  	
  Date:

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  	
   

  	
  Name Printed:

  	
  Steve Riboli

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
  General Partner

  	
   

  
	
  Telephone:

  	
  (      )

  	
   

  	
   

  	
  Telephone:

  	
  (       )

  	
   

  
	
  Facsimile:

  	
  (      )

  	
   

  	
   

  	
  Facsimile:

  	
  (       )

  	
   

  
	
  Email:

  	
   

  	
   

  	
   

  	
   

  
	
  Federal ID No.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Date:

  	
   

  	
   

  
	
   

  	
   

  	
  Name Printed:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  	
  737 Lamar Street

  	
   

  
	
   

  	
   

  	
  Los Angeles, California
  90031

  	
   

  
	
   

  	
   

  	
  Telephone:

  	
  (323) 223-1401 ext. 24

  	
   

  
	
   

  	
   

  	
  Facsimile:

  	
  (323) 221 -7261

  	
   

  
	
   

  	
   

  	
  Email:

  	
   

  	
   

  
	
   

  	
   

  	
  Federal ID No.

  	
   

  	
   

  
																						

 

27.       Acceptance.

 

27.1
 Seller accepts the foregoing offer to
purchase the Property and hereby agrees to sell the Property to Buyer on the
terms and conditions therein specified.

 

27.2
 Seller acknowledges that Brokers have been retained to locate a Buyer
and are the procuring cause of the purchase and sale of the Property set forth
in this Agreement.  In consideration of
real estate brokerage service rendered by Brokers, Seller agrees to pay Brokers
a real estate Brokerage Fee in a sum equal to                %
of the Purchase Price divided in such shares as said Brokers shall direct in
writing.  This Agreement shall serve as
an irrevocable instruction to Escrow Holder to pay such Brokerage Fee to
Brokers out of the proceeds accruing to the account of Seller at the Closing.

 

 

	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
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10

 

27.3
 Seller acknowledges receipt of a copy
hereof and authorizes its representatives Brokers to deliver a signed copy to Buyer.

 

NOTE: A
PROPERTY INFORMATION SHEET IS REQUIRED TO BE DELIVERED TO BUYER BY SELLER UNDER
THIS AGREEMENT.

 

 

	
  BROKER:

  	
   

  	
  SELLER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  201 West Sotello Realty,
  Inc.,

  a California corporation

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attn:

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/ /Domenic
  Gatto

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  	
  Date:

  	
  April 15, 2005

  	
   

  
	
  Address:

  	
   

  	
   

  	
   

  	
  Name Printed:

  	
  Domenic Gatto

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Chief Executive Officer

  	
   

  
	
  Telephone:

  	
  (      )

  	
   

  	
   

  	
  Telephone:

  	
  (718 ) 442-7000

  	
   

  
	
  Facsimile:

  	
  (      )

  	
   

  	
   

  	
  Facsimile:

  	
  (718 ) 442-9103

  	
   

  
	
  Email:

  	
   

  	
   

  	
   

  	
   

  
	
  Federal ID No.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Neil
  Abitabilo

  	
   

  
	
   

  	
   

  	
  Date:

  	
  April 15,
  2005

  	
   

  
	
   

  	
   

  	
  Name Printed:

  	
  Neil
  Abitabilo

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Chief Financial Officer

  	
   

  
	
   

  	
   

  	
  Address:

  	
  7 North Street

  	
   

  
	
   

  	
   

  	
  Staten Island, NY 10302

  	
   

  
	
   

  	
   

  	
  Telephone:

  	
  (718 ) 442-7000

  	
   

  
	
   

  	
   

  	
  Facsimile:

  	
  (718 ) 442-5105

  	
   

  
	
   

  	
   

  	
  Email:

  	
   

  	
   

  
	
   

  	
   

  	
  Federal ID No:

  	
   

  	
   

  
																						

 

These forms
are often modified to meet changing requirements of law and needs of the
industry.  Always write or call to make
sure you are utilizing the most current form: AIR COMMERCIAL REAL ESTATE
ASSOCIATION, 700 South Flower Street, Suite 600, Los Angeles, CA 90017. (213)
687-8777.

 

© Copyright 2003 By AIR Commercial Real Estate
Association.

All rights reserved.

 

No part of these works may be reproduced in any form
without permission in writing.

 

 

	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
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11

 

ADDENDUM TO OFFER, AGREEMENT AND
ESCROW INSTRUCTIONS FOR

PURCHASE OF REAL ESTATE (NON-RESIDENTIAL)

 

This Addendum is incorporated into
and made a part of that certain Standard Offer, Agreement and Escrow
Instructions For Purchase of Real Estate (Non-Residential), dated April 12,
2005 (the “Agreement”), between S.R. Partners, a California general Partnership
(the “Buyer”) and 201 West Sotello Realty, Inc., a California corporation (the
“Seller”).  To the extent of any conflict
between the terms and provisions of this Addendum and the terms and provisions
of the Agreement, the terms and provisions of this Addendum shall be
controlling.

 

28.  PERSONAL PROPERTY; TENANT’S TRADE FIXTURES AND FUEL TANKS.

 

In addition to those items listed in
Paragraph 2.3 of this Agreement, the “Property” includes, at no additional cost
to Buyer, the following items: (a) any assignable permits, approvals and other
land use entitlements of Seller obtained from governmental agencies regarding
the use of the Property; (b) any tangible personal property of Seller used
exclusively in connection with the operation, maintenance or improvements on
the Property (including but not limited to any and all plans and specifications
for improvements on the Property which are owned by Seller) as of the date of
execution of this Agreement; and (c) certain contract rights, warranties,
documents, and records, all as more specifically described in the Bill of Sale
attached hereto as Exhibit A.  As set
forth in Paragraph 10.2(g) of the Agreement, Seller shall deliver to Buyer
through escrow at the Closing the Bill of Sale, in the form attached hereto as
Exhibit A, conveying to Buyer title to the personal property included in the
Property.

 

The parties acknowledge that the Property is
presently occupied by an affiliate of Seller, Atlantic Express of L.A., Inc.
(“AELA”), which will continue to occupy the Property after the Closing pursuant
to a new lease as described in Paragraph 32. 
Buyer is not purchasing the personal property and trade fixtures of AELA
located on the Property, which includes, among other things, a fleet of buses,
related equipment for maintaining and servicing such buses, underground fuel
tanks, and office furnishings.  The
parties acknowledge that such items will remain on the Property after the
Closing for continued use by AELA as the tenant.  However, Seller agrees to remain obligated
after the Closing to cause all such personal property and trade fixtures of
AELA, including but not limited to the underground fuel tanks (unless removal
of the fuel tanks is waived as described below), to be removed from the
Property in accordance with all applicable laws (including but not limited to
all laws governing the removal and closing of underground fuel tanks and
remediation of the surrounding area) immediately upon the expiration or
termination of AELA’s lease described in Paragraph 32.

 

1

 

As to the underground fuel tanks, upon the
expiration or termination of AELA’s lease described in Paragraph 32, as it may
be extended, the Parties shall cooperate, at AELA’s sole cost and expense, in
testing the underground fuel tanks and surrounding area (with four test borings
around the tanks at the depth of the tanks in a manner consistent with the test
borings made by Buyer as part of Buyer’s due diligence before the Closing) to
determine if any leakage has occurred from the tanks.  If such tests indicate that the tanks are in
good condition, based upon comparison with the results of Buyer’s tests before
the Closing, they shall be left on the Property and become Buyer’s property and
Buyer shall be responsible thereafter for their maintenance.  However, if such tests indicate that the
underground fuel tanks have leaked, based upon comparison with the results of
Buyer’s tests before the Closing, Seller shall be responsible for causing the
underground fuel tanks to be removed from the Property in accordance with all
applicable laws as described above.

 

29.  CONTINGENCY PERIOD; ACCESS TO DOCUMENTS; BUYER’S UNILATERAL RIGHT TO
CANCEL.

 

Notwithstanding any shorter period
set forth in Paragraph 9.1 or elsewhere in this Agreement, Buyer shall have
sixty (60) days from the Date of Agreement (the “Due Diligence Period”) to
review and approve all aspects to this transaction, including but not limited
to matters related to Buyer’s Contingencies listed in Section 9.1.  Accordingly, notwithstanding anything to the
contrary in this Agreement, Buyer may cancel this transaction for any reason
(or no reason) within such 60-day Due Diligence Period (as such period may be
extended under Paragraph 9.1) by giving written notice to Seller of such
cancellation.  (If Buyer so elects, Buyer
may provide Seller the opportunity in such cancellation notice to cure specific
defects as provided in Paragraph 9.3 as an alternative to cancellation, in
which case such defects shall be listed by Buyer in the cancellation notice and
the provisions of Paragraph 9.3 shall then apply.)  In the event of such cancellation, Buyer
shall be promptly refunded all funds deposited by or on behalf of Buyer with
Escrow Holder or Seller (less only customary cancellation fees and costs of
Title Company and Escrow Holder to the extent required of Buyer upon
cancellation elsewhere in this Agreement) and Buyer shall thereafter have no
further obligation under this Agreement.

 

In order to facilitate Buyer’s due
diligence review, Seller shall provide to Buyer and Buyer’s consultants
reasonable access (during normal business hours upon at least 24 business
hours’ advance notice) during the Due Diligence Period, at the Property or at
another location in Los Angles County, California, as Seller may elect, to
inspect any contracts, agreements, documents, records, plans and
specifications, reports, studies, and files (excepting tax returns and Seller’s
internally prepared confidential memoranda which have not been disclosed to any
third party, but including files, records and correspondence regarding Seller’s
past and current tenants and other occupants at the Property and files, records
and correspondence regarding any prior casualties or damage at or to the
Property,

 

2

 

including but not limited to damage by fire, flood,
earthquake, soil subsidence, or hazardous materials spills, and/or regarding
any insurance claims regarding the Property), relating to the Property which
are in Seller’s possession or control.

 

30.  TITLE POLICY AND ENDORSEMENTS.

 

Escrow Holder shall cause to be issued to
Buyer an ALTA extended coverage owner’s form policy of title insurance [with
the following endorsements or substantially equivalent endorsements issued by
Title Company in the State of California: CLTA Endorsement Nos. 101.4
(regarding mechanic’s liens) and 116.7 (regarding legal subdivision), and a
special endorsement reasonably approved by Buyer insuring against any surface
entry or other entry above a depth of 500 feet below the surface by the holder
of any reserved oil or mineral rights], effective as of the Closing (the “Title
Policy”), issued by the Title Company in the full amount of the Purchase Price,
insuring title to the Property vested in Buyer or its nominee, subject only to
the exceptions approved by Buyer.  Buyer
shall pay the additional premium for ALTA extended coverage and for the listed
endorsements.  Seller shall pay the
premium for standard coverage and shall provide all information and perform
such other acts as are required to enable the issuance of the Title Policy with
the specified endorsements.

 

31.  EFFECTIVENESS OF THIS AGREEMENT; RELATED ASSIGNEE OR NOMINEE.

 

The preparation
and/or delivery of unsigned drafts of this Agreement shall not create any
legally binding rights in the Property and/or obligations of the parties.  This Agreement shall not be effective until
all Parties have duly executed and delivered it.  Buyer reserves the right, at any time prior
to the Closing, to assign its rights and delegate its obligations hereunder to
a person, persons, trust or entity controlling, controlled by, or under common
control with Buyer, or to designate a nominee to take title to the Property at
the Closing.

 

32.  LEASE CONTINGENCY.

 

Notwithstanding anything to the contrary in this
Agreement, the effectiveness of this Agreement is conditioned upon both (a) the
execution and delivery by Buyer and AELA (the current occupant of the Property
as described in Paragraph 28 above) to each other, concurrently with the
execution and delivery of this Agreement, of a written lease (the “AELA Lease”)
for the Property for a 10-year term to commence as of the Closing, on terms and
conditions acceptable both to Buyer and to AELA, each of them in its sole
discretion; and (b) the execution and delivery to Buyer by Atlantic Express
Transportation Corporation (“AETC”) as guarantor, concurrently with the
execution and delivery of this Agreement, of a lease guaranty in a form
acceptable to Buyer and AETC,

 

3

 

each of them in its sole discretion, guaranteeing to
Buyer the performance of AELA’s obligations as tenant under the AELA Lease.

 

33.  CONTINGENT PURCHASE PRICE INSTALLMENT.

 

The $4,850,000 Purchase Price described in
Paragraph 3.1(a) shall be paid to Seller through escrow at the Closing.  Buyer’s obligation to pay to Seller each
installment of the additional $150,000 of the Purchase Price described in
Paragraph 3.1(b) (which shall be due in three equal installment payments of
$50,000 each as described below) shall be conditioned upon Buyer’s timely (as
defined below) actual receipt (and retention free of bankruptcy claims or other
insolvency claims) of the full rent and all other monetary charges due from the
lessee or guarantor under the AELA Lease throughout the lease term up through
the date the applicable installment is due. 
If such condition is satisfied, the first $50,000 installment shall be
due and payable to Seller six (6) years and ninety (90) days after the date of
the Closing.  If such condition is
satisfied, the second $50,000 installment shall be due and payable to Seller
seven (7) years and ninety (90) days after the date of the Closing.  If such condition is satisfied, the final
$50,000 installment shall be due and payable to Seller eight (8) years and
ninety (90) after the date of the Closing. 
(In this regard the parties acknowledge that Buyer’s agreement to pay
such additional $150,000 in installments is being made in specific reliance
upon all payments under the AELA Lease being timely made up through the due
dates of such installments and that Buyer would not otherwise agree to pay more
than $4,850,000 for the Property.)

 

As used in this Paragraph 33, “timely” shall
mean that Buyer (or Buyer’ successor-in-interest as lessor under the AELA
Lease) has received each applicable lease payment by the earlier of the
following: (a) within thirty (30) days after the scheduled due date of such
payment prescribed in the AELA Lease (without regard to any delays available to
the lessee under bankruptcy or other laws), or (b) prior to the termination of
the AELA Lease due to lessee’s default or any other reason.

 

Prior to the Closing, Buyer shall deposit
with Escrow Holder the $150,000 for the three conditional installments of the
Purchase Price described above.  Escrow
Holder shall hold such funds and invest them in an interest-bearing account
reasonably approved by Buyer throughout the AELA Lease term until the
applicable date each $50,000 installment is due.  The funds for each $50,000 installment shall
be deemed to be Buyer’s funds unless and until the condition to Buyer’s
obligation to pay such funds to Seller is fully satisfied, at which time such
funds, without interest, shall be paid to Seller.  The Parties agree to execute such escrow
instructions regarding the funds as Escrow Holder may reasonably require.  Seller shall pay all fees charged by Escrow
Holder regarding Escrow Holder’s holding such funds.  If Escrow Holder declines to hold such funds
in escrow for up to eight years and ninety days, as described above, or if
Seller fails to pay

 

4

 

when due Escrow Holder’s fees regarding such funds, then such funds
shall be released to Buyer (or Buyer’s successor-in-interest) and deposited
into a separate interest-bearing bank account of Buyer (or Buyer’s
successor-in-interest).  The interest
earned on such funds, whether earned through an escrow account or a bank
account of Buyer (or Buyer’s successor-in-interest), shall be paid to Buyer (or
Buyer’s successor-in-interest) from time to time upon the request of Buyer (or
Buyer’s successor-in-interest).

 

If any payment of rent or other monetary
charges due from the lessee under the AELA Lease is not paid in a timely manner
(as defined above), any portion of the 
$150,000 deposit which has not yet been released to Seller, together
with accrued interest, shall be immediately released to Buyer (or Buyer’s
successor-in-interest), and Buyer shall have no further obligation to Seller
regarding such balance of the $150,000. Escrow Holder may conclusively rely
upon a written notice from Buyer (or Buyer’s successor-in-interest) that Buyer
(or such successor-in-interest) is entitled to the release of the funds due to
failure of timely receipt of payment, without the necessity of any written
instructions from Seller.  (As a matter
of agreement between the Parties with which Escrow Holder need not be
concerned, Buyer shall not give such a notice unless such a failure of timely
receipt of payment has actually occurred.) 
Seller’s sole and exclusive remedy for any default by Buyer under this
Paragraph 33 shall be to pursue a civil claim for damages based upon Buyer’s
contractual obligations to Seller under this Paragraph 33.  In no event shall Buyer’s obligations to
Seller for the conditional $150,000 in installments of the Purchase Price be
deemed to be, nor result in, a lien upon the Property, nor shall Buyer be
required to give any security for such obligation.

 

Without limiting the foregoing, to the extent
all or any part of such $150,000 does not become part of the Purchase Price and
thus does not have to be paid by Buyer to Seller, Buyer agrees to reduce by
such amount retained by Buyer the rent or other monetary charges last due under
the AELA Lease at the end of the 10-year lease term after all other obligations
of the lessee and guarantor under the AELA Lease have been fully satisfied
(either by performance of such obligations or by payment of the damages
resulting from nonperformance).  Such
reduction of the last amounts due during the AELA Lease term shall be without
prejudice to Buyer’s right to terminate the AELA Lease if AELA or its successor
as lessee defaults in any other obligations under the AELA Lease.  In the event Seller and AELA notify Buyer in
writing during the 10-year AELA Lease term that Seller is no longer affiliated
with AELA and jointly request in such notice that Buyer send Seller, at a
specified address, copies of any future default notices served by Buyer on AELA
under the AELA Lease, Buyer agrees to send Seller copies of any such notices at
such address by certified mail.  Such
notices shall be provided as a courtesy for informational purposes only and
shall not be preconditions to Buyer’s right to take any action, enforce any
obligation, or pursue any remedy under this Agreement or the AELA Lease.  This notice provision shall not be construed
to limit Buyer’s rights against AELA nor give Seller any rights to cure
defaults by AELA.

 

5

 

BILL OF
SALE

 

FOR VALUABLE CONSIDERATION, receipt and
adequacy of which is hereby acknowledged, the undersigned, 201 West Sotello
Realty, Inc., a California corporation (“Transferor”), hereby sells, transfers,
assigns and conveys to S.R. Partners, a California general partnership
(“Transferee”), the entire owner’s interest (free of liens, encumbrances and
claims) and any other right, title and interest of Transferor in and to the
personal property listed on Schedule 1 attached hereto (the “Personal
Property”).  Transferor hereby represents
and warrants to Transferee that Transferor is hereby conveying to Transferee
good, marketable title to the Personal Property, in its “as is” condition, but
free of any liens, encumbrances or claims of any kind.

 

IN WITNESS WHEREOF, Transferor has executed
this Bill of Sale as
of                             ,
2005, at Los Angeles, California.

 

 

	
   

  	
   

  	
  TRANSFEROR:

  
	
   

  	
   

  	
  201 West Sotello Realty, Inc.,

  a California corporation

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Domenic Gatto, Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  , Chief Financial Officer

  
							

 

EXHIBIT A

 

 

INVENTORY
OF PERSONAL PROPERTY

 

1.                                       To
the extent assignable, the entire owner’s interest (free of liens,
encumbrances, and claims) and any other right, title and interest of Transferor
in, to and under any and all site plans, construction and development drawings,
plans and specifications, parking agreements, surveys, engineering studies,
soil reports, licenses and permits (including but not limited to any zoning
approvals, land use entitlements, sewer and water permits and licenses,
building permits, certificates of occupancy, demolition and excavation permits,
curb-cut and right-of-way permits, utility permits, and drainage rights,
permits and agreements), and similar or equivalent governmental documents of
every kind and character whatsoever pertaining or applicable to or in any way
connected with the development, construction, ownership or operation of the
real property at 201 Sotello Street, in Los Angeles, California (the
“Property”), including all buildings and other improvements thereon or
thereunder.

 

2.                                       The
entire owner’s interest (free of liens, encumbrances, and claims) and any other
right, title and interest of Transferor in, to, and under any and all
contractual or statutory guaranties, warranties, affidavits, lien waivers and
agreements given heretofore and with respect to the construction or composition
of all improvements located in, on, upon or under and comprising a part of the
Property.

 

3.                                       The entire owner’s interest (free of liens,
encumbrances, and claims) and any other right, title and interest of Transferor
in and to any tangible personal property of Transferor located on and used
exclusively in connection with the operation, maintenance or improvement of the
Property (including but not limited to all records, reports, studies and other
documents relating to the operation, maintenance, improvement, and repair of
the Property).

 

The items described in this inventory shall
not be deemed to include buses, fuel, bus maintenance supplies, bus line
business licenses, bus line records, and other personal property relating
specifically to the bus line operations conducted on the Property by Atlantic
Express of L.A., Inc., an affiliate of Transferor which owns such items.

 

SCHEDULE 1 to EXHIBIT A

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