AMENDMENT NO. 1 TO LEASE
Exhibit
10.2
EXECUTION
FORM
AMENDMENT
NO. 1 TO LEASE
THIS
AMENDMENT NO. 1 TO LEASE (this
“Agreement”) is dated and effective as of December 21, 2005, by and between
VALLEY
DRUG COMPANY, an
Ohio
corporation with its
principal place of business in
New
Castle, Pennsylvania (“Tenant”), and BECAN
DEVELOPMENT LLC,
a
Pennsylvania limited liability company (“Landlord”).
WHEREAS,
Tenant
and Landlord are parties to a Commercial Lease dated January 1, 2004 (the
“Lease”), with respect to Tenant’s distribution facility located at 000 Xxxxx
Xxxxx Xxxx, Xxx Xxxxxx, Xxxxxxxxxxxx (the “Facility”); and
WHEREAS,
Tenant
and Landlord have agreed to certain modifications to the Lease to become
effective upon the execution and delivery of this Agreement.
NOW,
THEREFORE,
in
consideration of the premises and the mutual covenants contained herein, and
other good and valuable consideration, the receipt and sufficiency of which
are
hereby acknowledged by the parties, the parties agree as follows:
1. Amendments
to Lease.
The
parties agree that, effective as of the date hereof, the Lease shall be amended
as follows:
(a) Section
2
of the Lease is hereby amended and restated as follows:
“2. PREMISES.
Landlord hereby leases to Tenant and Tenant leases from Landlord upon all of
the
conditions set forth herein, that certain real property situated at 000 Xxxxx
Xxxxx Xxxx, Xxx Xxxxxx, XX, 00000, and described as a 45,000 square foot
building as described in Exhibit “A” attached hereto and made a part hereof.
Said real property, including the land, all improvements thereon and all
fixtures purchased and installed thereon by Landlord, is herein called the
“Property”“.
(b) Section
3.1 of the Lease is hereby amended and restated as follows:
“3.1 Initial
Term; Renewal Terms.
The
initial term hereof shall be for five (5) years commencing on December 21,
2005
(the “Initial Term”), unless terminated sooner pursuant to any provision hereof.
The Tenant shall have the right to extend the term of this Lease for two (2)
consecutive five-year renewal terms (collectively, the “Renewal Term”) by
sending written notice of its election to renew to Landlord not later than
six
(6) months prior to the end of the then existing term of the
Lease.”
(c) The
following new Section 48 is hereby added to the Lease:
“48. Purchase
Option.
The
Tenant shall have the option, exercisable at any time on or after December
21,
2008, to purchase the Property from the Landlord. The Tenant shall exercise
the
purchase option by sending written notice of its election to purchase to
Landlord. The notice of election to purchase shall specify a closing date for
the purchase and sale which closing date shall be not less than sixty (60)
nor
more than ninety (90) days from the date of the notice of purchase. The purchase
price shall be the “fair market value” of the Property determined as set forth
below. The purchase price shall be paid in full in immediately available funds
at closing. The closing shall be conducted, and all closing adjustments shall
be
made in accordance with, the local customs for commercial real estate
transactions in New Castle, Pennsylvania.
The
“fair
market value” of the Property shall be determined as follows: Within ten (10)
days of the exercise of the purchase option by Tenant, each of Landlord and
Tenant shall engage, at its own expense, a licensed independent appraiser
experienced in commercial real estate appraisals. Such appraisers shall conduct
appraisals of the Property to be completed within thirty (30) days of their
engagement. Upon receipt of the appraisals, the Landlord and Tenant shall share
with one another the appraisal reports. In the event the fair market value
of
the Property as determined by Landlord’s and Tenant’s independent appraisers
does not vary by more than ten percent (10%) of the lower of the appraised
fair
market values, the fair market value for purposes of this Lease shall be the
average of the two appraised values. In the event the fair market value of
the
Property as determined by Landlord’s and Tenant’s independent appraisers varies
by more than ten percent (10%) of the lower of the appraised fair market values,
then both appraisals shall be disregarded and the two independent appraisers
shall appoint a third independent appraiser to determine the appraised fair
market value of the Property. The fair market value as determined by the third
appraiser shall be binding upon Landlord and Tenant. The expenses of the third
appraiser shall be borne equally by Landlord and Tenant.”
(d) The
following new Section 49 is hereby added to the Lease:
“49. Right
of First Refusal.
Tenant
shall have a right of first refusal to purchase the Property upon the terms
and
subject to the conditions set forth herein. In the event that Landlord receives
a bona fide offer from a third-party (the “Buyer Party”) to purchase the
Property, and prior to its acceptance of any such bona fide offer, the Landlord
shall promptly (but in any event within five (5) business days) notify Tenant
in
writing of such offer, including but not limited to: (i) the amount and the
form
of consideration proposed to be paid by the Buyer Party for the Property, (ii)
the proposed closing date for such purchase and sale of the Property, and (iii)
any material conditions to the closing of the purchase and sale of the Property
(the “Sale Notice”). Within ten (10) business days from receipt of the Sale
Notice, Tenant shall inform Landlord in writing of its desire to purchase the
Property on terms and conditions identical to those offered by the Buyer Party
and described in the Sale Notice (the “Purchase Notice”). In the event that
Tenant delivers a Purchase Notice to Landlord within the ten-day period,
Landlord shall be obligated to sell the Property to the Tenant upon the terms
and subject to the conditions described in the Sale Notice, and Landlord shall
promptly decline the offer from the Buyer Party. Notwithstanding the foregoing,
nothing herein is intended to or shall prohibit a transfer of membership
interests between the members of Landlord without first offering such membership
interests to Tenant.
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In
the
event that Tenant fails to deliver a Purchase Notice within such ten-day period,
or in the event Tenant sooner notifies Landlord in writing that it does not
desire to purchase the Property on the terms set forth in the Sale Notice,
Landlord may proceed without further restriction to sell the Property to the
Buyer Party on the terms and conditions set forth in the Sale Notice;
provided,
that
such Buyer Party shall purchase the Property subject to this Lease, which shall
remain in full force and effect in accordance with the terms hereof, except
that
the purchase option granted to Tenant by Landlord pursuant to Section 48 and
the
right of first refusal granted to Tenant by Landlord in this Section 49 shall
automatically be extinguished and terminated.”
2. Consent
to Assignment.
Landlord hereby acknowledges that Tenant is party to a certain Asset Purchase
Agreement, dated as of the date hereof, with Rochester Drug Cooperative, Inc.,
a
New York corporation (“RDC”), for the sale of certain of Tenant’s assets to RDC
(the “Purchase Agreement”). Landlord further acknowledges that following the
closing of the transactions contemplated by the Purchase Agreement, Tenant
shall
sublease the Facility to RDC on the same terms and conditions as are set forth
in the Lease (as amended hereby) so that RDC may conduct certain business
operations from the Facility. Landlord further acknowledges that it is the
intention of Tenant and RDC that, upon the satisfaction of certain conditions
set forth in the Purchase Agreement, Tenant shall assign the Lease (as amended
hereby) to RDC, and RDC shall assume the Lease from Tenant, and the sublease
of
the Facility shall then be terminated (the “Lease Assignment”). Landlord
consents to the sublease and the Lease Assignment, and in furtherance thereof
Landlord hereby covenants and agrees to use best efforts to obtain, within
sixty
(60) days from the date hereof, the written consent of The Pennsylvania
Industrial Development Authority (or any successor thereto, “PIDA”) and National
City Bank (the “Bank”) to the Lease Assignment and this Agreement. Tenant shall
cooperate with Landlord and use its own reasonable efforts to assist Landlord
in
obtaining the necessary consents from PIDA and the Bank.
3. No
Other Changes.
Except
as expressly provided in this Agreement, the Lease shall remain in full force
and effect.
4. Binding
Effect.
This
Agreement and all of the provisions hereof shall be binding upon and inure
to
the benefit of the parties hereto and their respective successors and permitted
assigns, but neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned or assignable by either of the parties
hereto without the prior written consent of the other party (except as
contemplated by the Lease Assignment). Any assignment in violation of this
Agreement shall be null and void.
5. Governing
Law; Counterparts.
This
Agreement shall be governed by and construed and enforced in accordance with
the
laws of the Commonwealth of Pennsylvania, without regard to its principles
of
conflict or choice of law. This instrument may be executed in two or more
counterparts, including by way of facsimile, each of which shall be deemed
an
original, but all of which together shall constitute the same
instrument.
[THE
NEXT PAGE IS THE SIGNATURE PAGE]
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IN
WITNESS WHEREOF,
the
parties hereto, intending to be legally bound, have caused this Amendment No.
1
to Lease to be duly executed and delivered on their behalf by their duly
authorized representatives as of the day and date first above
written.
| TENANT: | ||
| VALLEY DRUG COMPANY | ||
| |
|
|
| By: | /s/ Xxxxxxx X. Xxxxxxxxxx | |
|
Name: Xxxxxxx X. Xxxxxxxxxx |
||
| Title: President & CEO | ||
| LANDLORD: | ||
| BECAN DEVELOPMENT LLC | ||
| |
|
|
| By: | /s/ Xxxxxx Xxxxx | |
|
Name: Xxxxxx Xxxxx |
||
| Title: | ||
