FIRST AMENDMENT TO LEASE AGREEMENT
THIS FIRST AMENDMENT TO LEASE AGREEMENT, made as of the lst day of July,
1996, by and between SARTAK HOLDINGS, INC., a New Jersey corporation,
successor in interest to National Utility Service, Inc., "Lessor" and MERIT
BEHAVIORAL CARE CORP., a Delaware corporation, successor in interest to
Medco Behavioral Care Corporation, "Lessee". W I T N E S S E T H: WHEREAS,
Lessors predecessor in interest, National Utility Service, Inc. and Lessees
predecessor in interest Medco Behavioral Care Corporation entered into a
Lease dated as of November 30, 1993 (the "Lease") for certain Premises
described in the Lease; and WHEREAS, the Commencement Date of the Lease is
January 31, 1994 and the termination of the initial term is January 31,
2004; and
WHEREAS, Lessee exercised its right to lease the Expansion Space as defined
in the Lease and consisting of 5,119 rentable square feet; and
WHEREAS, Lessee has requested that Lessor lease to it additional office
area in the Building; and WHEREAS, Lessor and Lessee wish to amend the
Lease as hereinafter provided. NOW, THEREFORE, in consideration of the
mutual covenants herein made and other good and valuable consideration, the
parties hereto agree as follows: 1. All definitions and terms set forth in
the Lease shall have the same meaning herein except as specifically amended
or otherwise intended to have a different meaning. 2. (a) Lessor hereby
leases to Lessee and Lessee hereby leases the following space: 15,973
rentable square feet located on the second floor, north wing of the
Building (the "Additional
Premises") for the same purposes as set forth in Paragraph First of the
Lease. (b) Lessor at its cost and expense shall provide a "turn-key" fit up
of the Additional Premises with plans (the "AP Plans") mutually agreed upon
by Lessor and Lessee, provided that the fitup of the Additional Premises
shall be with improvements and finishes comparable to those provided by
Lessor in the Expansion Space (the "AP Fitup"), (c) Subject to Lessors
receipt of sealed construction documentation documents and Plans from
Lessee by July 15, 1996 Lessor will undertake the AP Fitup and use its best
efforts to complete such fitup on or about September 30, 1996. Lessor shall
give Lessee five (5) days prior written notice of the date it estimates the
AP Fitup will be substantially completed. 3. The term of the Lease shall be
extended for a period of ten (10) years commencing October 1, 1996 and to
end at 12:00 midnight September 30, 2006 (the "New Term"). 4. On the date
which is the later of (i) October 1, 1996 or (ii) the date upon which the
AP Fitup has been substantially completed as set forth in Lessor's notice
referred to in Paragraph 2 (c) above, (the "AP Commencement Date") ,
Lessee's rights in and to the lease and occupancy of the Expansion Space
shall terminate and Lessee shall vacate such space as of such date. 5. From
and after the date hereof to the AP Commencement Date the Basic Rent
payable by Lessee and all Additional Rent payable under the Lease shall be
the same as is due from Lessee as of the date hereof. Commencing on the AP
Commencement Date the Basic Rent for the Premises described in the Lease,
exclusive of the Expansion Space and constituting original 21,480 rentable
square feet leased to Lessee under the Lease (the "Initial Premises") plus
the Additional Premises shall be as follows, based upon the aggregate of
the Initial Premises and Additional Premises (collectively the "Combined
Premises") being 37,453 rentable square feet: October 1, 1996 to September
30, 1997 in the amount of $595,502.70 calculated at the rate of $15,90 per
rentable
square foot payable in equal monthly installments of $49,625.23; October 11
1997 to January 31, 1999 in the amount of $969,283,63 calculated at the
rate of $19.41 per rentable square foot payable in equal monthly
installments of $60,580.23; February 1, 1999 to September 30, 2001, the
amount of $2,298,811.60 calculated at the rate of $23.01 per rentable
square foot payable in equal monthly installments of $71,816.13; and
October 1, 2001 to September 30, 2006 in the amount of $4,213,462.50
calculated at the rate of $22.50 per rentable square foot payable in equal
monthly installments of $70,224.375. In the event the AP Commencement Date
is other than the first day of the month, the Basic Rent for such month
shall be prorated, If the Additional Premises have been completed and
occupied by Lessee prior to October 1. 1996, the New Basic Rent shall
nevertheless become effective on October 1, 1996. 6. Lessee shall pay to
Lessor an amount not to exceed $50,000 against Lessors costs to retrofit
the Expansion space ("Retrofit Cost") to be vacated on the AP Commencement
Date. The term "retrofit" shall mean the removal of all improvements
presently located in the Expansion Space and the improvements undertaken by
Lessor to make such provision ready for a new tenant after the AP
Commencement Date, For the period commencing October 11 1997 through
September 30, 2001 (the "Repayment Period"), Lessee shall pay to Lessor as
Additional Rent the sum of $0.42 per rentable square foot of the Combined
Premises for each twelve (12) month period from October 1 through September
30, If the retrofit is completed prior to October 1, 1997 then the actual
cost thereof shall be utilized to determine the Retrofit Cost, which sum up
to $50,000 shall be amortized over the Repayment Period. In the event the
retrofit has not been completed by October 1, 1997 and Lessee has commenced
the payment at the start of the Payment Period, when the retrofit is
completed and if the costs of the retrofit is less than $50,000, then the
Retrofit Cost payable during
the Payment Period shall be recalculated to equal the actual cost to Lessor
and any overpayments made by Lessee shall be credited against the
recalculated payments next due from Lessee. Lessor shall provide Lessee
with reasonable documentation supporting the Retrofit Cost and the
calculation of the payment for the Repayment Period upon completion of the
retrofit. 7. On and after the AP Commencement Date the term "Premises" and
"Demised Premises" whenever used in the Lease shall mean the combined
Premises defined herein. 8. On and after the AP Commencement Date, Lessees
proportionate share whenever that phrase is used, shall be 26,745% (with
respect to a rentable area of 37,453 square feet which the parties agree is
the proper square footage of the Combined Premises and that these shall be
no further measurement thereof). 9. Lessor and Lessee agree that the Base
Period defined in the Lease shall remain as 1994 and shall be the Base
Period utilized with respect to the Combined Premises. 10. Paragraph
Twenty-Fifth of the Lease is hereby deleted in its entirety. 11. Paragraph
Thirty-Fourth of the Lease is hereby amended, effective as of the AP
Commencement Date to provide that Lessee's occupancy of the Combined
Premises (as the 37,453 rentable square feet shall include 142 parking
spaces, of which 16 shall be reserved as set forth on Schedule I to the
Lease. 12. Lessor and Lessee hereby confirm the provisions of Paragraph
Thirty-Sixth of the Lease with respect to the Brokers instrumental in the
leasing of the Additional Premises and that Lessor shall pay the fees
therefor in accordance with the terms of a separate agreement. 13. The
first paragraph of Paragraph Fortieth of the Lease is hereby deleted in its
entirety. The second paragraph of Paragraph Fortieth is hereby amended to
provide that Lessee shall have the right to terminate the Lease, effective
as of the end of the New Term Fifth Lease year, that
is September 30, 2001, upon not less than nine (9) months notice as thereon
provided; that the reference to the calculation of unamortized costs as to
the Initial Premises shall remain as thereon set forth, but that there
shall be added to such calculation the Lessor's unamortized cost of the
improvements to the Additional Premises as provided in this First
Amendment. The aggregate cost of the foregoing unamortized costs shall
constitute the payment for the Early Termination Right. All references
therein to the Expansion Space is hereby deleted. 14. Paragraph
Forty-Fourth of the Lease is hereby amended in its entirety as follows:
"FORTY-FOURTH - EXPANSION OPTION.
So long as Lessee is not in default hereunder after the expiration of
any applicable grace period, Lessee shall have a right of first refusal to lease
the space adjacent to the Demised Premises currently occupied by Xxxxxxx Inc.,
subject to Xxxxxxx Inc. rights thereto pursuant to its lease (the "New Expansion
Space") upon the same terms and conditions offered in writing by any unrelated
third party to Lessor and which Lessor is willing to accept, provided: (i) not
less than three (3) years remain on the Lease term, including any extensions, if
Lessee shall have given notice effective to extend the term under Paragraph
FIFTY-FIFTH and (ii) the tenant fitup set forth in the unrelated third party
offer shall be proportionally reduced by the same percentage that the number of
months that have elapsed from the Commencement Date bears to the lease term.
Lessee shall have twelve (12) days from the date Lessor gives written notice to
Lessee of the amount of contiguous space proposed to be leased and the terms,
together with a copy of the written offer, within which to accept or reject
Lessor's offer to lease such contiguous space. If Lessee elects to lease such
contiguous space, then the terms and rent shall be at the rate offered by the
unrelated third party, except that the term for the New Expansion Space shall be
coterminous with the Term for the Premises. Tenant shall pay Additional Rent on
the New Expansion Premises in the same manner and utilizing the same Base Period
as utilized in connection with the Demised Premises, Lessee's Proportionate
Share for the New Expansion Space shall be determined by the percentage which
reflects the percentage the New Expansion Space bears to the total rentable
square footage of the Building. The rent commencement date for the Expansion
Space shall commence on the date Lessors Work has been substantially completed
as such term is defined in Paragraph THIRTY-NINTH. Except with respect to the
rent as set forth herein, upon the delivery of possession of the New Expansion
Space to Lessee by Lessor, the New Expansion Space shall be deemed to be a part
of the Demised Premises and subject to all the terms and conditions of this
Lease including the Lease Termination Date and Renewal Option, The right of
first refusal granted to Lessee pursuant to this Paragraph FORTYFOURTH shall not
be deemed to extend to any space in the Building contiguous to the New Expansion
Space."
15. Except as specifically set forth in this First Amendment to Lease
and except for any inconsistencies between the Lease and this First Amendment in
which case the First Amendment shall prevail, the parties agree in all respects
that the terms and conditions of the Lease shall remain in full force and
effect.
IN WITNESS WHEREOF, the parties have hereunto set their hands and seals as
of the day and year first above written.
WITNESS: LESSOR:
SARTAK HOLDINGS, INC.
/s/ By:/s/ Xxxxxx Xxxxxxxxxx, President
WITNESS: LESSOR:
MERIT BEHAVIORAL CARE CORP.
/s/ By: /s/ Xxxxxx X. Xxxxxx
Executive Vice President and
Chief Financial Officer
