STATE OF NEW YORK

SUPREME COURT      COUNTY OF ESSEX

______________________________________________

HSBC BANK USA, NATIONAL ASSOCIATION,

successor by merger to HSBC BANK USA,   

        TERMS OF SALE                           Plaintiff,      

-against-       Index No.: 629-04

        RJI No.: 15-1-05-0019         Hon. James P. Dawson

GIBSON'S HARDWARE (A PARTNERSHIP),                  J.S.C.

DALE L. GIBSON, Individually and as a Partner   

in GIBSON'S HARDWARE, LEONARD D. GIBSON,

Individually and as a Partner in GIBSON'S HARDWARE,

JOHN DOE and MARY ROE,

    Defendants.

______________________________________________

That real property, premises, fixtures and items of personal property described in the Notice of Foreclosure Sale (the “Property”), will be sold under the direction of John T. Wilkins, Esq., Referee, with the assistance of Uncle Sam Auctions & Realty, Inc. (the “Auctioneer”), upon the following terms:

1. The Property will be sold to the highest bidder at public auction (the “Purchaser”) on October 27, 2005 at 11:00 a.m.  Upon the Auctioneer's acceptance of the Purchaser's bid, the Purchaser will be required to sign a Memorandum of Sale which shall contain an agreement to comply with these Terms of Sale.

2. Upon the Auctioneer's acceptance of the Purchaser's bid, the Purchaser, other than the Plaintiff, will be required to make a down payment in the sum of $10,000.00 with the Auctioneer at the time and place of sale in cash, certified check or bank check drawn on a bank, trust company, savings bank, or savings and loan association having offices in the State of New York, for which a receipt will be given.  Additionally, upon the Auctioneer's acceptance of the Purchaser's bid, the Purchaser, other than the Plaintiff, shall be required to pay to the Auctioneer at the time and place of sale, a buyer's premium equal to twelve percent (12%) of the amount of the Purchasers's bid, in the form of either cash, certified check or bank check drawn on a bank, trust company, savings bank, or savings and loan association having offices in the State of New York, for which a receipt will be given.

3. The residue of said Purchase Price will be required to be paid via cash, certified funds or wire transfer to the Auctioneer on or before the 30th day of November, 2005 at the time and place indicated in the Memorandum of Sale when the Referee's Deed will be ready for delivery (after that date, however, or at any date if the Plaintiff is the Purchaser).

4. The Auctioneer is not required to send any notice to the Purchaser; if Purchaser neglects to call at the time and place specified in the Memorandum of Sale to receive his/her deed, the plaintiff may resell the Property.  In the event of default by Purchaser in accordance with these Terms, the down payment shall be forfeited to the Plaintiff as liquidated damages regardless of the amount bid and paid on the resale of the Property.

5. The biddings will be kept open after the property is struck down and in case any Purchaser shall fail to comply with any of the above conditions of sale, the property so struck down to said Purchaser will be again put up for sale under the direction of the Referee under these same terms of sale, without application to the Court, unless the plaintiff's attorneys shall elect to make such application; and such Purchaser will be held liable for any deficiency there may be between the sum for which said Property shall be struck down upon the sale, and that for which it may be purchased on the resale, and also for any costs or expenses occurring on such resale.

6. The Property is being sold “AS IS” in its condition as of the date of sale and subject to:

 a) Any state of facts an accurate, survey of the Premises might disclose;

 b) Easements, restrictions, rights-of-way, restrictive covenants and conditions of record;

 c) Rights of the public and others in and any part of the Property that lies within the bounds of any street, alley or highway;

 d) Rights and claims of all tenants, lessee and persons in possession; zoning ordinances; building code regulations and any violations, notices, orders or other requirements issued by any federal, state, city, county, town or village agency having jurisdiction of record;

 e) Any state of facts than an inspection of the Property might disclose;

 f) The rights of any party pursuant to Section 1411 (5) of the Real Property Actions and Proceedings Law and CPLR Sections 317, 2003 and 5015;

 g) Any statutory right of redemption of the United States of America within 120 days from the date of sale;  

7. The real estate transfer tax, the Real Property Transfer Gains Tax Affidavit, and all recording and filing fees or charges arising from the sale or the recording of the deed will be paid by the Purchaser.  No abstract of title, title search or survey will be furnished by the Auctioneer, and all abstracts of title, continuance, and other charges, and all survey expenses shall be paid by the Purchaser.

8. The Purchaser acknowledges that the Plaintiff has never owned or operated the Property and has not made any representation, warranty or promise with respect to the Property and Purchaser releases and forever discharges Plaintiff, its parent, agents, servants, directors, officers, employees, shareholders, successors, assigns, subsidiaries and affiliates and their attorneys (each a “Related Party”) of and from any and all causes of action, claims, demands and remedies of whatsoever kind or nature that Purchaser now has or may in the future have against Plaintiff or any such Related Party on account of, arising out of or related to the Property or the past or present use, ownership, control, operation or condition of the Property, including without limitation, the environmental condition of the Property and the presence or release of any hazardous or toxic fluids, substances, materials, asbestos, lead or fungi on the Property, whether known or unknown to the Purchaser as of the date hereof.

9. The Purchaser assumes all responsibility for any and all environmental conditions, known or unknown, existing at the Property, including conditions existing prior to the sale, and agrees to indemnify and hold harmless and defend the Plaintiff, together with any Related Party (the Plaintiff and all such Related Parties herein collectively called the “Indemnified Parties”), from and against any losses, causes of action, liabilities, claims, demands, obligations, damages, costs and expenses, including reasonable consultants' fees and attorneys' fees, to which the Indemnified Parties may become subject under any current, future or future interpretation of any laws, statutes, ordinances, directives, administrative or executive orders, rules or regulations or otherwise (collectively, “Environmental Laws”), of any federal, state, or local governmental or quasi-governmental entities or authorities having jurisdiction on account of, arising out of or related to the Property or the past or present use, ownership, control, operation or condition of the Property, including, without limitation, the environmental condition of the Property and the presence or release of any hazardous or toxic fluids, substances, materials, asbestos, lead or fungi (as defined by the Environmental Laws and referred to herein as “Hazardous Materials”) on or from the Property, whether known or unknown to the Purchaser as of the date hereof.

10. Purchaser acknowledges and agrees that, the Plaintiff, the Related Parties, the Referee and the Auctioneer have not made, whether in these Terms of Sale or otherwise, nor will they make in the deed or Memorandum of Sale, any representation, warranty, promise, covenant, agreement or statement of any nature concerning the quality, condition, marketability, operability or suitability for any particular purpose of the Property or any part thereof, including, without limitation any matter or thing relating to any latent or patent defects, any hidden or concealed conditions, or any subsoil, groundwater or geological conditions or the presence of any Hazardous Materials or the compliance of the Property with any laws, statutes, ordinances, directives, administrative or executive orders, rules or regulations of any federal, state, or local governmental or quasi-governmental entities or authorities having jurisdiction over the Property, including, without limitation, the Environmental Laws, applicable zoning ordinances and building and health codes.  The Purchaser acknowledges that Purchaser has been provided with an adequate opportunity to perform any due diligence that Purchaser, in its sole discretion, deems appropriate, and that Purchaser has made a diligent and thorough investigation of all matters, including but not limited to environmental conditions at the Property, prior to this sale.

Dated: October           , 2005   ___________________________________

 John T. Wilkins, Esq., Referee

        

     UNCLE SAM AUCTIONS & REALTY, INC.

     as Auctioneer

     By:___________________________________

     Name:  Ralph F. Passonno Jr.

     Title:     President

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