Document:

exv10w1

EXHIBIT 10.1

AMENDMENT NO. 2 TO DEVELOPMENT AND LICENSE AGREEMENT

     This Amendment No. 2 (the “Amendment”) dated June 30, 2010 (“Amendment No. 2 Effective
Date”) is entered into by and between Abbott Diabetes Care Inc., formerly known as TheraSense,
Inc., (“ADC”) and Insulet Corporation (“Insulet”) to amend the Development and
License Agreement entered into between TheraSense, Inc. (“Therasense”) and Insulet,
effective as of January 23, 2002 and as amended on March 3, 2008 (together with this Amendment No.
2 hereinafter referred to collectively as the “Agreement”). Capitalized terms used herein
but not otherwise defined shall have the meanings ascribed to them in the Agreement.

     WHEREAS, pursuant to that Amendment No.1 to Development and License Agreement dated March 3,
2008, ADC and Insulet amended their original Development and License Agreement to provide for an
exclusive relationship in the United States and Israel pursuant to which Insulet would not market,
promote, offer for sale, sell or distribute a Product with any DBGM other than an ADC DBGM; and

     WHEREAS, in connection with that same Amendment No. 1 the parties agreed on certain commercial
terms and conditions pursuant to which ADC would compensate Insulet for certain services performed
by Insulet for New Customers and Upgrade Customers in the United States and Israel; and

     WHEREAS, ADC and Insulet now desire to further amend the Agreement to enable Insulet to,
directly or indirectly, market and sell, on a non-exclusive basis in the Expansion Territory, the
Product (which as of the Amendment No. 2 Effective Date is marketed and sold by Insulet as the
OmniPod Insulin Management System) with a Remote Controller that includes an ADC DBGM (which as of
the Amendment No.2 Effective Date is (i) made up of the FreeStyle Glucose Engine and the FreeStyle
Test Strip Port, and (ii) uses the FreeStyle Test Strip or the FreeStyle Lite Test Strip to measure
blood glucose values); and

     WHEREAS, ADC and Insulet have also decided that they wish for Insulet to provide certain
services for New Customers in the Expansion Territory, on such commercial terms and conditions as
the parties deem appropriate in the Expansion Territory in consideration of the nature of the
services and the markets and conditions in which they will be provided; and

     WHEREAS, ADC and Insulet desire to incorporate into the Agreement certain of the terms of that
letter agreement dated May 27, 2010, and agreed and acknowledged on June 8, 2010 (“Letter
Agreement”) regarding the provision by ADC to Insulet of certain no-charge meters for Insulet
to provide to its end-user customers in the United States; and

     WHEREAS, ADC and Insulet desire to update certain other provisions of the Agreement including
the requirements and commitments with respect to labeling and branding of the Product;

     NOW, THEREFORE, in consideration of the premises and mutual covenants contained in this
Amendment and in the Agreement, and expressly incorporating the foregoing recitals, ADC and Insulet
hereby agree as follows:

 

 

	 	1.	 	The definition of “FreeStyle Meter” in the Recitals of the Agreement is amended as
follows:
	 
	 	 	 	“FreeStyle Meter” means that certain discrete blood glucose monitoring device owned
and developed by ADC which (i) is made up of certain circuitry to measure glucose based on
coulometric glucose measurement technology (the “FreeStyle Glucose Engine”) and the
FreeStyle Test Strip Port, (ii) uses a FreeStyle Test Strip or FreeStyle Lite Test Strip to
measure blood glucose values and (iii) is commercialized by ADC under the tradename
“FreeStyle Blood Glucose Monitor” and/or such other tradename as ADC may determine. For
avoidance of doubt, the definition of a FreeStyle Meter does not include the FreeStyle Lite
Blood Glucose Monitor.
	 
	 	2.	 	The definition of “Test Strips” in the Recitals of the Agreement is amended as follows:
	 
	 	 	 	“Test Strips” means those certain blood glucose test strips commercialized by ADC as
the FreeStyle Test Strip and/or the FreeStyle Lite Test Strip.
	 
	 	3.	 	The definition of “New Customer” at Section 1.35 is amended and restated as follows:
	 
	 	 	 	“New Customer” is an end-user customer (i) who has not previously purchased or
received a Remote Controller with an ADC DBGM, or (ii) who purchases or receives a Remote
Controller that includes an ADC DBGM having connectivity to an ADC continuous glucose
monitoring system.
	 
	 	4.	 	The definition of Territory at Section 1.25 is amended and restated as follows:
	 
	 	 	 	“Territory” means the United States of America, Canada and Israel.
	 
	 	5.	 	The following new definition is hereby added at Section 1.37:
	 
	 	 	 	“Expansion Territory” means Germany, France, UK, Netherlands, Switzerland, Belgium,
Finland, Norway, and Sweden. Except as otherwise set forth herein, the Expansion Territory
shall be considered a part of the Territory.
	 
	 	6.	 	The following new definition is hereby added at Section 1.38:
	 
	 	 	 	“Expansion Territory Customer Service Event” means the services performed by or on
behalf of Insulet for a New Customer in the Expansion Territory in support of sale or
placement of a Remote Controller that includes an ADC DBGM with such New Customer, as such
services are further outlined on Schedule B attached hereto and made a part hereof. The
sale or placement of a Remote Controller is any transfer of a Remote Controller to an
end-user customer for which Insulet receives compensation. The sale or

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	 	 	 	placement of a Remote Controller does not include any transfer of a Remote Controller to
satisfy a product warranty claim or FDA recall requirement.
	 
	 	7.	 	Section 2.7(a) is amended and restated in its entirety as follows:
	 
	 	 	 	(a) Insulet represents and warrants that is has all regulatory approvals necessary for, or
has submitted for regulatory approval for, the sale by it of the Product with ADC DBGM in
the United States, Israel and Germany. Insulet shall be solely responsible for satisfying
all regulatory requirements (including without limitation the obtaining and maintaining of
all regulatory approvals) necessary for the sale by it of the Product with ADC DBGM in the
Territory, including the conduct of all necessary clinical trials; provided that, upon
request by Insulet, ADC shall provide to Insulet or the appropriate regulatory authorities,
at ADC’s expense, and pursuant to such commercially reasonable timelines as agreed to by
both Parties, such information, data, materials and product samples in its possession as
reasonably necessary to obtain such approvals; and, provided further, that (i) in the event
ADC determines in its reasonable discretion that any information or documentation to be
provided pursuant to this Section 2.7(a) contains information of a sensitive nature, ADC
shall have the right to provide any such information or documentation in confidence directly
to the applicable Regulatory Authorities provided it notifies Insulet of such submission,
and (ii) ADC shall have no obligation to provide any information or documentation beyond
that which has already been provided by ADC to the applicable regulatory authorities.
Insulet shall keep ADC reasonably informed with respect to any regulatory filings and
clinical trials that Insulet has conducted or is conducting regarding the Product and at a
minimum shall provide ADC with written notice of all filings for regulatory approvals
commensurate with Insulet’s submission of such filings.
	 
	 	8.	 	Section 2.11(a) is amended and restated in its entirety as follows:
	 
	 	 	 	(a) If ADC introduces to the market in the Territory a FreeStyle Meter that incorporates any
modification, enhancement or improvement to the FreeStyle Glucose Engine or FreeStyle Test
Strip Port in the FreeStyle Meter (hereinafter referred to as an “Improvement”),
then, if ADC has the right to do so, ADC shall make such Improvement available to Insulet,
and such Improvement shall be deemed to be part of the Technical Information for all
purposes of this Agreement. ADC shall undertake commercially reasonable efforts to secure
the right to make Improvements available to Insulet. For the avoidance of doubt, an
Improvement does not include any new features or new functionality which ADC may bring to
market for the FreeStyle Meter.
	 
	 	9.	 	Section 2.11(b) is amended and restated in its entirety as follows:
	 
	 	 	 	(b) Insulet shall not, without prior consultation with ADC, modify the Product with ADC
DBGM.

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	 	10.	 	Section 6.3(a) is amended and restated as follows:
	 
	 	 	 	(a) Insulet will ensure that:
	 
	 	 	 	(i) by [***] the Product with ADC DBGM marketed and sold in the United States, Canada and
Israel will contain the ADC “FreeStyle” trademark on the front bezel of the Remote
Controller in a size and configuration as agreed in writing between ADC and Insulet, such
size and configuration at a minimum requiring that the mark be clearly legible, prominent
and visible, and in no event [***]; and
	 
	 	 	 	(ii) prior to any commercialization in the Expansion Territory, the Product with ADC DBGM
marketed and sold in the Expansion Territory will contain the ADC “FreeStyle” trademark on
the Remote Controller in such appearance and placement as finally determined by Insulet;
provided that (1) the size of the mark shall be such that it is clearly legible and in no
event [***], and (2) to the extent possible, [***].
	 
	 	11.	 	Section 6.4(f) of Agreement is deleted in its entirety.
	 
	 	12.	 	New Section 6.7 is added as follows:
	 
	 	 	 	6.7 Notice of Commercialization in Expansion Territories. Insulet will notify ADC in
writing of its intent to begin marketing and selling the Product with ADC DBGM in each
country in the Expansion Territory at least [***] prior to any such planned launch; provided
that Insulet may launch in France and the UK on [***] prior written notice and in Germany
upon execution of this Amendment.
	 
	 	13.	 	New Section 6.8 is added as follows:
	 
	 	 	 	6.8 [***] Meters for New Customers
	 
	 	 	 	(a) At Insulet’s request, and solely for inclusion as a sample with Insulet’s OmniPod
Insulin Management System system starter kit for the Product with ADC DBGM for New
Customers, ADC will supply Insulet [***], up to the amount of the Kit Forecast (defined
below), with kits containing an ADC meter system and a vial of up to [***] test strips (the
“Kits”); provided, that Insulet shall provide ADC with a [***] rolling forecast of
its Kit requirements for New Customers, on a country by country basis, at least [***] in
advance of any month in which such Kits are required (the “Kit Forecast”), which Kit
Forecast shall be subject to ADC’s approval and acceptance in its sole discretion. ADC may
terminate its obligation to provide Kits at any time upon [***] prior written notice to
Insulet. ADC and Insulet agree that the Letter Agreement, and for the avoidance of doubt the
letters dated March 3, 2005 and September 19, 2005 referenced therein, are hereby terminated
and of no further force and effect.

4

 

	 	 	 	(b) Insulet represents, warrants and covenants as follows:

     i. Insulet will not provide any Kits other than to a New Customer (or to a third
party only for distribution to a New Customer) as part of an OmniPod Insulin Management
System starter kit for the Product with ADC DBGM; and

     ii. Insulet will provide Kits at no charge and will not bill any third party for
such Kits.

	 	 	 	(c) Insulet and ADC each agree to comply with laws applicable to their respective operations
and the transactions contemplated hereby, including but not limited to the Federal Social
Security Act and applicable regulations thereunder related to the Federal Medicare and
Medicaid Programs.
	 
	 	 	 	(d) EXCEPT FOR THE LIMITED WARRANTIES PROVIDED IN KIT LABELING OR INSERTS, ADC GRANTS NO
OTHER WARRANTIES OR CONDITIONS, EXPRESS OR IMPLIED, BY STATUTE, IN ANY COMMUNICATION WITH
INSULET OR ITS CUSTOMRS OR END-USERS, OR OTHERWISE, REGARDING THE KITS. ADC SPECIFICALLY
DISCLAIMS ANY IMPLIED WARRANTIES OF FITNESS FOR PARTICULAR PURPOSE, MERCHANTABILITY, AND
NONINFRINGEMENT, ADC DOES NOT WARRANT THAT OPERATION OF THE KITS WILL BE INTERRUPTED OR
ERROR-FREE. ADC NEITHER ASSUMES NOR AUTHORIZES ANY OTHER PERSON TO ASSUME ANY OTHER
LIABILITIES ARISING OUT OF OR IN CONNECTION WITH THE SALE OR USE OF ANY KIT. ANY OTHER
REPRESNTATIONS OR WARRANTIES MADE BY ANY PERSON OR ENTITY, INCLUDING EMPLOYEES OR
REPRESENTATIVES OF ADC, THAT ARE INCONSISTENT HEREWITH WILL BE DISREGARDED AND WILL NOT BE
BINDING UPON ADC. ADC WILL HAVE NO LIABILITY FOR INDIRECT, INCIDENTAL, SPECIAL OR
CONSEQUENTIAL DAMAGES RELATING TO THE SALE OR USE OF ANY OF THE KITS AND ADC’S LIABILITY
THEREFOR WILL BE LIMITED TO [***].
	 
	 	14.	 	For the avoidance of doubt, discontinuance of the FreeStyle Test Strips, or notice of
discontinuance of the FreeStyle Test Strips pursuant to Section 6.4(e)(iii), does not
entitle either Party to terminate the Agreement;
	 
	 	15.	 	For the avoidance of doubt, Section 8.1 of the Agreement shall not apply to sales of
the Product in the Expansion Territory and Insulet may offer versions of the Product with a
DBGM other than ADC DBGM, or no DBGM, in the Expansion Territory.
	 
	 	16.	 	For the avoidance of doubt, Section 9.3 of the Agreement shall apply [***] and it is
hereby agreed between ADC and Insulet that [***].
	 
	 	17.	 	New Section 9.4 is added as follows:

5

 

	 	 	 	9.4 Customer Service Event Payments — Expansion Territory. For each Expansion Territory
Customer Service Event during the term, ADC will pay Insulet on a calendar quarterly basis:
(i) an initial fee equal to [***] payable within [***] of ADC receiving a written report
from Insulet identifying the number of New Customers added in each country of the Expansion
Territory in the preceding calendar quarter and specifying the Expansion Territory Customer
Service Events to be provided for such end-user customers, and (ii) an annual fee of [***]
for each of the [***] years following the addition of any such New Customer (provided that
at least some portion of each such year occurs during the term, and, in the event the
Agreement terminates during any such year, Insulet continues to provide the contemplated
services to such end-user customer for the duration of that year), which annual fee will be
payable within [***] of ADC receiving a written report from Insulet confirming and/or
specifying, as applicable:

     (a) that each such end-user customer has purchased “OmniPod Pods” within six
months of such report,

     (b) that each such end-user customer has not received a Remote Controller with
a DBGM other than an ADC DBGM, or a Remote Controller with no DBGM, and

     (c) the Expansion Territory Customer Service Events to be provided for such
end-user customer.

	 	 	 	For avoidance of doubt, Insulet will assign to each New Customer a unique patient
identification number (“PIN”) that will be used to identify such customer in all
reports submitted by Insulet. Insulet will (A) not change the PIN for any such New Customer
during the term of this Agreement, and (B) ensure that in the event of an audit as provided
in Section 10.2, such PIN will enable ADC or its designated auditors to verify the
information provided by Insulet to ADC on the reports submitted pursuant to this Section
9.4. Subject to the audit provisions at Section 10.2, payments under this Section 9.4 are
non-refundable, provided that ADC will receive a credit in the amount of the most recently
paid annual fee or initial fee, as applicable, in the event that Insulet accepts return of
any Remote Controller in the Expansion Territory that includes an ADC DBGM and refunds the
end-user customer’s (or its insurer’s) payment for such Remote Controller. For the
avoidance of doubt, in the event an end-user customer receives a Remote Controller with a
DBGM other than an ADC DBGM, or a Remote Controller with no DBGM, ADC will have no further
obligations for Expansion Territory Customer Service Event payments for such end-user
customer.

6

 

	 	18.	 	New Section 9.5 is added as follows:
	 
	 	 	 	9.5 Customer Service Event Payments (United States, Canada and Israel) Upon Expiration of
Initial Term. Commencing on the first day following expiration of the Initial Term and
continuing through the expiration of the term, for each Customer Service Event in the United
States, Canada and Israel (except for Upgrade Customers), ADC will pay Insulet on a calendar
quarterly basis: (i) an initial fee equal to [***] payable within [***] of ADC receiving a
written report from Insulet identifying the number of New Customers added in each of the
United States, Canada and Israel in the preceding calendar quarter and specifying the
Customer Service Events to be provided for such end-user customers, and (ii) an annual fee
of [***] for each of the [***] years following the addition of any such New Customer
(provided that at least some portion of each such year occurs during the term, and, in the
event the Agreement terminates during any such year, Insulet continues to provide the
contemplated services to such end-user customer for the duration of that year), which annual
fee will be payable within [***] of ADC receiving a written report from Insulet confirming
and/or specifying, as applicable:

     (a) that each such end-user customer has purchased “OmniPod Pods” within six
months of such report,

     (b) that each such end-user customer has not received a Remote Controller with
a DBGM other than an ADC DBGM, or a Remote Controller with no DBGM, and

     (c) the Customer Service Events to be provided for such end-user customer.

	 	 	 	For avoidance of doubt, Insulet will assign to each New Customer a PIN that will be used to
identify such customer in all reports submitted by Insulet. Insulet will (A) not change the
PIN for any such New Customer during the term of this Agreement, and (B) ensure that in the
event of an audit as provided in Section 10.3, such PIN will enable ADC or its designated
auditors to verify the information provided by Insulet to ADC on the reports submitted
pursuant to this Section 9.5. Subject to the audit provisions at Section 10.3, payments
under this Section 9.5 are non-refundable, provided that ADC will receive a credit in the
amount of the most recently paid annual fee or initial fee, as applicable, in the event that
Insulet accepts return of any Remote Controller in the United States, Canada and Israel that
includes an ADC DBGM and refunds the end-user customer’s (or its insurer’s) payment for such
Remote Controller. For the avoidance of doubt, in the event an end-user customer receives a
Remote Controller with a DBGM other than an ADC DBGM, or a Remote Controller with no DBGM,
ADC will have no further obligations for Customer Service Event payments for such end-user
customer.

	 	19.	 	For the avoidance of doubt, Section 10.1 shall apply only to audits of [***].
	 
	 	20.	 	New Section 10.2 is added as follows:
	 
	 	 	 	10.2 Audit of Expansion Territory Customer Service Events. Insulet will maintain a record
system through which ADC can determine [the Expansion Territory Customer

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	 	 	 	Service Events and verify the data set forth in the reports provided pursuant to Section
9.4; provided, however, that Insulet shall only be required to maintain such
records for a period of [***] following such Expansion Territory Customer Service Events
and/or the date of the applicable report. Insulet will make such information available for
inspection by ADC’s designated independent auditors [***] during the term, and for [***]
thereafter, on such dates as reasonably agreed between the Parties but no later than [***]
following ADC’s request. Such information shall be made available during regular business
hours. Except as set forth below, ADC shall be solely responsible for the costs of any such
audit. If ADC’s designated independent auditors discover that Insulet has reported
Expansion Territory Customer Service Events in excess of those calculated by the audit,
Insulet will refund to ADC the excess amounts paid by ADC within [***] of issuance of the
audit report. If ADC’s designated independent auditors discover that any end-user customer
data submitted by Insulet pursuant to Section 9.4 was inaccurate, Insulet will refund to ADC
all amounts paid by ADC for any such end-user customer for which inaccurate data was
provided within [***] of issuance of the audit report. If ADC’s designated independent
auditors discover that Insulet has reported Expansion Territory Customer Service Events in
excess of [***] of those calculated by the audit, and/or that inaccurate data was provided
for more than [***] of end-user customers during the period for which reports were audited,
Insulet will, in addition to refunding to ADC the amounts set forth above, reimburse ADC for
the reasonable and documented costs of the audit yielding such results within [***] of
issuance of the audit report.
	 
	 	21.	 	New Section 10.3 is added as follows:
	 
	 	 	 	10.3 Audit of Customer Service Events (United States, Canada and Israel) After Initial Term.
Insulet will maintain a record system through which ADC can determine [***] and verify the
data set forth in the reports provided pursuant to Section 9.5; provided,
however, that Insulet shall only be required to maintain such records for a period
of [***] following such Customer Service Events and/or the date of the applicable report.
Insulet will make such information available for inspection by ADC’s designated independent
auditors [***] during the term, and for [***] thereafter, on such dates as reasonably agreed
between the Parties but no later than [***] following ADC’s request. Such information shall
be made available during regular business hours. Except as set forth below, ADC shall be
solely responsible for the costs of any such audit. If ADC’s designated independent
auditors discover that Insulet has reported Customer Service Events in excess of those
calculated by the audit, Insulet will refund to ADC the excess amounts paid by ADC, within
[***] of issuance of the audit report. If ADC’s designated independent auditors discover
that any end-user customer data submitted by Insulet pursuant to Section 9.5 was inaccurate,
Insulet will refund to ADC all amounts paid by ADC for any such end-user customer for which
inaccurate data was provided within [***] of issuance of the audit report. If ADC’s
designated independent auditors discover that Insulet has reported Customer Service Events
in excess of [***] of those calculated by the audit, and/or that inaccurate data was
provided for more than [***] of end-user customers during the period for which reports were
audited, Insulet will, in addition to refunding to ADC the amounts set forth above,
reimburse ADC for the reasonable and

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	 	 	 	documented costs of the audit yielding such results within [***] of issuance of the audit
report.
	 
	 	22.	 	Except as specifically modified or amended hereby, the Agreement shall remain in full
force and effect, and as so modified or amended, is hereby approved. No provision of this
Amendment may be modified or amended except expressly in a writing signed by both parties.

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IN WITNESS WHEREOF, the parties have caused this Amendment to be signed by a duly authorized
representative effective as of the date set forth above.

	 	 	 	 	 	 	 

	Insulet Corporation	 	Abbott Diabetes Care Inc.
	 
	By: 	 /s/ Duane DeSisto	 	By: 	      /s/   Robert Ford
	 
	 	 	 
	 	Name: 	 Duane DeSisto	 	 	Name: 	              Robert Ford
	 	Title:	 CEO	 	 	Title:	             Vice President

10Exhibit 10.1

Exhibit 10.1

FIRST AMENDMENT TO

ASSET PURCHASE AGREEMENT

THIS FIRST AMENDMENT TO ASSET PURCHASE AGREEMENT (this “Amendment”) is entered into effective
the 29th day of October, 2010, by and between Walgreen Co., an Illinois corporation
(“Buyer”), ApothecaryRx, LLC, an Oklahoma limited liability company (“Seller”), and
Graymark Healthcare, Inc., an Oklahoma corporation and the sole member of Seller
(“Parent”).

WITNESSETH:

WHEREAS, Buyer, Seller and Parent entered into the Asset Purchase Agreement dated as of
September 1, 2010 (the “Agreement”) and now wish to amend the Original Purchase Agreement
as set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
agree as follows:

1. Definition of Terms. Except as otherwise defined herein, all capitalized terms will
have the same meaning herein as the terms are defined in the Agreement.

2. New Defined Terms. In the Agreement as amended by this Amendment, the following terms
have the meanings specified or referred to in this Section 2:

“Barnes I” means Barnes Pharmacy & Barb’s Gifts, located at 422 Main Street, Sterling,
Colorado.

“Barnes II” means Barnes Pharmacy, located at 422 Main Street, Suite B, Sterling,
Colorado.

“Barnes II Non-Compete Amount” means $1,500,000.

“Barnes Parties” means Jenae Lorenzo Lock, Cassandra L. Behrends, Barbara Lorenzo,
Ronald G. Lorenzo, CJ Pharmacy Services, LLC and R.G. Lorenzo Pharmacy, Inc.

“Buyer’s Sterling Pharmacy” means the pharmacy owned and operated by Buyer at 101 W.
Main Street, Sterling, Colorado.

“Closing Prescription Count Certificate” means a certificate provided by Seller to
Buyer certifying the average daily prescription count at Barnes I excluding prescriptions filled
using Non-Continuing Services during the six (6) month period ending on the day prior to the
Applicable Closing Date for Barnes I.

“Compete With Barnes” means a Barnes Party or an Affiliate of a Barnes Party takes any
action which would be in violation of Section 7.1(a), 7.1(b) or 7.1(c) of the LTC Agreement if such
action were to be taken by CJ Pharmacy Services, LLC.

 

 

 

“Exhibit C Services” means those services provided by Seller at Barnes I which are to
be identified, agreed upon and attached hereto as Exhibit C by Buyer and Seller prior to
the Applicable Closing Date for Barnes I.

“Jenae Lorenzo Lock Employment Agreement” means the Employment Agreement made
effective August 27, 2007 between Seller and Jenae Lorenzo Lock.

“Lorenzo Lawsuit” means the Complaint for Injunctive Relief and Damages filed by
Seller against Jenae Lorenzo Lock, Cassandra L. Behrends, Ronald G. Lorenzo, CJ Pharmacy Services,
LLC and R.G. Lorenzo Pharmacy, Inc.

“LTC Agreement” means that Purchase and Sale Agreement, by and among Buyer, CJ
Pharmacy Services, LLC, Jenae Lorenzo Lock, Ronald Lorenzo and Barbara Lorenzo, on the form and
terms as attached hereto as Exhibit A.

“Non-Continuing Services” means those services provided by Seller at Barnes I which
are identified and agreed upon by Buyer and Seller prior to the Applicable Closing Date for Barnes
I.

“Post-Closing Prescription Count Certificate” means a certificate provided by Buyer to
Seller certifying (i) the average daily prescription count at Buyer’s Sterling Pharmacy. excluding
prescriptions filled using Non-Continuing Services, during the six (6) month period following the
Applicable Closing Date; (ii) as to which of the Exhibit C Services have been performed or not
performed by Buyer at such location during such six (6) month period; and (iii) the Retention Rate.

“Retention Rate” means the percentage equal to (i) the average daily prescription
count for Buyer’s Sterling Pharmacy set forth on the Post-Closing Prescription Count Certificate
less a Buyer baseline average daily prescription count of 106 prescriptions (the “Baseline Count”),
divided by (ii) the average daily prescription count at Barnes I set forth on the Closing
Prescription Count Certificate, provided that if Buyer does not continue the Exhibit C Services for
six (6) months after the Applicable Closing Date for Barnes I, then the prescriptions included in
the Closing Prescription Count Certificate that were filled utilizing such Exhibit C Services at
Barnes I that Buyer did not continue will be excluded from the Closing Prescription Count
Certificate and the calculation of the Retention Rate. The Retention Rate will be calculated and
seasonally adjusted as set forth in the example calculation attached as Exhibit B.

3. Amendments to Definitions. The definitions of the following terms in the Agreement are
hereby amended to state as follows:

“First File-Transfer Locations” means the following File-Transfer Locations: Hapeth
(33rd St.), Corner Medical (Red Wing, MN), Newt’s (Guthrie, OK), Cox (Park Hill, OK) and
Professional Discount (Oklahoma City, OK).

“Subsequent File-Transfer Locations” means (a) Parkway Drugs, located at 2342 North
Clark Street, Chicago, Illinois, (b) Barnes I and (c) Barnes II.

 

 

 

4. Amendment to Section 3.2(a). The following paragraphs are added as subsections (iii)
and (iv) of Section 3.2(a):

	 	 	 	“(iii) Notwithstanding subsection (ii) of this Section 3.2(a), if the transactions
contemplated by the LTC Agreement are not consummated, on terms substantially
similar to, and no less favorable to Buyer than, those specified therein,
concurrently with the Applicable Closing with respect to Barnes I and Barnes II and
Buyer notifies Seller in writing prior to completion of the Applicable Closing of
such failure (an “LTC Agreement Failure”), then the aggregate Closing Date
Payment with respect to Barnes I and Barnes II shall be reduced by the Barnes II
Non-Compete Amount; and

	 
	 	 	 	(iv) If an LTC Agreement Failure occurs, on the Applicable Closing Date with respect
to Barnes I and Barnes II, Buyer shall deposit the Barnes II Non-Compete Amount into
an indemnity escrow account (the “LTC Escrow Account”) pursuant to the terms
of the Indemnity Escrow Agreement.”

5. Amendment to Section 3.2(c). Section 3.2(c) is hereby deleted and the following is
substituted therefor:

	 	 	 	“(c) All payments made by Buyer hereunder shall be by wire transfer of immediately
available funds to an account specified by Seller or, in the case of the funds in
the Indemnity Escrow Account or the LTC Escrow Account, by the Indemnity Agent.”

6. Amendment to Section 3.4. Section 3.4 is hereby deleted and the following is
substituted therefor:

	 	 	“3.4 Indemnity Fund. Notwithstanding anything to the contrary in this Agreement,
each Applicable Indemnity Amount, and the Barnes II Non-Compete Amount, if applicable, shall
be deposited by Buyer on the Applicable Closing Dates with J.P. Morgan Chase Bank, as
indemnity escrow agent (the “Indemnity Agent”). The Applicable Indemnity Amount and
Barnes II Non-Compete Amount, if applicable, so deposited with the Indemnity Agent shall
initially constitute the indemnity escrow fund (the “Indemnity Fund”) to be held and
released in accordance with the provisions of Section 3.7 and Article VIII
and the Indemnity Escrow Agreement. Pursuant to the terms and conditions of the Indemnity
Escrow Agreement, all interest, dividends and proceeds received on the Indemnity Amount
shall be retained by the Indemnity Agent as part of the Indemnity Fund. The Indemnity Fund
shall be governed by the terms set forth herein and in the Indemnity Escrow Agreement. The
Indemnity Fund shall be available to indemnify the Buyer Group Members from any Loss or
Expense pursuant to the terms of Article VIII. All fees and expenses of the
Indemnity Agent shall be shared equally by Buyer and Seller as provided in Section
11.7.”

 

 

 

7. Barnes Matters. The following is added as new Section 3.7 to the Agreement:

	 	 	“3.7 Barnes Matters.

(a) On the six (6) month anniversary of the Applicable Closing Date for Barnes
I and Barnes II, if the Retention Rate, as certified in the Post-Closing
Prescription Count Certificate, is within the range of percentages set forth below,
the following amount of funds from the Indemnity Escrow Account shall be distributed
to Buyer:

	 	 	 	 	 
	 	 	Funds Paid	 
	% Range	 	to Buyer	 
	Equal to or less than 45%
	 	$	1,000,000	 
	Greater than 45% but less than 50%
	 	$	800,000	 
	Equal to or greater than 50% but less than 55%
	 	$	600,000	 
	Equal to or greater than 55% but less than 60%
	 	$	400,000	 
	Equal to or greater than 60% but less than 65%
	 	$	200,000	 
	Equal to or greater than 65%
	 	$	0.00	 

(b) If an LTC Agreement Failure occurs:

(i) if the Barnes Parties do not Compete With Barnes between the Applicable
Closing Date with respect to Barnes I and Barnes II and the six month anniversary
thereof, $500,000 of the LTC Escrow Account shall be distributed to Seller on such
six month anniversary;

(ii) if the Barnes Parties do not Compete With Barnes between the Applicable
Closing Date with respect to Barnes I and Barnes II and the eighteen month
anniversary thereof, an additional $1,000,000 of the LTC Escrow Account shall be
distributed to Seller on such eighteen month anniversary;

(iii) if the Barnes Parties do Compete With Barnes at any time prior to the
eighteen month anniversary of the Applicable Closing Date with respect to Barnes I
and Barnes II, the remaining funds in the LTC Escrow Account shall be immediately
distributed to Buyer; and

(iv) notwithstanding anything to the contrary herein, if after the occurrence
of an LTC Agreement Failure, Buyer closes the sale of all or part of Barnes II, on
terms substantially similar to, and no less favorable to Buyer than, those specified
in the LTC Agreement, to any of the buyers named in the LTC Agreement and none of
the Barnes Parties have taken action to Compete With Barnes, then the entire balance
of the LTC Escrow Account will be distributed to Seller and this Section 3.7(b) will
be of no further force or effect.

 

 

 

(c) Notwithstanding anything to the contrary in the Agreement or this Amendment, the
remedies in this Section 3.7 constitute the sole and exclusive remedy of Buyer in connection
with breaches as of the date hereof of representations, warranties or covenants, or damages
incurred with respect to Barnes I and Barnes II relating to, arising out of or in connection
with the Lorenzo Lawsuit and the matters described therein and all agreements executed in
connection therewith, breaches as of the date hereof by any Barnes Party of the Goodwill
Protection Agreement assigned to Buyer, in each case above based on facts and circumstances known
to Buyer as of the date hereof, or the lease or use of the Barnes II location after the
Applicable Closing Date.”

8. Amendment to Section 4.1.

	 	8.1	 	The phrase “the remaining three (3) First File Transfer Locations” in the
second sentence of Section 4.1(a) is hereby deleted and the phrase “the remaining two
(2) First File Transfer Locations” is hereby substituted therefor.

	 
	 	8.2	 	The following phrase is added before the period at the end of Section 4.1(b):
“; provided further, however, that the Applicable Closings of
Barnes I and Barnes II shall occur on the same day”.

9. Barnes Prescription Count. The following is added as new Section 4.6 to the Agreement:

	 	 	“4.6 Barnes Prescription Count.

(a) Within five (5) business days after the Applicable Closing with respect to Barnes I
and Barnes II, Seller shall deliver to Buyer the Closing Prescription Count Certificate.
Within thirty (30) days after receiving the Closing Prescription Count Certificate, Buyer
shall give written notice to Seller stating whether it disputes the prescription count set
forth on the Closing Prescription Count Certificate. If such notice of dispute is provided,
Seller and Buyer shall cooperate to agree upon a revised Closing Prescription Count
Certificate. If such an agreement is not reached within ten (10) days after receipt by
Seller of such written notice, Buyer and Seller shall submit the Closing Prescription Count
Certificate to an agreed-upon third party arbitrator and vest in such arbitrator the
authority to resolve the dispute, including the right to review Seller’s relevant records.

(b) Within five (5) business days after the six month anniversary of the Applicable
Closing with respect to Barnes I and Barnes II, Buyer shall deliver to Seller the
Post-Closing Prescription Count Certificate and, if the Retention Rate reported therein is
less than 65%, Buyer shall deliver to Seller upon Seller’s request a prescription retention
report. Within thirty (30) days after receiving the Post-Closing Prescription Count
Certificate, Seller shall give written notice to Buyer stating whether it disputes the
prescription count set forth on the Post-Closing Prescription Count Certificate. If such
notice of dispute is provided, Seller and Buyer shall cooperate to agree upon a revised
Post-Closing Prescription Count Certificate. If such an agreement is not reached within ten
(10) days after receipt by Buyer of such written notice, Buyer and Seller shall submit the
Post-Closing Prescription Count Certificate to an agreed-upon third party arbitrator and
vest in such arbitrator the authority to resolve the dispute, including the right to review
Buyer’s prescription retention reports.”

 

 

 

10. Amendment to Section 7.22. The phrase “Barnes Pharmacy, located at 422 Main Street,
Suite B, Sterling, Colorado” in Section 7.22(i) is hereby deleted and the phrase “Barnes II” is
hereby substituted therefor.

11. Lorenzo Lawsuit. The following is added as new Section 7.25 to the Agreement:

	 	 	“7.25 Lorenzo Lawsuit.

(a) Seller shall use best efforts to pursue settlement of or its claims under the
Lorenzo Lawsuit using all available rights and remedies with respect to the subject matter
thereof. Seller shall promptly provide to Buyer any court filings received by Seller.
Buyer shall have the reasonable opportunity to review and comment on any court filings made
by Seller prior to filing. Seller shall consult in good faith with Buyer on any matters or
actions with respect the Lorenzo Lawsuit and shall not enter into any settlement agreement
thereto without the consent of Buyer. Seller shall name Buyer as a party to the Lorenzo
Lawsuit or grant to Buyer third party beneficiary rights with respect to the Lorenzo
Lawsuit.

(b) Seller shall use best efforts to fully enforce any and all rights and remedies with
respect any non-solicitation and non-competition provisions in the Jenae Lorenzo Employment
Agreement and pursue any and all remedies for any breach thereof.”

12. Amendment to Section 8.3(a). Subsection (i) of Section 8.3(a) is hereby deleted and
the following is substituted therefor: “(i) charge the amount of any Loss and Expense against (and
be entitled to receive payment from) the Indemnity Fund until the amounts owed under this
Article VIII together with payments made under Section 3.7 hereof exceed the
Indemnity Fund,”.

13. Amendment to Section 10.1(a). The phrase “90 days after the date hereof” in subsection
(iv) of Section 10.1(a) is hereby deleted and the phrase “December 31, 2010” is hereby substituted
therefor.

14. Buyer Representations. Buyer represents and warrants to Seller that: (a) the Baseline
Count is the average number of prescriptions sold per day at Buyer’s Sterling Pharmacy over the six
(6) month period ending September 30, 2010; and (b) Buyer has received and reviewed copies of the
Complaint and Motion for Temporary Restraining Order filed in the Lorenzo Litigation.

15. Supersession. In all respects, except as specifically amended hereby, the Agreement
remains in full force and effect and unabated.

16. Multiple Counterparts. This First Amendment may be executed in counterparts, or
facsimiles thereof, each of which will be deemed an original document but all of which will
constitute a single document.

 

 

 

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

	 	 	 	 	 
	 	WALGREEN CO.

 	 
	 	By:  	/s/
Robert M. Silverman	 
	 	 	Name:  	Robert M. Silverman	 
	 	 	Title:  	Divisional Vice President	 
	 
	 	APOTHECARYRx, LLC

 	 
	 	By:  	/s/ Lewis P. Zeidner
 	 
	 	 	Name:  	Lewis P. Zeidner 	 
	 	 	Title:  	President & CEO, ApothecaryRx, LLC 	 
	 
	 	GRAYMARK HEALTHCARE, INC.

 	 
	 	By:  	/s/ Stanton Nelson
 	 
	 	 	Name:  	Stanton Nelson 	 
	 	 	Title:  	CEO

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