Contract
Exhibit
10.3
EXECUTION
FORM
THIS
SUBLEASE (as
it
may be amended from time to time, this “Agreement”) is dated as of December 21,
2005, by and between VALLEY
DRUG COMPANY, an
Ohio
corporation with its
principal place of business in
New
Castle, Pennsylvania (“Sublandlord”), ROCHESTER
DRUG COOPERATIVE, INC.,
a New
York corporation with its principal place of business in Rochester, New
York
(“Subtenant”), and BECAN
DEVELOPMENT LLC,
a
Pennsylvania limited liability company (“Landlord”), in connection with that
certain Asset Purchase Agreement, dated as of December 21, 2005, by and
between
Subtenant and Sublandlord (the “Purchase Agreement”). This Agreement shall be
deemed to be effective as of the Closing Date as defined in the Purchase
Agreement.
WHEREAS,
Sublandlord and Landlord are parties to a Commercial Lease dated January
1,
2004, as amended by Amendment No. 1 to Lease dated December 21, 2005 (as
amended, the “Lease”), with respect to Seller’s distribution facility located at
000 Xxxxx Xxxxx Xxxx, Xxx Xxxxxx, Xxxxxxxxxxxx (the “Facility”); and
WHEREAS,
Subtenant and Sublandlord have entered into the Purchase Agreement for
the
purchase and sale of Sublandlord’s wholesale pharmaceutical products
distribution business, and following the Closing Date the Subtenant desires
to
occupy and conduct certain business operations from the Facility;
and
WHEREAS,
pursuant to the terms of the Purchase Agreement, Sublandlord has agreed
to
sublease to Subtenant all of Sublandlord’s rights to the Facility as tenant
under the Lease; and
WHEREAS,
pursuant to the terms of the Purchase Agreement, Subtenant has agreed to
sublease Sublandlord’s obligations and liabilities as tenant under the
Lease.
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. Sublease.
Sublandlord, for itself, its successors and assigns, hereby subleases to
Sublandlord all of Sublandlord’s right, title and interest as tenant in and to
the Lease and Subtenant hereby agrees to sublease from Sublandlord, and
to
perform in accordance with the Lease, all of Sublandlord’s right, title and
interest as tenant under the Lease. Landlord acknowledges and consents
to the
sublease evidenced by this Agreement.
2. Lack
of Consent to Assignment; Indemnity.
Sublandlord and Subtenant acknowledge and understand that the sublease
evidenced
by this Agreement is prohibited without the prior consent of The Pennsylvania
Industrial Development Authority (including any successor entity thereto,
“PIDA”) and National City Bank (the “Bank”). Sublandlord and Subtenant further
acknowledge that the consents of PIDA and the Bank to this Agreement have
not
been obtained as of the date hereof, but that Sublandlord and Landlord
are
cooperating to obtain such consents. Notwithstanding the lack of such consents,
Sublandlord and Subtenant desire to enter into this Agreement. In consideration
of Subtenant’s agreement to sublease from Sublandlord, and to perform in
accordance with the Lease, all of Sublandlord’s right, title and interest as
tenant under the Lease, Sublandlord agrees to indemnify, defend and hold
Subtenant harmless from, against and in respect of any and all Losses (as
defined in the Purchase Agreement) asserted against, imposed upon or incurred
by
Subtenant, directly arising out of claims by PIDA and/or the Bank related
to the
sublease of the Facility by Sublandlord to Subtenant, as evidenced by this
Agreement, without the prior consent of PIDA or the Bank. This indemnity
granted
by Sublandlord to Subtenant hereunder is the exclusive and entire remedy
of
Subtenant against Sublandlord in respect of any Losses or claims arising
out of
or related to the sublease contemplated by this Agreement. Any claim for
indemnification hereunder shall be subject to the indemnification procedure
set
forth in Section 11.6 of the Purchase Agreement, which is incorporated
herein by
reference.
3. 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. Any assignment
in
violation of this Agreement shall be null and void.
4. 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.
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IN
WITNESS WHEREOF,
the
parties hereto, intending to be legally bound, have caused this Agreement
to be
duly executed and delivered on their behalf by their duly authorized
representatives as of the day and date first above written.
| SUBLANDLORD: | ||
| VALLEY DRUG COMPANY | ||
| |
|
|
| By: | /s/ Xxxxxxx X. Xxxxxxxxxxx | |
|
Name: Xxxxxxx X. Xxxxxxxxxxx |
||
|
|
Title: President & CEO | |
|
|
|
|
| SUBTENANT: | ||
| ROCHESTER DRUG COOPERATIVE, INC. | ||
| |
|
|
| By: | /s/ Xxxxxxxx X. Xxxx III | |
|
Name: Xxxxxxxx X. Xxxx III |
||
| Title: CEO | ||
|
|
||
| LANDLORD: | ||
| BECAN DEVELOPMENT LLC | ||
| |
|
|
| By: | /s/ Xxxxxx Xxxxx | |
|
Name: Xxxxxx Xxxxx |
||
| Title: | ||
