PURCHASE AGREEMENT
AGREEMENT made the 8th day of March, 1996 between Mesa Drug, Inc. having an
office at 0000 Xxxxx Xxxxxx Xxx, Xxxxxxxxxx, Xxx Xxxxxx 00000 (hereinafter
referred to as the "seller"), and HORIZON PHARMACIES, INC., a Texas Corporation,
having offices located at 000 Xxxxxxxxxx Xxxx, XxXxxxxx, Xxxxx, 00000
(hereinafter referred to as the "Buyer").
WITNESSETH
WHEREAS, the Seller and the Buyer have reached an agreement, in accordance
with the terms and conditions hereinbelow set forth, with respect to the sale by
the Seller and the purchase by the Buyer of certain of the assets of the Seller
utilized in connection with and as part of the retail drug store operations of
the Seller known as Mesa Drug, Inc. and Four States Pharmacies, Inc.
(hereinafter referred to as the "DRUG STORE") and desire to reduce said
agreement in writing;
NOW, THEREFORE, THE PARTIES AGREE:
1. SALE OF ASSETS.
1.1 For the purpose of this Agreement, Seller agrees to sell to Buyer as
is certain assets of the Drug Store (hereinafter referred to as the
"Drug Store Assets"), which the Buyer hereby agrees to purchase. Such
assets include and are hereby limited to:
A. INVENTORY, All of the marketable inventory (as defined in Exhibit
A attached hereto) held for retail sale by the Seller and located
at the Drug Store; and
B. PRESCRIPTION FILES INCLUDING ALL CUSTOMER AND PATIENT LISTS AND
PATIENT PROFILES. All prescription files and patient profiles of
Seller located at and pertaining to prescription customers of the
Drug Store.
C. ALL FIXTURES AND EQUIPMENT. All Rx, OTC, and DME fixtures and
equipment owned by Seller (computer/peripherals, registers,
refrigerator, typewriter, Microfiche, etc.) located at the Drug
Store, I.V. Operation, Hospital pharmacy; and all telephone
equipment, and all miscellaneous shelving, counters and supplies
belonging to Seller as listed on Exhibit B attached hereto and
made a part hereof.
D. STORE TELEPHONE NUMBER(S), All telephone numbers of the Drug
Store location shall be transferred to Buyer.
E. SUPPLIES. All bottles, vials, ointment jars, and other usable
supplies of Seller located at the Drug Store location and at
Seller cost.
F. ASSETS NOT PURCHASED. Buyer shall not purchase any consigned
merchandise or layaway items.
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G. All business transactions prior to the closing date are credited
to the Seller. All business acquired after the closing date
belong to the HORIZON Pharmacies, Inc. including any insurance
payments made to the existing NABP, State Welfare number(s),
and/or contract(s) as long as the date of service is on or after
the closing date.
2. PURCHASE PRICE.
2.1 The total purchase price to be paid by the Buyer for the Drug Stores
Assets shall be computed, but not allocated, as follows:
Furniture, Fixtures and Equipment Prescription Files, $200,000
Patient Profiles, Customer List, Patient
Telephone Numbers, 3 Automobiles
Includes $50,000 non-compete for XXX XXXXXX.
2.2 Plus an amount equal to the aggregate value of marketable inventory (as
defined in Exhibit A attached hereto) as determined in the physical
inventory described in paragraph 5 below and as valued in accordance
with Exhibit A attached hereto and made a part hereof.
2.3 Seller will keep 100% of the third party insurance receivables and
individual charge accounts.
3. ALLOCATION OF PURCHASE PRICE.
The purchase price shall be allocated in the following manner:
3.1 Item 2.2 (inventory) in the amount of five (5%) under retail cost;
3.2 Item 2.1 (furniture, fixtures, and equipment) per attached list at the
assigned asset values on the list.
3.3 Non-compete covenant at the value of $50,000.00
3.4 Items 1.1 B and 1.1 D in the amount of $725,000.00 less items 3.1,
3.2, and 3.3.
4. PAYMENT OF PURCHASE PRICE.
4.1 Subject to the following provisions, the purchase price hereafter
shall be paid as follows:
4.1(a) Cash at the closing equal to $200,000.00 less $1,000
escrow deposit.
4.1(b) A note at the closing equal to the purchase price less cash
in Section 4.1(a) bearing interest at the rate of eight (8)
percent. The note is due and payable in eighty four (84)
equal consecutive monthly installments, the first
installment due on May 1, 1996. The Note will be executed
by Buyer and payable to the order of Seller. It will be
secured by the inventory at the DRUG STORE.
5. INVENTORY.
5.1 A physical inventory shall be taken at the Drug Store by RGIS
Inventory Specialists on the closing date. Each party shall pay
one-half of the inventory expense.
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6. REPRESENTATIONS AND WARRANTIES BY SELLER.
6.1 The Seller does hereby represent and warrant as follows:
A. AUTHORITY. The execution, delivery and performance of this
agreement by Seller has been duly authorized by all necessary
entity action and constitutes a legal, valid, and binding
obligation on Seller enforceable in accordance with its terms.
B. TITLE TO PROPERTIES. The Seller has good and marketable title to
all of the Drug Store assets to be transferred hereunder, free
and clear of all mortgages, liens, encumbrances, pledges, or
security interests of any nature whatsoever, except for secured
debts, if any, listed on Exhibit C attached hereto which shall be
satisfied and released at or prior to closing. The Seller has
received no notice of violation of any applicable law, regulation
or requirement relating to the retail Drug Store business
operation or Drug Store assets to be transferred hereunder; and
as far as known to the Seller, no such violation exists.
C. CONTRACTS. Seller is not party to any contract, understanding or
commitment whether in the ordinary course of business or not,
relating to the conduct of business by Seller from the Drug Store
which contract, understanding or commitment shall extend beyond
the closing date for the Pharmacy Location except the real estate
lease. Seller is not party to any contractual agreement or
commitment to individual employees which may not be terminated at
the will of Seller.
D. LITIGATION. To the best of Seller's current actual knowledge
there is no suit, action, proceeding, investigation, claim,
complaint or accusation pending or, threatened against or
affecting Seller or the Assets or to which Seller is a party, in
any court or before any arbitration panel of any kind or before
or by any federal, state, local, foreign, or other governmental
agency, department, commission, board, bureau, instrumentality or
body which would have a materially adverse affect on the
financial condition of Seller, and to the best knowledge and
belief of Seller, there is no basis for any such suit, action,
litigation, proceeding, investigation, claim, complaint or
accusation. There is no outstanding order, writ, injunction,
decree, judgment or award by any court, arbitration panel or
governmental body against or affecting Seller with which Seller
is not currently in compliance.
E. EMPLOYEES.
(a) To the best of Seller's actual knowledge, the Seller is in
full compliance with all wage and hour laws, and is not engaged
in any unfair labor practice or discriminatory employment
practice and no complaint of any such practice against Seller is
filed or threatened to be filed with or by the National Labor
Relations Board, the Equal Employment Opportunity Commission or
any other administrative agency, federal or state, that regulates
labor or employment practices, nor is any grievance filed or
threatened to be filed against Seller by any employee pursuant to
any collective bargaining or other employment agreement to which
Seller is a party. To the Seller's best knowledge and belief is
in compliance with all applicable federal and state laws and
regulations regarding occupational safety and health standards
and has received no material complaints from any federal or state
agency or regulatory body alleging violations of any such laws
and regulations.
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(b) The employment of all persons and officers employed by
Seller is terminable at will without any penalty or severance
obligation of any kind on the part of the employer. All sums due
for employee compensation and benefits and all vacation time
owing to any employees of Seller have been duly and adequately
accrued on the accounting records of Seller. To the Seller's best
knowledge, all employees of Seller are either United States
citizens or resident aliens specifically authorized to engage in
employment in the United States in accordance with all applicable
laws.
F. TAXES.
(a) Seller has duly filed all required federal, state, local,
foreign and other tax returns, notices, and reports (including,
but not limited to, income, property, sales, use, franchise,
capital, stock, excise, added value, employees' income
withholding, social security and unemployment tax returns)
heretofore due; and to Seller's best knowledge all such returns,
notices, and reports are correct, accurate, and complete.
(b) All deposits required to be made by Seller with respect to
any tax (including but not limited to, estimated income,
franchise, sales, use, and employee withholding taxes) have been
duly made.
(c) All taxes, assessments, fees, penalties, interest and other
governmental charges which have become due and payable have been
paid in full by Seller or adequately reserved against on its
books of account and the amounts reflected on such books are to
the best belief and knowledge of Seller sufficient for the
payment of all unpaid federal, state, local, foreign, and other
taxes, fees, and assessments, and all interest and penalties
thereon with respect to the periods then ended and or all periods
prior thereto. Seller hereby agrees to indemnify and hold
harmless Buyer from and against any and all liability, claims, or
causes of action for any unpaid taxes, or other assessments due
and owing to any federal, state, or local governmental entity
arising out of the business of Seller prior to the closing date.
(d) Buyer shall pay any and all Sales, Use, and Transfer Taxes,
if any, arising out of the assets which are the subject of this
sale.
(e) Seller shall pay any and all personal property taxes for
prior years attributable to the property being transferred hereby
prior to closing
(f) The parties shall pro rate at Closing anticipated personal
property taxes as of the date of Closing based upon last year's
tax renditions, and personal property tax bills and rent.
7. CONDITIONS PRECEDENT.
7.1 All obligations of Seller under this Agreement are subject to the
fulfillment, prior to or at the closing, of each of the following
conditions (unless waived in writing by Buyer).
A. REPRESENTATIONS. The representations and warranties of Seller
contained in this Agreement shall not only have been true and
complete as of date of this Agreement, but shall also be true and
complete as though again made as of the date of closing.
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B. COMPLIANCE. The Seller shall have performed and complied with all
terms and conditions required by this Agreement to be performed
or complied with by it prior to or at the closing.
C. CONSENTS. All necessary consents to the transfer of the Drug
Store assets have been obtained.
8. LIABILITIES NOT ASSUMED BY BUYER.
8.1 It is expressly understood and agreed that Buyer shall not, by virtue
of this Agreement, the consummation of the transactions contemplated
herein or otherwise, assume any liabilities or obligations of the
Seller or any liabilities or obligations constituting a charge, lien,
encumbrance or security interest upon the Drug Store assets to be
transferred hereunder, regardless of whether such liabilities or
obligations are absolute or contingent, liquidated or unliquidated or
otherwise.
8.2 Seller hereby indemnifies the Buyer, its officers, directors, and
controlling persons against any liability for any fee or commission
payable to any broker, agent or finder retained by Seller with respect
to any transaction contemplated by this agreement.
9. CLOSING.
9.1 The closing shall take place on or before April 20, 1996 at Buyer's
discretion, but in no event later than May 4, 1996, at the Drug Store
location.
A. TO BE DELIVERED TO BUYER. The Seller shall deliver to Buyer a
Xxxx of Sale, which shall be effective to vest in Buyer good and
marketable title to the Drug Store Assets, free and clear of all
mortgages, security interest, liens, encumbrances, pledges and
hypothecation of every nature and description, except the
Security interest securing Buyer's Note to the Seller.
B. TO BE DELIVERED TO SELLER. The Buyer shall deliver to the Seller
a Cashier's check for the cash portion of the purchase price less
$1,000.00 Escrow amount and Buyer's promissory note described in
Paragraph 4.1 hereof, and the Security instruments required by
section 4.1(b).
10. INDEMNITY BY SELLER.
10.1 The Seller hereby agrees to indemnify and hold harmless Buyer against
and in respect of:
A. LIABILITY OF THE SELLER. All liabilities and obligations of the
Seller, of every kind and description, regardless of whether such
liabilities or obligations are absolute or contingent, liquidated
or unliquidated, accrued or otherwise, and regardless of how and
when the same may have arisen, which are asserted against Buyer
as a result of this Agreement or the consummation of the
transaction contemplated herein.
B. CLAIMS UPON ASSETS. All claims against, or claims of any interest
in, or of a lien or encumbrance or the like upon any or all of
the Drug Store assets to be transferred hereunder by the Seller
to Buyer which are caused or created by indemnifying party.
C. LITIGATION. Claim filed by Xxxxx Xxxxxx with EEOC and claims filed
in bankruptcy court arising from contractual dispute with Recomm.
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D. The buyer will indemnify the Seller for all claims against the
Assets for any period after the closing date. The Buyer further
indemnifies the Seller for break or leases and dissatisfied
customer claims caused by HORIZON for any period after the
closing date.
11. SURVIVAL OF REPRESENTATIONS WARRANTIES & INDEMNIFICATIONS.
11.1 All of the covenants, representations, warranties and indemnification
of the parties set forth in this Agreement shall survive the closing
date hereof.
12. RISK OF LOSS.
12.1 The risk of loss of damage of Drug Store assets to be conveyed
hereunder shall be upon Seller until the closing hereof.
13. NON-COMPETE COVENANT OF SELLER.
13.1 In consideration of the purchase price hereinabove stated in paragraph
2 of which $50,000.00 is allocated to this covenant not to compete,
Xxx Xxxxxx hereby agrees that for a period of seven (7) years after
the date of closing hereunder, Xxx Xxxxxx will not, directly or
indirectly, through a subsidiary, joint venture arrangement or
otherwise, conduct or assist another party other than the Buyer in
conducting or managing any operation which has as its purpose what is
generally known as a retail pharmacy, or Nursing Home or IV operation
within the city limits of Farmington, New Mexico and five (5) miles
radius of the said above city limits, or have any equity investment in
such operation. This non-compete clause does not prohibit Xxx Xxxxxx
from performing duties such as relief pharmacist at other pharmacies.
The parties hereby recognize and acknowledge that the territorial and
time limitations contained in this paragraph are reasonable and
properly required for the adequate protection of the business to be
conducted by Buyer with the assets and properties to be transferred
hereunder and cannot be changed except by written permission of Buyer.
Xxx Xxxxxx will work a minimum of 2 days a week for 1 year.
13.2 The parties recognize that, in the event of a breach by Seller of any
of the provisions of this paragraph, the remedy of law alone would be
inadequate and, accordingly, Buyer, (in addition to damages), shall be
entitled to an injunction restraining Seller from violating the
covenants herein contained.
13.3 It is the intention of the Seller and the Buyer that the execution of
these covenants not to compete be considered as materially significant
and essential to the closing of this Agreement, and that such
covenants are a material portion of the purchase price set forth
herein above.
14. GOVERNING LAW.
14.1 This agreement shall be governed and construed in accordance with the
laws of the State of Texas or New Mexico.
15. ENTIRE AGREEMENT.
15.1 This agreement contains the entire agreement between the parties, and
no representations, warranties or promises, unless contained herein,
shall be binding upon the parties hereto. This document is null and
void if the Purchase Agreement is not signed by both parties within 10
days from date the Buyer has received the Purchase Agreement document.
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15.2 It is stipulated that this agreement is null and void if HORIZON
Pharmacies, Inc. can not secure a real estate lease for DRUG STORE
location. Furthermore, this agreement is null and void in its entirety
if HORIZON Pharmacies, Inc. can not secure a valid New Mexico License
under its own merit for the said DRUG STORE location to conduct
business as a retail pharmacy operation.
15.3 The Seller will perform duties as relief pharmacist for the DRUG STORE
for up to period of one (1) year after the closing date.
16. XXXXXXX MONEY.
16.1 To bind this Agreement, Buyer herewith deposits with Mesa Drug, as
Escrow Agent, the sum of $1,000 (one thousand dollars), which sum
shall be applied to the cash portion of the purchase price upon the
closing of the transaction contemplated herein. However, in the event
Seller fails to perform each and every covenant and condition required
hereunder, Buyer may cancel this Agreement and have the Xxxxxxx Money
returned to it. If the Buyer fails to perform each and every
obligation hereunder, Seller shall retain the Xxxxxxx Money as
liquidated damages. Each party's remedy provided in this Section is
that party's exclusive remedy.
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IN WITNESS WHEREOF, the parties hereto have set their hands the day
and year first above written.
BUYER:
HORIZON PHARMACIES, INC.
/s/ XXXX XxXXXX
-------------------------------
Xxxx XxXxxx, President
THE STATE OF NEW MEXICO )
COUNTY OF SAN XXXX )
THIS INSTRUMENT was acknowledged before me on this the 8th day of March,
1996, by XXXX XXXXXX, who holds the office of President of HORIZON PHARMACIES,
INC., a Texas Corporation on behalf of such corporation.
/s/ XXX XXXXX
----------------------------------
SEAL Xxx Xxxxx
Notary Public, State of New Mexico
My commission Expires: 7-3-99
SELLER:
Mesa Drug
/s/ XXX XXXXXX
----------------------------------
Xxx Xxxxxx, President
THE STATE OF NEW MEXICO )
COUNTY OF SAN XXXX )
THIS INSTRUMENT was acknowledged before me on this the 8th day of March,
1996, by XXX XXXXXX, who holds the office of PRESIDENT of MESA DRUG.
/s/ XXX XXXXX
----------------------------------
SEAL Xxx Xxxxx
Notary Public, State of New Mexico
My commission Expires: 7-3-99
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