Document:

exhibit101q12014

Confidential Information has been omitted in places marked “[***]” and has been filed separately with the Securities and Exchange Commission.  Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 24b-2 under the Securities Exchange Act of 1934, as amended

LIMITED LABORATORY AND ADMINISTRATIVE SERVICES AGREEMENT

	
																
	Company Name:
	Hooper Holmes, Inc.
	 

	Address:
	560 N. Rogers Road
	 

	City:
	Olathe
	State:
	KS
	Zip:
	66062
	 

	Contact Name:
	Ernie Sifford
	Contact Title:
	Vice President Operations
	 

	Telephone:
	913.747.2555
	Email:
	Ernie.Sifford@hooperholmes.com
	 

	Nature of Company:
	X
	Corporation
	o
	Limited Liability Company
	 

	 
	o
	Partnership
	o
	Other:
	     
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 

The company identified above (on its own behalf and on behalf of its Affiliates, and their respective employees, agents and representatives, collectively referred to herein as “Company” or “Client”) agrees to engage Clinical Reference Laboratory, Inc., a Kansas corporation (hereinafter “CRL”) to furnish specific services,  as set forth and defined herein.   “Affiliate” means any entity that directly, or indirectly through one or more intermediaries, is controlled by, is under common control with, or controls, a party to this Agreement.
This Limited Laboratory and Administrative Services Agreement (“LLASA”), including associated Exhibits, Schedules and any Statement(s) of Work executed hereunder or attached hereto (collectively, the “Agreement”), shall become effective upon Closing and as of the Closing Date of the Strategic Alliance Agreement (“SAA”) (“Effective Date”) entered into by the parties coincident herewith. The LLASA shall be construed wherever possible to avoid conflict between the documents comprising the SAA and the documents comprising the LLASA. The fact that a clause appears in one document but not another shall not be considered a conflict. 
SIGNATURES:
By signing below, the undersigned certify that they have read and understand, and agree to be legally bound by, the terms and conditions of this Agreement.  

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Confidential Information has been omitted in places marked “[***]” and has been filed separately with the Securities and Exchange Commission.  Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 24b-2 under the Securities Exchange Act of 1934, as amended

	
							
	CRL:
	 
	 
	COMPANY:
	 

	CLINICAL REFERENCE LABORATORY, INC. 
(by its authorized representative)
	 
	 HOOPER HOLMES, INC.
(by its authorized representative)

	 
	 
	 
	 
	 

	By:
	/s/ Timothy S. Sotos
	 
	By:
	/s/ Henry E. Dubois

	 
	 
	 
	 
	 

	Print Name:
	Timothy S. Sotos
	 
	Print Name:
	Henry E. Dubois

	 
	 
	 
	 
	 

	Title:
	Chairman/CEO
	 
	Title:
	President/CEO

	 
	 
	 
	 
	 

	Address:
	8433 Quivira Road
	 
	Address:
	560 N Rogers Road

	 
	Lenexa, KS 66215
	 
	 
	Olathe, KS  66062

	 
	 
	 
	 
	 

	Date:
	April 16, 2014
	 
	Date:
	April 16, 2014

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	CRL CONTRACT ID #
	     
	 
	COMPANY CONTRACT ID #:
	     

	 
	 
	 
	 
	 

CRL is a laboratory specializing in human specimen and bodily fluid analysis for the purpose of health assessment screening.  CLIENT desires to utilize CRL for laboratory testing services and related compliance services to support CLIENT’s provision of health risk assessment and wellness programs in the United States, Puerto Rico and Guam, pursuant to the provisions of this Agreement.
A G R E E M E N T:
		
	1.
	Services Performed.  During the term of this Agreement, and subject to the performance of CLIENT hereunder, CRL agrees to provide and perform the following services (the “Services”) for CLIENT consistent with the agreed to performance specifications, applicable Federal and state laws, statutes, regulations, and rules (“Laws”) and commensurate with standard industry practices in the wellness laboratory testing market:

		
	(a)
	Laboratory Services, including baseline laboratory testing (blood, dried blood spot, oral fluid, and/or urine analysis) for each specimen (“Specimen”) and reporting of lab test results, as more fully described in Schedule A-Pricing attached hereto and the Specification of Lab Services Agreement (“SLSA”) entered into by the parties simultaneously herewith;

		
	(b)
	Administrative Services, including the fulfillment of responsibilities  necessary for the conduct of CLIENT’s Health and Wellness events in compliance with applicable Laws, as more particularly described in Schedule B-Pricing attached hereto and the Specification of Administrative Services Agreement (“SASA”) entered into by the parties simultaneously herewith;

		
	(c)
	Any other additional or optional laboratory tests and/or services  as otherwise directed by CLIENT and accepted in writing by CRL.

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Confidential Information has been omitted in places marked “[***]” and has been filed separately with the Securities and Exchange Commission.  Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 24b-2 under the Securities Exchange Act of 1934, as amended

		
	2.
	Term.  This Agreement shall become effective on the Closing Date of the SAA (the “Effective Date”) and shall expire at the end of five (5) years from the Effective Date (the “Initial Term”) unless auto-renewed or sooner terminated by either party by notice to the other party as follows:

		
	(a)
	For Cause.  In the event the other party commits a material breach of this Agreement, the party wishing to terminate on the basis of a material breach shall give the breaching party written notice specifying the nature of the breach, as follows:

		
	(i)
	In the event of Chronic Failure as defined in Exhibit A to the SLSA or Exhibit B to the SASA, CRL shall have five (5) days following the date of such written notice in which to cure such default. 

		
	(ii)
	For any material breach, other than a Chronic Failure, the breaching party shall have thirty (30) days following the date of such written notice in which to cure such default.

If the breaching party fails or is unable to cure such default within such period, the party wishing to terminate this Agreement may do so by written notice at the expiration of the cure period. 
		
	(b)
	Contract Buy Out  If CLIENT sells substantially all of its assets (or any other transaction that results in a change of control of CLIENT) during the Initial Term and the purchaser does not assume CLIENT’s obligations under this Agreement pursuant to Section 3(e) of this Agreement  (or if CLIENT otherwise engages in any other transaction during the Initial Term in which the surviving entity desires to terminate this Agreement), CLIENT may terminate this Agreement by providing to CRL at least ninety (90) days before the effective date of such termination written notice of termination together with  a buyout fee in cash equal to the Purchase Price (as defined in the SAA), reduced ratably on a straight line basis over a five year period for each complete month commencing from the Effective Date to the effective date of termination. 

		
	(c)
	Bankruptcy.  In the event a party files for protection under any bankruptcy or creditor’s rights statutes or has such action filed against it and the action is not dismissed within thirty (30) days.

		
	(d)
	Auto Renew.  Unless notice to the contrary is given, by either party, at least one (1) year prior to end of the then-current term, this Agreement shall automatically renew for successive additional five (5) year terms with each such renewal a “Renewal Term”.

Following expiration or termination, this Agreement shall be of no further force or effect except that: (i) each party shall remain liable for its own liability arising prior to such expiration or termination, and (ii) the provisions of Sections 5, 9 and 11 shall survive.
		
	3.
	Pricing and Payment. 

		
	(a)
	Pricing.  CRL agrees to provide Services in exchange for timely payment from CLIENT.  CRL shall invoice CLIENT once per calendar month for Services requested by CLIENT and performed by CRL, in accordance with the prices contained in Schedule A and Schedule B attached hereto (“Price List”).

		
	(b)
	Except as stated in this provision, the Price List is guaranteed for the Initial and any Renewal Term of this agreement:

		
	i)
	Fees for sample shipping/postage may increase, with thirty (30) days written notice by CRL to CLIENT, whenever CRL receives price increase from its vendors, and/or

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Confidential Information has been omitted in places marked “[***]” and has been filed separately with the Securities and Exchange Commission.  Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 24b-2 under the Securities Exchange Act of 1934, as amended

		
	i)
	Prices for specimen collection kits may increase, with thirty (30) days written notice by CRL to CLIENT, whenever CRL receives price increase from its vendors.

		
	ii)
	CRL has the right to increase its prices on each anniversary date of this Agreement.  Such increase shall be no greater than the increase in the Consumer Price Index (CPI-U), published by the United States Bureau of Labor Statistics from the more recent of the Effective Date or most recent date of a CRL price increase to the date CRL notifies CLIENT of the new prices. CRL will notify CLIENT at least sixty (60) days prior to the anniversary date of the Agreement on which such price increase shall become effective.  If CRL notifies CLIENT of a price increase that is greater than the increase in the Consumer Price Index (CPI-U), published by the United States Bureau of Labor Statistics from the more recent of the Effective Date or most recent date of a CRL price increase to the date CRL notifies CLIENT of the new prices, CLIENT shall have the right, effective on the date the new pricing is to take effect and upon no less than thirty (30) days prior written notice to CRL, 

x)        to terminate this Agreement , or
y)        to modify this Agreement in writing only insofar as to permit CLIENT to purchase such Services from CRL as CLIENT requests (subject to a renegotiated price), and to meet its remaining requirements by either in-sourcing its lab testing services insofar and only as necessary to support its H&W Business or procuring lab testing services from another vendor to the extent CLIENT determines in its discretion.  
If CLIENT fails to provide CRL timely notice of termination or modification under this Section3(b), then the price increase shall become effective and CLIENT shall have no right to exercise its options under Section 3(b)) unless and until a subsequent price increase greater than the increase in the Consumer Price Index (CPI-U) is imposed.
		
	(c)
	Payment.  CLIENT shall pay all undisputed CRL invoices no later than forty-five (45) days following CRL's submission to CLIENT of a correct invoice for services performed by CRL during the preceding month.  If CLIENT does not make full payment to CRL within forty-five (45) days following CRL's delivery of the undisputed  invoice to CLIENT, the payment shall immediately become subject to a fee equal to one and a half (1 1⁄2 %) of the amount due, with the entire one and a half percent (1 1⁄2%) fee accruing on the forty-sixth (46th)  day after CRL delivers the invoice to CLIENT.  In the event CLIENT fails to pay undisputed charges within sixty (60) days, CRL shall have the right to cease providing the Services and reporting results on CLIENT’s account until payment is brought current.  CRL’s suspension of Services and reporting results shall not constitute a breach of this Agreement provided CRL resumes all Services and reporting results promptly upon CLIENT’s payment of arrears.

		
	(d)
	Disputes. CLIENT may withhold payment of charges in dispute upon notice to CRL specifically identifying the charge and the reason it is disputed. The withholding of charges in dispute will not be considered overdue and the late fees described in 3(c) shall not apply. Following resolution of the dispute, CLIENT shall pay any properly due charges promptly upon receipt of a corrected invoice.

		
	(e)
	Minimum Threshold.  If CLIENT sells substantially all of its assets (or any other transaction that results in a change of control of CLIENT) during the Initial Term and the purchaser assumes CLIENT’s obligations under this Agreement, the purchaser shall be obligated to order and/or pay for a minimum of 300,000 Specimen testings per year at the Prices specified in  Schedule A for each Contract Year 

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Confidential Information has been omitted in places marked “[***]” and has been filed separately with the Securities and Exchange Commission.  Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 24b-2 under the Securities Exchange Act of 1934, as amended

during the Initial Term (the “Minimum Threshold”).    For purposes of this Agreement, “Contract Year” means a period beginning on the Effective Date or any anniversary of the Effective Date and ending twelve (12) months later. 
		
	4.
	Exclusivity  

		
	(a)
	During the term of this Agreement, CLIENT shall use CRL as its exclusive provider of the Lab Tests specifically listed in Schedule A , except that:

		
	i)
	CLIENT shall remain free to procure Lab Tests from third party walk-in laboratory providers; and 

		
	ii)
	CLIENT shall remain free to in-source Lab Services or procure Lab Services from a third party vendor in accordance with Section 3(b)(iii)(y) of the Agreement;

		
	iii)
	CLIENT shall remain free to manufacture or assemble wellness specimen collection kits or kit components for its own use, or to procure wellness specimen collection kits or kit components from third party vendors.  Nothing in this provision shall obligate CLIENT to use or procure CRL’s wellness specimen collection kits.

		
	iv)
	CLIENT shall remain free to maintain a Certificate of Waiver exclusively to conduct waived laboratory tests, as defined in the Clinical Laboratory Improvement Amendments of 1988 (“CLIA”), in the ordinary course of and exclusively in support of its H&W Business. 

		
	v)
	In the event CRL is incapable (as a matter of law or fact) of providing Administrative Services in a particular jurisdiction and the parties are unable to achieve a mutually acceptable alternative approach despite good faith effort, CLIENT shall be free to procure Lab Services or otherwise engage a third party vendor (including another clinical laboratory) to enable CLIENT to conduct its H&W Business in accordance with the Laws of the relevant jurisdiction.  In the event CRL thereafter becomes capable of providing Administrative Services for such relevant jurisdiction, CRL shall notify CLIENT and, within thirty days thereafter, CLIENT will begin to procure Lab Services and Administrative Services from CRL related to any future H&W event where CLIENT is not yet obligated to procure such services from a third party.

		
	(b)
	During the Initial Term and all Renewal Terms, CRL shall include CLIENT as a member of CRL’s preferred provider network for wellness programs. 

		
	5.
	Confidentiality

		
	(a)
	Confidential Information. As used in this Agreement, “Confidential Information” shall mean any information (whether written, oral or electronic) which is confidential or proprietary information of the disclosing party, which shall be deemed to include without limitation, nonpublic personal and/or protected health information of an individual, technical information, laboratory technology or procedures, processes, techniques, formulas, compounds, methodologies, research, developments, plans, licenses, information and computer systems, data, know-how, trade secrets, customers, customer lists, business prospects, catalogs and price lists, records, policies, business plans and strategy, business alliances, budgets, financial information, and information related to the disclosing party’s business, operations, assets, liabilities, equity ownership and control, marketing programs, courier systems, billing systems, personnel, suppliers and all other confidential and 

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Confidential Information has been omitted in places marked “[***]” and has been filed separately with the Securities and Exchange Commission.  Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 24b-2 under the Securities Exchange Act of 1934, as amended

proprietary information of whatever description that may be divulged to the receiving party. Notwithstanding the foregoing, such definition of Confidential Information shall not include information that: (i) is, as of the time of its disclosure, or thereafter becomes, part of the public domain from a source other than the receiving party or its affiliates, employees and agents; (ii) was known to the receiving party as of the time of its disclosure, as established by written documentation bearing a date prior to the time of disclosure by the disclosing party; or (iii) is subsequently legally learned from a third party not subject to an obligation of confidentiality with respect to the information disclosed.
		
	(b)
	Non-Disclosure.  The receiving party covenants and agrees to maintain the Confidential Information of the disclosing party in strict confidence and not disclose or divulge such Confidential Information, using the same degree of care as it uses to protect its own Confidential Information of like nature, but not less than a reasonable degree of care for the kind of information involved.  Without limiting the generality of the foregoing, the receiving party shall: (i) not, directly or indirectly, disclose any such Confidential Information to any person outside its business organization, and disclose only the minimum necessary Confidential Information to persons within its business organization (including employees, officers, directors, representatives, and agents) on a “need to know” basis who have executed confidentiality agreements with the receiving party that are at least as comprehensive as the provisions of this Agreement; (ii) not disclose any Confidential Information that would violate any federal or state laws, including without limitation the Gramm-Leach-Bliley Act (“GLBA”) and/or the Health Insurance Portability and Accountability Act (“HIPAA”), (iii) maintain physical, electronic and procedural safeguards to protect the Confidential Information,  (iv) comply with the provisions of Exhibit A – Business Associate Agreement, (v) not, directly or indirectly, copy, reproduce, distribute, manufacture, duplicate, reveal, report, publish, disclose, cause to be disclosed, reverse engineer, decompile, assign or otherwise transfer such Confidential Information; and ((vi) return such Confidential Information to the disclosing party upon the disclosing party’s request provided that the receiving party may retain one copy of the Confidential Information for legal archival purposes only. The receiving party shall notify the disclosing party promptly in the event the receiving party receives legal process that would require disclosure of Confidential Information.

		
	(c)
	Non-Use. The receiving party shall not use the Confidential Information of the disclosing party for its own benefit or the benefit of any person or entity other than disclosing party, and only as instructed by the disclosing party. Notwithstanding the foregoing, CRL shall have the right, without either directly or indirectly identifying CLIENT or the Specimen donor, to utilize the results or other information from CLIENT and/or Specimen donor in statistical analysis, and CLIENT shall have the right to utilize the results or other information from Specimen donor in statistical analysis.

		
	(d)
	Proprietary Rights.  The receiving party recognizes and acknowledges that the Confidential Information of the disclosing party is confidential and the property of the disclosing party and comprises “trade secrets” as that term is defined in the Kansas Trade Secrets Act set forth in K.S.A. 60-3320 et. seq. and that the protections afforded the disclosing party under this Agreement concerning such Confidential Information are in addition to those provided by such act.  All proprietary rights created or developed by the receiving party arising out of or related to the Confidential Information of the disclosing party shall be owned by the disclosing party. The receiving party is not granted any license or other interest in such proprietary rights or any portion thereof.

		
	(e)
	Remedies.  In the event that either party is in material breach of any provision of this Agreement, it shall immediately advise the non-breaching party and take steps to remedy such breach, including 

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Confidential Information has been omitted in places marked “[***]” and has been filed separately with the Securities and Exchange Commission.  Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 24b-2 under the Securities Exchange Act of 1934, as amended

but not limited to protecting customers, the non-breaching party and its affiliates against the consequences of any disclosure or use of Confidential Information in violation of this agreement. The receiving party acknowledges that use or disclosure of the Confidential Information of the disclosing party, whether by the receiving party, its employees, or any person or other entity associated with or under the control of the receiving party, in a manner inconsistent with this Agreement, will result in irreparable and continuing damage to the disclosing party for which there will be no adequate remedy at law and that the disclosing party may therefore obtain, in addition to any other legal remedies which may be available, such equitable relief as may be necessary to protect the disclosing party against any such breach or threatened breach, including, without limitation, injunctive relief.
		
	6.
	Intellectual Property.  The parties herein agree that CRL possesses certain intellectual property; including inventions, know-how, trade-secrets, analytical methods, computer technical expertise, software and statistical methodologies originated by CRL prior to or under or during the term of this Agreement without benefit of information provided by CLIENT (CRL’s “Intellectual Property”). CRL’s Intellectual Property is the sole property of CRL.  Further, to the extent that any improvement to or addition to CRL’s Intellectual Property, as such improvement or addition related to performing laboratory analyses and Services, made by CRL in the course of performing the Services under this Agreement, such improvement and/or addition to CRL’s Intellectual Property shall be the sole and exclusive property of CRL. Any invention that directly relates to CLIENT’s data or Confidential Information or any unique technology developed expressly and solely for CLIENT which directly relates to the Services provided by CRL hereunder shall belong to CLIENT.

		
	7.
	Information Security and Business Continuity.  CRL will comply with applicable regulations related to Information Security and Privacy as set forth in Exhibit A and use commercially reasonable efforts to ensure continuity of its business operations in support of providing the Services to CLIENT. 

		
	8.
	Maintenance of records. CRL agrees to establish and maintain true and correct (in all material respects) records of all transactions and Services arising out of this Agreement. Such records shall be maintained in paper and/or electronic images for no less than seven (7) years.

		
	9.
	Indemnification.

		
	(a)
	By CRL.  CRL shall indemnify and save CLIENT, and its officers, directors, employees, agents, or representatives harmless from and against all damages sustained or incurred by a third party arising from personal injuries or other claims recovered against CLIENT, as a result of any negligent act or omission of CRL, its agents, servants, or employees, arising out of or related to this Agreement, including any and all reasonable expense, legal or otherwise, incurred by CLIENT or its officers, directors, employees, agents, or representatives in the defense of any such third party claim or suit.

		
	(b)
	By CLIENT.  CLIENT shall indemnify and save CRL, and its officers, directors, employees, agents or representatives harmless from and against all damages sustained or incurred by a third party arising from personal injuries or other claims recovered against CRL, as a result of any negligent act or omission of CLIENT, its agents, servants, or employees, arising out of or related to this Agreement, including any and all reasonable expense, legal or otherwise, incurred by CRL, or its officers, directors, employees, agents, or representatives in the defense of any such third party claim or suit.

		
	(c)
	Claims for indemnity under this Agreement shall be subject to the following additional terms:  (i) The indemnified party shall provide prompt written notice, in reasonable detail, of any claim for which it 

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Confidential Information has been omitted in places marked “[***]” and has been filed separately with the Securities and Exchange Commission.  Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 24b-2 under the Securities Exchange Act of 1934, as amended

may seek indemnification hereunder; (ii) If such notice is not provided within the time stated above, the indemnified party nonetheless shall be entitled to indemnification by the indemnifying party, except to the extent that indemnifying party is actually prejudiced by the late receipt of such notice; (iii) The Indemnified Party agrees to cooperate with Indemnifying Party in a commercially reasonable manner in the defense of such claim.  Indemnifying Party shall at all times keep the Indemnified Party reasonably apprised of the status of any such action; (iv) The Indemnifying Party shall not effect a settlement of any such claim, without the prior written consent of the Indemnified Party, which consent shall not be unreasonably withheld. It shall not be considered unreasonable to withhold consent if the settlement contains any admission on the part of the Indemnified Party of wrongdoing or contains any sanctions other than the payment of money that the Indemnifying Party agrees to and is able to pay.
		
	10.
	Insurance.  CRL and CLIENT each, at its sole cost and expense, shall procure and maintain policies of comprehensive general liability and other insurance in the minimum amounts of $1,000,000.00 per occurrence/$2,000,000.00 aggregate to insure such party and its officers, agents, and employees against liability, claims or damages in connection with the performance of such party’s responsibilities under this Agreement.  Evidence of each party’s policies shall be submitted to the other upon the other’s written request.

		
	11.
	Consequential Damages.  CRL and CLIENT shall not be liable for any indirect, consequential,     incidental, special, punitive or other damages (except as specified herein) of any kind arising from  any claim, whether based on contract, negligence, tort, strict liability or other theory, arising out of this Agreement.

		
	12.
	Limitation of Liability.  Either Party’s entire liability and the other party’s exclusive remedy for damages on account of any claim arising out of this Agreement shall be limited as follows:

		
	(a)
	Direct damages in the case of bodily injury, death or damage to real property or to tangible personal property proximately caused by a party’s negligence;

		
	(b)
	The amount of the penalty or fine finally assessed in the case of penalties or fines imposed by a regulatory entity arising from CLIENT’s performance of delegated Administrative Services;

		
	(c)
	Direct damages in the case of all other claims, on a per claim or aggregate basis during any twelve (12) month period, not to exceed 25% of the Purchase Price as defined in the Strategic Alliance Agreement.

		
	13.
	Independent Relationship. The relationship between CRL and CLIENT pursuant to this Agreement is that of independent entities contracting with each other, and neither party shall be construed to be a joint venturer, partner, agent, employee, or representative of the other.

		
	14.
	Force Majeure. No party to this Agreement shall be liable for failure to perform any duty or obligation that said party may have under this Agreement where such failure has been occasioned by any act of God, fire, strike, inevitable accident, war or any cause outside the reasonable control of the party who had the duty to perform.

		
	15.
	Publication.  Neither of the parties herein shall use the name of the other party in any advertising or promotional literature of any type without that party’s prior written approval.

		
	16.
	Notices. Any required notices under this Agreement shall be in writing and shall be deemed validly delivered if made by hand (in which case delivery will be deemed to have been effected immediately), 

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Confidential Information has been omitted in places marked “[***]” and has been filed separately with the Securities and Exchange Commission.  Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 24b-2 under the Securities Exchange Act of 1934, as amended

or by overnight mail (in which case delivery will be deemed to have been effected one (1) business day after the date of mailing), or by first class pre-paid post (in which case delivery will be deemed to have been effected five (5) days after the date of posting), or by facsimile or electronic transmission (in which case delivery will be deemed to have been effected on the day the transmission was sent).  Any such notice shall be sent to the office of the recipient set forth on the cover page of this Master Agreement or to such other office or recipient as designated in writing from time to time.
		
	17.
	Assignment. Neither party’s rights or obligations under this Agreement (except the right to receive money) will be assigned or delegated without the written consent of the other party, except that either party may without such consent assign all of its rights and delegate all of its obligations under this Agreement to an entity: (a) which such party owns or controls; (b) by which such party is owned or controlled; or (c) which is under common ownership or control with such party provided, however, that the assigning party shall remain liable to the non-assigning party for the timely performance of the obligations assigned. In the case of any assignment permitted hereunder without the other party’s consent, the assignor will promptly notify the non-assigning party in writing of the assignment and will include in its notice a statement of the facts that permit assignment without consent.

		
	18.
	Solvency.

(a)    CRL is not now insolvent and will not be rendered insolvent by any of the Contemplated Transactions.  As used in this Section, “insolvent” means that the sum of the debts and other probable liabilities of CRL exceeds the present fair saleable value of CRL’s assets.
		
	(b)
	Upon signing the Agreement:

		
	(i) 
	CRL will be able to pay its liabilities as they become due in the usual course of its business;

		
	(ii) 
	CRL will not have unreasonably small capital with which to conduct its present or proposed business;

		
	(iii) 
	CRL will have assets (calculated at fair market value) that exceed its liabilities; and

		
	(iv) 
	taking into account all pending and threatened litigation, final judgments against CRL in actions for money damages are not reasonably anticipated to be rendered at a time when, or in amounts such that, CRL will be unable to satisfy any such judgments promptly in accordance with their terms (taking into account the maximum probable amount of such judgments in any such actions and the earliest reasonable time at which such judgments might be rendered) as well as all other obligations of CRL.

		
	19.
	General Provisions.   This Agreement shall be governed by the laws of the State of Kansas without regard to the choice-of-law principles thereof, and is the entire agreement of the parties related to the subject matter hereof.  No amendment or waiver of any provision of this Agreement will be effective unless in a writing signed by the parties.  The illegality or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any legal and enforceable provisions hereof.  Any headings used herein are for convenience of reference only and are not a part of this Agreement, nor shall they affect the interpretation hereof. This Agreement may be executed in multiple counterparts, each of which is an original, true and correct version hereof, and shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, executors, administrators, successors, and permitted assigns.

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Confidential Information has been omitted in places marked “[***]” and has been filed separately with the Securities and Exchange Commission.  Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 24b-2 under the Securities Exchange Act of 1934, as amended

EXHIBIT A
Business Associate Agreement

WHEREAS, under the Agreement, CRL (“BA”) may perform or assists in performing function(s) or activity(s) on behalf of Client that involves the use and/or disclosure of protected health information, as defined below.
NOW THEREFORE, in consideration of the mutual promises and representations contained herein and in the Agreement, the parties hereto agree as follows:
		
	1)
	Definitions.  Business Associate Agreement (hereinafter referred to as “BA Agreement”), the following definitions shall apply:

	
			
	A)
	Agreement
	Means the agreement executed between the parties relating to the provisions of services and all amendment or addendums thereto.

	B)
	Business Associate Functions
	Means functions performed by business associate on behalf of Client pursuant to the services Agreement which involve creating, receiving, maintaining, or transmitting NPI by business associate.  Business Associate Functions shall not include any function requiring a use or disclosure that would not be permissible under the Privacy Rules if done by Client.

	C)
	GLBA
	Gramm-Leach-Bliley Act.

	D)
	HIPAA
	Health Insurance Portability and Accountability Act.

	E)
	HITECH
	Health Information Technology for Economic and Clinical Health Act provisions of the American Recovery and Reinvestment Act of 2009.

	F)
	Individual
	Means the person who is the subject of the NPI and includes a person who qualifies as a personal representative in accordance with the Privacy Rules.

	G)
	NPI
	Any nonpublic personal information of any individual as defined in Title V of GLBA and/or any PHI of any individual as defined in HIPAA.

	H)
	PHI
	Means protected health information as defined in 45 CFR § 164.501

	I)
	Required by Law
	A mandate contained in law that compels an entity to make a use or disclosure of NPI and that is enforceable in a court of law.

	J)
	Secretary
	Secretary of the U.S. Department of Health and Human Services or his/her designee.

	K)
	Privacy Rules
	Any federal or state laws concerning the privacy and security of NPI, including, without limitation, GLBA, HIPAA, and/or HITECH

	L)
	All other terms used but not otherwise defined in this agreement shall have the meaning ascribed in the HIPAA regulations.

		
	2)
	Permitted Uses and Disclosure of NPI.  Except as otherwise limited in this BA Agreement and/or the Agreement,

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Confidential Information has been omitted in places marked “[***]” and has been filed separately with the Securities and Exchange Commission.  Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 24b-2 under the Securities Exchange Act of 1934, as amended

	
		
	A)
	BA may use NPI to perform the functions, activities or services for or on behalf of Client as specified in the Agreement provided that such use and/or disclosure would not violate any federal or state laws, including, without limitation, the Privacy Rules, if done by Client.

	B)
	BA may use NPI (i) as set forth in the Agreement, (ii) for proper management and administration of BA, and to carry out the legal responsibilities of BA; and (iii) for the provision of Data Aggregation services relating to the Healthcare Operations of the Covered Entity.

	C)
	BA may disclose NPI as set forth in section 2(b) above, provided that disclosures are (i) Required by Law, or (ii) BA obtains reasonable assurances from the person to whom the information is disclosed that it will remain confidential and used or further disclosed only as Required by Law or for the purpose for which it was disclosed to the person, and the person notifies BA of any instances of which it is aware in which the confidentiality of the information has been breached.

	D)
	BA may de-identify any and all NPI created or received by BA under this BA Agreement and/or the Agreement; provided however, that the de-identification conforms to the requirements of the Privacy Rules.  Such resulting de-identified information would not be subject to the terms of this BA Agreement.

	E)
	BA may use NPI to report violations of law to appropriate Federal and State authorities, consistent with 45 C.F.R. 164.502(j)(1).

		
	3)
	Responsibility of BA.   With regard to the use and/or disclosure of NPI, BA hereby agrees to do the following:

	
		
	A)
	Use of Disclosure of NPI.  Not use and/or disclose NPI other than as permitted or required by the Agreement or this BA Agreement or as Required by Law;

	B)
	Safeguards.  Maintain and use appropriate safeguards (including administrative, physical and technical safeguards that reasonably and appropriately protect the confidentiality, integrity and availability of the electronic NPI that BA creates, receives, maintains or transmits on behalf of Client as required by 45 CFR 164.314) to protect and prevent the use and/or disclosure of NPI other than as provided by this BA Agreement or the Agreement.  BA shall document and keep these safeguards current;

	C)
	Mitigation.  Mitigate, to the extent practicable, any harmful effect that is known to BA of a use or disclosure of NPI by BA in violation of the requirements of this BA Agreement or the Agreement;

	D)
	Reporting.  
a)    Promptly notify Client of any use and/or disclosure of NPI not provided for by this BA Agreement or the Agreement of which it becomes aware;
b)    Report to Client any Security Incident in regard to Client’s electronic NPI of which BA becomes aware.  This does not include trivial incidents that occur on a routine basis, including but not limited to scans, “pings” or unsuccessful attempts to penetrate computer networks or servers maintained by BA;
c)    With the exception of law enforcement delays that satisfy the requirements of HIPPA or as otherwise required by law, BA shall notify CLIENT promptly, in writing without unreasonable delay and in no case later than sixty (60) calendar days, upon the discovery of a breach of Unsecured NPI.  Such notice shall include, to the extent possible, the name of each individual whose Unsecured NPI has been, or is reasonably believed by BA to have been accessed, acquired, or disclosed during such breach.  BA shall also, to the extent possible, furnish Client with any other available information that Client is required to include in its notification to individuals under HIPPA at the time of BA’s notification to Client or promptly thereafter as such information becomes available.  For purposes of this BA Agreement, a breach of Unsecured NPI shall be treated as discovered by BA as of the first day on which such breach is known to BA or should reasonably have been known to BA by exercising reasonable diligence.

	E)
	Agents/Subcontractors.  to ensure that any agent, including subcontractors, to whom it provides NPI received from, or created or received by BA on behalf of Client, agrees to the same restrictions and conditions that apply to BA pursuant to this BA Agreement and the Agreement, including but not limited to implementing reasonable and appropriate safeguards to protect it;

11
	
	
	 

Confidential Information has been omitted in places marked “[***]” and has been filed separately with the Securities and Exchange Commission.  Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 24b-2 under the Securities Exchange Act of 1934, as amended

	
		
	F)
	Access.  
Provide access, at the request of Client, within two (2) weeks from the date of receipt of such request,  to NPI in a Designated Record Set received from, or created or received by BA on behalf of Client, to Client in order to meet the requirements under Privacy Rules.  This provision shall be applicable only if BA has NPI in a Designated Record Set;
Make internal practices, books, and records, including policies and procedures and NPI, relating to the use and/or disclosure of NPI received from, or created or received by BA on behalf of Client, available to Client, or at the request of Client, to the Secretary, in a time and manner mutually agreed upon or as is designated by the Secretary for purposes of determining Client’s compliance with the Privacy Rules;

	G)
	Amendments.  Make any amendment(s), within two (2) weeks from the date of the receipt of such request, to NPI in a Designated Record Set that Client directs or agrees to pursuant to Privacy Rules, at the request of Client.  This provision shall be applicable only if BA has NPI in a Designated Record Set;

	H)
	Accounting of Disclosures.  
Document such disclosures of NPI and information related to such disclosures as would be required for BA to respond to a request by an individual for an accounting of disclosures of NPI in accordance with Privacy Rules; and
Provide to Client, within two (2) weeks from the date of the receipt of such request, a description of any disclosures of NPI and information related to such disclosures to permit Client to respond to a request by an individual for an accounting of disclosures of NPI in accordance with Privacy Rules.

	I)
	Restrictions.  BA shall comply with an individual’s request to restrict disclosure of NPI of that individual and shall notify Client of individual’s request within ten (10) business days of such request; where such individual is a customer of Client.  Upon request of Individual, BA will not disclose Individual’s NPI for purposes of payment or Healthcare Operations when Individual paid in full out of pocket for Services to which NPI relate (45 CFR § 164.522)

	J)
	Minimum Necessary.  BA shall limit its use, disclosure, or request of NPI to the minimum necessary to accomplish the intended purpose of such use, disclosure or request as agreed to by the parties pursuant to the Agreement.

	K)
	Remuneration.  BA may not receive direct or indirect remuneration in exchange for NPI, except where so authorized by the individual or by law.

	L)
	Alternative Communications.  BA agrees to accommodate alternative means or alternative locations to communicate NPI, and document those alternate means or alternate locations, at the request of Client or an individual pursuant to 45 CFR 164.522(b), in a prompt and reasonable manner consistent with HIPAA.

		
	4)
	Obligations of Client.

	
		
	A)
	Client shall provide BA with any limitations in its notice of privacy practices that Client produces in accordance with Privacy Rules as well as any changes to such limitations, to the extent that such limitations may affect BA’s use or disclosure of NPI.

	B)
	Client shall notify BA of any changes in, restrictions to, or revocation of, use or disclose of individual’s NPI, to the extent that such changes may affect BA’s use or disclosure of NPI.

	C)
	Client shall obtain any consent, authorization or permission that may be required by the Privacy Rules or applicable state laws and/or regulations prior to furnishing BA the NPI pertaining to an individual.

	D)
	Client shall not request BA to use or disclose NPI in any manner that would not be permissible under the Privacy Rules if done by Client.

		
	5)
	Term. This BA Agreement shall survive the termination of the Agreement and shall continue for as long as BA has access to NPI.  In the event that any term or provision of this BA Agreement shall conflict with any term or provisions of the Agreement, the term of provision of this BA Agreement shall govern, control and be given effect.  All other terms and conditions of the Agreement shall remain in full force and effect.  Client may immediately terminate any and/or all Agreements between BA and Client if Client determines that BA has violated any material 

12
	
	
	 

Confidential Information has been omitted in places marked “[***]” and has been filed separately with the Securities and Exchange Commission.  Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 24b-2 under the Securities Exchange Act of 1934, as amended

requirements of the Privacy Rules or this BA Agreement. Alternatively, at the discretion of Client, Client may grant to BA a reasonable time in which to cure any such violations to the reasonable satisfaction of Client.
	
		
	A)
	Except as provided in Section 5.B. below, upon termination of the Agreement and this BA Agreement, for any reason, BA shall destroy all NPI received from Client, or created or received by BA on behalf of Client.  This provision shall apply to NPI that is in the possession of subcontractors or agents of BA. Notwithstanding the foregoing and to the extent permitted by law, BA may keep a copy of any NPI received from Client or received or created by BA on behalf of Client for maintaining reasonably appropriate business records, as may be required by law, or to the extent such NPI is incorporated into BA’s systems or databases.

	B)
	If BA determines that destroying the NPI is infeasible, BA shall provide to Client notification of the conditions that make destruction infeasible.  BA shall extend the protections of this BA Agreement to such NPI and limit further uses and disclosures of such NPI to those purposes that make the destruction infeasible, for so long as BA maintains such NPI.

		
	6)
	Amendment.  The parties agree to take such action as is necessary to amend the Agreement and this BA Agreement from time to time as is necessary for Client to comply with the requirements of the Privacy Rules.  The parties agree to negotiate such amendments in good faith in order to bring Client into compliance with Privacy Rules.  Any such amendments will be in writing and signed by both parties.  In the event that Parties cannot agree on the terms of any required amendment, either party may immediately terminate the Agreement and such termination will not be considered a breach of the Agreement or this BA Agreement.

		
	7)
	Interpretation.  Any ambiguity in the Agreement or this BA Agreement shall be resolved in favor of the meaning that permits Client to comply with the Privacy Rules.  If there is a dispute in the interpretation, the parties will enter into good faith negations to try and resolve the dispute.  If the dispute cannot be resolved, either party may immediately terminate the Agreement and such termination will not be considered a breach of the Agreement or this BA Agreement.

		
	8)
	Indemnification.

	
		
	A)
	By BA.  BA shall indemnify and save CLIENT, and its officers, directors, employees, agents, or representatives harmless from and against all damages sustained or incurred by a third party arising from personal injuries or other claims recovered against CLIENT, as a result of any negligent act or omission of BA, its agents, servants, or employees, arising out of or related to this BA Agreement, including any and all reasonable expense, legal or otherwise, incurred by CLIENT or its officers, directors, employees, agents, or representatives in the defense of any such third party claim or suit.

	B)
	By CLIENT.  CLIENT shall indemnify and save BA, and its officers, directors, employees, agents or representatives harmless from and against all damages sustained or incurred by a third party arising from personal injuries or other claims recovered against BA, as a result of any negligent act or omission of CLIENT, its agents, servants, or employees, arising out of or related to this BA Agreement, including any and all reasonable expense, legal or otherwise, incurred by BA, or its officers, directors, employees, agents, or representatives in the defense of any such third party claim or suit.

		
	9)
	Notices.  All notices given pursuant to this BA Agreement shall be in writing and shall be accomplished by personal delivery, certified mail or overnight mail followed by postmark within two (2) days. Any such notice shall be treated as having been given on the date of actual receipt. All such notices shall be sent as follows to the addresses set forth on the signature page of this BA Agreement.

		
	10)
	Counterparts; Facsimile Signatures.  This BA Agreement may be executed simultaneously in two or more counterparts (by facsimile, email or other electronic means), each of which will be considered an original, but all of which together will constitute one and the same instrument and shall be admissible in evidence.  

		
	11)
	Governing Law.  This Agreement shall be governed by and construed, interpreted, and enforced in accordance with the laws of the State of Kansas, without reference to its conflicts or choice of law principles.  Each party hereto agrees to the exclusive and personal jurisdiction of the District Court of Johnson County, Kansas and hereby 

13
	
	
	 

Confidential Information has been omitted in places marked “[***]” and has been filed separately with the Securities and Exchange Commission.  Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 24b-2 under the Securities Exchange Act of 1934, as amended

waives any objection it may have to the laying of venue of any such proceeding and any claim or defense of inconvenient forum.
		
	12)
	Survival.  The respective right and obligations of BA and Client under Section 5 of this BA Agreement shall survive termination of this BA Agreement.

14
	
	
	 

Confidential Information has been omitted in places marked “[***]” and has been filed separately with the Securities and Exchange Commission.  Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 24b-2 under the Securities Exchange Act of 1934, as amended

SCHEDULE A  – LAB SERVICES
PRICE LIST 

		
	•
	The pricing below is for laboratory testing only.  Collection kits, kit supplies, inbound freight, outbound freight and all other services are excluded from this pricing.

		
	•
	Pricing includes data entry of a maximum of three (3) fields:  i) CRL Unique Barcode Sequence ID; ii) date of birth and iii) gender.

		
	•
	Additional data entry will be priced according to the number and complexity of fields with a maximum of ten (10) fields for an additional $[***] per sample.

		
	•
	Pricing includes all lab test reports being reported to CLIENT only.

		
	•
	Pricing includes a single, consolidated invoice for all services to CLIENT only.

		
	•
	Panel details and test code mapping contained in the client specification document.

	
			
	ROUTINE PANELS

	First 300,000 Samples in Contract Year
	For Samples 300,001+ in Contract Year

	Basic Blood Chemistry Profile
	 
	 

	 
	$[***]
	$[***]

	 
	 
	 

	Lipid Panel
	 
	 

	 
	$[***]
	$[***]

	 
	 
	 

	Metabolic Profile
	 
	 

	 
	$[***]
	$[***]

	 
	 
	 

	SPECIALTY PANELS

	 
	 

	CBC
	 
	 

	   
	$[***]
	$[***]

	 
	 
	 

	Comprehensive Health Profile
	 
	 

	   
	$[***]
	$[***]

	 
	 
	 

	Heart Profile
	 
	 

	 
	$[***]
	$[***]

	 
	 
	 

	Electrolytes
	 
	 

	      
	$[***]
	$[***]

	 
	 
	 

	Comprehensive Health Profile plus Electrolytes
	 
	 

	 
	$[***]
	$[***]

15
	
	
	 

Confidential Information has been omitted in places marked “[***]” and has been filed separately with the Securities and Exchange Commission.  Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 24b-2 under the Securities Exchange Act of 1934, as amended

Reflex, Add-on, or Stand Alone Tests

	
			
	Test
	Reflex or Add-on
	Stand Alone

	Test 001
	$[***]
	$[***]

	Test 002
	$[***]
	$[***]

	Test 003
	$[***]
	$[***]

	Test 004
	$[***]
	$[***]

	Test 005
	$[***]
	$[***]

	Test 006
	$[***]
	$[***]

	Test 007
	$[***]
	$[***]

	Test 008
	$[***]
	$[***]

	Test 009
	$[***]
	$[***]

	Test 010
	$[***]
	$[***]

	Test 011
	$[***]
	$[***]

	Test 012
	$[***]
	$[***]

	Test 013
	$[***]
	$[***]

	Test 014
	$[***]
	$[***]

	Test 015
	$[***]
	$[***]

	Test 016
	$[***]
	$[***]

	Test 017
	$[***]
	$[***]

	Test 018
	$[***]
	$[***]

	Test 019
	$[***]
	$[***]

	Test 020
	$[***]
	$[***]

	
		
	Wal-Mart ReliOn® Tests
	 

	 
	 

	Test WM001
	$[***]

Testing Fees shall not be charged for:

		
	a. 
	confirmatory tests requested by CLIENT (where the confirmatory test indicates that the initial testing was inaccurate); 

		
	b.
	any testing performed on replacement Specimen when the original Specimen is damaged as a result of an act or omission of CRL;

		
	c.
	any Specimen reported outside the Service Level objectives set forth  in section 3.1 (b), (c) and (d) herein as calculated on a monthly basis. 

In the event CLIENT’s customer requires reimbursement of testing fees for improperly tested specimens, without providing replacement specimen for re-test, CRL shall reimburse CLIENT for all testing fees applicable to the original specimen testing if previously paid by CLIENT.

Minimum Volume Pricing in the event of Change of Control (Section 3(e) of the LLASA):
If the new purchaser fails to order and pay for Services, the aggregate value of which under the LLASA meets or exceed the Minimum Threshold as set forth in Section 3(e), then such purchaser shall pay CRL an amount equal to the difference between (i) the Minimum Threshold and (ii) the number of units for which CRL received revenue in the Contract Year multiplied by 40% of the then applicable Price for the Basic Blood Chemistry Profile.  Purchaser shall make this payment to CRL within fifteen (15) days after the end of each Contract Year.

16
	
	
	 

Confidential Information has been omitted in places marked “[***]” and has been filed separately with the Securities and Exchange Commission.  Confidential Treatment has been requested with respect to this omitted information pursuant to an application for confidential treatment filed with the Commission under Rule 24b-2 under the Securities Exchange Act of 1934, as amended

SCHEDULE B  - ADMINISTRATIVE SERVICES
PRICE LIST

		
	1.
	CLIENT will be responsible to pay CRL for any activity or undertaking in support of CRL’s delivery of the Administrative Services, on a time and materials basis as set forth inthis Schedule, the SASA or, any applicable SOW(s), or as mutually agreed upon for any Administrative Service not specifically included in Exhibit C or an SOW. 

		
	2.
	In addition, CLIENT shall reimburse CRL for all application fees and other out of pocket expenses related to advance notification or permit requirements for H&W events.  For avoidance of doubt, CRL shall be solely responsible for all costs and fees associated with state lab licenses.

		
	3.
	CRL will charge no fee for the following components of Administrative Services:

		
	a.
	Provide CRL’s written documentation of testing protocols, lab credentials, equipment, proficiency testing and other supporting data requested by a regulatory body.  

		
	b.
	Affix signatures of appropriate CRL personnel for the completion of applications or permits

		
	c.
	Make available CRL’s Customer Service Representative or other personnel for meetings with regulators, except that CLIENT will reimburse CRL for reasonable travel related expenses consistent with CLIENT’s travel policies.

		
	d.
	Visits by CLIENT”s customers to CRL’s facility

		
	4.
	Where a component of Administrative Services involves CRL expenditure of personnel resources that create a materially cost to CRL, CRL will advise CLIENT of such prior to providing such Administrative Services and, upon CLIENT’s approval to perform the requested Administrative Services, will charge CLIENT for such costs as follows:

		
	a.
	Lab Director/MD Pathologist/Ph.D support - $225/hour

		
	b.
	Legal/Compliance related support - $150/hour

		
	c.
	Other Lab Personnel support - $95/hour

		
	d.
	Sales support - $95/hour

		
	e.
	Event related support - $75/hour

		
	f.
	Reimbursement of reasonable travel related expenses 

17exhibit102q12014

PURCHASE AND SALE AGREEMENT

THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is made and entered into as of the 13th day of May 2014 (“Effective Date”) by and between McElroy Deutsch Mulvaney & Carpenter, LLP or its assignee, (the "Purchaser"), and Hooper Holmes, Inc., a New York corporation (the "Seller").

W I T N E S S E T H:

For and in consideration of the mutual covenants and agreements herein contained, Seller agrees to sell and convey to Purchaser, and Purchaser agrees to purchase from Seller, subject to the terms and conditions hereof, the "Property" and the “Included Personal Property” (as hereinafter defined).

NOW, THEREFORE, the parties hereto agree as follows:

1.    Definitions    .  The terms defined in this Section 1 shall have the respective meanings stated in this Section 1 for all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:

1.1    Building shall mean the approximately 52,000 square foot building plus detached maintenance garage facility and all other buildings and structures as well as the generator now or at the Closing Date (as hereinafter defined) situated on the Land (as hereinafter defined).

1.2    Business Day or Business Days shall mean those days of the week which are not Saturday, Sunday or a federal, State of New Jersey or bank holiday.

1.3    Closing shall mean actions whereby Seller conveys to Purchaser and Purchaser purchases and accepts from Seller legal title to the Property, subject to and in accordance with this Agreement.

1.4    Closing Date shall mean the date as defined in Section 5.2 hereof.

1.5    Deposit shall mean the aggregate principal sum of One Hundred Fifty Thousand Dollars ($150,000) to be deposited by Purchaser with the Escrow Agent (hereafter defined) pursuant to the provisions of Sections 3.1(a) and (b) hereof.

1.6    Effective Date shall mean the date the last party to sign this Agreement delivers the fully executed Agreement to the other party.

1.7    End of the Inspection Period shall mean 5:00 p.m. New Jersey time on the date that is forty (40) days subsequent to the Effective Date.

                                    
1.8    Land shall mean all those certain tracts or parcels of land situated and lying and being designated as Lot 4 in Block 2401 on the Tax Map of Bernards Township. Somerset County, New Jersey, which are more particularly described on Schedule 1.8 annexed hereto and made a part hereof.  

-1-

1.9    Other Seller Interests shall mean all of the right, title and interest, if any, of Seller in and to the following:

(a)    Any easements, rights of way, privileges, rights, appurtenances, hereditaments, oil and mineral rights, grants of right, or other agreements benefiting the Property and any and all rights and privileges to further develop the Property, the Land or any portion thereof; and

(b)    Any land lying in the bed of any street, road, alley or avenue, public or private, opened or proposed, in front of or adjoining the Property, any strips or gores adjoining or relating to the Property or any part thereof, any award made or to be made in lieu thereof, and any unpaid award for damages to said Property by reason of change of grade of any street.

1.11    Permitted Exceptions shall mean collectively the following:  (i) those restrictions, encumbrances, covenants, agreements, easements, matters and things of fact or of record affecting title to the Property; (ii) real estate taxes not due and payable as of the Closing Date; (iii) encumbrances on the Property caused solely by Purchaser or its agents, employees, contractors or consultants; (iv) such state of facts as an accurate Survey of the Property would disclose; and (v) zoning ordinances and development and building regulations or requirements adopted by any governmental or municipal authority having jurisdiction over the Property, and any amendments and additions thereto now or hereinafter in force and effect that relate to the Property.

1.12    Property shall mean the Land, the Other Seller Interests, the Site Improvements, the Building, and the Included Personal Property.

1.13    Service Contracts shall mean those contracts relating to or affecting the use or operation of the Property, such as service utility, maintenance, labor, and similar agreements, which are set forth in Schedule 1.13 annexed hereto and made a part hereof.  To the extent Purchaser identifies and accepts in writing other such agreements prior to Closing, those agreements shall be deemed Service Contracts for the purposes of this Agreement.

1.14    Site Improvements shall mean all of the parking lots, driveways, pavings, access cuts, parking lot striping, lighting, bumpers, drainage systems and landscaping situated upon the Land.

1.15    Title Company shall mean a reputable title insurance company selected by the Purchaser.

2.    Sale of the Property    .  Upon and subject to the terms and conditions contained in this Agreement, Seller agrees to sell and convey to Purchaser, and Purchaser agrees to purchase and accept from Seller, title to the Property free and clear of any and all mortgages, liens, claims, or encumbrances affecting such title, except the Permitted Exceptions and such other matters approved in writing by Purchaser.  

3.    Purchase Price and Payment; the Deposit    .  

3.1    The purchase price for the Property to be sold to Purchaser pursuant to this Agreement shall be the sum of Three Million Fifty Thousand and 00/100 U.S. DOLLARS 

-2-

($3,050,000.00) (the "Purchase Price"), which sum shall be payable by Purchaser to Seller as follows:

(a)    Simultaneously with the execution of this Agreement by all parties, Purchaser shall deliver Seventy-Five Thousand and 00/100 U.S. DOLLARS ($75,000.00) of the Deposit to The Garibaldi Group, LLC (the “Escrow Agent”). 

 (b)    One business day after the End of the Inspection Period, an additional sum of Seventy-Five Thousand and 00/100 U.S. DOLLARS ($75,000.00) shall be paid by Purchaser to Escrow Agent, which shall be part of the Deposit. The parties agree to direct the Escrow Agent to release the Deposit to Seller or return the Deposit to Purchaser, as the case may be, as provided in this Agreement.

 (c)    At Closing, the sum of Two Million Nine Hundred Thousand and 00/100 U.S. DOLLARS ($2,900,000.00) shall be paid by Purchaser to Seller by certified check, official bank check or confirmed federal wire transfer of immediately available funds, as Seller shall direct.

3.2    (a)    The Escrow Agent shall hold the Deposit when received until such time as (i) the Deposit is applied at Closing to the Purchase Price; or (ii) pursuant to the provisions of this Agreement, the Deposit is to be released to Purchaser or to Seller.  The Escrow Agent shall invest the Deposit into a non-interest bearing federally insured short-term trust account or accounts reasonably acceptable to the Escrow Agent.  The Escrow Agent may not commingle the Deposit with other funds of the Escrow Agent.  If the Purchaser terminates this Agreement as provided in Section 7.4 hereof, then the Escrow Agent shall return the Deposit to Purchaser promptly following such termination.

(b)    Escrow Agent shall not be liable to any party for an act or omission, except for bad faith or gross negligence, and the parties agree to indemnify Escrow Agent and hold Escrow Agent harmless from any and all claims, damages, losses or expenses arising in connection herewith.  The parties acknowledge that Escrow Agent is acting solely as stakeholder for their mutual convenience.  In the event Escrow Agent receives written notice of a dispute between the parties with respect to the Deposit and the interest earned thereon (the “Escrowed Funds”), Escrow Agent shall not release and deliver the Escrowed Funds to either party but may either (i) continue to hold the Escrowed Funds until otherwise directed in a writing signed by all parties hereto or (ii) deposit the Escrowed Funds with the clerk of any court of competent jurisdiction in Morris County, New Jersey.  Upon such deposit, Escrow Agent will be released from all duties and responsibilities hereunder.
(c)    Escrow Agent may defend any legal proceeding that may be instituted against it with respect to the Escrowed Funds, the Property or the subject matter of this Agreement and shall be indemnified and held harmless by Purchaser and Seller in equal amounts against the cost and expense of such defense.  Escrow Agent shall not be required to institute legal proceedings of any kind and shall have no responsibility for the genuineness or validity of any document or other item deposited with it or the collectibility of any check delivered in connection with this Agreement (except for checks issued by or on behalf of Escrow Agent).  Escrow Agent shall be fully protected in acting in accordance with any written instructions given to it hereunder and believed by it to have been signed by the proper parties.

-3-

4.    Adjustments and Prorations; Closing Costs    .  The items of income or expense arising from the ownership or operation of the Property set forth hereinafter shall be prorated and adjusted as of 11:59 p.m. New Jersey time on the day preceding the Closing Date.  All prorations, adjustments and allocations made at the Closing shall be final, except (i) for clear errors subsequently discovered and (ii) as otherwise expressly provided in this Section 4.  The parties agree to work together after Closing in good faith to promptly resolve all outstanding or continuing proration and allocation matters.  At the Closing, the following items of income and expense shall be allocated between the parties in accordance with the principles set out herein above, and with the following specific provisions applying to the following specific items:

4.1    (a)    Real estate taxes for the Property shall be prorated at and as of the Closing on the basis of the most recent real estate tax bill delivered to Seller.  

(b)    If on the Closing Date any assessment is a lien on all or part of the Property, and such assessment is or may be payable in installments, of which the first installment is then a charge or lien, or has been paid, then Seller shall be required to pay only those installments that are due and payable on or prior to the Closing Date and the Purchaser shall be responsible for all unpaid installments after the Closing Date.

(c)    Water, sewer, electric and other utility charges for the Property.  If consumption of any of the foregoing is measured by meters, prior to the Closing Date, Seller shall obtain a reading of each such meter and a final bill as of the Closing Date.  If there is no such meter or if the bill for any of the foregoing will not have been issued as of the Closing Date, the charges therefor shall be adjusted as of Closing Date on the basis of the charges of the prior period for which such bills were issued and shall be further adjusted between the parties when the bills for the correct period are issued (and this obligation shall survive the Closing).  Any utility security deposits to be refunded to Seller shall be obtained by Seller from the utility company and Purchaser shall make its own deposit with such companies.

(d)    Premiums on insurance policies will not be adjusted.  Seller may terminate its insurance coverage as of Closing and Purchaser will effect its own insurance coverage.

(e)      Fees, charges and deposits under any Service Contracts that are assigned by Seller to Purchaser and assumed by Purchaser at the Closing.

4.2    Seller shall pay the New Jersey realty transfer tax (or permit an appropriate credit therefor) in connection with the recordation of the deed described in Section 9.1(a) and the conveyance of the Property by Seller to Purchaser and Purchaser shall pay the Mansion Tax.

4.3    Purchaser and Seller shall each pay their respective attorney's fees.

4.4    Except as otherwise herein provided, any fee, cost, charge or expense incurred by either party hereto or for which either party hereto may be liable in connection with the negotiation, examination and consummation of this Agreement, shall be paid by the party hereto incurring, or liable for, such fee, cost, charge or expense.

4.5    The costs of any survey, any searches, and a current form owner’s ALTA title insurance policy are to be borne by Purchaser.  

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4.6    The Seller shall be responsible for payment of the Broker’s (hereafter defined) commission payable at Closing pursuant to a separate written agreement between seller and Broker.

4.7       The provisions of this Section 4 shall survive the Closing Date.

5.    Closing; Closing Date    .

5.1    The Closing shall take place at the offices of the McElroy, Deutsch,  Mulvaney & Carpenter, LLP, or at such other place as Seller and Purchaser may agree, at 10:00 a.m. New Jersey time on the Closing Date.

5.2    The Closing Date shall occur five (5) days after the End of the Inspection Period but no later than July 11, 2014.

6.    Title.

6.1    Purchaser may, at its sole cost and expense, order (a) a title insurance commitment on the Property issued by the Title Company reporting on the condition of title to the Property and committing to issue title insurance to Purchaser, and (b) a survey of the Property (collectively, the title insurance commitment and the survey being in this Agreement referred to as the "Title Report").  Within thirty (30) days of the Effective Date, Purchaser shall provide Seller with a copy of the Title Report and written notification to Seller of any items shown in the Title Report, other than Permitted Exceptions, which would prevent Purchaser from receiving such title to the Property as provided herein (collectively, the “Title Objections”).  Seller shall, at its option, be entitled to a period of twenty (20) days from its receipt of written notice from Purchaser to remove and discharge any liens, encumbrances, covenants or easements set forth on the Title Report, other than the Permitted Exceptions, which cure, at Purchaser’s option, may be by means of affirmative insurance or endorsement from the Title Company, in form and substance satisfactory to Purchaser (and paid for by Seller), insuring over and providing that any liens, encumbrances, covenants, easements or other matters which are not Permitted Exceptions shall not be collected out of, or enforced against, the Property.  If Seller is unable to cure the Title Objections within the aforesaid twenty (20) day period, Seller shall be entitled to an additional ten (10) day cure period provided Seller is diligently pursuing such cure.  If Seller has not cured, or elects not to cure, the Title Objections as aforesaid, Purchaser, as its only remedies, may either (a) within ten (10) days of receiving notice from Seller that it is unable or unwilling to remove such Title Objections, terminate this Agreement by written notice to Seller, receive the return of the Deposit and this Agreement shall be null and void, each party having no further obligation to the other, or (b) subject to Section 6.2 hereof, purchase the Property subject to such Title Objections (which shall be deemed Permitted Exceptions), in which case this Agreement shall remain in full force and effect and the parties shall proceed to Closing hereunder without reduction in the Purchase Price or other obligation, except as provided in Section 6.2, on the part of Seller by reason of such Title Objections.  The foregoing shall not, however, be deemed to limit the unconditional obligation of Seller to discharge and remove of record all title exceptions referred to in Section 6.2 below at or prior to Closing.

6.2    Anything herein to the contrary notwithstanding, the parties agree that in the event there are any mortgages, financing statements, or similar liens placed on the Property by Seller, mechanic's or materialman's liens arising from work performed on the Property by, for or with the consent of Seller, or money judgments or other monetary liens against Seller that can be 

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discharged or removed by the payment of a liquidated sum, or any Title Objections placed upon the Property after the Effective Date (other than those resulting from the acts of Purchaser), then at or prior to Closing Seller shall be obligated to bond off with the Title Company or remove, satisfy and discharge of record all such matters (collectively, the "Liens"), and deliver title to the Property to the Purchaser at the Closing free of same; provided, further, Seller shall not place, caused to be placed, nor consent to the placement by any other party of, any Liens on the Property from and after the Effective Date. 

7.    Inspection Period; Due Diligence.

7.1    Seller shall use its best efforts to make available to Purchaser for inspection and copying within five (5) days of the Effective Date such materials in the possession of or reasonably accessible to Seller pertaining to the Property as Purchaser may reasonably request, including but not limited to: back-title, environmental reports, surveys, plans and specifications for the Building, structural reports, the Service Contracts (if written), and statements of operating expenses (the “Property Documents”).

7.2    Commencing on the Effective Date, and continuing until the End of the Inspection Period (the “Inspection Period”), Purchaser may make, or cause to be made, at its sole cost and expense, such investigations (including physical, structural, economic, mechanical and environmental) relating to the Property as Purchaser deems prudent.  Notwithstanding the foregoing, Purchaser agrees that it will use its best efforts not to interfere in any material and adverse fashion with the operation of the Property by Seller.

7.3    Seller agrees that at all times prior to the Closing or sooner termination of this Agreement, Purchaser or its designated agents or consultants shall be given reasonable access to the Property during normal business hours, and Seller shall cooperate with Purchaser in that regard.  Seller shall be entitled to have a representative of Seller present at all times during any testing, examination, inspection or other activities on the Property by Purchaser.  To the extent Seller has such information available, Seller will also open to Purchaser and make available for inspection and copying its files, books and records, and property management records  (other than matters relating to confidential or proprietary matters) with respect to the Property.

7.4    At any time prior to the End of the Inspection Period, Purchaser may send Seller or Seller’s Attorney a written notice that Purchaser elects to terminate this Agreement for any reason whatsoever, and on Seller's or Seller’s Attorney’s receipt of such notice the Deposit shall be returned to Purchaser, and this Agreement shall become null and void as between Seller and Purchaser, each party having no further obligation to the other hereunder except (a) Purchaser shall promptly return to Seller all of the Property Documents made available to, or copied by, Purchaser, and (b) as otherwise specifically provided in this Agreement.  Notwithstanding the foregoing, If Purchaser wishes to raise a claim, it shall advise Seller and Seller shall have ten (10) days from receipt of such notice to decide whether to agree to do the claimed repair or remediation or to advise that will not, in which case Purchaser may decide to either take title without the resolution of such claim(s) or terminate this contract in which event all deposits shall be returned to Purchaser.  In the event that a repair or remediation is undertaken, the End of the Inspection Period shall be deemed extended from the date of such notice until the repair or remediation is completed and for such reasonable period as may be necessary for Purchaser to inspect same.  In the event that such repair or remediation is not satisfactory to the Purchaser, Purchaser may again give notice to Seller as provided above. 

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7.5    Purchaser agrees to make all repairs to and otherwise restore the Property to its condition existing immediately prior to such damage with respect to any damage caused by or attributable to Purchaser, its agents and/or its contractors as the result of any access, inspections or investigations they or any of them make or authorize. 

8.    Conditions Precedent.

8.1    The obligations of the Purchaser to close the transaction hereunder are subject to satisfaction of all the following conditions at or prior to Closing, any one or more of which may be expressly waived in writing by the Purchaser:

(a)    All of the terms, covenants and conditions of this Agreement to be complied with and performed by Seller on or before the Closing Date shall have been duly complied with and performed in all material respects, including, without limitation, the delivery by Seller of the documents enumerated in Section 9.1 hereof.

(b)    The representations and warranties made by Seller under this Agreement shall be true and correct in all material aspects on and as of the Closing Date with the same force and effect as though such representations and warranties had been made on and as of the Closing Date.  

(c)    Title to the Property shall be as required by Section 4 above.

(d)    Purchaser’s satisfactory walk-through of the Property prior to but on the same day as Closing to confirm Seller’s compliance with all representations, conditions precedent and covenants of Seller contained in this Agreement.

8.2    Seller's obligations to close hereunder shall be conditioned upon the occurrence of each of the following conditions.  If any of the following conditions are not satisfied, then Seller may elect to terminate this Agreement or waive noncompliance with any such condition in whole or in part:

(a)    The representations and warranties of Purchaser as set forth herein shall be true in all material respects on and as of the Closing Date with the same force and effect as if such representations and warranties had been made on and as of the Closing Date.

(b)    Purchaser shall have performed, observed and complied in all material respects with all the covenants, agreements and conditions required by this Agreement to be performed, observed and complied with, prior to or as of the Closing Date, including payment of the Purchase Price as provided pursuant to Section 3, and shall execute and/or deliver the documents to be executed and/or delivered by Purchaser pursuant to this Agreement.

9.    Documents at Closing.

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9.1    Seller shall execute and deliver to Purchaser at Closing, the following instruments:

(a)    Duly executed and acknowledged Bargain and Sale Deed with Covenants Against Grantor’s Act conveying to Purchaser the fee simple title to the Property, subject only to the Permitted Exceptions and such other matters as may be approved in writing by Purchaser (the "Deed").

(b)    An affidavit of Seller setting forth that it is not a "foreign person" for purpose of the Foreign Investment in Real Property Transfer Act of 1990, as amended.

(c)    A standard form seller's affidavit of title;

(d)    Standard form of Seller’s Residency Certification and Seller’s Affidavit of Title (if require);

(e)    A settlement statement (the "Settlement Statement") documenting the Closing and reflecting the Purchase  Price, charges, credits, adjustments and prorations.

(f)    Keys and/or security codes to all entrance doors to the Property.

(g)    Such affidavits and indemnities as the Title Company shall reasonably and customarily require.

(h)    All necessary and proper consents of Seller, including an appropriate resolution of the Board of Directors of the Seller, authorizing the sale of the Property in accordance with the terms of this Agreement. 

(i)    A duly executed assignment (the "Assignment of Service Contracts") of all Service Contracts, if any, and such other agreements as to which Purchaser has notified Seller in writing prior to the Closing Date that Purchaser wishes to accept.

(j)    Bring Down Certificate.  A certificate of Seller stating that all representations and warranties of Seller contained in this Agreement are true and correct in all material respects on and as of the Closing Date with the same force and effect as if such representations and warranties had been made on and as of the Closing Date, or if different, in what respect.

(k)    An estoppel certificate of American Educational Institute, Inc.

(l)    Such additional documents as the Seller and the Purchaser shall mutually agree are necessary to carry out the provisions of this Agreement.

9.2    In addition to payment of the Purchase Price as provided in Section 3 hereof, Purchaser shall execute and deliver to Seller at Closing, subject to full compliance by Seller with all Seller's obligations to be kept, observed and performed by Seller under this Agreement:

(a)    The Settlement Statement.

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(b)    All necessary and proper consents of Purchaser consenting to and approving the within transaction and purchase by Purchaser.  

(c)    Such additional documents as Seller and Purchaser shall mutually agree are necessary to carry out the provisions of this Agreement, provided that such additional documents do not expand Purchaser's liability beyond the liability of Purchaser described in or under this Agreement.

10.    Covenants of Seller.  Seller covenants and agrees that, between the date hereof and the Closing Date:

10.1    At its sole cost and expense, Seller shall continue to maintain the Property in the ordinary course in accordance with its normal practices and procedures.  Seller shall keep the Property and all of the Buildings and improvements thereon (and all parts thereof), including mechanical equipment of every kind used in the operation thereof, in at least the same condition as it is in as of the End of Inspection Period, reasonable wear and tear excepted.  Seller will not remove any of the Included Personal Property from the Building.
  
10.2     Seller shall continue to maintain the existing insurance on the Property.

10.3    Seller shall not modify, cancel, extend, renew or otherwise change in any manner any of the terms, covenants, or conditions of any of the Service Contracts, nor enter into any other agreements (including, without limitation, cleaning, maintenance, employment, management, supply, union and similar contracts) without obtaining the consent of the Purchaser unless same is terminable without penalty or liability to Purchaser upon the Closing (any such action or act or agreement, an “Agreement Modification”).  Immediately upon the occurrence of any Agreement Modification, Seller shall deliver to Purchaser a complete, certified copy thereof.
        
10.4    Seller shall not mortgage, pledge or create any contractual lien, charge or any other encumbrance (or agree to do so) in respect of the Property or any part thereof.  Seller shall not sell or transfer any portion of the Property.  

10.5    Seller shall deliver the Property at Closing vacant of any tenants or other occupants other than American Educational Institute, Inc. who is located on the second floor of Building A and occupying 5,672 rental square feet of space in the Building.  Seller shall deliver the Lease with American Educational Institute Inc. with the other Property Documents.  Seller shall deliver a customary and reasonable estoppel certificate from this tenant.  

10.6    The Seller agrees to provide the Purchaser with all information needed to notify (the “Bulk Sale Notification”) the New Jersey Division of Taxation Bulk Sales Unit (the “Bulk Sales Unit”) as to the sale of the Property by the Seller to the Purchaser (as contemplated under Section 54:50-38, New Jersey Statutes, and any related sections).  The Bulk Sale Notification must be delivered to the Bulk Sales Unit no less than 10 days prior the Closing Date.  The Seller shall cooperate with the Purchaser in connection with the timely delivery of the Bulk Sale Notification, and the Seller shall comply with all applicable demands, or other applicable escrow demands, from the Bulk Sales Unit or other such Governmental Authority.  If the Bulk Sales Unit suggests or requires a tax escrow, then a portion of the Purchase Price in an amount equal to the sum required or suggested by the Bulk Sales Unit shall be held in escrow (the “Withheld Amount”) by the 

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Purchaser’s attorney pending notification from the Bulk Sales Unit as to the disposition of the Withheld Amount (i.e., either payment to the Seller or to the Bulk Sales Unit).  Should the Seller’s obligations to the Bulk Sales Unit exceed the Withheld Amount, the Seller shall remain responsible for the payment of any such outstanding sales tax obligations.
10.7    Immediately upon the Effective Date, Seller shall permit Purchaser to store up to 750 boxes containing legal files in a mutually agreed upon area within the Building.  There will be no charge for the file storage so long as the transaction contemplated herein closes.  Should the transaction not close for any reason, Purchaser shall remove its boxes from the Building unless otherwise agreed with the Seller and shall pay to Seller for the temporary storage $5,000 per month beginning on the date that Purchaser moves its boxes into the Building.  This amount shall be prorated for any partial month.

10.8    Seller shall allow Purchaser early access to the Property two (2) weeks prior to Closing to install its telephone and data systems.  In the event Closing does not take place after Purchaser has installed telephone and data systems, Purchaser shall remove such installations and restore the Property to it original condition without any charge to Seller.

        
11.    Representations and Warranties of Seller.

Seller represents, warrants, and agrees that:

11.1    Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of New York, and has the power to own its own properties and to carry on its business as now being conducted.

11.2    Seller has the full right, power and capacity to enter into this Agreement and to carry out the transactions contemplated hereby and, no consent or authorization of any person is required as a condition precedent to the consummation of this Agreement or the transactions contemplated herein.  

11.3    The execution and delivery of this Agreement, the consummation of the transactions herein contemplated and the compliance with the terms hereof will not conflict with or result in a breach of any agreement to which Seller is a party or by which any it is bound, or any lease, indenture, mortgage, loan agreement or instrument to which Seller is a party or by which the Property or Seller is bound or, to Seller's knowledge, any applicable law or regulation or order of any governmental agency or court, domestic or foreign, having jurisdiction over the Property or Seller.

11.4    Seller has received no notice of, and, to Seller's knowledge, there is no pending or threatened action, litigation, investigation, condemnation or other proceeding (by any private person or entity or by any governmental authority) against or relating to the Property, or against Seller, which would or could (i) result in a judgment or other Lien being filed against the Property, (ii) otherwise affect the Property, any construction, use or occupancy thereof, or (iii) affect the right or ability of Seller to perform its obligations under this Agreement.

11.5    Seller is not a foreign person as that term is used and defined in Sections 1445 and 7701 of the Internal Revenue Code. 

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11.6    With the exception to the lease to American Educational Institute, Inc. there are no leases, subleases, or occupancy agreements in effect regarding the Property.

11.7    Seller has not received written notice from any governmental authority having jurisdiction that the Property, the use, construction, maintenance, operation or occupancy thereof, is not in compliance with any applicable laws, regulations and requirements of any such noncompliance.

11.8    To Seller’s knowledge, there are no pending or threatened condemnation proceedings regarding the Property. 

11.9    Attached hereto as Schedule 1.13 is a true and correct list of all Service Contracts in connection with the Property.  True, correct and complete copies of the Service Contracts have been furnished by the Seller to the Purchaser.

11.10    Seller has no knowledge of any federal, state, county or municipal or plans to change the road system in the immediate vicinity of the Property or to restrict or change access from any such roads to the Property or of any pending or threatened condemnation of the Land or the Property or any part thereof or of any plans for improvements which might result in a special assessment against the Property.

11.11    There are no facts known to Seller materially affecting the value of the Property that are not readily observable by Purchaser or that have not been disclosed to Purchaser by Seller.  No representation or warranty made by the Seller in this Agreement, in any Exhibit annexed hereto, or in any letter or certificate furnished to the Purchaser pursuant to the terms hereof, each of which is incorporated herein by reference and made a part hereof, omits to state a material fact necessary to make the statements contained herein or therein not misleading.

11.12    Seller has not retained any person to file notices of protest against, or to commence actions to review, real property tax assessments against the Property.

11.13    (a)  To the Seller’s knowledge, the Property has not been used intentionally or unintentionally (i) as a landfill to receive garbage, refuse or waste, whether or not hazardous or (ii) for the storage, deposit, disposal, treatment, handling or recycling of any Hazardous Materials (as defined in this Paragraph).  To the Seller’s knowledge, the Property does not contain any Hazardous Materials, nor has there been a release of any Hazardous Materials on or from the Property whether or not such release emanated from the Property or any contiguous real estate, equipment, or underground storage tanks.  For purposes of this Agreement, "Hazardous Materials" means and includes petroleum, petroleum products, flammable explosives, radioactive materials, asbestos or any material containing asbestos, polychlorinated biphenyl, urea formaldehyde or any pollutant or any toxic or hazardous waste or substance, regulated, prohibited, restricted or controlled by any existing applicable Federal, state, county, or local statutes, laws, regulations, rules, ordinances, directives or codes relating to environmental matters, including by way of illustration and not by way of limitation, the New Jersey Industrial Site Recovery Act, N.J.S.A. 13:1K-6 et seq.; the New Jersey Spill Compensation and Control Act, N.J.S.A. 58:10-23.11, et seq.; the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended 42 U.S.C. Sec. 9601, et seq. (“CERCLA”); the Hazardous Materials Transportation Act, as amended, 49 U.S.C. Sec. 1801, et seq. (“HMTA”); the Resource Conservation and Recovery Act, as amended, 42 U.S.C. Sec. 6901, et seq., (“RCRA”); the Federal Water Pollution Control Act, as amended, 33 U.S.C. 

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Sec. 1251, et seq.; the Occupational Safety and Health Act of 1970, 29 U.S.C. Sec. 651 et seq.; the Emergency Planning and Community Right-to-Know Act, 42 U.S.C. Sec. 11001 et seq.; otherwise known as the Superfund Amendments and Reauthorization Act of 1986; the Clean Air Act, 42 U.S.C. Sec. 4701 et seq.; the Toxic Substances Control Act, 15 U.S.C. Sec. 2601 et seq.; the Solid Waste Disposal Act, 42 U.S.C. Sec. 6901 et seq., as the same exist as of the date hereof (collectively, the "Environmental Laws").

(b)    Neither Seller nor, to Seller’s  knowledge, any former owner or 
operator of the Property, has used or introduced any Hazardous Materials on or affecting the Property or received any notice from any governmental agency, entity or person with regard to Hazardous Materials on, from or affecting the Property.  To Seller’s knowledge after due inquiry, neither Seller nor any owner or operator of the Property has violated any applicable Environmental Law relating to or affecting the Property, and, to Seller's knowledge, there is no pending or threatened any action, suit, investigation or proceeding against Seller relating to the Property seeking to enforce any right or remedy under any Environmental Law.

(c)    There are no underground storage tanks on the Property.

(d)      No spillage or discharge of any Hazardous Materials has occurred
on, to or under the Property (or any part thereof) or on, to or under those portions of any other properties immediately adjoining the Property.

11.14    There is ingress and egress to the Property.

11.15    To Seller's knowledge there is no restriction, limitation or moratorium on the right of the owner of the Property to hook up to or to use any sewer utility, other than the obligation for Seller to pay ordinary and prevailing hook-up charges.  Seller has not received written notice of, and Seller has no knowledge of, any threatened or actual reduction or curtailment of any utility service supplied to the Property. 

11A.    The representations, warranties and covenants set forth in the following Sections shall survive the Closing without limit of duration:  11.13.  The remaining representations, warranties and covenants set forth in this Agreement shall survive the Closing only for a period of two (2) years, and upon the expiration of such two-year period all such representations, warranties and covenants (and any and all claims and causes of action resulting from or on account of any breach thereof) for which Purchaser has not theretofore served upon Seller written notice of claim shall terminate and may not be asserted.  Nothing herein shall limit the duration of any (i) indemnity or other agreement specified in this Agreement to survive the Closing (other than indemnity agreements relating to representations or warranties which have expired two (2) years after the Closing, and (ii) any representations, warranties, indemnities, covenants or agreements set forth in the instruments or documents delivered at Closing, except as limited in this Section 11A.

12.    Representations and Warranties of Purchaser.

12.1    Purchaser represents, warrants, covenants and agrees that:

(a)  (i)    This Agreement and all agreements, instruments and documents herein provided to be executed and delivered, or actually executed and delivered, by Purchaser 

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to Seller at or before the Closing are, and on the Closing Date will be, binding upon Purchaser, (ii) Purchaser is (or if Purchaser assigns its rights hereunder on the Closing Date will be) a limited liability partnership or other entity duly organized and validly existing under the laws of its state of organization and (if Purchaser assigns its rights hereunder) qualified to do business in the State of New Jersey; (iii) Purchaser is duly authorized and qualified to execute and do all things required of it under this Agreement, (iv) Purchaser has the capacity and authority to enter into this Agreement and consummate the transactions contemplated hereunder, and (v) upon execution hereof by all parties this Agreement will be binding on Purchaser and enforceable against Purchaser in accordance with its terms, subject to the laws of  creditors' rights, bankruptcy and insolvency laws and regulations and the availability of equitable remedies.

(b)      The execution and delivery of this Agreement, the consummation of the transactions herein contemplated and the compliance with the terms hereof will not conflict with or result in a breach of any agreement to which Purchaser is a party, or any lease, indenture, mortgage, loan agreement or instrument to which Purchaser is a party or by which Purchaser is bound or any applicable law, regulation, or order of any governmental agency or court, domestic or foreign, having jurisdiction over the Purchaser.

(c)    The Purchaser shall have available to it at Closing, sufficient funds to proceed with Closing.

(d)    Purchaser agrees to pursuant to reasonable and customary terms and conditions to retain the services of Gary Olson post-closing to manage the Building.

12.2    The representations, warranties and covenants of Purchaser set forth in this Section 12 shall survive the Closing only for a period of two (2) years, and upon the expiration of such two-year period all such representations, warranties and covenants (and any and all claims and causes of actions resulting from or on account  of breach thereof) for which Seller has not theretofore served upon Purchaser written notice of claim shall terminate and may not be asserted.

13.    Condemnation and Destruction.

13.1    If, prior to the Closing Date, all or any portion of the Property or any means of ingress thereto or egress there from is taken by eminent domain (or is the subject of a pending or threatened taking which has not been consummated), then Seller shall immediately notify the Purchaser of such fact and Purchaser shall have the option to terminate this Agreement upon written notice to the Seller given not later than ten (10) Business Days after receipt of the Seller's notice.  If this Agreement is terminated, as aforesaid, the Deposit shall be returned to the Purchaser.  Upon such return of the Deposit, neither party shall have any further rights or obligations hereunder, except such rights or obligations specified in this Agreement to survive the termination of this Agreement.  If Purchaser does not exercise this option to terminate this Agreement, Seller shall assign and turn over, and the Purchaser shall be entitled to receive and keep, all awards for the taking by eminent domain, and there shall be no abatement of the Purchase Price.

13.2    If any part of the Property or any part of any means of ingress thereto or egress there from subject to this Agreement is damaged, destroyed by fire or other casualty, Seller shall immediately notify the Purchaser of such fact and Purchaser shall have the option to terminate this Agreement upon written notice to Seller given not later than ten (10) Business Days after 

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receipt of the Seller's notice.  Upon such termination, the Deposit shall be returned to Purchaser.  Upon such return of the Deposit, neither party shall have any further rights or obligations hereunder, except such rights or obligations specified in this Agreement to survive the termination of this Agreement.  

14.    Broker.  Except for The Garibaldi Group, LLC (the “Broker”) Purchaser and Seller hereby represent to each other that they have not dealt with, or otherwise disclosed this Agreement or the subject matter hereof to, any real estate broker, agent, or salesman, so as to create any legal right or claim in any such broker, agent, or salesman for a real estate commission or compensation with respect to the negotiation and/or consummation of this Agreement or the conveyance of the Property by Seller to Purchaser.  Payment of the Broker’s commission shall be made by the Seller in accordance with a separate written agreement between the Seller and Broker.  Purchaser and Seller hereby indemnify and defend each other against, and agree to hold each other harmless from any and all claims for a real estate commission or similar fee other than the Broker’s fee arising out of or in any way connected with any claimed agency or other relationship with the indemnitor and relating to the transactions contemplated hereby.  The provisions of this Section 14 shall survive the Closing or the termination of this Agreement.

15.    Default and Remedies.

15.1    If Purchaser shall fail or refuse to close title as required by the terms of this Agreement, or Purchaser otherwise is in default hereunder so that Seller has the right to refuse to close title, in either case so as to entitle Seller to a remedy under this Agreement, then, following receipt by Purchaser of five (5) Business Days prior written notice from Seller stating that Purchaser is in default hereunder, unless Purchaser shall have cured such default during the five (5) Business Day period, the sole and exclusive remedy of Seller (and the parties constituting Seller) shall be to receive and retain the Deposit (with all interest thereon, if any), as and for full liquidated damages (the parties hereto acknowledging that it is impossible to estimate more precisely the damages which might be suffered by Seller upon Purchaser's default), and neither Seller, nor either of the parties constituting Seller, shall have any other or additional right or remedy against Purchaser.  The Seller's retention of the Deposit is intended not as a penalty, but as full liquidated damages and is Seller's sole and exclusive remedy in the event of default hereunder by Purchaser.  Nothing in this Section 15.1 shall be deemed a limitation on the liability of Purchaser in respect of any obligations and covenants of Purchaser set forth in any instruments or documents executed and delivered by Purchaser at the Closing, or specifically and expressly set forth in this Agreement to survive the Closing.  

15.2    If Seller shall fail or refuse to close title as required by the terms of this Agreement, or Seller otherwise is in default hereunder so that Purchaser has the right to refuse to close title, in either case so as to entitle Purchaser to a remedy in respect of this Agreement, then, following receipt by Seller of five (5) Business Days prior written notice from Purchaser stating that Seller is in default hereunder, unless Seller shall have cured such default during the five (5) Business Day period, subject to the provisions of Section 6 relating to uncured Title Objections, Purchaser shall have the right to (i) obtain specific performance of Seller's obligations hereunder, or (ii) cancel this Agreement and receive a return of the Deposit.  In no event shall Purchaser be entitled to an award of compensatory, consequential, or other damages from Seller.  Nothing in this Section 15.2 shall be deemed a limitation on the liability of Seller in respect of any obligations and covenants of Seller set forth in any instruments or documents executed and delivered by Seller at the Closing, or specifically and expressly set forth in this Agreement to survive the Closing.

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16. Indemnification.    

16.1    Seller shall, and hereby does indemnify, defend and hold harmless Purchaser from and against:

(a)    Any and all claims or demands made by third parties and arising 
out of any and all acts or omissions of Seller relating to the Property or any other rights, properties or interests sold by Seller hereunder and any and all liabilities and obligations of Seller to third parties including, without limitation, claims which are asserted against Purchaser or the Property (or any part thereof) by third parties by reason of Seller's (or Seller's agents', employees' or contractors') acts or wrongful omissions with respect to the Property (or any part thereof), or any other rights, properties or interests sold by Seller hereunder, agreements relating to the Property, by reason of events which occurred or causes of action which accrued prior to the Closing, specifically excluding all claims and causes of action caused by Purchaser, its agents, employees or contractors;

(b)    Subject to the provisions of Section 11.A, any misrepresentation,
breach of warranty, or nonfulfillment of any representation, warranty, covenant or agreement on the part of Seller under this Agreement, or from any misrepresentation in, or wrongful or fraudulent omission from, any certificate or other instrument furnished or to be furnished by or for Seller to Purchaser under this Agreement;

(c)    Any losses, expenses or costs incurred by or suffered by Purchaser
as a result of  (i) the occurrence of any of the following prior to Purchaser’s ownership of the Property: any discharge of Hazardous Materials, or any other introduction of Hazardous Materials on, under or about the Property, or any discharge of Hazardous Materials or any other introduction of Hazardous Materials on, under or about any property adjoining the Property, which was caused by or permitted by Seller, or any of Seller's agents, employees, contractors, licensees or invitees or any person claiming through or under any of such persons; or (ii) any wrongful act of Seller prior to Purchaser’s ownership of the Property (subject to the provisions of Section 11.A). excluding the discharge, release, escape or presence of any Hazardous Materials, which occurred prior to the Seller’s ownership of the Property of which Seller had no knowledge; and

(d)    All claims, actions, suits, proceedings, demands, assessments, 
judgments, costs and expenses (including reasonable attorneys' fees) incident to any of the foregoing.

16.2    The provisions of this Section 16 shall survive the Closing.

17.    Notices.  Any notices required or permitted to be given hereunder shall be in writing and shall be delivered by (i) hand, (ii) overnight courier, or (iii) certified mail, return receipt requested, postage prepaid and addressed to each party at its address as set forth below.  Any notice, request or other communication given by an attorney for Purchaser shall be deemed given by Purchaser; and any notice, request or other communication given by an attorney for Seller shall be deemed given by Seller.  Any such notice, request, or other communication shall be considered given or delivered, as the case may be, on the date of hand delivery, one (1) Business Day after mailing 

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by a generally recognized overnight courier (requesting proof of delivery), or three (3) Business Days after the date of deposit in the United States mail as provided above.  By giving at least ten (10) days' prior written notice thereof, any party hereto may from time to time and at any time change its mailing address.

If to Seller:                Hooper Holmes, Inc.
560 N. Rogers Road
Olathe, Kansas 66062
Attn: General Counsel

            

With a copy to:            Michael Behrens
Bevan, Mosca, Giuditta & Zarillo, PC
222 Mount Airy Rd., Suite 200
Basking Ridge, NJ 07920
                        
            
If to Purchaser:             McElroy, Deutsch Mulvaney & Carpenter, LLP
1300 Mt. Kemble Avenue
P.O. Box 2075
Morristown, New Jersey   07962-2075
Attn: Edward B. Deutsch, Esq.        

With a copy to:            McElroy, Deutsch, Mulvaney & Carpenter, LLP
1300 Mt. Kemble Avenue
P.O. Box 2075
Morristown, New Jersey 07962-2075
Attn:    Lucille J. Karp, Esq.

18.    Assignment.  Purchaser may assign this Agreement to any entity controlled by Purchaser, provided Purchaser notifies Seller of such assignment prior to Closing and provides reasonable evidence of such assignment.  

19.    Entire Agreement; Modification.  This Agreement supersedes all prior discussions and agreements between Seller and Purchaser with respect to the Property and contains the sole and entire understanding between Seller and Purchaser with respect to the Property.  All promises, inducements, offers, solicitations, agreements, commitments, representations and warranties heretofore made between such parties are merged into this Agreement.  This Agreement shall not be modified or amended in any respect except by a written instrument executed by or on behalf of each of the parties to this Agreement.

20.    Exhibits.  Each and every Exhibit referred to or otherwise mentioned in this Agreement is attached to this Agreement and is and shall be construed to be made a part of this Agreement by such reference or other mention at each point at which such reference or other mention occurs, in the same manner and with the same effect as if each Exhibit were set forth in full and at length every time it is referred to or otherwise mentioned.

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21.    Captions.  All captions, headings, Section numbers and letters and other reference numbers or letters are solely for the purpose of facilitating reference to this Agreement and shall not supplement, limit, or otherwise vary in any respect the text of this Agreement.

22.    References.  All references to Sections shall be deemed to refer to the appropriate Sections of this Agreement.  Unless otherwise specified in this Agreement, the terms "herein," "hereof, "hereunder," and other terms of like or similar import, shall be deemed to refer to this Agreement as a whole, and not to any particular Section hereof.

23.    Counterparts.  This Agreement may be executed in several counterparts, each of which shall constitute an original and all of which together shall constitute one and the same instrument.

24.    Waiver    .  Any condition or right of termination, cancellation or rescission granted by this Agreement to either party may be waived by such party, but no such waiver may be relied upon or asserted by the other party unless such waiver has been made in writing by the waiving party, except as specifically provided herein.

25.    Rights Cumulative.  Except as expressly limited by the terms of this Agreement, all rights, powers, and privileges conferred hereunder shall be cumulative and not restrictive of those given by law.

26.    Successors and Assigns.  This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns.

27.    Date of Performance.  If the time period by which any right, option, or election provided under this Agreement must be exercised or by which any acts or payments required hereunder must be performed or paid, or by which the Closing must be held, expires on a day other than a Business Day, then such time period shall be automatically extended to the close of business on the next regularly scheduled Business Day.

28.    Governing Law.  This Agreement shall be governed by the laws of the State of New Jersey.  In any action or proceeding concerning this Agreement, or any agreement or instrument delivered pursuant to this Agreement, or the transactions delivered pursuant to this Agreement, or the transactions contemplated by this Agreement, all parties to this Agreement or such other agreement or instrument hereby consent  (a) to the jurisdiction of the State of New Jersey over all such parties and their general partners, and the partners of such general partners and (b) that venue for all actions and proceedings shall be in the State of New Jersey.

29.    Third Party Beneficiaries.  Nothing in this Agreement is intended or shall be construed to confer upon or to give to any person, firm or corporation other than the parties hereto, their successors and assigns any right, remedy, or claim under or by reason of this Agreement.  All terms and conditions in this Agreement shall be for the sole and exclusive benefit of the parties hereto, their successors and assigns.

30.    Further Assurances.  Purchaser and Seller each agree to execute promptly on demand without additional consideration therefor, but without cost thereto, and deliver to the other such further documents or instruments as may be reasonable and necessary in furtherance of the 

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performance of the terms, covenants and conditions of this Agreement.  This Section 29 shall survive the Closing.

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

32.    Time of the Essence    .  TIME IS OF THE ESSENCE for all provisions of this Agreement, including, without limitation, the Closing Date.

33.    Waiver of Jury Trial.  The parties acknowledge that disputes arising under this Agreement are likely to be complex and they desire to streamline and minimize the cost of resolving such disputes.  Therefore, each party irrevocably waives all rights to a trial by jury in any action, counterclaim, dispute or proceeding based upon, or related to the subject matter of this Agreement.  This waiver applies to all claims against all parties to such actions and proceedings including those involving Seller or Seller’s affiliates or related entities, or any officer, director, shareholder member, attorney or partner of any of them.  It also applies whether such dispute or proceeding arise under this Agreement, any other agreement, instrument or document heretofore or hereafter executed or any other contract, whether similar or dissimilar; and whether or not it arises from intentional or unintentional conduct, from fraud, other improper actions or failure to act, or from other reasons.  This Section 33 shall be deemed a covenant and enforceable independently of all other provisions of this Agreement.  This waiver is knowingly, intentionally, and voluntarily made by both parties.

[the next page is the signature page]

-18-

IN WITNESS WHEREOF, this Agreement was executed as of the day and year first above written.

PURCHASER    

By:    /s/ Edward B. Deutsch    
Name:    Edward B. Deutsch
Title:  Managing Partner

SELLER
.

By:    /s/ Henry E. Dubois        
            Name:    ____Henry E. Dubois______
Title:        President & CEO    
                                     

ESCROW AGENT
(as to Sections 3.1 and 3.2 only)

By:        /s/ Peter D. Blanchard
            Name:    ___Peter D. Blanchard__    
Title:        Principal        

                

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INDEX OF SCHEDULES

SCHEDULE                                 NUMBER

Land                                    1.8
                            
Service Contracts                            1.13

Schedule 1.8 Land

Schedule 1.8 (Land)
Purchase and Sale Agreement

ALL that certain tract, lot and parcel of land lying and being in the Township of Bernards, County of Somerset and State of New Jersey.

BEING known and designated as Lot No. 59 in Block 94 as shown on a Certain map entitled "Subdivision, Tax Lots 58 & 59 Block 94, Tax Map Sheet 19, Bernards Township, Somerset County, New Jersey". dated July 27, 1982, prepared by Couvrette Associates Inc., Consulting Engineers, said map being duly filed in the Somerset County Clerk's Office on November 18, 1982 as Filed Map No. 1985.

BEING further described in accordance with a survey prepared by Teunisen Surveying & Planning Co., Inc., dated January 16, 2007, as follows:

BEGINNING at a point in the southeasterly right-of-way line of Mount Airy Road, said point being the following two courses from the intersection of the .southeasterly right-of-way line of Mount Airy Road, with the northeasterly line of land now or formerly New Jersey Power and Light Company; thence

a.    Along the southeasterly right-of-way line of Mount Airy Road. North 40 degrees 58 minutes 37 seconds East, parallel with and .33.00 feet southeasterly. at a right angle, to the centerline of Mount .Airy Road, a distance of 210.86 feet; thence
b.     Continuing along the southeasterly right-of way line of Mount Airy Road, North 40 degrees 42 minutes 37 seconds East, parallel with and 33.00 feet southeasterly, at a right angle, to the centerline of Mount Airy Road, a distance of 497.31 feet to the point of BEGlNNING; thence
(1)     Along the southeasterly right-of-way line of Mount Airy Road, North 40 degrees 42 minutes 37 seconds East, parallel with and 33.00 feet southeasterly, at a right angle, to the centerline of Mount Airy Road, a distance of 100.00 feet; thence
(2)     Along the dividing line between Lot 58 and Lot 59 in Block 94, as shown on the aforementioned filed map, South 28 degrees 57 minutes 5.3 seconds East, a distance of 741.43 feet; thence
(3)     Continuing along the dividing line between Lot 58 and Lot 59 in Block 94, as show, on the aforementioned filed map, North 61 degrees 02 minutes 07 seconds East, a distance of 579.54 feet to land now or formerly Somerset Hills Y.M.C.A.; thence

(4)     Along land now or formerly Somerset Hills Y.M.C.A., South 26 degrees 56 minutes 23 seconds East, a distance of 338.83 feet to the northwesterly right-of-way line of New Jersey State Highway Route No. 287; thence
(5)     Along the northwesterly right-of-way line of New Jersey State Highway Route No. 287, South 41 degrees 39 minutes 11 seconds West, a distance of 322.13 feet, thence
(6)     Continuing along the northwesterly right-of-way line of New Jersey State Highway Route No. 287, South 45 degrees 44 minutes 45 Seconds West, a distance of 370.58 feet to land now or formerly White Airy III Associates; thence
(7)     Along land now or formerly White Airy III Associates, North 28 degrees 57 minutes 53 seconds West, a distance of 1249.94 feet to the southeasterly right-of-way line of Mount Airy Road and the point of BEGINNING.
For Information Only:
Also known as Lot(s) 4, Block 2401 on the Tax Map of the Township of Bernards, in the County of Somerset.

Schedule 1.13 Service Contracts

None

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