EXHIBIT 10.3
TRANSITION
AGREEMENT
This TRANSITION AGREEMENT (the
“Agreement”) is made effective the 26th day of March,
2008, among APOTHECARYRX, LLC, an Oklahoma limited liability
company (the “Buyer”), NEWT’S DISCOUNT PHARMACY,
INC., an Oklahoma corporation (the “Company”) and
JEREMY AVANCE, an individual (“Avance” and together
with the Company, the “Seller”).
WHEREAS, pursuant to the Pharmacy Purchase
Agreement dated effective March 24, 2008, (the “Purchase
Agreement”) between the Buyer and the Seller, the Buyer
purchased the Seller’s pharmacy business in Guthrie,
Oklahoma, known as “Newt’s Discount Pharmacy”
(the “Business”) effective on the date hereof;
and
WHEREAS, the Seller and the Buyer desire to
foster a smooth transition of the Business from the Seller to the
Buyer and, in the interests of facilitating such transition, the
Buyer desires to use the Seller’s Licenses (as hereinafter
defined) to operate the Business for a short period of time after
the Closing Date, and the Seller is willing to allow the Buyer to
use the Seller’s Licenses to operate the Business for a short
period of time after the Closing Date, pursuant to the terms and
conditions of this Agreement.
NOW, THEREFORE, in consideration of the
foregoing and the mutual covenants and agreements hereinafter set
forth, and in consideration of the execution and performance of the
Purchase Agreement, the parties hereto agree as follows:
1.
Definitions
. Capitalized terms
used and not defined herein shall have the meanings set forth in
the Purchase Agreement.
2.
Transition
Services . Commencing at the Time of Transfer and
continuing until the termination of this Agreement, the Buyer shall
be entitled to utilize, in connection with its operation of the
Business and in strict accordance with the terms of this Agreement,
the following permits, licenses, registrations or certifications of
the Seller related to the Business (collectively, the
“Licenses”):
2.1.
Oklahoma Pharmacy
License;
2.2.
Oklahoma Narcotics
Registration;
2.3.
Drug Enforcement Agency
Registration;
2.4.
National Council for
Prescription Drug Programs Provider Number; and
2.5.
Credit Card
Services.
To
effect the foregoing authorization, on the Closing Date, the Seller
will execute the Limited Power of Attorney in the form attached at
Exhibit “A” authorizing the Buyer to act on the
Seller’s behalf in connection with the Licenses, and other
documents, if any, as may be required or requested by a government
agency, including, without limitation, powers of attorney.
In
addition, during the term of this Agreement,
the Seller agrees to keep open the bank accounts used for payments
from insurance companies, Medicare, Medicaid and credit card
services (whether one or more, the “Accounts”) and
furnish to the Buyer all information regarding the Accounts and
payments by third parties to the Accounts so that the Buyer may
perform the accounting described in paragraph 5 below.
3.
Termination of Right to
Use Licenses . The Buyer’s right to use the
Licenses will terminate upon the written notice of either party
upon the earlier of: (a) the issuance to the Buyer of
the same types of permits, licenses, registrations or
certifications as the Licenses (the “Required
Licenses”); or (b) sixty (60) days from the Closing
Date; provided, in the event that the Buyer has not obtained the
Required Licenses within the required time period, the term of this
Agreement and the Power of Attorney will be extended by twenty (20)
days if (i) the Buyer has not breached and is not in default
of the terms of this Agreement, the Purchase Agreement or any
document executed in connection therewith, and (ii) the Buyer
is actively seeking and using best efforts to obtain the Required
Licenses as promptly as possible.
4.
Will Call
Prescriptions . The company performing the Inventory
will account for all orders at the Business for prescriptions
placed but not paid for prior to the Time of Transfer (“Will
Call Prescriptions”) and determine the cash amount owed by
customers for Will Call Prescriptions (the “Will Call
Receivables”). On the Closing Date, the Buyer will pay
the Seller the amount of the Will Call Receivables. All Will
Call Receivables will be the property of the Buyer. All other
receivables from third parties in connection with the Will Call
Prescriptions will be the property of the Seller subject to
paragraph 5 of this Agreement.
5.
Third Party
Receivables . All accounts receivable generated prior
to the Time of Transfer other than the Will Call Receivables (the
“Seller Receivables”), will be the property of the
Seller. The Buyer will collect the Seller Receivables on
behalf of the Seller and furnish an accounting of all Seller
Receivables (reconciled to the transaction generating such Seller
Receivables) to the Seller on a monthly basis. The Buyer will
pay the Seller all collected Seller Receivables on a weekly
basis. The Buyer will conduct the foregoing collection,
accounting and reconciliation at the Buyer’s expense.
All accounts receivable generated after the Time of Transfer will
be the property of the
