Whether accepting an asset purchase or a share purchase when selling a pharmacy, the buyer must exercise due diligence. Assuming ABC is satisfied with the results of the due diligence, closing will take place. Upon closing, the parties will sign a share purchase agreement, Johnson will sign a share transfer and the relevant closing documents will be signed. Some of the language in a pharmacy purchase contract seems to have existed since the mid-17th century. At ColonyRX, our lawyers keep the asset purchase agreement as simple as possible and use as little mysterious language as possible. In this context, securities purchase contracts are generally more than 20 pages long. In other words, if XYZ remains a sequential entity on Elm Street, it doesn`t need to get a new pharmacy license, DEA approval, and Medicaid provider number in most states. If ABC incorporates XYZ`s assets into ABC`s primary traffic location, resulting in the closure of the XYZ Elm Street location, ABC will not need to obtain a new pharmacy license and EMR approval. On the other hand, if XYZ`s assets remain at the Elm Street site and ABC takes control of the Elm Street site, ABC will need to obtain a new pharmacy license and an EMR permit for that location. At Colony RX, we use the same model for all our pharmacy purchases, which significantly reduces the back and forth between parties. This gives an advantage to the buyer because the deal has already been negotiated effectively by other pharmacy sellers and their lawyers, all of whom have interests essentially similar to those of the current seller. If ABC is satisfied with the results of the due diligence, the transaction is closed.
Upon closing, ABC and XYZ will sign an asset purchase agreement; XYZ signs a purchase contract; If it is approved by the state, and abc takes control of the XYZ site, the parties sign a power of attorney that allows ABC to operate under XYZ`s pharmacy license and DEA approval until ABC obtains its own license/permit for the Elm Street site. and related final documents are signed. Since Johnson is individually the seller, it is important that the “Agents and Guarantees” section of the share purchase agreement imposes clear obligations on Johnson in the event that ABC determines after closing that certain agents and warranties were incorrect. As discussed above, Johnson will want as many representatives and guarantees as possible to depend on Johnson`s “knowledge.” It is normal to give this advantage to the buyer because there is really not much to negotiate in these contracts for the purchase of pharmaceutical assets. All terms are disclosed in the letter of intent, and virtually 100% of the asset purchase agreement is standard language used in the purchase and sale of any type of business, whether it is a pharmacy or not. In fact, I estimate that the asset purchase agreement is 95% similar from one transaction to the next, with the remaining 5% related to specific risks or opportunities of a particular pharmacy. The purchase contract is the binding legal agreement used in the sale of pharmacy business assets such as prescriptions, inventory, furniture, furniture and appliances. Contracts, agreements and leases relating to purchase goods to which the Seller is involved or to which the Seller is bound are taken over by the Buyer. The following models of legal sales instruments contained herein are provided for discussion purposes only in connection with the Website of the National Community Pharmacists Association (NCPA) Ownership Transition Business Tools and do not constitute legal advice from the law firm of Brown and Fortunato or the NCPA. Contact a qualified business lawyer to support your pharmacy`s sales process.
While ABC should not be held liable for XYZ`s liabilities prior to closing, in order to keep XYZ in operation after closing, ABC must work with its subsidiary to settle liabilities. XYZ`s NPI, pharmacy license, DEA approval, and Medicaid provider number remain intact at XYZ once completed. A mutual confidentiality agreement is a legal document that requires all parties involved to keep certain information confidential. All parties share confidential information and must sign the agreement for it to be valid. Any information shared by companies covered by a confidentiality agreement is considered secret and cannot be shared without legal consequences When purchasing shares, all outstanding shares of the pharmaceutical business are transferred from the seller to the buyer. The buyer is actually following in the seller`s footsteps and the operation of the business continues without interruption. Johnson will want to move away from the shutdown without being responsible for XYZ`s pre-closing activities. From ABC`s point of view, it will be important that the share purchase agreement does not allow this. Conversely, ABC wants as many representatives and guarantees as possible to be absolute. In the case of a share purchase, it is particularly important that part of the purchase price is held until after closing.
This will provide a reserve of money for ABC to compensate in case Johnson violates his agents and warranties. As with the purchase of securities, the share purchase agreement must contain a section on remuneration and a non-compete obligation. When you sell a pharmacy, buyers and sellers sign a full purchase agreement (“APA”) that is negotiated by their respective lawyers. In general, the purpose of the asset purchase agreement is to document what is purchased, what is paid, and to clarify who is responsible for what before and after the sale. The purchase agreement will contain a number of important provisions, including the following: Virtually all agreements to purchase assets OR shares of a pharmacy contain a clause that subjects the sale to satisfactory due diligence on the part of the buyer […].