ASSET PURCHASE AND SALE AGREEMENT
EXHIBIT
10.1
ASSET PURCHASE
AND SALE AGREEMENT
AGREEMENT dated
this 9th day of
December, 2008, (hereinafter “Agreement”) by and between DAW, INC., d/b/a XXXXX
APOTHECARY #2050 a Massachusetts corporation, with a notice address of 00 Xxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000, (“Seller") and MASSACHUSETTS CVS
PHARMACY, L.L.C., a Massachusetts limited liability company, with an office at
Xxx XXX Xxxxx, Xxxxxxxxxx, Xxxxx Xxxxxx 00000 (“Buyer").
WHEREAS, Seller
is the operator of a retail drugstore located at 00 Xxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxxxxxxx 00000 (the “Store”); and Nyer Medical Group (“Stockholder”)
warrants that it owns all of the issued and outstanding stock of Seller
..
WHEREAS, in
connection with the operation of the Store, Seller owns certain prescription
files and records which Seller desires to transfer to Buyer exclusively and
certain pharmacy and front store merchandise inventory which Seller desires to
sell and Buyer desires to purchase upon the terms hereinafter set forth;
and
In order to
induce Buyer to purchase the assets (as hereinafter defined) Stockholder has
entered into as of the date hereof, a guaranty of Seller’s obligations
hereunder.
NOW THEREFORE, for and in consideration of the
mutual covenants and agreements hereinafter set forth, and for other good and
valuable consideration, Buyer and Seller agree as follows:
1. TRANSFER
OF ASSETS - PURCHASE PRICE -
Subject to the terms and conditions of this
Agreement, on the Date of Inventory (hereinafter defined), Seller shall sell,
transfer, assign and convey to Buyer, free and clear of all liens and security
interests, the following described assets associated with the
Store(“Assets”).
(a) Merchandise
Inventory. Shall include all prescription merchandise and
front store merchandise (the “Merchandise Inventory”) set forth in Schedule A
(the “Inventory Instructions”). The purchase price for the prescription
merchandise shall be determined by the cost factors listed in the Inventory
Instructions not to exceed a
maximum of
$350,000.00. The purchase price for the front store merchandise shall be
determined by the cost factors listed in the Inventory Instructions not to
exceed a maximum of $80,000.00.
(b) Prescription
Files (i) As part of the assets being sold hereunder,
Seller shall transfer to Buyer title and possession of all prescription files
records and data utilized and/or generated by Seller in the course of operating
its licensed pharmacy from the Date of Inventory (hereinafter defined) and going
back no less than six (6) years (or for such shorter period if Seller did not
operate for six (6) years prior to the Date of Inventory). The
prescription files records and data shall include all hard copy prescriptions,
customer lists, and all electronic data maintained in any format by Seller
(hereinafter “Seller’s RX Data”). Seller will work in good faith with
Buyer to transfer Seller’s Rx Data in the most effective and efficient
manner. Seller shall cooperate fully with Buyer at least thirty (30)
days prior to the Date of Inventory in Buyer’s efforts to convert or download
Seller’s RX Data, as determined in the sole discretion of Buyer.
(ii) The purchase
price for Seller’s RX Data to be delivered to Buyer exclusively shall be
$500,000.00. Seller’s RX Data shall not be shared with a third party, shall not
be diminished, or removed from the Store between the date of execution of this
Agreement and the Date of Inventory (hereinafter defined). Payment for Seller’s
RX Data shall be paid to the Seller or at Buyer’s option, paid to Seller’s
secured creditors. Payment shall be delivered at Closing.
(c) Telephone. At
no additional cost to Seller, Seller agrees to cooperate with Buyer in the
transfer of the telephone lines and number(s), used in the operation of the
Store. The transfer will occur on the Date of Inventory (hereinafter
defined). Buyer shall facilitate the transfer. Seller
shall be solely responsible for the cancellation of, and final payment for, any
telephone lines or services NOT forwarded to the Buyer’s store. This
includes, but is not limited to, telephone lines, FAX lines, modem lines,
equipment leases and advertising.
(d) Pharmacy
Computer. At no additional cost to Buyer, Seller agrees
that Buyer will have full right to use Seller’s pharmacy computer including hardware, software and
printer (the “Computer”) for a period of 180 days from the Date of Inventory.
Seller warrants that the Computer shall be in working order on the Date of
Inventory and Seller shall provide Buyer with the name and telephone number of
Seller’s software and hardware maintenance vendors and contact person, if any,
prior to the Date of Inventory. On the Date of Inventory, Buyer shall remove the
Computer to Buyer’s store. In consideration for the
use of the Computer, Buyer agrees to be fully responsible for the Computer while
in its possession. Buyer shall return the Computer to Seller upon the expiration
of the 180 day period, with all data, including patient information, eradicated
from it, but otherwise in the same condition as received, ordinary wear and tear
excepted.
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(e) Goodwill. All
goodwill with respect to the Assets being sold hereunder shall be transferred to
Buyer as part of the sale.
(f) Excluded. This
sale does not include the furniture, trade fixtures, trademarks, service marks,
cash, or accounts receivable of Seller. Further, Buyer shall not
assume any liability of any nature of Seller as a result of this
transaction.
(g) Purchase
Price. The amounts payable under Articles 1(a), 1(b), and 6(b)
are hereinafter referred to as the “Purchase Price”.
2. CONDUCT
OF BUSINESS –
Seller agrees to
carry on its business in the Store premises in its usual and customary manner up
to the Date of Inventory (hereinafter defined).
3. STORE
CLOSING - PAYMENT OF PURCHASE PRICE -
(a) Store
Closing. On
the evening prior to the Date of Inventory, Seller shall close the Store to the
general public and the Store shall remain closed thereafter. Seller
shall, within thirty (30) days of the Date of Inventory, remove all fixtures
and interior and
exterior signage in reference to the Store.
(b) Date of
Inventory. A physical inventory of the Store shall be taken on
December 27, 2008, (the “Date of Inventory”) or such other date mutually agreed
upon. RGIS Inventory Service and/or any other independent firm (the “Inventory
Service”) shall conduct the physical inventory, at Buyer’s expense using the
categories and cost factors listed in the Inventory Instructions, attached
hereto and made a part hereof. If for any reason the Date of
Inventory has not occurred by January, 27, 2008, then either party may elect to
terminate this agreement by written notice given to the other and upon giving
such notice, both parties shall be released of all future liabilities or
obligations hereunder.
(c) Time and
Place of Closing. The closing of the purchase and sale of all
the inventory and any other Assets being sold hereunder shall take place by
facsimile transmission of documents including counterpart signature pages (with
hard copy to follow) on a date, which shall be in no event later than three (3)
business days (hereinafter the “Closing”) following the date of the actual
taking of the inventory, or at such other time and place or in such manner as
Buyer and Seller may agree. Buyer shall not be required to make any payment
hereunder until Buyer has received a fully executed Xxxx of Sale and Closing
Statement in a form attached hereto as Schedule B. Buyer shall pay to
Seller the Purchase Price by wire transfer to an account to be supplied by
Seller, minus any amounts paid directly by check or wire transfer to Seller's
secured creditors. By execution of this Agreement, the Seller
warrants and represents to Buyer that it agrees to the manner and form of
payment described in the preceding sentence and that Buyer, upon making
said
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payment in said
manner and form, shall conclusively be deemed to have fulfilled its payment
obligations hereunder.
(d) Creditor
List and Payoff Letters. On the date Seller executes this
Agreement Seller shall provide a list of secured creditors, which shall be
attached as Schedule C and made a part hereof. The list shall contain the names,
addresses, as well as the amount owed, and the name of any persons who may
assert claims even though the claim may be disputed. The list of creditors may
be computer generated, typed, or hand written, and must be signed by Seller. As
a condition of closing, Buyer shall have received an updated creditor list and
copies of pay-off letters in a form satisfactory to Buyer from such secured
creditors as may be required by Buyer.
(e) Seller and Buyer acknowledge
that they have negotiated in good faith regarding the allocation of the purchase
price. Buyer and Seller each agree to separately file Form 8594 with its federal
income tax return for the tax year in which the closing of the Store occurs, and
that neither Seller nor Buyer will take a position on any income, transfer or
gains tax return, before any governmental agency charged with the collection of
any such tax or in any judicial proceeding, that is in any manner inconsistent
with the terms of any allocation herein, without the written consent of the
other. Seller’s Employer Identification Number is
00-0000000.
4. SUBJECT
TO AUDIT
This Agreement is subject to an Audit to be
conducted by Buyer two (2) weeks prior to the Date of Inventory (the “Audit”).
The parties shall mutually agree on a time and date for the Audit. The Audit
must disclose that Seller has filled an average of 811 prescriptions per week
from the Store for the last six (6) months prior to the Audit. If
Seller has failed to fill the required prescriptions per week in the six (6)
month period, Buyer shall have the right to terminate this Agreement. Further,
upon demand Seller agrees to provide Buyer with invoices of all brand name and
generic name prescription drugs for the (6) months prior to the Date of
Inventory.
5. WARRANTIES
(a) Title. Seller
warrants and covenants that it is the owner and has good and merchantable title
to all of the Assets, and that all the Assets are free and clear of liens and
encumbrances. Seller shall provide Buyer with a UCC-3 Termination Statement or
UCC-3 Partial Release Statement from all secured creditors. Seller
shall satisfy all Seller’s secured creditors which method may include payment to
secured creditors either by Seller or by Buyer directly, prior to or at
Closing.
(b) Licenses
and Permits. Seller possesses all permits and licenses
necessary for the operation of its business in the Premises and the same are
now, and will be, on the Date of Inventory, in full force and effect and Seller
has received no notice of,
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nor is there any
pending or, to Seller's knowledge, any threatened proceeding relating to, the
revision, cancellation or termination of any such permits or
licenses.
(c) No Legal
Actions. There are no actions, suits, labor disputes,
arbitration, legal or administrative proceedings or investigations pending
against Seller or, to Seller's knowledge, threatened against Seller with respect
to the Store's operations or Seller's assets at the Store, and to Seller's
knowledge, no such actions, disputes, proceedings or investigations are
contemplated.
(d) Compliance
with Laws. Seller has, to its knowledge, complied with all
laws, regulations and ordinances applicable to its business, employees, store
and Seller's assets at the Store.
(e) Labor
Matters. With regard to the Store, Seller has complied and is
in compliance with, in all material respects, applicable legal requirements
pertaining to the employment of labor, including those relating to wages, hours,
collective bargaining, employment discrimination, drug testing, polygraphs,
sexual harassment, worker’s compensation, immigration, plant closing and
unemployment compensation, and there are no claims, causes of action, charges,
suits, complaints, administrative proceedings, arbitrations, material labor
grievances, or government investigations or proceedings, pending or, to the
knowledge of Seller, threatened against Seller in connection
therewith. Seller has not received notice of, nor does Seller have
knowledge of any matter that could reasonably form the basis for, any such
claims. There are no collective bargaining agreements covering any
employees of Seller, no collective bargaining agent has been certified as a
representative of any of the employees of Seller, and no representation campaign
or election is now in progress with respect to any of the employees of Seller,
except as disclosed in agreements furnished to Buyer.
(f) Right to
Enter into Agreement. The parties warrant and represent that
each has full right to enter into the Agreement and that there are no
impediments, contractual or otherwise, to full performance
hereunder.
6. NON-COMPETITION
COVENANT
(a) Seller agrees that it will not,
directly or indirectly, during the period commencing on the Date of Inventory
and expiring on the three (3) year anniversary of the Date of Inventory (the
“Restrictive Period”): (i) anywhere within a radius of ten (10) miles of the
Buyer’s store located at 000 Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxxxx 00000 (the
“Territory”), be employed by form, acquire, invest in, finance, own, operate,
manage, , whether as a stockholder, partner, lessor, lessee, member, joint
venture, advisor, employee, consultant or independent contractor, an enterprise
(a “Competing Business”) which is engaged in the business of any pharmacy, drug
store and/or health and beauty aid store operation, or any service competitive
with, or having the same applications as, any products or services now sold by
the Seller in the conduct of its business; (ii) hire,
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engage, employ or
interfere with or attempt to hire, engage, employ or interfere with any current
employees employed within the Territory, representatives or agents of Buyer, or
any affiliates now controlling, controlled by, or under common control with
Buyer (an “Affiliate”), or induce or attempt to induce any of them to leave the
employ of Buyer or any Affiliate, or violate the terms of his or her contract
with Buyer or any Affiliate; or (iii) call upon, solicit, advise or otherwise do
or attempt to do, business with any clients, suppliers, customers or accounts of
the business of Seller or the Buyer or any Affiliate or take away or interfere
or attempt to take away or interfere with any custom, trade, business or
patronage of the business of Seller or the Buyer or any Affiliate.
Buyer acknowledges that Seller’s continued
ownership and operation of the stores located at 00 Xxx Xxxxxx, Xxxxxxx,
Xxxxxxxxxxxxx and 00 Xxxxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxxxxxxx shall not be a
breach of this Article 6.
(b) Consideration. The
purchase of the Assets hereunder shall be deemed to be good and sufficient
consideration for said covenant not to compete.
(c) Remedies. Buyer
and Seller hereby agree that if either one or both or all shall breach the
provisions of this Article 6, then Buyer shall have available all its right and
remedies at law or in equity including the right to appropriate reimbursement
from the Seller..
7. ADVERTISING.
Seller acknowledges and agrees that it is very
important that service to Seller’s customers remain uninterrupted. To
insure such continued service, Seller agrees that Buyer shall have the right to
use Seller’s trade name, immediately followed by Topsfield, for a period of six
(6) months from the Date of Inventory to advertise in the local newspapers and
shall have the right to put signs in Buyer’s store windows and in the windows of
Seller’s Store (if permitted to do so by Seller’s Landlord) notifying customers
that Seller’s Store located in Topsfield, Massachusetts has closed and the
prescription files have been transferred to Buyer’s store.
8. BUYER’S
INDEMNIFICATION OBLIGATION
Buyer shall indemnify, defend and hold Seller
harmless from and against all losses, costs, expenses, damages, or liabilities
(including court costs and reasonable attorney’s fees) incurred by Seller,
arising from (a) any breach of any covenant, representation or warranty by Buyer
contained in or given in writing pursuant to this Agreement, or (b) relating to
Buyer’s possession or use of Seller’s Assets being sold hereunder, after the
Date of Inventory, or resulting from operations or based on events, acts or
omissions of Buyer which occur after such date.
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9. SELLER’S
INDEMNIFICATION OBLIGATION
Seller shall indemnify, defend and hold Buyer
harmless from and against any and all losses, costs, expenses, damages or
liabilities (including court costs and reasonable attorneys’ fees) incurred by
Buyer arising from (a) any breach of any covenant, representation or warranty by
Seller contained in or given in writing pursuant to this Agreement or (b)
relating to Seller’s possession or use of Seller’s Assets being sold hereunder,
up to an including the Date of Inventory, or resulting from operations, or based
on events, acts or omissions of Seller which occurred prior to or on such
date.
10. BULK
SALES LAWS
In consideration of Buyer’s agreement to
refrain from compliance with the relevant provisions of the applicable Bulk
Sales laws, if applicable or other laws for the protection of creditors, Seller
shall defend, indemnify and hold Buyer harmless from and/or reimburse Buyer for,
any and all claims, liabilities or obligations, including the expense of defense
thereof, which Buyer may suffer or incur by virtue of the noncompliance by
Seller or Buyer with such applicable laws.
11. ACCESS
(a) After
the Date of Inventory, Buyer shall use commercially reasonable efforts to make
Seller’s RX Data available for access to patients and disclosure to other
authorized third (3rd)
parties in accordance with the Health Insurance Portability and Accountability
Act Privacy Standards (hereinafter ”HIPAA Privacy Standards”) and other
applicable laws. Seller acknowledges and agrees that notwithstanding the
foregoing, Buyer shall not assume any legal obligations of Seller under the
HIPAA Privacy Standards relating to uses and disclosures of protected health
information made prior to the Date of Inventory. All inquiries relating to
patient rights under HIPAA Privacy Standards relating to uses or disclosures of
health information made prior to the Date of Inventory shall be forwarded to
Seller or its designated agent for handling.
(b) In
addition, Buyer hereby agrees to provide Seller full and free access at
reasonable times and after reasonable notice from Seller, to Seller’s Rx Data
transferred to Buyer and to the Computer, in the event Seller must re-file a
third party claim for a third party prescription sale reimbursement, or if for a
legitimate business reason Seller requires access to Seller’s RX Data
transferred to Buyer pursuant to this Agreement.
12. WARRANTIES
The
warranties and covenants contained herein shall survive the Closing, and become
a part thereof, and continue in full force as though set forth for a period of
five (5) years, with the exception of the indemnifications of Seller with
respect to any pharmacy
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related issues,
including misfills. But for the explicit warranties set forth in
Section 5 above, Seller makes no representations or warranty to Buyer and Buyer
acknowledges and agrees that the sale hereunder is without representation or
warranty of any type or nature, including fitness for a particular
purpose.
13. LICENSES
Seller
agrees to cooperate with Buyer in the transfer and/or application for licenses
and all pharmacy and other permits if necessary.
14. APPLICABLE
STATE LAW
This
Agreement shall be governed by and construed and enforced in accordance with the
laws of the state in which the Store is located.
15. SEVERABILITY
If
any term or provision of this Agreement or the application thereof to any
persons or circumstances shall to any extent be invalid or unenforceable, the
remainder of this Agreement or the application of such term or provision to
persons or circumstances other than those to which it is held invalid or
unenforceable shall not be affected thereby, and each term and provision of this
Agreement shall be valid and enforceable to the fullest extent permitted by
law.
16. EMPLOYMENT
Buyer and Seller agree that Buyer has not
offered any terms of employment to Seller or to any of Seller’s employees as
consideration for the sale contemplated herein. Buyer and Seller
agree that in the event that Seller and/or any employees of Seller shall be
employed by Buyer, then Seller or any individual employee of Seller, shall be an
“employee-at-will” of Buyer, and Buyer shall have no contractual obligation with
regard to such employment.
17. BROKERS
The parties represent that their negotiations
relative to this Agreement, have been carried on by them directly, and in such a
manner as not to give rise to any claims against either party for a brokerage
commission, and each party shall defend, indemnify and hold the other harmless
from claims for said commission based upon its acts.
18. COUNTERPARTS
This Agreement may be executed in separate
counterparts each of which shall be an original and all of which shall be deemed
to be one and the same instrument.
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19. FACSIMILE
SIGNATURES
Buyer and Seller agree that a facsimile
signature on this Agreement is as valid as an original signature.
20. CONFIDENTIALITY
Buyer and Seller hereby covenant and agree to
keep the information, terms, conditions, and details of any discussion and/or
negotiations relating to this Agreement confidential, except to the extent
necessary to carry out the party’s respective obligations prior to and after the
parties execute this Agreement, and further, except as required by court
order. Accordingly, neither party will disclose any details
concerning any information, terms, conditions, negotiations or transaction to
any other person, without limitation, employees of Seller (except as required by
law), and customers of Seller, without first obtaining the other party’s written
consent, which shall not be unreasonably withheld. Buyer acknowledges
that Seller has an obligation to file notice of the transaction with the SEC and
hereby consents to said notice.
21. NOTICES
Any notice, request or other document to be
given hereunder to any party shall be in writing and delivered personally, sent
by certified mail, postage prepaid or sent by a commercially recognized
overnight courier, provided a receipt is required if to Buyer, addressed to it
at the address provided on Page 1 hereof, and if to Seller, addressed to it at
the address provided on Page 1 hereof, or such other address as any party
thereof shall indicate by writing as herein provided.
22. SUCCESSORS
AND ASSIGNS
This Agreement shall bind and inure to the
benefit of the parties hereto and their respective heirs, representatives,
successors and assigns.
23. Intentionally
deleted.
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24. CONDITION
PRECEDENT
Notwithstanding anything contained herein to
the contrary, this Agreement and the obligations of Buyer hereunder are strictly
contingent upon and subject to the satisfaction by the Date of Inventory the
condition set forth below:
Seller shall
obtain a termination agreement from Seller’s landlord, in a form satisfactory to
Buyer, whereby Seller’s landlord shall agree not to sell, rent, lease, or
otherwise transfer the Store to any person, corporation, or any entity
whatsoever for the purpose of operating a pharmacy, drug store, or health and
beauty aid business for a period of twelve (12) months from the Date of
Inventory (herein referred to as the “Landlord Restricted Period”).
In consideration
of Seller obtaining the Landlord Restricted Period, Buyer agrees to pay to
Seller the sum of $30,415.00. Payment shall be made to Seller or at
Seller’s instruction to Seller’s landlord and shall be delivered within 2
business days of the Inventory Date.
Seller hereby
acknowledges that the benefit of the restrictions set forth herein is a material
inducement to Buyer entering into this Agreement.
The provisions of
this Article 24 shall survive the Closing.
25. WAIVER OF
TRIAL BY JURY -
The parties hereto waive to the fullest extent
permitted by law, trial by jury in any action, proceeding or counterclaim
brought by either of such parties against the other with respect to any matter
whatsoever arising out of or in any way connected with this
agreement.
(SIGNATURES ON
FOLLOWING PAGE)
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IN WITNESS WHEREOF, the parties hereto have
duly executed this Agreement as of the day and year first above
written.
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WITNESS:
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SELLER:
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DAW, INC.,
d/b/a
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XXXXX
APOTHECARY #2050
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______________________
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BY: /s/ Xxxx X.
Xxxxxxxxx
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WITNESS
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NAME: Xxxx
X. Xxxxxxxxx
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TITLE: President
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WITNESS:
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BUYER:
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MASSACHUSETTS
CVS PHARMACY, L.L.C.
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/s/ Xxxxx X.
Xxxxxx
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BY: /s/ Xxxx X.
XxXxxxxx
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WITNESS
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Xxxx X. XxXxxxxx
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VICE PRESIDENT
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CVS LEGAL
APPROVAL: KAB
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The following
schedules have been omitted and will be supplementally furnished to the
Securities and Exchange Commission upon request:
Schedule A -
Inventory Instructions
Schedule B - Xxxx
of Sale
