Document:

a6380139ex101.htm

Exhibit 10.1

 

LEASE AGREEMENT

This Lease Agreement is made on July 15, 2010,

 

	BETWEEN	 	Veronica Development Associates, a New Jersey General Partnership,
	whose address is	 	c/o Ventura, Miesowitz, Keough & Warner, P.C.,
	 	 	783 Springfield Ave., Summit, NJ 07901,
	 	 	 	herein designated as the “Landlord”,
	 	 	 	 
	 	 	 	 
	AND	 	Akorn (New Jersey), Inc., an Illinois Corporation,
	whose address is	 	1925 West Field Court, Suite 300, Lake Forest, IL 60045,
	 	 	 	herein designated as the “Tenant”.

WITNESSETH

WHEREAS, the Landlord and Advanced Remedies, Inc. previously entered into a lease agreement dated July 31, 1992, an Agreement dated October 9, 1992, an Amendment Agreement dated October 9, 1992, a Second Amendment Agreement dated May 19, 1993 and a Third Amendment Agreement effective May 1, 1994 for such land and improvements located at 72 Veronica Avenue, Units 5, 6, 7, 8, 9 and 10, Franklin Township, New Jersey; and

WHEREAS, Advanced Remedies, Inc. and Akorn, Inc. subsequently entered into an Assignment of Lease dated July 16, 1998 whereby Advanced Remedies, Inc. assigned all of its right, title and interest in the Agreements to Akorn, Inc.; and

WHEREAS, Landlord and Akorn, Inc. subsequently entered into a Fourth Amendment Agreement dated September 11, 1999 whereby the Lease was amended to expand Akorn, Inc.’s occupancy to include units 3 and 4 at 72 Veronica Avenue, Franklin Township, New Jersey; and

WHEREAS, Landlord and Akorn, Inc. subsequently entered into a Letter Amendment Agreement dated June 12, 2002 whereby the term of the Lease was extended for seven (7) years and Akorn, Inc. assigned all of its rights under the Lease to Tenant; and

WHEREAS, Landlord and Tenant subsequently entered into a Fifth Amendment Agreement dated November 16, 2006 whereby the Lease was amended to expand Tenant’s occupancy to include units 1 and 2 at 72 Veronica Avenue, Franklin Township, New Jersey and to extend the Term of the Agreements; and

WHEREAS, Landlord and Tenant now desire to enter into a new Lease Agreement to come into effect upon the expiration of the currently effective lease, as amended.

NOW, THEREFORE, in consideration of the premises, the mutual covenants herein contained, and other good and valuable consideration, it is hereby agreed as follows:

1. Premises.  The Landlord does hereby lease to the Tenant and the Tenant does hereby rent from the Landlord, the following described premises (“Premises”):  Approximately Fifty Thousand (50,000) square feet of office and warehouse space located in Franklin Technical Center, 72 Veronica Avenue, Units 1, 2, 3, 4, 5, 6, 7, 8, 9 and 10, Franklin Township, New Jersey, (“Premises”) being more particularly described in Exhibit “B” attached hereto and made a part hereof.  Except for the remediation and improvements to be performed by the Landlord pursuant to the Landlord’s Work Letter (“Work Letter”), attached hereto as Exhibit “A” and incorporated by referenced herein, the Premises shall be leased to Tenant in “AS IS” condition.  By signing this Lease Agreement the Tenant hereby consents to and accepts the condition of the Premises “AS IS”, except for the items listed in the Work Letter.

 

  

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2. Term.  For a term of Seven (7) years (“Term”) commencing on August 1, 2010 (“Commencement Date”), and ending on July 31, 2017.

3. Use.  The Premises shall be used and occupied only and for no purpose other than for general office space and for the development, manufacture, storage and wholesale distribution of ophthalmic and optic products and skin care products.  The Tenant shall not, and will not allow others, to occupy or use the leased Premises or any part thereof for any purposes other than as herein limited, nor for any purpose deemed unlawful, disreputable, or extra hazardous, on account of fire or other casualty.  Tenant also will not establish any retail business or conduct any retail sales on the Premises.  Further, Tenant and not Landlord shall be responsible for obtaining the certificate of occupancy from the Township of Franklin regarding their use and occupancy of the Premises hereunder including any and all costs and expenses associated therewith.

4. Payment Due Upon Ex­ecu­tion.  Tenant shall pay to Landlord the sum of Fifty One Thousand Two Hundred Eighteen and 00/00 Dollars ($51,218.00) on or before the Commencement Date representing the following:

a.Thirty Eight Thousand Eight Hundred One and 30/00 Dollars ($38,801.30) representing the initial Monthly rent (for the month of August, 2010) as provided in Paragraph 5 of the Lease.

b.Twelve Thousand Four Hundred Sixteen and 70/00 Dollars ($12,416.70) representing the initial months tax and maintenance expense as provided in Paragraph 6 of the Lease.

5. Rent.  The Tenant agrees to pay Three Million Two Hundred Fifty Nine Thousand Three Hundred Nine and 20/00 Dollars ($3,259,309.20) as rent (“Base Rent”) during the Term, which Base Rent shall be paid on a monthly basis in the amount of Thirty Eight Thousand Eight Hundred One and 30/00 Dollars ($38,801.30) per month (“Monthly Base Rent”), commencing with the execution of this Lease by Tenant and paid on the first day of each consecutive month thereafter during the Term through and including July 1, 2017.  The Monthly Base Rent and any additional amount to be paid by Tenant hereunder (i.e., Additional Rent, COLA) shall be due and payable in advance on the first day of each and every month without demand and without offset or deduction together with such additional rent and charges as set forth in this Lease.  The first payment of Monthly Base Rent and additional security deposit is due upon the signing of the Lease by Tenant. The Tenant must pay a late charge of Two Hundred Dollars ($200) as additional rent for each payment that is more than ten (10) days late.  This late charge is due with the Monthly Base Rent payment.  Any installment or installments of Base Rent or Additional Rent as hereinafter described and all other sums payable by Tenant hereunder which are not paid when due, shall bear interest at the maximum legal rate of interest allowed by law until the same shall be paid in full.  On July 1, 2012, and every 24 months thereafter, during the Term and during any renewals pursuant to Paragraph 39, the Rent paid by the Tenant shall be subject to a cost of living adjustment (“COLA”) pursuant to Paragraph 8.  Base Rent as adjusted from time to time, pursuant to Paragraph 8, shall hereinafter be referred to as “Adjusted Base Rent.”

6. Additional Rent.  The Tenant, in addition to the Base Rent, shall, during the Term of this Lease and any renewals thereof, promptly pay (before any fine, penalty, interest or cost shall be added thereto) at its own cost and expense, when the same shall be lawfully due and payable, its proportionate share of all real estate property taxes and other assessments against the entire parcel for land, building and improvements of which the Premises are a part by the Township of Franklin, or any other governmental authority and its proportionate share of the total cost of maintenance services provided by the Landlord to the entire building complex located at 68-72 Veronica Avenue in which the Premises are located.

  

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a. The amount to be paid by Tenant shall be calculated by multiplying 50,000 by the “dollar per square foot” charged by the Landlord to Tenant for its annual share of real estate taxes (being One Hundred Percent (100%) of the real estate tax obligation, if the Premises are taxed as a separate tax lot), assessments and maintenance costs, which figure shall be subject to adjustment by the Landlord from time to time.  Currently, the “dollar per square foot” charged by Landlord to Tenant is $2.98.  Therefore, the Additional Rent to be paid by Tenant is currently $12,416.70 per month.

b. At the end of each year of the Lease, the parties may adjust said monthly payment in accordance with the actual annual expenses and proper apportionment shall be made.

c. The Tenant has previously provided Landlord with a deposit of One Thousand One Hundred Twenty Five Dollars ($1,125.00) that is currently held as security against Additional Rent, as an additional security deposit, separate and apart from the rent security set forth in Paragraph 7, to insure a sufficient amount for said real estate property taxes and maintenance expense, which deposit shall be returned to Tenant if said expenses have been paid, and without offset as to any other liabilities or obligations of the Tenant under this Lease at the expiration of the Lease term and any extensions thereof.

d. Tenant shall pay all utilities in­clud­ing but not limited to tele­phone and elec­tric­ity, that are separately metered to the leased pre­mises, when such pay­ments become due.

e. If the Tenant makes any im­prove­ments, al­ter­ations or ad­di­tions which result in ad­di­tional  mu­nicipal taxes during the term of this Lease or any renewal thereof, the same will be payable as ad­di­tional rent payable an­nu­ally upon pre­sen­ta­tion by Land­lord to Tenant.

f. Tenant shall have the right, one time annually from the commencement of the Lease until the first anniversary following the end of the Term, to request in writing an accounting of the Additional Rent charged to Tenant.  Upon such request, Landlord shall provide an accounting supported by reasonable detailed backup for the Additional Rent.  Should Tenant contest any portion of the Additional Rent, then the parties shall use reasonable efforts to confer and resolve any such contest.  In the event the parties are unable to reach resolution, they shall then submit the dispute to a third party for mediation.

7. Security.  The Tenant has previously deposited Thirty Seven Thousand Three Hundred Thirty Two and 32/00 Dollars ($37,332.32) with the Landlord as security for the payment of the Rent hereunder and the full and faithful performance by the Tenant of the covenants and conditions on the part of the Tenant to be performed.  Said sum shall be returned to the Tenant, without interest, after the expiration of the Term hereof, provided that the Tenant has fully and faithfully performed all such covenants and conditions and is not in arrears in Rent.  During the Term hereof, the Landlord may, if the Landlord so elects, have recourse to such security, to make good any default by the Tenant, in which event the Tenant shall, on demand, promptly restore said security to its original amount.  The Landlord shall assign or transfer said security, for the benefit of the Tenant, to any subsequent owner or holder of the reversion or title to said Premises, in which case the assignee shall become liable for the repayment thereof as herein provided, and the assignor shall be released by the Tenant from all liability to return such security.  This provision shall be applicable to every change in title and does not permit the Landlord to retain the security after termination of the Landlord’s ownership.  The Tenant shall not mortgage, encumber or assign said security without the written consent of the Landlord.

 

  

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8. COLA.

a. Commencing on July 1, 2012 and on the first day of July of every second year thereafter ("Adjustment Date", individually”; “Adjustment Dates”, collectively), during the term of this Lease and any Renewal Period(s) (hereinafter defined), the Base Rent due under this Lease shall be adjusted to reflect the increase in the cost of living based upon the "Revised Consumer Price Index Cities (1982-1984 = 100)" published by the Bureau of Labor Statistics for the United States Department of Labor ("Index").

b. The Index number indicated in the column for New York, N.Y.-Northeastern, N.J., entitled "all items", for the month of July, 2010, shall be the "Base Index Number" and the corresponding Index number for the Adjustment Date shall be the "Current Index Number".

c. The Current Index Number shall be divided by the Base Index Number.  From the quotient thereof, there shall be subtracted the integer 1, and any resulting positive number shall be deemed to be the percent of increase in the cost of living (“Percentage of Increase”).

d. The adjustment to the Annual Base Rent (hereinafter defined) shall be equal to Four Hundred Sixty Five Thousand Six Hundred Fifteen and 60/00 Dollars ($465,615.60) (“Annual Base Rent”) multiplied by the Percentage of Increase.  One-Twelfth (1/12) of such adjustment to the Annual Base Rent, to be paid by Tenant for the lease year(s) in question, shall be paid with the Monthly Base Rent in lawful money of the United States during each such lease year.  Pending the determination of the adjustment to the Annual Base Rent, if any, to be paid by Tenant, Tenant shall continue to pay the Monthly Base Rent plus any adjustment to the Annual Base Rent made for the prior period.  When the adjustment to the Annual Base Rent has been determined, Tenant, on the first day of the month immediately following the furnishing by Landlord to Tenant of the computation thereof, shall pay to Landlord the adjustment to the Annual Base Rent due pursuant to this Section, for each month which has elapsed from the most recent Adjustment Date through the date of payment.  In subsequent months, the adjustment to the Annual Base Rent fixed pursuant to this Paragraph shall be paid simultaneously on the date when the Monthly Base Rent is due.

e. If publication of the Consumer Price Index shall be discontinued, the parties hereto shall thereafter accept comparable statistics on the cost of living for the Northeastern New Jersey, as they shall be computed and published by an agency of the United States or by a responsible financial periodical of recognized authority then to be selected by the parties hereto.  In the event there is (1) the use of comparable statistics in place of the Consumer Price Index as above mentioned, or (2) the publication of the Index figure at other than monthly intervals, there shall be made in the method of computation herein provided for such revisions as the circumstances may require to carry out the intent of this Section.

f. The Monthly Base Rent and any additional amount to be paid by Tenant hereunder shall be due and payable monthly in advance on the first day of each and every month without demand and without offset or deduction together with such Additional Rent as set forth Paragraph 6.

9. Guaranty.  In consideration for Landlord entering into this Lease Agreement, Akorn, Inc. agrees to guarantee the prompt payment of Rent and Additional Rent and the performance of all obligations of the Tenant under this Lease Agreement.  This guaranty shall remain effective and fully enforceable during the Term, and any extension thereof against Akorn, Inc. and against any successors or assignees of Akorn, Inc.  In the event of the merger, consolidation, business combination, take-over, assignment, sale or transfer of Akorn, Inc. or all of the business of Akorn, Inc., the Landlord shall receive and the Tenant shall provide written guarantees from the assignee, survivor or successor of Akorn, Inc., and such additional assurances as the Landlord, in its sole discretion, may require, as a condition of the continuation of this Lease.

 

  

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10. Broken Glass.  The Tenant shall repair or replace, as nec­es­sary, all broken glass, doors, door frames, and window frames which become damaged during the term hereof caused by the carelessness, negligence or improper conduct by the Tenant or any employee, invitee, or agent of Tenant.  The Pre­mises shall not be used or main­tained as a dumping ground for rubbish, trash, garbage or other waste, which shall be kept in sanitary con­tain­ers and regularly taken away from the pre­mises.  All equip­ment for the storage or dis­posal of such ma­te­rial shall be kept in a clean and sanitary con­di­tion.

11. Heating/Ventilation.  If there are any combination or separate heating, ventilation and/or air-conditioning units (“HVAC units”) in or at the Premises, owned by the landlord, the landlord shall, at its own cost and expense, either (a) obtain and maintain throughout the term a service contract with a licensed HVAC contractor , which provides for service and maintenance of the HVAC units at least in accordance with the manufacturer’s recommended service and maintenance procedures, or (b) personally provide to the HVAC units such service and maintenance.   All HVAC equipment installed by the Tenant shall be maintained at Tenant’s own cost and expense.

12. Repairs and Care.  The Tenant has examined the Premises and has entered into this Lease without any representation on the part of the Landlord as to the condition thereof.   The Tenant shall occupy the Pre­mises and operate its busi­ness and work in a manner as not to damage the Pre­mises, in­clud­ing loading dock bumpers and seals, if any, nor any plumb­ing, heating, air-conditioning, elec­tri­cal, sewage, light­ing, sprin­kler systems, over­head doors, or de­mis­ing walls and any other similar in­stal­la­tions therein, and should any damages to the same occur or should repairs other­wise be nec­es­sary, Tenant shall diligently repair the same to the con­di­tion prior thereto, and the Tenant shall make all nec­es­sary re­place­ments with parts or items equal in quality and con­di­tion to the originals.  The Tenant's em­ploy­ees, agents and cus­tom­ers shall occupy or utilize the Pre­mises in such a manner so as to main­tain and pre­serve therein at all times safety, care, clean­li­ness and good order.  The Tenant shall have any debris or dis­carded ma­te­rial regularly removed and carted away from the Pre­mises.  Tenant will not be held responsible for the ordinary wear and tear to the Premises resulting from Tenant's use and enjoyment of the Premises.  ­In particular, the Tenant assumes re­spon­si­bil­ity for the prompt removal of all snow and ice from the walk­ways immediately in front of the Pre­mises and the concrete steps in the rear of the Premises. The Tenant shall neither encumber nor obstruct the sidewalks, driveways, yards, entrances, hallways and stairs, but shall keep and maintain the same in a clean condition, free from debris, trash, and refuse.  The Land­lord shall solely be re­spon­sible for the following: (i) nec­es­sary struc­tural repairs and re­place­ments to the roof, ex­te­rior walls, paved areas, floor or foun­da­tion in the Pre­mises; (ii) repairs and maintenance to all landlord owned air conditioning, heating, plumbing and sprinkler systems at the Premises; and (iii) removal of snow and ice from the parking lot.  Notwithstanding the aforementioned, in no event shall the Landlord be responsible for any repairs or re­place­ments if the same shall be re­quired as a result of acts of the Tenant, Tenant's employees, rep­re­sen­ta­tives, or agents, in which case Tenant shall be re­spon­sible for such repairs or re­place­ments.  Landlord's li­abil­ity shall be limited to the cost of the repair or re­place­ment and Land­lord shall in no event be liable for con­se­quen­tial damages ensuing there­from.

13. Inspection and Repair. The Tenant agrees that the Landlord and the Landlord’s agents, employees or other representatives, shall have the right to enter into and upon the said Premises or any part thereof, at all reasonable hours, with reasonable advance notice and accompanied by a Tenant representative, for the purpose of (a) examining the same; or (b) making such repairs or alterations therein as may be necessary, in the Landlord’s reasonable judgment and following consultation with Tenant, for the safety and preservation thereof; or (c) erecting, maintaining, repairing or replacing wiring, cables, conduits, vents or plumbing equipment running in, to or through the premises; or (d) showing the premises to prospective new tenants during the last six (6) months of the term of this lease.  This clause shall not be deemed to be a covenant by the Landlord nor be construed to create an obligation on the part of the Landlord to make such inspection or repairs.

 

  

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14. Maintenance Services.  The Landlord shall perform all landscaping, ground maintenance, roof maintenance and removal of snow from the parking lots, if applicable, and any other normal maintenance services with reference to the Premises.  The Tenant shall pay a proportionate share of the total cost of such services to the entire building in which the Premises are located equal to the percentage of the total building area which the Premises comprises.  In addition, the Tenant shall pay a proportionate share of any water, sewer, electricity and any other costs incurred by the Landlord in maintaining the Premises.  The Landlord shall be entitled to a sum equal to Ten Percent (10%) of the Tenant’s proportionate share of all of the above expenses, including taxes and assessments, to cover the cost of administering the maintenance of the Premises.

The maintenance fees shall comprise a portion of the Additional Rent, and shall be charged to Tenant pursuant to Paragraph 6.

Landlord shall have the option to contract directly for trash removal or require Tenant to obtain a contract for trash removal. In either event, Landlord shall have the right to select the contractor who will service the Premises and to make final decisions as to the adequacy and frequency of trash removal services.  All trash shall be stored in a manner and at such locations as may be designated by the Landlord.

15. Alterations and Improvements.  All equipment and apparatus installed in or attached to the premises by Tenant shall be removed and Tenant shall restore the premises to its original condition, reasonable wear and tear expected.  Tenant shall be solely responsible for, and required to, obtain permits for any alternations, additions or improvements made by Tenant to the premises, and all such alternations, additions or improvements must be made in conformance to all applicable zoning rules, building and safety codes, ordinances, rules and laws.

16. Signs.  The Tenant shall not place nor allow to be placed any signs, upon, in or about the said Premises, except as may be consented to by the Landlord in writing.  Signs may only be permitted on the entrance doorway of the Premises.  In case the Landlord or the Landlord’s agents, employees or representatives shall deem it necessary to remove any such signs in order to paint or make any repairs, alterations or improvements in or upon said Premises or any part thereof, they may be so removed, but shall be replaced at the Landlord’s expense when the said repairs, alterations or improvements shall have been completed.  Any signs permitted by the Landlord shall at all times conform with all municipal ordinances or other laws and regulations applicable thereto.

17. Utilities.  The Tenant shall pay when due all the rents or charges for electric, gas or other utilities used by the Tenant, which are or may be assessed or imposed upon the leased Premises or charged to the Landlord by the suppliers thereon during the Term hereof, and if not paid, such rents or charges shall be added to and become payable as additional rent with the installment of Rent next due or within 30 days of demand therefor, whichever occurs sooner.

18. Compliance with Laws etc.  The Tenant shall promptly comply with all laws, ordinances, rules, regulations, requirements and directives of all Governmental or Public Authorities and of all their subdivisions, applicable to and affecting the said Premises arising out of their use and occupancy, and shall promptly comply with all orders, regulations, requirements and directives of the Board of Fire Underwriters or similar authority and of any insurance companies which have issued or are about to issue policies of insurance covering the said Premises and its contents, for the prevention of fire or other casualty, damage or injury, at the Tenant’s own cost and expense.

 

  

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19. Assignment.  Tenant shall not other­wise assign this Lease or sublet the pre­mises or any portion thereof without the prior written consent of Land­lord which consent will not be unreasonably withheld.  If Tenant desires to sublet all or part of the pre­mises, or assign this Lease and obtains any bona fide third-party offers there­for, it shall im­me­di­ately notify Land­lord in writing of said offers, and upon receipt of same, Land­lord may do any of the fol­low­ing:

a. If Land­lord de­ter­mines, in its sole dis­cre­tion that the new oc­cu­pancy might cause chemical or other odors, smoke or noise, or con­sti­tute a nui­sance or dis­tur­bance to the other tenants of Land­lord or might use the pre­mises in a haz­ard­ous or unsafe manner or might other­wise be ob­jec­tion­able with respect to the pro­posed use, or its fi­nan­cial sound­ness, Land­lord may with­hold its consent;

b. If the third-party offer is for an as­sign­ment of this Lease or a sub­lease of the entire pre­mises, Land­lord may ter­mi­nate this Lease.  If such offer is for a sub­lease of less than all of the pre­mises, Land­lord may modify this Lease to exclude such area, in which event, Tenant's ob­li­ga­tions to make any pay­ments here­un­der, in­clud­ing rent, shall be reduced protanto, pro­vided, however, such pay­ments shall not be reduced below an amount which, when added to the pay­ments to be re­ceived from said third-party, shall be equal to the total pay­ments then payable under this Lease.  If Land­lord so ter­mi­nates or modifies this Lease, the pre­mises, or the part thereof ex­cluded from this Lease, shall revert to the ab­so­lute and sole control of the Land­lord, without further ob­li­ga­tion to Tenant or the third-party offeror.  Land­lord may, however, enter into a lease di­rectly with said third-party offeror without li­abil­ity to Tenant; or

c. Consent to such request, in which event Tenant shall not be re­leased from any of its ob­li­ga­tions here­un­der.

20. Liability Insurance.  The Tenant, at Tenant’s own cost and expense, shall obtain or provide and keep in full force for the benefit of the Landlord, during the Term hereof, general public liability insurance, insuring the Landlord against any and all liability or claims of liability arising out of, occasioned by or resulting from any accident or otherwise in or about the leased Premises for injuries to any persons, for limits of not less than One Million Dollars ($1,000,000) for property damage, One Million Dollars ($1,000,000)  for injuries to one person and Three Million Dollars ($3,000,000) for injuries to more than one person, in any one accident or occurrence.  The insurance policies shall be with companies authorized to do business in this State and shall be delivered to the Landlord, together with proof of payment promptly upon Landlord’s written request.  At least fifteen days prior to the expiration or termination date of any policy, the Tenant shall deliver a renewal or replacement policy with proof of the payment of the premium therefor.

21. Waiver of Subrogation Rights.  The Tenant waives all rights of recovery against the Landlord or Landlord’s agents, employees or other representatives, for any loss, damages or injury of any nature whatsoever to property or persons for which the Tenant is insured.  The Tenant shall obtain from Tenant’s insurance carriers and will deliver to the Landlord, waivers of the subrogation rights under the respective policies.

22. Non-Liability of Landlord.  The Landlord shall not be liable for any damage or injury which may be sustained by the Tenant or any other person, as a consequence of the failure, breakage, leakage or obstruction of the water, plumbing, steam, sewer, waste or soil pipes, roof, drains, leaders, gutters, valleys, downspouts or the like or of the electrical, gas, power conveyor, refrigeration, sprinkler, air-conditioning or heating systems, elevators or hoisting equipment; or by reason of the elements; or resulting from the carelessness, negligence or improper conduct on the part of Tenant or any third party; or from the gross negligence or willful misconduct of the Landlord or the Landlord’s agents or employees; or attributable to any interference with, interruption of, or failure beyond the control of the Landlord.

 

  

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23. Indemnification.  The Tenant also agrees to and shall hold harmless and indemnify the Landlord from and for any and all payments, expenses, costs, attorneys fees and from and for any and all claims and liability for losses or damage to property or injuries to person occasioned wholly or in part by or resulting from any acts or omissions by the Tenant or the Tenant’s agents, employees, guests, licensees, invitees, subtenants, assignees or successors, or for any cause or reason whatsoever arising out of or by reason of the occupancy or business of the Tenant.

24. Risk of Loss.  The Tenant hereby assumes the risk of loss or damage to any per­sonal prop­erty, used or stored by it in or at the Pre­mises or other prop­erty of the Land­lord of which the Pre­mises form a part, caused by fire, water, theft, war, vermin, flood, or any other ca­su­alty or peril nor­mally in­cluded in multi-peril all risk in­sur­ance with minimum al­low­able spe­cific peril or ca­su­alty ex­clu­sions, agrees not to look to the Land­lord or its allied or af­filiated cor­po­ra­tions, part­ner­ships or in­di­viduals for in­dem­ni­fi­ca­tion for the same, and hereby re­leases the Land­lord from any li­abil­ity for any such loss or damage, except where such loss or damage is caused by the Landlord’s or the Landlord’s agents’ or employees’ gross negligence or willful misconduct.  The Tenant agrees to look solely to third parties, its insurer, if any, or itself for com­pen­sa­tion for such loss or damage.  If the Tenant chooses not to self-insure against the same, Tenant further agrees that each such policy shall contain the fol­low­ing pro­vi­sion, or one to similar effect:

Any written agree­ment or release from li­abil­ity entered into by the insured prior to any loss here­un­der shall not affect this policy or the right of the insured to recover here­un­der.  The insurer hereby waives its rights to recover from the Land­lord, its allied or af­filiated cor­po­ra­tions, part­ner­ships or in­di­viduals by way of subrogation or other­wise for any loss under this policy.

25. Mortgage Priority.  This Lease shall not be a lien against the said Premises with respect to any mortgages that may hereafter be placed upon said Premises.  The recording of such mortgages shall have preference and be superior and prior in lien to this Lease, irrespective of the date of recording.  The Tenant agrees to execute any instruments, without cost, which may be deemed necessary, to further effect the subordination of this Lease to any such mortgages.  A refusal by the Tenant to execute such instruments is a violation and shall entitle the Landlord to cancel this Lease.

26. Condemnation/Eminent Domain.  If any portion of the Premises of which the leased Premises are a part shall be taken under eminent domain or condemnation proceedings, or if suit or other action shall be instituted for the taking or condemnation thereof, or if in lieu of any formal condemnation proceedings or actions, the Landlord shall grant an option to purchase and or shall sell and convey the said Premises or any portion thereof, to the governmental or other public authority, agency, body or public utility, seeking to take said land and Premises or any portion thereof, then this Lease, at the option of the Landlord, shall terminate, and the Term hereof shall end as of such date as the Landlord shall fix by notice in writing.  The Tenant shall have no claim or right to claim or be entitled to any portion of any amount which may be awarded as damages or paid as the result of such condemnation proceedings or paid as the purchase price for such option, sale or conveyance in lieu of formal condemnation proceedings.  All rights of the Tenant to damages, if any, are hereby assigned to the Landlord.  The Tenant agrees to execute and deliver any instruments, at the expense of the Landlord, as may be deemed necessary to expedite any condemnation proceedings or to effectuate a proper transfer of title to such governmental or other public authority, agency, body or public utility seeking to take or acquire the said lands and Premises of any portion thereof.  The Tenant agrees to vacate the said Premises, remove all of the Tenant’s personal property therefrom and deliver up peaceable possession thereof to the Landlord or to such other party designated by the Landlord.  The Tenant shall repay the Landlord for such costs, expenses, damages and losses as the Landlord may incur by reason of the Tenant’s breach hereof.

  

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27. Fire and Other Casualty.  In case of fire or other casualty, the Tenant shall give immediate notice to the Landlord.  If the Premises shall be partially damaged by fire, the elements or other casualty, the Landlord shall repair the same as speedily as practicable, but the Tenant’s obligation to pay the Rent hereunder shall not cease.  If, in the opinion of the Landlord, the Premises are so substantially damaged as to render them untenantable, then the Rent shall cease until such time as the Premises shall be made tenantable by the Landlord.  However, if, in the opinion of the Landlord, the Premises are so substantially damaged that the Landlord decides not to rebuild, then the Rent shall be paid up to the time of such destruction and thenceforth this Lease shall come to an end.  However, the provisions of this clause shall not become effective or be applicable, if the fire or other casualty and damage shall be the result of the carelessness, negligence or improper conduct of the Tenant or the Tenant’s agents, employees, guests, licensees, invitees, subtenants, assignees or successors.  In such case, the Tenant’s liability for the payment of the Rent and the performance of all the covenants, conditions and terms hereof on the Tenant’s part to be performed shall continue and the Tenant shall be liable to the Landlord for the damage and loss suffered by the Landlord.  If the Tenant shall have been insured against any of the risks herein covered, then the proceeds of such insurance shall be paid over to the Landlord to the extent of the Landlord’s costs and expenses to make the repairs hereunder, and such insurance carriers shall have no recourse against the Landlord for reimbursement.

28. Reimbursement of Landlord.  If the Tenant shall fail or refuse to comply with any of the terms and conditions of this Lease, the Landlord may carry out and perform such conditions at the cost and expense of the Tenant, which amounts shall be payable on demand to the Landlord.  This remedy shall be in addition to such other remedies as the Landlord may have by reason of the breach by the Tenant of any of the terms and conditions of this Lease.

29. Increase of Insurance Rates.  If for any reason it shall be impossible to obtain fire and other hazard insurance on the buildings and improvements on the leased Premises, in an amount and in the form and in insurance companies acceptable to the Landlord, the Landlord may, at any time, terminate this Lease, upon giving to the Tenant fifteen (15) business days’ notice in writing of the Landlord’s intention so to do.  Upon the giving of such notice, this Lease shall terminate.  If by reason of the use to which the Premises are put by the Tenant or character of or the manner in which the Tenant’s business is carried on, the insurance rates for fire and other hazards shall be increased, the Tenant shall, upon demand, pay to the Landlord, as Rent, the amounts by which the premiums for such insurance are increased.

30. Right to Exhibit.  The Tenant agrees to permit the Landlord and the Landlord’s agents, employees or other, after six (6) months next preceding the expiration of the Term hereof, to place notices on the front of said Premises or any part thereof, offering the Premises for rent or for sale; and the Tenant hereby agrees to permit the same to remain thereon without hindrance or molestation.

31. Removal of Tenant’s Property.  Any equipment, fixtures, goods or other property of the Tenant, not removed by the Tenant upon the termination of this Lease, or upon any quitting, vacating or abandonment of the Premises by the Tenant, or upon the Tenant’s eviction, shall be considered as abandoned and the Landlord shall have the right, without any notice to the Tenant, to sell or otherwise dispose of the same, at the expense of the Tenant, and shall not be accountable to the Tenant for any part of the proceeds of such sale, if any.

32. Default.  Each of the following shall constitute a “Default” for purposes of the Lease and this Rider:

a. Tenant fails to pay any rent or other monetary obligation when due;

 

  

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b. Tenant vacates or abandons the Premises;

c. The Premises or any part thereof is taken upon execution or by other process of law directed against Tenant, or is taken upon or subject to any attachment by any creditor of Tenant or claimant against Tenant, and said attachment is not discharged or disposed of within ten (10) days after its levy;

d. Tenant or any guarantor of Tenant’s obligations under the Lease or this Rider (“Guarantor”) files a petition in bankruptcy or insolvency or for reorganization or arrangement under the bankruptcy laws of the United States or under any insolvency act of any state, or admits the material allegations of any such petition by answer or otherwise, or admits in writing its inability to meet its debts as they mature, or is dissolved or makes an assignment for the benefit of creditors;

e. Involuntary proceedings under any such bankruptcy law or insolvency act or for the dissolution of Tenant or any Guarantor are instituted against Tenant or any Guarantor, or a receiver or trustee is appointed for all or substantially all of the property of Tenant or any Guarantor, and such proceeding is not dismissed or such receivership or trusteeship vacated within thirty (30) days after such institution or appointment;

f. Tenant fails to take possession of the Premises on the Commencement Date of the Term;

g. Tenant violates the terms of Paragraph 19 regarding assignment and subletting;

h. Tenant, Akorn, Inc. and/or the assignee, survivor or successor of Akorn, Inc., fail to maintain the guaranty required under Paragraph 9;

i. Tenant breaches any of the agreements, terms, covenants, or conditions of the Lease or this Rider and such breach involves a hazardous condition and is not cured immediately upon written notice to Tenant;

j. Tenant breaches any of the other agreements, terms, covenants, or conditions that the Lease or this Rider requires Tenant to perform, and such breach continues for a period of thirty (30) days after written notice from Landlord to Tenant or if Tenant fails to diligently commence to cure such breach within thirty (30) days after written notice from Landlord and to complete such cure within a reasonable time thereafter; or

k. Any guaranty of the Lease obligations, if applicable, becomes unenforceable in whole or in part for any reason.

In the event of any Default of the Tenant under the terms of the Lease and this Rider, Landlord shall have the right to exercise the remedies set forth in Paragraphs 33 and 34, below, of the Lease or those available at law or in equity.  The specified remedies to which Landlord and Tenant may resort under the terms of the Lease or this Rider are cumulative and are not intended to be exclusive of any other remedies or means of redress to which Landlord or Tenant may be lawfully entitled in case of any breach or threatened breach by Landlord or Tenant of any provisions of this Lease.  The failure of Landlord or Tenant to insist in any one or more cases upon the strict performance of any of the covenants of the Lease or to exercise any option herein contained shall not be construed as a waiver or a relinquishment for the future of such covenant or option.  A receipt by Landlord of rent with knowledge of the breach of any covenant hereof shall not be deemed a waiver of such breach, and no waiver of such breach, and no waiver by Landlord or Tenant of any provision of this Lease shall be deemed to have been made unless expressed in writing and signed by Landlord or Tenant (as the case may be).  In addition to the other remedies in this Lease provided, Landlord or Tenant shall be entitled to the restraint by injunction of the violation or attempted or threatened violation, of any of the covenants, or provisions of the Lease or this Rider.

 

  

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33. Remedies Upon Tenant’s Default.  If there should occur any default on the part of the Tenant in the performance of any conditions and covenants herein contained, or if during the Term hereof the Premises or any part thereof shall be or become abandoned or deserted, vacated or vacant, or should the Tenant be evicted, the Landlord, in addition to any other remedies herein contained or as may be permitted by law, may either by force or otherwise, without being liable for prosecution therefor, or for damages, re-enter, possess and enjoy the said Premises.  The Landlord may then re-let the Premises and receive the rents therefor and apply the same, first to the payment of such expenses, reasonable attorney fees and costs, as the Landlord may have been put to in re-entering and repossessing the same and in making such repairs and alterations as may be necessary; and second to the payment of the Rents due hereunder.  The Tenant shall remain liable for such Rents as may be in arrears and also the Rents as may accrue subsequent to the re-entry by the Landlord to the extent of the difference between the Rents reserved hereunder and the Rents, if any, received by the Landlord during the remainder of the unexpired Term hereof, after deducting the aforementioned expenses, fees and costs; the same to be paid as such deficiencies arise and are ascertained each month.

34. Termination on Default.  If there should occur any default on the part of the Tenant in the performance of any conditions and covenants herein contained, or should proceedings be instituted by or against the Tenant for agreement of composition or assignment for the benefit of creditors, or if this Lease or the estate of the Tenant hereunder shall pass to another by virtue of any court proceedings, writ of execution, levy, sale, or by operation of law, the Landlord may, at any time thereafter, terminate this Lease and the Term hereof, upon giving to the Tenant, five (5) days’ notice in writing, of the Landlord’s intention so to do.  Upon the giving of such notice, this Lease and the Term hereof shall end on the date fixed in such notice as if the said date was the date originally fixed in this Lease for the expiration hereof; and the Landlord shall have the right to remove all persons, goods, fixtures and chattels therefrom, by force or otherwise, without liability for damage.

35. Costs on Default.  Tenant shall pay, upon demand, all of Landlord's rea­son­able costs, charges and ex­penses, in­clud­ing the rea­son­able fees of counsel, agents and others re­tained by Land­lord ne­ces­si­tated by the Tenant's willful default or wrong­ful breach of any of the ma­te­rial terms and con­di­tions of this Lease.

36. Non-Waiver by Landlord.  The various rights, remedies, options and elections of the Landlord, expressed herein, are cumulative.  The failure of the Landlord to enforce strict performance by the Tenant of the conditions and covenants of this Lease or to exercise any election or option, or to resort or have recourse to any remedy herein conferred or the acceptance by the Landlord of any installment of Rent after any breach by the Tenant, in any one or more instances, shall not be construed or deemed to be a waiver or a relinquishment for the future by the Landlord of any such conditions and covenants, options, elections or remedies, but the same shall continue in full force and effect.

37. Non-Performance by Landlord.  This Lease and the obligation of the Tenant to pay the Rent hereunder and to comply with the covenants and conditions hereof, shall not be affected, curtailed, impaired or excused because of the Landlord’s inability to supply any service or material called for herein, by reason of any rule, order, regulation or preemption by any governmental entity, authority, department, agency or subdivision or for any delay which may arise by reason of negotiations for the adjustment of any fire or other casualty loss or because of strikes or other labor trouble or for any cause beyond the control of the Landlord.

 

  

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38. Holdover Tenant.­.  If Tenant holds pos­ses­sion of the Pre­mises beyond the ter­mi­na­tion date or prior ex­pi­ra­tion of the term, Tenant shall become a Tenant from month-to-month.  Tenant shall be charged rent at one hundred fifty (150%) percent of the basic rent and ad­di­tional rent payable here­un­der if the pre­mises have not been vacated within fifteen (15) days after the ex­pi­ra­tion of this Lease.  All of the terms and con­di­tions of this Lease shall con­tinue to apply to the Tenant until such tenancy shall be ter­mi­nated by Land­lord or Tenant and such pos­ses­sion shall cease.  Nothing con­tained in this pro­vi­sion shall be con­strued as a consent by Land­lord to the oc­cu­pancy or pos­ses­sion by Tenant of the Pre­mises beyond the ter­mi­na­tion date or prior ex­pi­ra­tion of the Term, and Land­lord, upon said ter­mi­na­tion date or prior ex­pi­ra­tion of the Term shall be en­titled to the benefit of all legal rem­edies that may now be en­forced or may be here­af­ter enacted re­lat­ing to the speedy re­pos­ses­sion of the Pre­mises.

39. Option to Renew.   Provided that Tenant is not in default of any of the provisions of the Lease Agreement and further provided that Tenant notifies the Landlord, in writing, at least six (6) months prior to the termination of the Term or any Renewal Period (hereinafter defined), as the case may be, of its intention to renew the Term of the Lease, as to any separate Unit, or Units, comprising the Premises, individually, then Tenant shall be given the option of renewing the Term of the Lease for  Four (4) additional Five (5) year periods (referred to as the “First Renewal Period”; the “Second Renewal Period”; the “Third Renewal Period”; and the “Fourth Renewal Period”, respectively; the “Renewal Period”, individually, and the “Renewal Periods”, collectively).

In the event that Tenant elects to renew the Term, or any Renewal Period, if applicable, of the Lease, pursuant to this Paragraph, for an additional Five (5) year period, Tenant shall pay Monthly Base Rent, as adjusted pursuant to Paragraph 8, and Additional Rent per Paragraph 6; except that (i) Paragraph 8(b) shall be amended such that the term “Base Index Number” shall be defined as “the Index number indicated in the column for New York, N.Y.-Northeastern, N.J., entitled ‘all items’, for the month of July, of the year of the exercise of the subject option to renew”; (ii) Paragraph 8(a) shall be amended such that the Base Rent during the subject Renewal Term shall be equal to the Adjusted Base Rent which is payable by the Tenant as of the date of exercise of the subject option to renew; and (iii) Paragraph 8(d)  shall be amended such that the term “Annual Base Rent” shall be defined as the “the Annual Base Rent, adjusted pursuant to the terms of Paragraph 8, as is then payable by the Tenant as of the date of exercise of the subject option to renew.”

40. Liens.  ­­ In the event that any mechanic's lien is filed against the pre­mises as a result of al­ter­ations, ad­di­tions or im­prove­ments made by the Tenant, Tenant shall at its own expense cause the same to be dis­charged of record or bonded within ten (10) business days after notice of filing thereof.  If Tenant fails to do such, the Land­lord, at its option, after thirty (30) days notice to the Tenant, may ter­mi­nate this Lease and/or pay said lien without in­quir­ing into the va­lid­ity thereof and the Tenant shall im­me­di­ately there­af­ter reim­burse Land­lord the total expense in­curred by Land­lord in dis­charg­ing the said line, in­clud­ing any and all ex­penses or losses in­curred by Land­lord as a result of such earlier ter­mi­na­tion as ad­di­tional rent or liq­ui­dated damages if this Lease has been ter­mi­nated.

41. Parking.  The Land­lord shall have the right to regulate and control the outside parking area.  Tenant shall be en­titled to use its pro rata share of parking spaces adjacent to the Premises entrances, based on the per­cent­age that the square footage of the leased pre­mises bears to the entire build­ing.

42. Extra Area/Oc­cu­pies.  If the Tenant, without the express written consent of the Land­lord, oc­cu­pies or uti­lizes an area in the build­ing wherein the Pre­mises are situate or other areas owned by Land­lord, in ad­di­tion to the build­ing area and land area demised herein, if any, the Land­lord may, in ad­di­tion to re­quir­ing the Tenant to im­me­di­ately vacate said ad­di­tional build­ing or land area, charge the Tenant rent for said ad­di­tional land or build­ing area at the square foot rate which the Tenant is paying for the Pre­mises and said ad­di­tional area rent shall be payable as ad­di­tional rent here­un­der.  If the Tenant fails to pay said ad­di­tional rent, for the pur­poses of Land­lord ex­er­cis­ing its rem­edies, said ad­di­tional build­ing and land area shall be deemed to be leased here­un­der and that the re­la­tion­ship of the parties hereto with respect to said area shall be deemed to be that of Land­lord and Tenant.  Nothing herein shall ob­li­gate the Land­lord to provide or permit the Tenant to occupy or utilize any area other than pre­mises demised herein as shown on Exhibit "A" annexed hereto.

 

  

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43. Broker.  The parties hereto represent and warrant to each other that they have not dealt with any broker in this transaction.  Each party agrees to defend, indemnify and hold the other party harmless from and against any and all claims for finders' fees or brokerage or other commissions which may at any time be asserted against the indemnified party based on a claim that the aforesaid representation of the indemnifying party is untrue, together with any and all losses, damages, costs and expenses (including, without limitation, attorneys' fees and disbursements) relating to such claims or arising therefrom or incurred by the indemnified party in connection with the enforcement of this indemnification provision.

44. Notice to Interested Third-Parties.  The Tenant agrees to provide written notification to all lenders, creditors, and other third-parties having a security interest with regard to Tenant, of the replacement of the Lease Agreement, dated July 31, 1992, as amended, with the instant lease.

45. Air, Ground and Water Pol­lu­tion.  The Tenant ex­pressly cov­enants and agrees to in­dem­nify and save Land­lord harm­less against any claim, damages, li­abil­ity, costs, pen­al­ties or fines which the Land­lord may suffer as a result of air, ground, or water pol­lu­tion caused by the Tenant in its use of the Pre­mises, except if the same are at­trib­ut­able to defects in the design, con­struc­tion or in­stal­la­tion of the me­chanical or other systems in­stalled by Land­lord.  The Tenant cov­enants and agrees to notify the Land­lord im­me­di­ately of any claim or notice served upon it with respect to any such claim that the Tenant is causing water, ground or air pol­lu­tion; and the Tenant, in any event, will take im­me­di­ate steps to halt, remedy or cure any pol­lu­tion of air, ground or water caused by the Tenant by its use of the Pre­mises.

46. En­vi­ron­mental Terms.

a. Use of the Pre­mises; ISRA.  Tenant's use or oc­cu­pancy, or any per­mit­ted subtenant's use or oc­cu­pancy, of the Pre­mises shall be restricted to the use de­scribed for Stan­dard In­dus­trial Clas­si­fi­ca­tions #2834 or to any other SIC Major group or groups which, as of the date of this Lease Agree­ment are not gov­erned under the New Jersey Industrial Site Recovery Act N.J.S.A. 13:1K-6 et. seq. (to­gether with amend­ments thereto and regula­tions imple­ment­ing same, here­in­af­ter "ISRA") and such ad­di­tional group or groups as may be ex­cluded under ISRA there­af­ter.  Tenant's or per­mit­ted subtenant's change of use to a clas­si­fi­ca­tion not here­un­der per­mit­ted without the prior written consent of Land­lord shall con­sti­tute a default here­un­der.

b. Tenant Com­pli­ance with ISRA.  Not­with­stand­ing the fore­go­ing, Tenant shall at its sole cost and expense comply with ISRA.  In fur­ther­ance of this ob­li­ga­tion, Tenant, at least six (6) months prior to closing, ter­mi­nat­ing, or trans­fer­ring op­erations at or from the Pre­mises, shall notify the New Jersey De­part­ment of En­vi­ron­men­tal Pro­tec­tion ("NJDEP") of such in­ten­tion and shall there­af­ter pros­ecute its ap­pli­ca­tion through NJDEP ap­proval not later than the date of such closing, ter­mi­nat­ing, or trans­fer­ring op­erations.  Tenant shall supply Land­lord with copies of all find­ings and com­mu­ni­ca­tions between or among the Tenant, its rep­re­sen­ta­tives and con­sult­ants, and the NJDEP so that at all times, the Land­lord is kept cur­rently ap­prised of the status for the ap­pli­ca­tion of NJDEP ap­proval.

If this Lease is to be as­signed by Tenant, pur­su­ant to Para­graph 19 hereof, as a result of its de­ci­sions to close, ter­mi­nate or trans­fer op­erations, then con­cur­rent with its no­ti­fi­ca­tion to NJDEP of its intent to close, ter­mi­nate or trans­fer op­erations, Tenant shall require that its As­signee deposit with Land­lord a sum equal to Two (2) months rent, which deposit shall be used by Land­lord to pay for those costs not paid for by Tenant or Tenant's As­signee during com­pli­ance with ISRA.  The monies so de­pos­ited shall be held by Land­lord in a separate in­ter­est bearing account and shall not be com­mingled with other funds of the Land­lord.  Any amount of the deposit and accrued in­ter­est thereon not so uti­lized by the Land­lord to pay the costs of ISRA com­pli­ance shall be re­funded to the As­signee upon Landlord's receipt of written con­fir­ma­tion of ISRA com­pli­ance from NJDEP.  The deposit re­quired here­un­der shall not affect, in any way, the parties' agree­ment that ISRA com­pli­ance shall be the sole and ex­clu­sive re­spon­si­bil­ity of Tenant and any As­signee.

 

  

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If, for any reason without the control of Tenant or Tenant's As­signee written con­fir­ma­tion of ISRA com­pli­ance has not been re­ceived by the Tenant or As­signee prior to the in­tended date of closing, ter­mi­nat­ing or trans­fer­ring of op­erations, Tenant's or Assignee's ob­li­ga­tion to pay rent, ad­di­tional rent and any other sums pro­vided for here­un­der shall survive the ex­pi­ra­tion or ter­mi­na­tion of this Lease and the sur­ren­der of the Premise to the Land­lord and con­tinue in full force and effect until written con­fir­ma­tion of ISRA com­pli­ance.  Land­lord shall not, under any cir­cum­stances, be re­quired to mitigate damages here­un­der by re-letting the Pre­mises until written con­fir­ma­tion of ISRA com­pli­ance has been re­ceived from NJDEP.

It is ex­pressly un­der­stood and agreed that in the event there are any ob­li­ga­tions of Tenant with respect to payment or per­for­mance as re­quired under the terms and con­di­tions of this Para­graph that shall not have been per­formed or paid prior to the ex­pi­ra­tion or ter­mi­na­tion of this Lease in ac­cor­dance with its terms, such ob­li­ga­tion, in­clud­ing, but not limited to, the ob­li­ga­tion to remedy and cure any such con­di­tion at Tenant's sole cost and expense and to in­dem­nify Land­lord as herein pro­vided, shall survive the ex­pi­ra­tion or ter­mi­na­tion of the term of this Lease and the sur­ren­der of the Pre­mises by the Tenant to the Land­lord.

c. Spill Com­pen­sa­tion and Control Act.  Tenant further war­rants and rep­re­sents that from the date of this Lease and during the term hereof it will promptly give Land­lord im­me­di­ate notice of any lien about to be at­tached or which becomes at­tached to any rev­enues or any real or per­sonal prop­erty owned by the Tenant or any tenant or op­erator of any prop­erty owned by it and located in the State of New Jersey, in­clud­ing but not limited to the Pre­mises, as a result of the chief ex­ecutive of the New Jersey Spill Com­pen­sa­tion Fund ex­pend­ing moneys from said fund to pay for "Damages", as such term is defined in N.J.S.A. 58:10-23.11(g) and/or "Cleanup and Removal Costs", as such term is defined in N.J.S.A. 58:10-23.11b(d), arising from any in­ten­tional or un­in­ten­tional act or omis­sion of the Tenant, or any tenant or lessee thereof, re­sult­ing in any re­leas­ing, spill­ing, pumping, pouring, emit­ting or dumping of any "Haz­ard­ous Sub­stance or Waste" as defined in N.J.S.A. 58:10-23.11b(k) into any of the waters of the State of New Jersey or into waters outside the juris­dic­tion of the State of New Jersey where damage may have re­sulted to any of the lands, waters, fish, shell­fish, wild­life, biota, air and other re­sources owned, managed, held in trust or other­wise con­trolled by the State of New Jersey.

In the event that there shall be filed a lien against the Pre­mises by the New Jersey De­part­ment of En­vi­ron­men­tal Pro­tec­tion, pur­su­ant to and in ac­cor­dance with the pro­vi­sions of N.J.S.A. 58:10-23.11f(f), as amended by L.1985, c.11 (1984 Senate 1423) as a result of the chief ex­ecutive of the New Jersey Spill Com­pen­sa­tion Fund having ex­pended moneys from said fund to pay for "Damages", as such term is defined in N.J.S.A. 58:10-23.11(g), and/or "Cleanup and Removal Costs", as such term is defined in N.J.S.A. 58:10-23.11b(d), arising from any in­ten­tional or un­in­ten­tional act or omis­sion or Tenant, or any tenant or lessees thereof, re­sult­ing in the re­leas­ing, spill­ing, pumping, pouring, emit­ting, emp­ty­ing and dumping of any "Haz­ard­ous Sub­stance or Waste", as such term is defined in N.J.S.A. 58:10-23.11b(k) into the waters of the State of New Jersey or onto lands located in the State of New Jersey or into waters outside the juris­dic­tion of the State of New Jersey where damage may have re­sulted to any of the lands, waters, fish, shell­fish, wild­life, biota, air and other re­sources owned, managed, held in trust or other­wise con­trolled by the State of New Jersey, then Tenant shall, within thirty (30) days from the date that the lien was placed against the Pre­mises or within such shorter period of time in the event that the State of New Jersey has com­menced steps to cause the Pre­mises to be sold pur­su­ant to the lien, either (i) pay the claim and remove the lien from the Pre­mises, or (ii) furnish: (a) a bond sat­is­fac­tory to the Land­lord in the amount of the claim out of which the lien arises; (b) a cash deposit in the amount of the claim out of which the lien arises;; or (c) other se­cu­rity rea­son­ably sat­is­fac­tory to the Land­lord in an amount suf­fi­cient to dis­charge the claim out of which the lien arises.

 

  

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The Tenant covenants and agrees that it shall provide Land­lord with im­me­di­ate tele­phone and written notice of any dis­charge of a "Haz­ard­ous Sub­stance or Waste" within the meaning of N.J.S.A. 58:10-23.11b(k) with respect to the Pre­mises.  [The owner, under case law, is liable for any cleanup in the event of a dis­charge at the pre­mises.]

Tenant war­rants and rep­re­sents that its prop­erty is not cur­rently subject to any lien arising  as a result of the chief ex­ecutive of the New Jersey Spill Com­pen­sa­tion Fund ex­pend­ing moneys from said Fund for "Damages" as such term is defined in N.J.S.A. 58:10-23.1(g) and/or "Cleanup and Removal Costs" as such term is defined in N.J.S.A. 58:10-23.11b(d).

The Tenant war­rants and rep­re­sents that it has not re­ceived a summons, ci­ta­tion, di­rec­tive, letter or other com­mu­ni­ca­tion, written or oral, from the New Jersey De­part­ment of En­vi­ron­men­tal Pro­tec­tion con­cern­ing, is not a party to any pro­ceed­ing, in­clud­ing, without limita­tion, litiga­tion or ar­bi­tra­tion, con­cern­ing, and is not aware of any in­ten­tional or un­in­ten­tional act or omis­sion on its part re­sult­ing in the re­leas­ing, spill­ing, leaking, pumping, pouring, emit­ting, emp­ty­ing or dumping of any "Haz­ard­ous Sub­stance or Waste", as defined in N.J.S.A. 58:10-23.11b(k) into the waters or onto the lands of the State of New Jersey or into waters outside the juris­dic­tion of New Jersey when damage may result to the lands, waters or natural re­sources within juris­dic­tion of New Jersey.

The Tenant and Owner warrant each to the other that neither "knows of or sus­pects the oc­cur­rence of any haz­ard­ous dis­charge" within the meaning of Section 2(a) of L.1984, c.2 10 (1984 Assem­bly 310), amend­ing N.J.S.A. 13:1K-15 et seq., with respect to the Pre­mises.

d. Viola­tion; In­dem­nity.  In the event Tenant shall violate this Para­graph or in any way conduct its op­erations of the Pre­mises or permit the Pre­mises to be used or main­tained so as to subject the Land­lord, the Tenant, or the Pre­mises to a claimed viola­tion of this Para­graph, Tenant shall im­me­di­ately remedy and fully cure such con­di­tion at its own cost and expense and shall in­dem­nify and save the Land­lord harm­less from any and all damages, re­me­dial orders, judg­ments or decrees and all costs and ex­penses related thereto or arising there­from, in­clud­ing, but not limited to, attorney's and con­sult­ants' fees, cleanup, removal and res­to­ra­tion costs and lost rentals.  It is ex­pressly un­der­stood and agreed that in the event there are any ob­li­ga­tions of Tenant with respect to payment or per­for­mance as re­quired under the terms and con­di­tions of this Para­graph that shall not have been per­formed or paid prior to the ex­pi­ra­tion or ter­mi­na­tion of this Agree­ment, such ob­li­ga­tions in­clud­ing, but not limited to, the ob­li­ga­tions to remedy and cure any such con­di­tion at Tenant's sole cost and expense and to in­dem­nify Land­lord as afore­said, shall survive the ex­pi­ra­tion or ter­mi­na­tion of this Lease and the sur­ren­der of the Pre­mises by the Tenant to the Owner.

e. Upon the request of the Land­lord from time to time, Tenant agrees to execute and deliver to the Land­lord an af­fi­da­vit stating that Tenant is not an "In­dus­trial Estab­lish­ment" as such term is defined under ISRA and the regula­tions pro­mul­gated there­un­der.

 

  

18

  

47. Further Construction.  In the event that Land­lord elects to have re­ha­bilita­tion work or any further con­struc­tion work per­formed in or on the build­ing in which the Pre­mises is located, or if other rent­able space or the build­ing is being pre­pared for other tenants, in ad­di­tion to Landlord's rights con­tained in Para­graph 13 herein, Land­lord may have such repairs, re­ha­bilita­tion and/or con­struc­tion per­formed in or on the build­ing or sur­round­ing areas during busi­ness and/or non-business hours and may also make al­ter­ations to the Pre­mises rea­son­ably re­quired by such re­ha­bilita­tion work, further con­struc­tion and/or pre­par­ing other tenant space pro­vided that such al­ter­ations do not ma­te­ri­ally in­ter­fere with Tenant's use of the Pre­mises, and none of the above shall be deemed a default of Landlord's cov­enant of quiet en­joy­ment nor shall Land­lord be deemed guilty of an evic­tion, partial evic­tion or dis­tur­bance of Tenant's use or pos­ses­sion of the Pre­mises and shall not be liable to Tenant for same, nor shall Tenant have any right to can­cel­la­tion of this Lease or abate­ment of any of its rent or ad­di­tional rent due to Land­lord by reason thereof.  Tenant con­sents to same not­with­stand­ing that during any such work, there may be ongoing, con­tinuous heavy con­struc­tion work which may be per­formed during busi­ness hours and on the week­ends at the option of the Land­lord.  Landlord shall consult with Tenant prior to performing any work to arrange for reasonable procedures and schedules in order to reduce any interference with Tenant's use or possession hereunder.

48. Title and Quite Enjoyment.  The Landlord covenants and represents that the Landlord is the owner of the Premises herein leased and has the right and authority to enter into, execute and deliver this Lease; and does further covenant that the Tenant on paying the Rent and performing the conditions and covenants herein contained, shall and may peaceably and quietly have, hold and enjoy the leased Premises for the Term aforementioned.

49. Additional Work.  The parties hereto agree that the Tenant accepts the Premises in “AS IS” condition and that the Landlord shall not be responsible for any "fit up" work.  Rather, Tenant shall be responsible for any “fit up” work to be performed at the Premises.

50. Nuisance.  Tenant rep­re­sents that it shall not engage in the use or storage of haz­ard­ous, noxious, in­flam­mable or other harmful sub­stances.  The Tenant shall not store any equip­ment or ma­te­rial within five (5) feet from any window.

51. Window Coverings.  Land­lord shall provide blinds for the Pre­mises.

52. Sale of Property.  If during the term of this lease, or any extension thereof, Landlord decides to sell the Premises, the Landlord will immediately notify the Tenant; upon receipt of such notification the Tenant shall have a period of Sixty (60) days during which to make a bona fide offer to purchase the Premises.  The Landlord covenants and agrees to negotiate with Tenant in good faith in the event of any such offer from the Tenant.  At the expiration of such Sixty (60) day period, if the Landlord and the Tenant have not entered into a binding contract for the purchase and sale of the Premises, the Landlord shall be free to offer the Premises for sale on the open market.

53. Additional Space.  If during the term of this lease, or any extension thereof, a unit or units , located in the Landlord’s property at 68 Veronica Avenue, Franklin Township, New Jersey (“68 Veronica”), becomes vacant, such available unit(s) will be offered to the Tenant under the same terms and conditions as those which apply to the Premises, except that the rent for such unit(s) shall be equal to the greater of (i) the then applicable Adjusted Base Rent, as adjusted from time to time pursuant to Paragraph 8, pro rated for the difference in square footage between the Premises and the subject unit(s); or (ii) the then applicable fair rental value of such unit(s).  However, nothing in this paragraph shall be construed to prohibit the Landlord from prohibiting any such unit(s) to (i) an existing tenant who currently lets unit(s) in 68 Veronica; or (ii) a third party who is willing to pay greater than fair rental value for the said unit(s)

 

  

19

  

54. Validity of Lease.  The terms, conditions, covenants and provisions of this Lease shall be deemed to be severable.  If any clause or provision herein contained shall be adjudged to be invalid or unenforceable by a court of competent jurisdiction or by operation of any applicable law, it shall not affect the validity of any other clause or provision herein, but such other clauses or provisions shall remain in full force and effect.

55. Conformation with Laws and Regulations.  The Landlord may pursue the relief or remedy sought in any invalid clause, by conforming the said clause with the provisions of the statutes or the regulations of any governmental agency as if the particular provisions of the applicable statutes or regulations were set forth herein at length.

56. Number and Gender.  In all references herein to any parties, persons, entities or corporations the use of any particular gender or the plural or singular number is intended to include the appropriate gender or number as the text of the within instrument may require.  All the Terms, covenants and conditions herein contained shall be for and shall inure to the benefit of and shall bind the respective parties hereto, and their heirs, executors, administrators, personal or legal representatives, successors and assigns.

57. Notices.  All notices required under the terms of this Lease shall be given and shall be complete by mailing such notices by certified or registered mail, return receipt requested, to the address of the parties as shown at the head of this Lease, or to such other address as may be designated in writing, which notice of change of address shall be given in the same manner.

58. Entire Contract.  This Lease contains the entire contract between the parties.  No representative, agent or employee of the Landlord has been authorized to make any representations or promises with reference to the within letting or to vary, alter or modify the terms hereof.  No additions, changes or modifications, renewals or extensions hereof, shall be binding unless reduced to writing and signed by the Landlord and the Tenant.

59. Execution.  The parties hereto represent that they are authorized to execute this Lease and have received all proper authorizations (corporate or otherwise) with respect to the execution of the documents.  Further, Tenant shall have no rights to the Premises until the Lease and this Rider have been executed by all parties hereto.

IN WITNESS WHEREOF, the parties have set their hands and seals, or caused these presents to be signed by their proper corporate officers and their proper corporate seal to be hereto affixed, the day and year first above written.

 

	
WITNESSED/ATTESTED BY:

	 	 	
VERONICA DEVELOPMENT ASSOCIATES,

	 
	 	 	 	Landlord	 
	 	 	 	 	 
	 	 	BY:	 	(Seal)
	 	 	 	AUGUST F. VENTURA, General Partner	 
	 	 	 	 	 
	 	 	BY:	 	(Seal)
	 	 	 	
SYLVESTER SULLIVAN, General Partner

	 

 

  

20

  

 

	 	 	 	
AKORN (NEW JERSEY), INC.,

	 	 
	 	 	 	Tenant	 	 
	 	 	 	 	 	 
	 	 	BY:	 	(Seal)
	 	 	 	 	 	 
	 	 	 	 	,	 
	 	 	 	Print Name	 	Print Title
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	
AKORN, INC.,

	 	 
	 	 	 	Guarantor	 	 
	 	 	 	 	 	 
	 	 	BY:	 	(Seal)
	 	 	 	 	 	 
	 	 	 	 	, 	 
	 	 	 	Print Name	 	Print Title

 

 

  

21

  

 

EXHIBIT “A”

LANDLORD WORK LETTER

In consideration for Tenant entering into the Lease Agreement, dated June ___, 2010, between Veronica Development Associates and Akorn (New Jersey), Inc., for Franklin Technical Center, 72 Veronica Avenue, Units 1, 2, 3, 4, 5, 6, 7, 8, 9 and 10, Franklin Township, New Jersey (“Premises”), the Landlord agrees to make the following improvements to the Premises, to be provided at the Landlord’s expense, except as otherwise indicated herein.

	
1.  

	
EXTERIOR MASONRY. Concrete pads, curbs, and landings shall be repaired or replaced, as necessary pursuant to applicable building codes and regulations.

	
2.  

	
EXTERIOR STAIRS. Loose and missing stair treads shall be repaired or replaced, pursuant to applicable building codes and regulations.

	
3.  

	
INSULATION. Building expansion joints, windows, door frames and vent housings shall be caulked.

	
4.  

	
WINDOWS. Dual-pane exterior windows which have experienced moisture infiltration shall be replaced.

	
5.  

	
DOORS. Unfinished doors shall be painted with Tenant’s choice of Landlord approved colors.  Damaged entry doors shall be repaired or replaced, as necessary.

 

22Employment Agreement - Asset Acceptance, LLC and Reid E. Simpson

 Exhibit 10.1 

EMPLOYMENT AGREEMENT 

This EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into May 14, 2010 to be effective as of
May 17, 2010, between ASSET ACCEPTANCE, LLC, a Delaware limited liability company (the “Company”), a wholly owned subsidiary of Asset Acceptance Capital Corp., a Delaware corporation (“AACC”), and REID E.
SIMPSON (the “Executive”). 
 Recitals 

A. The Company desires to employ the Executive and to have Executive serve as the Senior Vice President-Finance and Chief Financial
Officer of the Company and AACC, subject to the terms of this Agreement. 
 B. The Executive desires to be employed by the
Company and to serve as the Senior Vice President-Finance and Chief Financial Officer of the Company and AACC, subject to the terms of this Agreement. 

Agreement 

In consideration of the mutual covenants and agreements contained herein, the parties hereto agree as follows: 

1. EMPLOYMENT PERIOD. The Company hereby agrees to employ the Executive and the Executive hereby accepts employment with the
Company, on the terms and subject to the conditions hereinafter set forth in this Agreement, for the period commencing as of the date of this Agreement and ending at midnight on December 31, 2011 (the “Initial Term”). The term
of employment shall be automatically extended for an additional one (1) year period (the “Extended Term”) on December 31, 2011 and on each subsequent anniversary thereafter unless at least two (2) years before
December 31, 2011 or each such subsequent anniversary date, as the case may be, either party gives the other party notice in writing of his or its intent not to extend this Agreement, in which case the term of this Agreement shall end as of the
end of the Initial Term or such Extended Term, as the case may be, unless sooner terminated in accordance with Section 6 hereof, provided that the period of the Executive’s employment under this Agreement pursuant to any such
Extended Term cannot be extended beyond midnight on December 31, 2018. Subject to the provisions set forth below regarding Severance Benefits (as defined below), the Executive serves at the pleasure of the Board of Directors of AACC (the
“Board of Directors”) and may be terminated at any time, at will, with or without Cause (as defined below). The period of the Initial Term and all such Extended Terms, subject to earlier termination under Section 6 hereof, are
collectively referred to herein as the “Employment Period”. 
 2. POSITION AND DUTIES. Subject to the
terms and conditions contained herein, the Executive shall serve as Senior Vice President-Finance and Chief Financial Officer of the Company and AACC and, in such capacities, shall provide such services and perform such functions, consistent with
the nature of such positions, as shall be determined from time to time by the Board of Directors or Chief Executive Officer, or pursuant to authority of the Board of Directors, and such other reasonable duties as are from time to time agreed to
between the Board of Directors or the Chief Executive Officer and the Executive. The Executive shall report directly to the Chief Executive Officer and shall observe all directives, rules, policies, regulations, customs and practices now or
hereafter established by AACC and the Company for the conduct of their business to the extent the foregoing are not materially inconsistent with the terms of this Agreement. The Executive understands and agrees that he may be required to undertake
normal business travel from time to time. 

 3. COMPENSATION; BENEFITS 

(a) Regular Base Salary. As compensation for the performance of the Executive’s services hereunder, the Company shall pay to
the Executive an annual salary (the “Regular Base Salary”) of $340,000 (less deductions required by law) payable in arrears in accordance with the Company’s payroll policy as the same may be modified by the Company from time to
time. So long as this Agreement is in effect, the Regular Base Salary shall be subject to annual review, but shall not be reduced below $340,000. 

(b) Bonus. The Executive shall be entitled to participate in such cash bonus plans and with such terms and conditions as may be
determined by the Board of Directors from time to time (the “Bonus”), in each case with a target Bonus to be set at 80% of the Regular Base Salary payable and in each case payable within two and one-half months following the end of
each fiscal year as to which the Bonus relates (or such later time as is allowed in accordance with Treasury Regulation 1.409A-3(d)). Unless otherwise expressly approved by the Board of Directors, upon termination of employment, all rights to
receive any Bonus for any period shall also terminate; provided that: 
 (i) If the Executive’s
employment is terminated during a fiscal year under the circumstances contemplated by Section 6(c) and the Executive would have otherwise been entitled to a Bonus with respect to the attainment of any broad-based objectives tied to the
performance of AACC or the Company (ignoring whether the Executive attained any personal objectives not related to broad-based objectives tied to the performance of AACC or the Company), the Executive shall be entitled to receive the pro rata
portion (based upon the number of days in such fiscal year that the Executive was employed by the Company) of the Bonus, if any, that would have been paid to the Executive pursuant to this Section 3(b) at the time such Bonus would have
been paid had the Executive’s employment not been terminated under the circumstances contemplated by Section 6(c), with the amount of the Bonus subject to such pro rata portion to be calculated solely with respect to the broad-based
objectives tied to the performance of AACC or the Company (i.e., regardless of whether such personal objectives were attained) (the “Earned Bonus”). (For example, if the Executive’s employment is terminated under the
circumstances contemplated by Section 6(c), if the target Bonus was $272,000 (with 50% related to the attainment of personal objectives and 50% related to the attainment of broad-based objectives tied to the performance of AACC or the
Company), and if the broad-based objectives tied to the performance of AACC or the Company were attained at the target level, then the Earned Bonus would be equal to the pro rata portion (based upon the number of days in such fiscal year that the
Executive was employed by the Company) of $272,000.) 
  

 2 

 (ii) If the Executive’s employment is terminated pursuant to Section
6(d) within one (1) year of the effective date of a Change in Control (as defined below in Section 8(b)(ii)), the Executive shall be entitled to receive the amount described in Section 8(b)(ii). 

(c) Benefits. During the Employment Period, the Executive shall be entitled to receive such other employee benefits, including,
without limitation, participation in such group health, life, and disability plans provided by the Company, as are afforded from time to time hereafter to the other Senior Executives (as defined below) of the Company. The Executive acknowledges and
agrees that (i) the Company does not guarantee the adoption or continuation of any particular employee benefit plan or program or other fringe benefit during his employment, (ii) participation by the Executive in any such plan or program
shall be subject to the rules and regulations applicable thereto, (iii) participation by the Executive in any such plan or program may be limited from time to time by tax or other regulations applicable to AACC and the Company, and
(iv) subject to the provisions in Section 3(b), the grant of any Bonus or equity award shall be at the discretion of the Board of Directors and, as a result, may or may not be equal to those of other Senior Executives based upon
such factors as base salary, prior grants, etc. 
 As used herein, “Senior Executive” means any officer of AACC
who files Forms 3, 4 and/or 5 under Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). 

(d) Vacation. During the Employment Period, the Executive shall be entitled to twenty-four (24) days paid time off (PTO)
during each full calendar year to be scheduled at the mutual convenience of the Executive and AACC and otherwise in accordance with the policies of the Company. Any PTO not taken during a calendar year shall be forfeited. 

(e) Initial Compensation and Relocation Reimbursement Matters. Set forth on Schedule 1 attached hereto are certain initial
compensation and relocation reimbursement matters applicable to the Executive. 
 4. EXCLUSIVITY. During the Employment
Period, and excluding any periods of vacation and sick leave to which the Executive is entitled, the Executive shall devote his full attention and time during normal business hours to the business and affairs of AACC and the Company, shall perform
his services primarily at AACC’s headquarters, wherever the Board of Directors may from time to time designate them to be, and at all times use his best efforts to carry out such responsibilities faithfully and efficiently and to advance the
business of AACC and the Company. During the Employment Period, the Executive will not be engaged in any other business activity which, in the reasonable judgment of the Board of Directors or its designee, conflicts with the duties of the Executive
hereunder, whether or not such activity is pursued for gain, profit or other pecuniary advantage. It shall not be considered a violation of the foregoing for the Executive to (i) serve on not more than two (2) for profit, private, civic or
charitable boards, provided that, other than any service by the Executive on the Board of Directors of AACC, the Executive shall not be permitted to serve on more than one (1) other board of directors of a company with securities
registered under the Exchange Act, (ii) deliver lectures, fulfill speaking engagements or teach at educational institutions, and (iii) manage personal investments, so long as such activities in clauses (i), (ii) or
(iii) do not compete with and are not provided to or for any entity that competes with or intends to compete with AACC or the Company or any of their subsidiaries and affiliates and do not interfere with the performance of the
Executive’s responsibilities as an employee of the Company in accordance with this Agreement. 
  

 3 

 5. REIMBURSEMENT FOR EXPENSES. Upon the presentation of itemized vouchers and receipts to
the reasonable satisfaction of the Company, the Company shall reimburse the Executive for travel, meals, entertainment and other expenses reasonably incurred by the Executive in the performance of his duties under this Agreement in accordance with
the Company’s expense reimbursement policy as the same may be modified by the Company from time to time (provided that expense reimbursement will under no circumstances occur later than sixty (60) days after the date on which the expense
is incurred). 
 6. TERMINATION. 

(a) With or Without Cause. The Company shall be entitled to terminate this Agreement and the employment relationship established
hereby with or without Cause immediately by giving written notice of termination to the Executive. 
 As used herein,
“Cause” means any of the following circumstances: 
 (i) continual or deliberate neglect by the
Executive in the performance of his material duties under this Agreement; 
 (ii) failure by the Executive to
devote substantially all of his working time to the business of AACC and the Company and the Subsidiaries (the “Subsidiaries”) in accordance with Section 4 hereof; 

(iii) the Executive’s willful failure to follow the directives of the Chief Executive Officer or the Board of
Directors in any material respect; provided that such directives are not materially inconsistent with the terms of this Agreement; 

(iv) the Executive’s engaging willfully in misconduct in connection with the performance of any of his duties
hereunder which is reasonably likely to result, in the Board of Director’s good faith judgment, in material injury to the reputation of AACC, the Company or any of the Subsidiaries, including, without limitation, the misappropriation of funds;

 (v) the Executive’s breach of the provisions of Section 7 of this Agreement or any other
noncompetition, noninterference, nondisclosure, confidentiality or other similar agreement executed by the Executive with the Company, AACC or any of its Subsidiaries; or 
  

 4 

 (vi) the Executive’s engaging in conduct which is reasonably likely to
result, in the Board of Director’s good faith judgment, in material injury to the reputation of the Company, AACC or any of its Subsidiaries, including, without limitation, commission of a felony, fraud, embezzlement or other crime involving
moral turpitude; 
 provided that, with respect to the events set forth in clauses (i) through (iii), the Executive shall
have been given written notice of the act, omission or event constituting Cause and shall not have cured such act, omission or event within 30 days after the giving of such notice. 

After the effective date of termination for Cause under this Section 6(a), the Company shall not be obligated to make any
further payments to the Executive under this Agreement, except for all amounts due the Executive hereunder as of such effective date for the accrued but unpaid Regular Base Salary (which shall be paid by the end of the next payroll period following
the date of termination), plus any amounts or benefits to which the Executive may be entitled under the terms of any employee benefit plan of the Company, as in effect on the effective date of such termination. 

(b) Resignation – Other than Retirement or Substantial Breach. In the event that the Executive resigns, other than upon
Retirement or for Substantial Breach (as those terms are hereinafter defined), this Agreement and the employment relationship established hereby shall terminate immediately upon the receipt by the Company of notice of the Executive’s
resignation. After the effective date of termination under this Section 6(b), the Company shall not be obligated to make any further payments under this Agreement, except for all amounts due the Executive hereunder as of such effective
date for the accrued but unpaid Regular Base Salary (which shall be paid by the end of the next payroll period following the date of termination), plus any amounts or benefits to which the Executive may be entitled under the terms of any employee
benefit plan of the Company, as in effect on the effective date of such termination. 
 (c) Death, Retirement or
Disability. In the event that the Executive dies, Retires (as hereinafter defined) or becomes Disabled (as hereinafter defined) during the term of this Agreement, this Agreement and the employment relationship established hereby shall terminate
immediately upon the date on which the Executive dies, Retires or becomes Disabled, as the case may be. After the effective date of termination under this Section 6(c), the Company shall not be obligated to make any further payments
under this Agreement, other than payment to the Executive or the Executive’s heirs, devisees, executors, administrators, legal representatives or the trustee of a revocable trust of which the Executive is the grantor, as the case may be, of
(i) all amounts due the Executive hereunder as of such effective date for the accrued but unpaid Regular Base Salary (which shall be paid by the end of the next payroll period following the date of termination), plus any amounts or benefits to
which the Executive may be entitled under the terms of any employee benefit plan of the Company, as in effect on the effective date of such termination, and (ii) the pro rata portion of the Earned Bonus, if any, due to the Executive in
accordance with Section 3(b). 
 For purposes of this Section 6(c), “Retires” or
“Retirement” shall mean the voluntary termination of employment by the Executive after the Executive attains age sixty-five (65), and “Disabled” shall mean, as of any date, the inability of the Executive to perform
his essential duties hereunder without reasonable accommodation for a period of six (6) months as determined in the good faith judgment of the Board of Directors. 
  

 5 

 (d) Without Cause or Substantial Breach. In the event that (i) the Company
elects to terminate the employment of the Executive without Cause, or (ii) the Executive resigns from his employment hereunder following a Substantial Breach (as defined in this Section 6(d) (such Substantial Breach having not been
corrected by the Company within thirty (30) days of receipt of written notice from the Executive of the occurrence of such Substantial Breach, which notice shall specifically set forth the nature of the Substantial Breach which is the reason
for such resignation)), then, in either such event in clause (i) or (ii) and regardless of the time remaining in the Initial Term or Extended Term, as the case may be, the Company shall not be obligated to make any further payments
under this Agreement, except (x) for amounts due the Executive hereunder as of such effective date for the accrued but unpaid Regular Base Salary (which shall be paid by the end of the next payroll period following the date of termination),
plus any amounts or benefits to which the Executive may be entitled under the terms of any employee benefit plan of the Company, as in effect on the effective date of such termination, and (y) for the Severance Benefits as defined and provided
in Section 8 hereof. 
 “Substantial Breach” shall mean any material breach by the Company of its
obligations under this Agreement including without limitation: (i) the assignment of the Executive to a position or duties materially diminished from those normally assigned to a Senior Vice President-Finance and Chief Financial Officer of a
business enterprise comparable to the Company and AACC; (ii) a material reduction in the Executive’s then Regular Base Salary; or (iii) a change in location at which the Executive is required to perform his duties for the Company,
AACC and its Subsidiaries which is outside a 50 mile radius of Detroit, Michigan, but only if such change occurs within one (1) year after a Change in Control; provided that the term “Substantial Breach” shall not include
(x) an immaterial breach by the Company of any provisions of this Agreement or (y) a termination for Cause under Section 6(a). 

The Executive must notify the Company in writing of the Executive’s intention to invoke termination for “Substantial
Breach” within ninety (90) days after the initial existence of such event and provide the Company with thirty (30) days for cure, or such event shall not constitute a “Substantial Breach” under this Agreement. Additionally,
the Executive must terminate employment within one (1) year following the initial existence of one (1) or more of the events listed above for the termination to be considered a “Substantial Breach”. The date of resignation under
this Section 6(d) shall be thirty-one (31) days after receipt by the Company of written notice of resignation; provided that the Substantial Breach specified in such notice shall not have been corrected by the Company during
the preceding 30-day period. The effective date of termination of employment by the Company under this Section 6(d) and the effective date of resignation by the Executive under this Section 6(d) shall each be referred to as a
“Section 6(d) Termination Date”. 
 (e) General. Notwithstanding anything in this Section 6
to the contrary, but subject to the consequences set forth in this Section 6, (i) the Company may terminate the Executive’s employment at any time with or without Cause, (ii) the Executive may terminate his employment at
any time whether or not there has been a Substantial Breach and (iii) the Executive’s rights in any employee benefit plans offered by the Company shall be governed by the rules of such plans as well as by applicable law. 

 

 6 

 (f) Survival. Notwithstanding anything in this Section 6 to the contrary,
the provisions of Sections 7 and 9 shall survive termination of this Agreement. 
 7. CONFIDENTIALITY AND NON
COMPETITION. The Executive acknowledges that (x) the agreements and covenants contained herein are essential to protect AACC and the Company’s business and assets and (y) by virtue of his association with AACC and the Company, the
Executive has access to and has obtained and will continue to have access to and obtain such knowledge, know-how, proprietary information, training and experience, which is known only to the members, officers or managers of AACC and the Company, or
other employees, former employees, consultants, or others in a confidential relationship with the Company, AACC and its Subsidiaries, and there is a substantial probability that such knowledge, know-how, proprietary information, training and
experience could be used to the substantial advantage of a competitor of AACC or the Company and to AACC or the Company’s substantial detriment. 

(a) Covenant Not To Compete. The Executive agrees that, for the period commencing on the date of this Agreement and ending one
(1) year after the effective date of the termination of the Executive’s employment with the Company (regardless of whether such effective date occurs upon the expiration of the Initial Term or the Extended Term, as the case may be, occurs
pursuant to Section 6 or occurs after the expiration of the Initial Term or the Extended Term, as the case may be, due to the Executive’s continued employment with the Company outside of the terms of this Agreement) (the
“Restricted Period”), the Executive shall not, in the Territory (hereinafter defined), directly or indirectly, either for himself or for, with or through any other person, own, manage, operate, control, be employed by, participate
in, loan money to or be connected in any manner with, or permit his name to be used by, any business which is engaged (1) in the business of purchasing and collecting consumer accounts receivable that have been charged off by the original
creditor (“Charged Off Accounts”), (2) in financing sales of consumer product retailers or (3) any other business activity in which the Company, AACC or any of its Subsidiaries may engage during the Employment Period (a
“Competitive Activity”). 
 For purposes of this Agreement, the term “participate” includes
any direct or indirect interest, whether as an officer, director, employee, partner, sole proprietor, trustee, beneficiary, agent, representative, independent contractor, consultant, advisor, provider of personal services, creditor, owner (other
than by ownership of less than one (1) percent of the stock of a corporation that has a class of equity securities registered under the Securities Exchange Act of 1934), and the term “Territory” means each country in which
AACC, the Company or any of their affiliates shall have conducted business in a substantial manner during the Employment Period. 
  

 7 

 (b) Nondisclosure or Use of Confidential Information. 

(i) The Executive shall not, whether during or after employment, disclose to any person or entity or use, any information
not in the public domain, in any form, acquired by the Executive while he was employed or associated with AACC and the Company or, if acquired following the termination of such association, such information which, to the Executive’s knowledge,
has been acquired, directly or indirectly, from any person or entity owing a duty of confidentiality to the Company or AACC (the “Confidential Information”). By way of illustration but not limitation, Confidential Information may
include trade secrets, supplier lists regarding Charged Off Accounts, collection methods, information regarding bulk purchases of Charged Off Accounts, employee compensation arrangements, business practices, plans, policies, secret inventions,
processes and compilations of information, records and specifications, as well as information related to the management policies and plans for AACC, the Company or their affiliates. 

(ii) Notwithstanding the foregoing, the restrictions in subsection (b)(i) of this Section 7 are not
applicable to the disclosure or use of Confidential Information in connection with the following: (A) in the course of faithfully performing the Executive’s duties as an employee of the Company; (B) with the Company’s express
written consent; (C) to the extent that any such Confidential Information is in the public domain other than as a result of the Executive’s breach of any of his obligations hereunder; or (D) where required to be disclosed by court
order, subpoena or other governmental process. In the event that the Executive shall be required to make disclosure pursuant to the provisions of clause (D) of the preceding sentence, the Executive promptly (but in no event more than
forty-eight (48) hours after learning of such subpoena, court order, or other governmental process) shall notify the Company in writing, by personal delivery or by facsimile, confirmed by mail or by certified mail, return receipt requested.

 (iii) The Executive agrees and acknowledges that all of such Confidential Information, in any form, and copies
and extracts thereof are and shall remain the sole and exclusive property of AACC and the Company, and the Executive shall on request return to the Company the originals and all copies of any such information provided to or acquired by the Executive
in connection with his association with AACC or the Company, and shall return to the Company all files, correspondence and/or other communications received, maintained and/or originated by the Executive during the course of such association.

 (c) No Interference. During the Restricted Period, the Executive shall not, without the prior written approval of the
Board of Directors, directly or indirectly through any other person (i) induce or attempt to induce any employee of the Company, AACC or any of its Subsidiaries to leave the employ of the Company, AACC or any of its Subsidiaries or in any way
interfere with the relationship between the Company, AACC or any of its Subsidiaries and any employee thereof, (ii) induce or attempt to induce any supplier of Charged Off Accounts or other business relation of the Company, AACC or any of its
Subsidiaries to cease doing business with the Company, AACC or its Subsidiaries, or in any way interfere with the relationship between any such supplier or business relation and the Company, AACC and its Subsidiaries or (iii) acquire Charged
Off Accounts from any person that was a seller of Charged Off Accounts to the Company, AACC or any of its Subsidiaries during the Restricted Period. 
  

 8 

 (d) Inventions. The Executive hereby sells, transfers and assigns to the Company or
to any person or entity designated by the Company all of the entire right, title and interest of the Executive in and to all inventions, ideas, disclosures and improvements, whether patented or unpatented, and copyrightable material, made or
conceived by the Executive, solely or jointly, or in whole or in part, during his employment (including employment prior to the date hereof) by the Company which are not generally known to the public or recognized as standard practice and which
(i) relate to methods, apparatus, designs, products, processes or devices sold, leased, used or under construction or development by the Company or any subsidiary and (ii) arise (wholly or partly) from the efforts of the Executive during
his employment with the Company (an “Invention”). The Executive shall communicate promptly and disclose to the Company, in such form as the Company requests, all information, details and data pertaining to any such Inventions; and,
whether during the Restricted Period or thereafter, the Executive shall execute and deliver to the Company such form of transfers and assignments and such other papers and documents as reasonably may be required of the Executive to permit the
Company or any person or entity designated by the Company to file and prosecute the patent applications and, as to copyrightable material, to obtain a copyright thereon. The Company shall pay all costs incident to the execution and delivery of such
transfers, assignments and other documents. Any invention by the Executive within six months following the termination of his employment hereunder shall be deemed to fall within the provisions of this Section 7(d) unless the Executive
bears the burden of proof of showing that the Invention was first conceived and made following such termination. 
 8.
SEVERANCE BENEFITS. 
 (a) General; Release. If the Executive’s employment with the Company is terminated
pursuant to Section 6(d) hereof, the Executive shall be entitled to receive as his sole and exclusive remedy the termination benefits provided under this Section 8 regardless of the time remaining in the Initial Term or
Extended Term, as the case may be (the “Severance Benefits”). Any Severance Benefits that are not exempt from Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) must be paid no later
than the last day of the Executive’s second tax year following the tax year in which the Executive’s separation from service occurs. As a condition of receiving the Severance Benefits, Executive agrees to sign an effective legal release in
substantially the form attached hereto as Schedule 2, provided that such form may be revised to reflect subsequent changes in the law or practices as may be deemed necessary and advisable by counsel to the Company to provide for
Executive’s waiver of any and all claims he has or may have against the Company, AACC and their agents, employees, directors, subsidiaries, attorneys, successors, assigns, and affiliates, as of the date of his termination. 

(b) Amount. 

(i) Non-Change in Control. Except in the circumstances described below in subsection (ii), the Executive
shall, upon a termination of employment pursuant to Section 6(d), be paid periodically, according to the Company’s payroll policy, his Regular Base Salary at the rate in effect on the Section 6(d) Termination Date for the
Severance Period (as defined below); provided that, if the Executive is a “specified employee” within the meaning of Code Section 409A, on the Section 6(d) Termination Date, the sum of such amount that is paid
within the first six (6) months following the Section 6(d) Termination Date shall not exceed two (2) times the lesser of: 

(A) the maximum dollar amount that may be taken into account under a tax-qualified retirement plan pursuant to Code
Section 401(a)(17) for the year in which the Executive was terminated (for example, during 2010: $245,000 x 2 = $490,000); or 
  

 9 

 (B) the sum of the Executive’s annualized compensation based upon the
annual rate of pay for services to the Company for the Executive’s taxable year prior to the taxable year in which the termination occurs (adjusted for any increase during the year that was expected to continue indefinitely if the Executive had
not terminated employment). 
 The payments under this Section 8(b)(i) that are made during the first
six (6) months following the Executive’s Section 6(d) Termination Date are intended to constitute a “separation pay plan due to involuntary termination of service” under Treasury Regulation Section 1.409A-1(b)(9)(iii).
In the event the Executive’s separation pay is limited by application of this Section 8(b)(i), the Company shall make any additional true-up payments in accordance with Section 9 of this Agreement. Unless delayed under
this Section 8(b)(i), any Regular Base Salary amounts due under this Section 8(b)(i) shall be paid no later than the end of the calendar year to which such salary amounts relate (determined by dividing the Executive’s
annual Regular Base Salary by twelve (12)) and allocating such salary to each month following the Executive’s Section 6(d) Termination Date. 

“Severance Period” shall mean the period beginning on the Section 6(d) Termination Date and
continuing for a period of twelve (12) months, provided that, in the event the Company elects to terminate the employment of the Executive without Cause, such period will be shortened by the period of time between the date written notice
is given by the Company to the Executive advising of the Company’s election to terminate the Executive without Cause and the Section 6(d) Termination Date. 

(ii) Change in Control. If the Executive’s employment with the Company is terminated pursuant to
Section 6(d) hereof within one (1) year after the effective date of a Change in Control (as defined below), the Executive shall, in lieu of the amount described above in subsection (i), receive the following amount payable as
indicated below: 
 (A) An amount equal to the product of the following; 

(1) one (1), multiplied by 

(2) the annual amount of the Executive’s Regular Base Salary as in effect at the end of the calendar year preceding
the Section 6(d) Termination Date (adjusted for any increase during the calendar year of the Section 6(d) Termination Date that had been expected to continue indefinitely). 

 

 10 

 The foregoing amount shall be due and payable in a lump sum within 60 days of the
Section 6(d) Termination Date, unless subject to the 409A Suspension Period described in Section 9(a). 

As used herein, “Change in Control” means the occurrence of any of the following events: 

(w) the acquisition of ownership by a person, corporation or other entity, or a group acting in concert, of fifty-one
percent, or more, of the outstanding common stock of AACC in a single transaction or a series of related transactions within a one-year period; 

(x) a sale of all or substantially all of the assets of AACC to any person, corporation or other entity; 

(y) a merger or similar transaction between AACC and another entity if shareholders of AACC do not own a majority of the
voting stock of the surviving entity or any parent thereof and a majority in value of the total outstanding stock of such surviving entity or any parent thereof; or 

(z) during any consecutive two-year period commencing after January 1, 2009, individuals who constituted the Board
of Directors of AACC at the beginning of the period (or their approved replacements, as defined herein) cease for any reason to constitute a majority of the Board of Directors, with a new director being considered an “approved replacement”
director if his or his election (or nomination for election) was approved by a vote of at least a majority of the directors then still in office who either were directors at the beginning of the period or were themselves approved replacement
directors, but in either case excluding any director whose initial assumption of office occurred as a result of an actual or threatened solicitation of proxies or consents by or on behalf of any person other than the Board of Directors; 

provided, however, that there shall not be included within the meaning of “Change in Control” any such event involving:
(a) any employee benefit plan (or related trust) sponsored or maintained by AACC; or (b) any of the current shareholders of AACC as of January 1, 2009 (or any entity at any time controlled by any such shareholder or shareholders).

 (B) The Executive shall also be paid an amount equal to the product of the following: 

(1) one (1), multiplied by  

(2) the sum of the Executive’s Bonus for the Company’s fiscal year immediately preceding the effective date of
such Change in Control. 
  

 11 

 The foregoing amount shall be due and payable in a lump sum within 60 days of the
Section 6(d) Termination Date, unless subject to the 409A Suspension Period, described in Section 9(a). 

(iii) Certain Limitations. The Executive shall not be entitled to any further notice, severance pay, pay in lieu of
notice or any compensation whatsoever, except any amounts owing under this Agreement. The Executive agrees that the foregoing notice is deemed conclusively to be reasonable notice of termination at common law and the Executive is not entitled to any
additional notice or pay in lieu of notice or severance pay. The Executive acknowledges that the Company has drawn his attention to the provisions contained herein prior to executing this Agreement. 

(c) Welfare Benefits and COBRA. The Company shall reimburse the Executive for his COBRA costs (to the extent applicable) for a
period of eighteen (18) months following the Section 6(d) Termination Date (including dependent coverage) in any group health, vision and dental benefit plans provided by the Company, in effect immediately prior to the Section 6(d)
Termination Date. Following the Section 6(d) Termination Date, the Company shall not be obligated to (i) provide disability, life or business accident insurance covering the Executive or (ii) to make contributions in respect of the
Executive to any qualified retirement and pension plans or profit sharing plans for compensation paid after the Section 6(d) Termination Date. The Company will use its good faith efforts to make the payments hereunder directly to the Executive
and/or to the insurance carrier / employee benefit provider, as the case may be, in such a manner as will maximize the tax efficiencies for both the Company and the Executive. 

9. TAXES; CERTAIN DEDUCTIONS AND LIMITATIONS. 

(a) Taxes. The benefits provided hereunder are intended to be exempt from, or comply with, Code Section 409A. Notwithstanding
the foregoing, except as otherwise specifically provided elsewhere in this Agreement or herein, the Executive is solely responsible for the satisfaction of any taxes that may arise pursuant to this Agreement (including taxes arising under Code
Section 409A regarding deferred compensation, and Code Section 4999 regarding golden parachute excise taxes). The Company shall not have any obligation whatsoever to pay such taxes or to otherwise indemnify or hold the Executive harmless
from any or all of such taxes. 
 If any amounts that become due under this Agreement constitute “nonqualified deferred
compensation” within the meaning of Code Section 409A, payment of such amounts shall not commence until the Executive incurs a “separation from service” within the meaning of Treasury Regulation Section 1.409A-1(h). If, at
the time of the Executive’s separation from service, the Executive is a “specified employee” (within the meaning of Code Section 409A), any benefit to which Code Section 409A additional taxes could be assessed on account of
his separation from service (including any amounts payable pursuant to the preceding sentence) will not be paid until after the end of the sixth calendar month beginning after the Executive’s separation from service (the “409A
Suspension Period”) to the extent such delay may reasonably be expected to avoid Code Section 409A additional taxes. Within fourteen (14) calendar days after the end of the 409A Suspension Period, the Executive shall be paid a
lump sum payment in cash equal to any payments delayed because of the preceding sentence. Thereafter, the Executive shall receive any remaining benefits as if there had not been an earlier delay. The Company shall have the sole discretion to
interpret the requirements of the Code, including Code Section 409A, for purposes of this Agreement. 
  

 12 

 Notwithstanding any other provisions of this Agreement, the parties hereto agree to take all
actions (including adopting amendments to this Agreement) as are required to comply with or minimize any potential interest charges and/or additional taxes as may be imposed under Code Section 409A with respect to any payment or benefit due the
Executive under this Agreement (including a delay in some or all payments until the seventh month after the Executive’s employment termination). 

(b) Deductions and Withholding. The Executive agrees that the Company shall be entitled to deduct and withhold from any
compensation payable to the Executive under this Agreement (i) any taxes in respect of the Executive that the Company is required to deduct and withhold under federal, state or local law whether arising from compensation hereunder or otherwise
and (ii) any other amounts lawfully due from the Executive as determined in good faith by the Company and/or the Board of Directors. In the event that the Executive is no longer employed by the Company at a time when the Company otherwise would
be entitled to deduct and withhold any amount pursuant to the preceding sentence, the Executive shall remit such amount to the Company within five days after the receipt of notice from the Company specifying such amount or otherwise in accordance
with the Executive’s obligations with respect thereto. 
 (c) Clawback – For Cause Matters. If, within 90 days
after a Section 6(d) Termination Date, the Board of Directors becomes aware of facts that, if known during the Executive’s employment, it reasonably believes would have justified termination for Cause, the Company may refrain from paying
any unpaid amounts due with respect to Severance Benefits or require the Executive to promptly (but in no event less than 90 days after notice to the Executive of such determination by the Board of Directors) repay any previously paid amounts
related thereto. 
 (d) Clawback – Substantial Decline in Stock Price. Notwithstanding the
provisions of Section 8, any payments under Section 8(b)(i) and (ii) will be capped at one times the Regular Base Salary at the rate in effect on the Section 6(d) Termination Date if (i) at any time during the
period beginning on Section 6(d) Termination Date and ending six months thereafter, the rolling 30-day average closing price for the common stock of AACC is lower than 10% of the closing price for the common stock on the first
(1st) trading day after May 17, 2010
(i.e., 90% shareholder value lost), after taking into account any intervening adjustments to the common stock (such as stock splits) in the same manner as provided for option adjustments under the Company’s 2004 Stock Incentive Plan, as
amended, and (ii) the Board of Directors, acting reasonably and in good faith, determines that such decline in the closing price of the common stock was materially attributable to the action or inaction of the Executive during the Employment
Period. 
  

 13 

 (e) Certain Limitations – Parachute Payments. The benefit limitations of this
Section 9(e) shall be applicable in the event the Executive receives any benefits under this Agreement which are deemed to constitute parachute payments under Code Section 280G. In the event that any payments to which the Executive
becomes entitled in accordance with the provisions of this Agreement would otherwise constitute a parachute payment under Code Section 280G, then such payments will be subject to reduction to the extent necessary to assure that the Executive
receives only the greater of (i) the amount of those payments which would not constitute such a parachute payment, or (ii) the after-tax amount of benefits after taking into account any excise tax imposed on the payments provided to the
Executive under this Agreement (or on any other benefits to which the Executive may be entitled in connection with any change in control or ownership of AACC or the subsequent termination of the Executive’s employment with the Company) under
Code Section 4999. Should a reduction in benefits be required to satisfy the benefit limit of this Section 9(e), then the payment of the Severance Benefits shall accordingly be reduced to the extent necessary to comply with such
benefit limit. Should such benefit limit still be exceeded following such reduction, then any obligation of AACC or the Company to make payments under any other employee benefit plans shall be reduced to the extent necessary to eliminate such
excess. 
 10. INJUNCTIVE RELIEF. Without intending to limit the remedies available to AACC and the Company, the
Executive acknowledges that a breach of any of the covenants contained in Section 7 hereof may result in material irreparable injury to AACC, the Company or their affiliates for which there is no adequate remedy at law, that it will not
be possible to measure damages for such injuries precisely and that, in the event of such a breach or threat thereof, AACC and the Company shall be entitled to obtain a temporary restraining order and/or a preliminary or permanent injunction
restraining the Executive from engaging in activities prohibited by Section 7 hereof or such other relief as may be required to specifically enforce any of the covenants in Section 7 hereof. The Executive hereby agrees and
consents that such injunctive relief may be sought in any state or federal court of record in Michigan, or in the state in which such violation may occur, or in any other court having jurisdiction, at the election of AACC or the Company. 

11. EXTENSION OF RESTRICTED PERIODS. In addition to the remedies AACC and the Company may seek and obtain pursuant to
Section 10 of this Agreement, the Restricted Period shall be extended by any and all periods during which the Executive shall be found by a court to have been in violation of the covenants contained in Section 7 hereof.

 12. SUCCESSORS; BINDING AGREEMENT. This Agreement is personal to the Executive and, without the prior written consent
of the Board of Directors, shall not be assignable by the Executive otherwise than by will, the laws of descent and distribution or the terms of a revocable trust of which the Executive is the grantor. This Agreement shall inure to the benefit of
and be enforceable by the Executive’s legal representatives. This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns. 

13. WAIVER AND MODIFICATION. Any waiver, alteration or modification of any of the terms of this Agreement shall be valid only if
made in writing and signed by the parties hereto; provided that any such waiver, alteration or modification is consented to on the Company’s behalf by the Board of Directors. No waiver by either of the parties hereto of their rights
hereunder shall be deemed to constitute a waiver with respect to any subsequent occurrences or transactions hereunder unless such waiver specifically states that it is to be construed as a continuing waiver. 

 

 14 

 14. SEVERABILITY. The Executive acknowledges and agrees that the covenants set forth
in Section 7 hereof are reasonable and valid in geographical and temporal scope and in all other respects. If any of such covenants or other provisions of this Agreement are found to be invalid or unenforceable by a final determination
of a court of competent jurisdiction (a) the remaining terms and provisions hereof shall be unimpaired and (b) the invalid or unenforceable term or provision shall be deemed replaced by a term or provision that is valid and enforceable and
that comes closest to expressing the intention of the invalid or unenforceable term or provision. 
 15. SUBMISSION TO
JURISDICTION; VENUE. 
 (a) WITH THE EXCEPTION OF THE RIGHTS OF AACC AND THE COMPANY UNDER SECTION 10 OF THIS
AGREEMENT, ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY TRANSACTIONS CONTEMPLATED HEREBY SHALL BE BROUGHT IN THE COURTS OF THE STATE OF MICHIGAN OR IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF MICHIGAN
SITTING IN DETROIT, MICHIGAN, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE PARTIES HEREBY ACCEPTS FOR HIMSELF OR ITSELF AND IN RESPECT OF HIS OR ITS PROPERTY GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE
AFORESAID COURTS. EACH OF THE PARTIES IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY MAILING COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO SUCH PARTY
AT HIS OR ITS ADDRESS AS PROVIDED IN SECTION 18 HEREOF. NOTHING IN THIS PARAGRAPH (a) SHALL AFFECT THE RIGHT OF ANY PARTY TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS IN ANY OTHER
JURISDICTION. 
 (b) WITH THE EXCEPTION OF THE RIGHTS OF AACC AND THE COMPANY UNDER SECTION 10 OF THIS AGREEMENT, EACH
PARTY HEREBY IRREVOCABLY WAIVES ANY OBJECTIONS WHICH HE OR IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT BROUGHT IN THE COURTS REFERRED TO IN
PARAGRAPH (a) OF THIS SECTION 15 AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

 (c) WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, EACH OF THE PARTIES TO THIS AGREEMENT AGREES THAT, AT THE TIME OF ANY
SUCH ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY TRANSACTIONS CONTEMPLATED HEREBY, EACH OF THE PARTIES WILL EXECUTE SUCH INSTRUMENTS AND OTHER DOCUMENTS AS MAY BE NECESSARY TO CONSENT TO AND WAIVE ANY OBJECTION TO VENUE AND
JURISDICTION IN THE COURTS IDENTIFIED IN SUBSECTIONS (a) AND (b) ABOVE. 
  

 15 

 16. WAIVER OF JURY TRIAL. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY
WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY
OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. 
 17. BLUE
PENCILLING. In the event that, notwithstanding the first sentence of Section 14 hereof, any of the provisions of Section 7 relating to the geographic or temporal scope of the covenants contained therein or the nature of
the business restricted thereby shall be declared by a court of competent jurisdiction to exceed the maximum restrictiveness such court deems enforceable, such provision shall be deemed to be replaced herein by the maximum restriction deemed
enforceable by such court. 
 18. NOTICES. All notices required to be given hereunder shall be in writing and shall be
deemed to have been given if (a) delivered personally or by documented courier or delivery service, (b) transmitted by facsimile or (c) mailed by registered or certified mail (return receipt requested and postage prepaid) to the
following listed persons at the addresses and facsimile numbers specified below, or to such other persons, addresses or facsimile numbers as a party entitled to notice shall give, in the manner hereinabove described, to the others entitled to
notice: 
 In the case of the Company: 

Asset Acceptance, LLC 

28405 Van Dyke Avenue 

Warren, Michigan 48093 

Attention: President and Chief Executive Officer 

Facsimile No.: 586-446-7832 

with a copy (which will not constitute notice) to: 

Asset Acceptance, LLC 

28405 Van Dyke Avenue 

Warren, Michigan 48093 

Attention: Edwin L. Herbert, Esq. 

Vice President and General Counsel 

Facsimile No.: 586-446-7832 

In the case of the Executive: 

Reid E. Simpson 

XXX XXXXX XXXXXX 

XXXXXXX, XXXXXXXX XXXXX 
  

 16 

 Notice pursuant hereto shall be deemed given (i) if delivered personally, when so delivered,
(ii) if given by facsimile, when transmitted to the facsimile number set forth above, when so transmitted if transmitted during normal business hours at the location to which it is transmitted or upon the opening of business on the next
Business Day if transmitted other than during normal business hours at the location to which it is transmitted and (iii) if given by mail, on the third business day following the day on which it was posted. 

19. CAPTIONS AND PARAGRAPH HEADINGS. Captions and section headings herein are for convenience only, are not a part hereof and
shall not be used in construing this Agreement. 
 20. ENTIRE AGREEMENT. This Agreement constitutes the entire
understanding and agreement of the parties hereto regarding the employment of the Executive, and supersedes all prior agreements and understandings between the parties. 

21. COUNTERPARTS. This Agreement may be executed in counterparts, including by facsimile transmission or electronic signature as
permitted by applicable Law, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. 

22. ACKNOWLEDGMENT AND INDEPENDENT LEGAL ADVICE. The Executive acknowledges that (a) he has read and understands this
Agreement and that the Company has advised him that the foregoing alters and supersedes his common law rights, and (b) neither his execution of this Agreement nor his performance of services pursuant to this Agreement will violate any prior or
existing employment agreement, non-competition agreement, or similar agreement to which the Executive is or ever has been a party. The Executive acknowledges that the Company has advised him to seek legal advice prior to executing this Agreement.

 23. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the domestic laws of the State
of Michigan, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Michigan or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of
Michigan. 
 [Signatures on next page] 
  

 17 

 WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written. 
  

					
	ASSET ACCEPTANCE, LLC
			
	By:	 	 /s/ Rion B. Needs
	  	05/17/2010 
		 	RION B. NEEDS	  	Date
		
	Its:	 	 President and Chief Executive Officer

		
	 /s/ Reid E. Simpson 
	  	05/17/2010
	 REID E. SIMPSON
	  	Date

  

 18 

 SCHEDULE 1 

Certain Initial Compensation and Relocation Reimbursement Matters 

Set forth below are certain initial compensation and relocation reimbursement matters applicable to the Executive: 

(1) 2010 Management Bonus Plan. For 2010, the Executive shall be entitled to participate in AACC’s 2010 Annual Incentive
Compensation Plan for Management (the “Management Bonus Plan”), with the target Bonus set at 80% of the Regular Base Salary and with the Personal Objectives to be jointly developed by the Executive and the President of AACC and with
any Bonus payable pursuant thereto to be prorated for the calendar year 2010 based upon the Executive’s start date of May 17, 2010. A copy of the Plan previously has been provided to the Executive. 

(2) Sign-On Bonus. The Company shall pay the Executive a sign-on bonus in the aggregate amount of $87,500, with $43,750 payable on
May 17, 2010, being the Executive’s start date of employment, and with $43,750 payable promptly after the Executive notifies the Company that his and his family’s household goods have been shipped to his new residence in the
metropolitan area of Detroit, Michigan. 
 (3) Sign-On Equity Grant. AACC shall effect a sign-on equity grant, with a
grant date of May 17, 2010, being the Executive’s start date of employment, consisting of the following pursuant to AACC’s 2004 Stock Incentive Plan, as amended and restated: 

(a) 23,000 non-qualified stock options that vest in four equal installments of 25% on each of the four anniversary dates of the grant
date, with an exercise price equal to the closing price on May 17, 2010; and 
 (b) 10,000 restricted stock units that vest
in four equal installments of 25% on each of the four anniversary dates of the grant date. 
 (4) Temporary Living. The
Company shall pay the Executive for, or reimburse him for his expenses related to, his temporary living at the Towne Place Suites by Marriott in an amount not to exceed $65.00 per day for a period equal to the shorter of six (6) months or until
the move of his family to the metropolitan area of Detroit, Michigan has been completed. 
 (5) Existing Home Sale. The
Company shall reimburse the Executive for the real estate commissions incurred by him upon the sale of his current home in an amount not to exceed 7% of the sales price for such home. 

 

 19 

 (6) Relocation Matters. The Company shall reimburse the Executive for the expenses
incurred with respect to the following relocation matters: 
 (a) two round trip coach airline tickets for his spouse from
Chicago O’Hare or Midway airport to Detroit Metropolitan airport; and 
 (b) packing, transportation and insurance to
transport all household goods and up to two automobiles from the metropolitan area of Chicago, Illinois to the metropolitan area of Detroit, Michigan. 

(7) Settling-In Expenses. The Company shall pay the Executive a one-time lump sum amount of $5,000 for miscellaneous settling-in
expenses payable after the Executive notifies the Company that his and his family’s household goods have been delivered to his new residence in the metropolitan area of Detroit, Michigan. 

 

 20 

 SCHEDULE 2 

Form of Release 

AGREEMENT AND RELEASE 

Asset Acceptance, LLC (“Company”) and
                     (“Executive”) enter into this Agreement and Release (“Agreement”) related to the termination of
Executive’s employment with the Company. 
 RECITALS 

A. The Company and Executive are parties to that certain Employment Agreement dated
                     (the “Employment Agreement”) and that certain letter agreement dated
                     (the “Letter Agreement”). 

B. Executive’s employment with Company was terminated on
                    . 

C. This Agreement is the legal release described in the Employment Agreement and also referenced as Exhibit A to the Letter Agreement.

 TERMS 

1. Severance Pay; COBRA. Executive shall receive the severance benefits, as well as reimbursement of his COBRA costs, as set forth
in the Employment Agreement and the Letter Agreement. 
 2. Release of Claims. Executive, on behalf of Executive, and
anyone who could claim for Executive, agrees not to sue and fully release and discharge the Company, its parents, subsidiaries and affiliates, past, present and future, insurers, members, officers, employees, stockholders, representatives, assigns
and successors, past, present and future (all referred to collectively as “Releasees”), from any and all claims, wages, demands, rights, severance, liens, agreements, contracts, covenants, actions, suits, causes of action, obligations,
debts, costs, expenses, attorney’s fees, damages, judgments, orders and liabilities of whatever kind or nature in law, equity or otherwise, arising out of or in any way connected with his employment relationship with the Company, or his
termination therefrom, including, but not limited to discrimination, retaliation, breach of contract, wrongful dismissal, libel, slander, tort, and, specifically, any action under (1) the Elliot Larsen Civil Rights Act; (2) Title VII of
the Civil Rights Acts of 1964 and 1991, as amended, 42 U.S.C. §2000(e) et. seq.; (3) the Equal Pay Act; (4) the Americans With Disabilities Act, as amended, 42 U.S.C. §12101, et. seq.; (5) the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”), 29 U.S.C. §1001, et. seq.; (6) the Family and Medical Leave Act of 1993; (7) the Age Discrimination in Employment Act of 1967 (“ADEA”);
(8) any and all state laws regarding employment or employment discrimination and/or termination of employment; and (9) any other federal, state or local statute, rule, regulation, common law authority or precedent relating to, or dealing
with, employment, termination of employment or employment discrimination that arose on or before the date of execution of this Agreement, as well as any claim for severance pay, bonus, commission, sick leave, holiday pay, overtime pay, life
insurance, health or medical insurance or any other fringe benefit; provided, however, that this Section 2 does not pertain to the severance pay and reimbursement of COBRA costs described above in Section 1. 

 

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 3. Confidentiality and Non-disparagement. Executive agrees that, except as disclosed
by the Company in SEC filings or in releases of information to the general public or via Company-wide releases to its associates, he will keep the terms, amount and fact of this Agreement completely confidential, and that he will not hereafter
disclose any information concerning this Agreement to anyone, except Executive’s attorneys, financial advisors and immediate family members. Executive agrees that he will not make any communication to any other associate of the Company or to
any third-party that states or implies that the Company is not a good place to work or that reflects negatively upon the good character, business ethics or professional competence of the Company or any of its affiliates, officers, directors,
members, employees, agents, successors or assigns. 
 Company agrees that no executive officer of the Company will make (or
direct any representative to make) any communication to any other associate of the Company or to any third-party that states or implies that the Executive is not a good worker or that reflects negatively upon the good character, business ethics or
professional competence of the Executive. 
 4. Return of Property. Executive must immediately return all property of the
Company, including any manuals, access cards, files or data, regardless of how it is stored. 
 5. Unemployment Benefits.
It is understood that Executive will not assert a claim for unemployment benefits for the period during which he is entitled to payments. After the period of payments, the Company will not contest any claim for unemployment made by Executive.

 6. Notices Required By The Older Workers’ Benefit Protection Act. 

a. Executive acknowledges that he has read each section of this Agreement, that the Agreement is written in a manner calculated to be
understood by Executive, and that he in fact understands his rights and obligations under it, including the fact that he is waiving and releasing rights to bring an age discrimination claim against the Company under the Age Discrimination in
Employment Act. 
 b. By signing this Agreement, Executive expressly acknowledges and agrees that, in return for this Agreement,
he will receive compensation beyond which Employee was otherwise entitled to receive before entering into this Agreement. 
 c.
Executive is hereby advised to consult with legal counsel before executing this Agreement.                      (initial here)

 d. Executive has up to 21 calendar days following receipt of this Agreement to consider this Agreement before signing it. If
Executive signs this Agreement before the 21 day period has ended, that is Executive’s voluntary decision. 
 e. If
Executive decides to sign this Agreement, Employee has seven days after his execution of the Agreement (the “Revocation Period”). Any revocation of this Agreement should be in writing and must be delivered to the President and CEO before
5:00 p.m. on the seventh business after Executive signed the Agreement. If the seventh day does not fall on a business day, then the Revocation Period shall be deemed extended to 5:00 p.m. the next business day. 

 

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 f. This Agreement will not become enforceable or effective until the Revocation Period has
expired, and no monies or other consideration will be sent to Executive until after the Revocation Period has expired (assuming Executive has not timely exercised his right to revoke the Agreement). 

g. This Agreement does not waive any of Executive’s future rights or any claims that may arise after the execution of this
Agreement. 
 7. Governing Law. This Agreement shall be governed by and constructed in accordance with Michigan
law, regardless of conflicts of law principles. 
 8. Severability. Should any of the covenants or other provisions of
this Agreement be found to be invalid or unenforceable by a final determination of a court of competent jurisdiction, the remaining terms and provisions shall be unimpaired and the invalid or unenforceable term or provision shall be deemed replaced
by a term or provision that is valid and enforceable and which comes closest to expressing the intention of the invalid or unenforceable term or provision. 

9. Entire Agreement. This Agreement, together with the Employment Agreement and the Letter Agreement, constitutes the entire
understanding and agreement of the parties hereto regarding the employment of the Executive and supersedes all prior agreements and understandings between the parties. No waiver, alteration, or modification of this Agreement shall be valid unless
signed by both the Executive and the President and CEO. 
  

							
	EXECUTIVE	 		 	
			
	  
	 		 	  

		 		 		 	Date
			
	 ASSET ACCEPTANCE, LLC
	 		 	
				
	By:	 	  
	 		 	  

		 		 		 	 Date

				
	Its:	 	  
	 		 	

  

 23

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