TRUCK LEASE AGREEMENT
This TRUCK LEASE AGREEMENT ("Agreement") made as of July 1, 1997, by and
between NEUMAN DISTRIBUTORS, INC., a New Jersey corporation ("NDI") and DRUG
GUILD DISTRIBUTORS, INC., a New Jersey corporation ("DGD").
WHEREAS, pursuant to that certain Asset Purchase Agreement, by and among
DGD, NDI and Neuman Health Services, Inc., a New Jersey corporation ("Neuman"),
dated as of July 1, 1997 ("Asset Purchase Agreement"), NDI has purchased certain
of the assets of DGD ("Assets"); and
WHEREAS, DGD is the owner of certain motor vehicles, more particularly
described on Exhibit A attached hereto, which are not part of the Assets
purchased by NDI under the Asset Purchase Agreement ("DGD Vehicles"); and
WHEREAS, NDI desires to lease from DGD the DGD Vehicles;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained herein, and other good and valuable consideration, the
receipt of which is hereby acknowledged, DGD and NDI, intending to be legally
bound, hereby agree as follows.
SECTION 1. LEASE OF DGD VEHICLES.
1.1 Lease. DGD hereby rents and leases to NDI, and NDI hereby rents and
leases from DGD, the DGD Vehicles for the Term set forth below.
1.2 Term of Lease. The term of the lease under this Agreement shall be for
a term of thirty (30) days commencing upon the date hereof, and shall
automatically be renewed for additional thirty (30) day periods if on the last
day of such 30 day period or any subsequent 30 day period Meadow Trucking, Inc.
has not received its license as a common carrier ("Term").
1.3 Consideration. As consideration for the lease of the DGD Vehicles, NDI
agrees to pay to DGD, on the first day of each month, in advance, the sum of
$30,417. DGD presently supplements its own vehicles availability by leasing, on
a short-term basis, additional vehicles from outside leasing companies. To the
extent that these short-term vehicle leases are paid by DGD, rather than NDI,
DGD will invoice these extra costs at DGD's cost and provide a supporting copy
of the outside leasing company's invoice. NDI agrees to pay such invoices over
and above the consideration set forth above which they have agreed to pay.
1.4 Status of DGD Vehicles. During the Term of this Agreement, the DGD
Vehicles shall remain the personal property of DGD. NDI shall have no right or
interest in the DGD Vehicles other than the right to use the DGD Vehicles under
the terms of this Agreement.
1.5 Protection of DGD Vehicles. (a) During the Term, NDI shall keep and
maintain the DGD Vehicles in good condition and working order, shall use,
operate and maintain the DGD Vehicles in conformity with all laws and
regulations relating to the DGD Vehicles' ownership, possession, use and
maintenance, shall keep the DGD Vehicles free and clear of all liens,
encumbrances and claims, shall pay all costs and expenses of every character
occasioned by or arising out of the use and maintenance of the DGD Vehicles,
and, on expiration or termination of this Agreement, NDI shall, at NDI's cost,
immediately return the DGD Vehicles to DGD in the same condition as received,
reasonable wear, tear and depreciation resulting from proper use thereof alone
excepted.
1.6 Insurance. NDI assumes the entire risk of loss, theft, or damage to the
DGD Vehicles during the Term, whether or not covered by insurance, and no such
loss, theft, or damage shall relieve NDI of its obligations hereunder except as
otherwise specifically set forth in this Agreement. While the DGD Vehicles are
in the possession or control of NDI, NDI agrees, at its own cost and expense, to
keep the DGD Vehicles insured to protect all interests of DGD, against all risks
of loss, theft, or damage from every cause whatsoever for not less than the
replacement value of the DGD Vehicles.
1.7 Loss, Theft, Damage. In the event of loss, theft or damage to the DGD
Vehicles in whole or in part, NDI shall promptly so notify DGD and, at DGD's
option, shall:
(a) restore such DGD Vehicles to good condition and working order; or
(b) if any item of DGD Vehicles is beyond repair, pay to DGD, within ten
(10) days of such notification, the loss value thereof which shall be an amount
equal to the value of the item of DGD Vehicles on the date of loss, and upon
such payment this Agreement shall terminate with respect to the item of DGD
Vehicles so paid for and NDI shall thereupon become the owner thereof. The
obligations of NDI pursuant to this Section 1.7 shall be offset to the extent
that any insurance proceeds are received by DGD with respect to the subject DGD
Vehicles.
1.8 Default. Any of the following events or conditions shall constitute an
event of default of NDI under this Agreement:
(a) Default in the payment of any sums due hereunder for a period of ten
(10) days after the same becomes due;
- 2 -
(b) If any writ or order of attachment, execution or other legal access
against NDI is levied on any or all DGD Vehicles and not released or satisfied
within ten days; or
(c) Any other breach of any material term or condition of this Agreement.
1.9 Remedies. Upon the happening of any event of default as set forth in
Section 1.8 above, DGD shall have the right to do any or all of the following
without demand or notice of any kind:
(a) Declare due, sue for, and receive from NDI the sum of all amounts due
and owing under this Agreement;
(b) Terminate this Agreement as to any or all DGD Vehicles; or
(c) Pursue any other remedies at law or in equity.
1.10 Concurrent Remedies. The rights granted to DGD under Section 1.9
hereof shall be cumulative and not alternative and action on one shall not be
deemed to constitute an election or waiver of any other right to which DGD may
be entitled.
SECTION 2. MISCELLANEOUS.
2.1 Notices. All notices relating to this Agreement shall be delivered in
person to an officer of DGD or NDI or shall be mailed certified or registered or
sent by facsimile (answerback received) to DGD or NDI at its respective address
shown below or at any other address hereinafter furnished by notice given in
like manner:
If to DGD: Drug Guild Distributors, Inc.
350 Meadowlands Parkway
Secaucus, New Jersey 07094
Attention: Harold Blumenkrantz
Facsimile: (201) 348-0874
with a copy to: Scheichet & Davis, P.C.
505 Park Avenue, 20th Floor
New York, New York 10022
Attention: David I Scheichet, Esq.
Facsimile: (212) 371-7634
If to NDI: Neuman Distributors, Inc.
175 Railroad Avenue
Ridgefield, New Jersey 07657
Attention: Mr. Anthony A. Bonelli
Facsimile: (201) 941-6327
- 3 -
with a copy to: Kelley Drye & Warren LLP
101 Park Avenue
New York, New York 10178
Attention: George J. Marchese, Esq.
Facsimile: (212) 808-7897
All notices so delivered shall be deemed given when received by the addressee.
2.2 Entire Agreement. This Agreement constitutes the entire agreement
between the parties and may not be modified except by an instrument signed by
the parties.
2.3 Further Assurances. Each of NDI and DGD shall, upon request of the
other party, take all actions and execute and deliver all such documents as
shall be reasonably necessary or desirable to effectuate the purpose and intent
of this Agreement.
2.4 Severability. If any provision of this Agreement is prohibited by law
in any applicable jurisdiction, such provision shall, as to such jurisdiction,
be ineffective to the extent of such prohibition without invalidating the
remaining provisions hereof.
2.5 Governing Law; Jurisdiction; Venue; Waiver of Jury Trial.
(a) This instrument shall be governed by and construed in accordance with
the laws of the State of New Jersey.
(b) Each of NDI and DGD hereby irrevocably (i) agrees that any suit, action
or other legal proceeding brought by or on behalf of the other party, its
successors or assignees, arising out of or relating to this Agreement may be
brought in a court of record in the State of New Jersey or in the courts of the
United States of America located in the State of New Jersey, (ii) consents to
the jurisdiction of each such court in any such suit, action or proceeding and
(iii) waives any objection which it may have to the laying of venue of any such
suit, action or proceeding in any of such courts and any claim that any such
suit, action or proceeding has been brought in an inconvenient forum.
(c) Nothing in this Section 2.5 shall affect the right of NDI or DGD to
serve legal process in any other manner permitted by law or affect the right of
DGD, its successors, or assignees to bring any suit, action or proceeding
against the other party or the property of such other party in the courts of any
other jurisdiction.
(d) Each of NDI and DGD hereby knowingly, voluntarily, and intentionally
waive any rights it may have to a trial by jury in respect of any litigation
based hereon, or arising out of, under, or in connection with this Agreement.
2.6 Headings. Headings in this instrument are for convenience only and
shall not be used to interpret or construe its provisions.
- 4 -
2.7 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
2.8 Effect of Agreement; Binding Nature; Assignment. The respective rights
of NDI and DGD under this Agreement are cumulative and not alternative. NDI may
not assign its rights or obligations under this Agreement without the prior
written consent of DGD. The provisions of this Agreement shall be binding upon
and inure to the benefit of DGD and NDI and their respective legal
representatives, successors and assigns.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
NEUMAN DISTRIBUTORS, INC.
By: /s/ Philip A. Piscopo
-----------------------------------
Name: Philip A. Piscopo
Title: Executive Vice President
DRUG GUILD DISTRIBUTORS, INC.
By: /s/ Harold Blumenkrantz
-----------------------------------
Name: Harold Blumenkrantz
Title: President
EXHIBIT A
(DGD Vehicles)
Vehicle Vehicle
Description I.D. Number
----------- -----------