Exhibit 10.1

 

ASSET PURCHASE AGREEMENT

 

This Asset Purchase Agreement (this “Agreement”) made as of October 31, 2004, by
and among Drug Depot, Inc., a Florida corporation (“Buyer”) and T & L
Pharmacies, Inc., a Florida corporation, d/b/a Advanced Pharmacy Solutions
(“Seller”).

 

WHEREAS, subject to the terms and conditions hereof, Seller desires to sell,
transfer and assign to Buyer, and Buyer desires to purchase from Seller, all of
the properties, rights and assets used or useful in connection with the pharmacy
business of Seller, which includes, without limitation, inventory, customer
lists, equipment, fixtures and transferable licenses (the “Business”).

 

NOW THEREFORE, in consideration of the mutual covenants and agreements herein
contained, the parties hereto agree as follows:

 

SECTION 1. PURCHASE AND SALE OF ASSETS.

 

1.1 Sale of Assets. Seller agrees to sell, assign, transfer and deliver to
Buyer, and Buyer agrees to purchase from Seller, all of Seller’s right, title
and interest in and to all of the properties, assets and business of the
Business, of every kind and description, tangible and intangible, real, personal
or mixed, and wherever located, but excluding the Excluded Assets (as hereafter
defined), including, without limitation, the following:

 

(a) Fixed Assets. All equipment, machines, test equipment, fixed assets,
accessories, stock, inventory, office materials, software, supplies and other
tangible personal property of every kind and description owned by Seller and
used or held for use in connection with the Business, all as set forth on
Schedule 1.1(a);

 

(b) Contracts. All of the rights of Seller under, and interest of Seller in and
to, all contracts relating to the Business, a true, correct and complete list of
which contracts is attached hereto as Schedule 1.1(b);

 

(a) Intellectual Property and Licenses. All of Seller’s Intellectual Property or
any licenses capable of being transferred and relating to the Business, as set
forth on Schedule 1.1(c) attached hereto;

 

(d) Goodwill. All of the goodwill of Seller in, and the going concern value of,
the Business, and all of the business and customer lists and accounts,
proprietary information, marketing materials and trade secrets related to the
Business; and

 

(e) Records. All of Seller’s customer logs, location files and records, and
other business files and records, in each case relating to the Business.

 

The assets, properties and business of Seller being sold to and purchased by
Buyer under this Section 1.1 are referred to herein collectively as the
“Assets.”

 

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1.2 Excluded Assets. There shall be excluded from the Assets and retained by
Seller, the following assets (the “Excluded Assets”):

 

(a) Accounts Receivable; Other Assets. All accounts receivable generated by the
Business prior to the date of this Agreement, all assets identified on Schedule
1.2(a) attached hereto, and all other assets of Seller which are not used or
held for use in connection with the Business or otherwise necessary to the
operation of the Business;

 

(b) Corporate Records. All of Seller’s corporate and other organizational
records; and

 

(c) Cash and Credit. Cash or credit receivables on hand, exclusive of reserves
associated with undelivered services or products.

 

1.3 Assumed Liabilities; Excluded Liabilities; Employees.

 

(a) Assumed Liabilities. Buyer shall accept and assume, and shall become and be
fully liable and responsible for, and other than as expressly set forth herein
Seller shall have no further liability or responsibility for or with respect to,
(i) liabilities and obligations arising out of events occurring on and after the
date hereof related to Buyer’s ownership of the Assets and Buyer’s operation of
the Business after the consummation of the transactions contemplated herein; and
(ii) all obligations and liabilities of Seller which are to be performed after
the date hereof arising under the Contracts (collectively, the “Assumed
Liabilities”). The assumption of the Assumed Liabilities by Buyer hereunder
shall not enlarge any rights of third parties under contracts or arrangements
with Buyer or Seller or any of their respective affiliates or subsidiaries.

 

(b) Excluded Liabilities. It is expressly understood that, except for the
Assumed Liabilities, Buyer shall not assume, pay or be liable for any liability
or obligation of Seller of any kind or nature at any time existing or asserted,
whether, known, unknown, fixed, contingent or otherwise, not specifically
assumed herein by Buyer, including, without limitation, any liability or
obligation relating to, resulting from or arising out of (i) the Excluded
Assets, (ii) the employees of the Business, or (iii) any fact existing or event
occurring prior to, or relating to the operation of the Business prior to, the
date hereof, including but not limited to taxes, assessments, levies or charges
of any kind or nature relating to the Business prior to the date hereof.

 

(c) Employees, Wages and Benefits.

 

(i) Seller shall terminate or reassign all of its employees related to the
Business effective immediately and Buyer shall not assume or have any
obligations or liabilities with respect to such employees or such terminations,
including, without limitation, any severance obligation.

 

(ii) Buyer specifically reserves the right, on or after the date hereof, to
employ or reject any of Seller’s employees or other applicants in its sole and
absolute discretion. Nothing in this Agreement shall be construed as a
commitment or obligation of Buyer to accept for employment, or otherwise
continue the employment of, any of Seller’s employees, and no employee shall be
a third-party beneficiary of this Agreement.

 

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(iii) Seller shall pay all wages, salaries, commissions, and the cost of all
fringe benefits provided to its employees which shall have become due for work
performed as of and through the date hereof, and Seller shall collect and pay
all Taxes in respect of such wages, salaries, commissions and benefits.

 

(iv) Seller acknowledges and agrees that Buyer shall not acquire any rights or
interests of Seller in, or assume or have any obligations or liabilities of
Seller under, any benefit plans maintained by Seller, or for the benefit of any
employees of Seller, including, without limitation, obligations for severance or
vacation accrued but not taken.

 

1.4 Purchase Price. In consideration of the sale by Seller to Buyer of the
Assets, and subject to the assumption by Buyer of the Assumed Liabilities and
satisfaction of the conditions contained herein, Buyer shall pay to Seller an
amount equal to (i) Two Hundred Fifteen Thousand ($215,000), to be paid at the
Closing by certified check, bank check or wire transfer; (ii) an amount equal to
the current value of the fixed assets and inventory set forth on schedule 1.1(a)
hereto (book value, less depreciation as set forth on schedule 1.1(a)), to be
paid at the Closing by certified check, bank check or wire transfer, and (iii)
Two Hundred Fifteen Thousand ($215,000) shall be paid by delivery of a
promissory note in the form of Exhibit 1.4 attached hereto.

 

1.5 Records and Contracts. Seller shall deliver to Buyer all of the Contracts,
with such assignments thereof and consents to assignments as are necessary to
assure Buyer of the full benefit of the same. Seller shall also deliver to Buyer
all of Seller’s files and records constituting Assets.

 

1.6 Further Assurances. Seller shall, from time to time after the consummation
of the transactions contemplated herein, at the request of Buyer and without
further consideration, execute and deliver further instruments of transfer and
assignment and take such other action as Buyer may reasonably require to more
effectively transfer and assign to, and vest in, Buyer the Assets free and clear
of all Liens.

 

1.7 Sales and Transfer Taxes. All sales, transfer, use, recordation,
documentary, stamp, excise taxes, personal property taxes, fees and duties
(including any real estate transfer taxes) under applicable law incurred in
connection with this Agreement or the transactions contemplated hereby will be
borne and paid by Buyer.

 

1.8 Transfer of Subject Assets. Seller shall deliver or cause to be delivered to
Buyer good and sufficient instruments of transfer transferring to Buyer title to
all of the Assets, together with all required consents. Such instruments of
transfer (a) shall contain appropriate warranties and covenants which are usual
and customary for transferring the type of property involved under the laws of
the jurisdictions applicable to such transfers, (b) shall be in form and
substance reasonably satisfactory to Buyer and its counsel, (c) shall
effectively vest in Buyer good and marketable title to all of the Assets free
and clear of all Liens, and (d) where applicable, shall be accompanied by
evidence of the discharge of all Liens against the Assets. Buyer agrees and
acknowledges that the form of instrument of transfer attached hereto as Exhibit
1.8 is acceptable.

 

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SECTION 2. REPRESENTATIONS AND WARRANTIES OF SELLER. In order to induce Buyer to
enter into this Agreement, Seller, hereby represents and warrants to Buyer as
follows:

 

2.1 Organization. Seller is a corporation duly organized, validly existing and
in good standing under the laws of the State of Florida, with full corporate
power and authority to own or lease its properties and to conduct its business
in the manner and in the places where such properties are owned or leased or
such business is currently conducted or proposed to be conducted.

 

2.2 Required Action. All actions and proceedings necessary to be taken by or on
the part of Seller in connection with the transactions contemplated by this
Agreement have been duly and validly taken, and this Agreement and each other
agreement, document and instrument to be executed and delivered by or on behalf
of Seller pursuant to, or as contemplated by, this Agreement (collectively, the
“Seller Documents”) has been duly and validly authorized, executed and delivered
by Seller and no other action on the part of Seller or its is required in
connection therewith. Seller has full right, authority, power and capacity to
execute and deliver this Agreement and each other Seller Document and to carry
out the transactions contemplated hereby and thereby. This Agreement and each
other Seller Document constitutes, or when executed and delivered will
constitute, the legal, valid and binding obligation of Seller, enforceable in
accordance with its respective terms.

 

2.3 No Conflicts. The execution, delivery and performance by Seller of this
Agreement and each other Seller Document does not and will not (i) violate any
provision of the Articles of Incorporation and by-laws of Seller, in each case
as amended to date, (ii) constitute a violation of, or conflict with or result
in any breach of, acceleration of any obligation under, right of termination
under, or default under, any agreement or instrument to which Seller is a party
or by which Seller or the Assets is bound, (iii) violate any judgment, decree,
order, statute, rule or regulation applicable to Seller or the Assets, (iv)
require Seller to obtain any approval, consent or waiver of, or to make any
filing with, any person or entity (governmental or otherwise) that has not been
obtained or made or (v) result in the creation or imposition of any Lien on any
of the Assets. No consent of any party is necessary in order that the business
of the Seller can be conducted by the Buyer in the same manner after the Closing
as heretofore conducted by the Seller.

 

2.4 Compliance with Laws. Seller’s operation of the Business and the Assets is
in compliance in all material respects with all applicable statutes, ordinances,
orders, rules and regulations promulgated by any federal, state, municipal or
other governmental authority, and Seller has not received notice of a violation
or alleged violation of any such statute, ordinance, order, rule or regulation.

 

2.5 Contracts. The Contracts constitute all leases, contracts and arrangements,
whether oral or written, under which Seller is bound or to which Seller is a
party which relate to the Business or Assets. Schedule 1.1(b) attached hereto
contains a true, correct and complete list of all Contracts. With respect to
each oral agreement or understanding involving the Business, Seller has provided
a written summary of the material terms of each such agreement or understanding
on Schedule 1.1(b). Each Contract is valid, in full force and effect and binding
upon Seller and the other parties thereto in accordance with its terms. Neither
Seller nor, to the knowledge of Seller, any other party is in default under or
in arrears in the performance, payment or satisfaction of any agreement or
condition on its

 

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part to be performed or satisfied under any Contract, nor does any condition
exist that with notice or lapse of time or both would constitute such a default,
and no waiver or indulgence has been granted by any party under any Contract.
Seller has not received notice of, and has no knowledge of, any fact which would
result in a termination, repudiation or breach of any Contract. Seller has
provided Buyer with true and complete copies of all of such Contracts, other
than with respect to the oral agreements or understandings described on Schedule
1.1(b).

 

2.6 Title. Seller has good and marketable title to all of the Assets free and
clear of all mortgages, pledges, security interests, charges, liens,
restrictions and encumbrances of any kind (collectively, “Liens”) whatsoever.
Upon the sale, assignment, transfer and delivery of the Assets to Buyer
hereunder and under the Seller Documents, there will be vested in Buyer good,
marketable and indefeasible title to the Assets, free and clear of all Liens.
The Assets include all of the assets and properties (i) held for use by Seller
to conduct the Business as presently conducted and (ii) necessary for Buyer to
operate the Business in the same manner as such business is currently operated
by Seller. All of the tangible Assets are in good repair, have been well
maintained and are in good operating condition, do not require any material
modifications or repairs, and comply in all material respects with applicable
laws, ordinances and regulations, ordinary wear and tear excepted.

 

2.7 No Litigation. Seller is not now involved in nor, to the knowledge of
Seller, is Seller threatened to be involved in any litigation or legal or other
proceedings related to or affecting the Business or any Asset or which would
prevent or hinder the consummation of the transactions contemplated by this
Agreement. Seller has not been operating the Business under, and the Business is
not subject to, any order, injunction or decree of any court of federal, state,
municipal or other governmental department, commission, board, agency or
instrumentality.

 

2.8 Employees; Labor Matters. Upon termination of the employment of any of
Seller’s employees, Buyer will not by reason of the transactions contemplated
hereby or anything done prior to the date hereof be liable to any of said
employees for so-called “severance pay” or any other payments. Seller is in
compliance in all material respects with all applicable laws and regulations
respecting labor, employment, fair employment practices, work place safety and
health, terms and conditions of employment, and wages and hours. There are no
charges of employment discrimination or unfair labor practices, nor are there
any strikes, slowdowns, stoppages of work, or any other concerted interference
with normal operations existing, pending or, to the knowledge of Seller,
threatened against or involving Seller. No question concerning representation
exists respecting any group of employees of Seller.

 

2.9 Financial Statements. Copies of the balance sheet of Seller as at September
30, 2004 (the “Balance Sheet”) and the statements of income and expense of
Seller for the two years ended December 31, 2003 (collectively the “Financial
Statements”), will be provided within 75 days. The Financial Statements will
have been prepared in accordance with generally accepted accounting principles
applied consistently during the periods covered thereby (except for the absence
of footnotes with respect to unaudited financials), are will be complete and
correct and present fairly and accurately the financial condition of the
Business at the dates of said statements and the results of operations of the
Business for the periods covered thereby. As of the date of the Balance Sheet
(the “Balance Sheet Date”), Seller had no liabilities or obligations of any kind
with respect to the Business, whether accrued, contingent or otherwise, that are
not disclosed and adequately reserved against on the Balance

 

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Sheet. As of the date hereof, Seller has no liabilities or obligations of any
kind with respect to the Business, whether accrued, contingent or otherwise,
that are not disclosed and adequately reserved against on the Balance Sheet.

 

2.10 Licenses. Seller is the holder of all licenses, permits and authorizations
with respect to the Business, all of which are in full force and effect and no
licenses, permits or authorizations of any governmental department or agency are
required for the operation of the Business which have not been duly obtained.

 

2.11 Assigned Contracts; Consents. Except as set forth on Schedule 2.11 attached
hereto, no approval, consent, authorization or exemption from or filing with any
person or entity not a party to this Agreement is required to be obtained or
made by Seller in connection with the execution and delivery of this Agreement
and the Seller Documents and the consummation of the transactions contemplated
hereby and thereby.

 

2.12 Customers and Suppliers. Seller’s relations with its customers and
suppliers, including its Subscribers, are good and there are not pending or, to
Seller’s knowledge, threatened claims or controversies with any customer or
suppliers that, independently or collectively, is material to the Assets or the
Business.

 

2.13 Brokers. Seller has not retained any broker or finder or other person who
would have any valid claim against any of the parties to this Agreement for a
commission or brokerage fee in connection with this Agreement or the
transactions contemplated hereby.

 

2.14 Intellectual Property

 

(a) All of the Intellectual Property of Seller related to the Business or Assets
is identified on Schedule 1.1(c) attached hereto. For purposes hereof, the term
“Intellectual Property” includes: (i) all patents, patent applications, patent
rights, and inventions and discoveries and invention disclosures related to the
Business (whether or not patented) (collectively, “Patents”); (ii) Seller’s
rights to the name “Advanced Pharmacy Solutions,” all trade names, trade dress,
logos, packaging design, slogans, any and all Internet domain names used or
useful in the Business, registered and unregistered trademarks and service marks
and applications related to the Business (collectively, “Marks”); (iii) all
copyrights in both published and unpublished works related to the Business,
including, without limitation, all compilations, databases and computer
programs, and all copyright registrations and applications, and all derivatives,
translations, adaptations and combinations of the above (collectively,
“Copyrights”); (iv) all know-how, trade secrets, confidential or proprietary
information, customer lists, IP addresses, research in progress, algorithms,
data, designs, processes, formulae, drawings, schematics, blueprints, flow
charts, models, prototypes, techniques related to the Business (collectively,
“Trade Secrets”); (v) all goodwill, franchises, licenses, permits, consents,
approvals, technical information, telephone numbers related to the Business (the
“Rights”); and (vii) all contracts relating to the Intellectual Property to
which Seller is a party or is bound, including, without limitation, all
nondisclosure and/or confidentiality agreements entered into by persons in
connection with disclosures by Seller (collectively, “Assigned Contracts”).

 

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(b) Seller has exclusive ownership of, and has good, valid and marketable title
to, all of the Intellectual Property, free and clear of any Liens, and has the
right to use all of the Intellectual Property without payment to any third
party.

 

2.15 Undisclosed Liabilities. Seller has no liabilities or obligations of any
nature related to the Business (whether known or unknown and whether absolute,
accrued, contingent or otherwise) except for liabilities or obligations
reflected on the Base Balance Sheet and current liabilities incurred in the
ordinary course of business since the date thereof.

 

2.16 Disclosure. The representations, warranties and statements contained in
this Agreement and in the certificates, exhibits and schedules delivered by
Seller to Buyer pursuant to this Agreement do not contain any untrue statement
of a material fact, and, when taken together, do not omit to state a material
fact required to be stated therein or necessary in order to make such
representations, warranties or statements not misleading in light of the
circumstances under which they were made. There are no facts known to Seller
which presently or may in the future have a material adverse affect on Seller’s
business, properties, assets, prospects, operations or (financial or other)
condition related to the Business of Seller which has not been specifically
disclosed herein or in a Schedule furnished herewith, other than general
economic conditions affecting the pharmacy industry generally.

 

SECTION 3. REPRESENTATIONS AND WARRANTIES OF BUYER. As a material inducement to
Seller entering into this Agreement, Buyer hereby represents and warrants to
Seller as follows:

 

3.1 Organization. Buyer is a corporation duly organized, validly existing and in
good standing under the laws of the State of Florida. Buyer has all requisite
power and authority to conduct its business as it is now conducted and to own,
lease and operate its properties and assets.

 

3.2 Required Action. All actions and proceedings necessary to be taken by or on
the part of Buyer in connection with the transactions contemplated by this
Agreement have been duly and validly taken, and this Agreement and each other
agreement, document and instrument to be executed and delivered by or on behalf
of Buyer pursuant to, or as contemplated by, this Agreement (collectively, the
“Buyer Documents”) has been duly and validly authorized, executed and delivered
by Buyer. Buyer has full right, authority, power and capacity to execute and
deliver this Agreement and each other Buyer Document and to carry out the
transactions contemplated hereby and thereby. This Agreement and each other
Buyer Document constitutes, or when executed and delivered will constitute, the
legal, valid and binding obligations of Buyer enforceable in accordance with its
respective terms.

 

3.3 No Conflicts. The execution, delivery and performance by Buyer of this
Agreement and each other Buyer Document does not and will not (a) violate any
provision of the Articles of Organization or Operating Agreement of Buyer, as
amended to date, (b) constitute a violation of, or conflict with or result in
any breach of, acceleration of any obligation under, right of termination under,
or default under, any agreement or instrument to which Buyer is a party or by
which it is bound, (c) violate any judgment, decree, order, statute, rule or
regulation applicable to Buyer, or (d) require Buyer to obtain any approval,
consent or waiver of, or to make any filing with, any person or entity
(governmental or otherwise) that has not been obtained or made. The officers who
execute this Agreement and the other Buyer Documents contemplated hereby on
behalf of Buyer have and shall have all requisite power to do so in the name of
and on behalf of Buyer.

 

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3.4 Brokers. Buyer has not retained any broker or finder or other person who
would have any valid claim against any of the parties to this Agreement for a
commission or brokerage fee in connection with this Agreement or the
transactions contemplated hereby.

 

SECTION 4. POST-CLOSING COVENANTS; SURVIVAL.

 

4.1 Non-Competition. Seller hereby agrees that during the period commencing on
the date hereof and ending on the second anniversary of the date hereof, it will
not, without the express written consent of Buyer, directly or indirectly,
anywhere in the Restricted Region (which shall include without limitation
directing services within the Restricted Region from outside the Restricted
Region), engage in any activity which is, or participate or invest in, or
provide or facilitate the provision of financing to, or assist (whether as
owner, part-owner, principal, shareholder, member, partner, director, officer,
trustee, employee, agent or consultant, or in any other capacity), any business,
organization or Person other than Buyer (including without limitation any
business, organization or Person involving, or which is, a family member of any
of the principals of Seller) whose business, activities, products or services
are competitive with any of the business, activities, products or services
conducted or offered by Buyer with respect to the Business. For purposes of this
Agreement, (i) the term “Person” shall mean an individual, a corporation, an
association, a partnership (limited or general), a limited liability company, an
estate, a trust, and any other entity or organization, and (ii) the term
“Restricted Region” shall mean anywhere within the States of Florida. After the
date hereof, neither Seller, nor any person controlling, controlled by or under
common control with Seller will for any reason, directly or indirectly, for
itself or any other person, use or disclose any trade secrets, confidential
information, know-how, proprietary information or other intellectual property of
Seller transferred pursuant to this Agreement.

 

4.2 Post-Closing Transitional Matters. From the date of this Agreement until
Buyer has completed the Medicaid licensing process, Seller will grant Buyer the
right to use licenses issued to Seller by Medicaid in the conduct of the
Business. For a period of ninety (90) days following the closing of the
transactions contemplated herein, Seller shall provide, without additional cost
to Buyer, such assistance as is reasonably requested by Buyer in order to effect
an orderly transition in the ownership and operation of the Assets.
Notwithstanding the foregoing, Seller and Buyer agree to work together in good
faith to provide for reasonable transition process and transition period so that
customer service is not adversely impacted as a result of the transactions
contemplated in this Agreement.

 

4.3 Payment of Vendors. Seller aggress to pay all amounts due to vendors, within
five business days after the Closing.

 

4.4 Access to Records. For a period of one year following the date hereof,
Seller and Buyer shall give the representatives of Buyer and Seller,
respectively, at reasonable times and with reasonable prior notice, free access
to the books and records of the Business and will furnish to Buyer or Seller,
respectively, and its representatives such information regarding the Business
and the Assets as Buyer or Seller, respectively, or its representatives may from
time to time reasonably request.

 

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4.5 Survival. All representations, warranties, covenants, agreements and
indemnities contained in this Agreement, or in any schedule, exhibit,
certificate, agreement, document or statement delivered pursuant hereto, are
material, shall be deemed to have been relied upon by the parties and, shall
survive the consummation of the transactions contemplated herein for a period of
two (2) years regardless of any investigation conducted by or knowledge of any
party hereto.

 

4.6 Collection of Accounts Receivable; Mail. In the event that Buyer on the one
hand, or Seller on the other, shall collect any of the accounts receivable
belonging to, or receive any mail which was intended for, the other party, the
party collecting such accounts receivable, or receiving such mail, shall hold
the same in trust and shall promptly pay the same over to the party entitled
thereto in the case of accounts receivable and, in the case of mail, deliver
such mail to the party for which it is intended, and shall not be entitled to
apply any of such funds against any amounts due from the party entitled to such
accounts receivable.

 

4.7 Right to Purchase Assets. In the event that anytime within one year from the
Closing, Buyer seeks to sell substantially all of the Assets acquired pursuant
to this Agreement, Buyer shall provide Seller five days’ prior notice of such
sale and shall permit Seller to purchase the Assets on the same terms and
conditions as offered to any third party.

 

SECTION 5. INDEMNIFICATION. Seller hereby agrees to indemnify and hold harmless
Buyer, its affiliates and its and their respective directors, officers,
partners, members, managers, employees, and agents, against and in respect of
all losses, liabilities, obligations, damages, deficiencies, actions, suits,
proceedings, demands, assessments, orders, judgments, costs and expenses
(including the reasonable fees, disbursements and expenses of attorneys and
consultants) of any kind or nature whatsoever, but net of the proceeds from any
insurance policies or other third party reimbursement for such loss, to the
extent sustained, suffered or incurred by or made against any indemnified party,
to the extent based upon, arising out of or in connection with: (a) any breach
of any representation or warranty made by Seller in this Agreement or in any
schedule, exhibit, certificate, agreement or other instrument delivered pursuant
to this Agreement; (b) any breach of any covenant or agreement made by Seller in
this Agreement or in any schedule, exhibit, certificate, financial statement,
agreement or other instrument delivered pursuant to this Agreement; (c) any
claim made by any person or entity which relates to the operation of the Assets
or the Business which arises in connection with or on the basis of events, acts,
omissions, conditions or any other state of facts occurring on or existing
before the date hereof; and (d) any claim which arises in connection with any
liability or obligation of Seller other than the Assumed Liabilities.

 

SECTION 6. NOTICES. All notices and other communications required to be given
hereunder, or which may be given pursuant or relative to the provisions hereof,
shall be in writing and shall be deemed to have been given when delivered in
hand or mailed, postage prepaid, by first class United States mail, certified
return receipt requested as follows:

 

If to Buyer:    Vertical Health Pharmacy, Inc.      855 Dunbar Avenue     
Oldsmar, Florida 34677      Tel: 727-548-8345      Attention: Stephen M. Watters
If to Seller:    T & L Pharmacies, Inc.

 

or to such other address of which any party may notify the other parties as
provided above. Notices shall be effective as of the date of such delivery or
mailing.

 

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SECTION 7. MISCELLANEOUS.

 

7.1 Assignability; Binding Effect. This Agreement shall not be assignable by
Seller except with the written consent of Buyer. This Agreement shall be binding
upon and shall inure to the benefit of, the parties hereto and their respective
successors and assigns.

 

7.2 Headings. The subject headings used in this Agreement are included for
purposes of convenience only and shall not affect the construction or
interpretation of any of its provisions.

 

7.3 Amendments; Waivers. This Agreement may not be amended or modified, nor may
compliance with any condition or covenant set forth herein be waived, except by
a writing duly and validly executed by Buyer and Seller or, in the case of a
waiver, the party waiving compliance. No delay on the part of any party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any waiver on the part of any party of any such right, power
or privilege, or any single or partial exercise of any such right, power or
privilege, preclude any further exercise thereof or the exercise of any other
such right, power or privilege.

 

7.4 Bulk Sales Law. Buyer hereby waives compliance by Seller of any applicable
bulk sales law and Seller agrees, to make full and timely payment when due of
all amounts owed by such Seller to its creditors. Seller agrees to indemnify and
hold Buyer harmless from, and reimburse Buyer for, any loss, cost, expense,
liability or damage (including reasonable counsel fees and disbursements and
expenses) which Buyer may suffer or incur by virtue of the non-compliance by
Seller with such laws.

 

7.5 Entire Agreement. This Agreement, together with the schedules and exhibits
hereto, constitutes the entire agreement between the parties with respect to the
subject matter hereof and supersedes and cancels any and all prior or
contemporaneous arrangements, understandings and agreements between them
relating to the subject matter hereof, including without limitation that certain
letter agreement between Buyer and Seller dated December 12, 2001.

 

7.6 Severability. In the event that any provision or any portion of any
provision of this Agreement shall be held to be void or unenforceable, then the
remaining provisions of this Agreement (and the remaining portion of any
provision held to be void or unenforceable in part only) shall continue in full
force and effect.

 

7.7 Governing Law. This Agreement and the transactions contemplated hereby shall
be governed and construed by and enforced in accordance with the laws of the
State of Florida, without regard to conflict of laws principles.

 

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7.8 Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original and all of which shall constitute the
same instrument.

 

7.9 Expenses. Each party shall pay its own expenses incident to the negotiation,
preparation and performance of this Agreement and the transactions contemplated
hereby, including all fees and expenses of its counsel and accountants for all
activities of such counsel and accountants undertaken pursuant to this
Agreement, whether or not the transactions contemplated hereby are consummated.

 

7.10 Remedies. It is specifically understood and agreed that certain breaches of
this Agreement will result in irreparable injury to the parties hereto, that the
remedies available to the parties at law alone will be an inadequate remedy for
such breach, and that, in addition to any other legal or equitable remedies
which the parties may have, a party may enforce its rights by an action for
specific performance and the parties expressly waive the defense that a remedy
in damages will be adequate.

 

7.11 Dispute Resolution. Except as provided below, the parties agree to submit
disputes between them relating to this Agreement and its formation, breach,
performance, interpretation and application to arbitration as follows. Each
party will provide written notice to the other party of any dispute within one
year of the date when the dispute first arises or occurs. If a party fails to
provide such notice, recovery on the dispute will be barred. Arbitration will be
conducted in Florida pursuant to the Rules of the American Arbitration
Association (“AAA”), as modified herein. The arbitration shall be conducted by
one (1) arbitrator chosen in accordance with the rules of the AAA and, to the
extent possible, such arbitrator will have knowledge of and experience regarding
the pharmacy industry. Unless the arbitrator finds that exceptional
circumstances require otherwise, the arbitrator will grant the prevailing party
in arbitration its costs of arbitration and reasonable attorneys’ fees as part
of the arbitration award. Neither party will be required to arbitrate any
dispute relating to actual or threatened violation of intellectual property
rights. Either party will be entitled to receive in any court of competent
jurisdiction injunctive, preliminary or other equitable relief, in addition to
damages, including court costs and fees of attorneys and other professionals, to
remedy any actual or threatened violation of its rights with respect to which
arbitration is not required hereunder.

 

7.12 Third Party Rights. Except as regards the indemnification rights and
obligations herein, this Agreement is for the benefit of the parties hereto and
is not entered into for the benefit of, and shall not be construed to confer any
benefit upon, any other party or entity.

 

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IN WITNESS WHEREOF, Seller and Buyer have caused this Asset Purchase Agreement
to be executed as of the date first above written.

 

SELLER: T & L PHARMACIES, INC.

By:

 

/s/ BRIAN NUGENT

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Name:

 

Brian Nugent

Title:

 

President

BUYER: DRUG DEPOT, INC.

By:

 

/s/ MANDEEP TANEJA

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Name:

 

Mandeep Taneja

Title:

 

President