Exhibit 2.1
Offer for Purchase and Sale
and receipt for deposit. This is a legally binding contract
(please read carefully before signing)
Received from Effective Heath, Inc. Date October 4 ,2002
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Check for $20,000.00 Payable to Xxxx Xxxxx Escrow
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as a deposit for the purchase of Sespe Pharmacy
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Address of 000 Xxxxx Xxxxxx, Xxxxxxxx, XX. 00000
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The Seller(s) agree to sell and the Buyer Effective Health, Inc. or assignee
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agree to purchase Sespe Pharmacy on the following terms and conditions.
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1. Purchase price, which includes supplies, fixtures, furniture,
equipment, goodwill, customer lists, computer and data, trade name,
leasehold improvements, and tangible assets of the business shall be
in the sum of $ 100,000.00 plus inventory estimated at $ 75,000.00.
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Terms of sale: $65,000 cash at closing of escrow along with two (2)
promissory notes. The first Note is for the balance of the sale in the
amount of $35,000 to be paid as follows: 1/3 due 60 days from the
closing of escrow, 1/3 due in 90 days of the closing of escrow, and
the final 1/3 due 120 days from the closing of escrow. Each of the
three payment to be in the amount of $11,666.66. The second note to be
in the amount of inventory of approximately $75,000. This note is to
be paid in four equal installments beginning 60 days after the close
of escrow. Each payment shall be in the amount of 1/4th of the actual
inventory number or approximately $75,000 (ie. $18,777.77 for 4
consecutive months beginning 60 days from the close of escrow. A
default on either note shall trigger the notes to accrue interest at
the rate of 8 percent from the month of default. Both notes shall be
personally guaranteed by Xxxxx Xxxxxxxx.
Sale will be an asset sale only. All assets are to be free and clear
of all liens. The Seller(s) represents and warrants that He/She/They
own title to all the assets being transferred therein.
2. Close of escrow shall be approximately 30 days from the date of
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opening of escrow. The parties agree to all things necessary to close
escrow within the agreed upon time frame. Buyer(s) agree to pay
pro-ration of personal property taxes, pro-ration of acceptable
insurance, pro-ration of rent, utilities, phone directory, maintenance
contracts, if any. And to reimburse Seller(s) for sales tax assessed
against fixtures and equipment. Buyer(s) and Seller(s) each to pay
one-half of the cost of inventory service fee.
Page 1 of 6 Buyers Initials____ Sellers Initials____
3. Inventory of the stock in trade shall be taken on the date of
possession by Buyer(s) and Seller(s) or their respective
representatives and based upon Seller(s) net acquisition cost, less
rebates and discounts. Only clean and salable merchandise (salable
merchandise is to have at least 180 days dating remaining) and the
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supplies are to be taken, no damaged , outdated or discontinued
merchandise accepted. The Inventory Service shall be the sole judge of
salability. The cost of taking the inventory shall be borne equally
between Buyer and Seller
4. At the close of escrow, the Seller(s) warrant that all personal
property taxes, rent, utilities, insurance, State Board of
Equalization, accounts payable, Xxxxxxx'x Compensation, Licenses. All
other non mentioned obligations will be paid in a timely manner.
5. Buyer(s) will not assume any contractual agreements either verbal or
written to any employee that was made by Seller(s).
6. The amount allocated in the purchase of the business with regard to
furniture, fixtures, equipment, goodwill, trade name, covenant not to
compete, etc. shall be determined and agreed upon by Buyer(s),
Seller(s) and/ or their respective accountants. A signed copy of the
allocation of assets will be submitted to escrow within 14 days from
the start of escrow.
7. All vacation due to employees and bonuses promised must be satisfied
prior to the close of escrow ( or mutually agreed upon between
Buyer(s) and Seller(s).
8. Buyer(s) and Seller(s) shall immediately take a joint inventory of all
furniture, fixtures and equipment being conveyed. A list of same,
approved in writing by both parties to be attached to the escrow
agreement. Seller(s) shall provide prior to the close of escrow a good
and valid Xxxx of Sale covering the same, free and clear of any liens
and encumbrances whatsoever, except only those specifically set forth
in this agreement.
9. Seller(s) hereby warrants and guarantees that they have not operated
the subject business under a name other than that which is being
presented here.
10. Seller(s) warrant that through the close of escrow they have no
knowledge of any pending or threatening litigation or other claims
against the business, notice of violations of the city, county, state,
federal, building, zoning, health codes or ordinances, or other
governmental regulations filed or issued against the real property or
the business itself. This warranty shall survive the date of the close
of escrow.
11. Opening of escrow is contingent on the Buyer(s) obtaining a new lease
or assignment of the existing lease that meets with Buyer(s) approval.
12. In addition to the purchase price, Buyer(s) shall reimburse Seller(s)
through escrow, the rental security and/or any lease deposits, as
required by the landlord.
13. Seller(s) agree to execute supersedure documents with the telephone
company prior to the close of escrow in order that all existing
telephone numbers of the business will be transferred to the Buyer(s).
14. As part of the consideration herein paid, the Seller(s), officers, or
principles do covenant that they will not engage either directly or
indirectly, by proprietorship in whole or in part, or as an officer,
director, shareholder or member of any corporation, association or
other entity, or as manager, an independent contractor, or consultant
to such entity, having such interest in any same or similar business
within a radius of five (5) miles for a period of five (5)
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years from and after the date of Buyer(s) possession. This is not
transferable or assignable.
Page 2 of 6 Buyers Initials____ Sellers Initials____
15. Seller(s) will assist with the transfer of any and all agreements as
may exist for the continuation of the business and to include all
third party prescription contracts.
16. Seller to execute a Power of Attorney to allow buyer to operate under
Seller's pharmacy permit, DEA license, and Medi-Cal provider number
until new licenses are obtained by Buyer(s). Buyer(s) must submit
their State Board of Pharmacy application within 30 days after the
close of escrow. Buyer(s) will hold Seller(s) harmless during this
period of time. Seller acknowledges that if any action be brought
against the pharmacy during this time the Seller(s) license could
conceivably be in jeopardy.
17. Seller to train Buyer(s) for a period of 7 days after the close of
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escrow, during regular business hour ( not to exceed 40 per week) at
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no cost to the Buyer(s).
18. Buyer(s) to be able to use Seller(s) third party billing accounts and
necessary transmittals until Buyer(s) establish their own or until all
accounts are transferred into Buyer(s) name.
19. The purchase concerned herein does not include the accounts receivable
occasioned prior to the date of Buyer(s) possession. However, with the
purpose of maintaining the goodwill and the orderly transition of
ownership, the Seller(s) will furnish the Buyer(s) an itemized list of
such accounts outstanding as of the date of Buyer(s) possession,
setting forth names addresses, and balances unpaid and the Buyer(s)
will in the normal course of billing, include those balances which
will remain the property of the Seller(s) and thereafter to the newer
accounts of the Buyer(s) and Buyer(s) will within ten days after
receipt of same, remit such amounts to the Seller(s). Provided,
however, that after 90 days following possession, buyer(s) may cease
billing of those accounts remaining unpaid, if any, and their
collection thereafter becomes the sole responsibility of the
Seller(s).
20. Buyer(s) acknowledge that they are aware of the licensing requirements
of the California State Board of Pharmacy and shall obtain such
required license together with any other business licenses and permits
(including DEA ) as may be required for the operation of the subject
business outside of escrow. Buyer(s) warrant to Seller(s) that there
are no violations pending against him and that he knows of no reason
why a license should be denied him. Buyer(s) agree to apply for such
licenses and permits within 30 days of closing escrow.
21. Escrow shall comply with the bulk transfer provision of the California
Commercial Code. The parties thereby instruct the escrow holder, on
their behalf and at their expense, to obtain from the Secretary of
State a UCC title search under the names of the Seller(s), the
business firm name and release from the Franchise Tax Board and the
State Board of Equalization and the Employment Development Department.
Buyer(s) and Seller(s) agree to split 50/50 the escrow fees.
22. In the event that litigation is commenced in connection with or
concerning the subject matter of this agreement, the prevailing party
shall be entitled to recover all costs including without limitation
its reasonable attorney's and accountants fees.
23. Seller(s) warrants and holds Buyer harmless in the event of any third
party audits pertaining to any fraudulent xxxxxxxx that may have
transpired prior to the Buyer(s) taking possession of the pharmacy.
During the transition period of obtaining a new Pharmacy and DEA
license the buyer alleges to be licensable and the seller alleges that
his license is in good standing. In the event of any litigation
against either party due to either parties negligence. Seller(s) to
allow Buyer(s) to operate under their board of pharmacy and DEA
licenses until new licenses are obtained. This must transpire within a
reasonable period of time and without further consideration. Buyer(s)
will hold Seller(s) harmless during this period of time.
Page 3 of 6 Buyers Initials____ Sellers Initials____
A. Seller shall indemnify, defend and hold harmless Buyer, its
officers, directors, agents, successors, and assigns from and
against any and all claims, demands, losses, liabilities, costs,
expenses, obligations and damages, including, without limitation,
debts and interest, penalties and reasonable attorneys' fees,
suffered or incurred by Buyer which arise, result from or relate
to any breach of or failure by Seller to perform any of its
covenants or agreements in this Agreement, or from any
inaccuracies of any representation or warranty of Seller in this
agreement, or in any schedule, certificate, exhibit or other
instrument furnished or to be furnished under this Agreement, or
which arise, result from or relate to any liability or obligation
of the Seller arising out of there conduct and operation of Sespe
Pharmacy, prior to the close of escrow, which are not
specifically assumed by Buyer hereunder.
B. Buyer shall indemnify, defend and holds harmless Seller, its
officers, directors, agents, successors and assigns from and
against any and all claims, demands, losses, liabilities, costs,
expenses, obligations and damages, including, without limitation,
any claim, demand, loss liability, cost, expenses, obligation,
damages arising or resulting from or relate to any action by
Buyer under the Power of Attorney, and/or interest, penalties and
reasonable attorneys' fees suffered or incurred by Seller which
arise, result from or relate to any breach of or failure by Buyer
to perform any of its covenants, or agreements this Agreement, or
from any inaccuracy of any representation or warranty of the
Buyer in this Agreement, or in any schedule, certificate, exhibit
or other instrument furnished or to be furnished under this
Agreement, or which arise, result from or relate to any liability
or obligation of Buyer arising out of the conduct and operation
of Sespe Pharmacy, after the close of escrow, which are not
specifically assumed by Seller hereunder.
C. In the event any claim for indemnification hereunder arises on
account of a claim or action made or instituted by a third person
against the party to be indemnified, the party to be indemnified
shall notify the indemnifying party to be indemnified that such a
claim was made or that such action was commenced. The
indemnifying party shall be entitled to participate in the
defense of any such claim or action by counsel of its own
choosing, which counsel shall be reasonably satisfactory to the
indemnifying party. If the indemnifying party shall participate
in the defense of such claim or action, the same shall not be
settled without its written consent, which consent shall not be
unreasonably be withheld.
24. The only contingency is that the buyer receives either a new lease or
assumption of existing lease.
25. Seller agrees to conduct subject business operations and hours in the
same manner as it was heretofore conducted in the past year and agrees
to use his best efforts to preserve the business intact, to keep
available all employees, and to preserve present relationships with
customers and suppliers until Buyer(s) date of possession.
26. Buyer(s) to deposit a fully executed Fictitious Business Name
statement to the escrow holder at least 14 days prior to the expected
date of close of transaction. Escrow holder shall file and publish the
statement in accordance with information to be provided escrow holder
by Buyer(s) account for said filing and publishing. If Seller (s) has
an outstanding Fictitious name Statement, Seller(s) shall at its own
cost and though escrow, cause an abandonment of said statement to be
filed. Seller(s) shall assign Buyer(s) all all of its rights to use
the Trade Name " Sespe Pharmacy ".
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Page 4 of 6 Buyers Initials____ Sellers Initials____
27. IN THE EVENT BUYER(S) BREACHES ANY CONDITIONS OR TERMS OF THIS ESCROW
RESULTING IN A FAILURE TO CLOSE ESCROW, AND A CANCELLATION OF ESCROW,
BUYER(S) SHALL BECOME OBLIGATED TO SELLER(S) FOR LIQUIDATED DAMAGES IN
THE AMOUNT EQUAL TO BUYER(S) DEPOSIT IN ESCROW, LESS ONLY ESCROW FEES
AND COSTS, IT IS AGREED THAT IN SO FAR AS THE ACTUAL AMOUNT SET FORTH
ABOVE IS DEEMED JUST AND EQUITABLE, AND SHALL BE THE TOTAL AMOUNT OF
LIQUIDATED DAMAGES DUE THE SELLER(S) FROM THE BUYER(S) IN THE EVENT OF
CANCELLATION
28. In the event of any dispute concerning the meaning, interpretation,
enforcement, applicability, or application of this agreement shall be
arbitrated before the American Arbitration Association using its
Commercial Arbitration Rules. Each party completely and forever waives
any right to bring civil action on this agreement, with the sole and
limited exception of a Petition to Confirm Arbitration Award. Each
party agrees that no claim for punitive damages can be arbitrated and
that each party completely and forever waives the right to bring a
claim for punitive damages in any proceeding, whether judicial,
arbitration or otherwise in connection with or based upon this
Agreement to the purchase and sale of subject Pharmacy. In addition to
any other award ordered by the court, the prevailing party shall be
entitled to recover its reasonable attorneys' Fees.
29. This agreement is the full, complete and wholly integrated Agreement
between the parties for the purchase of subject Pharmacy. No oral
statements or other document will be admissible in any arbitration or
judicial proceeding to modify, explain, supplement, simplify or amend
this Agreement in whole or in part.
30. Both Buyer(s) and Seller(s) acknowledge that the Broker in this
transaction represents both the Buyer(s) and Seller(s) in this
contract, and are in agreement with this dual agency, and that the
Broker did not give any legal or accounting advice. If either buyer(s)
or Seller(s) have any questions regarding this contract or any
information supplied by either broker or Seller(s) they should consult
with their attorney or accountant.
31. Buyer(s) and Seller(s) acknowledge their need to know the
license/permit transfer policies and requirements of the State Board
of Pharmacy, Federal Drug Enforcement Agency (DEA), California
Department of Heath Services (MediCal), and any other regulatory
agencies and/ or municipalities as may be required for the operation
of subject business. Buyer(s) and Seller(s) are responsible for their
own due diligence relative to the transfer of all licenses/permits and
acknowledge the information offered by third parties other than the
agencies involved (including Pharmacy Brokerage Services, Inc. and
it's agents), must be considered here say and cannot be relied
uponBuyer acknowledges that all the information regarding this
pharmacy has been supplied by the Seller. The broker in this
transaction believes the information supplied is correct, however the
broker does not assume any liability for errors, omissions, or
misrepresentations. It is also understood that the broker has not made
any investigation or audit of said business and strongly advises the
Buyer to do their due diligence carefully before opening of escrow.
32. Buyer(s) agree to submit application for transfer of pharmacy license
to the State Board of Pharmacy within fourteen days close of escrow.
The license application shall not be a concern of the escrow holder.
33. Seller agrees to execute a Limited Power of Attorney, effective as of
the date of possession, appointing Buyer as his attorney-in-fact for
the operation of the business.
34. Should the Seller(s) fail to accept this offer to purchase by their
signatures hereon prior to October 10th ,2002. then the Buyer(s) to
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have the option to revoke this offer.
Page 5 of 6 Buyers Initials____ Sellers Initials____
35. The parties agree that this agreement contains the complete offer for
the purchase of Sespe Pharmacy between the parties for this
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transaction.
Buyer(s) hereby agree to buy on the terms and conditions set forth in pages 1
through 5.
Dated January 23, 2003
Buyer(s):___/s/ Effective Health Xxxxx Xxxxxxxx ________________________________
(print name) (signature)
Address: __________________________________________
City _______________________________ State__________________ ZIP ___________
Federal Tax ID #______________________ Phone # ( )_____________________________
Seller(s) hereby agree to sell on the terms and conditions set forth in pages 1
through 5.
Dated 23, 2003
Seller(s) _/s/ Xxxxxxxx Kendrick________________________________________________
(print name) (signature)
Address: ___________________
City _______________________________ State__________________ ZIP ___________
Federal Tax ID #_____________________ Phone # ( )______________________________
Page 6 of 6
POWER OF ATTORNEY
________________________, doing business as Sespe Pharmacy located at 000
Xxxxx Xxxxxx, Xxxxxxxx, XX 000000 (the "Pharmacy"), to the full extent of her
power legally to do so, hereby makes, constitutes, and appoints Effective
Health, Inc., and/or its pharmacist-in-charge the Pharmacy's true and lawfull
attorney ("Attorney"), in her name, place, and xxxxx, to operate and conduct the
business of the Pharmacy, as it is presently conducted, under the Pharmacy's
current (i) Pharmacy Permit No. PHY_____________ issued by the State Board of
Pharmacy, (ii) Medi-Cal provider number PHA__________ issued by the Department
of Health Services, and (iii) DEA registration No. _____________, and in
executing application for bookls of official order forms and in signing such
order forms in requisition for schedule II controlled substances in accordance
with Section 1308 of the Controlled Substance Act (21 U.S.C. 828) and part 1305
of Title 21 of the Code of Federal Regulations, for such reasonable time as it
shall take for the Attorney to obtain such new permit, provider, and
registration numbers as may be required by the appropriate issuing agencies. The
undersigned hereby ratifies and confirms all that Attorney shall lawfully do or
cause to be done hereby.
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Dated: _____________, 2003
