EXHIBIT 10.2

 

GOODWILL PROTECTION AGREEMENT

 

                THIS GOODWILL PROTECTION AGREEMENT is made effective the 29th
day of February, 2008, between ApothecaryRx, LLC, an Oklahoma limited liability
company (the “Buyer”), and Thrifty Drug Stores, Inc., a Minnesota corporation
(the “Seller”).

 

W I T N E S S E T H:

 

                WHEREAS, pursuant to that certain Asset Purchase Agreement dated
February 8, 2008, (the “Purchase Agreement”) among the Buyer and Seller, the
Buyer purchased certain assets of the Seller’s pharmacy business located in Red
Wing, MN (the “Business”) for a sum in excess of $662,960;

 

                WHEREAS, the Seller has operated the Business for numerous years
during which time the Seller has built a strong patronage which is the predicate
on which the Seller’s Business is based; and

 

                WHEREAS, to induce the Buyer to perform the Purchase Agreement
and to protect the goodwill purchased by the Buyer in the Business, the Seller
has agreed to execute, deliver and perform this Goodwill Protection Agreement.

 

                NOW, THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties agree as follows:

 

1.             Noncompetition Covenant.  The Seller agrees as follows:

 

1.1           For the five (5) year period beginning on the date of this
Goodwill Protection Agreement, the Seller agrees that the Seller, the Seller’s
affiliates and any person receiving a portion of the Purchase Price under the
Purchase Agreement will not undertake any plan, program or effort designed or
intended to, directly or indirectly, contract or provide, solicit or offer to
prepare, dispense or sell at retail any pharmacy, prescription or over the
counter drugs or pharmaceuticals (the “Pharmacy Services”) to any person and the
family members of any person, or any entity and the affiliates of any entity,
who acquired Pharmacy Services within the past five (5) years from the Business.

 

1.2           For the five (5) year period beginning on the date of this
Goodwill Protection Agreement, the Seller agrees that the Seller, the Seller’s
parents, subsidiaries, affiliates and shareholders and any person receiving a
portion of the Purchase Price under the Purchase Agreement will not, directly or
indirectly, conduct any Pharmacy Business within fifteen (15) miles of the
location of the Business.

 

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For purposes of this Goodwill Protection Agreement, the term “Pharmacy Business”
means: owning, managing, operating, controlling, engaging in or being connected
with as a partner, investor, stockholder, creditor, guarantor, advisor,
employee, independent contractor or consultant, the business of offering,
soliciting, conducting or providing Pharmacy Services.

 

2.             Separate Covenants.  This Goodwill Protection Agreement will be
deemed to consist of a series of separate covenants independent from any
provision of the Purchase Agreement.  The Seller expressly agrees that the
character, duration and geographical scope of this Goodwill Protection Agreement
are reasonable in light of the circumstances as existing on the date of this
Goodwill Protection Agreement.  However, should a determination nonetheless be
made by a court of competent jurisdiction at a later date that the character,
duration or geographical scope of this Goodwill Protection Agreement is
unreasonable in light of the circumstances as then existing or existing at the
execution of this Goodwill Protection Agreement, then it is the intention and
the agreement of the Seller and the Buyer that this Goodwill Protection
Agreement be construed by the court and given effect in such a manner as to
impose only the restrictions on the conduct of the Seller which are reasonable
in light of the circumstances as then existing and as are necessary to assure
the Buyer of the intended benefit of this Goodwill Protection Agreement.  If, in
any judicial proceeding, a court refuses to enforce all of the separate
covenants deemed included herein because, taken together such covenants are more
extensive than necessary to assure the Buyer of the intended benefit of this
Goodwill Protection Agreement, it is expressly understood and agreed between the
parties that those covenants not to be enforced in such proceeding will, for the
purpose of such proceeding, be deemed eliminated from the provisions hereof.

 

3.             Payments.  As consideration for the Seller’s execution, delivery
and performance of this Goodwill Protection Agreement, the Buyer agrees to pay
to the Seller the amounts, and on the terms, as set forth in Section 2(b) and
Section 3, respectively, of the Purchase Agreement.

 

4.             Default by Seller.  If the Seller fails to perform any obligation
contained in this Goodwill Protection Agreement, the Purchase Agreement or any
instrument entered into in connection therewith, the Buyer will serve written
notice to the Seller specifying the nature of such default and demanding
performance.  If such default has not been cured within five (5) business days
after receipt of such default notice, the Buyer will be entitled to demand
specific performance, suspend performance of any obligation under this Goodwill
Protection Agreement, the Purchase Agreement or any instrument entered into in
connection therewith, or exercise all remedies available at law or in equity. 
Given the nature of the Pharmacy Business, the parties acknowledge and agree
that the goodwill sold by the Seller and purchased by the Buyer cannot be
protected if the provisions of this Goodwill Protection Agreement are not
strictly enforced.  Accordingly, the parties acknowledge and agree that if there
is a breach by the Seller of the provisions of this Goodwill Protection
Agreement, money damages alone will not be adequate and the Buyer will be
entitled to an injunction restraining the Seller from violating the provisions
of this Goodwill Protection Agreement.  In addition to the foregoing and any
other remedies available to the Buyer, at law or in equity, in the event the
Seller is in default and the Buyer is diligently pursuing a judicial remedy, the
periods specified in paragraphs 1.1, 1.2 and 1.3 will be tolled until the
conclusion of the judicial action (the “Tolling Period”) and such periods will
be

 

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automatically extended by the number of days elapsed during the Tolling Period. 
The remedies provided by this Goodwill Protection Agreement are cumulative and
will not exclude any other remedy to which a party might be entitled under this
Goodwill Protection Agreement.  In the event, a party elects to selectively and
successively enforce such party’s rights under this Goodwill Protection
Agreement, such action will not be deemed a waiver or discharge of any other
remedy.

 

5.             Default by Buyer.  If the Buyer defaults in its payment
obligations under this Agreement, then the Seller’s obligations under this
Agreement, including, without limitation, the obligations described in Sections
1 and 3 hereof, will immediately terminate.  Buyer shall be deemed to be in
default under this Agreement if any payment is received more than ten (10) days
after its due date.

 

6.             Miscellaneous.  It is further agreed as follows:

 

6.1           Notices.  Except as expressly provided herein, any notice, demand
or communication required or permitted to be given by any provision of this
Goodwill Protection Agreement will be in writing and will be deemed to have been
given and received when delivered personally or by telefacsimile, or on the date
following the day sent by overnight courier, or on the third (3rd) business day
after the same is sent by certified mail, postage and charges prepaid, directed
to the following addresses or to such other or additional addresses as any party
might designate by written notice to the other parties:

 

To the Buyer:

 

ApothecaryRx, LLC

 

 

c/o Lewis P. Zeidner, President

 

 

5500 Wayzata Boulevard, Suite 210

 

 

Golden Valley, Minnesota 55416

 

 

Fax: (763) 647-1137

 

 

 

With a copy to:

 

Commercial Law Group, P.C.

 

 

c/o Michael Meleen, Esq.

 

 

700 Oklahoma Tower

 

 

210 Park Avenue

 

 

Oklahoma City, Oklahoma 73102

 

 

Fax: (405) 232-5553

 

 

 

To the Seller:

 

Thrifty Drug Stores, Inc.

 

 

c/o Robert J. Narveson, President and CEO

 

 

6901 East Fish Lake Road, Suite 118

 

 

Maple Grove, MN 55369

 

 

Fax: (763) 513-4347

 

 

 

With a copy to:

 

Fredrikson & Byron, P.A.

 

 

c/o Neil A. Weikart, Esq.

 

 

200 South Sixth Street, Suite 4000

 

 

Minneapolis, MN 55402

 

 

Fax: (612) 492-7077

 

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6.2           Severability.  If any clause or provision of this Goodwill
Protection Agreement is illegal, invalid or unenforceable under any present or
future law, the remainder of this Goodwill Protection Agreement will not be
affected thereby.  It is the intention of the parties that if any such provision
is held to be illegal, invalid or unenforceable, there will be added in lieu
thereof a provision as similar in terms to such provisions as is possible and to
be legal, valid and enforceable.

 

6.3           Entire Agreement.  This Goodwill Protection Agreement, together
with the Purchase Agreement and the other instruments executed in connection
therewith, constitute the entire agreement between the parties with respect to
the subject matter hereof and there are no agreements, understandings,
warranties or representations except as set forth herein.  Neither this Goodwill
Protection Agreement nor any of the provisions hereof can be changed, waived,
discharged or terminated except by an instrument signed by the party against
whom enforcement of the change, waiver, discharge or termination is sought.

 

6.4           Attorneys’ Fees.  If any party institutes an action or proceeding
against any other party relating to the provisions of this Goodwill Protection
Agreement, the party to such action or proceeding which does not prevail will
reimburse the prevailing party therein for the reasonable expenses of attorneys’
fees and disbursements incurred by the prevailing party.

 

6.5           Waiver.  Waiver of performance of any obligation or term contained
in this Goodwill Protection Agreement by any party, or waiver by one party of
the other’s default hereunder will not operate as a waiver of performance of any
other obligation or term of this Goodwill Protection Agreement or a future
waiver of the same obligation or a waiver of any future default.

 

6.6           Assignment.  The Buyer may assign all or any portion of its rights
hereunder to:  (a) any other entity or person which at any time controls or is
under common control with the Buyer, or (b) any entity or person which acquires
all or any portion of the Business.

 

6.7           Governing Law.  This Goodwill Protection Agreement will be
interpreted, construed and enforced in accordance with the laws of the State of
Minnesota, regardless of any applicable principles of conflicts of law.

 

[Signature page follows]

 

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[Signature page to Goodwill Protection Agreement]

 

                IN WITNESS WHEREOF, this Agreement has been executed by the
parties effective the date first above written.

 

 

THRIFTY DRUG STORES, INC.

 

a Minnesota corporation

 

 

 

By:/S/ROBERT J. NARVESON

 

 

Robert J. Narveson

 

Its:

President and CEO

 

 

 

 

 

APOTHECARYRX, LLC

 

an Oklahoma limited liability company

 

 

 

By:/S/LEWIS P. ZEIDNER

 

 

Lewis P. Zeidner

 

Its:

President

 

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