Dear Doctor:
Thank you for contacting Western Practice Sales/John M. Cahill Associates regarding the dental practices currently available for purchase. Enclosed please find the practice information you requested. Please review this information and let us know how we can be of further assistance.
Included in this package is a Confidentiality Agreement. Should you wish detailed financial information in the future concerning a practice you are interested in, we will need a signed copy of the Confidentiality Agreement in our file prior to the releasing of that information. Please take a moment now to thoroughly review the enclosed agreement, sign and return by mail or fax to (530) 674.9765.
We will make sure your name is on our mailing list to keep you informed of any new practices that may become available in your areas of interest. To further assist you, I have included a “Dental Buyer’s Check List”. I hope you find it helpful in your quest for the practice that suits you best.
We look forward to the opportunity of assisting you in the selection of a practice suitable to your professional needs. Please feel free to call if you have questions.
Sincerely,
Western Practice Sales/John M. Cahill Associate
Enclosure
CONFIDENTIALITY AGREEMENT
Western Practice Sales (WPS) and John M. Cahill Associates (JMCA) represent various doctors in matters concerning the sale of their dental practice.
In connection with the possible purchase by you, ______, ___, of a dental practice represented by WPS/JMCA on behalf of the selling doctor, you will be provided access to certain proprietary information about the business; including financial condition, operation and prospects of the Practice. Information and records may include, but not be limited to, financial statements, patient lists, patient files, appointment schedules, employee list and salary histories, capital and operating leases of the Practice. The purpose for the release of any such proprietary information is to aid you in performing due diligence and analysis of the proposed transaction.
1) In consideration of obtaining such information, I hereby agree as follows:
a) I will not go inside the SELLER’s practice without prior consent and arrangement with WPS/JMCA. I will not contact the SELLER, the SELLER’s patients, SELLER’s employees or SELLER’s constituents.
b) All proprietary information furnished by WPS/JMCA (or from the Practice) to me will be confidential. “Proprietary Information” does not include any information, which is, or becomes, readily available to the public.
c) Unless otherwise agreed in writing, I will not disclose or reveal any proprietary information to anyone other than my legal council or financial consultant actively evaluating the information for any purpose other than in connection with the proposed purchase transaction.
d) If I decide not to pursue the proposed transaction, I will promptly advise WPS/JMCA of this fact and deliver to WPS/JMCA any and all proprietary information furnished to me.
e) Although WPS/JMCA and the Seller have included in the proprietary information certain information, which they consider to be relevant for the purpose of your investigation of the condition of the Practice, WPS/JMCA cannot make any representation or warranty as to the accuracy or completeness of said information. Therefore, all information is subject to my verification.
f) Acquisition of proprietary information or trade secrets by me will be presumed confidential upon the release of any such material to me. Any unauthorized use of such information will be presumed to be an intentional act in bad faith violation of this Agreement.
2) In regards to patient lists and patient records, I acknowledge that patients of record of the Practice have an expectation of privacy. The review of any such records is for the sole purpose of determining the type of work being performed and various other information that such patient charts reveal. In consideration of obtaining such information, I hereby agree as follows:
a) The information contained in the patient charts of the subject practice is considered confidential and proprietary information.
b) I acknowledge that the “number of active patients” is a relative term and it is solely my responsibility to determine the accuracy of any number that may be represented to me by the SELLER or Broker. I agree to hold harmless the Broker, SELLER or their agents concerning any litigation concerning this issue.
c) I agree that I will not use the information that I obtain to the detriment of the selling doctor or attempt in any way to approach a patient or patients with the intent to provide dental services.
d) I will not copy any of the records or remove said records from the premises.
e) I agree that all questions related to the patient files will be directed to the selling doctor only; I am not authorized to ask questions of staff or interrupt their normal work schedule.
3) Further, in consideration for WPS/JMCA providing me with information on the above described Practice, I understand, acknowledge, and agree as follows:
a) Information provided to me by WPS/JMCA and the Seller represents sensitive and confidential information and its disclosure to others could/would be damaging to the Practice and WPS/JMCA’s relationship with the Seller.
b) I agree not to disclose information to any other person who has not also signed and dated this agreement, except to secure the advice and recommendations of my advisors (accountants, attorneys, etc.) in which case I agree to obtain their oral consent to maintain such confidentiality. “INFORMATION” shall include the fact that the business is for sale.
c) I agree not to contact the Seller, his/her employees, landlord, lien holder, neighbors, constituents, or suppliers except through WPS/JMCA.
d) I agree that all correspondence, inquires, offer to purchase and negotiations relating to the purchase of the Practice will be conducted exclusively through WPS/JMCA. WPS/JMCA will make arrangements for all meetings between the Seller and I. I understand that such face-to-face meetings are essential and are encouraged to obtain more detail concerning the subject business for my benefit and knowledge.
e) I understand that WPS/JMCA is not an agent for me, but is an agent for the Seller, and has a contract providing for a fee to be paid to WPS/JMCA by the Seller upon the sale, trade, lease, or exchange of the Seller’s Practice or property.
f) I understand that WPS/JMCA, through its staff, will assist me in locating a business or property that I might have some interest in owning. However, I understand and agree that such assistance, incidental advice and/or statements made in connection with that process will not convert any member of WPS/JMCA’s’ staff into being my agent. WPS/JMCA and its staff will at all times be the agent for the Seller. Neither WPS/JMCA nor any member of WPS/JMCA’s staff has a fiduciary relationship with me.
g) I further understand that Western Practice Sales/John M. Cahill Associates is not an attorney-at-law and that all future forms and all future addenda thereto are prepared without the benefit of legal or tax counsel. They should be submitted to your own attorney for review and possible modification, and used upon the advise of your own legal and/or tax counsel
4) I agree not to circumvent or interfere with WPS/JMCA’s contract with the Seller in any way. I understand that if I interfere in any way with WPS/JMCA’s contract right to its fee from Seller, I may be personally liable for the payment of the fee paid to WPS/JMCA’s by Seller. I understand that if I make the purchase through WPS/JMCA, then I will not be liable for the fee to be paid by Seller to WPS/JMCA’s.
The undersigned understands that disclosure of confidential information may result in damages for which he/she may be held liable.
Attorneys’ Fees: The parties agree that in the event of controversy, claim or dispute between the parties hereto arising out of or relating to this Agreement or the breach thereof, the prevailing party shall be entitled, in addition to such other relief as may be granted, a reasonable sum as and for attorneys’ fees which shall be determined by the Court in such litigation or in a separate action brought for that purpose.
Sign: Date:Name:
Home Address:
City, State, Zip:
Home Phone:
Cell Phone:
Office Address:
City, State, Zip:
Office Phone:
City’s/Area’s Interested In:
Preference
For
Corresponding: / Home Address / Office Address
Fax #: / Fax #:
E-mail: / E-mail:
Return to:
Western Practice Sales/John M. Cahill Associates
437 Century Park Drive, Suite A
Yuba City, CA 95991
800-641-4179
Fax: 530-674-9765
DENTAL BUYER’S CHECKLIST
STARTING OUT:
1. Interview prospective CPA's and Attorney's to assist you in the purchase of a practice
2. Prepare a personal financial statement (any bank can provide you with a blank form)
3. Prepare a resume or curriculum vitae
4. Interview Lenders - 100% financing is available
5. Search for a practice that fits your requirements, size, location, affordability, etc.
6. Start the application process for securing a Life Insurance Policy in the amount of a loan
7. Provide a Delta Dental fee schedule.
WHAT A LENDER WILL ASK FOR:
1. Personal Finance Statement and Tax Returns
2. Business Plan for Practice
3. 3 to 5 years of financials on practice you propose to buy (P&L's and Tax Returns)
4. Resume or Curriculum Vitae
5. Dental License
6. EPA Number from state
7. Life Insurance
8. Disability Insurance - not always required
9. Business License (copy of application)
10. Copy of Sales Contract including allocation of purchase price
11. Lease assumption or negotiate new one, purchase of building
12. Credit report- minimum 1 to 2 years as a dentist
DUE DILIGENCE:
1. Review financial information and have CPA review information
2. Visit practice interview selling dentist
3. Set time to review patient’s charts
4. Inspect practice equipment and supplies - seller warrants equipment in working order at close of escrow, no warranty after close of escrow.
5. Have attorney review contract of sale, lease, loan documents, promissory notes, security agreements, equipment leases, etc.
6. Meet and interview staff, preferably 2 or 3 weeks prior to take over
7. Review compensation and benefits of each employee with selling dentist
INSURANCE NEEDS:
1. Life Insurance - collateral assignment to cover loan
2. Disability Insurance for seller financing
3. Malpractice Insurance - verification for loan and seller financing
a. Require "on door" endorsement on buyer's malpractice insurance for use of seller's name for a year.
4. Office Business Package - workers compensation, fire, theft, liability, contents of office.
DOCUMENTATION OF PURCHASE PRACTICE:
1. Contract of sale - broker to prepare draft contract of sale
2. Buyer to have attorney review draft contract of sale
3. Seller financing will require a promissory note
4. Security agreements - what assets used to secure note
5. Office lease - assume or negotiate a new one
a. Terms must coincide with bank loan
b. Landlord named as loss payee on office insurance policy
PERMITS:
1. Dental license
2. Business license
3. Employer id numbers for state and federal government
4. EPA number
5. DEA license - notify of change of address
ADVERTISING:
1. Letter of announcement prior to close of escrow
a. All patients seen in last three to five years
b. Broker to provide sample letters
2. Review Yellow Page advertising
/Lender Names
Company
/Contact
/ Bus. Ph. / Bus. Fax / EmailHPSC /
Dave Judy
/ (877) 436-9048 / (877) 436-0391 /Professional Practice Capitol / Brannon Moncrief / (800) 456-2779 / (281) 419-8309 /
Solano Bank / Jamie Smith / (707) 751-2486 /
Bank of Walnut Creek / Fred McCarl / (925) 932-5353 / (925) 937-4831 /
This is a list of “Lenders” provided for your convenience.
Western Practice Sales/John M. Cahill Associates
does not endorse, is not associated with, nor receives commission from any lender.