Jason M. Ohta (SBN 211 107) Heather U. Guerena (SBN 238122) DUANE MORRIS LLP 750 Street, Suite 2900 San Diego, CA 92101-4681 FILED Superior Court of California Telephone: 619.744.2200 Facsimile: 619.744.2201 9 ?3 0 cm? OfLOS?Ange'es E-mail: johta@duanemorris.com . SEP 0 8 2015 Abootj E-mail: huguerena@duanemorris.com Tl Sherri R. - . Attorneys for Plainn?? ?0 By?mgr/Clerk Isolam, LLC H1 I Judi Lara 1 9131"? SUPERIOR COURT OF CALIFORNIA COUNTY OF LOS AN GELES 3c593861 CASE NO. ISOLANI, LLC, a Delaware limited liability company, CONIPLAINT IN EQUITY FOR: Plaintiff, (1) WRIT OF AND vs. (2) INJUNCTIVE RELIEF RUSSELL REITZ, an adult individual and resident of the State of California, and PHARMACY, LLC, a California limited liability company, and DOES 1 through 20, inclusive, Defendants. Plaintiff ISOLANI, LLC (?Plaintiff? or ?Isolani?), by and through its attorneys, Duane Morris LLP, submits this complaint for (1) writs of attachment and (2) injunctive relief, against Defendants, RUSSELL REITZ (?Reitz?) and R850 PHARMACY, LLC and DOES 1 :0 r- . . . n;t through 20, incluswe, collectively referred to as ?Defendants,? and alleges as follows; g1, 11,; 34 r1: - a i: ?13 FF: PARTIES, JURISDICTION AND ??"flaal? a l. Pla1nt1ffIsolan1 is a 11m1ted 11ab111ty company organlzed under the laws gf Ln - 1:3 '11! Delaware. 5; 2. Defendant is a limited liability company organized under the laws?of? California. 14> 444 1,4 5 a EIUI .121 E: 55 E1 13 a -1- COMPLAINT IN EQUITY duvurL24 Defendant Reitz is an adult individual and a resident of the State of California, who is last known to reside at 6966 Quinto Court, Camarillo, California 93012. 4. operates a pharmacy located at 651 Via Alondra, Units 708 and 709, Camarillo, CA 93012 (hereafter the ?Pharmacy?). Reitz has been at all relevant times appointed as the Pharmacist-in-Charge of the Pharmacy. 5. Plaintiff is ignorant of the true names and capacities of those Defendants sued herein as DOES 1 20, inclusive, and therefore sues such Defendants by such ?ctitious names. Plaintiff will amend this Complaint (?Complaint?) to allege their true names when the same are ascertained. Plaintiff is informed and believe and based thereon allege that each said fictitiously named Defendants is proximately, jointly, and severally liable to Plaintiff on the conduct, obligations, or liabilities set forth herein. 6. Plaintiff is informed and believes, and based thereon alleges, that at all times mentioned herein each of Defendants was the agent, servant, employee, successor, and/or assignee of each of the other Defendants, and in doing the things herein alleged was acting within the scope of his, her, or its authority as such agent, servant, employee, successor, and/or assignee and with the permission and consent of each of the other Defendants. (Reitz, and Does 1 through 20, inclusive, are collectively referred to as ?Defendants?.) 7. Reitz and entered into a Purchase and?Sale Agreement (the ?Purchase Agreement?) with Isolani whereby Isolani paid Reitz $350,000 in valuable consideration to acquire full ownership interest in and the Pharmacy. See Purchase Agreement, a true and correct c0py of which is attached as Exhibit 8. In addition to the Purchase and Sale Agreement, Reitz, and Isolani entered into a Management Services Agreement (the that, inter alia, appointed Isolani as manager of the Pharmacy. See MSA, a true and correct copy of which is attached as Exhibit -2- COMPLAINT IN EQUITY iithis action, Isolani is alleging material breaches, both express and implied, of the Management Services Agreement by Reitz, acting individually or by and through see in?a. 9. The MSA requires the parties to submit any dispute relating to the MSA to non? binding mediation. If the dispute is not resolved in non?binding mediation within 45 days, the dispute must then be submitted to binding arbitration in accordance with the arbitration rules and procedures set forth by the American Health Lawyers Association. Counsel for the parties have discussed the selection of a potential mediator and commencement of alternative dispute proceedings.2 10. Section 1281.8 of the Code of Civil Procedure provides: A party to an arbitration agreement may ?le in the court in the county in which an arbitration proceeding is pending, or if an arbitration proceeding has not commenced, in any proper court, an application for a provisional remedy in connection with an arbitrable controversy, but only upon the ground that the award to which the applicant may be entitled may be rendered ineffectual Without provisional relief. C.C.P. In this action, Isolani seeks only provisional and preliminary relief that is crucial to maintain the status quo and prevent the loss of millions of dollars being wrongfully confiscated, hidden, and withheld by Reitz, individually or acting by?and through in breach of the MSA. 11. Accordingly, this Court has subject matter jurisdiction over this dispute under California law, including without limitation, the Constitution of the State of California, Article VI, Section 4. 12. This Court has jurisdiction over the parties. 13. Venue is proper in this Court pursuant to a choice of venue clause contained in the MSA that states ?[t]he site of any such arbitration or dispute resolution (including any 1 Isolani is the contractually appointed manager of and the Pharmacy. To the extent Reitz is purporting to act by or for R850 or the Pharmacy, such acts are unauthorized and Reitz has wrongfully appropriated and used in furtherance of the wrongful conduct alleged herein. 2 Nothing in this Complaint should be construed as a waiver of Isolani?s right to proceed with the dispute in arbitration on its breach of contract and other potential claims, and Isolani af?rmatively reserves its right to proceed with nonbinding mediation and arbitration as required by the agreements between the parties. -3- COMPLAINT IN EQUITY 10arbitration or litigation) shall be in Los Angeles County, California.? MSA 11.G (emphasis added). 14. Pursuant to the MSA, the laws of California govern this diSpute. GENERAL ALLEGATIONS 15. was formed as a limited liability company under the laws of the State of California on or around July 16, 2012. On July 11, 2013, the California State Board of Pharmacy issued a retail pharmacy license to 16. Isolani was formed as a limited liability company under the laws of the State of Delaware on October 28, 2014. Isolani is a single?member limited liability company created for the purpose of acquiring ownership of and the Pharmacy from Reitz. 17. In November 2014, Reitz, and Isolani entered into the Purchase Agreement conveying a 10% ownership of to Isolani immediately with the remaining 90% stake to be conveyed upon the completion of certain conditions precedent set forth in Section 4 of the Purchase Agreement, in exchange for $350,000 in valuable consideration. See Exh. 18. Upon ?nalization and closure of the Purchase Agreement, Isolani will continue to operate as a retail pharmacy. 19. In November 2014, Reitz, and Isolani also entered into the MSA providing that Isolani will have full responsibility for the operation and conduct of the business of the Pharmacy, including acceptance of liability for all claims and expenses of any nature incurred in its operations. See MSA at 2, Exh 20. Specifically, the MSA provides the following material terms: a. Isolani is ?to provide all such management and administrative services as are reasonably necessary and related to the day-to-day operations of the Pharmacy.? MSA 1. b. Isolani ?shall have full responsibility for the operation and conduct of the business of the Pharmacy.? MSA 2. 0. ?Neither nor [Reitz] shall undertake any actions or activities, or fail to undertake any actions or activities such that [Isolani] would be -4- COMPLAINT IN EQUITY menu-precluded from the due observance or performance of its duties and MSA 3. d. ?[Reitz] shall remain involved and available to [Isolani] in order to ful?ll obligations? as it relates to ?compliance with all regulatory MSA 7. 21. The MSA gave Isolani the exclusive authority to manage the business operations of the Pharmacy. This both explicitly and impliedly includes Isolani?s right to control the receipt and payment of corporate funds. 22. As compensation for Isolani?s management services, and for Isolani accepting liability for all expenses and claims incurred by and the Pharmacy, the MSA provides that ?[Isolani] shall retain, for itself, all pro?ts and losses realized by and the Pharmacy during the term of the MSA 6. 23. The Pharmacy dispenses medications by ?lling prescription orders submitted by various insured individuals. At periodic intervals, the Pharmacy will submit invoices for the prescriptions ?lled to various ?Payors? (123., pharmacy bene?t managers, healthcare companies, health insurance provides, etc.). The Payors, in turn, will send reimbursement checks to the Pharmacy as payment for the medications dispensed to their insured members. 24. Reitz has at all relevant times been appointed as the Pharmacist?in-Charge of As the Pharmacist-in-Charge, Reitz has access to prescription orders, claims, and the reimbursement checks sent by Payors to 25. Pursuant to the Purchase Agreement, Reitz was required to execute the Seller?s Certi?cation on the Board of Pharmacy Application in order for the application to be submitted to the Board. The Application was required for the Board to approve the transfer of interest to Isolani and the Board?s approval was a condition precedent to Closing. In or around May 2015, legal counsel for Isolani attempted to obtain information from Reitz. Reitz ignored and/or refused to provide the information requested from Isolani?s counsel. As? a result of Reitz?s refusal to provide the information, Isolani has been precluded from completing the provisions necessary for it to obtain 100% ownership of -5- COMPLAINT IN EQUITY 26. Thereafter, Reitz as the Pharmacist-in-Charge locked Isolani out and began con?scating the checks received in the mail by various Payors to and is refusing to disclose the current whereabouts of the checks/funds. In addition, Reitz, acting individually or by and through failed to undertake the actions and activities necessary to allow Isolani to perform its contractual obligations under the MSA including payment of accounts payable, payroll, etc. 27. Recently, Reitz, individually or by and through has breached his obligations under the MSA by taking actions or failing to take actions that preclude Isolani fr0m performing its duties and responsibilities under the MSA and failing to remain involved and available to Isolani in order to ful?ll regulatory requirements. 28. As of July 30, 2015, there was in excess of $3,000,000 in reimbursement checks that Reitz hid ?om Isolani and refused to deposit into bank account in accordance with the MSA. Legal counsel for Isolani demanded that these checks be immediately deposited. A true and correct copy is attached as Exhibit Isolani?s counsel further demanded that: Reitz resign as the Pharmacist?in-Charge (as manager, Isolani had full responsibility for the operation and conduct of the Pharmacy?s business, including, inter alia, the authority to hire and terminate employees and appoint a new pharmacist-in-charge); and (2) Reitz state his intention on the ?nalization and closure of the Purchase Agreement. Id. Reitz refused these demands and to honor his obligations under the MSA. 29. On August 6 and 12, 2015, Isolani requested that Reitz provide certain ?nancial information regarding operations under the MSA. See Exhibit attached to the Declaration of Eric Rice. Reitz again re?ised Isolani?s request. 30. Isolani has performed all of its obligations under the terms of the Purchase Agreement and MSA. 31. Unlike Isolani, Reitz and have committed, inter alia, the following material breaches of the MSA: 3. hiding, withholding, and refusing to deposit reimbursement checks received from Payors or other payments into company bank accounts; b. refusing to comply with mail and invoice remittance procedures; -6- COMPLAINT IN EQUITY U32. Reitz?s refusing to send Isolani mail and invoices the Pharmacy has received since at least early?July 2015; refusing to submit customer order invoices to Isolani; withholding communications concerning the Pharmacy?s operations (including communications concerning licensing, audits, notices and the California State Board of Pharmacy); and refusing to cooperate with audits required by the Payors as a condition of the contracts between and the Payors. and material breaches of the MSA have caused Isolani to suffer, inter alia, the following signi?cant, immediate, and irreparable harm to Isolani and the Pharmacy (including a diminution and/or loss of the Pharmacy?s goodwill, market value, and potentially licensing): a. b. c. d. 33. Most si Reitz has con?scated and refused to deposit reimbursement checks and other monies into Pharmacy?s account, thereby creating an ongoing cash ?ow problem and depleting bank account. This has caused Isolani to be unable to pay outstanding invoices. Additionally, because checks have not been deposited, Payors will liker stop payments on, and eventually void, the checks as they age; At least one manufacturer ceased shipping product because bi-weekly payments for product have not been made; The depletion of inventory resulting from Defendants? action subjects the Pharmacy to regulatory and Payor risk; Isolani?s ability to perform mandatory accounting of ?nancials, including Accounts Receivable balances, Accounts Payable balances and a statement of the pharmacy?s cash position, has been signi?cantly impaired. gni?cantly, there is a serious risk that the Payors will remove the Pharmacy from Healthcare Bene?ts Agreements and/or Payor networks because of the -7- COMPLAINT IN EQUITY ifoperational problems caused by Reitz?s con?scation of the checks. 34. As a result of Reitz?s and material breaches of the MSA, Isolani will be forced to shut down operations at the Pharmacy within the next 10 days. 35. As of August 31, 2015, the Pharmacy has an outstanding balance due on invoices submitted to Payors in the amount of $19,3 19,659.08. Attached as Exhibit to the Declaration of Eric Rice is a voluminous record of prescription orders ?lled by the Pharmacy and the outstanding accounts receivable related to these orders. Based on historical payment trends, the Pharmacy has certainly received at least in reimbursement checks for the outstanding accounts receivable checks that are currently in the possession of Reitz. The precise amount of these checks is not currently ascertainable by Isolani because Reitz re?lses to disclose any information about the checks he has con?scated and hidden other than to state the checks are being held in a ?safe place.? As part of the relief sought in this action, Isolani seeks a temporary protective order compelling Reitz and to provide an accounting of these funds. Upon the completion of such an accounting, the exact amount being withheld by Reitz will be readily ascertainable and ?xed. 36. Reitz-admits that he is or at least, was if he has since misused the funds in possession of the reimbursement checks, but has refused to disclose the location of the checks (or the funds, to the extent deposited into a personal account) or deposit the reimbursement checks into bank account, stating only that he is keeping them in a ?safe place.? This is despite the fact that the reimbursement checks are payable to not Reitz, and that Reitz has no right to the funds payable via those checks. 37. Given that at least $15,087,304.53 is currently in the hands of a private individual Reitz who has refused to disclose the whereabouts of these funds or even communicate directly with Isolani as he is-required to do as the appointed Pharmacist-in?Charge his conduct gives rise to the inference that there is a real danger that the reimbursement checks or monies therefrom will be misused, concealed, substantially diminished in value, or otherwise made unavailable to levy if the matter is delayed until ?nal resolution through arbitration. 38. Isolani further believes, and therefore avers, that without a prejudgment writ of -3- COMPLAINT IN EQUITY attachment and temporary and preliminary injunctive relief, Defendants will not have any assets to pay Plaintiff or even to fund the operations of the Pharmacy, including payment for products ordered and shipped and payroll, after the ultimate resolution of the matter. FIRST CAUSE OF ACTION (Writ of Attachment Against All Defendants) 39. Isolani incorporates by reference the foregoing paragraphs 1 through 38, inclusive, as if fully restated herein. 40. California Code of Civil Procedure section 1281.8 permits this court to adjudicate provisional remedies when a matter is Subject to arbitration but the arbitration has not yet commenced. 41. The claim is a commercial claim for money that is based on an express and/or implied contract. 42. The amount of the reimbursement checks at issue is readily ascertainable upon an accounting in an amount totaling at least $15,087,304.53 as of the date of this ?ling. 43. The claim is not secured by real property. 44. There is a probable validity of success on the merits of the breach of contract claim upon which the attachment is based. 45. The attachment is sought for the sole purpose of securing recovery on the claim. 46. Reitz has no lawful purpose or legal justi?cation to withhold the funds at issue. 47. Reitz can establish no right to possess the funds at issue. Isolani will suffer great and irreparable injury by the inability to recover these signi?cant business funds if the reimbursement checks and/or monies derived therefrom are not attached pending ?nal resolution of this matter in arbitration. WHEREFORE, Isolani respectfully requests that the Court issue of a Right to Attach Order and Order for Issuance of Writ of Attachment against Reitz and to preserve at least in reimbursement checks and/or the monies deposited therefrom that rightfully belong to Isolani and the Pharmacy pending ?nal resolution in arbitration. -9- COMPLAINT IN EQUITY . 317SECOND CAUSE OF ACTION (Injunctive Relief Against All Defendants) 49. Isolani incorporates by reference the foregoing paragraphs 1 through 48, inclusive, as if fully restated herein. 50. Isolani is entitled to an injunction against Reitz and barring them from transferring, encumbering, secreting, hiding, or otherwise affecting or disposing of the I reimbursement checks and/or monies deposited from them. 51. Isolani has a protectable right to the monies from the reimbursement checks pursuant to the Purchase Agreement and MSA. 52. Isolani has a likelihood of success on the merits of its breach of contract claim because it has fully performed its contractual obligations under the MSA and Reitz and have breached their obligations and acted in bad faith. 53. Isolani believes that Reitz, acting individually or by and through may attempt to convert, misuse, or otherwise interfere with Isolani?s right to access and use these funds in the management of the Pharmacy?s business. 54. Isolani is further being denied its management fee under the MSA which is the right to receive all pro?ts resulting from the Pharmacy?s operations. 55. Isolani will suffer irreparable harm if the requested injunction is not granted because the reimbursement checks and any monies deposited are crucial to maintain the ongoing operations of the Pharmacy. 56. There is no adequate remedy atplaw in the event the reimbursement checks and/or monies are deposited into Reitz?s personal bank accounts or otherwise transferred or hidden by Reitz. WHEREFORE, Isolani, in the alternative, requests a temporary protective order barring Reitz from transferring, encumbering, secreting, hiding, or otherwise affecting or disposing of the reimbursement checks and/or monies deposited from pending ?nal resolution of the arbitration proceedings. -10- COMPLAINT IN EQUITY PRAYER FOR RELIEF WHEREFORE, Isolani respectfully requests judgment against Defendants as follows: 1. The Court issue of a Right to Attach Order and Order for Issuance of _Writ of Attachment against Defendants to preserve at least $15 million, in reimbursement checks or the monies deposited therefrom that rightfully belong to Isolani and the Pharmacy pending ?nal resolution in arbitration. 2. The Court order Reitz and to provide an accounting of all reimbursement checks received and, to the extent those checks have been deposited, cashed, or otherwise transferred, the location of those funds, including information about the bank accounts where such monies is located. 3. In the alternative, a temporary protective order barring Reitz from transferring, encumbering, secreting, hiding, or otherwise affecting or disposing of the reimbursement checks and/or monies deposited from pending ?nal resolution of the arbitration proceedings. 4. The Court award Isolani its reasonable attorneys? fees and costs. 5. Such other relief as the court deems just and proper. Dated: September? 2015 DUANE MORRIS LLP ea her U. Guerena Attorneys for Plaintiff Isolani, LLC -11- COMPLAINT IN EQUITY at; a 3 EXHIBIT 1 PURCHASE AND SALE AGREEMENT This Purchase and Sale Agreement is made on this day of November, 2014 (?the Effective Date") by and among Russell Neil Reitz, hereinafter ("Seller"), lsolani, LLC, hereinafter ("Buyer"), and 0 Pharmacy, LLC, hereinafter ("Company"). RECITALS A.- Company ovims and operates 8c 0 Pharmacy, located at 651 Via Alondra, Units 708 709, Camarillo, CA 93012 ("the Business"). . - B- Seller owns. of record and bene?cially, all of the issued and outstanding membership interest in Company (?the Ownership"). C. Buyer desires to purchase from Seller and Seller desires to sell to Buyer the Ownership, on the terms and subject to the conditions set forth in this Agreement; Company desires that this transaction be consummated. D. Seller?shall retain possession of all of Company's cash on hand, cash in banks, and accounts receivable, all of which-shall be excluded from the contemplated purchase and sale. Now, therefore, in consideration of the mutual covenants, agreements, representations, and warranties contained herein, the parties hereto agree as follows: 1. Sale _ar_id Transfer of Ownership Subject to the terms and conditions of this-Agreement, Seller will sell, convey, transfer, and deliver to Buyer, and Buyer will purchase from Seller, the Ownership, as follows: Ten percent on the Effective Date (?the Initial Purchase?). Ninety percent on the Closing Date (?the Final Purchase?). 2. Purchase Price In consideration for the sale and transfer of the Ownership, Buyer shall pay to Seller, the aggregate sum of Three Hundred Fifty Thousand Dollars plus an amount equal to the Value of the Inventory, as de?ned below in Paragraph 5, collectively, ("the Purchase Price"). 3. _P_ayment of the Purchage Price 3.1 On the Effective Date. Buyer shall pay directly to Seller sum of Thirty Five Thousand Dollars in payment for the Initial Purchase. 3.2 On the Closing Date, Buyer shall pay to Seller the balance of the Purchase Price, less $30,000. 6t570595.i if! California Corporations Code. 4. Conditions-Precedent to the Clasing The obligation of the parties to complete the transactions contemplated herein shall be contingent upon satisfaction or written waiver of the following: 4.1 Buyer shall have completed its review of Company?s books, records, and Operation, as Such due diligence is detailed on Exhibit a copy of which is attached hereto, and incorporated herein by this reference. 4.2 Buyer shall have received an assignment of Seller?s premises lease, or a new premises-lease upon terms and conditions acceptable to Buyer. 4.3 Buyer shall have obtained written assurance from the California State Board of Pharmacy that it is prepared immediately to issue a temporary pharmacy permit. 4.4 Buyer shall have entered into written employment agreements with Seller, employing him as Phannacist?in?Charge, commencing as of the Effective Date. 5. Inventory. At the close of business on the .day immediately preceding the Effective Date, or on the Effective Date, if possible, a physical inventory of all of the Pharmaby's stock in trade shall be 1 taken to be valued. at Company's actual acquisition cost ("the Value of the InVentory"). No itern will be included which is unsalable or bears an expiration date which "is less than 120 days after the Effective Date. The cost of taking the inventory shall be borne equally between Buyer and Sellers. . 6. Representations and Warranties of Seller As of the Effective Date?, Seller represents and warrants to Buyer the following, the truth and accuracy of each of which shall constitute a condition precedent to the obligations of Buyer and which shall survive the Closing Date: Organization. Company is a limited liability company, duly formed, validly existing, and in good standing under the laws of the State of California. 6.2 Authority. Seller has full power and authority to enter into and consummate the transaction contemplated by this Agreement and. when executed, this Agreement will be a legal, valid and binding obligation of Seller, enforceable in accordance with its terms, except as such enforcement may he limited by bankruptcy laws, laws a?'ecting creditors' rights generally and equitable principles. 6.3 Title to the Ownership. The Ownership is owned, bene?cially and of record, by Seller, all of which shares are free and clear of all liens, encumbrances, security agreements, equities, options, claims, charges and restrictions, other than restrictions that 'may be set forth in any permits issued by the California Commissioner of Corporations or otherwise imposed by the ?570595.: 2 6.4 Tax Returns and Audits. To the best of Seller?s knowledge, within the time and in the manner prescribed by law, Company has ?led all federal, state, and local tax returns required by law and has paid all taxes, assessments and penalties due and payable attributable to Company's business. There are no present disputes as to taxes of any nature payable by Company. - 6.5 Compliance With Laws. To the best of Seller?s knowledge, Company and Seller have complied with all laws, ordinances, regulations and orders applicable to the conduct of Company and its business, and have not received any notice asserting or alleging any noncompliance, and ?led with the proper authon?ties each statement, report, information and form required by each such authority. 6.6 Legal Actions. To the best of Seller's knowledge, there are no actions, suits or proceedings pending or threatened against Seller or Company which, individually or in the aggregate, could have a material adverse effect on any of Company?s assets, the transactions. contemplated herein or the operation of the Business after the Effective Date, whether at law er in equity. Company is not in default with respect to any order, writ, injunction or decree of any federal, state or local court, department, agency or instrumentality, or of any arbitrator, which is directed against it, and is not in violation of any applicable federal, state or local statute, law or regulation which would have a material adverse effect on the transactions contemplated herein after the Effective Date. 6.7 Company Debts. Prior to the Effective Date, Company shall have paid all employee salaries, fringe bene?ts, accrued vacation pay, and payroll taxes accruing through the Effective Date, as well as all debts to vendors and suppliers. 6.8 Material Misstatements or Omissions. No representation or warranty of Seller contained .in this Agreement, or in the Exhibits hereto, or in any document, including ?nancial statements furnished or to be furnished pursuant to this Agreement, contains, or on the Closing Date will contain, an untrue statement of a material fact, or omits or will omit to state on the Closing Date a material fact, necessary to make the statements of fact herein or therein contained not misleading. 6.9 Adverse Facts and Circumstances. Seller knows of no facts or circumstances, other than those generally applicable to companies or other entities engaged in businesses similar to the Business, 'which might materially and adversely affect the Company or the Business. 7. Representations and Warranties of Buyer As of the Effective Date, Buyer represents and warrants to Seller the following, the truth and accuracy of each of which shall constitute a condition precedent to the obligations of Sellers and which shall survive the Closing Date: 7.1 Authority. Buyer has full power and authority to execute and deliver this Agreement and consummate the transactions contemplated herebyand, when executed, this Agreement will be a legal, valid and binding obligation of Buyer, enforceable in accordance with its terms, except as such enforcement may be limited by bankruptcy laws. 51570595.: - 3 7.2 Approvals. Buyer is aware that Company shall require a new permit from the Board of Pharmacy, and a new DEA registration. 7.3 Material Misstatements or Omissions. No representation or warranty of Buyer contained in this Agreement will contain and untrue statement of a material fact, or omits or will omit to state on the Closing Date a material fact, necessary to make the statements of fact herein or therein contained not misleading- . . 8. Covenants and Agreements of Seller Seller covenants and?agrees to the following, the ful?llment of each of which shall also constitute a condition precedent to the obligations of Buyer hereunder: 8.1 I Conduct of Business Before the Closing. 8.1.1. Diligent Conduct. Between the date hereof and the Effective Date, Seller will conduct the Business diligently in the ordinary course, will not change in any material respect its methods of business operations or its accounting practices, and will preserve intact its business organization, use its best efforts to retain in its employ all of its key employees, and to preserve its relationships with its customers and others having business relations with Business. 8.1.2. Properties and Assets. BetWeen the date hereof and the Effective Date, Seller will not, without the prior written consent of Buyer, sell or otherwise dispose of (except liens for taxes not due), any of Company's assets, and (ii) will keep all of the equipment and other tangible. personal preperty in good working order and repair, reasonable wear and tear excepted, and continue to perform all normal repairs and maintenance in the ordinary course of business. 8.2 Certain Deliveries at the Closing. At the Closing, Seller shall deliver to Buyer all prescription ?les and records of Company relating to the Business, and all business records. Buyer agrees to preserve such records and provide Sellers with reasonable access thereto and permit Seller to make copies thereof during news] business hours for a period of three years following the Closing Date. 9. Deliveries 9.l On in Effective Date. 9.1.1 Buyer to pay to Seller the Sum of $35,000.00, and the executed Employment Agreement; . 9.1.2 Seller shall transfer to Buyer ten percent of the Ownership. 9.1.3 Buyer and Seller shall enter into a Management Agreement, a copy of which is attached hereto, marked Exhibit and incorporated herein by this reference. 61570595.! - 4 9.2 On the Closing Date 9.2.1 Buyer shall pay to Seller the balance of the Purchase Price, less $30,000.00 9.2.2 Seller shall transfer to Buyer Seller?s remaining 90% of the Ownership. 9.2.3 Seller to'deliver to Buyer Seller?s Written resignations a managing member of Company. - - 9.2.4 Seller to deliver to Buyer the DEA Power of Attorney. 9.2.5 If Buyer so desires, Seller shall provide written authoriZation transferring Company's and NPI numbers into Buyer's name. 9.3 On the Qgte Company is issued its New Pharmacsr Permit. Buyer shall pay to Seller the remaining $30,000.00 of the Purchase Price. 10. Inde-mnifigatlon 10.1 Seller shall, indemnify, defend and hold harmless Buyer its agents, successors, and assigns from and against any and all claims, demands, losses, liabilities, costs, expenses, obligations and damages, including, without limitation, debts, interest, penalties and reasonable attorneys' fee, suffered or incurred by Company and Buyer which arise, result from or relate to any liabilities or obligations of Seller or Company arising out of the conduct and operation of Company's business, prior to the Effective Date. 10.2 Buyer and Company shall indemnify, defend and hold harmless Seller, his agents, successors, and assigns from and against any and all claims, demands, losses, liabilities, costs, expenses, obligations and damages, including, without limitation, debts to third party payers arising out of the use by Buyer of Company's provider numbers, interest, penalties and reasonable attorneys' fees, suffered or incurred by Sellers which arise, result from or relate to any liability or obligation of Buyer or Company arising out of the conduct and operation of Company's business, following the Eifective Date. 10.3 In the event any claim for indemni?cation hereunder arises on account of a claim or action made or instituted by athird person against the party to be? indemni?ed, the party to be indemni?ed shall notify the indemnifyng party alter the receipt of notice by the party to be indemni?ed that such claim was made or that such action was commenced. 11. Company?s Accounts ligeivahle All accounts receivable of Company, including third-party receivables, which accrue prior to the Effective Date shall remain the property of Sellers. For a period of 120 days from and after the Effective Date, Buyer agrees to accept payment of accounts. receivable for an on behalf of Sellers, and shall make an accounting of and transmit such collected receivables to Seller whether received during the ?rst 120 days period, or thereafter. On the 121?" day 61570595.] 5 after the Effective Date, Buyer shall return accounts? receivable records to Sellers. Payments received, unless otherwise speci?ed by payer, shall be allocated on a ?rst in ?rst out basis. Notwithstanding any of the above, Buyer shall have no duty actively to attempt to collect such receivables, but will cooperate with Seller in such collection. 12. Assignments Seller will, upon Buyer?s request, and to the extent possible, assign the Pharmacy?s and NPI numbers, and all third party payer contracts to Buyer. 13. Power of Attomey 13.1 Seller shall grant to Buyer a DEA Power of Attorney, in the form attacEd hereto marked Exhibit and incorporated herein by this reference Power of Attorney"). 13.2 Seller and Buyer shall execute a Successor Liability and Joint and Several Liability Agreement ("Form 6217"), in the form attached hereto marked Exhibit and incorporated herein by this reference, to enable Company to continue to submit Medi-Cal claims under its present provider number. Buyer shall submit Form DI-ICS 6217 to the. Department of Health Care Services within not more than-?ve (5) days following the Closing Date. 14. General Provisions . 14,1 Further Assurapces. After the Closing Date, Sellers, Buyer, and Company shall execute and deliver all such further instruments and documents and shall performall other acts which the other may reasonably request in order effect or? perfect the sale and transfer of the Stock to Buyer as contemplated in this Agreement. 14.2 Time. Time is of the essence to the performance of the parties under this Agreement. 14.3 Soles Tag. Buyer shall pay all sales and use taxes arising out of transfer of the Assets, if any. 14.4 Expenses. Each of the parties shall pay all costs and expenses incurred or to be incurred by him or her in negotiating and preparing this Agreement and in closing and carrying out the transactions contemplated by this Agreement. 14.5 Notices. All notices, statements or demands shall be in writing and shall be - served in person, by facsimile, by express ?mail, by certi?ed mail or by private overnight delivery. Service shall be deemed conclusively made at the time of service, if personme served, at the time of receipt, if served by ?facsimile, twenty four (24) hours after deposit in the United States mail, properly addressed and postage prepaid, if served by express mail; ?ve (5) days after deposit in the United States mail, properly addressed and postage prepaid, return receipt requested, if served by certi?ed mail and twenty four (24) hours after delivery by the party giving the notice, statement or demand to the private overnight deliverer, if served by private overnight delivery. 5157055.! 6 AL K363.th We? MAE :1 6.30/1? Any notice to Seller shall be given to: lsolan'i, LLC 400 Horsham Road, Suite .109 Horsham, PA 19044 Attn: Eric Rice Any not-iceto Buyer shall be given. to: Either party may,'by virtue of written notice in compliance with this paragraph, alter or change the address or the identity of the person to whOm any notice, or copy thereof, is to be sent. [4.6 Waivers. A waiver by any party of any of the terms and conditions of this Agreement in any one instance shall not be deemed 'or construed to be a waiver of such term or condition for the future?, or of any subsequent breach thereof, nor shall it be deemed a waiver of performance of any other obligation hereunder. 14.7 Disgutes. In the event a diSpute shall arise between the parties, whether based on contract, tort, statute or other legal theory, arising out of or related to this Agreement, resulting in litigation, in addition to such other relief as may be awarded by the courts, the prevailing party or parties shall be entitled to recover reasonable attorneys' fees, expenses and costs. 14.8 Binding Effect. This Agreement shall be binding upon and inure to the bene?t of the successors and assignees of the parties. 14.9 Headings. The subject headings of the paragraphs- and subparagra-phs. of this. Agreement are _for convenience only and shall not in any way affect the construction or interpretation of any provision of this Agreement. . 14.10 Entire Agreement. This Agreement contains the entire understanding of the parties hereto relating to the subject matter hereof and supersedes all prior and collateral agreements, understandings, statements and negotiations of- the parties. Each party acknowledges that no representations, inducements promises, or agreements, oral or written, with reference to the subject matter hereof have been made other than as expressly set forth herein. 1-4.11 Severabiliix. If any provision of this Agreement, as applied to? any party or to any circumstance, shall be found by a court of Competent jurisdiction to be Void, invalid or unenforceable, the same shall in no way affect any other provision of this Agreement, the application of any such provision in any other circumstance, or the validity or enfcreeabi-lity of this. Agreement. . 14.12 Governing Law/Interpretation. This Agreement shall be governed by, construed in. accordance with and enforced under the?laws of the State of California. words used herein, regardless of the number and gender Speci?cally used, shall be deemed and construed to alsrososJ 7 include any other number, singular or plural, and any other gender, masculine, feminine or neuter, as the context requires. 14.13 Assignment. The reSpective rights and obligations of the parties to this Agreement may not be assigned by any party without the prior written consent of the other, which consent may not be unreasonably withheld or delayed. 14.14 "Successors and Assigns. The terms provisions of this Agreement shall .be binding on and inure to the bene?t of the successors and assigns of the parties. 14.15 Modi?cation and Waiver. This Agreement may not be amended, modi?ed, or supplemented except by written agreement signed by the party against which the enforcement of the amendment, modi?cation, or supplement is sought. No waiver of any 'of the provisions of this Agreement shall be deemed, or shall constitute, a waiver of any other provision. No waiver shall be binding unless executed .in writing bythe party making the waiver. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year ?rst above written. "Company" ?Seller? 4- 0 Pharmacy; LLC I 16mm . Russell Neil Reitz Russell Neil Reitz, Managing Me be: ?Buyer? 130mm, LLC By: Eric Rice, Managing Member ?570595.! 3 PM Viz/pt?? . EXhibit MANAGEMENT SERVICES AGREEMENT THIS MANAGEMENT AGREEMENT (?Agreement?) is made. as of the day of November, 2014 (?Effective Date?), by and between 0 Pharmacy, Inc. (the ?Company"), Russell Neil Reitz (?Reitz?), and lsolani, LLC (?Manager?), hereinafter referred to collectively as the Parties. WHEREAS, The Company owns and Operates 85 0 Pharmacy, located at 651 Via Alondra, Units 708 709, Camarillo, CA 93012 (?the Pharmacy?); and WHEREAS, Reitz is the sole owner of the Company; and WHEREAS, Manager has caperience in the management and administration of pharmacies; and - WHEREAS, Manager and Reitz have executed an agreement whereby Manager will all of the issued and outstanding ownership interest in the Company from Reirz (?the Transaction"); and WHEREAS, the Company desires to engage ?Manager to manage and administer the Pharmacy until the Transaction is completed; and WHEREAS, Manager desires to be so engaged by the Company, under the terms and conditions stated herein. NOW THEREFORE, in consideration of the foregoing recitals and the mutual promises and conditions set forth herein and other valuable consideration, the receipt and suf?ciency of which are hereby acknowledged, the Parties hereby agree as follows: 1. of Manager; Term. The Company hereby appoints and engages Manager as the manager and administrator of the Pharmacy, and Manager hereby accepts such appointment, to provide all such management and administrative services as are reaSOnably necessary and related to the day?to-day business operations of the Pharmacy. The term of this Agreement shall be for a period of one (1) year from the date hereof, or until the Transaction is completed, whichever first occurs. 2. Duties and Responsibilities of Manager. During the term of this Agreement, Manager shall have full responsibility for the operation and conduct of the business of the ?Pharmacy, including acceptance of liability for all expenses of any nature incurred in. its operation. 3. Duties and Responsibilitiesof the Company. During the term of this Agreement, the Company will cooperate with and provide timely responses to Manager, in order to enable Manager to perform his services hereunder. Neither the Company nor the Shareholder shall undertake any actions or activities, or fail to undertake any actions or activities such that Manager would be precluded from the due observance or performance of its duties and responsibilities 6 607229.! howl 1:2? Tit-.51 {It} hereunder. All employees of the Company shall fully cosperate with Manager in the ful?llment of his duties hereunder. 4. Exclusivity. During the term of this Agreement, the Company agrees not to engage any party other than Manager to perform the management and administrative services required of Manager hereunder. . . 5. Performance Standards. Manager shall use his reasonable business efforts to perform its duties and responsibilities hereunder in a diligent, professionally responsible and ef?cient manner and in accordance with all applicable statutory and regulatory requirements and basic industry standards. Manager agrees to cooperate with the Company and Reitz in developing timely responses in support of the business needs of the Pharmacy. 6. Management. Fee. As compensation for all services rendered by Manager under this Agreement, and for Manager accepting liability for all expenses incurred during the term of this Agreement, the Manager shall retain, for, itself, all pro?ts and losses realized by the Company and the Pharmacy during the term of this Agreement. 7. Regulatogg Matters. The Company shall continue to bear responsibility for compliance with all regulatory requirements imposed upon the operation of the Pharmacy by the Board of Pharmacy, the Drug Enforcement Administration, and the Food and Drug Administration; Reitz shall remain involved and available to the Manager in order to ful?ll the Company?s obligations under this Section 7, and shall be compensated for such duties pursuant to the terms of an. Employment Agreement. 8. Indemnification. By Mangger. Manager shall defend, indemnify and save the Company, its shareholders, officers, and directors harmless from any and all liabilities, claims, actions, losses, damages, expenses and create (including reasonable attorneys? fees) arising directly- or indirectly cut of or in connection with Manager?s provision of services to the Company hereunder from and after the Effective Date, including but not limited to Manager?s breach of a material provision of this Agreement, other thanwith respect to any liability, claim, action, damage, expense or cost which was incurred by reason of an act or acts of Reitz or Company, or any of its agents or employees negligent act or negligent omission or willful misconduct. . (ii) By the Company. The Company and Reitz shall defend, indemnify and save Manager harmless from any and all liabilities, claims, actions, losses, damages, expenses and costs (including reasonable attorneys? fees) arising directly or indirectly out of or in connection with the operation of the Pharmacy prior to the Effective Date, or its breach of a material provision of this Agreement, Other than with respect to any liability, claim, action, damage, expense or cost which was incurred by reason of the Company or any of its agents or employees negligent act or negligent omission or willful misconduct, following the Effective Date. 9. Nondisclosure. A. During the term of this Agreement and for a period of three (3) years following any termination other than the natural expiration of this Agreement, no party shall, directly or indirectly, in) {wt} its" if; 61607229.] 2 disclose, divulge crappropriate for its own use any con?dential 0r proprietary information belonging to the other party, except as may be necessary to enable the other party to carry out. its described herein or as may otherwise be required by court order, or in response to an inquiry by any government agency. . . B. Each party hereby acknowledges and agrees that any breach or threatened breach of the provisions of Section 9 hereof binding on a party will result in irreparable harm and injury to the other party and that monetary damages Will not provide an adequate remedy'toa party. Accordingly, each hereby agrees that in the event of a breach or threatened breach of the provisions of.Section.9 hereof, the non?breaching party shall be entitled to; a temporary restraining order, preliminary injunction and permanent injunction to enjoin such breach or threatened breach; and recover from breaching party the reasonable attorneys? fees and costs incurred by the non-breaching party in enforcing the provisions of Section 9 hereof. The breaching party further agrees that in the event of a breach or threatened breach of the provisions of Section 9 hereof, the restrictions set forth in Section 9 shall" be extended during the period of any breach or threatened breach .by the breaching party. The rights and remedies set forth herein are cumulative and shall be in addition to any other-rights or remedies to which a party may be entitled. C. Each party hereby acknowledges that the restrictions set forth in Section 9 are minimal, reasonable in scope and duration and are necessary to protect the legitimate interests of the parties and that any breach or threatened breach of these restrictions will result in irreparable harm to the non-breaching party. in the event any of the restrictions are found by a court of competentjurisdiction to be too broad to permit enforcement to its full extent, then such restrictions shall be enforced to the maximum extent allowable by law and the parties hereby consent to and authorize the Court to modify the restrictions in a manner to permit their enforcement. - 10. Ipr?mination. Any of the Parties may terminate this Agreement immediately upon the occurrence of any of the following events with regard to the other party: the making of a general assignment for the bene?t of creditors; (ii) the ?ling of a voluntary petition er the commencement of any proceeding by either party for any relief under any bankruptcy or insolvency laws, or any laws relating to the relief of debtors, readjustment of indebtedness, reorganization, composition or extension; the ?ling of any involuntary petitiOn or the commencement of any proceeding by or against any party for any relief under any bankruptcy or insolvency laws, or any laws relating to the relief of debtors, readjustment of indebtedness, reorganization, composition or extension, which such petition or proceeding is not dismissed within ninety (90) days of the date on which it is ?led er commenced; or (iv) suspension of the transaction of the usual business of any party a period in excess of ninety (90) days. B. Any of the Parties may terminate this Agreement upon ninety (90) days? prior written notice to the other parties solely in the event of a material breach by such party of any material term or gondition hereof, if such written notice sets forth with speci?cin the nature of such breach; and (ii) !Either such breach is not cured to the reasonable satisfaction of the non-breaching party within ninety {690) days after notice has been given; or if such breach is of a nature that it cannot be cured within such time period, each party has not taken commercially reasonable stePs to begin curing such breach and I_._dpes not therea?er proceed to cure such breach in a diligent manner. - t" :e 51607229.: 3 . Miscellaneous. A. Status of Parties. in the performance of the work, duties and obligations under this Agreement, it is mutually understood and agreed that each party is at all tirnes acting and performing as an independent contractor with respect to the other and that no relationship of partnership, joint Venture or employment is created by this Agreement. B. Force Maieu-re. No party shall be deemed to be in default of this. Agreement if prevented ?rom performing any obligation hereunder for any reason beyond its control, including but not limited to Acts of God, war, civil commotion, ?re, ?ood or casualty, labor dif?culties, shortages of or inability to obtain labor, materials or equipment, governmental regulations or restrictions, or unusually severe weather. In, any such case, the parties agree to negotiate in good faith (and be bound by the Limited Renegotiation prosedures set forth below) with the goal of preserving this Agreement and the respective rights and obligations of the parties hereunder, to the extent reasonably practicable. It is agreed that ?nancial inability shall not be a matter beyond a party's reasonable contnol. C. Notices. Any notices to be given hereunder by either party to the other shall be deemed to be received by the intended recipient when delivered personally, the day following delivery to a nationally recognized overnight courier service with proof of delivery, or ?ve (5) days after mailing by certi?ed mail, postage prepaid with return receipt requested, in each case addressed to the parties at the addresses set forth below or at any other address designated by the parties in writing. D. Entire Aggeement. This Agreement supersedes any and all other agreements. either oral or in writing, between the parties hereto with respect to the subject matter of this Agreement. E. Amendment. This Agreement may not be changed orally, and may only be amended by an agreement in writing signed by all parties. F. No Rights or Liabiliu?es in Third Parties. This Agreement is not intended to, nor shall it be construed to, create any rights or liabilities in any third party. - G. Governing Law. This Agreement and all questions arising hereunder shall be determined in accordance with the laws of the State of California. The site of any such arbitration or dispute resolution (including any arbitration or litigation) shall be in Los Angeles County, California. H. Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be e?'ective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement. Waiver. The failure of a party to insist upcm strict adherence to any term 'of this on any occasion shall not be considered a waiver or deprive that party of the right thereafter-to filial term or any 'other term of this Agreement. No amendment, supplement or termination of this ll-irAgreement shall affect or impair any rights or obligations which shall have theretofore matured hereunder. 5:1, - interpretation. All references made and pronouns used herein shall be construed in the :singular or plural, and in such gender, as the sense and circumstances require. are; . . it?: . 6l607229.l 4 t. . i K. Further Actions. Each of the parties agrees that it shall hereafter execute and deliver such further instruments and do such further acts and things as may be required or useful to carry out the intent and purpose of this Agreement and as are not inconsistent with the terms hereof. I L. Assignment and Successors. No party hereto may assign this Agreement except with the prior written approval of the other party. This Agreement shall be binding upon and shall inure to the benefit of the parties and their permitted heirs, executors, administrators and assigns. . M. Non-Discrimination. Each party shall comply with all applicable federal, state and local laws and regulations prohibiting discrimination against employees or patients. Without limiting the generality of the foregoing, no party shall discriminate against any patient on the basis of age, race, color, sexual orientation, marital status, religion, sex, national origin or sponsor, and no parties shall employ personnel without regard to age, race, color, sexual orientation, religion, sex or national origin. N. Countem'ts. This Agreement may he executed. in any number of counterparts, each of which shall be an original and all of which shall together constitute one agreement. 0. Survival. Provisions of this Agreement which, by their terms or by reasonable implication, are. to be performed after the termination or expiration of this Agreement shall survive the termination or expiration of this Agreement. Limited Renegotiation; Binding Arbitration. This Agreement shall be construed to- be in accordance with any and all federal and state statutes, including Medicare, Medicaid and all federal and State rules, regulations, principles and interpretations applicable to the practice of pharmacy. it is the intent of this Section to set forth a procedure so that if certain legal developments occur, a procedure will be in place that will bring the terms of this Agreement back into legal compliance while preserving, to the extent possible, the economic and governance relationships set forth here. Bight to Mediate; Binding Arbitration. Any dispute between the parties relating to this Agreement must ?rst be submitted to non-binding mediation in accordance with procedures agreed upon by the parties. if the dispute is not resolved through mediation within forty-?ve (45) days of the initial request for mediation or within a time frame mutually agreed upon by the parties?, the dispute must then be submitted for binding arbitration in accordance with procedures set ferth by the American Health LaWyers Association. I?m-Arbitration Procedure. - 1. Any dispute shall be submitted to arbitration by notifying the other party hereto in writing of the Submission of such dispute to arbitration (the ?ArbitrationNoticc?. . The party delivering the Arbitration Notice shall specify therein, to the fullest extent then possible, its version of the facts surrounding the dispute and the amount of any damages and/or the nature of any injunctive or other relief such party claims. 2.. The party receiving such Arbitration Notice shall respond within sixty (60) days after receipt thereof in writing (the ?Arbitration Response"), stating its version of the facts to the ?lliest extent then possible and, if applicable, its pesition as to damages or other relief sought by the party initiating arbitration; . 61607229.! 5 3. The parties shall then endeavor, in good faith, to resolve the diSpnte outlined in the Arbitration Notice and Arbitration Response. In the event the parties are unable to resolve such dispute within sixty (60) days alter receipt of the Arbitratioa Response, the parties shall initiate the arbitration procedure outlined below. Arbitration Pro ced'ure. l. If the parties hereto are unable to resolve the dispute within sixty (60) days a?er receipt of the Arbitration Response as set forth above, dien.tl1e..parties must submit the dispute to binding arbitration in accordance with the American Health Lawyers arbitration program. if the parties are unable to agree on an arbitrator within_sixty (60) days after receipt of the Arbitration Response, each of the parties shall, within sixty (60) days after receipt of the Arbitration Response, choose an arbitrator selector (?Selector?). The two SelectOrs shall then have forty (40) days to select an arbitratorywho shall serve as the ?nal arbitrator for the dispute. (The arbitrator chosen by the parties hereto or by the Selectors, as the case may he, shall hereinafter be referred to as the ?Arbitrator?). The Arbitrator shall not be an Affiliate of any of the parties hereto. . 2. The arbitration shall be held in Los Angeles County, California. The parties shall submit to the Arbitrator the Arbitration Notice and the Arbitration Response and any other facts regarding the dispute of which any party desires. 3. The ArbitratOr shall apply the arbitration rules set forth below in making his or her decision. The decision of the Arbitrator shall be rendered within sixty (60) days'of the close of the hearing record, shall be in writing and shall contain ?ndings of fact and conclusions of law. Arbitration Rules. 1. The Arbitrator shall allow reasonable discovery, which he or she determines is necessary for: determination, of the issues presented. 2. The Arbitrator shall agree to resolve all factual disputes print to resolving legal disputes. 3. The Arbitrator shall be guided by, and shall substantially comply with, the thennapplicable Federal Rules ovaidence. 4. The Arbitrator is empowered to include in any award made hereunder such relief as theArbitrator deems (other than punitiVC damages. or attorneys? fees), including, without limitation, injunctive relief in addition to or in lieu of monetary damages. 5. Should any party refuse or neglect to appear or participate in the arbitration proceedings, including the procedures relating to the selection of an Arbitrator, the participating party may select the Arbitrator and the Arbitrator is einpowered to decide the controversy in accordance with whatever evidence is presented. - - 6l607229. - 6 6. The Arbitrator?s award shall be in a form. suf?cient to clearly the parties of the Arbitrator?s decision. - - 7. The award of the Arbitrator shall be binding on the parties. Q. Waiver of Trial bY Jury. EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN CONNECTION WITH ANY ACTION OR PROCEEDING INSTITUTED UNDER OR RELATING TO THIS AGREEMENT, OR ANY OTHER DOCUMENT EXECUTED PURSUANT HERETO, OR IN CONNECTION WITH ANY COUNTERCLAIM RESULTING FROM ANY SUCH ACTION OR IN WITNESS WHEREOF, and. intending to be legally bound, the parties hereto af?x their signatures below and execute this Agreement under seal. THE COMPANY: PHARMACY, LLC .f By: O74, ., Russell Neil Reitz, Managing Member \i MANAGER: ISOLANI, By: x/K/ Russell Neil Reitz 6I607229J 7 EXHIBIT 3 a - . ms. 4.-. - I-.. z?au. From: Ohta, Jason M. Sent: Thursday, July 30, 2015 4:21 PM gary@kaufmanlawgrouplacom Subject: Pharmacy: Mediation Gary, I spoke with my client this afternoon and informed them about the discussion we had this morning concerning mediation. My client would like Mr. Reitz to reconsider lsolani?s reasonable conditions before conducting the mediation. First,'lsolani requests that Mr. Reitz deposit the reimbursement checks (in excess of into a bank account so lsolani may properly manage the business pursuant to the Management Services Agreement dated November 2014. Second, lsolani requests that Mr. Reitz resign as the PIC/employee of Third, lsolani requests that Mr. Reitz state his intentions whether he wants to close the Purchase Agreement we entered into on November 2014 or if he prefers to unwind the transaction. Finally, lsolani requests that the scope ofthe mediation be specifically defined to cover the particular issues that Dr. Reitz wishes to resolve. I hope that your client will agree to these conditions so we may participate in a productive mediation. I am available to discuss at your earliest convenience. Best Regards, Jason Jason M. Ohta Special Counsel Duane Morris LLP 750 Street. Suite 2900 San Diego. CA 92101-4681 P: +1 619 744 2235 F: +1 619 923 2673 JOhta@dua nemorriscom RNEY OR PARTY WITHOUT ATTORNEY (Name, 8 number, and address): FOR COURT USE ONLY Mu. ?31313?? 430 FAX No: FOR (?mt .M .1 .1 LC Suigt?lor Court of California SUPERIOR COURT OF CALIFORNIA, UNTY cum STREET ADDRESS: tum L05 Angcles MAILING ADDRESS: BRANCH NAME: Coo Mk?) 3e Sher 'i Executive Of?cer/Clerk CASE NAMERos Rub; 2A- Ok Judi ,m eputy CIVIL CASE COVER SHEET Complex Case Designation CASE NUMBER: 802233;? I: 51:53:: Counter Joinder 5 9 3 6 demanded demanded is Filed with first appearance by defendant JUDGE exceeds $25,000) $25,000 or less) (Cal. Rules of Court, rule 3.402) DEPT: Items 1?6 below must be completed (see instructions on page 2). Auto Tort Auto (22) Uninsured motorist (46) Other PIIPDIWD (Personal lnjuryIProperty Damage/Wrongful Death) Tort Asbestos (04) Product liability (24) Medical malpractice (45) Other (23) (Other) Tort Civil rights (08) Defamation (13) Fraud (16) Intellectual property (19) Professional negligence (25) Other non-PliPD/WD tort (35) Employment Wrongful termination (36) El Other employment (15) Real Property '3 Other real property (26) Unlawful Detainer Business tort/unfair business practice (07) Judicial Review . Check one box below for the case type that best describes this case: Contract Breach of contract/warranty (06) Rule 3.740 collections (09) Other collections (09) Insurance coverage (18) Other contract (37) Eminent domain/Inverse condemnation (14) Wrongful eviction (33) Commercial (31) Residential (32) Drugs (38) Asset forfeiture (05) Petition re: arbitration award (11) El I: Writ of mandate (02) IE Other judicial review (39) Provisionally Complex Civil Litigation (Cal. Rules of Court, rules 3.400-3.403) regulation (03) Construction defect (10) Mass tort (40) Securities litigation (28) Environmental/Toxic tort (30) Insurance coverage claims arising from the above listed provisionally complex case types (41) Enforcement of Judgment Enforcement of judgment (20) Miscellaneous Civil Complaint I: RICO Other complaint (not speci?ed above) (42) Miscellaneous Civil Petition Partnership and corporate gavernance (21) Other petition (not speci?ed above) (43) owner? I This case I: is (Eds not factors requiring exceptional judicial management: a. Large number of separately represented parties b. Extensive motion practice raising difficult or novel issues that will be time-consuming to resolve c. Substantial amount of documentary evidence Nymber of causes of action (specify): This case I: is iS not I 7?0? PD If" Glucrevxsk.? (TYPE OR PRINT NAME) a class action suit. Ifnthere are any known related cases, file and serve a notice of related case. (You may use form CM-015.) (SIGNATURE OF complex under rule 3.400 of the California Rules of Court. If the case is complex, mark the d. I: Large number of witnesses e. Coordination with related actions pending in one or more courts in other counties, states, or countries, or in a federal court I: Substantial postjudgmentjudicial supervision Remedies sought (check all that apply): monetary b. $Ionmonetary; declaratory or injunctive relief 0. l:]punitive NOTICEV Plaintiff must ?le this cover Sheet with the ?rst paper ?led in the action or proceeding (except small claims cases or cases ?led under the Probate Code, Family Code, or Welfare and Institutions Code). (Cal. Rules of Court, rule 3.220.) Failure to file may result in-sanctions. 0 File this cover sheet in addition to any cover Sheet required by local court rule. 0 lf-this case iS complex under rule 3.400 et seq. of the California Rules of Court, you must serve a copy of this cover sheet on all other parties to the action or proceeding. 0 Unless this is a collections case under rule 3.740 or a complex case, this cover sheet will be used for statistical purposes onl . age1of2 Form Adopted for Mandatory Use Judicial Council of California CM-010 [Rev. July 1, 2007] CIVIL CASE COVER SHEET Cal. Rules 01 Court, rules 2.30, 3.220. 3.400-3.403, 3.740; Cal. Standards ofJUdicial Administration, std. 3.10 w. courtinfo. ca. gov CM-010 CM-010 INSTRUCTIONS ON HOW TO COMPLETE THE COVER SHEET To Plaintiffs and Others Filing First Papers. If you are filing a ?rst paper (for example, a complaint) in a civil case, you must complete and file, along with your ?rst paper, the Civil Case Cover Sheet contained on page 1. This information will be used to compile statistics about the types and numbers of cases ?led. You must complete items 1 through 6 on the sheet. In item 1, you must check one box for the case type that best describes the case. If the case ?ts both a general and a more speci?c type of case listed in item 1, check the more specific one. If the case has multiple causes of action, check the box that best indicates the primary cause of action. To assist you in completing the sheet, examples of the cases that belong under each case type in item 1 are provided below. A cover sheet must be filed only with your initial paper. Failure to ?le a cover sheet with the ?rst paper filed in a civil case may subject a party, its counsel, or both to sanctions under rules 2.30 and 3.220 of the California Rules of Court. To Parties in Rule 3.740 Collections Cases. A "collections case" under rule 3.740 is defined as an action for recovery of money owed in a sum stated to be certain that is not more than $25,000, exclusive of interest and attorney's fees, arising from a transaction in which property, services, or money was acquired on credit. A collections case does not include an action seeking the following: (1) tort damages, (2) punitive damages, (3) recovery of real property, (4) recovery of personal property, or (5) a prejudgment writ Of attachment. The identification of a case as a rule 3.740 collections case on this form means that it will be exempt from the general time-for-service requirements and case management rules, unless a defendant ?les a responsive pleading. A rule 3.740 collections case will be subject to the requirements for service and obtaining a judgment in rule 3.740. To Parties in Complex Cases. In complex cases only, parties must also use the Civil Case Cover Sheet to designate whether the case is complex. If a plaintiff believes the case is complex under rule 3.400 of the California Rules Of Court, this must be indicated by completing the appropriate boxes in items 1 and 2. If a plaintiff designates a case as complex, the cover sheet must be served with the - complaint on all parties to the action. A defendant may ?le and. serve no later than the time of its ?rst appearance a joinder in the plaintiff's designation, a counter-designation that the case is not complex, or, if the plaintiff has made no designation, a designation that the case '5 Comp'ex' CASE TYPES AND EXAMPLES Auto Tort Auto (22)?Personal Injury/Property Damage/Wrongful Death Uninsured Motorist (46) (if the case involves an uninsured motorist claim subject to arbitration, check this item instead of Auto) Other (Personal Injury! Warranty property Damage/wrongful Death) Other Breach of Contract/Warranty Tort Collections money owed, open Asbestos (04) book accounts) (09) . I Enforcement of Judgment (20) Asbestos property Damage Collection Case?Seller Plaintiff Abstract of Judgment (Out of Asbestos persona) Injury) OthecrI Prgmissory NotelCOIIections JUdgment (non as - Product or Insurance Coverage (not provisionally . domestic relations) toxic/environmental) (24) Complex) (18), S'Ste'r State: JUdgment Medical Malpractice (45) Auto Subrogatron Administrative Agency Award Medical alpractice_ Other Coverage (not unpaid taxes) Physicians Surgeons Other Contract (37) Plenum/Certi?cation of Entry Of Other Professional Health Care Contractual Fraud JUdgmem 0? Unpa'd Taxes Malpractice Other Contract Dispute Othecr; Enforcement 0? JUdeent Other (23) Real Property M. as; I Premises Liability slip 'Vl 0MP and fall on emna ion I intentional B)odi y Injury/PD/WD Wrongful Eviction (33) Otherbcompf?nt ("or Spec??ed (ed. assault. vandalism) Other Real Property quiet title) (26) o?l?e) (t I. I intentional in?iclion 0f Writ of Possession of Real Property {new Emotional Distress Mortgage Forecloswe harassment) Negligent In?iction of Quiet Tine Emotional Distress Other Real Property (not eminent 0:10 ages 'en. 1 I . Other domain, landlord/tenant, or e? ommerct'an/ omp am I (Other) Tort foreclosure) omega) Graigfn'comp Business Tort/Unfair Business UNI-ilme Det?lner Praetice (on commerc'al (31) Miscellaneous Civil Petition Civil Rights discrimination, Residentia (32) Partnership andCorporate jalse EWGSU (not Drugs (38) (if the case involves illegal .- . Governance (21) (08) - . drugs, check this item; otherwrse, Other petition (not Speci?ed Defamation (99-. Slander. llbe') report as Commercial or Residential) above) (43) I Judicial Review Civil Harassment Frayd (16) Asset Forfeiture (05) workpiece Vib enc? Intellectual Property (19) Petition Re: Arbitration Award (11) Elder/Dependent Adun Pnplessional Negligence . Writ of Mandate (02) Abuser Legal Malpractice Writ?Administrative Mandamus Election Contest Professional_Malpractice Writ?Mandamus on Limited Court petition for Name Change (not medical or legal) Case Matter - - Oth?er Tort (35) Pem'm f?r Re'le?mm Late Contract Breach of Contract/Warranty (06) Breach of Rental/Lease Contract (not unlawful detainer or wrongful eviction) Contract/Warranty Breach?Seller Plaintiff (not fraud or negligence) Negligent Breach of Contract/ Provisionally Complex Civil Litigation (Cal. Rules of Court Rules 3.400?3.403) Regulation (03) Construction Defect (10) Claims Involving Mass Tort (40) Securities Litigation (28) EnvironmentaliToxic Tort (30) Insurance Coverage Claims (arising from provisionally complex case type listed above) (41) Enforcement of Judgment Writ-Other Limited Court Case Claim Employment I . Review Other Civil Petition Termlnai'on (35) Other Judicial Review (39) Other Employment (15) Review of Health Of?cer Order H. Noticeof Appeal?Labor . - Commissioner Appeals . crer CASE COVER SHEET CM-010 ['R'elr. July 1, 2007] Page 2 of 2 SHORT TITLE: 55,001" I LLC, II c+el. CASE NUMBER 3c S'?zrsl 3059386 CIVIL CASE COVER SHEET ADDENDUM AND STATEMENT OF LOCATION (CERTIFICATIE OF GROUNDS FOR ASSIGNMENT T.O COURTHOUSE LOCATION) This form is required pursuant to Local Rule 2.0 in all new civil case ?lings in the Los Angeles Superior Court. Item I. Check the types of hearing and ?ll in the estimated length of hearing expected for this case: YES CLASS CI YES LIMITED EYES TIME ESTIMATED FORTRIAL El El DAYS Item ll. Indicate the correct district and courthouse location (4 steps If you checked "Limited Case", skip to Item Ill, Pg. 4): Step 1: After ?rst completing the Civil Case Cover Sheet form, ?nd the main Civil Case Cover Sheet heading for your case in the left margin below, and, to the right in Column A, the Civil Case Cover?Sheet se type you selected. Step 2: Check Superior Court type of action in Column below which best describes the nature of this case. Step 3: In Column C, circle the reason for the court location choice that applies to the type of action you have checked. For any exception to_the court location, see Local Rule 2.0. Applicable Reasons for Choosing Courthouse Location (see Column below) 1. Class actions must be ?led in the Stanley Mosk Courthouse, central district. 6. Location of property or permanently garaged vehicle. 2. May be ?led in central (other county, or no bodily injury/property damage). 7. Location where petitioner resides. 3. Location where cause _of_ action arose. 3. Location wherein defendantlres ondent functions wholly.? 4. Location where bodily injury, death or dama occurred. 9. Location where one or mpre of arties reside. . 5. Location where performance requrred or de endant resides. 10. Location of Labor Commissioner 0 ce Step 4: Fill in the information requested on page 4 in Item Ill; complete Item IV. Sign the declaration. m: as); .o t, 13.. Damage/Wrongful Death 1.. 2.4- .2 Uninsured Motorist (46) El A7110 Personal Injury/Property DamageNVrongful Death?Uninsured Motorist El A6070 Asbestos Property Damage Asbestos (04) 1: A7221 2. t: 0 . a 2 Product Liability (24) CI A7260 Product Liability (notasbestos ortoxiclenvironmental) 1..2., 8. El A7210 Medical 34-9"? .2 Medical Malpractice (45) ?as: En El A7240 Other Professional Health Care Malpractice 1., 4. 35.4% .6 El A7250 Premises Liability slipa?nd fall) 1 4 Other i=3; Personaunjury El A7230 Intentional Bodily InjuryIProperty DamageNVrongful Death 1 4 {2:35 a Prope?y Damage assault, vandalism, etc.) {Mo wron?gugfeath El A7270 Intentional ln?iction of Emotional Distress 1"3? 1 El A7220 Other Personal lnjuryIProperty Damage/Wrongful Death 1"4? I if}: - i - -. CIVILCASECOVERSHEET ADDENDUM, - -, Local Ru e2.0 MISC Approved 03-04 AND STATEMENT OF LOCATION Page 1 of 4 SHORT TITLE: CASE NUMBER .?Other Commercial/Business Tort (not haul/breach of contract) . . Civil Rights (08) A6005 Civil Rightleiscrirnination 1..2.. 3. . ED Defamation (13) A6010 Defamation (slanderllibet) 3. 5 EVE: 5 Fraud (16) A6013 Fraud (no contract) 3. I: - ?76 A6017 Legal Malpractice 3. a. a Professional Negligence (25) El A6050 Other Professional Malpractice (not medical or legal) 1..2..3. 2 Other (35) A6025 Other Nan-Personal InjuryIProperty Damageton 2.3. Wrongful Termination (36) El A6037 Wrongful Termination Other Employment (15) Lu El A6109 LaborCommissionerAppeals 10. A6004 Breach of Rental/Lease Contract (not unlawful detainer or 2 5 eviction) fC reac 066;? arrany El A6008 ContracWVarranty Breach -Seller Plaintiff (no fraud/negligence) 2"5' ("0t insurance) A6019 Negligent Breach of Contract/Warranty (no fraud) 1"2"5' A6028 Other Breach of Contract/Warranty (notfraud ornegtigence) 1"2"5' El A6002 Collections Case-Seller Plaintiff 2., Cotlections (09) 8 A6012 Other Promissory Note/Collections Case 2.5. I Insurance Coverage (18) El A6015 Insurance Caverage (not complex) 1..2..5..8. I I El A6006 Contractual Fraud I Otherpontract(37) El A6031 Tartiouslnterferenoe CI A6027 Other Contract Eminent Domain/Inverse . . . Condemnation (14) . Cl A7300 EminentDomain/Condemnation Numberof parcels 2. a Wrongful Eviction (33) El A6023 Wrongful Eviction Case I El A6018 Mortgage Foreclosure 2.6. Q) 0! Other Real Property (26) El A6032 Quiet Title 2.,6 1 El A6060 Other Real Property (not eminentdomain. tandlord/tenant, foreclosure) 2,6. I 133;; I unlawmlBeggar?commerce! A6021 Unlawful Detainer?Commercial (notdrugs orwrongful eviction) 2..Resldent'aI A6020 Unlawful Detainer-Residential (notdrugs or wrongful eviction) - a Unlawful Detamer~ . . a .- Unlawful Detainer-Drugs (38) El A6022 Unlawful Detainer-Drugs - 2., 6. rye-ii .. CIVIL COVER .1. Local Rule 2.0 Approved 03-04 STATEMENT OF LOCATION '?age20f4?. t- ., 11 q. - A. 5?1 SHORT TITLE: CASE NUMBER - *1 at a: ?j?ptic'gbi: . i - a mm 'Asset Forfeiture (05) El A6106 Asset Forfeiture Case 7 I 2.6. a Petition re Arbitration (11) El A6115 Petition to CompellCon?rmNacateArbitration 2.5. a: A6151 Writ-Administrative Mandamus (U 2? Writ of Mandate (02) A6152 Writ-Mandamus on Limited Court Case Matter 2. 3-. El A6153 Writ-Other Limited Court Case Review 2. OtherJudicialReview(39) El A6150 OtherWritlJudicial Review I: Antitrust/Trade Regulation (03) El A6003 Regulation 1., 2.. 8. .2 45 . Construction Defect(10) El A6007 Construction Defect I .5 . . . M355 A6006 Claims Involving Mass Tort - 3; Securities Litigation (28) El A6035 Securities Litigation Case I I i oxnc ort . . Environmental (30) El A6036 Tochort/Envrronmental 1..2..3..6. 1 . Insurance Coverage Claims . 0- Complex Case (41) El A6014 Insurance Coverage/Subrogatlon (complex case only) 1., 2., 5., 8. El A6141 SisterState Judgment 2.9. A6160 AbstractofJudgment 2.6. u: 5? Enforcement El A6107 Confession of Judgment (non-domesticrelations) 2.9. 3: ?fJUd9mem(20) El A6140 Administrative AgencyAward (not unpaid taxes) . Lu 3 I A6114 Petition/Certi?cate for Entryof Judgment on Unpaid Tax I El A6112 OtherEnforcementofJudgmentCase . 9. - RICO (27) A6033 Racketeering (RICO) Case - . A6030 Declaratory RelietOnly A - - - . 47,2778; - . 8 OtherComplaims A6040 lnjunctive (NOtSpecr?ed El A6011 Other Commercial ComplaintCase (non-tortlnon-complex) . 1:1 A6000 Other Civil Complaint (non-tortlnon-complex) Partnersmp corporation A6113 Partnership and Corporate Governance Case Governance (21) - El A6121 Civil Harassment ?h I fang El A6123 Workplace Harassment 2,3,9. "137"" . I i .- 1 Other Petitions A6124 Elder/Dependent Adult Abuse Case' - . 3 "zip-E (Not Speci?ed Above) El A6190 Election Contest . A6110 Petition forChange ofName - 2.7. Cl A6170 Petition for Relief from Late Claim Law 2., 3., 4., 8. I Cl A6100 Other Civil Petition . - I thief if: - 109 (Rev. 03/11) CIVIL CASE COVER SHEET ADDENDUM Local Rule 2.0 Approved 03-04 AND STATEMENT OF LOCATION Page 3 of 4 SHORT TITLE: CASE NUMBER Item Statement of Location: Enter the address of the accident, party's residence or place of business, performance, or other circumstance indicated in Item Step 3 on Page 1, as the proper reason for ?ling in the court location you selected. REASON: Check the appropriate boxes for the numbers shown under Column for the type of action that you have selected for this case. U1. U2. U3. U4. U5. U6. U7. U8. U9. U10. I ADDRESS: (05: Via Mon CAM/via 6Mon? STATE: ZIP CODE: Item IV. Declaration of Assignment I declare under penalty of perjuryI under the laws of theState of California that the foregoing is true and correct and that the above-entitled matter is properly ?led to? assignment to the Rule 23-9. cc) end idli- Dated: courthouse in the District of the Superior Court of California, County of Los Angeles [Code Civ. Proc., 392 et seq.. and Local (SI A URE OF PA PLEASE HAVE THE FOLLOWING ITEMS COMPLETED AND READY TO BE FILED IN ORDER TO PROPERLY COMMENCE YOUR NEW COURT CASE: 1. Original Complaint or Petition. If?ling aIComplaint, a completed Summons form for issuance by the Clerlf. 2 3. Civil Case Cover Sheet, Judicial Council form CM-010. 4 Civil Case Cover Sheet Addendum and Statement of Location form, LACIV 109, LASC Approved 03-04 (Rev. 03/11). Payment in full of the ?ling fee, unless fees have been waived. 6. A signed order appointing the Guardian ad Litem, Judicial Council form if the plaintiff or petitioner is a minor under 18 years of age will be required by Court in order to issue a summons. 7. Additional copies of documents to be conformed by the Clerk. Copies of the cover sheet and this addendum must be served along with the summons and complaint, or other initiating pleading in the case. HEACIV 109 (Rev. 03/11) Approved 03-04 CIVIL CASE COVER SHEET ADDENDUM AND STATEMENT OF LOCATION Local Rule 2.0 Page 4 of 4