Document:

Exhibit 10.19

 

MHA LONG TERM CARE NETWORK, INC.

PARTICIPATING PROVIDER AGREEMENT

 

This Participating LTC Pharmacy Agreement (“Agreement”)
is between MHA Long Term Care Network, Inc. (“Network”)
a Delaware corporation located at 25A Vreeland Ave #203, Florham Park, New
Jersey 07932 and the Long-Term Care Pharmacy (“LTC Pharmacy”)
which has executed the signature page hereof.

 

ARTICLE I.                                Scope
of Agreement

 

A.  Grant
of Authority.  LTC Pharmacy hereby (i) appoints Network as
LTC Pharmacy’s agent for the purposes of marketing the services of LTC Pharmacy
to Third-Party Payors and contracting with such Third-Party Payors on behalf of
LTC Pharmacy and (ii) agrees to be a Participating Long-Term Care Pharmacy in
Network.

 

B.  LTC
Pharmacy Right to Contract/Exclusivity.  Except as specifically set forth in this
Article, LTC Pharmacy shall retain its full right and ability to establish,
contract, or otherwise associate directly with any Third-Party Payor without
being deemed in breach of this Agreement, provided that any such contract or
other arrangement shall not materially interfere with or prevent LTC Pharmacy
from fulfilling its obligations under this Agreement. However, LTC Pharmacy
shall not, during the term of this Agreement contract with any other national network
or entity that would contract with Third-Party Payors on behalf of LTC
Pharmacy. In the event that LTC Pharmacy contracts directly with any
Third-Party Payor, such contract between LTC Pharmacy and Third-Party Payor
shall survive: i) the termination of this Agreement for any reason; or ii) the
termination of LTC Pharmacy’s participation under any particular Accepted
Product Description.

 

C.  Common
Contracts.  Notwithstanding
the provisions of paragraph B of
this Article I, if LTC Pharmacy shall have a
contract with the same Third-Party Payor as Network, LTC Pharmacy shall be
required to render Covered Pharmacy Services pursuant to the Payor
Reimbursement Schedule set forth in the contract negotiated by the Network if
the contract negotiated by the Network has a Payor Reimbursement Schedule which
provides for compensation to LTC Pharmacy that, in the aggregate, is not less
than the compensation provided pursuant to the contract directly between LTC
Pharmacy and the Third-Party Payor.

 

ARTICLE II.                            Agreements
and Obligations of the Parties

 

A.  Pharmacy
Services.  LTC
Pharmacy hereby agrees to provide Covered Pharmacy Services to Beneficiaries in
accordance with applicable pharmacy law and regulations. LTC Pharmacy
acknowledges that neither Network nor any Third-Party Payor, by this Agreement
or otherwise, guarantees to LTC Pharmacy a minimum number of Beneficiaries.

 

B.  Non-Discrimination.
 LTC Pharmacy
shall not discriminate in the provision of Covered Pharmacy Services to
Beneficiaries based on race, creed, age, gender, disability, sexual
orientation, place of origin, source of payment, health status or type of
illness or condition, and shall otherwise render Covered Pharmacy Services in
accordance with generally accepted standards of care, safety and efficiency and
in compliance with all relevant federal, state and local laws and regulations.

 

 

C.  Records.  LTC Pharmacy shall maintain adequate
pharmacy, financial and administrative records for all care provided to
Beneficiaries. Network agrees to comply with all federal and state laws
regarding confidentiality of patient records. These provisions shall survive
termination of this Agreement for any reason.

 

D.  Compliance
With Law.  LTC Pharmacy agrees to comply fully with all
applicable federal and state laws, regulations and regulatory agency
guidance(s). Applicable federal laws and regulations include, but are not
limited to the Medicare Modernization Act (“MMA”),
including substantially complying with the CMS Minimum Performance and Service
Criteria set forth in the CMS Addendum,
and the Health Insurance Portability and Accountability Act (“HIPAA”) and regulations promulgated pursuant thereto.
Applicable state laws include, but are not limited to the minimum standards for
pharmacy practice and licensure in the state in which pharmacy provides its
services.

 

E.  Compliance
With Third-Party Payor Requirements.  LTC Pharmacy agrees to comply fully with the
requirements of this Agreement, Accepted Product Descriptions, Third-Party
Payor and Network policies and procedures including, but not limited to, (i)
quality assurance; (ii) utilization management; (iii) claims payment review and
(iv) grievances and in compliance with Third-Party Payors’ contractual
obligations to CMS. Network or Third-Party Payors will advise LTC Pharmacy of
all such policies and procedures.

 

F.  Network
Roster.  LTC
Pharmacy agrees to allow Network and Third-Party Payors to use LTC Pharmacy’s
name, address, telephone number, and other similar information in their
directories of Participating Long-Term Care Pharmacies.

 

G.  Fees
Due to Network from LTC Pharmacy.  LTC Pharmacy shall pay Network fees in
accordance with Exhibit A.

 

H.  Product
Descriptions.  LTC Pharmacy agrees to be bound by a Product
Description that, in the Judgment of Network, is consistent with the terms of
this Agreement. LTC Pharmacy shall be bound by the Product Description unless
LTC Pharmacy provides Network with written notice of rejection within thirty
(30) days after Network provides notice to LTC Pharmacy that it has entered
into such Product Description. The terms and conditions of any Accepted Product
Description may be amended by agreement of Network, as agent for LTC Pharmacy,
and the applicable Third-Party Payor, without LTC Pharmacy’s consent, so long
as the compensation provisions meet the requirements of this Agreement. In the
event of an amendment of an Accepted Product Description, including changes in
reimbursement, Network shall provide LTC Pharmacy with thirty (30) days’ prior
written notice thereof. If LTC Pharmacy does not object in writing to such
proposal within thirty (30) days after Network gives such notice, the amendment
shall become effective at the expiration of such thirty (30) day period. If LTC
Pharmacy objects in writing to the proposal as set forth herein, LTC Pharmacy
shall no longer be eligible to participate in the corresponding Product offered
by such Third-Party Payor. Notwithstanding the foregoing, all of the terms and
conditions set forth in any direct contract between LTC Pharmacy and a
Third-Party Payor, as set forth in paragraph B of Article 1, shall survive and remain in full force and effect
in the event that LTC Pharmacy

 

2

 

rejects any Product Description or amendment to an Accepted Product
Description as set forth above. All notices required by this section shall be
in accordance with Article IV(F).

 

I.  Compensation.  LTC Pharmacy shall receive compensation
for Covered Pharmacy Services rendered to Beneficiaries in accordance with the
applicable Accepted Product Description.

 

J.  Source
and Time of Payment.  LTC Pharmacy acknowledges that, although
Network may contract with a Third-Party Payor, as agent for LTC Pharmacy, and
Network may provide administrative services in connection with a Benefit Plan,
Network shall not be liable in any way for payment to LTC Pharmacy for Covered
Pharmacy Services rendered to Beneficiaries unless the Third-Party Payor has
paid Network for such Covered Pharmacy Services. Network shall use its best
efforts to require Third-Party Payors to pay clean claims within fifteen (15)
days after adjudication thereof.

 

K.  Payments
to Network.  LTC Pharmacy acknowledges that Network may
receive a fee from Third-Party Payors to compensate Network for (x) granting
such Third-Party Payor(s) access to the Network and (y) administrative costs
relating to the development and operation of the Network.

 

ARTICLE III.                        Term,
Suspension and Termination

 

A.  Term
and Renewal.  The initial term of this Agreement shall commence
on the Effective Date and end on December 31st of the calendar year following
the year of the Effective Date, unless earlier terminated in accordance with
the terms of this Article. This Agreement shall thereafter be automatically
renewed for successive one-year terms unless (i) either party hereto gives the
other party hereto ninety (90) days’ written notice of non-renewal prior to the
commencement of any such renewal term or (ii) this Agreement is earlier
terminated in accordance with the terms of this Article.

 

B.  Termination.  This Agreement, or LTC Pharmacy’s
participation under a particular Accepted Product Description may be terminated
as follows:

 

1.               By mutual agreement
of Network and LTC Pharmacy, at any time.

 

2.               By Network or
Third-Party Payor, upon thirty (30) days’ prior written notice to LTC Pharmacy:

 

a.                    On
suspension or termination of LTC Pharmacy’s license or its participation in
Medicaid, Medicare or other federal health program;

 

b.                   On
the indictment for a felony of LTC Pharmacy or for any criminal charge related
to the rendering of pharmacy services;

 

c.                    On
the failure of LTC Pharmacy to comply with Network’s and/or a Third-Party Payor’s
utilization management, quality assurance or other requirements, provided LTC
Pharmacy has not cured any such failure within thirty (30) days from its
receipt of notification from Network or the Third-Party Payor;

 

3

 

d.                   If
LTC Pharmacy becomes insolvent, bankrupt, files a voluntary petition in bankruptcy,
makes an assignment for the benefit of creditors or consents to the appointment
of a trustee or receiver;

 

e.                    On
a material breach of this Agreement, including any Accepted Product
Descriptions, by LTC Pharmacy that remains unremedied for more than thirty (30)
days after receipt by LTC Pharmacy of written notice thereof (or if such breach
cannot be remedied within such thirty (30) day period, LTC Pharmacy has failed
to make substantial effort towards such remedy as determined in the discretion
of Network); or

 

f.                      Upon
the enactment of any federal, state or local law or regulation or the written
interpretation of any law or regulation by a court or government that affects
the method of reimbursement or any other material provision of this Agreement
in a significant manner adverse to Network.

 

3.                    Immediately by Network or a Third-Party
Payor with respect to a particular Accepted Product Description, upon written
notice to LTC Pharmacy on a determination by Network or a Third-Party Payor, in
their sole discretion, that (i) LTC Pharmacy shall have engaged in fraud,
theft, embezzlement or other financial misconduct, (ii) a final disciplinary
action by a state licensing board or other governmental agency has occurred,
the effect of which is to impair LTC Pharmacy’s ability to operate as such or
(iii) LTC Pharmacy has engaged in conduct that poses an immediate and material
threat to the safety and/or well-being of any patient to whom LTC Pharmacy has
rendered or intends to render care.

 

4.                    By LTC Pharmacy, upon notice to
Network as set forth in Article IV
hereof, in the event LTC Pharmacy objects to an amendment to this Agreement.

 

5.                    By LTC Pharmacy, upon thirty (30)
days’ prior written notice to Network:

 

a.                    If
Network becomes insolvent, bankrupt, files a voluntary petition in bankruptcy,
makes a general assignment for the benefit of creditors or consents to the
appointment of a trustee or receiver; or

 

b.                   Upon
the enactment of any federal, state or local law or regulation or the written
interpretation of any law or regulation by a court or government that affects
the method of reimbursement or any other material provision of this Agreement
in a significant manner adverse to LTC Pharmacy.

 

6.                    By
LTC Pharmacy, in the event of a material breach of this Agreement by Network
that remains unremedied for more than thirty (30) days after receipt by Network
of written notice thereof or if such breach cannot be remedied within such
thirty (30) day period, Network has not made substantial effort towards such
remedy.

 

Upon termination of this Agreement or any Accepted Product Description,
reasonable actions shall be taken by both parties hereto to ensure proper
transfer of applicable Beneficiaries under LTC Pharmacy’s care. This provision
shall survive termination of this Agreement.

 

4

 

ARTICLE IV.                       Miscellaneous
Provisions

 

A.  Assignment.  Neither party hereto shall assign this
Agreement without the prior written consent of the other party. Any purported
assignment without such consent shall be null and void. Notwithstanding the
foregoing, Network may assign this Agreement, in whole or in part, to a parent,
subsidiary or an affiliate thereof upon the giving of written notice of such assignment
to LTC Pharmacy. This Agreement shall extend to and be binding upon the
successors and assigns of the respective parties should any assignment be
consented to and made.

 

B.  Amendments.  Product Descriptions may be amended as
provided in Article II(H). Other amendments
may be made as follows: Network may amend this Agreement on ten (10) days’
prior written notice to conform to any regulatory requirements. Additionally,
this Agreement may be amended by Network upon thirty (30) days' prior written
notice by certified mail to LTC Pharmacy of the proposed amendment. If LTC
Pharmacy does not object to such proposed amendment in the manner hereinafter
set forth, the amendment shall be effective and LTC Pharmacy shall be bound by
the terms thereof upon the expiration of such thirty (30) day period. If LTC
Pharmacy objects to such amendment, LTC Pharmacy may terminate this Agreement
by providing written notification thereof to Network within fifteen (15) days
of the giving of the notice of amendment. If LTC Pharmacy submits notice of
termination as provided in this Article IV,
Network may, at its sole option, continue LTC Pharmacy’s participation under
this Agreement without giving effect to such amendment upon written notice to
LTC Pharmacy within five (5) business days after receipt of LTC Pharmacy’s notice
of termination. LTC Pharmacy may also terminate this agreement pursuant to Article III(A).

 

C.  Relationship
of Parties.  The
parties hereto are independent legal entities. Except for the appointment by
LTC Pharmacy of Network as LTC Pharmacy’s agent pursuant to Article I(A) hereof, 
nothing in this Agreement shall be deemed to create any relationship of
joint venturers, employer and employee, or principal and agent between Network,
or a Third-Party Payor and LTC Pharmacy. In performing services under this
Agreement, LTC Pharmacy and Network are independent contractors.

 

D.  Governing
Law.  This
Agreement shall be interpreted, construed, governed by and enforced in
accordance with the laws of the State of New Jersey without regard to its
conflicts of laws provisions.

 

E.  Waiver.
 No failure on
the part of any party hereto to exercise, and no delay in exercising, any
right, power or remedy hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of any right, power or remedy hereunder preclude
any other or further exercise thereof, or the exercise of any other right,
power or remedy.

 

F.  Notices.
 All notices
required under this Agreement, shall be in writing, and shall be deemed to have
been duly given on the date delivered if delivered in person; or one (1) day
after being sent if sent overnight by prepaid Federal Express or other similar
prepaid, receipted overnight courier service; or seven (7) days after being
sent if sent by first class mail properly addressed to the respective party at
the address set forth herein.

 

5

 

G. Survival.  All representations,
warranties and covenants made or furnished by any party hereunder, as well as
all of the terms and conditions hereof that by their nature survive, whether
expressly set forth herein or otherwise, shall be construed to be continuous
and shall survive the execution, performance, termination or expiration of this
Agreement and shall remain in full force and effect, and shall be enforceable
by the parties hereto and their respective legal representatives, successors
and permitted assigns.

 

H. Severability.  In the event any one
or more of the provisions of this Agreement shall be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected thereby
unless any party would be substantially deprived of benefits hereunder as a
result thereof.

 

I. Further Assurances.
 Each party hereto shall perform any
further acts and execute and deliver any documents that may be reasonably
necessary to carry out the provisions and purposes of this Agreement.

 

J. Entire Agreement.
 This Agreement and amendments hereto
pursuant to Article IV(B) hereof (together
with all Accepted Product Descriptions and other addenda attached hereto and
thereto, which by this reference are incorporated herein and made a part
hereof), embody the entire agreement and understanding among the parties hereto
with respect to the subject matter hereof and cancel and supersede all prior
agreements and understandings between the parties hereto, whether written or
oral, with respect to the subject matter hereof. In the event of any
inconsistency between the language of this Agreement and an Accepted Product
Description, the terms of the Accepted Product Description shall prevail with
respect thereto. This Agreement alone shall govern and control the parties’
rights, duties, obligations and liabilities with respect to the matters set
forth herein, and no statement, representation, warranty or covenant has been
made by any party with respect thereto except as expressly set forth herein.

 

IN WITNESS WHEREOF, the
parties have executed this Agreement on the dates indicated below.

 

	
  MHA Long Term Care Network, Inc. 

  	
   

  	
  LTC
  Pharmacy

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Michael J. Sicilian

  	
   

  	
  Print Name:

  	
  MARK BALDINGER

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
  5/16/05

  	
   

  	
  Signature:

  	
  /s/ Mark Baldinger

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  	
  790-750 PARK PLACE

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Tax ID:

  	
  13-1865997

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date:

  	
  4/7/05

  	
   

  
											

 

6

 

DEFINITIONS

 

The following terms with their initial letters capitalized shall,
unless the context requires otherwise, have the following meanings:

 

“Accepted Product Description”
is a Product Description to which LTC Pharmacy becomes bound in accordance with
the terms of Article II(H) hereof. Upon LTC
Pharmacy becoming so bound, the Accepted Product Description(s) shall be deemed
to be attached to this Agreement as addendum(s) hereto.

 

“Benefit Plan” is the contract,
certificate or other evidence of coverage issued by a Third-Party Payor that
describes the obligations of the Third-Party Payor to deliver pharmacy services
to, and/or pay for pharmacy services on behalf of, Beneficiaries.

 

“Covered Pharmacy Services” are
those pharmacy services that a Third-Party Payor is obligated to provide to,
and/or pay for on behalf of, Beneficiaries as set forth in a Benefit Plan.

 

“Product” is a health care
benefit program offered by a Third-Party Payor or combination of Third-Party
Payors that utilizes Participating Long-Term Care Pharmacies to provide
pharmacy Covered Pharmacy Services to Beneficiaries under terms and conditions
described in the applicable Product Description.

 

“Product Description” is a
written description of a Product that is offered and financed by a Third-Party
Payor. The Product Description includes terms and conditions, including,
without limitation, compensation, under which Participating Long-Term Care
Pharmacies may provide Covered Pharmacy Services to Beneficiaries enrolled in
the Product and shall include the relevant terms of the Benefit Plan and the
Payor Reimbursement Schedule for the Product.

 

“Third-Party Payor” means a
Medicare Part D Plan (including entities working on behalf of Medicare Part D
plans) or other entity listed in a Product Description.

 

7

 

EXHIBIT A

 

FEES DUE TO NETWORK

 

Network shall attempt to have Third-Party Payors pay for Network’s
services under this Agreement. However, in order to cover its costs, Network
reserves the right to charge a fee to LTC Pharmacy if a Third-Party Payor does
not agree to pay for Network’s services. In that event, LTC Pharmacy shall pay
Network a fee, not to exceed two hundred ($200.00) dollars per month. This fee
may be waived, in whole or in part, by Network to the extent that Third-Party
Payors have agreed to pay administrative fees to Network.

 

8

 

CMS ADDENDUM

 

MINIMUM PERFORMANCE AND SERVICE CRITERIA

 

1.                                      Comprehensive Inventory and Inventory Capacity — LTC
Pharmacy must provide a comprehensive inventory of Plan formulary drugs
commonly used in the long term care setting. In addition, LTC Pharmacy must
provide a secured area for physical storage of drugs, with necessary added
security as required by federal and state law for controlled substances. This
is not to be interpreted that the pharmacy will have inventory or security
measures outside of the normal business setting.

 

2.                                       Pharmacy Operations and Prescription Orders — LTC Pharmacy
must provide services of a dispensing pharmacist to meet the requirements of
pharmacy practice for dispensing prescription drugs to LTC residents, including
but not limited to the performance of drug utilization review (“DUR”). In addition, the LTC Pharmacy pharmacist must conduct
DUR to routinely screen for allergies and drug interactions, to identify
potential adverse drug reactions, to identify inappropriate drug usage in the
LTC population, and to promote cost effective therapy in the LTC setting. The
LTC Pharmacy must also be equipped with pharmacy software and systems
sufficient to meet the needs of prescription drug ordering and distribution to
an LTC facility. Further, the LTC Pharmacy must provide written copies of the LTC
Pharmacy’s pharmacy procedures manual and said manual must be available at each
LTC facility nurses’ unit. LTC Pharmacy is also required to provide ongoing
in-service training to assure that LTC facility staff are proficient in the LTC
Pharmacy’s processes for ordering and receiving of medications. LTC Pharmacy
must be responsible for return and/or disposal of unused medications following
discontinuance, transfer, discharge, or death as permitted by State Boards of
Pharmacy. Controlled substances and out of date substances must be disposed of
within State and Federal guidelines.

 

3.                                      Special Packaging — LTC Pharmacy must have the capacity to
provide specific drugs in Unit of Use Packaging, Bingo Cards, Cassettes, Unit
Dose or other special packaging commonly required by LTC facilities. LTC
Pharmacy must have access to, or arrangements with, a vendor to furnish
supplies and equipment including but not limited to labels, auxiliary labels,
and packing machines for furnishing drugs in such special packaging required by
the LTC setting.

 

4.                                      IV Medications — LTC Pharmacy must have the capacity to
provide IV medications to the LTC resident as ordered by a qualified medical
professional. LTC Pharmacy must have access to specialized facilities for the
preparation of IV prescriptions (clean room). Additionally, LTC Pharmacy must
have access to or arrangements with a vendor to furnish special equipment and
supplies as well as IV trained pharmacists and technicians as required to
safely provide IV medications.

 

5.                                       Compounding/Alternative Forms of Drug Composition — LTC
Pharmacy must be capable of providing specialized drug delivery formulations as
required for some LTC residents. Specifically, residents unable to swallow or
ingest medications through

 

9

 

normal routes may require tablets split or crushed or provided in
suspensions or gel forms, to facilitate effective drug delivery.

 

6.                                      Pharmacist On-call Service — LTC Pharmacy must provide
on-call, 24 hours a day, 7 days a week service with a qualified pharmacist
available for handling calls after hours and to provide medication dispensing
available for emergencies, holidays and after hours of normal operations.

 

7.                                      Delivery Service — LTC Pharmacy must provide for delivery of
medications to the LTC facility up to seven days each week (up to three times
per day) and in-between regularly scheduled visits. Emergency delivery service
must be available 24 hours a day, 7 days a week. Specific delivery arrangements
will be determined through an agreement between the LTC Pharmacy and the LTC
facility. LTC Pharmacy must provide safe and secure exchange systems for
delivery of medication to the LTC facility. In addition, LTC Pharmacy must
provide medication cassettes, or other standard delivery systems, that may be
exchanged on a routine basis for automatic restocking. The LTC Pharmacy
delivery of medication to carts is a part of routine “dispensing”.

 

8.                                      Emergency Boxes — LTC Pharmacy must provide “emergency”
supply of medications as required by the facility in compliance with State
requirements.

 

9.                                      Emergency Log Books — LTC Pharmacy must provide a system for
logging and charging medication used from emergency/first dose stock. Further,
the pharmacy must maintain a comprehensive record of a resident’s medication
order and drug administration.

 

10.                               Miscellaneous Reports, Forms and Prescription Ordering Supplies
— LTC Pharmacy must provide reports, forms and prescription ordering supplies
necessary for the delivery of quality pharmacy care in the LTC setting. Such
reports, forms and prescription ordering supplies may include, but will not
necessarily be limited to, provider order forms, monthly management reports to
assist the LTC facility in managing orders, medication administration records,
treatment administration records, interim order forms for new prescription
orders, and boxes/folders for order storage and reconciliation in the facility.

 

10

 

ADDENDUM(S)

 

ACCEPTED PRODUCT DESCRIPTIONS

 

(To be attached as negotiated.)

 

11

 

	
  

  	
  
 Managed Health Care Associates Long
  Term Care Network, Inc.

  

 

September 12, 2005

 

MARK BALDINGER

BJK INC./CHEM RX

790 PARK PLACE

LONG BEACH, NY 11561

 

Dear Mark:

 

Per the contractual terms of the MHA LTC Network Participation
Agreement, we have enclosed via certified mail, this Amendment B for your files
regarding the $0.05 per paid claim administration fee. This has been discussed
on the various conference calls and was outlined in the contract terms that
have been sent to you previously. You are not required to sign or take any
action at this time. Per the terms of our agreement you now have 30 days to
notify us in the event you do not want to continue your participation in the
MHA LTC Network.

 

You will recall that at one time we discussed a dues structure in order
to find the on-going needs of the network. After negotiating contracts with the
PDPs and discussing this issue with the MHA LTC Advisory Board, the decision
was made to go with a per paid claim model that was based on actual utilization
of Network contracts. It was determined that no dues structure would be fair to
all pharmacies as a fixed dollar payment to a small pharmacy has a much
different impact than a fixed dollar payment to a large pharmacy. It is also
possible that, based on which PDPs get approved in which regions, some
pharmacies may benefit more than others based on how many MHA contracted plans
are actually approved to serve dual eligible patients in that pharmacy’s
region. By implementing the per claim admin fee it was determined that each
pharmacy would carry this cost based on their own benefit of participation in
the MHA network.

 

It is important to remember that the per claim admin fee only pertains
to those contracts where the MHA LTC Network negotiated a better rate than was
offered to any other Independent LTC pharmacy or Independent LTC Pharmacy
Network. As of today this per claim fee will apply to 13 of the 14 agreements
the Network has executed. There will be no charge for the one plan where we
agreed to a contracted rate that is equal to the rate currently available to
you in the market.

 

MHA has historically prided itself on our service, which includes
considerably more people and larger investments in technology than any of our
competition. We continually reinvest back into our business to bring you the
highest caliber customer service personnel and superior tools and technology to
help you manage your business. Our plan is to do the same with the MHA network.
To date we have invested hundreds of thousands of dollars to launch the Network
and we are only just beginning. We have recently hired a Manager of Network
Operations and are now actively recruiting for a VP of Network Services out of the
PBM industry. We are also developing the tools and services you will need to
obtain formulary and MAC information as well as creating new reports that will
marry the information we supply on the GPO side with new information needs
created by our new

 

“Exceptional Service. Extraordinary People”

25-A Vreeland Road, Suite 203, P.O. Box 789,
Florham Park, New Jersey 07932-0789

12

 

contracts with PDPs. We can assure you that task of getting close to
500 pharmacies set up to be paid correctly by 14 PDPs on January 1, 2006 is
also consuming considerable resources.

 

MHA is convinced that the needs of our Network members will be on-going
as has been the case with our GPO members over the years. While we are satisfied
with the results of the first round of contracting, it is clear this is going
to be an on-going issue as we try to insure appropriate payment for the
services our pharmacies provide. We believe pharmacies need to look at this as
a multi-year initiative that has really only just begun now that the initial
contracting phase is over. The charge per paid claim will insure a continued
revenue stream that will make this a viable business for MHA and allow us to
make the people and technology investments required to insure we can
appropriately represent your needs with this new group of PDPs that will be
paying you for your services for the foreseeable future.

 

We appreciate your business and your being part of our GPO and Network.
If you have any questions please contact your National Account Manager Terri DiCaro
or Frank Kurilla- Pharmacy Network Operations Manager at 800-642-3020 x4435 or
by e-mailing him at fkurilla@mbainc.com

 

	
  Sincerely,

  
	
   

  
	
  /s/ Michael J. Sicilian

  	
   

  
	
   

  
	
  Michael J. Sicilian

  
	
  President

  
	
  MHA LTC Pharmacy Network, Inc.

  

 

Enclosures

 

Mailing created for:

BJK INC./CHEM RX

790 PARK PLACE

LONG BEACH, NY 11561

NCPDP: 3300794

 

13

 

AMENDMENT TO

 

MHA LONG TERM CARE NETWORK, INC.

 

PARTICIPATING PROVIDER AGREEMENT

 

The participating LTC Pharmacy Agreement between MHA Long Term Care
Network, Inc. (“Network”) and LTC Pharmacy (“Agreement”) is hereby amended, effective September 12,
2005 as follows:

 

Exhibit A which provided for a service fee of up to $200 per month is
deleted and replaced in its entirety with the following new Exhibit A:

 

“EXHIBIT A

 

FEES DUE TO NETWORK

 

LTC Pharmacy shall pay Network an administrative fee equal to Five
($0.5) Cents for each claim LTC Pharmacy submits and which is successfully adjudicated
and paid by a Third Party Payor which has contracted with Network (“Administrative Fee”).

 

LTC Pharmacy agrees that a Third Party Payor may withhold the amount of
the above administrative fee from the payments otherwise due to LTC Pharmacy
from the Third-Party Payor and may pay the administrative fee directly to
Network.

 

In the event a Third-Party Payor does not withhold the amount of the
administrative fee, LTC Pharmacy shall pay Network the administrative fee
within 30 days of Network’s bill for such administrative fee.

 

Except as set forth above, the Agreement remains in full force and
effect.

 

Dated: September 12, 2005

 

	
   

  	
  MHA Long Term Care Network Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael J. Sicilian

  
	
   

  	
   

  	
  Michael J. Sicilian

  
	
   

  	
   

  	
  President-MHA LTC Network, Inc.

  

 

14

 

2nd AMENDMENT TO

 

MHA LONG TERM CARE NETWORK, INC.

 

PARTICIPATING PROVIDER AGREEMENT

 

The Participating LTC Pharmacy Agreement between MHA Long Term Care
Network, Inc. (“Network”) and BJK, Inc. (“BJK”) (“Agreement”) is hereby amended, effective January
1, 2006 as follows:

 

Exhibit A, as amended on September 12, 2005, which provided for an
administrative fee equal to Five ($0.5) Cents for each claim BJK submits and
which is successfully adjudicated is deleted and replaced in its entirety with
the following new Exhibit A:

 

EXHIBIT A

 

FEES DUE TO NETWORK

 

BJK shall pay Network an administrative fee equal to Three ($0.3) Cents
for each claim BJK submits and which is successfully adjudicated and paid by a
Third Party Payor which has contracted with Network (“Administrative
Fee”).

 

BJK agrees that a Third Party Payor may withhold the amount of the
above administrative fee from the payments otherwise due to BJK from the
Third-Party Payor and may pay the administrative fee directly to Network.

 

In the event a Third-Party Payor does not withhold the amount of the
administrative fee, BJK shall pay Network the administrative fee within 30 days
of Network’s bill for such administrative fee.

 

Except as set forth above, the Agreement remains in full force and
effect.

 

Dated:                       ,
2006

 

	
   

  	
  MHA Long Term Care Network, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Douglas A. Present

  
	
   

  	
   

  	
  Douglas A. Present

  
	
   

  	
   

  	
  CEO-MHA LTC Network, Inc.

  

 

15Exhibit 10.20

 

SECOND AMENDED AND RESTATED LEASE AGREEMENT

 

THIS SECOND AMENDED AND RESTATED LEASE
AGREEMENT (this “Lease”),
is made as of the 26th day of October, 2007 between 750 PARK PLACE REALTY CO., LLC, with offices at 750 Park
Place, Long Beach, New York 11561 (the “Landlord”),
and B.J.K. INC., d/b/a Chem Rx, a with
offices at 750 Park Place, Long Beach, New York 11561 (the “Tenant”).

 

W  I  T  N
E  S  S  E  T  H :

 

WHEREAS, by that
certain lease, dated as of  May 1, 2002
(the “Original Lease”),
Tenant leased from Landlord the land described in Exhibit
“A” (the “Land”),
together with all buildings and improvements located on the Land (including the
fixtures located therein), as more fully described on the Site Plan attached
hereto as Exhibit “B”
(the “Building”)
and the parking areas (the “Parking
Areas”)  located on the
Land as more fully described on the Site Plan, and all rights and appurtenances
thereto, and commonly known as 750 Park Place, Long Beach, New York
(Collectively, the “Premises”)
for a term of five (5) years from May 1, 2002 through and including April
30, 2007;

 

WHEREAS, by that
certain Lease Amendment (the “First
Amendment”), dated as of January 1, 2004, Landlord and
Tenant extended the term of the Original Lease through and including December
31, 2012 (the Original Lease, as amended by the First Amendment, hereinafter
referred to as the “Existing
Lease”);

 

WHEREAS, by that
certain Amended and Restated Lease Agreement, dated as of January 1, 2006,
Landlord and Tenant amended and restated the Existing Lease in its entirety
(the “First Amended and Restated
Lease”);

 

WHEREAS, Landlord
and Tenant desire to amend and restate the First Amended and Restated Lease in
its entirety (so that the terms and conditions of the tenancy shall be governed
by this Lease);

 

NOW, THEREFORE,
Landlord and Tenant, in consideration of the foregoing premises and other good
and valuable consideration, the receipt and sufficiency of which Landlord and
Tenant hereby acknowledge, hereby agree as follows:

 

1.                                       TERM/USE OF PREMISES/BASE RENT/ADDITIONAL RENT.

 

(a)                                  Term.  Landlord hereby leases the Premises to
Tenant, and Tenant hereby leases the Premises from Landlord, upon the terms and
conditions of this Lease for a term of fifteen (15) years (the “Term”) to commence on January
1, 2006 (the “Commencement Date”)
and to end on December 31, 2020 (the “Expiration
Date”), unless this Lease shall sooner terminate pursuant
to any of the terms or conditions of this Lease or any applicable Laws (as
defined in Paragraph 3). Tenant (or any subtenant
or assignee of Tenant permitted hereunder) may use and occupy the Premises for
any use, other than the Restrictions on Use (as defined in this Paragraph 1(a)), permitted by applicable Laws (the “Permitted Use”), subject to
the prior written consent of Mortgagee (as defined in Paragraph 19
below) to the extent required under

 

 

any Mortgage Documents (as defined in Paragraph 19
below). Tenant shall have exclusive possession and use of the Parking Areas
located on the Premises for the parking and temporary storage and other related
uses of motor vehicles and industrial and other equipment. Tenant (or any
subtenant or assignee of Tenant permitted hereunder) shall not, at any time,
use or occupy the Premises or any part thereof: (i) in any manner that may (1)
violate any certificate of occupancy for the Premises or (ii) constitute a
violation of the Laws or the requirements of insurance bodies; or (ii) for a
(1) racquet club, gymnasium, bowling alley, skating rink or other sports or
recreational facility, movie theatre, banquet facility, dance hall, disco, nightclub,
or other entertainment facility including video game, virtual reality or laser
tag room or facility, pool hall, arcade, indoor children’s recreational
facility, amusement park, carnival or other amusement center, (2) massage
parlor, adult bookstore, a so-called “head” shop, off-track betting, gambling,
gaming or check cashing facility, (3) car wash, automobile repair work or
automotive service or gas station, tire store, automobile body shop, automobile,
boat, trailer or truck leasing or sales, (4) funeral parlor, animal raising or
storage, pawn shop, flea market or swap meet, or junk yard, (5) drilling for
and/or removal of subsurface substances, dumping, disposal, incineration or
reduction of garbage or refuse or (6) any use which in Landlord’s reasonable
determination constitutes a public or private nuisance (collectively, “Restrictions on Use”). Landlord agrees that Tenant’s use of the Premises as
administrative and executive offices and as a warehouse in connection with
Tenant’s pharmaceutical business shall not fall within any of the Restrictions
on Use. Tenant shall provide Landlord with at least thirty (30) days prior
written notice of any proposed change in the use of the Premises, which notice
shall specify such proposed use of the Premises, and providing such further
information as Landlord reasonably may require.

 

(b)                                  Base
Rent.  Tenant shall pay base rent (“Base Rent”) to Landlord in equal
monthly installments in advance on the first (1st) day of each calendar month
and every calendar month during the Term in the amounts and for the periods set
forth below:

 

	
  Period

  	
   

  	
  Annual Base Rent

  	
   

  	
  Monthly Base Rent

  
	
  01/01/06 – 12/31/06

  	
   

  	
  $

  	
  1,200,000.00

  	
   

  	
  $

  	
  100,000.00

  
	
  01/01/07 – 12/31/07

  	
   

  	
  $

  	
  1,500,000.00

  	
   

  	
  $

  	
  125,000.00

  
	
  01/01/08 – 12/31/08

  	
   

  	
  $

  	
  1,500,000.00

  	
   

  	
  $

  	
  125,000.00

  
	
  01/01/09 – 12/31/09

  	
   

  	
  $

  	
  1,500,000.00

  	
   

  	
  $

  	
  125,000.00

  
	
  01/01/10 – 12/31/10

  	
   

  	
  $

  	
  1,800,000.00

  	
   

  	
  $

  	
  150,000.00

  
	
  01/01/11 – 12/31/11

  	
   

  	
  $

  	
  1,800,000.00

  	
   

  	
  $

  	
  150,000.00

  
	
  01/01/12 – 12/31/12

  	
   

  	
  $

  	
  1,800,000.00

  	
   

  	
  $

  	
  150,000.00

  
	
  01/01/13 – 12/31/13

  	
   

  	
  $

  	
  2,100,000.00

  	
   

  	
  $

  	
  175,000.00

  
	
  01/01/14 – 12/31/14

  	
   

  	
  $

  	
  2,100,000.00

  	
   

  	
  $

  	
  175,000.00

  
	
  01/01/15 – 12/31/15

  	
   

  	
  $

  	
  2,100,000.00

  	
   

  	
  $

  	
  175,000.00

  
	
  01/01/16 – 12/31/16

  	
   

  	
  $

  	
  2,400,000.00

  	
   

  	
  $

  	
  200,000.00

  
	
  01/01/17 – 12/31/17

  	
   

  	
  $

  	
  2,400,000.00

  	
   

  	
  $

  	
  200,000.00

  
	
  06/01/18 – 05/31/18

  	
   

  	
  $

  	
  2,400,000.00

  	
   

  	
  $

  	
  200,000.00

  
	
  01/01/19 – 12/31/19

  	
   

  	
  $

  	
  2,700,000.00

  	
   

  	
  $

  	
  225,000.00

  
	
  01/01/20 – 12/31/20

  	
   

  	
  $

  	
  2,700,000.00

  	
   

  	
  $

  	
  225,000.00

  

 

2

 

(c)                                  Additional
Rent.  All rent (other than Base
Rent), additional rent, sums, charges, expenses and costs identified in this
Lease (collectively, “Additional
rent”; Base Rent and Additional Rent are collectively, “Rent”) shall be paid to
Landlord by Tenant as provided in this Lease. Landlord shall have the same
remedies for a default in payment of Additional Rent as it has for a default in
payment of Base Rent.

 

(d)                                  No
Abatement.  Tenant shall pay the Rent
when the same shall become due and payable, without demand therefore and
without any abatement, deduction or set off whatsoever except as expressly
provided in this Lease.

 

2.                                       MAINTENANCE/REPAIRS.
Except as otherwise provided in his Lease, throughout the Term, Tenant
shall, at its sole cost and expense, maintain, repair and replace, in good
working order and condition, subject to normal and customary wear and tear and
damage by casualty or condemnation, all components of the Premises, including,
without limitation, (a) the Land and other exterior portions of the Premises,
including, without limitation, the sidewalks, driveways, curbs, loading areas,
Parking Areas (including paving, patching, striping, and lighting as
necessary), lawns, and planting and other landscaped areas; (b) all non-structural
and structural elements of the Building, including, without limitation,
foundation, slab, exterior and interior structural and non-structural
walls (including painting), structural supports and other load bearing
superstructure, and roof  and roof structure;
and (c) the fixtures, appurtenances and systems of the Premises, including,
without limitation, HVAC, plumbing, electrical, sprinkler and mechanical
systems of the Building, and the underground utility and sewer pipes and
systems and drainage outside the exterior walls of the Building. Except as
otherwise provided in this Lease, Tenant shall return the Premises to Landlord
on the Expiration Date or earlier termination of this Lease in good order and
condition, subject to normal and customary wear and tear and damage by casualty
or condemnation. Notwithstanding anything to the contrary contained in this
Lease, all capital replacement costs incurred by Tenant in connection with the
satisfaction of Tenant’s obligations under this Paragraph 2
shall be equitably pro-rated between Landlord and Tenant over the economic life
of the asset, and Landlord shall promptly reimburse Tenant for that portion of
the cost of such asset attributable to that portion of the economic life
remaining after the Expiration Date; provided that, Landlord
has given its prior written approval of such capital replacement and the cost
thereof; further provided that, (i)
if, within ten (10) business days after Landlord’s receipt of Tenant’s request
for Landlord’s approval of such capital replacement and the cost thereof,
Landlord shall fail to deliver to Tenant, in writing, (A) Landlord’s approval
or (B) Landlord’s reasonable objections to such request, stated with
specificity, Tenant may, but shall not be obligated to, deliver to Landlord a
second such written request, within twenty (20) business days after the first
request, marked “SECOND TENANT REQUEST FOR LANDLORD APPROVAL”
at the top of the first page of such request and in the subject line
of any cover letter from Tenant accompanying such request; and (ii) Landlord’s

 

3

 

failure to deliver to Tenant, in writing, (A) Landlord’s approval or
(B) Landlord’s reasonable objections to such request, stated with specificity,
within five (5) business days following Landlord’s receipt such second notice
shall be a deemed approval of such proposed capital replacement and the cost
thereof, so long as such capital replacement does not exceed the same or
substantially similar quality and specifications of the component of the
Premises that is the subject of such capital replacement; however,
Tenant shall still be required to receive any Mortgagee’s written consent to
the extent required under any Mortgage Documents. Tenant’s rights to
reimbursement set forth under this Paragraph 2
shall survive the expiration or earlier termination of this Lease.

 

3.                                       REQUIREMENTS OF LAW.

 

(a)                                  Compliance
With Laws.  Except as otherwise
provided in this Lease, or arising from or relating to Hazardous Materials
present, in, on, under or about the Premises prior to or on the date hereof,
Tenant shall, at its sole expense, comply with all the laws, statutes,
ordinances, orders, regulations, rules and requirements of every kind and
nature relating to the Premises now or hereafter in effect of the federal,
state, county, municipal or other governmental authorities and agencies and of
the New York Board of Fire Underwriters, whether that be usual or unusual,
ordinary or extraordinary, and whether they or any of them relate to structural
changes or repairs (or non-structural changes or repairs) of whatever nature,
or to charges or requirements incident to or as the result of any use,
occupancy or ownership thereof (each a “Law” and
collectively, “Laws”); provided,
however, that after prior written notice to Landlord, Tenant
shall have the right to contest by appropriate legal proceedings diligently
conducted in good faith, if necessary in the name of Landlord, but without cost
or expense to Landlord, the validity or application of any Law affecting the
Premises. Landlord may participate, at Tenant’s cost and expense, in any such
contest of Laws which must be brought in the name of Landlord. Tenant shall
promptly deliver a copy to Landlord of any written notice Tenant receives of
the alleged violation of any Laws. The judgment of any court of competent
jurisdiction, or the admission of Tenant in any action of proceeding against
Tenant, whether Landlord is a party thereto or not, that any such Law
pertaining to the Premises has been violated, shall be conclusive of that fact
as between Landlord and Tenant.

 

(b)                                  Hazardous
Materials.  As used in this Lease,
the term “Hazardous Materials” means
any hazardous, dangerous or toxic substance, material or waste or any
pollutant, contaminant or chemical that is or becomes regulated by any local
governmental authority, any agency of the State of New York or any agency of
the United States Government. The term “Hazardous  Materials” includes, without limitation, any material,
substance, pollutant, or contaminant that is (i) designated as a “hazardous
substance” pursuant to Section 311 of the Federal Water Pollution Control Act
(33 U.S.C. §1317), (ii) defined as “hazardous waste” pursuant to Section 1004
of the Federal Resource Conservation and Recovery Act, 42 U.S.C. §6901 et seq.
(42 U.S.C. §6903), (iii) defined as a “hazardous substance” pursuant to Section
101 of the Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.C. §9601 et seq. (42 U.S.C. §9601), (iv) petroleum and any
petroleum by-products, and (v) asbestos.

 

(c)                                  Tenant’s
Hazardous Materials Obligations.  Tenant
shall not, nor shall it permit its employees, agents, licensees, invitees, or
contractors (collectively “Tenant’s Agents”),
to bring upon, keep, store, use or dispose of any Hazardous Materials on, in,
under or

 

4

 

about the Premises, except for the following, in accordance with
applicable Laws: (i) Hazardous Materials used by Tenant in connection with the
use, maintenance and operation of the Premises for Tenant’s business purposes,
which Landlord acknowledges may result in spills and discharges of such
Hazardous Materials (however, Tenant shall comply with any such spill or
discharge in accordance with the terms and conditions of this Lease); (ii) gas,
diesel fuel, oil and other petroleum products and petroleum by-products that
drip in normal amounts from equipment or from motor vehicles on parking and
truck-loading areas located at the Premises (however, Tenant shall comply with
any such drip in accordance with the terms and conditions of this Lease); (iii)
Hazardous Materials to be incorporated or that are contained within Tenant’s
products, equipment or inventory and with respect to which Tenant complies in
all material respects with all Laws in the handling thereof; and (iv) general
office or warehouse supplies (including, without limitation, ordinary cleaning
chemicals and solution) used for their intended purpose. Except to the extent
caused by the negligence or willful misconduct of Landlord, or arising from or
relating to Hazardous Material present, in, on, under or about the Premises
prior to or on the date hereof, Tenant shall (1) defend, indemnify, protect and
hold Landlord harmless from and against all Losses (as defined in Paragraph 32(b) below) arising out of or in connection with
the presence, storage, use or disposal of Hazardous Materials in accordance
with and to the extent required by all applicable Laws. Tenant’s obligations
imposed pursuant to this Paragraph 3(c) shall
survive the Expiration Date or earlier termination of this Lease.

 

(d)                                  Landlord’s
Hazardous Materials Obligation.  Neither
Landlord nor Landlord’s employees, business invitees, agents, contractors or
subcontractors (collectively “Landlord’s
Agents”), shall bring upon, keep, store, use or dispose
of any Hazardous Materials in, on, under or about the Premises.

 

4.                                       DESTRUCTION, FIRE AND OTHER CASUALTY.

 

(a)                                  Notification
and Repair.  Upon Tenant’s learning
thereof, without any obligation on the part of Tenant to inspect therefor, Tenant
shall give prompt notice (which notice need not be a writing) to Landlord of
any fire or other casualty to the Building. Subject to the provisions of Paragraph 4(c) below and of any Mortgage Documents, if the
Building is damaged by fire or other insured casualty, Landlord (to the extent
of any insurance proceeds received by or made available to Landlord) shall
repair the damage and restore and rebuild the Building, excluding any
Alterations (as defined in Paragraph 23(a) below)
and Tenant’s Property (as defined in Paragraph 30(b)
below), to substantially the condition thereof immediately prior to the fire or
other casualty “Landlord’s Restoration”),
within 270 days after Landlord’s receipt of insurance proceeds or when such
insurance proceeds are made available to Landlord for Landlord’s Restoration,
as may be extended solely by an event of force majeure. Landlord’s Restoration
shall only be required to be performed to the extent insurance proceeds are
made available to Landlord. To such extent, Landlord shall use its diligent,
good faith efforts to perform Landlord’s Restoration timely and in such manner
as not to unreasonably interfere with Tenant’s use and occupancy of the
Premises, but Landlord shall not be required to do such repair or restoration work
except during normal business hours of business days; provided,
however,  that Landlord shall have no obligation to repair any
damage to, or to replace, any of Tenant’s Property or any Alterations. Tenant
shall, at its cost and expense, repair and replace Tenant’s Property and any
Alterations to substantially the condition prior to the damage.

 

5

 

(b)                                  No
Rental Abatement.  So long as this
Lease has not been terminated pursuant to the provisions of Paragraph 4(c) below, Tenant shall continue to pay all Rent
in accordance with this Lease after the Building is damaged by fire or other
casualty, and there shall be no abatement of Rent.

 

(c)                                  Total
Destruction; Untenantable.  If the
Building shall be totally destroyed or rendered wholly untenantable by fire or
other casualty, or if the Building shall be so damaged by fire or other
casualty that (in the reasonable opinion of a reputable contractor or architect
designated by Landlord and reasonably acceptable to Tenant): (i) repair or
restoration of the Building requires more than 270 days or (ii) such repair or
restoration requires the expenditure of more than 30% of the “full insurable
value”  (as defined in this Paragraph 4(c) below) of the Building immediately prior to
the casualty, excluding from such calculation the value of Tenant’s Property or
(iii) Landlord fails to complete Landlord’s Restoration in accordance with Paragraph 4(a) within 365 days after Landlord’s receipt of
insurance proceeds or when such insurance proceeds are made available to
Landlord for Landlord’s Restoration, as such 365-day period may be extended
solely by an event of force majeure, Tenant may terminate this Lease (by so
advising Landlord, in writing) within twenty (20) days after such contractor or
architect delivers written notice of its opinion to Landlord and Tenant or
after the expiration of such 365-day period, as the case may be. If the
Building shall be damaged by fire or other casualty on or after July 1, 2017
and such contractor or architect makes either of the determinations in clauses
(i) or (ii) of this Paragraph 4(c),
then Landlord may terminate this Lease (by so advising Tenant, in writing)
within twenty (20) days after such contractor or architect delivers written
notice of its opinion to Landlord and Tenant. If either Tenant or Landlord
terminates this Lease in accordance with this Paragraph
4(c), the termination shall be effective as of the date upon which
the other receives timely written notice of the termination pursuant to this Paragraph 4(c). If any such termination notice is not timely
delivered, unless otherwise agreed in writing by Landlord and Tenant, this
Lease shall remain in full force and effect and Landlord shall perform Landlord’s
Restoration in accordance with Paragraph 4(a).
For purposes of this Paragraph 4(c)
only, “full insurable value” shall mean replacement cost, less the cost of
footings, foundations and other structures below grade.

 

(d)                                  Waiver
of Section 227 of NYRPL.  Tenant
hereby expressly waives the provisions of Section 227 of the New York Real
Property Law, and of any successor law of like import then in force, and Tenant
agrees that the provisions of the Paragraph 4
shall govern and control in lieu thereof.

 

5.                                       ACCESS
TO PREMISES. Upon at least twenty-four (24) hours prior written notice to
Tenant (except in the case of emergency), Landlord and Landlord’s Agents shall
have the right to enter into and upon the Premises, or any part thereof, during
normal business hours for the purpose of examining the same, or making such
repairs or alterations therein as may be necessary for the safety and
preservation thereof and in accordance with Landlord’s obligations under this
Lease. Tenant also agrees that, upon at least twenty-four (24) hours prior
written notice to Tenant, to permit Landlord or Landlord’s Agents to show the
Premises to actual and prospective purchasers of the Premises or to actual or
prospective lenders to Landlord and, on and after January 1, 2020, to
prospective tenants of the Premises, and Tenant further agrees that on and
after January 1, 2020, Landlord shall have the right to place reasonable
notices on the front of the Premises offering the Premises “To Let” or “For
Sale”, and Tenant hereby agrees to

 

6

 

permit the same to remain thereon without hindrance or molestation from
Tenant or its employees, agents or representatives. Notwithstanding anything to
the contrary contained herein, (i) Tenant may accompany Landlord’s entry, and
that of Landlord’s Agents and (ii) Landlord and Landlord’s Agent shall use
reasonable efforts to minimize interference with the conduct of Tenant’s
business during any such entry of the premises.

 

6.                                       DEFAULT/REMEDIES; GOING DARK.

 

(a)                                  Default.  Each of the following events, if
occurring during the Term, shall constitute a “Default”
hereunder: (i) if Tenant shall default in the payment of any Rent when it is
due and payable and such default shall continue for five (5) business days
after Tenant’s receipt of written notice from Landlord regarding such default;
(ii) if Tenant shall default in purchasing, or keeping in force at all times
during the Term, any Tenant’s Insurance Policies (as defined in Paragraph  17(b)) and such
default shall continue for five (5) days after Tenant’s receipt of written
notice from Landlord regarding such default; (iii) if Tenant shall default in
the observance or performance of any term, covenant or condition (except as
otherwise expressly provided in this Paragraph 6(a)) of
this Lease on Tenant’s part to be observed or performed for a period of thirty
(30) days after Landlord’s delivery to Tenant of written notice of such default
under this Paragraph 6(a); provided,
however, that if such default is susceptible of cure but
cannot reasonably be cured within such thirty (30)-day period and provided
further that Tenant shall have commenced to cure such default within such
thirty (30)-day period and thereafter diligently and expeditiously proceeds to
cure the same, such thirty (30)-day period shall be extended for such time as
is reasonably necessary for Tenant in the exercise of due diligence to cure
such default, such additional period not to exceed ninety (90) days; (iv) if
Tenant shall default in the observance of any term, covenant or condition under
Paragraph 25(a); or (v) if Tenant makes
an assignment for the benefit of creditors, or if a receiver, liquidator or
trustee shall be appointed for Tenant or of or for any part of Tenant’s
property, or if Tenant admits it is insolvent or is not able to pay its debts
as they mature, or it Tenant shall be adjudicated a bankrupt or insolvent, or
if any petition for bankruptcy, reorganization or arrangement pursuant to the
United States Bankruptcy Code, or any similar federal or state law now or hereafter
in effect, shall be filed by or against, consented to, or acquiesced in by,
Tenant, or if any proceeding for the dissolution or liquidation of Tenant shall
be instituted; provided, however, if such
appointment, adjudication, petition or proceeding was involuntary and not
consented to by Tenant, upon the same not being discharged, stayed or dismissed
within ninety (90) days.

 

(b)                                  Landlord’s
Cure Rights Upon Default of Tenant.  Except
as provided in Paragraph 17(b), if a Default has
occurred and is continuing and Landlord has delivered (no earlier than five (5)
business days after the first default notice was sent to Tenant) a second
notice of such Default marked “SECOND NOTICE OF TENANT
DEFAULT” at the top of the first page of such notice, Landlord,
without thereby waiving such Default, may (but shall not be obligated to)
perform the same for the account, and at cost and expense, of Tenant, which
cost and expense shall be paid by Tenant to Landlord within five (5) days after
demand.

 

(c)                                  Landlord’s
Remedies.  Without limitation
of all other rights and remedies provided in this Lease, or otherwise at law or
in equity, except that any re-entry of the Premises by Landlord shall be by
legal process, upon any Default, Landlord may, at its sole option: (A) terminate
this Lease and Tenant’s right of possession of the Premises by giving to the

 

7

 

Tenant three (3) days’ notice of termination of this Lease and, in the
event such notice is given, this Lease and the Term shall come to an end and
expire upon the expiration of said three (3) days with the same effect as if
the date of expiration of said three (3) days were the Expiration Date
expressly set forth in this Lease, but Tenant shall remain liable for damages
and all other sums payable pursuant to law; or (B) terminate Tenant’s right of
possession of the Premises without terminating this Lease; provided,
however, that Landlord may, whether Landlord elects to proceed
under Subparagraphs (A) or (B) above, re-enter the Premises or any part thereof,
without notice, either by summary proceedings or by any other applicable legal
action or proceeding, and may repossess the Premises and dispossess the Tenant
and any other persons from the Premises and remove any and all of their
property and effects from the Premises including the Tenant’s Property and
Landlord, at the Landlord’s option, may relet the Premises, or any part thereof
for the account of Tenant, for such commercially reasonable rent and term and
upon such commercially reasonable terms and conditions, including, without
limitation, concessions and free rent periods, as are acceptable to Landlord.
For purposes of any reletting, at Tenant’s sole cost and expense, Landlord is
authorized to decorate, repair, alter and improve the Premises to the extent
deemed commercially reasonably necessary by Landlord to relet the Premises (“Reletting Improvement Costs”).
Tenant, on its own behalf and on behalf of all persons claiming through or
under Tenant, including all creditors, does further hereby waive any and all
rights which Tenant and all such persons might otherwise have under any present
or future Laws to redeem the Premises, or to re-enter or repossess the
Premises, or to restore the operation of this Lease, after (i) Tenant shall
have been dispossessed by a judgment or by warrant of any court or judge, or
(ii) any re-entry by Landlord, or (iii) any expiration or termination of this
Lease and the Term, whether such dispossess, re-entry, expiration or
termination shall be by operation of law or pursuant to the provisions of this
Lease. In the event that the relation of Landlord and Tenant may cease or
terminate by reason of the re-entry of the Landlord under the terms and
covenants contained in this Lease or by the ejectment of Tenant by summary
proceedings, or after the abandonment of the Premises by Tenant, it is hereby
agreed that Tenant shall remain liable and shall pay in monthly payments the
Base Rent (and any Additional Rent and other charges payable by Tenant
hereunder) which accrues subsequent to the re-entry by Landlord, and Tenant
expressly agrees to pay as damages for the breach of the covenants herein
contained, the difference between the Rent and the rent collected and received,
if any, by Landlord during the remainder of the unexpired term, such difference
or deficiency between the Rent and the rent collected if any, shall become due
and payable in monthly payments during the remainder of the unexpired term, or
earlier termination of this Lease by Landlord pursuant to Subparagraph
(A) above, as the amounts of such difference or deficiency shall
from time to time be ascertained (the “Deficiencies”).
Whether or not Landlord shall have collected any monthly Deficiencies as
aforesaid, but subject to application of all monthly Deficiencies collected by Landlord
from Tenant pursuant to the immediately preceding sentence or otherwise under
this Lease, in the event of the termination of 
this Lease by Landlord pursuant to Subparagraph (A) above,
Landlord shall be entitled to recover from Tenant (1) all damages and other
sums that Landlord is entitled to recover under any provision of this Lease or
at law or in equity, including, buy not limited to, all Base Rent and
Additional Rent accrued and unpaid for the period up to and including such
termination date; (2) all other additional sums payable by Tenant, or for which
Tenant is liable, or in respect of which Tenant has agreed to indemnify
Landlord, under any of the provisions of this Lease, that may be then owing and
unpaid; (3) all reasonable costs and expenses (including, without limitation,
court costs and reasonable

 

8

 

attorneys’ fees) incurred by Landlord in the enforcement of its rights
and remedies under this Lease; and (4) any damages including, without
limitation, an amount equal to the positive difference, if any, between (x) the
discounted present value of the Base Rent required to be paid for the remainder
of the Term (measured from the effective termination date of this Lease) and
(y) the fair market rental value of the Premises (determined at the date of
termination of this Lease) after deduction (from such fair market rental value)
of the reasonable costs and expenses of reletting the Premises (including the
Reletting Improvement Costs and reasonable legal fees and brokerage commissions
and a reasonable vacancy factor) as reasonable estimated by Landlord
(collectively, the “Reletting Costs”).
Notwithstanding anything contained in this Lease to the contrary, all Reletting
Costs incurred by Landlord shall be equitably prorated if Landlord’s successive
reletting of Premises is for a term extending beyond the Expiration Date. As
used herein, the “discounted present value” and the
“fair market rental value” shall be
determined by reference to the discount rate of 7%. If, before presentation of
proof of such fair market rental value of the Premises to any court, commission
or tribunal, the Premises, or any part thereof, shall have been relet by
Landlord for the period which otherwise would have constituted the unexpired
portion of the Term, or any part thereof, the amount of rent reserved upon such
reletting shall be deemed, prima facie, to be the fair market rental value for
the part or the whole of the Premises so relet during the term of the
reletting. Solely for the purposes of this Paragraph 6(c),
the term “Base Rent” shall mean the Base Rent in effect immediately prior to
the date upon which this Lease and the Term shall have expired and come to an
end, or the date of re-entry upon the Premises by Landlord, as the case may be,
adjusted to reflect any increases pursuant to the provisions of Paragraph 1(b).

 

(d)                                  Waiver
of Consequential, Indirect, Special, Incidental, Punitive and Exemplary Damages.
 Notwithstanding anything to the
contrary (except as provided in Paragraph 30(d) below)
contained in this Lease, Landlord and Tenant each hereby waive their right to
seek to recover any consequential, indirect, special, incidental, punitive or
exemplary damages.

 

(e)                                  Going
Dark.  In the event Tenant ceases to
conduct its business in the Premises for a period of three hundred sixty-five
(365) days (which 365th day shall be deemed the day Tenant “goes dark”), Landlord shall then
have the right, to be exercised at any time after the date Tenant goes dark, to
terminate this Lease upon written notice to Tenant (the “Termination
Notice”). In the event that Landlord exercises its option to
terminate this Lease, then this Lease shall terminate on the ninetieth (90th)
day following the Termination Notice is sent to Tenant (the “Termination Date”) and Landlord and
Tenant shall be released from all of their obligations hereunder after the
Termination Date, except those obligations which expressly survive the
expiration or termination of this Lease. Notwithstanding the foregoing, the
Termination Notice shall not be effective if on or before the Termination Date
Tenant (i) reopens the Premises for the conduct of its business, or (ii)
subleases the entire Premises or assigns this Lease, and the sublessee or
assignee reopens the Premises for the conduct of its business. Any such
sublease or assignment shall be subject to the provisions of Paragraph 25. Tenant shall not be deemed to have ceased
operating its business if there is an assignment of this Lease or a subletting
of the Premises in accordance with Paragraph 25 or
the Premises (or any portion thereof) is closed (1) due to damage by fire or
casualty, or a taking by eminent domain, (2) for Alterations or repairs being
diligently prosecuted, including, without limitation, renovations or

 

9

 

other preparations by an assignee or subtenant, or (3) for the review
of and accounting for inventory by Tenant in the normal course of its business.

 

7.                                       GLASS. Tenant shall promptly replace, at the expense of
Tenant, any and all broken glass in and about the Premises. Tenant may insure,
and keep insured, or self insure unless otherwise provided in any Mortgage
Documents, all plate glass in the Premises.

 

8.                                       NO OBSTRUCTION. Tenant shall neither permanently encumber
nor obstruct the sidewalk in front of, entrance to, or halls and stairs of the
Premises, nor allow the same to be permanently obstructed or encumbered in any
manner by any of Tenant’s Agents.

 

9.                                       SIGNAGE. Subject to compliance with all applicable Laws, (a)
Tenant shall be permitted to use, alter or replace the existing signs located
on the Premises as of the Commencement Date, and to erect or place, or cause or
allow to be erected or placed, any sign or signs of any kind whatsoever on the
interior of the Building deemed necessary in Tenant’s sole and absolute
discretion, and (b) subject to Landlord’s prior approval, which approval shall
not be unreasonably conditioned, delayed or withheld, and the approval of any
Mortgagee as may be required under any Mortgage Documents, Tenant may locate
any signs at, in or about the entrance to the Premises or on any exterior part
of the Building, including, without limitation, upon the roof of the Building; provided that such signs are located
so that the same do not affect the integrity of the roof or create any damage
to the roof. Upon termination of this Lease for any reason, Tenant shall remove
all of its signs from the Premises and repair any damage to the Premises and
the Building caused by such removal to substantially the same condition prior
to such removal.

 

10.                                 NO LIABILITY OF LANDLORD. Except to the extent attributable
to (a) Landlord’s gross negligence or willful misconduct or that of any of
Landlord’s Agents; (b) Landlord’s failure to comply with any of its obligations
under this Lease; or (c) as otherwise set forth in this Lease, Landlord shall
have no liability for any damage or injury to person or property caused by or
resulting from steam, electricity, gas, water, rain, ice or snow, or any leak
or flow from or into any part of the Premises or from any damage or injury
resulting or arising from any other cause or happening with respect to the
Premises or Tenant’s use thereof.

 

11.                                 QUIET ENJOYMENT. Subject to the provisions of this Lease, so
long as Tenant pays all of the Rent and performs all of its other obligations
hereunder, Tenant shall at all times peaceably and quietly have sole and
exclusive possession of the Premises, and shall hold and enjoy the same, and
not be disturbed in Tenant’s possession of the Premises by Landlord or any
other person lawfully claiming through or under Landlord. This covenant shall
be construed as a covenant running with the Premises and is not a personal
covenant of Landlord. Landlord’s entry onto and use of any portion of the
Premises permitted by this Lease shall not interfere, in any unreasonable
respect, with any or all of (a) Tenant’s rights to occupy and use the Premises
(in the manner and for the purposes contemplated hereunder); (b) Tenant’s right
to utilize the vehicular parking areas located on the Premises; and (c) Tenant’s
right of access, ingress and egress to and from the Premises.

 

12.                                 WATER/ SEWER. Tenant shall pay to Landlord the rent or
charge, which may, during the Term , be assessed or imposed for the water used
or consumed in or on the Premises, whether determined by meter or otherwise,
and will also pay the expenses for the setting of a

 

10

 

water meter in the Premises should the latter be required. Tenant shall
pay the sewer rent or charge imposed upon the premises. All such rents or
charges or expenses shall be paid as Additional Rent. Landlord shall provide
Tenant with at least ten (10) days written notice in advance of any required
payment therefor and such rents or charges or expenses shall be added to the
next month’s Base Rent to become due after Tenant’s receipt of a timely notice
from Landlord.

 

13.                                 NO WAIVER. The failure of either party to insist, in any one
or more instances, upon the strict performance of any one or more of the terms,
conditions, covenants or obligations of this Lease, or to exercise any election
herein contained, shall not be construed as a waiver or relinquishment for the
future of the performance of such one or more obligations of this Lease or of
the right to exercise such election or other rights or remedies that such party
may have against the other, and shall not be construed as a waiver of any
subsequent breach or default in the terms, conditions and covenants of this
Lease.

 

14.                                 EMINENT DOMAIN. If the whole or any substantial (as
reasonably determined by Landlord) portion, of the Premises is taken or
condemned for any use or purpose under any Law or by right of eminent domain,
or by private purchase in lieu thereof, and such taking would prevent or
materially interfere with Tenant’s then-current use of the Premises, this Lease
shall terminate effective as of the date Tenant is required to relinquish
Tenant’s right to occupy or to use all or any such substantial portion of the
Premises. If less than a substantial portion of the Premises is so taken or
condemned, or if the taking or condemnation is temporary (regardless of the portion
of the Premises affected), this Lease shall not terminate, but (a) Landlord, at
Landlord’s sole cost and expense to the extent of any award actually received
by Landlord, shall restore the Building to an architecturally whole unit, and
(b) the Rent payable hereunder shall be proportionally abated to the extent of
any actual loss of use of the Premises by Tenant. Landlord shall be entitled to
any and all payment, income, rent or award, or any interest therein whatsoever,
which may be paid or made in connection with such a taking or conveyance, and
Tenant shall have no claim against Landlord for the value of any unexpired
portion of this Lease. Tenant shall be entitled to retain any compensation
specifically and independently awarded to Tenant for loss of business or
goodwill, moving expenses or for Tenant’s Property.

 

15.                                 NO DIMINUTION/ABATEMENT. Except as otherwise provided in
this Lease, (a) no diminution or abatement of Rent, or other compensation,
shall be claimed or allowed for inconvenience arising from the making of
repairs or improvements to the Premises nor in the case of any fire or other
casualty; and (b) in respect to the various “services,” if any, herein
expressly or impliedly agreed to be furnished by Landlord to Tenant, it is
agreed that there shall be no diminution or abatement of Rent, or any other
compensation, for interruption or curtailment of such “service” when such
interruption or curtailment shall be due to accident, alterations or repairs
desirable or necessary to be made or to inability or difficulty in securing
supplies or labor for the maintenance of such “service” or to some other cause,
not gross negligence on the part of Landlord. No such interruption or
curtailment of any such “service” shall be deemed a constructive eviction.

 

11

 

16.                                 REAL ESTATE TAXES.

 

(a)                                  Real Estate
Taxes.  Except as expressly
provided otherwise in this Lease, throughout the Term, in addition to the Base
Rent required under Paragraph 1(b)
hereof to be paid by Tenant, Tenant shall be responsible for all real estate
taxes, assessment of any nature and any and all other impositions general or
special, ordinary or extraordinary, of every kind and nature due at any time or
from time to time, during the Term, in connection with the ownership, leasing
and operation of the Premises, or the personal property and equipment located
therein or used in connection therewith (“Taxes”);provided, however, in no event shall Tenant be
liable for any franchise taxes; any doing business as taxes; any gift taxes;
any corporate taxes; any estate, inheritance, succession or transfer taxes
charged against Landlord or the estate or interest of Landlord in the Premises
or upon the right of any person to succeed to the same or any part thereof by
inheritance, succession or transfer, or any capital levy that is imposed upon
Landlord or any transfer or recording charge resulting from a transfer of the
Premises; any income, profits or excess profits tax or gross receipts tax
assessed upon or in respect of the income or receipts of Landlord arising from
the Premises; or any town, county, state or federal sales taxes or use taxes
charged against Landlord for materials and equipment purchased by Landlord or
installed or incorporated into the reconstruction or repair of the building and
appurtenances or any part thereof by Landlord. Tenant agrees to pay to Landlord
the annual sums payable pursuant to the provisions of this Paragraph 16
in twelve (12) equal monthly installments in advance on the first (1st) day of
each and every month during the Term, together with, at the same time and
place, in the same manner and upon the same terms and conditions hereinbefore
provided for the payment of Base Rent, or as payments thereof may be required
under the Mortgage Documents, provided, however, that  if when any such Additional Rent payment provided for in
this Paragraph 16 shall become due, the
amount of Taxes for the then current fiscal period of the taxing authority
shall not have been determined, Tenant shall for such month make payment based
upon the amount of Taxes for the last preceding fiscal period of the taxing
authority, and when the amount of the Taxes for the then current fiscal period
of the taxing authority shall have been determined, total payments theretofore
made for the preceding months for such fiscal period based on the amount of
taxes for the preceding fiscal period shall be adjusted and Tenant, shall on
demand, make such additional payment to Landlord for such preceding months, or
Landlord shall make such refund to the Tenant of any overpayments made by
Tenant for such preceding months as the adjusted figures may indicate. Landlord
shall pay all Taxes due and owing during the Term directly to the applicable
taxing authority(ies) before they become delinquent. Notwithstanding anything
to the contrary contained herein, with respect to a fiscal period of the taxing
authority, a part of which period is included within the Term of this Lease and
a part of which is included in a period of time before the Commencement Date or
after the Expiration Date, Taxes (including, but not limited to, any special
assessments) shall be adjusted as between Landlord and Tenant as of the
Commencement Date and Expiration Date, respectively, so that Landlord shall pay
that proportion of such Taxes which that part of such fiscal period included in
the period of time before the Commencement Date or after the Expiration Date
bears to such fiscal period, and Tenant shall pay its share of the intervening
remainder thereof. If any special assessments levied against the Premises are
payable in installments, Tenant shall be responsible only for those
installments that are due and payable during the Term (or if paid in lump sum,
shall be amortized over the useful life of the improvements to which such
special assessment relates). For purposes hereof, Taxes for any year shall be
Taxes that are due for payment or paid in that year rather than Taxes that are
assessed, become a lien, or accrue during such year. Landlord shall send copies
of the related tax

 

12

 

bills to Tenant promptly after a written request with respect to a
particular fiscal period. If Tenant shall have paid an amount of Taxes and
Landlord thereafter receives a refund of such Taxes or a credit against future
Taxes, Tenant shall receive a proportionate credit (after all costs of
obtaining a refund have been deducted) towards subsequent estimated payments of
such Taxes.

 

(b)                                  Audit
Rights.  Tenant may, at Tenant’s sole
and absolute discretion, subject to the terms and conditions of any Mortgage
Documents, contest, or review, by legal proceedings, or in such other manner as
Tenant deems suitable, which proceedings if instituted shall be conducted
promptly, at Tenant’s own expense, and free of expense to Landlord, any Taxes or
sewer or water rents or charges imposed upon or against the Premises, and
attempt to obtain a reduction in the assessed valuation of the Premises for the
purpose of reducing any such tax assessment. In case any Taxes or sewer or
water rents or charges shall, as a result of such proceedings or otherwise, be
reduced, canceled, set aside or to any extent discharges, there shall be a
subsequent reduction in Tenant’s payments to Landlord attributable to Taxes or
sewer or water rents or charges for such year and Landlord shall promptly pay
over to any excess payments made by Tenant, when all refunds or credits to
which Landlord is entitled from the taxing authority with respect to such year
have been received or applied by Landlord. Landlord’s obligation to refund any
such overpayment shall survive such expiration or earlier termination. Landlord
will, at the request of Tenant and without expense to Landlord, cooperate with
Tenant in effecting such a reduction. Any reduction or tax refund payable as a
result of any proceeding Tenant may institute for that purpose or otherwise
shall be the property of Tenant to the extent to which it may be based on a
payment made by Tenant. Landlord shall not be required to join in any such
action or proceeding, unless required by law or any rule or regulation in order
to make such action or proceeding effective, in which event any such action or
proceeding shall be taken by the Tenant in the name of, but without expense to
Landlord. Landlord, however, will cooperate to the extent reasonably necessary
(without liability) and supply such data and execute such documents required
for the purpose of obtaining a decision thereon, either through litigation,
settlement or otherwise. Landlord shall, however, upon demand of Tenant join in
any such proceeding, provided Tenant indemnifies Landlord against any costs or
expenses in connection therewith, which indemnification shall survive the
expiration or termination of this Lease.

 

17.                                 INSURANCE.

 

(a)                                  Insurance to
be Maintained by Landlord.  Landlord
shall purchase, at its own expense, and keep in force at all time during this
Lease commercial general public liability insurance with a minimum combined
single limit for bodily injury and property damage of not less than Five
Million Dollars ($5,000,000) for each occurrence and annual aggregate covering
Landlord for claims arising out of liability for bodily injury, death, personal
injury, advertising injury and property damage occurring in and about the
Premises and otherwise resulting from any acts and operations of Landlord and
Landlord’s Agents.

 

(b)                                  Insurance
to be Maintained by Tenant.  Tenant
shall purchase, at its own expense, and keep in force at all times during the
Term the policies of insurance set forth below in this Paragraph
17(b) (collectively, “Tenant’s Insurance
Policies”). All Tenant’s Insurance Policies shall (A) be issued
by an insurance company with a Best rating of A-X or better and otherwise
reasonably acceptable to Landlord; (B) provide that such insurance shall not

 

13

 

be canceled or materially modified unless thirty (30) day’s prior
written notice shall have been given to Landlord and any Mortgagee; and (C)
otherwise be in such form, and include such coverages, as Landlord and any
Mortgagee may reasonably require. Certificates of Insurance evidencing Tenant’s
Insurance Policies shall be delivered to Landlord by Tenant upon commencement
of the Lease and at least thirty (30) days prior to the expiration, replacement
and renewal of each Tenant’s Insurance Policy. Tenant shall give prompt notice
to Landlord of any bodily injury, death, personal injury, advertising injury or
property damage occurring in and about the Property upon Tenant learning of
such injury death or damage. It is acknowledged and agreed by the parties that
Tenant may maintain the insurance set forth in the immediately preceding
sentence under a blanket policy; provided, however,
nothing in such blanket policy shall limit the substance, availability or
extent of the coverages described herein. If Tenant fails to supply Landlord
with current policies for all of the risks described in this Paragraph 17(b) in accordance with this Paragraph
17(b), then Landlord may at Landlord’s
option, after five (5) days written notice to Tenant (during which time Tenant
may cure its default herein) purchase the insurance required hereunder (to the
extent that Tenant has not yet purchased such insurance), and Tenant agrees to
pay to Landlord within ten (10) days after the presentation of a bill therefor,
the amount contained in the such bill, as Additional Rent, not a exceed three
(3) months premium. Except as expressly permitted under any other provision of
this Lease, Tenant will not do anything in the Premises, or bring anything into
the Premises, or permit anything to be brought into the Premises or to be kept
therein, which will in any way increase the rate of fire insurance or other
insurance on the Premises, nor use the Premises or any part thereof, nor suffer
or permit their use for any business or purpose which would cause an increase
in the rate of fire insurance or other insurance on the Premises, and Tenant
agrees to pay on demand any such increase. Notwithstanding the foregoing,
Tenant shall promptly comply with any commercially reasonable requirements of
any Mortgagee with respect to the types and amounts of coverages under or the
terms and conditions with respect to any Tenant’s Insurance Policies, as well
as providing such other commercially reasonable insurance as any Mortgagee may
require against such other insurable hazards which at the time are commonly
insured against for property similar to the Premises located in or around the
region in which the Premises is located. Subject to commercially reasonable
requirements of any Mortgagee, Tenant shall not be required to continue to
carry any insurance coverage which is no longer commonly insured against for
property similar to the Premises located in or around the region in which the
Premises is located or which cannot be obtained at commercially reasonable
rates.

 

(i)                                     All Risk/General Casualty.  Tenant shall purchase and maintain, throughout
the Term, a Tenant’s Insurance Policy(ies) of comprehensive all risk insurance
on the Building (including any Alterations), (A) in an amount equal to one
hundred percent (100%) of the “Full Replacement Cost,” which for purposes of
this Lease shall mean actual replacement value (exclusive of costs of
excavations, foundations, underground utilities and footings) with a waiver of
depreciation; (B) containing an agreed amount endorsement with respect to the
Building (including any Alterations) waiving all co-insurance provisions; (C)
providing for no deductible in excess of $10,000.00 for all such insurance
coverage; and (D) providing coverage for contingent liability from Operation of
Building Laws, Demolition Costs and Increased Cost of Construction Endorsements
together with an “Ordinance or Law Coverage” or “Enforcement” endorsement if
any of the Building or the use of the Premises shall at any time constitute
legal non-conforming structures or uses. In addition, Tenant shall obtain, if
any portion of the Building is currently or at any time in the future located
in a federally designated

 

14

 

“special flood hazard area”, flood hazard insurance in an amount equal
to the maximum amount of such insurance available under the National Flood
Insurance Act of 1968, the Flood Disaster Protection Act of 1973 or the
National Flood Insurance Reform Act of 1994, as each may be amended. The
Tenant’s Insurance Policies required by this Paragraph
17(b)(i) shall name Landlord, and any party holding an interest to
which this Lease may be subordinated as additional insureds and loss payees.

 

(ii)                                  General Liability and Auto Insurance. Tenant shall purchase
and maintain, throughout the Term, a Tenant’s Insurance Policy(ies) of
commercial general or excess liability insurance, including personal injury and
property damage, in the amount of not less than $5,000,000.00 per occurrence,
and $5,000,000.00 annual general aggregate, per location. The Tenant’s
Insurance Policies required by this Paragraph 17(b)(ii)
shall (W) name Landlord, and any party holding an interest to which this Lease
may be subordinated as additional insureds; (X) provide coverage on an
occurrence basis; and (Y) be primary, not contributing with, and not in excess
of, coverage that Landlord may carry.

 

(iii)                               Tenant’s Property and Workers’ Compensation Insurance.
Tenant shall purchase and maintain, throughout the Term, a Tenant’s Insurance
Policy or Insurance Policies of (X) “all-risk” property insurance policy
covering the Tenant’s Property, and (Y) workers’ compensation insurance per the
applicable state statutes covering all employees of Tenant.

 

(iv)                              Business Income Insurance. Tenant shall purchase and
maintain, throughout the Term, a Tenant’s Insurance Policy  or Insurance Policies of business income
insurance (A) covering all risks required to be covered by the insurance
provided for in Paragraph 17(b)(i) for a period
commencing at the time of loss for such length of time as it takes to repair or
replace with the exercise of due diligence and dispatch; and (B) in an amount
at least equal to one hundred percent (100%) of the Rent for a period from the
date of loss to a date (assuming total destruction) which is twelve (12) months
from the date that the Building and Tenant’s Property is repaired or replaced
and operations are resumed. The amount of such business income insurance shall
be determined prior to the date hereof and at least once each year thereafter
based on Tenant’s reasonable estimate of the Rent for the succeeding twelve
(12) month period.

 

(c)                                  Waiver
of Claims and Subrogation.  To the
extent permitted Law, and without affecting the coverage provided by insurance
required to be maintained hereunder, Landlord and Tenant each waive any right
to recover against the other for (i) damages to property, (ii) damages to all
or any portion of the Premises, (iii) claims arising by reason of the foregoing,
to the extent such damages and claims are insured against, or required to be
insured against, by Landlord or Tenant under this Lease, or (iv) claims paid by
Tenant’s workers’ compensation carrier. This provision is intended to waive,
fully and for the benefit of each party, any rights and/or claims that might
give rise to a right of subrogation by any insurance carrier. The coverage
obtained by each party pursuant to this Lease shall include, without
limitation, a waiver of subrogation by the carrier that conforms to the
provisions of this Paragraph 17(c).
Each policy of insurance required to be maintained by Landlord or Tenant
Hereunder shall expressly waive the right of subrogation and right of recovery.

 

15

 

18.                                 UTILITIES. Tenant shall purchase and be solely responsible
for all charges, claims and liens incurred with respect to water, gas,
electricity and any other utilities in connection with the Premises during the
Term (and agrees to arrange for the delivery of such utilities to the
Premises). Tenant further agrees that Tenant shall supply any fuel required, if
any, for the Premises and Tenant’s use of the Premises. Tenant shall pay such
utility and fuel charges during the Term directly to the utility or municipality
or supplier providing such service or fuel before such charges become
delinquent.

 

19.                                 NO REPRESENTATIONS BY LANDLORD. The parties hereby
acknowledge that Tenant is currently in possession of the Premises. Except as
otherwise set forth in this Lease, Tenant agrees that Landlord has made no
warranties or representations with respect to the Premises and Tenant accepts
the Premises “as is” as of the date hereof. Landlord hereby represents and
warrants that Landlord is the sole holder and owner of fee simple title to the
Land and the Premises, and that, as of the date hereof, there are no mortgages,
deeds of trust, ground leases or underlying leases encumbering the Premises,
except the (a) Building Loan Mortgage and Security Agreement, dated May 31,
2000, from Landlord, as mortgagor, to Fleet Bank, National Association, as
mortgagee, in the original principal amount of $1,250,000 and (b) Land Mortgage
and Security Agreement, dated May 31, 2000, from Landlord, as mortgagor, to
Fleet Bank, National Association, as mortgagee, in the original principal
amount of $2,240,000, (c) which mortgages described in clauses (a and (b) were
consolidated to form a single lien in the consolidated principal amount of
$3,278,132 pursuant to an Agreement of Consolidation of Notes and Mortgages and
Modification of the Consolidated Mortgage, dated April 30, 2002, between
Landlord and Fleet National Bank f/k/a Fleet Bank, National Association n/k/a
Bank of America, N.A., and (d) which consolidated mortgages described in clause
(c) were modified pursuant to a Mortgage Modification Agreement, dated of even
date with this Lease, between Bank of America, N.A. (successor by merger to
Fleet National Bank f/k/a Fleet Bank, National Association) (such mortgages as
so consolidated and modified, the “Bank of America Mortgage”;
the bank of America Mortgage and any other mortgage encumbering the Premises or
any part thereof from time to time, each a “Mortgage”;
a Mortgage and all agreements, documents and instruments in connection with a
Mortgage are, collectively, “Mortgage  Documents”; and the holder of a
Mortgage is a “Mortgagee”). Each of the
person(s) executing this Lease on behalf of Landlord does hereby personally
represent and warrant that Landlord is a duly organized and validly existing
limited liability company, that Landlord is in good standing and qualified to
do business in the State of New York, that Landlord has the full right, power
and authority to enter into the Lease, and that each person signing on behalf
of Landlord is fully empowered and authorized to do so.

 

20.                                 LATE CHARGE. All amounts of Rent past due for more than five
(5) business days after the date the same are due and payable hereunder shall
incur interest from the due date to the date of payment at the Default Rate. “Default Rate” shall mean the
annual rate equal to the lesser of (i) the “prime” or “reference” commercial
lending rate announced from time to time by Citybank, N.A., in New York, New
York plus three (3) percentage points per year; or (ii) the maximum rate
permitted by Law.

 

21.                                 PERMITS/LICENSES. Tenant shall, at Tenant’s own cost and
expense, apply for and obtain any necessary permits or licenses required for
the use, conduct and maintenance of the Premises during the Term and for the business
to be conducted by Tenant in the Premises,

 

16

 

including but not limited to the use and maintenance of any signs
thereon, and Tenant shall, at Tenant’s own cost and expense, make all necessary
repairs and improvements for the granting of any such permit or license or for
the continuance of same.

 

22.                               WALKS/SIDEWALKS.
Tenant shall keep the walks in front and in rear and sides of the Premises
free and clear of rubbish, snow and ice, and keep same in good repair and
control,  excepting normal wear and tear
and casualty and condemnation.

 

23.                               ALTERATIONS.

 

(a)                                  Alterations.  During the Term, Tenant may, from time
to time, at Tenant’s  sole cost and
expense, make alterations, replacements, changes, additions and improvements
in  and to the Premises (the “Alterations”); provided
that Tenant first obtains the written consent of  Landlord (which consent may be withheld for
any reason or for no reason) and any Mortgagee to the extent required under the
Mortgage Documents. If Landlord shall fail to respond in writing to Tenant with
respect to such request within ten (10) business days after Landlord receipt
thereof, Tenant may, but shall not be obligated to, deliver to Landlord a
second such written request, within twenty (20) business days after the first
request, marked “SECOND TENANT  REQUEST FOR
LANDLORD APPROVAL” at the top of the first page of such request and
in the subject line of any cover letter from Tenant accompanying such request.
Landlord’s failure to respond in writing to Tenant with respect to any such
second request within five (5) business days following Landlord’s receipt such
second notice shall be a deemed approval of such proposed Alteration; however, Tenant shall still be
required to receive any Mortgagee’s written consent to the extent required
under any Mortgage Documents. Such Alterations shall comply with all applicable
Laws and must be performed in accordance with the terms and conditions of any
Mortgage Documents. Notwithstanding anything to the contrary contained in this
Lease, Tenant shall not be required to obtain Landlord’s prior approval (but
shall be required to receive any Mortgagee’s approval to the extent provided
under any Mortgage Documents) with respect to Alterations (A) that will not (i)
affect (except to a diminimus extent) the structural integrity or structural
components of the Building or (ii) adversely affect (except to a diminimus
extent) the mechanical, electrical, sprinkler, heating, ventilating,
air-conditioning (“HVAC”),
sanitary and other service systems of 
the Premises; (B) except as otherwise provided in clause (A), that are
to the interior of the Building; and (C) shall conform with all other
requirements of this Lease. Additionally, before proceeding with any
Alterations, Tenant shall (X) at Tenant’s expense, obtain all necessary
governmental permits and certificates for the commencement and prosecution of
Alterations; (Y) submit to Landlord working drawings, plans and specifications
and all permits for the proposed Alterations; and (Z) cause those contractors
engaged to perform the Alterations to deliver to Landlord certificates of
insurance (in a form reasonably acceptable to Landlord) evidencing policies of
commercial general liability insurance and workers’ compensation insurance.
After obtaining Landlord’s and any Mortgagee’s approval to the Alterations (to
the extent required), Tenant shall give Landlord at least five (5) business
days’ prior written notice of the commencement of any Alterations at the
Premises, and Landlord may elect to record and post notices of
non-responsibility at the Premises. Together with its request for approval, or
notification to Landlord, of any proposed Alterations, Tenant may request that
Landlord irrevocably specify whether Landlord shall require such proposed
Alteration to be removed prior to the termination of the Term. If Landlord
shall fail to respond in writing to Tenant with respect to such request within
ten (10) business days after Landlord’s receipt thereof,

 

17

 

Tenant may, but shall not be obligated to, deliver to Landlord a second
such written request, within twenty (20) business days after giving the first
request, marked “SECOND TENANT REQUEST FOR LANDLORD APPROVAL”
at the top of the first page of such request and in the subject line
of any cover letter from Tenant accompanying such request. If landlord fails to
respond in writing to Tenant within five (5) business days of Tenant’s second
request therefor, Landlord shall be deemed to have agreed that Landlord shall
not require removal of such proposed Alteration prior to the termination of the
Term hereof.

 

(b)                                  Lien Waiver.
 In the event that the cost in any one
instance of any such decoration, alteration, replacement, change addition or
improvement to the Premises shall exceed $10,000, then, promptly following
final completion thereof, Tenant shall obtain from the contractor or
contractors performing the same a final lien waiver.

 

24.                                 LIENS.
Tenant will not create or permit to be created or to remain and will
discharge or bond any lien, encumbrance or charges levied on account of any
mechanic’s, laborer’s or materialman’s lien, which might be or become a lien,
encumbrance or charge upon the Premises for labor and services or materials furnished,
performed or supplied by or for the benefit of Tenant during the period
commencing on the date hereof and ending on the Expiration Date, or the date on
which this Lease earlier terminates pursuant to the terms and conditions
hereof. If any such lien, encumbrance or charge at any time is filed against
the Premises, then, within thirty (30) days after notice of the filing thereof,
Tenant will cause the same to be discharged of record by payment deposit, bond,
order of a court of competent jurisdiction or otherwise. If Tenant shall fail
to cause such lien to be discharged within such period, then in addition to any
other right or remedy, Landlord, without being obligated to do so, may
discharge the same by procuring the discharge of such lien by deposit or by
bonding proceeding and in such event Landlord shall be entitled, if Landlord
elects, to compel the prosecution of an action for the foreclosure of such lien
by the lienor and to pay the amount of the judgment in favor of the lienor with
interest, costs and allowances. Any amount so paid by Landlord and all costs
and expenses incurred by Landlord in connection therewith, together with
interest thereon at the maximum rate prevailing per annum from the respective
dates of Landlord’s making of the payment or incurring of the cost and expenses
shall constitute Additional Rent  payable
by Tenant under this Lease and shall be paid by to Landlord on demand. Nothing
contained in this Paragraph  24 shall obligate Tenant to pay or discharge any lien
created by Landlord. Landlord shall promptly discharge any lien filed against
the premises, the debt for which was created by Landlord. Nothing in this Lease
contained shall be deemed construed in any way as constituting the consent,
request or approval of Landlord, express or implied, by inference or otherwise,
to anyone for the performance of any labor or services, nor the furnishing of
any materials for any improvement, alteration or repair of the Premises or any
part thereof, nor as giving Tenant any right, power or authority to contract
for or permit the rendering of any service or labor or the furnishing of any
materials that would give rise to the filing of any lien against the fee of the
premises or any part thereof. The provisions of this Paragraph 24
shall survive the expiration or termination of this Lease.

 

25.                                 ASSIGNMENT, SUBLETTING, LEASEHOLD MORTGAGE.

 

(a)                                  Assignment;
Subletting.  (i) Except as otherwise
permitted under this Paragraph 25, Tenant,
for itself, its heirs, distributees, executors, administrators, legal

 

18

 

representatives, successors and assigns, expressly covenants that it
shall not, directly or indirectly, by operation of law or otherwise, assign,
transfer, mortgage, lien or otherwise encumber this Lease, or Tenant’s interest
herein or rights hereunder, or sublet all or any portion of the Premises,
without the prior written consent of Landlord in each instance, which consent
shall not be unreasonably withheld, conditioned or delayed, and the prior
written consent of Mortgagee to the extent required under any Mortgage
Documents. Except in the case of a Permitted Transfer (as defined in Paragraph 25(a)(ii) below), if Tenant is a corporation
(including a professional corporation), partnership, joint venture, limited
liability company or other entity, the provisions of this Paragraph 25(a)(i)
shall apply to a transfer, directly, indirectly or beneficially, by operation
of law or otherwise, by one or more transfers, of a “controlling amount” (as
defined in Paragraph 25(a)(ii) below) of  the stock, partnership, membership or other
applicable ownership interest of, or voting or management rights in or with
respect to, Tenant as if such transfer of a controlling amount of stock,
partnership, membership or other applicable ownership interest of, or voting or
management rights in or with respect to, Tenant were an assignment of this
Lease. In addition, except in the case of a 
Permitted Transfer, the provisions of this Paragraph
25(a)(i) shall apply to (x) the merger or consolidation of Tenant,
or any entity directly or indirectly controlling Tenant, into or with a
corporation, partnership, limited liability company or other entity and (y) any
change in control of Tenant either directly or indirectly, at any level or tier
or ownership, whether in one transaction or a series of related transactions (a
“Change-in-Control Transaction”), as
if such merger or consolidation or Change-in-Control Transaction were an
assignment of this Lease. Tenant shall provide Landlord with at least thirty
(30) days prior written notice requesting Landlord’s consent to any of the
foregoing, which notice shall specify the name and address of such assignee,
subtenant or transferee together with its financial statements, a description of
the contemplated transaction, a description of the intended use of the Premises
by such assignee, subtenant or transferee and providing such further
information as Landlord reasonably may require. If Landlord shall fail to
respond in writing to Tenant with respect to any such request by Tenant for Landlord’s
consent to any of the foregoing within ten (10) business days after Landlord’s
receipt thereof, Tenant may, but shall not be obligated to, deliver to Landlord
a second such written request, within twenty (20) business days after giving
the first request, marked “SECOND TENANT REQUEST FOR
LANDLORD APPROVAL” at the top of the first page of such request and
in the subject line of any cover letter from Tenant accompanying such request.
Landlord’s failure to respond in writing to Tenant with respect to such second
request within five (5) business days after Landlord’s receipt thereof shall be
a deemed approval of such assignment, sublease or transfer; however,
Tenant shall still be required to receive any Mortgagee’s written consent to
the extent required under any Mortgage Documents.

 

(ii)                                  Notwithstanding
anything to the contrary contained herein, Tenant shall have the right, without
obtaining Landlord’s prior written consent, however
subject to receiving any Mortgagee’s prior written consent to the extent
required under any Mortgage Documents, and without being subject to the terms
of Paragraphs 25(b) or 25(c) hereof,
upon at least thirty (30) days prior written notice to Landlord, to enter into
the following transactions (each a “Permitted Transfer”):
(A) (1) assign this Lease or sublet the entire Premises to any entity into or
with which Tenant is merged or consolidated by operation of law or otherwise or
to which substantially all of Tenant’s assets are transferred or Tenant’s
capital stock is transferred or purchased (“Successor”)
or (2) a Change-in-Control Transaction; provided that  such
Successor (or Tenant in the case of any Change-in-Control Transaction) has a
net worth

 

19

 

calculated in accordance with generally accepted accounting principles
equal to or greater than $15,000,000 immediately following any such transaction
(including the effect of any financing in connection with such transaction); or
(B) assign this Lease or sublet any portion of the Premises to any Qualified
Tenant Affiliate (as defined below). For purposes of Paragraphs
25(a)(i) and (ii), (I) the
term “Qualified Tenant Affiliate” shall
mean any entity which, directly and indirectly, controls or is controlled by or
is under common control with Tenant; and (II) the terms “control”,
“controlling” and “controlling amount”
shall mean the direct or indirect possession of the power to direct or cause
the direction of the management or policies of an entity or a person or the
disposition of its assets or properties or the operation or conduct of its
business or affairs, whether through ownership, voting or management rights, by
contract, arrangement or understanding, or otherwise. In no event shall the
trading of Tenant’s stock on a publicly-traded exchange be deemed an assignment
of this Lease.

 

(iii)                               In
connection with any assignment permitted or consented to hereunder, such
assignee shall assume in writing all of assignor’s obligations under this Lease
in form and substance satisfactory to Landlord; provided,
however, that Tenant originally named herein (or any tenant
under this Lease) shall not be relieved from its obligations under this Lease.
The consent by Landlord to any assignment, subletting or transfer shall not
relieve Tenant from its obligation to obtain the prior written consent of
Landlord (as may be required under this Lease) to any further assignment,
subletting or transfer. Any such assignment or transfer or attempted assignment
or transfer of this Lease, or subletting or attempted subletting of the
Premises, not permitted or consented to hereunder shall be void and have no
effect and shall constitute a default of Tenant hereunder. If there is an
assignment or transfer of this Lease, whether or not in violation of the
provisions of this Lease, Landlord may collect rent from the assignee; if the
Premises or any part thereof are sublet to any person, whether or not in
violation of this Lease, Landlord, after a Default by Tenant, may collect rent
from the subtenant. In either case, Landlord shall apply the net amount
collected to the rents reserved in this Lease, but neither any such assignment,
transfer or subletting, whether with or without Landlord’s prior consent, nor
any such collection or application, shall be deemed a waiver of any term,
covenant or condition of this Lease or the acceptance by Landlord of such
assignee, transferee or subtenant as tenant.

 

(b)                                  Excess
Profits.  In the event that Tenant
sublets or assigns this Lease, Tenant shall pay to Landlord as Additional Rent
an amount equal to fifty percent (50%) of any Increased Rent (as defined below)
when and as such Increased Rent is received by Tenant. As used in this Paragraph 25(b), “Increased Rent” shall mean the excess of
(i) all rent and other consideration that Tenant receives by reason of any
sublease of the Premises (or any part thereof) or any assignment of the Lease,
over (ii) the Rent otherwise payable by Tenant under this Lease at such time; provided, however,  Tenant shall be
entitled to deduct from such excess rental paid to Tenant prior to such payment
to Landlord the following costs incurred by Tenant in securing such assignment
or sublease: customary brokerage fees, reasonable advertising costs, reasonable
legal fees and expenses, other economic concessions granted to such assignee or
subtenant; and expenses for any improvements to be constructed in such assigned
or sublease space.

 

(c)                                  Reimbursable
Costs.  Tenant shall reimburse
Landlord for any expenses that may be incurred by Landlord in connection with
the proposed assignment or sublease hereunder by Tenant (“Reimbursable
Costs”), including without limitation the costs of making
investigations as to the acceptability of a proposed assignee or subtenant and
reasonable legal

 

20

 

fees and disbursements incurred in connection with the requested
consent to the assignment or sublease (whether or not such consent is granted).

 

(d)                                  Mortgage
of Tenant’s Interest.  Subject to the
prior written consent of any Mortgagee, Landlord hereby agrees and acknowledges
that Tenant and its successors and assigns shall have the right to mortgage,
pledge, assign and encumber any or all of the Tenant’s leasehold interest under
this Lease, including, without limitation, by a leasehold mortgage, leasehold
deed of trust or collateral assignment of lease (each such mortgage,
assignment, pledge or other encumbrance herein referred to as a “Leasehold Mortgage”), subject to the limitations of this Paragraph 25(d). Landlord shall cooperate, at Tenant’s
reasonable cost and expense, with any commercially reasonable request of any
institutional lender which contemplates making a loan to Tenant to be secured
by a Leasehold Mortgage, including, without limitation, the execution and
delivery of any customary consent and estoppel which is reasonably acceptable
to Landlord. No holder of a Leasehold Mortgage shall have the rights or
benefits set forth in this Paragraph 25(d), nor
shall the provisions of this Paragraph 25(d) be
binding upon Landlord, unless and until the name and address of the holder of
such Leasehold Mortgage shall have been delivered to Landlord in accordance
with this Paragraph 25(d).

 

26.                                 SUBORDINATION AND ATTORNMENT. (a) Landlord represents and
warrants to Tenant that, as of the date of this Lease, Landlord is the fee
simple owner of the Premises, and that, as of the date of this Lease, there are
not any mortgages or ground leases or underlying leases with respect to the
Premises except for the Bank of America Mortgage. Tenant’s rights under this
Lease shall be subject and subordinate at all times to the lien of the Bank of
America Mortgage and to all renewals, modifications, amendments,
consolidations, replacements and extensions thereof. Provided that Tenant is
provided with an SNDA duly executed by the holder of any future mortgage or the
landlord pursuant to any ground lease or underlying lease or future ground
lease or underlying lease affecting the Premises, then (i) Tenant’s rights under
this Lease shall be subject and subordinate at all times to the lien of any
future mortgage or mortgages, or ground lease or underlying lease which may now
or hereafter affect or be placed from time to time upon the Premises and to all
renewals, modifications, amendments, consolidations, replacements and
extensions of any such mortgages or ground or underlying leases; and (ii)
Tenant will execute and deliver, within ten (10) days after request by
Landlord, and SNDA that is submitted by Landlord in confirmation of such
subordination. “SNDA” means a subordination,
non-disturbance, and attornment agreement, in a commercially reasonable form
which is reasonably acceptable to Tenant, from a holder of any Mortgage (except
for the Bank of America Mortgage) and the landlord of any ground lease or
underlying lease existing as of the date of this Lease, or thereafter in
effect, and affecting the Premises.

 

(b)                                 In
the event of the enforcement by a Mortgagee of the remedies provided by law or
under the Mortgage Documents, Tenant will, upon the request of any person
succeeding to the interest of Landlord as a result of such enforcement, (i)
automatically become the tenant of said successor in interest, without change
in the terms or other provisions of this Lease; provided,
however, that said successor in interest shall not be bound by
(1) any payment of Base rent or Additional Rent for ore than one (1) month in
advance, except prepayments in the nature of security for the performance by
Tenant of its obligations under this Lease or (2) any amendment or modification
of this Lease made without the consent of the Mortgagee or such successor in
interest, and (ii) execute and deliver an instrument or instruments confirming
such attornment.

 

21

 

27.                                 NOTICES. All notices and other communications authorized or
required by either party pursuant to this Lease shall be in writing and shall
be deemed to have been properly given, rendered or made only if personally
delivered, of if sent by Federal Express or other comparable nationally
recognized commercial overnight delivery service, or if mailed by certified
mail or registered mail, return receipt requested, postage prepaid, addressed
to the other party at the addresses set forth below (or such other addresses as
Landlord or Tenant may designate to each other from time to time by written
notice) and any such notice of other communication shall be deemed to have been
given, rendered or made on the day so delivered or refused by the party to whom
such notice was sent (it being acknowledged that a facsimile or an e-mail
transmission shall not be deemed to be a “writing”)

 

	
  If to Landlord:

  	
  750 Park Place Realty Co., LLC

  
	
   

  	
  c/o Marshall Kopelman

  
	
   

  	
  600 Old Country Rd., Suite 304

  
	
   

  	
  Garden City, New York 11530

  
	
   

  	
  Telephone: (516) 228-9140

  
	
   

  	
   

  
	
  If to Tenant:

  	
  B.J.K. INC. d/b/a Chem Rx

  
	
   

  	
  750 Park Place

  
	
   

  	
  Long Beach, New York 11561

  
	
   

  	
  Attention: Jerry Silva

  
	
   

  	
  Telephone: (516) 889-8770

  

 

28.                                 SURVIVAL OF OBLIGATIONS. Upon the expiration or other
termination of this Lease, neither party shall have any further obligation nor
liability to the other except (a) as otherwise expressly provided in this
Lease, (b) for the payment of any Rent and (c) for such obligations as, by
their nature or under the circumstances, can only be, or by the provisions of
this Lease, may be performed after such expiration or other termination,
including, without limitation, Tenant’s Obligations pursuant to the terms and
conditions of Paragraph 6(c).

 

29.                                 LEGAL COSTS. If either Tenant or Landlord brings an action
to enforce the terms hereof or declare rights hereunder, the court in such
action shall award to the party in whose favor a judgment is entered reasonable
attorney’s fees and costs, which sum shall be paid by the losing party.

 

30.                                 LANDLORD’S AND TENANT’S PROPERTY; END OF TERM; HOLDOVER.

 

(a)                                 Landlord’s
Property.  Subject to Paragraph  30(b),  all fixtures, machinery, equipment,
improvements and appurtenances (other than Tenant’s Property) attached to, or
built into, the Premises during the period commencing on the Commencement Date
and ending on the Expiration Date or the date of earlier termination of this
Lease in accordance with the terms hereof, whether or not placed there by or at
the expense of Tenant, shall become and remain a part of the premises; shall be
deemed the property of Landlord (the “Landlord’s Property”),
without compensation or credit to Tenant; and shall (unless otherwise provided
in this Lease or in a notice from Landlord pursuant to Paragraph
23(a) above) not be removed by Tenant
at the Expiration Date or earlier termination of this Lease in accordance with
the terms 

 

22

 

hereof. Further, other than Tenant’s Property, any personal property in
the Premises on the Commencement Date; movable or otherwise, unless installed by,
or for the account of, Tenant and paid for by Tenant, shall be and shall remain
the property of Landlord and shall not be removed by Tenant.

 

(b)                                  Tenant’s
Property.  All movable non-structural
partitions, business and trade fixtures, machinery and equipment,
communications equipment and office equipment that are installed in the
Premises by, or for the account of, Tenant and without expense to Landlord, and
that can be removed without structural damage to the Building, and all
furniture, furnishings, equipment, trade fixtures, inventory, and product
samples and other articles of movable personal property owned by or under the
direct or indirect control of Tenant and located in the Premises (collectively,
the “Tenant’s Property”) shall be and
shall remain the property of Tenant and may be removed by Tenant at any time
during the Term; provided that Tenant repairs
or pays the cost of repairing any damage to the Premises resulting from the
installation and/or removal thereof. Landlord agrees to execute and deliver to
Tenant or Tenant’s designee, from time to time, and in each case at the request
of Tenant, a lien waiver or similar instrument in recordable form evidencing
Landlord’s waiver of any claim, right, lien or charge against any of Tenant’s
Property.

 

(c)                                  Surrender.
 Except as otherwise provided in this
Lease, at or before the Expiration Date, or the date of any earlier termination
of this Lease in accordance with the terms hereof. (i) Tenant shall vacate the
Premises broom clean and in good order and in the substantially the same
condition that the Premises existed on the date hereof, except for ordinary
wear and tear and damage by casualty or condemnation and such damage or
destruction or other correction, prevention, abatement, replacement or repair
as Landlord is required to repair, restore or otherwise perform under this
Lease; (ii) Tenant shall, at Tenant’s sole cost and expense, remove from the
Premises all Tenant’s Property (except such items thereof as Landlord shall
have expressly permitted, in writing, to remain which property shall become the
property of Landlord upon the Expiration Date, or the date of any earlier
termination of this Lease in accordance with the terms hereof) and all
Alterations (except as are permitted to remain pursuant to Paragraph
23(a) or as otherwise agreed in writing by Landlord); and (iii)
Tenant shall, at Tenant’s sole cost and expense, repair (to Landlord’s
reasonable satisfaction) any damage to the Premises resulting from any
installation and/or removal of Tenant’s Property and/or any Alterations. Except
as otherwise provided in this Lease, any other items of Tenant’s Property that
shall remain in the Premises after the Expiration Date, or following an earlier
termination date in accordance with the terms of this Lease, may, at the option
of Landlord, be deemed to have been abandoned, and in such case, such items may
be retained by Landlord as its property or be disposed of by Landlord, in
Landlord’s sole and absolute discretion, at Tenant’s expense. Tenant’s
obligations under this Paragraph  30 shall survive the expiration date of this Lease.

 

(d)                                  Hold
Over.  In the event that Tenant (or
any person claiming through or under Tenant) shall, without Landlord’s consent,
remain in occupancy of the Premises or any part thereof for any period beyond
the Expiration Date or the earlier termination of this Lease in accordance with
the terms hereof, such occupancy shall be deemed to be a month-to-month tenancy
at a monthly rental equal to one hundred fifty percent (150%) of the monthly
installment of Base Rent for the last month of the Term of this Lease, plus one
hundred percent (100%) of any Additional Rent and any other charges payable for
the last month of the Term of this Lease,

 

23

 

subject to all the other provisions of this Lease prevailing prior to
such termination date; and in such event the acceptance of monies by Landlord
shall not be deemed to create a new or additional tenancy other than as
aforesaid and there shall be no renewal or extension of this Lease by operation
of law. Landlord herby waives its right to seek and to recover any
consequential, punitive, or exemplary damages for Tenant remaining in the
Premises or any part thereof for any period beyond the Expiration Date or the
earlier termination of this Lease in accordance with the terms hereof, but in
no event for any period extending beyond three (3) months after the Expiration
Date or earlier termination of this Lease. The provisions of this Paragraph 30(d) shall survive the expiration or termination
of this Lease.

 

31.                                 NO LIABILITY OF LANDLORD.  Notwithstanding
anything to the contrary provided in this Lease, it is specifically understood
and agreed, such agreement being a primary consideration for the execution of
this Lease by Landlord, that there shall be absolutely no liability on the part
of Landlord and Landlord’s successors and assigns or any mortgagee in
possession of the Premises (such parties for the purposes of this Paragraph 31, collectively referred to as the “Landlord”), with respect to any of
the terms, covenants and conditions of this Lease beyond Landlord’s equity in
the Premises, and that Tenant shall look solely to the equity of Landlord in
the Premises (including any insurance, sale and condemnation proceeds
therefrom) for the satisfaction of each and every remedy of Tenant in the event
of any breach by Landlord of any of the terms, covenants and conditions of this
Lease to be performed by Landlord, such exculpation of liability to be absolute
and without any exceptions. However, the obligations of Landlord under this
Lease shall not be binding upon Landlord herein named with respect to any
period subsequent to the transfer of its interest in the Premises and in the
event of such transfer said obligations shall thereafter be binding upon each
transferee (to the extent set forth in the immediately preceding sentence) of
the interest of Landlord herein named, but only with respect to the period
ending with a subsequent transfer within the meaning of this Paragraph 31.

 

32.                                 ABSOLUTE NET LEASE/INDEMNIFICATION BY TENANT.

 

(a)                                 Absolute
Net Lease.  Except as otherwise
provided in this Lease to the Contrary, this Lease is intended to be, and shall
be construed as, an absolute net lease, whereby under all circumstances and
conditions (whether now or hereafter existing or within the contemplation of
the parties), the Rent and any other charges payable hereunder to Landlord
shall be a completely net return to Landlord throughout the Term of this Lease.
Landlord shall not be required to provide any services or do any act in
connection with the Premises, and the Rent and any other charges payable under
this Lease shall be paid to Landlord without any claim on the part of Tenant
for diminution or abatement, and the fact that Tenant’s use and occupancy of
the Premises shall be disturbed or prevented by any cause whatsoever shall not
in any way suspend, abate or reduce the Rent to be paid under this Lease except
as otherwise specifically provided in this Lease.

 

(b)                                 Indemnification
by Tenant.  Except to the extent
attributable to Landlord’s negligence or willful misconduct or that of any of
Landlord’s Agents, and subject to Paragraph 17,
or arising from or relating to Hazardous Materials present, in, on, under or about
the Premises prior to or on the date hereof, Tenant hereby indemnifies,
defends, and holds Landlord, and its affiliates, owners, partners, members,
directors, officers, agents and employees (collectively, “Landlord
Indemnified Parties”) harmless from and against any and all
Losses 

 

24

 

arising from or in connection with any or all of (a) the Premises, and
the leasing, operation, management, maintenance, repair, alteration, use or
occupation of the Premises after the date hereof but during the Term; (b) any
negligence or misconduct of any or all of Tenant and Tenant’s Agents after the
date hereof but during the Term; (c) any accident, injury or damage whatsoever
occurring in, at or upon the Premises after the date hereof but during the
Term; (d) claims for work or labor performed or materials furnished to, or at
the request of, any or all of Tenant and its affiliates, owners, partners,
members, directors, officers, agents and employees after the date hereof but
during the Term; (e) any presence, storage, use or disposal of Hazardous
Materials in, on, under or about the Premises; and (f) the failure of Tenant to
perform Tenant’s obligations under this Lease (collectively, “Tenant’s Indemnified Matters”). In
case any action or proceeding is brought against any or all of Landlord and
Landlord Indemnified Parties by reason of any of Tenant’s Indemnified Matters,
Tenant, upon notice from Landlord, shall resist and defend such action or
proceeding by counsel reasonably satisfactory to Landlord. Tenant shall have
the sole and exclusive right to control the defense of any such action or
proceeding and shall be entitled to settle same, subject to Landlord’s consent
only with respect to and in such circumstances under which the settlement
involves non-monetary damages. The term “Losses”
shall mean all claims, demands, expenses, actions, judgments, damages (actual,
but not consequential, indirect, special, incidental or punitive damages),
penalties, fines, liabilities, losses of every kind and nature (including,
without limitation, property damage, sums paid in settlement of claims and any
costs and expenses associated with injury, illness or death to or of any
person), suits, administrative proceedings, reasonable costs and fees,
including, without limitation, attorneys’ and consultants’ reasonable fees and
expenses, and the costs of cleanup, remediation, removal and restoration to the
extent required by applicable Law, that are in any way related to any matter
covered by the foregoing indemnity, net of any insurance proceeds recovered
from insurance maintained under Paragraph 17
hereof. The provisions of this Paragraph 32(b)
shall survive the expiration or termination of this Lease.

 

33.                                 GOVERNING LAW; CONSTRUCTION. This Lease shall be governed by
and construed in accordance with the laws of the State of New York pursuant to
Section 5-1401 of the New York General Obligations Law. If any provision of
this Lease shall be invalid or unenforceable, the remainder of this Lease shall
not be affected but shall be enforced to the extent permitted by Law. This
Lease shall be construed without regard to any presumption or other rule
requiring construction against the party causing this Lease to be drafted. Each
covenant, agreement, obligation, or other provision of this Lease to be
performed by Tenant, shall be construed as a separate and independent covenant
of Tenant, not dependent on any other provision of this Lease. All terms and
words used in this Lease, regardless of the number or gender in which they are
used, shall be deemed to include any other number and any other gender as the
context may require.

 

34.                                 WAIVER OF TRIAL BY JURY. LANDLORD AND TENANT, TO THE FULLEST
EXTENT THAT THEY MAY LAWFULLY DO SO, HEREBY WAIVE TRIAL BY JURY IN ANY ACTION
OR PROCEEDING BROUGHT BY ANY PARTY TO THIS LEASE WITH RESPECT TO THIS LEASE,
THE PREMISES OR TENANT’S POSSESSION AND USE THEREOF, OR ANY OTHER MATTER
RELATED TO THIS LEASE, OR THE PREMISES OR TENANT’S POSSESSION AND USE THEREOF.

 

25

 

35.                                 ESTOPPEL; CERTIFICATES. Each of landlord and Tenant shall at
any time and from time to time, within fifteen (15) days after request of the
other, deliver a written certificate duly executed by its respective authorized
signatory certifying to the other (or any other person or entity specified by
the requesting party): (i) that this Lease is unmodified and in full force and
effect, or if there has been any modification, if the same is in full force and
effect as so modified, and identifying any such modification; (ii) that to the
knowledge of the certifying party there are no existing offsets or defenses in
favor of such certifying party against the enforcement of any of the terms,
covenants and conditions of this Lease or, if there are any existing offsets or
defenses in favor thereof, specifying the same; (iii) that to the knowledge of
the certifying party, the non-certifying party has observed and performed all
of the terms, covenants and conditions on its part to be observed and
performed, or, if not, specifying the same; (iv) the dates to which Base Rent,
Additional Rent and any other charges payable hereunder have been paid; and (v)
any other factual matters relating to this lease reasonably requested by the
non-certifying party.

 

36.                                 RECORDATION OF LEASE. Landlord shall cooperate with Tenant
to record or file, at Tenant’s expense, in the appropriate land records a
memorandum hereof setting forth the parties hereto, the Term and a description
of the Premises, such that a title insurance company reasonably acceptable to
any current or prospective holder of a Leasehold Mortgage is willing to issue
its lender’s title insurance policy insuring such Leasehold Mortgage.

 

37.                                 TIME. Time is of the essence for this Lease. If the time for
performance hereunder falls on a Saturday, Sunday or a day that is recognized
as a legal holiday in the State of New York, then such time shall be deemed
extended to the next day that is not a Saturday, Sunday or legal holiday in the
State of New York.

 

38.                                 SUCCESSORS. Except as otherwise expressly provided for in
this Lease, this Lease shall be binding upon, and inure of the benefit of, the
parties hereto and upon their respective successors and assigns.

 

39.                                 BROKER. Tenant covenants, warrants and represents that no
broker represented Tenant in the negotiation of this Lease. Landlord covenants,
warrants and represents that no broker represented Landlord in the negotiation
of this Lease. Each of Landlord and Tenant agrees to and hereby does defend,
indemnify and hold the other harmless against and from any brokerage
commissions or finder’s fees or claims therefor by a party claiming to have
dealt with the indemnifying party and all reasonable costs, expenses and
liabilities in connection therewith, including, without limitation, reasonable
attorneys’ fees and expenses, for any breach or such indemnifying party’s
covenants, representations and warranties in this Paragraph
39. The preceding indemnification shall survive the termination or
expiration of this Lease.

 

40.                                 FORCE MAJEURE. The obligations of Landlord and the
non-monetary obligations of Tenant hereunder shall be excused with respect to
any act, event or circumstance arising out of either party’s failure to
fulfill, or delay in fulfilling any of its obligations under this Lease by
reason of acts of God, strikes, lockouts, material or labor restrictions by any
governmental authority, civil riot, floods, governmental preemption of property
in connection with a public emergency or shortages of fuel, supplies, or labor,
or any other cause, whether similar or dissimilar, beyond either party’s
reasonable control and which by the exercise of due diligence such party is
unable, wholly or in part, to prevent or overcome.

 

26

 

41.                                 RIDERS. All Exhibits attached hereto shall be deemed to be a
part hereof and hereby incorporated herein.

 

42.                                 HEADINGS. The headings in this Lease are inserted only as a
matter of convenience and for reference and in no way define, limit or describe
the scope of this Lease with the intent of any provision thereof.

 

43.                                 SUBMISSION OF LEASE. Submission of this Lease to Tenant for
signature does not constitute a reservation of space or an option to
lease.  This Lease is not effective until
execution by and delivery to both Landlord and Tenant.

 

44.                                 JOINT AND SEVERAL LIABILITY. If there be more than one
Tenant or Landlord, respectively, the obligations imposed hereunder upon Tenant
or Landlord, respectively, shall be joint and several.

 

45.                                 RIGHTS AND REMEDIES CUMULATIVE. The rights and remedies
provided by this Lease are cumulative and the use of any one right or remedy by
either party shall not preclude or waive its right to use any or all other
remedies.  Such rights and remedies are
given in addition to any other rights the parties may have by law, statute,
ordinance or otherwise.

 

46.                                 COUNTERPARTS. This Lease may be executed in two or more
counterpart copies of the entire document or of signature pages to the
document, each of which may be executed by one or more of the parties hereto,
but all of which, when taken together, shall constitute a single agreement
binding upon all of the parties hereto.

 

47.                                 FINANCIAL STATEMENTS. Tenant shall deliver to Landlord
within ninety (90) days after the end of each fiscal year, a copy of the
consolidated financial statements of Chem Rx Corporation, the holding company
(the “Holding Company”) of Tenant”, as of
the end of such year, fairly presenting the Holding Company’s financial
position, which statements shall consist of a balance sheet and related
statements of income, retained earnings, and cash flow covering the period of
the Holding Company’s immediately preceding fiscal year, and which shall be
prepared by independent certified public accountants satisfactory to the
Mortgagee, in its sole discretion, in form and substance in accordance with
generally accepted accounting principles, consistently applied (“GAAP”) and
otherwise acceptable to the Mortgagee in its sole discretion.  All financial statements shall be accompanied
by the certification of the chief financial offer of the Holding Company that
such financial statements fairly present, in all material respects, the
financial condition of the Holding Company and its subsidiaries as at the dates
indicated and the results of their operations and cash flows for the periods
indicated, subject to changes resulting from audit and normal year-end or
quarter-end adjustments, as applicable.

 

48.                                 AMENDED AND RESTATED LEASE. On and as of the date hereof,
this Lease shall have amended, restated and completely replaced the First
Amended and Restated Lease.  This Lease
is intended, and shall be deemed and construed, to be a continuation (without
interruption or recommencement) of the various terms and provisions of the
First Amended and Restated Lease and the obligations arising or accruing
thereunder existing to the date hereof, subject to any modifications made by
this Lease.  All prior understandings and
agreements between the parties are merged in this Lease, which alone fully and
completely expresses the agreement of 

 

27

 

the parties. No agreement shall be effective to modify this Lease, in
whole or in part, unless such agreement is in writing, and is signed by the
party against whom enforcement of said change or modification is sought.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

28

 

IN WITNESS WHEREOF, Landlord
and Tenant have executed and delivered this Lease of the date first written
above.

 

	
   

  	
  LANDLORD:

  
	
   

  	
   

  
	
   

  	
  750
  PARK PLACE REALTY CO., LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Jerry Silva

  
	
   

  	
   

  	
    Name:
  Jerry Silva

  
	
   

  	
   

  	
    Title:
    Member

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TENANT:

  
	
   

  	
   

  
	
   

  	
  B.J.K.
  INC., d/b/a Chem Rx

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Steven Silva

  
	
   

  	
   

  	
    Name:
  Steven Silva

  
	
   

  	
   

  	
    Title:   Executive Vice President

  

 

29

 

EXHIBIT A

 

AS
TO PARCEL I

 

ALL
that certain parcel or parcels of land, located in the City of Long Beach,
County of Nassau and State of New York, more particularly described as follows:

 

BEGINNING
at the corner formed by the intersection of the westerly side of Riverside
Boulevard and the southerly side of Park Place, as widened, which point is
20.16 feet south as measured along the westerly side of Riverside Boulevard
from the intersection of the old southerly side of Park Place and the westerly
side of Riverside Boulevard, both streets as shown on Map No. 1, Estates of
Long Beach, filed in Nassau County Clerk’s Office on April 20, 1911 as Map #31,
Case #231;

 

RUNNING
THENCE South 00 degrees 16 minutes East along the westerly side of Riverside
Boulevard, 35.38 feet to the point of curve;

 

THENCE
along the arc of a curve bearing to the right, and still along the westerly side
of Riverside Boulevard, and having a radius of 1,343,307 feet, a distance of
151.05 feet to a point:

 

THENCE
South 82 degrees 33 minutes West, 46.88 feet to a point;

 

THENCE
South 3 degrees 16 minutes 23 seconds East, 79.08 feet to a point;

 

THENCE
South 85 degrees 23 minutes 45 seconds West, 433.43 feet;

 

THENCE
North 7 degrees 27 minutes 00 seconds West, 241.01 feet to the southerly side
of Park Place, as widened;

 

THENCE
North 82 degrees 33 minutes East along the southerly side of Park Place, and 20.00
feet south of and parallel with, the old southerly side of Park Place, as shown
on aforementioned map, 517.24 feet to the point or place of BEGINNING.

 

AS
TO PARCEL II

 

ALL
that certain plot, piece or parcel of land, situate, lying and being in the City
of Long Beach, Town of

 

Hempstead,
County of Nassau and State of New York, bounded and described as follows:

 

30

 

BEGINNING
at a point on the south side of Park Place, as widened, and being the following
two (2) courses and distances from the corner formed by the intersection of the
west side of Riverside Boulevard and the south side of Park Place, both streets
as shown on Map No. 1, Estates of Long Beach, filed in the Nassau County Clerk’s
Office on April 20, 1911 as Map No. 31 and Case No. 231;

 

(1)
South 00 degrees 16 minutes 00 seconds East, 20.16 feet to the new widened
line; and

 

(2)
South 82 degrees 33 minutes 00 seconds West along the new widened line of Park
Place, 517.24 feet to a point;

 

THENCE
South 7 degrees 27 minutes 00 seconds East, 241.01 feet to point;

 

THENCE
South 85 degrees 23 minutes 45 seconds West, 115.24 feet to a point;

 

THENCE
North 7 degrees 27 minutes 00 seconds West, 235.30 feet to the new south line
of Park Place;

 

THENCE
North 82 degrees 33 minutes 00 seconds East along the new south line of Park
Place, 115.00 feet to the point or place of BEGINNING.

 

31

 

Exhibit B

 

Site Plan

 

32

 

 

33

 

GUARANTY OF LEASE

 

In consideration of, and as an inducement for the granting, execution
and delivery of the foregoing Second Amended and Restated Lease Agreement,
dated as of October 26, 2007 (as the same may be amended, modified, assigned,
extended, supplemented, renewed, replaced and/or restated from time to time,
collectively, the “Lease”), by 750 Park Place
Realty Co., LLC (“Landlord”) to B.J.K. Inc.,
d/b/a/ Chem Rx (“Tenant”), and in further
consideration of the sum of One ($1.00) Dollar and other good and valuable
consideration paid by Landlord to the undersigned, the receipt and sufficiency
of which are hereby acknowledged, the undersigned Chem
Rx Corporation, a Delaware corporation having an address at 750
Park Place, Long Beach, New York 11561 (the “Guarantor”),
hereby guaranties to Landlord, its successors and assigns, the (a) full and
prompt payment of all (i) Rent (as defined in the Lease), (ii) use and
occupancy charges to which Landlord may be entitled by law or otherwise after
the termination of the Lease and during the continued occupancy by Tenant, its
successors and assigns, (iii) costs incurred by Landlord in seeking a
termination of the Lease (including, without limitation, through a final
judgment by a court of competent jurisdiction) and all costs incurred by
Landlord in recovering vacant possession of the Premises (as defined in the
Lease) after Default (as defined in the Lease) by Tenant and/or by the
enforcement of this Guaranty, including without limitation, reasonable
attorneys’ fees and disbursements and (iv) damages, costs, expenses, claims or
liabilities that may arise as a result of Tenant’s failure to pay for all costs
of Tenant’s work or alterations, improvements or modifications to the Premises
by or for Tenant (other than such costs which the Lease expressly provides will
be paid for by Landlord, if any) or that may arise as a result of Tenant’s
failure to pay for any labor, materials or other costs for improvements
performed by or for Tenant with respect to the Premises which costs if not paid
for could give rise to lien against the Premises, except to the extent that the
payment of such costs was required to be made by Landlord pursuant to the terms
of the Lease, and (b) full and timely performance and observance of all the
covenants, terms, conditions and agreements in the Lease provided to be
performed and observed by Tenant, its successors and assigns (hereinafter such
payment and performance obligations are collectively referred to as the “Obligations”); and the Guarantor
hereby covenants and agrees to and with Landlord, its successors and assigns,
that if Default shall at any time be made by Tenant, its successors or assigns,
in the performance and observance of any the Obligations, including, without
limitation, the obligation to pay Rent, the Guarantor shall and will forthwith
pay such Rent to Landlord, its successors and assigns, and any arrears thereof,
and shall and will forthwith faithfully perform and fulfill all of the other
Obligations, and will forthwith pay to Landlord all damages that may arise in
consequence of any Default by Tenant, its successors or assigns, under the
Lease, including, without limitation, all reasonable attorney’s fees and
disbursements incurred by Landlord or caused by any such Default and/or by the
enforcement of this Guaranty (hereinafter referred to as “this
Guaranty”). Terms printed with initial capital letters in this
Guaranty and not otherwise defined shall have the respective meanings assigned
to them in the Lease.

 

This Guaranty is an absolute and unconditional guaranty of payment and
of performance. It shall be enforceable against the Guarantor, its successors
and assigns, without the necessity for 

 

34

 

any suit or proceedings on Landlord’s part of any kind or nature
whatsoever against Tenants, its successors or assigns, and without the
necessity of any notice of non-payment, non-performance or non-observance or of
any notice of acceptance of this Guaranty or of any other notice or demand to
which the Guarantor might otherwise be entitled, all of which the Guarantor
hereby expressly waives; and the Guarantor hereby expressly agrees that the
validity of this Guaranty and the obligations of the Guarantor hereunder shall
in nowise be terminated, affected, diminished or impaired by reason of (i) the
assertion of, or the failure to assert by Landlord against Tenants, or against
Tenant’s successors or assigns, any of the rights or remedies reserved to
Landlord pursuant to the provisions of the Lease or (ii) the assertion of, or
the failure to assert by Landlord against the Guarantor or against its
successors or assigns, any of the rights or remedies reserved to Landlord
pursuant to the provisions of this Guaranty or the Lease, or by relief of
Tenant or any other guarantor form any of their respective obligations under or
in connection with the Lease. Without in any way limiting the foregoing, the
Guarantor shall and does hereby waive any other act or omission of Landlord
which changes the scope of the Guarantor’s risk or any other event that
otherwise might constitute a legal or equitable counterclaim, defense or
discharge of a surety or guarantor.

 

This Guaranty shall be a continuing guaranty, and the liability of the Guarantor
hereunder shall in no way be affected, modified or diminished by reason of any
assignment renewal, modification or extension of the Lease or by reason of any
modification or waiver of or change in any of the terms, covenants, conditions
or provisions of the Lease by Landlord and Tenant, or by reason of any
extension of time that may be granted by Landlord to Tenant, its successors or
assigns, or by reason of any dealings or transactions or matter or thing
occurring between Landlord and Tenant, its successors or assigns, or by reason
of any bankruptcy, insolvency, reorganization, arrangement, assignment for the
benefit of creditors, receivership or trusteeship affecting Tenant or any other
guarantor, or their successors or assigns, whether or not notice thereof or of
any thereof is given to the Guarantor.

 

The Guarantor hereby represents and warrants to Landlord that it is not
entitled, directly or indirectly, to diplomatic or sovereign immunity under any
state or federal law. In the event that the Guarantor hereunder is a
corporation, the person executing this Guaranty on behalf of the Guarantor
hereby represents and warrants that: the Guarantor is a duly constituted
corporation authorized to do business in the State of New York; all franchise
and corporate taxes of the Guarantor have been paid to date; such person is
duly authorized to execute and deliver this Guaranty on behalf of said
corporation; the Federal Taxpayer Identification Number of said corporation is
as herein set forth below its signature; and any and all financial statements
relating to said corporation or Tenant heretofore furnished to Landlord are
true and correct in all material respects and do not fail to state or omit any
fact that would be necessary in order not to make the same misleading.

 

In the event that this Guaranty shall be held ineffective or
unenforceable by any court of competent jurisdiction, the Guarantor shall be
deemed to be a tenant under the Lease with the

 

35

 

same force and effect as if the Guarantor were expressly named in the
Lease as a joint tenant with joint and several liability.

 

Unless and until all of the Obligations are fully performed and
observed, the Guarantor: (a) shall not be subrogated to any rights of Landlord;
(b) waives all rights of subrogation, indemnity, contribution, exoneration,
reimbursement or any other claim which the Guarantor now has or hereafter shall
have against Tenant or any other person liable in any way with respect to the
Obligations; and (c) subordinates any liability or indebtedness of Tenant now
or hereafter held by the Guarantor to the Obligations. In addition, the
Guarantor agrees that, until all of the Obligations are fully performed and
observed, no Guarantor (a) shall accept payment from any other Guarantor or
person by way of contribution on account of any payment or act of performance
by such Guarantor, and (b) will take any action to exercise or enforce any such
rights to such contribution.

 

All of Landlord’s rights and remedies under the Lease and under this
Guaranty are intended to be distinct, separate and cumulative and no such right
or remedy therein or herein mentioned is intended to be in exclusion of or a
waiver of the others.

 

The Guarantor hereby covenants and agrees to and with Landlord, its
successors and assigns, that the Guarantor may be joined in any action against
Tenant or against any one or more other guarantors in connection with the Lease
and that recovery may be had against the Guarantor without Landlord, its
successors or assigns, first pursuing or exhausting any remedy or claim against
Tenant, its successors or assigns or against any one or more other guarantors
on the Lease. The Guarantor hereby also expressly agrees that, in any jurisdiction,
it will conclusively be bound by the judgment in any such action by Landlord
against Tenant (wherever brought) as if the Guarantor were a party to such
action even though the Guarantor is not joined as a party in such action.

 

As a further inducement to Landlord to make and enter into the Lease
and in consideration thereof, Landlord and the Guarantor covenant and agree
that in any action or proceeding brought on, under or by virtue of this
Guaranty, Landlord and the Guarantor shall and do hereby waive trial by jury.

 

The Guarantor hereby consents and agrees that the Supreme Court of the
State of New York for the County of New York and the United States District
Court for the Southern District of New York each shall have personal
jurisdiction and proper venue with respect to any dispute between Landlord and
the Guarantor; provided that the foregoing
consent shall not deprive Landlord of the right in its discretion to
voluntarily commence or participate in any action, suit or proceeding in any
other court having jurisdiction and venue. In any dispute with Landlord, the
Guarantor will not raise, and hereby expressly waives, any objection or defense
to any such jurisdiction as an inconvenient forum.

 

36

 

This Guaranty shall be governed by and construed in accordance with the
laws of the State of New York.

 

Any notice, demand or request by either party to the other shall be in
writing, and shall be deemed to have been duly given if given by any of the
means permitted for notices under Section 27 of the Lease, addressed to the
other party as follows: in the case of the Guarantor, at its address set forth
above or to such other address as the Guarantor shall have given notice of to
Landlord, and in the case of Landlord, at Landlord’s address for notices under
Section 27 of the Lease.

 

In case any term, condition or other provision contained in this
Guaranty shall be held to be invalid, illegal or unenforceable, such
invalidity, illegality or unenforceability shall not affect any other term,
condition or provision contained in this Guaranty.

 

This Guaranty shall inure to the benefit of Landlord and Landlord’s
successors and assigns, and shall be binding upon and enforceable against the
Guarantor and the Guarantor’s successors, assigns, heirs (and, if the Guarantor
is a natural person, his/her heirs and legal representatives).

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

37

 

The Guarantor has unconditionally delivered this Guaranty to Landlord,
and the failure to sign any other guarantee by any other person intended to be
a guarantor of the Tenant’s obligations under the Lease or any portion thereof
shall not discharge the liability of the Guarantor.

 

	
  Dated: October 26, 2007

  	
  Chem Rx Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
     /s/ Jerry Silva

  
	
   

  	
   

  	
     Name: Jerry Silva

  
	
   

  	
   

  	
     Title: Chief Executive Officer

  
	
   

  	
  Federal Taxpayer I.D. No.: 20-2938469

  
	
   

  	
   

  
	
   

  	
   

  
	
  STATE OF NEW YORK           )

  	
   

  	
   

  
	
   

  	
  :ss.:

  	
   

  
	
  COUNTY OF NEW YORK       )

  	
   

  	
   

  

 

On the 26th day of October, 2007, before me, the
undersigned, a Notary Public in and for said State, personally appeared Jerry Silva, personally known to me or proved to me on the
basis of satisfactory evidence to the individual whose name is subscribed to
the within instrument and acknowledged to me that he executed the same in his
capacity, and that by his signature on the instrument, the individual, or the
person upon behalf of which the individual acted, executed the instrument.

 

	
   

  	
   

  
	
   

  	
  /s/ Michael Grandis

  
	
   

  	
  Notary Public

  
	
   

  	
   

  
	
   

  	
  MICHAEL GRANDIS

  
	
   

  	
  Notary Public, State Of New York

  
	
   

  	
  No. 02-GR606

  
	
   

  	
  Qualified In New York County

  
	
   

  	
  Commission Expires 12/05/2009

  

 

38

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