Unassociated Document


     

    Exhibit
      10.3

     

    
      EXECUTION
        FORM

       

      
        SUBLEASE

         

        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
          209 Green Ridge Road, New Castle, Pennsylvania (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.


         

        [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 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/
                  Edgardo A. Mercandante
	 	
                  
Name:
                  Edgardo A. Mercandante
	
                   

                	Title:
                  President & CEO


        

        
          	
                   

                	 	
                   

                   

                
	 	SUBTENANT:
	 	 
	 	ROCHESTER DRUG COOPERATIVE,
                  INC.
	 
 	 
 	 
 
	 	By:  	/s/ Laurence
                  F. Doud III
	 	
                  
Name:
                  Laurence F. Doud III
	 	Title:
                  CEO


        

        
          	 	 	
                   

                   

                
	 	LANDLORD:
	 	 
	 	BECAN DEVELOPMENT
                  LLC
	 
 	 
 	 
 
	 	By:  	/s/
                  Philip Laird
	 	
                  
Name:
                  Philip Laird
	 	Title: