Cw aa Gary Jay Kaufman, Esq. (State Bar No. 92759) -gary@kaufmanlaw groupla.com Colin Hardacre, Esq, (State Bar No, 250915) colin@kaufmanlawgroupla.com — Fl ILED ‘Natasha L. Hill, Esq. (State Bar No. 249787) County af bea ae natasha@kaufmanlawgroupla.com . « THE KAUFMAN LAW GROUP SEP 8 2015 1901 Avenue of the Stars, Suite 1010 Sherr k smcert Los Angeles, California 90067 8 Dep Telephone: (310) 286-2202 Tennifer De Luna Facsimile: (310) 712-0023 Attomeys for Defendants, Russell N. Reitz and R&O Pharmacy, LLC SUPERIOR COURT OF THE STATE OF CALIFORNIA. FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT Isolani, LLC, caseno. RC $43 §6) Plaintiff, DECLARATION OF GARY JAY KAUFMAN RE OPPOSITION TO v. PLAINTIFF'S EX PARTE APPLICATION R&O Pharmacy, LLC; and Russell N. Reitz, _| Date: September 8, 2015, Time: 8:30 a.m, Defendants. Dept.: 82 ad Declaration of Gary Jay KaufinanDECLARATION OF GARY JAY KAUFMAN 1, Gary Jay Kaufinan, declare: 1, Taman attomey at law, duly licensed to practice in the State of California and my firm, The Kaufman Law Group, represents Russell N. Reitz and R&O Pharmacy, LLC in this action. Thave personal knowledge of all the facts set forth in this declaration and, if called and sworn as a witness at a hearing, I would and could testify as set forth herein. 2. Attached as Exhibits A through I are true and correct copies of ceitain documents relevant to the underlying dispute between Russell Reitz, R&O Pharmacy and plaintiff, Isolani, LLC. I declare under penalty of perjury, under the laws of the State of California, that the foregoing is true and accurate and that this declaration was exeputed by me on September 7, 2015 at Los Angeles, California. Gary Jay Kaufman Declaration of Gary Jay Kaufman 2Gary Jay Kaufman From: Gary Jay Kaufman Sent: Monday, September 07, 2015 2:29 PM To: ‘Guerena, Heather U. Ce: “Ohta, Jason M.'; Colin Hardacre’ Subject: RE: EX PARTE NOTICE - TUESDAY, SEPTEMBER 8, 2015 at 8:30 AM - ISOLANI v REITZ et al Heather, ‘Your firm and your clients have known for atleast six weeks that Mr. Reitz was in receipt of checks paid to his company to protect, himself and his company from the massive potential / actual civil, regulatory and even potential criminal liability that your clients have exposed hin to due to their malfeasance. We have outlined this conduct in prior correspondence, most recently our letter of. ‘August 31, 2015, to which your clients have provided no denials. AAs you are aware, your clients cannot feign a crisis on a holiday weekend in an attempt to get around notice requirements by claiming, exigent circumstances when they have known about this issue for six weeks and have done nothing. I am not going to engage in any further correspondence with you today as am going to get back to my family Labor Day barbeque. 1 look forward to receiving your papers. Gary Gary ay Keutinan THE KAUFMAN LAW GROUP 1901 Avenve ofthe Sts, Suite 1010 Ls Angeles, California 90067 “Telephone: (310) 28 Facsimile: (310) 712.0023, From: Guerena, Heather U. [mailto:HUGuerena@duanemorris.com] Sent: Monday, September 07, 2015 1:56 PM To: ‘Gary Jay Kaufman’ ta, Jason M.; ‘Colin Hardacre Subject: RE: EX PARTE NOTICE - TUESDAY, SEPTEMBER 8, 2015 at 8:30 AM - ISOLANI v REITZ et al Gary, ‘As you are aware, the California Rules of Court permit less than a full court day notice or even no notice when notice could)defeat the purpose of the ex parte relief sought. Such exigent circumstances exist here. Reitz’s conduct with respéct to hiding the checks gives rise to serious concerns that full notice would have provided him with an opportunity to hide, transfer, or otherwise convert the funds which he is wrongfully withholding. However, if Reitz is willing to enter into a stipulation today, which we will file tomorrow to be entered by the court that Reitz will (2) turn all of the checks/monies over to you to be held in trust, (2) provide an accounting of the checks/monies; and (3) agree that Reitz and R&O are prohibited from transferring, hiding, or otherwise misusing the cheéks/monies either until the dispute is resolved between the parties or until the right to attach motion can be heard by thé court, then we will agree not to move forward with the ex parte hearing tomorrow morning. MH wuI can be reached on my cell phone & 323-1496) if you would like to discuss a &., agreeable arrangement. If your client is not willing to reach an agreement today to ensure the checks/monies are secured, then we will be forced to move forward with the ex parte tomorrow morning, Shortly | will be forwarding copies of the papers we intend to file with the court tomorrow by separate email due to the size of some of the exhibits. The only additional docurnent that will be filed is my declaration which will be updated to reflect our communications. Heather U. Guerena Attorney Duane Morris LLP 750 B Street, Suite 2900 San Diego, CA 92101-4681 P: #1 619 744 2208 F: +1619 923 2624 C: +1 619 823 1496 From: Gary Jay Kaufman [mailto:aary@kaufmanlawaroupla.com) Sent: Monday, September 07, 2015 12:14 PM To: Guerena, Heather U. Cc: Ohta, Jason M.; ‘Colin Hardacre’ ‘Subject: RE: EX PARTE NOTICE - TUESDAY, SEPTEMBER 8, 2015 at 8:30 AM - ISOLANI v REITZ et al Heather / Jason, Just saw your email that was in my spam folder. You both must know that your purported notice over the holiday weekend for tomorrow morning is invalid. Please advise me immediately if you will agree to withdraw this notice. Should you fail to do so, we ‘will seck all appropriate sanctions from the court. In the meantime, please provide me with @ copy of your papers. Very truly yours, Gary Gary Jay Kautinan THE KAUFMAN LAW GROUP ~ 1901 Avenue o the Stats, Suite 1010 os Los Angeles, Califomia 90067 © : Telephone: (310) 286-2202 Focsimile: (310) 712-0023, From: Guerena, Heather U, [mailto:HUGuerena@duanemorris.com) Serit: Sunday, September 06, 2015 5:18 PM To! dary@kaufmanlawaroupla.comPLEASE TAKE NOTICE that on Tuesday, September 8, 2015 at in the Superior Court of California, Los Angeles County, located at 111 North Hill Street, Los Angeles, California, in Department 82 (pursuant to L.A. Local Rule 3.5, department 82 is listed as the department responsible for hearing writs on Tuesdays at 8:30 am; however, the court could also assign the ex parte to be heard in either departments 85 or 86 as well) [solani LLC will file a complaint and ex parte application for a right to attach order and/or a temporary protective order against R&O Pharmacy, LLC ("R&O") and Russell Reitz ("Reitz") to: (1) Prohibit Reitz and R&O from transferring, hiding, or otherwise misusing the checks/monies received in connection with the operations of the Pharmacy located at 651 Via Alondra, Units 708 and 709, Camarillo, CA 93012 operated by R&O, which are estimated to exceed $15 milion, (2) Awrit of attachment of all checks that Reitz has taken, hidden, or otherwise withheld and any bank accounts in which any checks received in connection with the operation of R&O have been deposited, (3) an order for an accounting of the checks/monies received by Reitz and R&O in connection with the operation of the Pharmacy, and (4) Such other relief that will assist with preserving the status quo and prevent Reitz or R&O from transferring, hiding, or otherwise misusing the checks/monies. This ex parte will be brought pursuant to the terms of the Master Services Agreement and California Code of Civil Procedure § 483.010 et seq. and 1281.8, Please notify me by email (huguerena@duanemorris.com) or telephone (619-823-1496) to let me know whether you will intend to appear at the hearing and oppose the application. Please advise whether Reitz will agree to a stipulation to an accounting and deposit of all funds received by Reitz and R&O in an attorney trust account, interpleader, or with some other third party while the dispute between Reitz and Isolani is resolved. Heather U. Guerena Altorey Duane Moris LLP ‘750 8 Steet, Suite 2000 ‘San Diego, CA 82101-4681 Pi 610 746 2208 F: +4 619 929 2624 1: #1619623 1496 ‘am uanemors com For mie information about Duane Mois, please vist tp #wuw OuaneMoris com CConfgentiaty Noe: This electronic mal ransmission ls prvileged and conidental and is intended only forthe review ofthe party to whom tis adaressod Ifyou hhaverecaved the transmission m error please mnmedataly return tothe seer Unnfende ransmsion shal not conettae waive of Ine atom chen any cotter pewione|EXHIBIT A EXHIBIT ATHE KAUFMAN LAW GROUP August 31, 2015 SENT VIA EMAIL: JOhta@duanemorris.com AND FEDERAL EXPRESS, Jason M, Ohta, Esq, Duane Mortis LLP 750 B Street, Suite 2900 San Diego, CA 92101-4681 Re: NOTICE OF TERMINATION OF AGREEMENTS PROCURED BY FRAUD Russell Reitz / R&O Pharmacy, LLC /Isolani, LLC / Philidor Rx Services, LLC Dear Jason: ‘As you know, this office represents Russell Reitz. and R&O Pharmacy, LLC (“R&O”) in connection with the above matters. Reference is hereby made to the following documents: 1, Purchase and Sale Agreement dated December 1, 2014, by and between Mr. Reitz and R&O on the one hand, and Isolani, LLC (“Isolani”) on the other hand (“P&S Agreement”); 2. Management Services Agreement dated December 1, 2014, by and between Mr. Reitz and R&O on the one hand, and Isolani on the other hand (“MS Agreement”); 3, Business Associate Agreement dated December 1, 2014, by and between R&O and Isolani (“BAA Agreement”); and 4, Letter regarding an offer of employment dated November 13, 2014 from Andrew J. & Davenport, on behalf of Philidor Rx Services, LLC (“Philidor”) to Mr. Reitz, and wo signed by Mr. Reitz on November 14, 2014 (“Employment Letter”). rs) ‘The P&S Agreement, MS Agreement, BAA Agreement and Employment Letter may be 3) _Teferred to collectively herein as the “Agreements.”‘THE KAUFMAN LAW GROUP Jason M. Ohta, Esq. oasis Page 2 0f4 Isolani/Philidor and its representatives have feiled to refute, or even respond in most cases, to the various allegations of fraud and malfeasance that Mr. Reitz has levelled at them over the past two months. It is now crystal clear that Isolani/Philidor fraudulently induced Mr. Reitz to sign the Agreements in order to allow Isolani/Philidor to engage in a massive fraud. Isolani/Philidor never intended to honor the Agreements and have, in fact, not honored them in any way. Therefore, please be advised that the Agreements are void and unenforceable and Mr. Reitz and R&O hereby terminate all of the Agreements, effective immediately, + Mr. Reitz has detailed Isolani/Philidor and its representatives? fraud and malfeasance in painstaking detail through numerous emails and letters, most notably: 1, Mr. Reitz’s July 14, 2015 email to Eric Rice, Christopher Urban, Jamie Fleming, ‘Sherri Leon and John Came; 2. Mr. Reita’s July 20, 2015 email to Andrew Davenport; and 3. Our office’s July 22, 2015 letter to Mr. Rice. Copies of these documents are attached hereto as Exhibits 1, 2 & 3 for ease of reference. ‘These letters sind emails catalog Mr. Reitz’s grave concems regarding Isolani’s relationship to Philidor and Valeant Pharmaceuticals International; Isolani/Philidor's billing practices; the pressure that Isolani/Philidor placed on Mr. Reitz to sign blatantly false audit responses; and other highly questionable conduct. Itis now readily apparent that Isolani is simply a shell created by Philidor to perpetrate a massive fraud against not only Mr. Reitz and R&O, but also the California State Board of Pharmacy, various payer networks and as yet unknown entities and individuals. Just @ couple of months ago, Mr. Reitz discovered that in May of 2014, the California State Board of Pharmacy denied Philidor’s application for a Nonresident Pharmacy Permit based on numerous false statements in Philidor’s application (a fact that Philidor never revealed to Mr. Reitz). ‘Thus, Philidor targeted Mr. Reitz and R&O back in the fall of 2014 because it needed access to R&O’s valuable multi-state pharmacy licenses and payer contracts. Philidor then created solani as the instrumentality to improperly use R&O's NCPDP and NPI numbers to distribute pharmaceuticals in jurisdictions that Philidor would not have had access to but for R&O. Several times now, Mr. Reitz has demanded that Isolani/Philidor cease the illegal use of R&O's NCPDP and NPI numbers, On July 19, 2015, Mr. Davenport provided Mr. Reitz with written assurance via email that Isolani/Philidor had ceesed such activities. A copy of Mr. : Davenport's email is attached hereto as Exhibit 4 for ease of reference,THE KAUFMAN LAW GROUP. Jason M, Ohta, Esq, os3/is Page 3 of 4 Now, Mr. Reitz’s worst fears have been realized, as he has obtained irrefutable proof that, despite Mr, Davenport’s written assurance, Isolani/Philidor continue to use R&O’s NCPDP and NPI numbers to bill payers for prescriptions dispensed by Philidor. If that were not enough, Mr. Reitz: now has concrete evidence that representatives of Isolani/Philidor have signed false and misleading payer audits and falsely represented themselves as officers or employees of R&O (which of course they are not) to certain payers. Based on the above, Mr. Reitz reiterates that the Agreements are hereby terminated, effective immediately. Mr. Reitz. and R&O hereby demand that Isolani, Philidor and all of their representatives, agents and employees immediately cease and desist any and all activities in connection with R&O and take no further action. Specifically, Isolani, Philidor, and their representatives shall not: 1. __ Represent themselves as agents or employees of R&O to anyone, anywhere; 2, Take any further prescriptions on R&O’s behalf; 3. Have any further contact with Mr. Reitz and/or R&O’s employees; 4, Dispense any prescriptions on R&O’s behalf; 5. Bill for any prescriptions on R&O’s behalf; 6. Sign any payer audits on behalf of R&O; 7. Communicate with any payers and/or auditors on R&O’s behalf; or 8 Use R&O’s NCPDP or NPI numbers in any way, Please be further advised that Mr. Reitz will retain any and all funds in R&O’s possession in order to protect himself and Ré&O from any and all liabilities, known or unknown, to which Isolani/Philidor have exposed them. Mr. Reitz also anticipates that he and R&O will incur further > damages from Isolani/Philidor’s actions. Therefore, Mr. Reitz and R&O reserve the right to pursue further action against Isolani/Philidor to recover proper compensation. Demand is also hereby made that Isolani/Philidor immediately retum or destroy any protected health information (as defined in the BAA. Agreement) that Isolani/Philidor may have © created or received during its relationship with R&O. Mr. Reitz further demands that Isolani/Philidor immediately provide him with copies of all communications that Isolani/Philidor has had, or may have in the future, with R&O’s payers and/or auditors related to past audits, present audits, future audits, or inquiries related to any audits.THE KAUFMAN LAW GROUP Jason M, Ohta, Esq, ossi/is Page 4 of 4 This is not intended to be a full recitation of all liabilities, damages or claims that Mr. Reitz and R&O may have and Mr. Reitz and R&O reserve all of their rights and remedies. Please govern yourselves accordingly. Very yurs, GARY JAY KAUFMAN GIK:ch Enclosures ps. Wenote that the P&S Agreement, MS Agreement and BAA Agreement have notice provisions providing for delivery to Eric Rice’s attention, or via other means. Given your confirmation that you represent Isolani, Philidor and all relevant employees, as a matier of professional courtesy, we did not contact your clients directly. We assume that this letter satisfies the applicable notice provisions. If you disagree, please let me know immediately and we will see to it that the parties are duly served,EXHIBIT 1 EXHIBIT 1From: Reitz, Russell Sent: Tuesday, July 14, 2015 12:30 PM Tot Rice, Eric Ce: Urban, Christopher; Fleming, Jamie; Leon, Sherri; Carne, John Subject: R&O Pharmacy Dear Eric, | am writing to you In order to address some very significant issues that require your Immediate attention. First and foremost is the issue of Philidor’s improper, and perhaps illegal, use of my NCPDP number without my knowledge or consent to bill for prescriptions that were either: 1. filled by some other pharmacy (in some cases for drugs that R&O did not even stock or dispense); or 2, were filled and billed before the execution of the R&O purchase and sale agreement. {have been asked several times now to sign off on payer audits that reflect these types transactions. | am ‘not aware of any authority that would permit these types of practices. However, given your size and resources, perhaps you know something | don’t. if you have some authority that you believe authorizes these practices, please provide it to me no later than Friday, July 17, 2015 at 10:00 a.m. Pacific. | have asked for such authority from Jamie Fleming and Chris Urban and they have promised to provide it to me, but as of this writing I have received nothing. Therefore, | am inclined to believe that this authority does not exist. Even more troubling, when | first inquired about these audits and sought answers as to why some of the prescriptions appeared to have been filled by Philidor RX Services, not R&O, the response was to provide me with the same prescriptions, but with the Philidor Name eliminated. Needless to say, | was not fooled and 1refused to sign off on the audit, Based on these issues, and pending my receipt of the requested authority, as owner of R&O and the PIC in charge, | hereby demand that you cease and desist these activities immediately. The second, no less urgent issue that you must address is the status of Philidor / Isolani’s pharmacy permit application. As you may know, section 4,3 of the purchase and sale agreement for R&O called for written assurance from the California State Board of Pharmacy that itis prepared to immediately issue a temporary pharmacy permit. 1 know from past experience that this process does not take 7 months. | want to know why this has taken so long and I want copies of any and all internal transmittals / correspondence regarding this issue, as well as copies of all correspondence between Philidor / Isolani and the Pharmacy board regarding this issue. Ihave requested this information from Dean Griffin, but as of this writing, have still not received it. This fact, combined with my recent discovery that in December 2014, the California State Board of Pharmacy denied Philidor’s application for a Nonresident Pharmacy Permit based on numerous false statements in the application (which was never revealed to me at any point), leads me to believe that you have never submitted any permit applications to the board in connection with R&O. Please be advised that if | do not receive satisfactory answers to my concerns by Friday, July 17, 2015 at 10:00, a.m. Pacific, | will take any and all necessary and appropriate action, Nothing contained herein shall be considered a waiver of any of mine or R&O’s rights and remedies, all of which are expressly reserved. Best regards, Russell Reitz, Pharm.D. R&O Pharmacy ‘The information in this transmission is intended for official use only and may contain information from Philidor Rx Services that is privileged, confidential and exempt from disclosure under applicable law. Itis intended for the exclusive use of the persons or entities to which itis addressed. If you are not an intended recipient or the employee or agent responsible for delivering this transmission to an intended recipient, be aware that any disclosure, dissemination, distribution or copying of this communication, or the use of its contents, is strictly prohibited. If you received this transmission in error, please notify the sender by return e-mail and delete the material from any computer.EXHIBIT 2 EXHIBIT 2From: Reltz, Russell Sent: Monday, July 20, 2025 2:42PM A To: Davenport, Andy Subject: R&O Pharmacy Dear Andy, This responds to your email of July 17, 2015 and your follow-up email of yesterday. Thank you for your representation that you have “ceased all central processing involving R&O’s NPI number.” | trust that it will not happen again. My concerns are far from allayed, however, as | have now reviewed the materials that you provided to me on Friday and they raise far more questions than they answer. First, after reviewing the transactional documents concerning R&O’s sale, | am perplexed as to why Philidor responding to my concerns instead of Eric Rice, who executed the purchase & sale agreement on Isolanis behaif. Does Philidor have any financial or beneficial interest in Isolani? What understanding, if any, is there between Philidor and Isolani relative to R&O? What financial or beneficial interest do you believe Philidor has in R&O? aPlease provide me with the answers to these questions, and send me copies of any and all correspondence / written agreements between 1) Philidor and Isolani, and 2) Philidor and R&O. Second, | just learned that Eric Rice recently signed off on an Argus-Humana audit, the same audit I refused to sign due to a lack of information. Eric Rice is not the PIC (I am ) and has never even stepped through R&O’s doors. | am not sure how he could verify the accuracy of anything pertaining to that audit. Did Philidor supply Mr. Rice with any documents to assist him with the audit? Ifo, what were they and please provide me with copies. Third, the files attached to your email included what appear to be Incomplete California State Board of Pharmacy permit application documents. Yet, you did not provide me with any response from the Board confirming receipt, or subsequent documents from the Board reflecting any action it may have taken. Has Philidor received any such communications from the Board? If so, please provide me with copies. Fourth, I see that Philidor is communicating with Herb Weinberg, Esq. regarding R&O. Does Mr. Weinberg represent Philidor, or Isolani? Fifth, after reviewing and reflecting upon the materials, you need to explain to me why | have been instructed to send checks from payers made out to R&O to Philidor. Finally, and of utmost importance, you still have not provided me with any documents or authority that would alithorize anyone else in the world to use my NCPDP number without my knowledge or consent to bill for prescriptions that were either: ._1. Filled by some other pharmacy that R&O has no ownership or beneficial interest in {in some cases for ,. dtugs that R&O did not even stock or dispense); or <2. were filled and billed before the execution of the R&O purchase and sale agreement. ' 2| ask you again to immediately provide me with these materials. Time is of the essence. You must provide me with substantive responses immediately, as my license and professional reputation are at stake. Best Regards, Russell Reitz, Pharm.D. R&O Pharmacy The information in this transmission is intended for official use only and may contain information from Philidor Rx Services that is privileged, confidential and exempt from disclosure under applicable law. itis intended for the exclusive use of the persons or entities to which it is addressed. If you are not an intended recipient or the employee or agent responsible for delivering this transmission to an intended recipient, be aware that any disclosure, dissemination, distribution or copying of this communication, or the use of its contents, is strictly prohibited. if you received this transmission in error, please notify the sender by return e-mail and delete the material from any computer. 6GEXHIBIT 3 EXHIBIT 3THE KAUFMAN LAW GROUP July 22, 2015 PERSONAL & CONFIDENTIAL VIA EMAL: erice@philidorreservices.com AND FEDERAL EXPRESS Mr, Eric Rice Isolani, LLC 400 Horsham Road, Suite 109 Horsham, PA 19044 Re: R&O Phermaoy / Isolani, LLC Dear Mr. Rice: Russell Reitz has retained this office in connection with the above-referenced matters Accordingly, please direct all future communications related to these matters to the undersigned, ‘We are in receipt of your email comespondence of July 20, 2015 and the various documents attached. We have also reviewed all previous correspondence between you and Mr, Reitz, as well as correspondence between Mr, Reitz and various individuals at Philidor RX Services, LLC (“Philidor”) between July 14 and July 21, 2015, Mr, Reitz also filled us in on the approximetely fifteen minute in-person meeting that you hhad with him yesterday in Camarillo, after you flew in unannounced from Pennsyivania. At that meeting, Mr. Reitz was surprised to learn ftom you that three otter individuels affliated with Philidor — CEO, Andy Davenport; Controller, Jamie Fleming; and in-house counsel, Gretchen ‘Wisehart- also flew in fiom Pennsylvania to meet with Mr, Reitz, Your July 20 email did not substantively respond to any of the issues raised in Mr, Reita? email to you of July 14 (and appears to simply be a copy and paste from Mr. Davenport's email of July 17); Moreover, at yesterday's in-person meeting you neither: 1) Answered any of Mr, Reitz’ direct questions; nor 2) Refuted any of the facts raised by Mr. Reitz in his various comespondences over the past week,THE KAUFMAN LAW GROUP Mr. Bri Rlce OTRAS Page 2 of2 ‘Your continued silence indicates to us that Mr. Reitz’ suspicions are well-founded, You appear to be engaging in a widespread fraud perpetrated against numerous individuals and entities, including but not limited to, Mr, Reitz, R&O, the California State Board of Phermacy and the various payer networks, We believe that your actions constitute fraud, breach of contract, and potential RICO violations, among other acts of malfeasance, Please be advised that Mr. Reitz will ake all appropriate action to protect hs license and his reputation, both of which you have placed in serious jeopardy. You are hereby admonished not to.use Mr. Reitz’ NCPDP or NPI number in any manner whatsoever. Finally, you may be able to mitigate the damage you have caused, and are continuing to cause, to Mr. Reitz? reputation and business, by simply responding substantively in writing to his previous questions and requests. Please govemn yourself accordingly, GIK:chEXHIBIT 4 EXHIBIT 4From: Davenport, Andy Sent: Sunday, July 19, 2015 7:23 AM To: Reitz, Russell Subject: One Addendum to my last email Russ, (One iter | neglected to mention in my last email is that we ceased all central processing Involving R&O's NPI number following your conversation with Herb Weinberg on June 17th. While we remain comfortable with the practice, we halted activity pending coming to some alignment with you. You had asked In your email that we cease the contentious activity, and | Just wanted to let you know that we had already done so. Please let me know when you are avallable to chat. Enjoy your weekend. Regards, Andy ‘The information in this transmission is intended for official use only and may contain information from Philidor Rx Services that is privileged, confidential and exempt from disclosure under applicable law. It is intended for the exclusive use of the persons or entities to which it is addressed. If you are not an intended recipient or the 1‘employee or agent responsible for delivering this transmission to an intended recipient, be aware that any disclosure, dissemination, distribution or copying of this communication, or the use of its contents, is strictly prohibited. if you received this transmission in error, please notify the sender by return e-mail and delete the material from any computer.EXHIBIT B EXHIBIT BColin Hardacre From: Gary Jay Kaufman Sent: Monday, September 07, 2015 2:29 PM To: "Guerena, Heather U." ‘Ohta, Jason M.' ‘Colin Hardacre’ Subject: RE: EX PARTE NOTICE - TUESDAY, SEPTEMBER 8, 2015 at 8:30 AM - ISOLANI v REITZ et Heather, ‘Your firm and your clients have known for at least six weeks that Mr. Reitz was in receipt of checks paid to his company to protect himself and his company from the massive potential / actual civil, regulatory and even potential criminal liability that your clients have exposed him to due to their malfeasance. We have outlined this conduct in prior correspondence, most recently our letter of ‘August 31, 2015, to which your clients have provided no denials, As you are aware, your clients cannot feign a crisis on a holiday weekend in an attempt to get around notice requirements by claiming, exigent circumstances when they have known about this issue for six weeks and have done nothing. 1 am not going to engage in any further correspondence with you today as I am going to get back to my family Labor Day barbeque. 1 look forward to receiving your papers. Gary (Gary Jay Kautinan ‘THE KAUFMAN LAW GROUP 1901 Avenue of the Stars, Suite 1010 Los Angles, Calfomia 90067 Telephone: (310) 286-2202 Fassile: (910) 712-0023 From: Guerena, Heather U. [mailto:HUGuerena@duanemorris.com] Sent: Monday, September 07, 2015 1:56 PM To: 'Gary Jay Kaufman’ Cc: Ohta, Jason M.; ‘Colin Hardacre! ‘Subject: RE: EX PARTE NOTICE - TUESDAY, SEPTEMBER 8, 2015 at 8:30 AM - ISOLANI v REITZ et al Gary, As you are aware, the California Rules of Court permit less than @ full court day notice or even no notice when notice coult#defeat the purpose of the ex parte relief sought. Such exigent circumstances exist here. Reit2’s conduct with respéétt to hiding the checks gives rise to serious concerns that full notice would have provided him with an opportunity to hide, transfer, or otherwise convert the funds which he is wrongfully withholding. However, if Reitz i willing to enter into a stipulation today, which we will file tomorrow to be entered by the court that Reitz will (1) turn all of the checks/monies over to you to be held in trust, (2) provide an accounting of the checks/monies; and (3) agree that Reitz and R&O are prohibited from transferring, hiding, or otherwise misusing the chetks/monies either until the dispute is resolved between the parties or until the right to attach motion can be heard by thé court, then we will agree not to move forward with the ex parte hearing tomorrow morning. - v| can be reached on my cell phone (619-823-1496) if you would like to discuss a mutually agreeable arrangement. If your client is not willing to reach an agreement today to ensure the checks/monies are secured, then we will be forced to move forward with the ex parte tomorrow morning. Shortly | will be forwarding copies of the papers we intend to file with the court tomorrow by separate email due to the size of some of the exhibits. The only additional document that willbe filed is my declaration which will be updated to reflect our communications, Heather U. Guerena Attorney Duane Morris LLP 750 B Street, Suite 2900 San Diego, CA 92101-4681 P: +1 619 744 2208 F: +1619 923 2624 C: +1 619 823 1496 HUGuerena@duanemorris.com www.duanemorris.com From: Gary Jay Kaufman [mailto:gary@kaufmanlawaroupla.com) Sent: Monday, September 07, 2015 12:14 PM To: Guerena, Heather U. Ge: Ohta, Jason M.; ‘Colin Hardacre’ ‘Subject: RE: EX PARTE NOTICE - TUESDAY, SEPTEMBER 8, 2015 at 8:30 AM - ISOLANI v REITZ et al Heather / Jason, Just saw your email that was in my spam folder. You both must know that your purported notice over the holiday weekend for tomorrow morning is invalid. Please advise me immediately if you will agree to withdraw this notice. Should you fail to do so, we will seek all appropriate sanctions from the court. In the meantime, please provide me with a copy of your papers. Very truly yours, Gary Cary Jay Kautinan ‘THE KAUFMAN LAW GROUP 1901 Avenue of he Str, Suite 1010 = Los Angeles, Calfomia 90067 Telephone: (310) 286-2202 Facsimile: (310) 712-0023 From: Guerena, Heather U. [mailto:HUGuerena@duanemorris.com] Sent?Sunday, September 06, 2015 5:18 PM To: gary@kaufmanlawaroupla.com Ce: Ohta, Jason ‘Subject: EX PARTE NOTICE - TUESDAY, SEPTEMBER 8, 2015 at 8:30 AM - ISOLANI v REITZ et al Importance: High UPLEASE TAKE NOTICE that on Tuesday, September 8, 2015 at 8:30 a.m. in the Superior Court of California, Los Angeles County, located at 121 North Hill Street, Los Angeles, California, in Department 82 (pursuant to LA. Local Rule 3.5, department 82 is listed as the department responsible for hearing writs on Tuesdays at 8:30 am; however, the court could also assign the ex parte to be heard in either departments 85 or 86 as well) Isolani LLC will file a complaint and ex parte application for a right to attach order and/or a temporary protective order against R&O Pharmacy, LLC ("R&O") and Russell Reitz (“Reitz”) to: (2) Prohibit Reitz and R&O from transferring, hiding, or otherwise misusing the checks/monies received in connection with the operations of the Pharmacy located at 651 Via Alondra, Units 708 and 709, Camarillo, CA 93012 operated by R&O, which are estimated to exceed $15 million, (2) Awrit of attachment of all checks that Reitz has taken, hidden, or otherwise withheld and any bank accounts in which any checks received in connection with the operation of R&O have been deposited, (3) an order for an accounting of the checks/monies received by Reitz and R&O in connection with the operation of the Pharmacy, and (4) Such other relief that will assist with preserving the status quo and prevent Reitz or R&O from transferring, hiding, or otherwise misusing the checks/monies. This ex parte will be brought pursuant to the terms of the Master Services Agreement and California Code of Civil Procedure § 483.010 et seq, and 1281.8 Please notify me by email (huguerena@duanemorris.com) or telephone (619-823-1496) to let me know whether you will intend to appear at the hearing and oppose the application. Please advise whether Reitz will agree to a stipulation to an accounting and deposit of all funds received by Reitz and R&O in an attorney trust account, interpleader, or with some other third party while the dispute between Reitz and Isolani is resolved. Heather U. Guerena ‘Attoney Duane Moers LLP 7508 Steet, Sule 2000 San Diego, GA 87101-4681 Pret g10 744 2208 F: +1 6190025 2624, 6:41 619623 1496 ‘HuGverena@euanemons com dusrermoms com For m6 information about Ouane Monts, ploase vst hte: twnw DuaneMonts com @ Confidentiality Notice: This electronic mal wansmision i prvleged and confidential and is ntenced oly for he review ofthe pat to whom tis addressed you have reed ini vansmissionn ero, please mediately retum Ilo the sender. Unintended transmission shall nol consti waiver ofthe attorney ciel oF ary ainer eve. Ny a uyae zeeEXHIBIT C EXHIBIT CVALEANT Valeunt Pharmacouticals Worth America, LC “400 Somerset Corporate Alva ‘Bridgewater, Wi OSGO? (808) 977 1400 we, Valeantcom VIA FEDERAL EXPRESS Mr. Russell Reitz Manager of California Pharmacy Operations and PIC /Store Manager R&O Pharmacy, LLC 651 Via Alondra, Suite 708 Camarillo, CA 93012 Dear Mr. Reitz: {thas come to our attention that R&O Pharmacy, LLC (“R&O”) has outstanding invoices to Valeant Pharmaceuticals (“Valeant’), as of August 31, 2015, reflecting gross invoiced amounts due of $69,861,343.08, Valeant is contacting you so that you may take the requisite steps to ensure immediate payment and avoid further damage to Valeant and other parties. ‘Valeant reserves the right to take any and all actions to ensure tha itis paid amounts due to it in a timely fashion, and to seek any and all damages, including without Kimitation, for past and future lost profits as well as costs and expenses (including attorneys’ fees) incurred related to this matter. This also includes, ‘without limitation, taking any and all actions against R&O and any relevant individuals for not meeting contractual commitments. Sincerely, Wap Robert Chai-Onn Executive Vice President, Chief Legal Officer and General CounselEXHIBIT D EXHIBIT DRx Services, LLC _— @ Re Philidor Complete Product Order #31025 Finance Department : R&O May 13,2015 Valent Phormaceuticals 700 Route 202 / 206N Bridgewater, N) 08807 Please ship to: R&-O Pharmacy 651 Via Alondra, Suite 708 Camarillo, CA 95102 ay ae as = Sil nee Svsie! si? islet Ay BS clan Slo ot islou ge m1 ay. pea slt Se sf2d @ Bat Regards deh Tet Andrew | Davenport Cher Brecutve Ofcer Philidbr Rx Services. LLC» 330 inster Rd — Suite 350, Hatboro. PA 19040 17.1593 » f 267.965.2010pe Philidor oe Finance Department : R&O | ay 25 Valeant Pharmaceuticals 700 Route 202 / 206N Bridgewater, N) 08807 Please ship to: R&.O Pharmacy 651 Via Alondra, Suite 708 Camarillo, CA 93102 slit = lie = av 5) sit say aaa” lly ma}ale aa/5I" aay sly est Regards, on tee Andrew |. Davenport Chief Executive Officer Pthidor Rx Services. LLEXHIBIT E EXHIBIT EFrom: Gary Jay Kaufman [mailto:gary@kaufmanlawgroupla.com) Sent: Friday, July 31, 2015 4:22 PM To: ‘Ohta, Jason M." Subject: RE: R&O Pharmacy: Mediation Jason, We already had this discussion, I your elient (and please clarify who you represent, i.e, Isolani, Eric Rice, Andy Davenport, Philidor etc.) does not want to participate in the ron-binding mediation that we discussed without preconditions, then it ioks like there will be 1no mediation. Best regards, Gary Gary tay Kaufman ‘THE KAUFMAN LAW GROUP 1901 Avenve ofthe Stars, Suite 1010 Los Angels, California 90067 Telephone: (310) 286-2202 Facsimile: (G10) 712-0023 From: Ohta, Jason M. [maitto:]Ohta@duanemorris.com] Sens Tabata, uy 30, 2015 421 Pt nk a.com Subject RRO Pharmacy: Mediation Gary, | 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 Isolani’s reasonable conditions before conducting the mediation. First, solani requests that Mr. Reitz deposit the reimbursement checks (in excess of $3M) into a R&O bank account, 0 Isolani may properly manage the business pursuant to the Management Services Agreement dated 1November 2014. Second, Isolani requests that Mr. Reitz resign as the PiC/employee of R&O. Third, Isolani 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, solani requests that the scope of the mediation be specifically defined to cover the particular issues that Dr. Reitz wishes to resolve. icipate in a productive mediation. | am available to | hope that your client will agree to these conditions so we may par discuss at your earliest convenience Best Regards, Jason Jason M. Ohta ‘Special Counsel vane Moris LLP 750.8 Steet, Sute 2900 ‘San Diego, CA 92101-4081 Pitt g19 744 2235, F: 01 6190028 2673, For more information about Duane Monts, please vst hts ww, DuaneMonis com Contisentatty Notice: This electronic mail ansmisslon i prvleged and confidential ands intended ony forthe review of the pay to whom iis addressed f you nave receved ts wansmssion in vor please immediately return tothe sender. Uninlendeswansmssion shal not consti waive othe atoms. clent or any ater prep.EXHIBIT F EXHIBIT FFrom: Ohta, Jason M. [mailto:Ohta@duanemorris.com] Sent: Friday, August 14, 2015 2:16 PM To: Gary Jay Kaufman ‘Subject: RE: R&O Pharmacy Gary, Ljust eft you a voice message. Isolani did not threaten your client with litigation, but stated that “Isolani will seek all available legal remedies for any and all consequences of such defaults.” Pursuant to the Agreement, we believe these issues must first be adjudicated in mediation. Thus, your interpretation of my email was incorrect. Regarding the substance of your email, Isolani denies your allegations of wrongdoing. Please give a me a call at your convenience to discuss mediation options. Thanks. Jason From: Gary Jay Kaufman [mailto:ary@kaufmanlawaroupla.com) Sent: Thursday, August 13, 2015 5:52 PM To: Ohta, Jason M. ‘Subject: RE: R&O Pharmacy Jason « This responds to your email below. The “operational issues / problems,” “consequences” and “risks” that Isolaniscomplains of below are 100% of Philidor/Valeant/Isolani’s making and pale in comparison to the potential civil, criminal and regulatory liability that Mr. Reitz has been exposed to by Isolani, Philidor, Valeant, Mr. Rige, Mr. Davenport and others, Your email does nothing to respond to our repeated accusations of wrongdoing, but instead appears to be a rather transparent attempt by Isolani to create @ false and misleading record As such, our response is simple: please be advised that all factual allegations contained in your email of ‘August 12, 2015 are hereby denied without need for further response.As you are well aware, we have grave concems regarding Isolani’s resin ® to Philidor and Valeant; Isolani/Philidor’s billing practices; the pressure that Isolani/Philidor have placed on Mr. Reitz to sign blatantly false audit responses; and other highly questionable conduct. We have asked repeatedly for legal support for Isolani/Philidor’s positions, yet we have been provided none. Your email represents yet another failure to provide that critical information, which further confirms that it does not exist. Moreover, your email addresses neither 1) Isolani’s material breaches of its agreements relative to R&O Pharmacy, as outlined in multiple correspondences from Mr. Retiz and our office over the past month; nor 2) the seemingly simple question of who your firm represents, ie. Isolani, Eric Rice, Andy Davenport, Philidor, others, etc. Given the above, coupled with Isolani’s threat of litigation, we interpret your email to be a refusal to participate in mediation, notwithstanding your email of Friday, August 7, wherein you stated “I'll get back to you early next week regarding the mediation.” It appears that litigation will now provide the methodology for us to finally get the answers we need from all appropriate parties under oath. Isolani, Erie Rice, Andy Davenport and Philidor may be able to mitigate the damage they have caused, and are continuing to cause, to Mr. Reitz’ reputation and business, by simply responding substantively in writing to our previous questions and requests. Please govern yourself accordingly. Best regards, Gary (Gay tay Kaufinan THE KAUFMAN LAW GROUP 1901 Avenue of the Stars, Site 1010 Los Angeles, California 90067 Telephone: (310) 286-2202 Facsimile: (310) 712-0023, From: Ohta, Jason M. [mailto:]Ohta@duanemorris.com) Sent: Wednesday, August 12, 2015 10:12 AM To: gary@kaufmanlawaroupla.com Ce: Toner, David C. Subject: R&O Pharmacy Gary, (On August 6, 2015, Isolani, LLC asked your client, Russell Reitz, to provide certain financial information regarding R&O's operations pursuant to the Management Services Agreement (“Agreement”) dated November 2014. Instead of providing that information as required under the Agreement, Reitz requested that all communications go through counsgl. This email is in response to Reitz’s request. Your lient’s course of conduct, ignoring his obligations under the Agreement and normal operating procedures, has created the following business issues that have led to operational failures of the pharmacy and are continuing to create Significant liabilities. Reite's current actions have, among other things, increased payor audit risk and risk of licensing termination, "iThe following is a list of operational issues/problems your client has created that must be corrected immediately: Operational Issues Ignoring mail and invoice remittance procedures. No mail or invoices have been received from R&O for the last 4 weeks, in violation of agreed to operating procedures under the Agreement. No invoices have been received No checks have been received No payments have been deposited into any company bank accounts b. Other communications concerning the pharmacy’s operation have also been withheld. In addition, there has been limited communications received concerning all other aspects of the business including licensing, audits, notices and Board communications. 2. Impacts or Consequences if Not Corrected a. Reitz’s course of conduct creates significant jeopardy to the pharmacy which includes the following: i. No vendors or manufacturers have been paid, unless paid directly by Isolani from the remaining limited funds in the company’s dedicated account. Payments are due and owing and must be paid from the proceeds of the checks that your client has purposefully withheld, currently estimated to be in excess of $6 milion. Inventory depletion. The manufacturer has not shipped product in the last three weeks as bi-weekly payments for product due from the pharmacy have not been made. ‘Audit isk. Depletion of inventory subjects the pharmacy to regulatory and payor risk Cash flow. The significant amount of receivables that your client hhas purposefully withheld have created an ongoing cash flow issue. Reitz’s failure to deposit checks will cause payors to stop payments on, and eventually void, the checks as they age, creating significant ongoing cash flow issues due to delays in the ability to get checks reissued. b. Financial Statement Risk Your client's actions of withholding checks, communications and other information jeopardizes the ongoing account and documentation of the financials for the business, including estimates needed to be used for the month ending July 2015. This is due to the above information not being provided by Reitz, including A/R balances, A/P balances and a statement of the pharmacy’s cash position. In order to continue to operate the pharmacy, all of these matters must be addressed immediately by your client. The Isolani d/b/a/ R&O Pharmacy account, which has been used by the pharmacy in the ordinary course of business to receive payments, pay payables and fund payroll, among other things, has not received payments for over 4 weeks as a result of your client’s improperly withholding funds. There are dwindling funds in the Isolani d/b/a/ R&O Pharmacy accolint due to Reitz’s intentional withholding of earned company funds. Isolani is in jeopardy of defaulting on its obligations to meet the financial operational needs of the business as a result of your client's unauthorized condiitt. Please let me know how your client will proceed by close of business tomorrow. If the above issues are not corrected, Isolani will seek all available legal remedies for any and all consequences of such defaults. Best Regards, Jason., Jasoi'M. Ohta Special QounselDuane Moris LLP 7508 Stee, Suite 2900 ‘San Diego. GA 92101-4681, Prergig 7442235 F: +1 619925 2673, Onia@duanemonis com wun duanemonns com For more infermation about Duane Mos, please vst hp Quanettors com CContsentilty Notice: This electronic mai transmission is privieged and confidential andi intended ony fr the review of the pay to whom iis addressed. you Nave received ths vransmission in err, please inmeditely return ht te sender. Unintended raremiation shall not constitte waver othe atomey cient ory her plageEXHIBIT G EXHIBIT GFrom: Russell Reitz (mailto:russell@r-opharmacy.com) Sent: Thursday, August 20, 2015 10:42 AM To: ‘Fleming, Jamie’ Subject: FW: [SPAM] Suggested responses for IHS Audit Jamie, Would you please answer the simple questions listed in my email below. Thank you. Russ From: Russell Reitz (mailto:russell@r-opharmacy.com] Sent: Wednesday, August 19, 2015 10:05 AM To: ‘Fleming, Jamie’ ‘Subject: RE: [SPAM] Suggested responses for IHS Audit Jamie, Just wanted to clear a couple of things with you. In your proposed response to the auditor, you said that you were a “Controller,” but didn’t say for which company. Would you please let me know specifically what company you work for? Do you work for Philidor? Isolani? Some other company? Also, do you believe that you are the Controller for R&0? I know I never appointed you as such. If you do claim that, please let me know who appointed you. Along those same lines, please let me know if you have ever communicated to ‘anyone, ever, that you are or were the Controller of R&O Pharmacy or that your business address was R&O's offices here in Camarillo. Finally, in your proposed response to the auditor you referenced a “Services Agreement,” what Services Agreement are you referring and who is it between? | know that | have not seen it, so would you please email me a copy of it? Thanks, Russ From: Fleming, Jamie (mailto:JFleming@philidorrxservices.com] Sent: Tuesday, August 18, 2015 2:07 PM To: Reitz, Russell Ce: Russell@r-opharmacy.com Subject: [SPAM] Suggested responses for IHS Audit uss Sorn) or jumping the gun on audit response, below (in red) are my suggestions for responses to the questions they asked. If you wéuld, please copy me on the response you send to the auditor. Thanks, Jamie 1, The preliminary review of audited prescriptions identified a large number of dispensed prescriptions that ‘were Shipped to patients from Pennsylvania, Below is a small list of examples of the same. Please provide additional information and or an explanation to support this practice. SEE‘ANSWER TO #4 BELOW ue1 } ‘ EXHIBIT H aeEXHIBIT H EXHIBIT HExhibit “B” MANAGEMENT SERVICES AGREEMENT THIS MANAGEMENT SERVICES AGREEMENT (“Agreement”) is made as of the _/ dey ore £2014 (“Effective Date”), by and between R & O Pharmacy, Inc. (the “Company”), Russell Neil Reitz (“Reitz”), and Isolani, LLC (“Manager”), hereinafter referred to collectively asthe Parties. WHEREAS, The Company owns and operates R & O Pharmacy, located at 651 Vie Alondra, Units 708 & 709, Camarillo, CA 93012 (“the Pharmacy”); and WHEREAS, Reitz isthe sole owner of the Company; and WHEREAS, Manager has experience in the management and administration of pharmacies; and. WHEREAS, Manager and Reitz have executed an agreement whereby Manager will acquire all of the issued and outstanding ownership interest in the Company from Reitz (“the ‘Transaction”); and WHEREAS, the Company desires to engage Manager to manage aid 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 sufficiency of which are hereby acknowledged, the Parties hereby agree as follows: 1. Appointment of Manager: Term. ‘The Company hereby appoints and engages Manager as the manager and administrator of the Pharmacy, and Manager hereby accepts such appointment, {0 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 petlod of one (1) year from the date hereof, or until the Transaction is completed, whichever first ‘occurs. 2. Duties and Responsibilities of set, 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, @ G3. Duties and Responsibilities of 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 wld be precluded from the due observance or performance of its duties and responsibilities otsorzaehereunder. All employees of the Company shall fully cooperate with Manager in the fulfillment 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 Guties aod responsibilities hereunder in a diligent, professionally responsible and efficient 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 duting the term of this Agreement, the Manager shall retain, for itself, al:profits and losses realized by the Company and the Pharmacy during the term of this Agreement, 7. Regulatory 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 shell remain involved and available to the Manager in order to fulfill 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 Manager. 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 costs (including reasonable attorneys? fees) arising directly © indirectly out of or in connection with Manager's provision of services to the Company hereunder ftom and after the Effective Date, including but not limited to Manager’s 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 an act or acts of Reitz or Compatty, or ‘any of its agents or employees negligent act or negligent omission or willful misconduct. Gi) _ Bythe Company. The Company and Reitz shall defend, indemnify and save Manager harmless fiom any and all liailties, claims, actions, losses, damages, expenses and costs (including reasonable attomeys’ 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 then with Tespect to any liability, claim, action, damage, expense or cost which was inured by reason of the Company or any of its agents or ““ employees negligent act or negligent omission of 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, ditectly or indirectly, « po sara 2 vudisclose, divulge or appropriste for its own use any confidential or proprietary information belonging 10 the other party, except as may be necessary to enable the other party to cary out its responsibilities described herein or as may otherwise be required by court order, or in response to an inquiry by any government agency. B. Bach 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 irceparable harm and injury to the other party and that monetary damages will not provide an adequate remedy to a 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) a temporary restraining order, preliminary injunction and ‘Permanent injunction to enjoin such breach or threatened breach; and (b) recover from breaching party the Teasonable attorneys’ fees and costs incurred by the non-breaching perty 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 entitle. 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. Tn the event any of the restrictions are found by a court of competent jurisdiction 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 cansent to and authorize the Court to modify the restrictions in a manner to permit their enforcement. 10, Termination, A. Any of the’Parties may terminate this Agreement immediately upon the occurrence of any of the following events with regard to the other party: (i) the making of a general assignment for the benefit of creditors; (i) the fling of @ voluntary petition or the commencement of any proceeding by either party for any relief under any banksuptcy or insolvency laws, or any laws relating to the relief of debtors, readjustment of indebtedness, reorganization, composition or extension; (ii) the filing of any involuntary petition or the commencement of any proceeding by or against any party for any relief under any bankruptey or insolvency laws, or eny laws relating to the relict 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 filed or commenced; or (iv) suspension of the ‘transaction of the usual business of any party for 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 condition hereof, if (i) such writen notice sets forth with specificity the nature of such breach; and (fi) cither (g) such breach is not cuted to the reasonable satisfaction of the non-breaching party within ninety (90) days after notice has been given; or (b) if such breach is of a nature that it cannot be cured within» such tinte period, each party has not taken commercially reasonable steps to begin curing such breach and does noF thereafter proceed to cure such breach in a diligent manner. 8 tTe Miscellaneous. A. Status of Patties. In the performance of the work, duties and obligations under this Agresment, itis mutually understood and agreed that each party is at all times acting and performing es 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 Majeure. No party shall be deemed to be in default of this Agreement if prevented from performing any obligation hereunder for any reason beyond its contro, including but not Jimited to Acts of God, war, civil commotion, fire, flood or casualty, labor difficulties, shortages of or inability to obtain labor, materials or equipment, governmental regulations or restrictions, or unusually Severs weather. In any such case, the parties agree to negotiate in good faith (and be bound by the Limited Renegotiation procedures 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 Enancial inability shall not be a matter beyond a party’s reasonable control. C. Notices. Any notices to be given hereunder by either party to the other shall be deemed to be received by the intended recipient (a) when delivered porsonally, (b) the day following delivery to a zationally recognized overnight courier service with proof of delivery, or (6) five (5) days after mailing by certified mail, postage prepaid with retum 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 Agreement. This Agreement supersedes any and all other agreements, either oral or in waiting, between the parties hereto with respect to the subject matter ofthis 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 Ri or Liabilities in Third Par ‘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 Alspate zesolution (including any arbitration or litigation) shall be in Los Angeles County, California, _ J, Waiver. The failure of a Party to insist upon strict adherence to any term of this Agreéitent on any occasion shall not be considered a waiver or deprive that party of the right thereafter to thal é'm or any other term of this Agreement. No amendment, supplement or termination of this Agreement shall affect or impair ay rights or obligations which shall have theretofore natured hercunde Lor sey Mismustation. All references made and pronouns used herein shall be construed in the singolAr or plural, and in such gender, asthe sense and circumstances require. Mi ¢ 61co7m,1 4 wK. Burther 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. 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 pormitted 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, (a) 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 (b) no parties shall employ personnel without regard to age, race, color, sexual orientation, religion, sex or national origin, N. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original and all of which shall together constitute one agreement. ©. Suvival. 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. P. 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, regulstions, principles and interpretations applicable to the practice of pharmacy. It is the intent of this Section to set forth « 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. Right to Mediate: Binding Arbitration. Any dispute between the parties relating to this Agreement must first 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-five (45) days ofthe initial request for mediation or within atime frame mutually agreed upon by the Parties, the dispute must then be submitted for binding arbitration in accordance with procedures set forth by the American Health Lawyers Association, Pre-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 “Arbitration Notice"), The party delivering the Arbitration Notice shall specify therein, to the fullest extent then possible, its version of the fucts surrounding the dispute and the amount of any damages and/or the nature of any injunctive or other relief such party claims. ® o 2. The party receiving such Arbitration Notice shall respond within sixty 2 (60) days afer receipt thereof in writing (the “Arbitration Response”), stating its version of the 5, facts to the fullest extent then possible and, if applicable, its position as to damages or other ‘relief sought by the party initiating arbitration,3. ‘The parties shall then endeavor, in good faith, to resolve the dispute outlined in the Arbitration Notice and Arbitration Response. In the event the parties are unable to resolve such dispute within sixty (60) days after receipt of the Arbitration Response, the parties shal initiate the arbitration procedure outlined below. Arbitration Procedure 1, Ifthe parties hereto are unable to resolve the dispute within sixty (60) days after receipt of the Arbitration Response as set forth above, then the parties must submit the dispute to binding arbitration in accordance with the American Health Lawyers arbitration rogram. 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 arbitrator who shall serve as:the final arbitrator for the dispute, (The arbitrator chosen by the parties hereto or by the Seleotors, as the case may be, 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 epply 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 findings of fact and conclusions of law. Arbitrat les. fs ‘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 prior to resolving legal disputes. 3. The Arbitrator shall be guided by, and shall substantially comply with, the then-applicable Federal Rules of Evidence. 4, The Arbitrator is empowered to include in any award made hereunder such relief as the Arbitrator deems appropriate (otber then punitive 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 empowered to decide the ig, Controversy in accordance with whatever evidence is presented, 4 b "fereor9.1 6 c6. The Arbitrator’s award shall be in a form. sufficient to clearly inform 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 PROCEEDING. IN WITNESS WHEREOF, and intending to be legally bound, the parties hereto affix their signatures below and execute this Agreement under seal. THE COMPANY: R& O PHARMACY, LLC By: MANAGER: ISOLANI, LLC By: Z Ah fc REITZ, Russell Neil Reitz sigorns.. 7EXHIBIT |EXHIBIT I EXHIBIT IPURCHASE AND SALE AGREEMENT pecembeR ‘This Purchase and Sale Agreement is made on this alk day of Nevember, 2014 (“the Effective Date") by and among Russell Neil Reitz, hereinafter ("Seller"), Isolani, LLC, hereinafter ("Buyer"), and R & O Pharmacy, LLC, hereinafter ("Company") RECITALS A. Company owns and operates R & O Pharmacy, located at 651 Via Alondra, Units 708 & 709, Cumarillo, CA 93012 ("the Business"). B. _Selier owns, of record and beneficially, 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 and ‘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 (10%) on the Effective Date (“the Initial Purchase”), Ninety percent (90%) on the Closing Date (“the Finat Purchase”). 2. Purchase Price In consideration for the sale and transfer of the Ownership, Buyer shall pay to Seller, the aggregate sum of (a) Three Hundred Fifty Thousand Dollars ($350,000.00), plus (b) an amount equal to the Value of the Inventory, as defined below in Paragraph 5, collectively, (“the Purchase Price"), 3. Payment of the Purchase Price 3.1 On the Effective Date, Buyer shall pay directly to Seller sum of Thirty Five ¢ Thousand Dollars ($35,000.00) in payment for the Initial Purchase. « 32 On the Closing Date, Buyer shall pay to Seller the balance of the Purchase Price, less $30,000. 6157095. 14. Conditions Precedent to the Closin; ‘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”, 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 anew premises lease upon terms and conditions acceptable to Buyer. 43 Buyer shall have obtained written assurance from the California State Board of Pharmacy that itis prepared immediately to issue a temporary pharmacy permit, 44 Buyer shall have entered into written employment agreements with Seller, employing him as Pharmacist-in-Charge, comunencing as of the Effective Date. 5. Inventory. At the close of business on the day immediately preceding the Effective Date, ot on the Effective Date, if possible, a physical inventory of all of the Pharmacy’s stock in trade shall be taken to be valued at Company's actual acquisition cost ("the Value of the Inventory"). No item 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: 6.1 Organization. Company is a limited liability company, duly formed, validly existing, and in good standing under the laws of the State of California, 62 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 be limited by bankruptey laws, laws affecting creditors! rights generally and equitable principles. 7 63 Titleto the Ownership. The Ownership is owned, beneficially 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 California Corporations Code. Hy sts70s851 264 — Tax Returns and Audits. To the best of Seller’s knowledge, within the time and in the manner prescribed by law, Company has filed all federal, state, and local tax relumns ‘equired 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. 65 Compliance With Laws. To the best of Seller’s knowledge, Company and Seller have (a) complied with all laws, ordinances, regulations and otders applicable to the conduct of Company and its business, and have not received any notice asserting or alleging any noncompliance, and (b) filed with the proper authorities 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 roceedings 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 or in equity. Company is not in default with respect to any order, writ, injunction o decree of any federal, state or local court, department, agency or instrumentality, or of any arbitrator, which is directed against it, and is not ia violation of any applicable federal, state or local statute, Iaw or regulation which would have @ material adverse effect on the transactions contemplated herein after the Effective Date. 67 Company Debts. Prior to the Effective Date, Company shall have paid all employee salaries, fringe benefits, accrued vacation pay, and payroll taxes accruing through the Effective Date, as well as all debts to vendors and suppliers. 68 Material Misstatements or Omissions. No representation or warranty of Seller contained in this Agreement, or in the Exhibits hereto, or in any document, including financial 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, 69 Adverse Facts and Circumstances. Seller knows of no facts or circumstances, other than those generally applicable to companies or other entities engayed in businesses similar to the Business, which might materially and adversely affect the Company or the Business, 7. Representatiyns 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 shalt 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 hereby and, 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 bankruptey laws, = sisro%8 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 materia! 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 Agreoments of Sell Selter covenants and agrees to the following, the fulfillment of each of which shall also constitute a condition precedent to the obligations of Buyer hereunder: 8.1 Conduet 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, Seiler () will not, without the prior written consent of Buyer, sel or otherwise dispose of (except Jiens for taxes not due), any of Company's assets, and (ii) will keep all of the equipment and other tangible. personal property 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. 82 Certain Deliveries at the Closing. At the Closing, Seller shall deliver to Buyer all prescription files 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 petmit Seller to make copies thereof during normal business hours for a period of three (3) years following the Closing Date. 9. Deliveries 9.1 On the 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 wansfer to Buyer ten percent (10%) of the Ownership. 9.1.3 Buyer and Seller shall enter info a Management Agreement, a copy of Which is attached hereto, marked Exhibit “B”, and incorporated herein by this reference. cismases. 4