EXECUTION COPY

 

ASSET PURCHASE AGREEMENT

 

AMONG

 

MEDICAL TRANSCRIPTION BILLING, CORP.

 

as Purchaser,

 

AND

 

Orion Healthcorp, inc.

Medical BilLing Services, inc.

Rand Medical Billing, Inc.

RMI Physician Services COrpORATION

Western SKies Practice MAnagement, Inc.

Physicians Practice Plus Holdings, LLC

PhysicianS Practice Plus LLC

NEMS Acquisition LLC

NorthEast Medical Solutions, LLC

NEMS West Virginia, LLC

Integrated physician Solutions, INC.

VEGA Medical professionals, LLC,

Allegiance consulting associates, llc,

allegiance billing & consulting, llc

 

Debtors-in-Possession,

 

as Sellers

 

Dated as of May 4, 2018

 

 

 

 

TABLE OF CONTENTS

 

  Page     Article 1 PURCHASE OF TARGET ASSETS. 2     1.1 Purchase and Sale of
Target Assets 2     1.2 Assumption of Certain Liabilities 3       1.3 Assignment
of Certain Contracts 5       1.4 Instruments of Conveyance, Assumption or
Assignment 5       1.5 “AS IS” TRANSACTION 6       Article 2 PURCHASE PRICE. 7  
  2.1 Purchase Price 7       2.2 Payment of the Purchase Price 7       2.3
Allocation of the Purchase Price 8       Article 3 EXCLUDED ASSETS. 9     3.1
Excluded Assets 9       3.2 Purchaser Agreement 11       Article 4 SELLERS’
REPRESENTATIONS AND WARRANTIES. 11     4.1 Organization and Corporate Power 11  
    4.2 Title and Related Matters 11       4.3 Necessary Property 11       4.4
Litigation 11       4.5 Insurance 12       4.6 Absence of Certain Changes 12    
  4.7 Compliance with Laws 13       4.8 Transactions with Related Persons;
Outside Interests 15       4.9 Officers, Directors, Managers, Employees,
Consultants and Agents; Compensation 15

 

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4.10 ERISA and Related Matters 15       4.11 Real Property 16       4.12
Validity of Contracts 16       4.13 Intellectual Property. 17       4.14
Authorization 17       4.15 No Conflict with Other Instruments or Agreements 17
      4.16 Brokers or Finders 18       4.17 Taxes 18       4.18 Financial
Information 19       Article 5 PURCHASER’S REPRESENTATIONS AND WARRANTIES. 19  
  5.1 Organization and Corporate Power 19       5.2 Authorization 19       5.3
No Conflict with Other Instruments or Agreements 19       5.4 Brokers or Finders
20       5.5 Funding 20       5.6 Adequate Assurance 20       5.7 Governmental
or Regulatory Approvals 20       5.8 Legal Proceedings 20       5.9 Brokers 20  
    5.10 Solvency 20       5.11 Affiliation with Parmjit Parmar 21       Article
6 COVENANTS, AGREEMENTS PENDING CLOSING, AND OTHER AGREEMENTS. 21     6.1
Conduct of Sellers’ Business Pending the Closing 21       6.2 Additional
Covenants and Agreements of Sellers 22       6.3 Covenants and Agreements of
Purchaser 23

 

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6.4 Bankruptcy Actions 24       6.5 Transition Services Agreement 28       6.6
Employment of Sellers’ Employees 28       6.7 Salaries and Benefits 29       6.8
ERISA 31       6.9 Reasonable Access to Records and Certain Personnel 31      
6.10 Audited Financial Statements 31       6.11 Cure Amounts 32       Article 7
CONDITIONS PRECEDENT TO PURCHASER’S OBLIGATIONS. 32     7.1 Conditions Precedent
32       7.2 Court Approval Required 33       7.3 Consents to the Transactions
33       Article 8 CONDITIONS PRECEDENT TO SELLERS’ OBLIGATIONS. 34     8.1
Representations and Warranties; Performance 34       8.2 Orders 34       8.3
Purchaser’s Deliveries 34       8.4 No Termination 34       8.5 No Injunctions
34       Article 9 CLOSING. 34     9.1 Time, Place and Manner of Closing 34    
  9.2 Closing Deliveries of Sellers 35       9.3 Closing Deliveries of Purchaser
36       9.4 Transfer Taxes 36       9.5 Proration of Taxes and Charges 37      
9.6 Consummation of Closing 37

 

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Article 10 TERMINATION OF AGREEMENT. 37     10.1 Termination Events 37      
10.2 Break-Up Fee; Expense Reimbursement 38       10.3 Effect of Termination 39
      10.4 Termination Procedure 39       Article 11 FURTHER ASSURANCES. 39    
11.1 Separate Agreements Executed in Connection with Closing 39       11.2
Cooperation of the Parties After Closing 40       11.3 Payroll 40       Article
12 DEFINITIONS. 40     Article 13 MISCELLANEOUS PROVISIONS. 48     13.1 Nature
and Survival of Representations and Warranties 48       13.2 Exhibits and
Schedules 48       13.3 Assignment 48       13.4 Governing Law and Jurisdiction
48       13.5 Severability 49       13.6 Notices 49       13.7 Public
Announcements; Confidentiality 49       13.8 Expenses 50       13.9 Third
Parties 50       13.10 Time of the Essence 50       13.11 Construction 50      
13.12 Counterparts; Electronic Signatures; Effectiveness of this Agreement 50  
    13.13 Remedies Cumulative 50       13.14 Entire Agreement; Amendment; Waiver
51       13.15 Disclaimer; Non-Recourse 51       13.16 Bulk Sales Laws 51      
13.17 No Right of Set-Off 52

 

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ASSET PURCHASE AGREEMENT

 

THIS ASSET PURCHASE AGREEMENT is made as of May 4, 2018, by and among Medical
Transcription Billing, Corp., a Delaware corporation or an assignee acceptable
to Sellers (hereinafter referred to as the “Purchaser”) and Orion Healthcorp,
Inc., a Delaware corporation (“Orion”), MEDICAL BILLING SERVICES, INC., a Texas
corporation, RAND MEDICAL BILLING, INC., a California corporation, RMI PHYSICIAN
SERVICES CORPORATION, a Texas corporation, WESTERN SKIES PRACTICE MANAGEMENT,
INC., a Colorado corporation, PHYSICIANS PRACTICE PLUS HOLDINGS LLC, a Delaware
limited liability company, PHYSICIANS PRACTICE PLUS LLC, a Delaware limited
liability company, NEMS ACQUISITION LLC, a Delaware limited liability company,
NORTHEAST MEDICAL SOLUTIONS, LLC, a Pennsylvania limited liability company, NEMS
WEST VIRGINIA, LLC, a Pennsylvania limited liability company, INTEGRATED
PHYSICIAN SOLUTIONS, INC., a Delaware corporation, VEGA Medical professionals,
LLC, a Delaware limited liability company, Allegiance consulting associates,
llc, a New York limited liability company, allegiance billing & consulting, llc,
a New York limited liability company (collectively, along with Orion, the
“Sellers” and each, individually, a “Seller”).

 

RECITALS

 

A. Sellers are engaged primarily in providing revenue cycle management, practice
management and group purchasing organization services for physicians in the
United States (hereafter referred to as the “Target Business”, which definition
excludes the Excluded Business).

 

B. Purchaser desires to purchase certain assets, constituting all or
substantially all of the assets (other than those assets used exclusively in the
Excluded Business) used by Sellers in the Target Business (the “Target Assets”,
as more particularly defined in Section 1.1 of this Agreement) and Sellers
desire to sell such Target Assets to Purchaser upon the terms and subject to the
conditions set forth herein.

 

C. Sellers have commenced jointly administered cases (collectively, the
“Bankruptcy Cases”) under Chapter 11 of Title 11 of the United States Bankruptcy
Code, as amended (the “Bankruptcy Code”) in the United States Bankruptcy Court
for the Eastern District of New York (the “Bankruptcy Court”), thereby creating
the estates (the “Bankruptcy Estates”) in accordance with Bankruptcy Code
Section 541 et seq., and have continued in the possession of their assets and in
the management of their business under Sections 1107 and 1108 of the Bankruptcy
Code.

 

D. Sellers, subject to the receipt of any higher or better offer received by
them for the Target Assets, desire to sell to Purchaser the Target Assets
pursuant to the terms and conditions of this Agreement and Purchaser desires to
so purchase and acquire such assets from Sellers (the “Acquisition”) in
accordance with Sections 105, 363 and 365 of the Bankruptcy Code.

 

NOW THEREFORE, IN CONSIDERATION OF THE PROMISES MADE HEREIN, AND INTENDING TO BE
LEGALLY BOUND HEREBY, THE PARTIES AGREE AS FOLLOWS:

 

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Article 1
PURCHASE OF TARGET ASSETS.

 

1.1 Purchase and Sale of Target Assets. Subject to the terms and conditions set
forth in this Agreement, at the Closing, Sellers agree to sell, convey,
transfer, assign, and deliver to Purchaser, and Purchaser agrees to purchase,
acquire and accept from Sellers, for the Purchase Price hereinafter specified,
all right, title and interest in and to the Target Assets (as defined below).
The Target Assets shall be sold, conveyed, transferred, assigned, and delivered
free and clear of all Encumbrances, except for Permitted Encumbrances. The
“Target Assets” to be acquired by Purchaser hereunder shall be all the assets,
properties, business and rights, of every kind and description (whether real,
personal or mixed, tangible or intangible) and wherever situated, which are
owned, used or held for use by Sellers as of the date hereof in connection with
the Target Business, except for the Excluded Assets and, in any event, shall
include, without limitation, all of the following assets, as such assets relate
to the Target Business (collectively, the “Target Assets”):

 

1.1.1 all work in progress, accounts receivable and other rights to payment from
customers of Sellers and the full benefit of all security for such accounts or
rights to payment, and any claim, remedy or right related to the foregoing,
which as of the date hereof includes those set forth on Schedule 1.1.2;

 

1.1.2 all rights of Sellers in, to and under the Assigned Contracts;

 

1.1.3 all rights of Sellers in the Intellectual Property material to the Target
Business or that is used in the Target Business, a complete list of which is
attached as Schedule 4.13, along with all income, royalties, damages and
payments due or payable on or after the Closing Date (including damages and
payments for past, present or future infringements or misappropriations thereof,
the right to sue and recover for past, present or future infringements or
misappropriations thereof and any and all corresponding rights that now or
hereafter may be secured throughout the world, and all copies and tangible
embodiments thereof)(collectively “Transferred Intellectual Property”);

 

1.1.4 all Licenses set forth on Schedule 1.1.4, to the extent such Licenses are
freely transferable (“Transferred Licenses”);

 

1.1.5 all records, data, know-how, software, and media content, whether in hard
copy, digital, electronic or magnetic format or otherwise, including copies of
all accounting and operating ledgers, asset ledgers, records, budgets, customer
lists, customer account information, customer medical billing and accounts
receivable information, information used for the performance of services for the
customers, supplier lists, technical data, employee files, sales literature,
advertising or promotional materials, web site software and content, research
and development records, engineering records, systems and methods of supply,
design, manufacture or distribution, referral sources, service and warranty
records, correspondence, computer printouts, books, notes, files, and all other
accounting and operating records and other operating and financial information
and materials, in each case, to the extent related to the Target Business or
Target Assets;

 

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1.1.6 all causes of action, judgments, claims and demands against third parties,
whether known or unknown, except those described in Section 3.1.3 and Section
3.1.11;

 

1.1.7 the goodwill associated with the Target Assets and the Target Business as
a going concern;

 

1.1.8 all insurance proceeds, claims and causes of action of any kind with
respect to the Target Assets in each case relating to casualty losses occurring
at any time prior to Closing, except as described in Sections 3.1.10 and 3.1.17.

 

1.1.9 all other assets, property, inventory and rights owned or held by Sellers
and used in or necessary for the operation of the Target Business;

 

provided, however, that none of the Target Assets shall in any event be deemed
to include any asset expressly designated as an Excluded Asset pursuant to
Section 3.1.

 

1.2 Assumption of Certain Liabilities.

 

1.2.1 Upon the terms and subject to the conditions of this Agreement, at the
Closing on the Closing Date and as of the Effective Time, Purchaser shall assume
only the following liabilities (the “Assumed Liabilities”):

 

1.2.1.1 the obligations of Sellers under the Assigned Contracts to the extent
such obligations are applicable to and accrue solely with respect to an Assigned
Contract with respect to periods subsequent to the Effective Time; for the
avoidance of doubt, Purchaser shall not be liable for any accounts payable for
goods or services due prior to the Effective Time and such payables shall be the
responsibility of Seller;

 

1.2.1.2 Taxes that relate to the ownership or operation of the Target Assets
with respect to any Tax period beginning after the Closing Date;

 

1.2.1.3 the obligations of Sellers for any accrued and unused vacation or paid
time off for the Hired Active Business Employees;

 

1.2.1.4 all Assumed Cure Amounts;

 

1.2.1.5 all Liabilities with respect to Transferred Licenses to the extent such
Liabilities arise after the Closing Date;

 

1.2.1.6 all Liabilities arising from the ownership of the Target Assets or
operation of the Target Business arising after the Closing Date; and

 

1.2.1.7 Taxes arising out of the ownership or operation of the Target Assets or
the Target Business with respect to any Tax period (or portion thereof)
beginning after the Closing Date.

 

Purchaser shall not assume, incur, guarantee, or otherwise be obligated with
respect to any liability whatsoever of Sellers other than the Assumed
Liabilities. With respect to any of the Assumed Liabilities, such assumption by
Purchaser is for the benefit only of Sellers and shall not expand, increase,
broaden, or enlarge the rights or remedies of any other party, nor create in any
other party any right against Purchaser that such party would not have against
Sellers if this Agreement had not been consummated.

 

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1.2.2 Except as provided in Section 1.2.1, Purchaser does not hereby and will
not assume or become liable for and shall not be obligated to pay or satisfy any
obligation, debt or liability whatsoever, whether fixed, contingent or
otherwise, of the Target Business or Sellers or any other Person, including,
without limitation any Cure Amounts (other than the Assumed Cure Amounts),
Indebtedness or other claim, liability, obligation or Tax arising out of the
ownership or use of the Target Assets or circumstances or occurrences or the
operations of the Target Business or transactions contemplated by this Agreement
or Sellers or any other Person prior to the Closing Date and whether or not
disclosed on the Schedules attached hereto, and regardless of when or by whom
asserted (collectively, the “Excluded Liabilities”). Without limiting the
foregoing and for the avoidance of doubt, the Assumed Liabilities shall in no
event include, and the Excluded Liabilities shall include (but not be limited
to), the Specifically Excluded Liabilities. The Excluded Liabilities shall
remain the responsibility and obligation of Sellers after Closing, and Sellers
shall pay and discharge all such liabilities as and when due.

 

1.2.3 For purposes of this Agreement, “Specifically Excluded Liabilities” means
(i) Sellers’ liabilities or obligations under this Agreement; (ii) Sellers’
liabilities or obligations for any fees and expenses incident to or arising out
of the consummation of the transactions contemplated hereby (including all
transaction related bonuses or benefits payable to any officer, director,
manager, employee, shareholder, member or Affiliate of Sellers); (iii) any
liability or obligation of Sellers for Taxes for any taxable period or year,
except as otherwise specifically provided in Section 9.4 or Section 9.5; (iv)
Sellers’ liabilities or obligations with respect to Indebtedness; (v)
liabilities or obligations of Sellers arising by reason of any violation or
alleged violation of any Law; (vi) Sellers’ liabilities or obligations arising
out of or related to any breach or alleged breach by any Seller of any Contract,
in each case, regardless of when any such liability or obligation is asserted;
(vii) Sellers’ liabilities or obligations for tort claims, known or unknown, and
any related claims and litigation with respect to Sellers’ operation of the
Target Business, whether arising prior to, on or after the Closing Date; (viii)
Sellers’ liabilities or obligations relating to any other Action arising out of
or in connection with Sellers’ conduct of the Target Business or otherwise
(including the Actions set forth on Schedule 4.4), or any other conduct of
Sellers or Sellers’ respective officers, directors, managers, employees,
consultants, agents or advisors prior to the Closing; (ix) except as otherwise
provided in Section 1.2.1, Sellers’ liabilities or obligations relating to
employees, including, without limitation, any employees who are offered
employment by Purchaser in accordance this Agreement but who decline to accept
such offer (except for the obligations of Sellers for any accrued and unused
vacation or paid time off for the Hired Active Business Employees); (x) any
liabilities, obligations or responsibilities relating to or arising under any
Benefit Plan, any “employee benefit plan” (as defined ERISA) or any other
employee benefit plan, program or arrangement at any time maintained or
contributed to by any Sellers or any ERISA Affiliate, or with respect to which
Sellers or any ERISA Affiliate has any liability or potential liability; (xi)
any liabilities or obligations with respect to any of the Excluded Assets
(including the Excluded Business); (xii) any liability of Sellers to any
Affiliate of any Seller (including any shareholder of such Affiliate); (xiii)
any liability to indemnify, reimburse or advance amounts to any officer,
director, manager, employee or agent of Sellers; (xiv) any liability to
distribute to any of shareholders, members or other securityholder of any Seller
or otherwise apply all or any part of the consideration received hereunder,
including any liability of Sellers arising as a result of the exercise by any of
its shareholders or members of such Person’s right (if any) to dissent from the
transactions contemplated hereby and seek appraisal rights; (xv) any liability
under any Contract not included as an Assigned Contract, including any liability
arising out of or relating to any employment or similar Contract to which any
Seller is a party or otherwise bound; and (xvi) any other liability or
obligation of Sellers not expressly assumed by Purchaser pursuant to Section
1.2.

 

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1.3 Assignment of Certain Contracts. At the Closing, Purchaser shall succeed to
the rights and privileges of Sellers, and shall assume the express obligations
of Sellers to the extent such obligations (A) are applicable to and accrue with
respect to periods subsequent to the Effective Time and (B) are accompanied by a
correlated duty of performance or payment on the part of the other parties
thereto, pursuant to those Real Property Leases or Contracts of the Target
Business that are shown as “Assigned Contracts” (along with the Cure Amount
applicable to each such Assigned Contract) on Schedule 1.3 hereto (“Assigned
Contracts”) as and in the form of the copies thereof (or, if oral, as and in the
form of the written statements of the terms thereof) furnished or made available
to Purchaser. Purchaser and Sellers, by mutual agreement, may amend Schedule 1.3
prior to the Sale Hearing; provided, that, Purchaser may remove any Assigned
Contract from Schedule 1.3 prior to the Sale Hearing if it determines, in its
sole discretion. Purchaser shall be responsible for the payment and satisfaction
of all cure amounts as determined by the Bankruptcy Court pursuant to Section
365(b) of the Bankruptcy Code with respect to the Assigned Contracts (the “Cure
Amounts”), but solely to the extent that a Cure Amount (i) is an Assumed
Liability and (ii) does not exceed the corresponding Cure Amount set forth on
Schedule 1.3 with respect to each such Assigned Contract (the “Assumed Cure
Amounts”). Sellers shall be responsible for any other Cure Amounts.

 

1.4 Instruments of Conveyance, Assumption or Assignment. The sale, conveyance,
transfer, assignment and delivery of the Target Assets, and the assumption of
the Assigned Contracts and the Assumed Liabilities, as herein provided, shall be
effected by bills of sale, assignments, deeds, consents, endorsements, drafts,
stock powers or other instruments in such reasonable and customary form as shall
be mutually agreed by Purchaser and Sellers, and Sellers shall at any time and
from time to time after the Closing, upon reasonable request, execute,
acknowledge, and deliver such additional bills of sale, endorsements,
assignments, deeds, drafts, checks, stock powers or other instruments and take
such other actions as may be reasonably required to vest title to the Target
Assets in Purchaser and otherwise effectuate the transactions contemplated by
this Agreement.

 

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1.5 “AS IS” TRANSACTION. PURCHASER HEREBY ACKNOWLEDGES AND AGREES THAT, EXCEPT
AS OTHERWISE EXPRESSLY PROVIDED HEREIN, SELLERS MAKE NO (AND SELLERS EXPRESSLY
DISCLAIM AND NEGATE ANY) REPRESENTATIONS OR WARRANTIES OF ANY KIND, WRITTEN OR
ORAL, STATUTORY, EXPRESS OR IMPLIED, WITH RESPECT TO THE TARGET ASSETS OR ANY
OTHER MATTER WHATSOEVER, INCLUDING, WITHOUT LIMITATION, INCOME TO BE DERIVED OR
EXPENSES TO BE INCURRED IN CONNECTION WITH THE TARGET ASSETS, THE PHYSICAL
CONDITION OF ANY PART OF THE TARGET ASSETS OR ANY OTHER ASSET WHICH IS THE
SUBJECT OF ANY LEASE OR CONTRACT TO BE ASSUMED BY PURCHASER AT THE CLOSING, TO
THE PHYSICAL CONDITION OF ANY REAL PROPERTY WHICH IS THE SUBJECT OF ANY REAL
PROPERTY LEASE TO BE ASSUMED BY PURCHASER AT THE CLOSING, THE VALUE OF THE
TARGET ASSETS (OR ANY PORTION THEREOF), THE TRANSFERABILITY OF THE TARGET
ASSETS, THE TERMS, AMOUNT, VALIDITY OR ENFORCEABILITY OF ANY ASSUMED
LIABILITIES, THE TITLE OF THE TARGET ASSETS (OR ANY PORTION THEREOF), THE
MERCHANTABILITY OR FITNESS OF THE TANGIBLE ASSETS, INVENTORY OR ANY OTHER
PORTION OF THE TARGET ASSETS FOR ANY PARTICULAR PURPOSE, OR ANY OTHER MATTER OR
THING RELATING TO THE TARGET ASSETS OR ANY PORTION THEREOF. WITHOUT IN ANY WAY
LIMITING THE FOREGOING, EXCEPT AS EXPRESSLY PROVIDED HEREIN, SELLERS HEREBY
DISCLAIM ANY WARRANTY, EXPRESS OR IMPLIED, OF MERCHANTABILITY OR FITNESS FOR ANY
PARTICULAR PURPOSE AS TO ANY PORTION OF THE TARGET ASSETS. PURCHASER FURTHER
ACKNOWLEDGES THAT PURCHASER HAS CONDUCTED AN INDEPENDENT INSPECTION AND
INVESTIGATION OF THE PHYSICAL CONDITION OF THE TARGET ASSETS AND ALL SUCH OTHER
MATTERS RELATING TO OR AFFECTING THE TARGET ASSETS AS PURCHASER DEEMED NECESSARY
OR APPROPRIATE AND THAT IN PROCEEDING WITH ITS ACQUISITION OF THE TARGET ASSETS,
EXCEPT FOR ANY REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH HEREIN,
PURCHASER IS DOING SO BASED SOLELY UPON SUCH INDEPENDENT INSPECTIONS AND
INVESTIGATIONS. ACCORDINGLY, SUBJECT TO THE TERMS AND CONDITIONS OF THIS
AGREEMENT, PURCHASER WILL ACCEPT THE TARGET ASSETS AT THE CLOSING “AS IS,”
“WHERE IS,” AND “WITH ALL FAULTS.” NO PARTY SHALL BE LIABLE TO ANY OTHER PARTY
FOR ANY (I) CONSEQUENTIAL, INDIRECT, SPECIAL, PUNITIVE, SPECULATIVE, EXEMPLARY,
TREBLE DAMAGES OR DAMAGES FOR ANY LOST PROFITS OR BUSINESS, LOST BUSINESS
OPPORTUNITY, DIMINUTION IN VALUE OR LOSS OF USE, (II) DAMAGES OR LOSSES BASED ON
OR USING CALCULATION OF LOSS OF FUTURE REVENUE, INCOME OR PROFITS OR DIMINUTION
OF VALUE OR (III) DAMAGES BASED ON A MULTIPLE OF EARNINGS OR OTHER METRIC OR
LOSS OF BUSINESS REPUTATION OR OPPORTUNITY FOR ANY REASON WITH RESPECT TO ANY
MATTER ARISING OUT OF OR RELATING TO THIS AGREEMENT, WHETHER BASED ON STATUTE,
CONTRACT, TORT, OR OTHERWISE AND WHETHER OR NOT ARISING FROM THE OTHER PARTY’S
SOLE, JOINT, OR CONCURRENT NEGLIGENCE, STRICT LIABILITY, OR OTHER FAULT.

 

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Article 2
PURCHASE PRICE.

 

2.1 Purchase Price. In consideration for the sale, conveyance, transfer, and
delivery of the Target Assets, upon the terms and subject to the covenants and
conditions set forth in this Agreement, Purchaser shall assume the Assigned
Contracts and the Assumed Liabilities and Purchaser shall pay to Sellers the
Purchase Price. Notwithstanding any provision hereof to the contrary, Purchaser
and the Escrow Agent shall be entitled to deduct and withhold from any
consideration otherwise payable under the terms of this Agreement such amounts
they are required to deduct and withhold pursuant to any provision of Law,
including those related to Taxes. To the extent that amounts are so withheld by
Purchaser under any provision of this Agreement, such withheld amounts (i) shall
be remitted to the applicable Governmental Authority in accordance with
applicable Law and (ii) shall be treated for all purposes of this Agreement as
having been paid to the recipients in respect of which such deduction and
withholding was made. Assuming that the Sellers deliver all items described in
Section 9.2, the Purchaser acknowledges that as of the date hereof, the
Purchaser has no knowledge that withholding will be required pursuant to this
Section 2.1.

 

2.2 Payment of the Purchase Price.

 

2.2.1 Within forty-eight (48) hours of the entry of a Bidding Procedures Order
providing for the payment of a Break-up Fee and Expense Reimbursement as set
forth in Section 6.4.2 below, Purchaser will execute and deliver to Sellers and
an escrow agent mutually acceptable to Sellers and Purchaser (the “Escrow
Agent”) an escrow agreement among Purchaser, Sellers and the Escrow Agent (the
“Escrow Agreement”) and, upon execution and delivery of the Escrow Agreement by
each of the other parties thereto, Purchaser will deliver to the Escrow Agent,
pursuant to the terms of the Escrow Agreement, an amount equal to One Million
U.S. Dollars ($1,000,000.00) in immediately available funds (the “Cash
Deposit”). Any fees or costs payable to the Escrow Agent or in connection with
the Escrow Agreement shall be divided evenly and payable one-half by Purchaser
and one-half by Sellers. The Cash Deposit shall be held by the Escrow Agent in
an interest-bearing account reasonably acceptable to Purchaser and Sellers. The
Cash Deposit shall be held by the Escrow Agent and be released as follows:

 

2.2.1.1 If the Closing occurs, Sellers and Purchaser shall jointly instruct the
Escrow Agent to, on the Closing Date, deliver the Cash Deposit, together with
all accrued investment income thereon, by wire transfer of immediately available
funds, to Sellers, as provided in Section 2.2.2.3 in accordance with the
instructions provided to the Escrow Agent (and such amounts shall be applied as
a credit toward the payment of the Purchase Price).

 

2.2.1.2 If this Agreement is terminated by Sellers pursuant to Section 10.1.6
and Sellers are not then in breach of Sellers’ obligations pursuant to this
Agreement, the Escrow Agent shall deliver the Cash Deposit, together with all
accrued investment income thereon, in accordance with the terms of the Escrow
Agreement and if such deposit is delivered to, or becomes deliverable to, anyone
other than Purchaser such deposit will constitute liquidated damages. Because it
would be impractical and extremely difficult to determine the extent of any
damages that might result from a breach of, or default under, this Agreement by
Purchaser prior to the Closing, it is understood and agreed that such liquidated
damages (in an amount equal to the Cash Deposit) represent Purchaser’s and
Sellers’ reasonable estimate of actual damages, such liquidated damages do not
constitute a penalty and such deposit will constitute Sellers’ sole and
exclusive remedy for any breach of, or default under, this Agreement by
Purchaser prior to the Closing.

 

2.2.1.3 If this Agreement is terminated for any reason other than as set forth
in Section 2.2.1.2, the Escrow Agent shall deliver the Cash Deposit, together
with all accrued investment income thereon, to Purchaser.

 

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2.2.2 At the Closing:

 

2.2.2.1 Purchaser shall make a cash payment, by wire transfer of immediately
available funds to such account as Sellers shall designate, of the “Closing
Payment” which shall equal the Purchase Price, minus (i) an amount equal to the
Cash Deposit and any accrued investment income thereon.

 

2.2.2.2 The Escrow Agent shall transfer the Cash Deposit and any accrued
investment income thereon to Sellers by wire transfer of immediately available
funds to such account as Sellers shall designate.

 

2.3 Allocation of the Purchase Price. Sellers and Purchaser agree the Purchase
Price and the Assumed Liabilities as well as any other items constituting a
portion of the amount realized with respect to the sale of the Target Assets for
Tax purposes (the “Allocable Consideration”) will be allocated among the Target
Assets in a manner consistent with Section 1060 of the Tax Code and Treasury
regulations promulgated thereunder. Purchaser will, no later than ninety (90)
days following the Closing Date, prepare and deliver to Sellers a schedule
setting forth the allocation of the Allocable Consideration in accordance with
the preceding sentence (the “Allocation Schedule”). Sellers shall have fifteen
(15) days to review and provide written comments to Purchaser with respect to
the Allocation Schedule. If Sellers provide written comments to Purchaser in
accordance with the preceding sentence, Purchaser and Sellers will endeavor for
a period of not less than thirty (30) days to resolve any such comments. If
Sellers do not provide written comments within such fifteen (15) day period or
if Purchaser and Sellers resolve all such comments, (i) the Allocation Schedule,
as revised, if applicable, shall be final and binding on the parties hereto,
(ii) neither Purchaser nor any Seller will take any position that is contrary to
or inconsistent with the Allocation Schedule for any Tax purpose, including with
respect to any Tax Return (including amended Tax Returns) and (iii) in the event
that the Allocation Schedule is disputed by any Governmental Authority, the
party receiving notice of such dispute will promptly notify the other parties
and the parties will consult in good faith as to how to resolve such dispute in
a manner consistent with the agreed upon Allocation Schedule. Notwithstanding
any provision of this Section 2.3 to the contrary, if Purchaser and Sellers are
not able to resolve all written comments made by Sellers within the applicable
fifteen (15) day period, each party shall be allowed to use that party’s own
allocation of the Purchase Price and the Assumed Liabilities. 

 

Article 3
EXCLUDED ASSETS.

 

3.1 Excluded Assets. The Target Assets to be acquired by Purchaser hereunder do
not include the following (hereinafter referred to as the “Excluded Assets”):

 

3.1.1 any cash on hand, in banks, and any cash equivalents;

 

3.1.2 all of Seller’s interest in any Intellectual Property used exclusively in
the Excluded Business;

 

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3.1.3 all claims, rights and causes of action of Sellers arising under or
relating to Chapter 5 of the Bankruptcy Code (whether or not asserted as of the
Closing Date) including, without limitation, any such claims and actions arising
under Sections 544, 545, 547, 548, 549 or 551 of the Bankruptcy Code, and
commercial tort claims;

 

3.1.4 Sellers’ rights under this Agreement (including the right to receive the
Purchase Price) and under any of the ancillary agreements to be entered into in
connection with the transactions contemplated hereby;

 

3.1.5 all shares of capital stock or other equity interests of Sellers or any of
their Affiliates, all securities convertible into or exchangeable or exercisable
for shares of capital stock or other equity interests of Sellers or any of their
Affiliates, and all securities owned and held by Sellers, whether equity or debt
or a combination thereof;

 

3.1.6 all Tax Returns and Tax records of Sellers and their Affiliates;

 

3.1.7 all Tax refunds, credits, abatements or similar offsets against Taxes of
Sellers and their Affiliates that relate to Specifically Excluded Liabilities;

 

3.1.8 all Tax attributes of the Sellers and its Affiliates;

 

3.1.9 the organizational documents, qualifications to do business as a foreign
corporation, arrangements with registered agents relating to foreign
qualifications, taxpayer and other identification numbers, seals, minute books,
blank stock certificates, and other documents relating to the organization,
maintenance and existence of Sellers or any of their Affiliates, any other books
and records exclusively related to the Excluded Business and all personnel
records or other records of the Sellers that are required by Law to be retained;

 

3.1.10 all claims arising on or prior to the Closing Date under any directors
and officers liability insurance policies owned by Sellers;

 

3.1.11 all claims and causes of action arising on or before the Closing Date
that Sellers have against any Affiliate, insider of any Seller or any third
party (and any recovery on account thereof), including rights of recoupment and
avoidance, except to the extent that such claims or causes of action (i) may
constitute a counterclaim, defense, offset, or recoupment right with respect to
affirmative claims (if any) that such third party may assert against Purchaser
or its Affiliates, (ii) arise under any rights under warranties (express or
implied), representations and guarantees made by any third party to Sellers in
connection with the Target Assets or the Target Business, (iii) arise under the
Assigned Contracts assumed and assigned to Purchaser, (iv) arise under any
Transferred Licenses, or (v) relate to the Target Assets; provided, however,
nothing in this Section 3.1.10 shall in any event be deemed to eliminate from
the Excluded Assets any other asset expressly designated as such pursuant to
this Article 3;

 

3.1.12 professional retainers paid by Sellers;

 

3.1.13 any letters of credit or similar financial accommodations issued to any
third party(ies) for the account of Sellers;

 

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3.1.14 all customer deposits which as of the date hereof are as set forth on
Schedule 3.1.13;

 

3.1.15 any assets related exclusively to the Excluded Business;

 

3.1.16 all Benefit Plans, and any other “employee benefit plan” (as defined in
ERISA) or any other employee benefit plan, program or arrangement, including, in
each case, any underlying assets, agreements, policies and rights in connection
therewith;

 

3.1.17 all insurance policies (except to the extent relating to the Target
Assets), all directors and officers liability insurance policies and errors and
omissions insurance policies and all rights to assert claims with respect to any
such policies; all unearned insurance premiums and all accrued insurance refunds
or rebates; all unearned insurance premiums and all accrued insurance refunds or
rebates;

 

3.1.18 all Contracts that are not Assigned Contracts, all Licenses that are not
Transferred Licenses and all Intellectual Property that is not Transferred
Intellectual Property and all Contracts, Licenses and Intellectual Property that
have terminated or expired prior to the Closing in the Ordinary Course of
Business;

 

3.1.19 any documents or communications of Sellers that are subject to Sellers’
attorney-client privilege and/or the work-product immunity doctrine;

 

3.1.20 those assets, if any, listed on Schedule 3.1.20.

 

3.2 Purchaser Agreement. Purchaser expressly agrees and understands that Sellers
shall not sell, assign, transfer, convey or deliver to Purchaser any of the
Excluded Assets.

 

Article 4
SELLERS’ REPRESENTATIONS AND WARRANTIES.

 

As a material inducement to Purchaser to enter into this Agreement and purchase
the Target Assets, each of the Sellers, jointly and severally, warrants and
represents to Purchaser on the date hereof:

 

4.1 Organization and Corporate Power.

 

4.1.1 Each Seller is duly formed, validly existing and in good standing under
the laws of the state of its formation. Each Seller is in good standing and
qualified to do business in every jurisdiction in which its ownership of
property or conduct of business requires it to qualify, except where the failure
to do so has not had and would not cause a Material Adverse Effect. A listing of
each such jurisdiction for each Seller is set forth on Schedule 4.1.1. Except as
a result of the commencement of the Bankruptcy Cases, each Seller has all
requisite power and authority and all material licenses, permits, and
authorizations necessary to own and operate its properties and to carry on its
business as now conducted. Sellers have made available to Purchaser true,
complete and correct copies of the charters and governing documents of each
Seller, as currently in effect.

 

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4.1.2 Except for the Excluded Business, no Seller is engaged in any business
other than the Target Business. None of the Target Business is conducted by any
Person other than Sellers, and none of the Target Assets is owned or held by any
Person other than Sellers.

 

4.2 Title and Related Matters. Except as set forth on Schedule 4.2, and
excluding Real Property (which is governed by Section 4.11 below), Sellers own
and have good and marketable title to all Target Assets, free and clear of all
Encumbrances, except for Permitted Encumbrances, and there exists no material
restriction on the use or transfer of such property. All of the tangible assets
included in the Target Assets have been maintained in a commercially reasonable
manner consistent with national industry practice, are in operating condition
and repair (subject to normal wear and tear), and are suitable for the purposes
for which they are presently used and proposed to be used.

 

4.3 Necessary Property. The Target Assets constitute all property (of any type,
whether tangible or intangible) and property rights now used in the conduct of
the Target Business as currently conducted by Sellers (except with respect to
the Excluded Business). Upon the Closing, good and marketable title to the
Target Assets and the rights under the Assigned Contracts shall be vested in
Purchaser free and clear of all Encumbrances (other than Permitted
Encumbrances).

 

4.4 Litigation. Except as set forth on Schedule 4.4 and except for the
Bankruptcy Cases, (a) there is no suit, claim, litigation, proceeding
(administrative, judicial, or in arbitration, mediation or alternative dispute
resolution), Governmental Authority or grand jury investigation, or other action
(any of the foregoing, “Action”) pending or, to the Knowledge of Sellers,
threatened against Sellers, the Target Business, any of the Target Assets or
Assumed Liabilities, that would cause a Material Adverse Effect, other than any
Action that is stayed by operation of Section 362(a) of the Bankruptcy Code; (b)
(i) as of the date hereof, there is no Action pending or, to the Knowledge of
Sellers, threatened against Sellers, the Target Business, any of the Target
Assets or Assumed Liabilities, challenging, enjoining, or preventing this
Agreement or the consummation of the transactions contemplated hereby, and, (ii)
as of the Closing Date, there will be no Action pending or, to the Knowledge of
Sellers, threatened against Sellers, the Target Business, any of the Target
Assets or Assumed Liabilities, challenging, enjoining, or preventing this
Agreement or the consummation of the transactions contemplated hereby, other
than any Action that is stayed by operation of Section 362(a) of the Bankruptcy
Code; and (c) (i) as of the date hereof, no Seller is currently subject to any
material judgment, order, writ, injunction, or decree of any court or other
Governmental Authority (“Order”) that would apply to the Purchaser or
Purchaser’s operation of the Target Business from and after the Closing, other
than Orders of general applicability or any Order that is stayed by operation of
Section 362(a) of the Bankruptcy Code, and, (ii) as of the Closing Date, no
Seller will be subject to any material Order that would apply to the Purchaser
or Purchaser’s operation of the Target Business from and after the Closing,
other than Orders of general applicability or any Order that is stayed by
operation of Section 362(a) of the Bankruptcy Code.

 

4.5 Insurance. To the Knowledge of Sellers and except as would not cause a
Material Adverse Effect, (i) Sellers’ insurance policies covering or relating to
the properties or operations of Sellers are in full force and effect (with
respect to the applicable coverage periods), and (ii) no Seller is in default
with respect to any of its obligations under any of such insurance policies.

 

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4.6 Absence of Certain Changes.

 

4.6.1 Except as set forth on Schedule 4.6.1, since the Petition Date, no Seller
has taken or allowed to occur any of the following actions or events, or agreed
or committed, in writing or otherwise, to do or allow to occur any of such
actions or events and no such events have occurred:

 

4.6.1.1 To the Knowledge of Sellers, the termination of any Contract related to
the Target Business, except for any termination pursuant to the express terms of
any such agreement permitting termination for convenience after a specified
notice period (and, for clarification, not for cause or in connection with a
breach or default by the other party thereto);

 

4.6.1.2 Any sale or other disposition of any material assets used in or related
to the Target Business; or

 

4.6.1.3 The damage or destruction by fire or other casualty of any material
asset used in or related to the Target Business, or any part thereof, if such
asset has not been replaced or repaired.

 

4.6.2 Except as set forth on Schedule 4.6.2, no Seller has received written or
verbal notice of breach or termination of any Assigned Contract, except for any
termination pursuant to the express terms of any such agreement permitting
termination for convenience after a specified notice period (and, for
clarification, not for cause or in connection with a breach or default by the
other party thereto).

 

4.7 Compliance with Laws.

 

4.7.1 Neither the execution of this Agreement nor the Closing will constitute or
result in any default, breach or violation under or with respect to any (i)
Applicable Laws, (ii) the provisions of any material permits, franchises, or
licenses issued by any Governmental Authority, or (iii) the provisions of each
Seller’s organizational documents (collectively, clauses (i) through (iii), the
“Legal Requirements”), except with respect to any default, breach or violation
under or with respect to any Legal Requirements which would not, individually or
in the aggregate, be material to the Sellers, when taken as a whole. To the
Knowledge of Sellers, no event has occurred, and no condition or circumstance
exists, that constitutes or result directly in a violation by a Seller of, or a
failure on the part of a Seller to comply with, any Legal Requirement, except
with respect to any violation or failure to comply with Legal Requirements which
would not, individually or in the aggregate, be material to the Sellers, when
taken as a whole. Except as set forth on Schedule 4.7.1, no Seller has received
any written notice or other written communication from any Governmental
Authority or any other Person regarding (i) any actual, alleged, or potential
violation of, or failure to comply with, any Legal Requirement, or (ii) any
actual, alleged, or potential obligation on the part of any Seller to undertake,
or to bear all or any portion of the cost of, any remedial, corrective or
response action of any nature, except with respect to any actual, alleged or
potential violation of, or failure to comply with, any Legal Requirements or
obligations to undertake, or bear all or any portion of costs of any remedial,
corrective or response action of any nature which would not, individually or in
the aggregate, be material to the Sellers, when taken as a whole.

 

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4.7.2 Each material authorization, license or permit required to conduct the
Target Business as the same is presently conducted is listed on Schedule 4.7.2
(the “Material Permits”), and is valid and in full force and effect. Neither the
execution of this Agreement nor the Closing do or will constitute or result in a
default under or material violation of any such Material Permit.

 

4.7.3 To the Knowledge of Sellers, none of the Sellers or any officer, director,
manager, member, agent, employee or independent contractor of the Sellers, in
the scope of their employment or engagement with Sellers, has submitted any
claims for reimbursement that are in material violation of, nor has engaged in
any activity that is in material violation of (i) the federal Medicare or
federal or state Medicaid statutes, the federal TRICARE statute (10 U.S.C. §
1071 et seq.), (ii) the civil False Claims Act of 1863 (31 U.S.C. § 3729 et
seq.), (iii) criminal false claims statutes (e.g., 18 U.S.C. §§ 287 and 1001),
(iv) the federal health care program Anti-Kickback Statute (42 U.S.C. §
1320a-7b(b)) (criminal penalties for acts involving Federal health care
programs), commonly referred to as the “Federal Anti-Kickback Statute,” or (v)
the Program Fraud Civil Remedies Act of 1986 (31 U.S.C. § 3801 et seq.), Section
14 of Public Law 100-93, the anti-fraud and related provisions of the Health
Insurance Portability and Accountability Act of 1996 (commonly referred to as
“HIPAA”) as amended by the Health Information Technology for Economic and
Clinical Health Act (commonly referred to as the “HITECH Act”), or related
regulations or other related or similar Applicable Laws (collectively,
“Healthcare Laws”), including, without limitation, the following:

 

4.7.3.1 making or causing to be made a materially false statement or
representation in any application for any benefit or payment;

 

4.7.3.2 making or causing to be made a materially false statement or
representation for use in determining rights to any benefit or payment;

 

4.7.3.3 soliciting or receiving any remuneration (including any kickback, bribe
or rebate), directly or indirectly, overtly or covertly, in cash or kind (A) in
return for referring an individual to a Person for the furnishing or arranging
for the furnishing of any item or service for which payment may be made in whole
or in part under any federal health care program, or (B) in return for
purchasing, leasing or ordering, or arranging for or recommending purchasing,
leasing or ordering of any good, facility, service or item for which payment may
be made in whole or in part under any federal health care program;

 

4.7.3.4 offering or paying any remuneration (including any kickback, bribe or
rebate), directly or indirectly, overtly or covertly, in cash or in kind, to any
person to induce such Person (A) to refer an individual to a person for the
furnishing or arranging of any item or service for which payment may be made in
whole or in part under a federal health care program, or (B) to purchase, lease,
order or arrange for or recommend purchasing, leasing or ordering of any good,
facility, service or item for which payment may be made in whole or in part
under a federal health care program; or

 

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4.7.3.5 any other activity that materially violates any Legal Requirements,
relating to prohibiting fraudulent, abusive or unlawful practices directly
connected with the provision of health care items or services or the billing for
such items or services provided to a beneficiary of any federal health care
program.

 

4.7.4 Except as set forth on Schedule 4.7.5, to the Knowledge of Sellers, each
Seller, to the extent the following is applicable, (i) is, and in the past three
(3) years have been, in all material respects in compliance with HIPAA and the
HITECH Act and comparable state privacy and data security Laws applicable to the
Sellers as business associates; (ii) has used and disclosed, and uses and
discloses, Protected Health Information (as defined in 45 C.F.R. § 160.103), to
the extent applicable as business associates, in material compliance with any
limitations set forth in its customer or payor agreements; and (iii) performs
its functions, activities and services in material compliance with the
limitations set forth in HIPAA, the HITECH Act, and applicable state privacy and
data security Laws (to the extent not preempted by federal Law) to the extent
applicable as business associates.

 

4.7.5 Except as set forth on Schedule 4.7.6, the Sellers have not received, in
the past three (3) years, any written notice from any Governmental Authority or
any other Person regarding any actual or suspected material violation of, or
failure to materially comply with, HIPAA, the HITECH Act or applicable state
privacy and data security Laws to the extent applicable as business associates.
To the Knowledge of Sellers, no breach has occurred with respect to any
unsecured Protected Health Information maintained by the Sellers that is subject
to the notification requirements of 45 C.F.R. part 164, Subpart D, and no
information security or privacy breach event has occurred that would require
notification under any comparable state Laws applicable to the Sellers as
business associates. Except as set forth on Schedule 4.7.6, with regard to
compliance with HIPAA, the HITECH Act, or applicable state privacy and data
security Laws, the Sellers have no obligation to undertake, or to bear all or
any portion of the cost of, any mitigation, notifications or any remedial,
corrective or response action of any nature. The services and products provided
by the Sellers materially comply with HIPAA, the HITECH Act and applicable state
privacy and data security Laws to the extent applicable.

 

4.8 Transactions with Related Persons; Outside Interests. To the Knowledge of
Sellers, no Seller nor any director, manager, officer or employee of such Seller
is a party to any Assigned Contract, or has any interest in any of the Target
Assets, except as specifically disclosed on Schedule 4.8.

 

4.9 Officers, Directors, Managers, Employees, Consultants and Agents;
Compensation.

 

4.9.1 Set forth on the Disclosure Statement of Private Information previously
provided to Purchaser is a complete list of: (i) all Active Business Employees
and Non-Active Business Employees, and (ii) all current paid operating
consultants providing services to the Target Business; together, in each case,
with the current rate of compensation (if any) payable to each and any paid
vacation time owing to such person, any incentive, bonus or deferred payments
owing to such persons but not yet paid, the date of employment of each such
person. No Seller has any employees (active or other) employed in the Target
Business outside of the United States.

 

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4.10 ERISA and Related Matters. Schedule 4.10 identifies each “employee benefit
plan,” as such term is defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”), that is maintained or otherwise
contributed to by Sellers or with respect to which Sellers otherwise have any
liability and each material plan, arrangement, or policy, qualified or
non-qualified, whether or not written or considered legally binding, not subject
to ERISA maintained or otherwise contributed to by Sellers or with respect to
which Sellers otherwise have any liability and providing for pension, thrift,
savings, retirement, profit sharing, deferred compensation, bonuses, stock
option, stock purchase, phantom stock, incentive compensation, equity
compensation, “fringe” benefits, vacation, severance, disability, medical,
hospitalization, dental, life, accidental death and dismemberment, tuition,
company car, club dues, income tax preparation, sick leave, maternity,
paternity, family leave, child care, education or cafeteria plan benefits, or
employee insurance coverage or any similar compensation or welfare benefit
arrangement including, without limitation, any voluntary employees’ beneficiary
associations or related trusts (each a “Benefit Plan” and, collectively, the
“Benefit Plans”). Schedule 4.10 identifies each (i) any employee benefit plan
subject to Title IV of ERISA or Section 412 of the Tax Code, or (ii) a
Multiemployer Plan, in each case that is currently maintained or contributed to
by the Sellers, its Affiliates, or any members of Seller’s current or former
“Controlled Group” (within the meaning of Sections 414(b), (c), (m) or (o) of
the Tax Code) (“ERISA Affiliates”), or which could reasonably be expected to
result in any Liability to the Purchaser as a result of the purchase of the
Target Assets. Each Benefit Plan has been maintained, funded and administered at
all times substantially in compliance with its terms and all Applicable Laws,
including ERISA and the Tax Code, applicable to such Benefit Plan, except where
the failure to do so would not cause a Material Adverse Effect. Each Benefit
Plan that is an employee pension benefit plan within the meaning of section 3(2)
of ERISA that is intended to be a qualified plan under section 401(a) has
received a favorable determination letter or opinion letter (a copy of which has
been provided to Purchaser), each related trust has been determined to be exempt
from taxation under Section 501(a) of the Tax Code, and nothing has occurred
that could reasonably be expected to cause the loss of such qualification or
exemption. Other than as required by Applicable Laws, no Sellers have any
obligation to provide any benefits in the nature of severance pay or any
post-retirement medical, health, life insurance or other post-retirement welfare
benefits for retired or terminated employees, their spouses or their dependents.
No representations have been made to any current or former employee of any
Seller or its Affiliates with respect to benefits to be provided under a Benefit
Plan that are materially inconsistent with the terms of such Benefit Plan.
Except as disclosed on Schedule 4.10, the consummation of the transactions
contemplated by this Agreement will not either alone or in connection with
another event (i) entitle any current or former employee of the Sellers to
severance pay, or any other similar payment, except as expressly provided in
this Agreement, (ii) accelerate the time of payment or vesting, or increase the
amount of compensation due to any such employee or former employee, or (iii)
give rise to the payment of any amount that could subject (whether alone or in
connection with another payment) a current or former employee of the Sellers to
tax penalties under Section 4999 of the Tax Code.

 

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4.11 Real Property.

 

4.11.1 Schedule 4.11.1 contains a complete and accurate list of all of the Real
Property leased or otherwise occupied by any Seller as tenant (collectively, the
“Real Property Leases”), which Real Property Leases are without modification
(written or oral) except as set forth in Schedule 4.11.1. True, accurate and
complete copies of all documents comprising the Real Property Leases (including
any and all exhibits, amendments, supplements and other modifications thereto)
have been delivered to Purchaser prior to the date hereof. Except as set forth
in Schedule 4.11.1, a Seller holds a valid leasehold interest in each Real
Property Lease, and each Real Property Lease is in full force and effect and is
enforceable against such Seller and, to the Knowledge of Sellers, the applicable
lessor(s) in accordance with its terms.

 

4.11.2 Except as set forth on Schedule 4.11.2: (i) the Real Property subject to
a Real Property Lease is in good condition and repair consistent with its
present use and is available for immediate use in the conduct of the Target
Business; (ii) to the Knowledge of Sellers, no condemnation or eminent domain
proceeding has been commenced against the Real Property nor is any such
proceeding under consideration for commencement of any condemnation or eminent
domain proceeding; (iii) no Person (other than Sellers) is in possession of any
portion of the Real Property.

 

4.12 Reserved.

 

4.13 Intellectual Property.

 

4.13.1 Schedule 4.13 lists all Transferred Intellectual Property, which includes
all Intellectual Property material to the Target Business that is used in the
Target Business, specifying whether such Transferred Intellectual Property is
owned, controlled, used or held (under license or otherwise) by Sellers, and
also indicating which of such Transferred Intellectual Property is registered.
No Seller has any rights to Intellectual Property used in the Target Business
that is not included in the Transferred Intellectual Property, except as
excluded by Article 3. No Seller has granted any license or made any assignment
of any Transferred Intellectual Property, and to the Knowledge of Sellers, no
other person or entity has any right to use any such Transferred Intellectual
Property. No Seller or its Subsidiaries have sent or received any written notice
or correspondence alleging infringement, misappropriation or other violation of,
or invalidity or lack of enforceability of, any Transferred Intellectual
Property rights. To the Knowledge of Sellers, no Person is infringing upon any
material Transferred Intellectual Property of such Seller and its Subsidiaries.

 

4.14 Authorization. Each Seller has, and on the Closing Date will have, full
power, authority and legal right to execute and deliver this Agreement and all
other agreements contemplated hereby to which such Seller is a party, subject to
the Bankruptcy Court’s entry of the Bankruptcy Orders. Except as set forth on
Schedule 4.14 and subject to the Bankruptcy Court’s entry of the Bankruptcy
Orders, no approvals or consents of any other persons, entity or governmental
authority having jurisdiction are necessary in connection with the execution,
delivery, and performance of each Seller’s obligations under this Agreement.
This Agreement and all other agreements contemplated hereby, when executed and
delivered by each Seller, and, subject to the Bankruptcy Court’s entry of the
Bankruptcy Orders, will constitute the legal, valid and binding obligation of
each such Seller, enforceable against it in accordance with its and their terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
and similar statutes affecting creditors’ rights generally and judicial limits
on equitable remedies.

 

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4.15 No Conflict with Other Instruments or Agreements. Except as set forth on
Schedule 4.15, the consummation by each Seller of the transactions contemplated
by this Agreement will not result in or constitute: (i) a default or an event
that, with the giving of notice or lapse of time, or both, would constitute a
default, breach, or violation of the organizational documents of the Seller;
(ii) to the Knowledge of Sellers, a default or an event that, with the giving of
notice or lapse of time, or both, would constitute a material default, breach,
or violation of any Assigned Contract to which such Seller is a party or by
which such Seller or any of its property is bound; (iii) to the Knowledge of
Sellers, the violation of any Law; (iv) to the Knowledge of Sellers, an event
that would permit any counter party to terminate any Assigned Contract or to
accelerate the maturity of any Indebtedness or other obligation of the Seller;
or (v) to the Knowledge of Sellers, the creation or imposition of any
Encumbrance on any of the assets of the Sellers (including the Target Assets);
except in the case of clauses (ii), (iii), (iv) and (v) for defaults, breaches,
violations, terminations, accelerations, liens, charges or encumbrances that (x)
are excused by the Bankruptcy Court or the applicability of any provision of the
Bankruptcy Code or (y) are set forth on Schedule 4.15.

 

4.16 Brokers or Finders. Except as set forth on Schedule 4.16, there are no
claims for brokerage commissions, finders’ fees or similar compensation in
connection with the transactions contemplated by this Agreement based on any
arrangement or agreement made by or on behalf of Sellers that are payable by the
Purchaser.

 

4.17 Taxes. Except as set forth on Schedule 4.17, and in each case, with respect
to the Target Business and the Target Assets, there are no Encumbrances for
Taxes (other than Permitted Encumbrances) upon any of the Target Assets.

 

4.18 Financial Information. Sellers have provided to Purchaser unaudited
financial information related to the Target Business, to the extent available to
Sellers as of the date of this Agreement.

 

Article 5
PURCHASER’S REPRESENTATIONS AND WARRANTIES.

 

As a material inducement to Sellers to enter into and perform its obligations
under this Agreement, Purchaser represents and warrants to Sellers on the date
hereof:

 

5.1 Organization and Corporate Power. Purchaser is duly formed, validly existing
and in good standing under the laws of the state of its formation. Purchaser is
in good standing and qualified to do business in every jurisdiction in which its
ownership of property or conduct of business requires it to qualify. Purchaser
has all requisite power and authority and all material licenses, permits, and
authorizations necessary to own and operate its properties and to carry on its
business as now conducted. Purchaser has made available to Sellers true,
complete and correct copies of the charter and governing document of Purchaser,
as currently in effect.

 

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5.2 Authorization. The execution, delivery, and performance by Purchaser of this
Agreement and all other agreements contemplated hereby to which Purchaser is a
party have been duly and validly authorized by all necessary company action of
Purchaser, and except as set forth on Schedule 5.2, no approvals or consents of
any other Person or Governmental Authority having jurisdiction are necessary in
connection with it. This Agreement and each such other agreement, when executed
and delivered by Purchaser, will constitute the legal, valid and binding
obligation of Purchaser enforceable against Purchaser in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, and similar statutes affecting creditors’ rights generally and
judicial limits on equitable remedies.

 

5.3 No Conflict with Other Instruments or Agreements. The consummation by
Purchaser of the transactions contemplated by this Agreement will not result in
or constitute a default or an event that, with the giving of notice or lapse of
time, or both, would constitute a default, breach, or violation of the
organizational documents of Purchaser or any Contract to which Purchaser is a
party or by which Purchaser or any of its property may be bound and which would
be material to Purchaser’s performance of this Agreement, or the violation of
any Law.

 

5.4 Brokers or Finders. There are no claims for brokerage commissions, finders’
fees or similar compensation in connection with the transactions contemplated by
this Agreement based on any arrangement or agreement made by or on behalf of
Purchaser.

 

5.5 Funding. Purchaser has sufficient liquid assets and available credit for
Purchaser to pay the anticipated Purchase Price on the Closing Date and to pay
and perform the Assumed Liabilities as they become due and to perform its
obligations under this Agreement and the agreements contemplated by this
Agreement, and has provided to Sellers a copy of Purchaser’s financial
statements and such other financial information reasonably available to
Purchaser requested by Sellers to demonstrate its ability to do so.

 

5.6 Adequate Assurance. Purchaser shall take commercially reasonable steps to
demonstrate to the Bankruptcy Court adequate assurance of future performance
under the Assigned Contracts, and shall provide a copy of Purchaser’s financial
statements and such other financial information reasonably available to
Purchaser that is required by the Bankruptcy Court to demonstrate Purchaser’s
ability to assume, or to take an assignment of, the Assigned Contracts;
provided, however, that any such financial information and related testimony and
exhibits, other than information that is otherwise publicly available or is
ordinarily provided by Purchaser to potential contracting parties, shall be
distributed subject to appropriate confidentiality arrangements and shall be
filed or otherwise introduced in the Bankruptcy Court only under seal.

 

5.7 Governmental or Regulatory Approvals. Except as set forth in Schedule 5.7,
no Governmental or Regulatory Approval on the part of Purchaser is required in
connection with the execution and delivery by Purchaser of this Agreement, the
agreements contemplated by this Agreement or the consummation of the
transactions contemplated hereby and thereby.

 

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5.8 Legal Proceedings. There are no Actions pending or, to the Knowledge of
Purchaser, threatened in writing against Purchaser or any of its assets or
properties that would reasonably be expected to result in the issuance of an
Order restraining, enjoining or otherwise prohibiting, delaying or making
illegal the purchase of the Target Assets or the assumption of the Assumed
Liabilities by Purchaser under this Agreement or the performance by Purchaser of
its obligations under this Agreement or the agreements contemplated by this
Agreement.

 

5.9 Brokers. No broker, finder or agent acting on behalf of Purchaser or its
Affiliates is entitled to any fee or commission with respect to the execution
and delivery of this Agreement or the consummation of the transactions
contemplated hereby that would be payable by any Seller or its Subsidiaries.

 

5.10 Solvency. As of the Closing and immediately after consummating the
transactions contemplated by this Agreement, Purchaser reasonably believes it
will not (a) be insolvent (either because its financial condition is such that
the sum of its debts is greater than the fair value of its assets or because the
present fair value of its assets will be less than the amount required to pay
its probable Liability on its debts as they become absolute and matured), (b)
have unreasonably small capital with which to engage in its business, including
the Target Business (it being understood that nothing herein requires Purchaser
to operate the Target Business for any specified period of time), or (c) have
incurred or planned to incur debts beyond its ability to repay such debts as
they become absolute and matured.

 

5.11 Affiliation with Parmjit Parmar. Parmjit Parmar is not (i) affiliated,
directly or indirectly, with Purchaser or any Affiliate of Purchaser, or a
representative of Purchaser or any Affiliate of Purchaser, (ii) an officer,
director, partner, member or beneficial owner of any equity of, Purchaser or any
Affiliate of Purchaser, or (iii) a relative or spouse of any such Person.

 

Article 6
COVENANTS, AGREEMENTS PENDING CLOSING, AND OTHER AGREEMENTS.

 

6.1 Conduct of Sellers’ Business Pending the Closing.

 

6.1.1 From the date of this Agreement until Closing, and except as otherwise
consented to or approved by Purchaser in writing or as may be limited or
modified as a result of the filing of the Bankruptcy Cases and to the extent
Purchaser is the Successful Bidder at the Auction, each Seller covenants and
agrees with Purchaser as follows:

 

6.1.1.1 Sellers will carry on the Target Business only in the Ordinary Course of
Business (subject to any limitations required by the Bankruptcy Cases) and in
compliance with Law in all material respects and use commercially reasonable
efforts to maintain its relationships with customers, suppliers and others
having business dealings with Sellers, and use commercially reasonable efforts
to keep in full force and effect liability insurance comparable in amount and
scope of coverage to that currently maintained.

 

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6.1.1.2 All Target Assets now owned or used by Sellers will be used, preserved
and maintained in the Ordinary Course of Business and in compliance with Laws in
all material respects, to the same extent and in the same condition as said
Target Assets are on the date of this Agreement, ordinary wear and tear
excepted.

 

6.1.1.3 Sellers will keep or cause to be kept in effect and undiminished the
insurance now in effect on its Target Assets, and will purchase such additional
insurance, at Purchaser’s cost, as Purchaser may request.

 

6.1.1.4 Sellers will pay all of their obligations incurred on or after the
Petition Date in the Ordinary Course of Business as they become due (subject to
any limitations required by the Bankruptcy Cases) and will timely perform their
obligations under Section 365(d)(3) of the Bankruptcy Code.

 

6.1.1.5 Sellers will not cause or allow any Encumbrance to be placed on any
Target Asset (except for Permitted Encumbrances or Encumbrances relating to
debtor-in-possession financing) or make any commitments relating to such Target
Asset beyond the date of Closing, including, without limitation: (i) incurring
any material obligations or liabilities, whether fixed or contingent that would
constitute an Assumed Liability; (ii) entering into any material Contract that
would constitute an Assigned Contract; (iii) modifying or terminating any
Assigned Contract except in the Ordinary Course of Business; or (iv) waiving any
rights in respect of an Assigned Contract of material value to the Seller; (v)
selling or otherwise disposing of any Target Asset;

 

6.1.1.6 Sellers will not increase the compensation, severance or fringe benefits
of any officer or employee of Sellers, except for such increases in salary or
wages of employees of Sellers in the Ordinary Course of Business;

 

6.1.1.7 Sellers will not (a) terminate, sublet (or similar arrangement) or amend
any Assigned Contract, or (b) enter into, terminate or amend any other Contract
material to the Target Business, except, in each case, in the Ordinary Course of
Business; and

 

6.1.1.8 Sellers will not authorize any of, or commit or agree to take any of the
foregoing actions.

 

6.2 Additional Covenants and Agreements of Sellers. From the date of this
Agreement until Closing, and except as otherwise consented to or approved by
Purchaser in writing or as may be limited or modified as a result of the filing
of the Bankruptcy Cases and to the extent Purchaser is the Successful Bidder at
the Auction, each Seller further covenants and agrees with Purchaser as follows:

 

6.2.1 The Sellers will use their respective commercially reasonable efforts to
obtain as promptly as practicable the satisfaction of the conditions to Closing
described in Article 7 of this Agreement.

 

6.2.2 The Sellers will promptly supplement or amend the Schedules (i) with
respect to any matter hereafter arising to the Knowledge of Sellers that, if
existing or occurring at the date of this Agreement, would have been required to
be set forth or described in any Schedule or (ii) that is necessary to correct
any information in such Schedules that, to the Knowledge of Sellers, is
inaccurate on account of the occurrence of an event described in subpart (i).

 

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6.2.3 The Sellers will promptly notify Purchaser of:

 

6.2.3.1 Any Material Adverse Effect;

 

6.2.3.2 Any fact, condition, change or event that, to the Knowledge of Sellers,
causes or constitutes a breach, in any material respect, of any of the
representations or warranties or covenants of Sellers hereunder made as of the
date hereof; or

 

6.2.3.3 The damage or destruction by fire or other casualty of any material
Target Asset or part thereof.

 

The Sellers hereby acknowledge that the Purchaser does not and shall not waive
any right it may have hereunder solely as a result of any Schedule update
pursuant to Section 6.2.2 or such notifications, and any Schedule update or
notification given pursuant to Section 6.2.2 or this Section 6.2.3 (including
any supplement to the Schedules to this Agreement) shall (i) not have any effect
for purposes of Purchaser’s determining satisfaction of the conditions set forth
in Article 7 of this Agreement, and (ii) not in any way limit the Purchaser’s
exercise of its rights hereunder.

 

6.2.4 Purchaser and its counsel, accountants and other representatives in
connection with this transaction shall have full access during normal business
hours to all properties and other assets, books, accounts, records, contracts
and other documentation of, or relating to, the Target Business. The Sellers
shall promptly furnish or cause to be furnished to Purchaser, or the
representatives of Purchaser hereunder, all data, documentation, processes and
other information concerning the business, finances and properties of the Target
Business that may reasonably be requested related to the Target Business, and
shall otherwise provide such support as is reasonably requested by Purchaser
relative to its transition planning such as, without limitation, coordinating
meetings with key personnel.

 

6.2.5 Governmental Approvals. Sellers will cooperate with the reasonable
requests of Purchaser and its representatives and at the expense of Purchaser
(a) with respect to all filings and notifications that Purchaser elects to make
or is required to make in connection with the transactions contemplated by this
Agreement; (b) in identifying and obtaining any governmental authorizations
required by Purchaser to own and operate the Target Business from and after the
Closing Date, and (c) in obtaining all consents identified in Schedule 4.14 and
waivers of the conflicts or defaults identified in Schedule 4.15. Each of the
parties hereto shall use all commercially reasonable efforts to take, or cause
to be taken, all actions and to do, or cause to be done, all things necessary,
proper or advisable under Applicable Law and regulations to consummate and make
effective the transactions contemplated by this Agreement, including all
necessary or appropriate waivers, consents and approvals to effect all necessary
registrations, filings and submissions and to lift any injunction or other legal
bar to the consummation of the transactions contemplated by this Agreement (and,
in such case, to proceed with the transactions contemplated by this Agreement as
expeditiously as possible). Each party shall promptly inform the other parties
hereto of any oral communication with, and provide to counsel for the other
party copies of written communications with, any Governmental Authority
regarding any filings made pursuant to this Section 6.2.5. Sellers (or
Purchaser, as the case may be) shall not agree to participate in any meeting
with any Governmental Authority in respect of any such filings, investigation or
other inquiry unless it consults with Purchaser (or Sellers) in advance and, to
the extent permitted by such Governmental Authority, gives Purchaser (or
Sellers) the opportunity to attend, direct and participate at such meeting.

 

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6.3 Covenants and Agreements of Purchaser. From the date of this Agreement until
Closing, Purchaser covenants and agrees with Sellers as follows:

 

6.3.1 Purchaser will use its commercially reasonable efforts to execute and
deliver any documents and instruments that may reasonably be required to assist
Sellers in obtaining any necessary consents or waivers under or amendments to
agreements by which Sellers are bound and which are conditions to Closing
described in this Agreement; provided, however, that Purchaser shall not be
obligated hereunder to incur any cost or expense relating thereto or to execute
any guaranty, assumption of liability or other document or instrument requiring
Purchaser to assume obligations not contemplated by this Agreement.

 

6.3.2 Promptly after the date of this Agreement, and in any event within the
applicable time period prescribed by statute or regulations, Purchaser will use
its commercially reasonable efforts to promptly make all filings and
notifications required by Law to be made by it in connection with the
transactions contemplated by this Agreement. Purchaser will use its commercially
reasonable efforts to cooperate with Sellers and their representatives (a) with
respect to all filings and notifications Sellers elect to make or are required
to make in connection with the transactions contemplated by this Agreement, (b)
in identifying and obtaining any governmental authorizations required by
Purchaser to own and operate the Target Business from and after the Closing
Date, and (c) in obtaining all consents identified in Schedule 5.1.

 

6.4 Bankruptcy Actions.

 

6.4.1 Sale Motion and Order.

 

6.4.1.1 Within five (5) Business Days after the execution of this Agreement,
Sellers shall serve and file a motion (the “Sale Motion”) in the Bankruptcy
Cases requesting that the Bankruptcy Court (i) schedule the Bidding Procedures
Hearing on a date no later than fourteen (14) days following the filing of the
Sale Motion, (ii) enter the Bidding Procedures Order no later than twenty-one
(21) days following the filing of the Sale Motion and (iii) enter a Sale Order
(as defined in Section 7.2.1 below) at the final hearing on the Sale Motion (the
“Sale Hearing”) on a date no later than fifty-two (52) days following the filing
of the Sale Motion. Purchaser and Sellers acknowledge and agree that the
Bankruptcy Court’s entry of the Sale Order shall be required in order to
consummate the Acquisition, and that the requirement that the Sale Order be
entered is a condition that cannot be waived by any party.

 

6.4.1.2 Sellers will provide Purchaser with a reasonable opportunity to review
and comment upon the Sale Motion, the Assignment Motion, the Bidding Procedures
Order, the Sale Order, and the Assignment Order contemplated by this Agreement
prepared by Sellers prior to the filing thereof with the Bankruptcy Court, each
of which shall be in a final form reasonably acceptable to Purchaser.

 

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6.4.2 Bidding Procedures Order. Sellers shall in connection with the sale of the
Target Assets advertise to the public in a commercially reasonable manner as
required by the Bankruptcy Code or as shall be directed by the Bankruptcy Court
following a preliminary hearing on the Sale Motion (the “Bidding Procedures
Hearing”) and the entry of an order in the Bankruptcy Cases approving procedures
for solicitation and consideration by the Bankruptcy Court of bids from third
parties for the Target Assets (the “Bidding Procedures Order”) considered at
such Bidding Procedures Hearing. The Bidding Procedures Order shall be in a
final form reasonably acceptable to Sellers and Purchaser, shall be entered by
the Bankruptcy Court no later than twenty-one (21) days following the filing of
the Sale Motion, and in any event shall:

 

6.4.2.1 schedule the Sale Hearing;

 

6.4.2.2 schedule an auction (the “Auction”);

 

6.4.2.3 require, as a precondition to participation in the Auction, the
submission of a competing bid for some or all of the Target Assets no later than
4:00 p.m. Eastern Time at least three (3) Business Days prior to the Auction
(the “Bid Deadline”);

 

6.4.2.4 require any Qualifying Bid (as defined below) to be accompanied by (i)
an earnest money deposit by wire transfer, certified or cashier’s check, in the
amount of no less than $500,000, which amount shall be paid to or deposited with
Sellers’ counsel to be held in trust in a segregated account by Sellers’
counsel; (ii) an executed confidentiality agreement, (iii) an executed asset
purchase agreement substantially in the form of this Agreement along with a
red-line marked against this Agreement to reflect changes, and (iv) written
evidence of a commitment for financing or other evidence of the party’s ability
to consummate the transaction and payment of the purchase price in cash at the
Closing;

 

6.4.2.5 provide that if this Agreement is terminated pursuant to Article 10,
then, subject to Section 10.2, Purchaser shall be entitled to (i) Purchaser’s
reasonably documented actual out-of-pocket fees and expenses (including legal,
accounting, escrow and other fees and expenses) not to exceed $200,000 (the
“Expense Reimbursement”) and (ii) in the event Sellers sell, transfer, lease or
otherwise dispose of, directly or indirectly (including through an asset sale,
stock sale, merger, or other similar transaction or pursuant to a plan of
reorganization in the Bankruptcy Cases) all or substantially all of the Target
Business or the Target Assets in a transaction or a series of transactions with
one or more persons other than Purchaser in any circumstance, including in
accordance with the Bidding Procedures Order (such event being an “Alternative
Transaction”) on or prior to the date that is twelve (12) months after the date
of such termination, a break-up fee in the amount equal to $400,000 (the
“Break-Up Fee”) with such amount being payable upon the closing or consummation
of such Alternative Transaction; provided, however, that the closing or
consummation of a transaction evidenced by a Qualifying Bid shall constitute an
Alternative Transaction, regardless of whether such Qualifying Bid involves all
or substantially all of the Target Business or the Target Assets; provided
further that, for the avoidance of doubt, notwithstanding any provisions of this
Agreement to the contrary, Sellers shall not be obligated to pay, and Purchaser
shall not be entitled to receive, the Break-Up Fee upon the closing on an
Alternative Transaction if (x) Sellers terminate this Agreement pursuant to
Section 10.1.6 as a result of Purchaser’s breach of this Agreement.

 

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6.4.2.6 provide that Sellers are authorized without further Bankruptcy Court
action to pay any amounts that become due and payable to Purchaser pursuant to
this Agreement (including the Break-up Fee and Expense Reimbursement), and that
such amounts shall have the priority specified in Section 10.2.3;

 

6.4.2.7 provide that no party submitting any other offer to purchase the Target
Assets or a Qualifying Bid shall be entitled to any expense reimbursement,
breakup, or termination or similar fee or payment;

 

6.4.2.8 require that a bid will not be considered by Sellers as qualified for
the Auction unless such bid is for an amount equal to or more than the aggregate
sum of (i) the Purchase Price in cash; (ii) the dollar value of the Break-up Fee
in cash; and (iii) $250,000 in cash (each bid which meets the foregoing criteria
constitutes, as applicable, a “Qualifying Bid”);

 

6.4.2.9 require that any subsequent bid at the Auction be at least $250,000
greater than the preceding bid, which if such preceding bid shall have been made
by Purchaser, shall be deemed to include the amounts in clause (ii) of Section
6.4.2.8; provided, however, any overbid submitted by Purchaser at the Auction
shall only be required to be equal to (A) the then existing leading bid, plus
(B) $250,000 less (C) the dollar value of the Break-up Fee;

 

6.4.2.10 provide that if one (1) or more Qualifying Bids are submitted in
accordance with the Bidding Procedures Order, Sellers will conduct the Auction
no later than two days prior to the Sale Hearing in accordance with the Bidding
Procedures Order; and at such Auction, Sellers shall have the right to select
the highest or otherwise best bid from Purchaser and any Person who submitted a
Qualifying Bid pursuant to Section 6.4.2.8 (the “Highest or Best Bid”), and the
next most favorable bid (the “Next Highest Bid”), each of which will be
determined by Sellers in their sole and absolute discretion;

 

6.4.2.11 require that the Next Highest Bid be held open until 21 days following
the entry of the Sale Order and that the Person submitting the Next Highest Bid
be required to perform its obligations thereunder in the event that the Person
submitting the Highest or Best Bid fails to consummate the transaction;

 

6.4.2.12 require at the Auction that Purchaser has the right to submit further
bids along with a markup of this Agreement, and at any time, request that
Sellers announce, subject to any potential new bids, the then current Highest or
Best Bid, and to the extent Purchaser requests, use reasonable efforts to
clarify any and all questions Purchaser may have regarding Sellers’ announcement
of the then current Highest or Best Bid; and

 

6.4.2.13 unless otherwise agreed to by Purchaser in its sole and reasonable
discretion, require that only the Persons who submitted Qualifying Bids and
Purchaser may participate in the Auction.

 

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6.4.3 Assignment Motion and Order. Contemporaneously with the filing of the Sale
Motion, Sellers shall file with the Bankruptcy Court a motion (which may be
included in the Sale Motion, the “Assignment Motion”) for an order authorizing
the assumption and assignment of the Assigned Contracts to Purchaser pursuant to
Section 365 of the Bankruptcy Code (which may be included in the Sale Order, the
“Assignment Order”), which shall be in form and substance reasonably acceptable
to Purchaser. Subject to Section 1.3, the Assigned Contracts shall be identified
on an exhibit to the Assignment Motion. The exhibit shall set forth proposed
Cure Amounts under each of such Assigned Contracts, as determined by Sellers
based on Sellers’ books and records, and notify all parties to the Assigned
Contracts that if they do not file an objection to the assumption and assignment
of an Assigned Contract, or to the proposed Cure Amount associated therewith,
such parties shall waive and be estopped from asserting any objection to such
assumption and assignment or to the establishment of such Cure Amount. Other
than the Assignment Motion, Sellers shall not file any motion seeking to assume
or reject any Assigned Contract under Section 365 of the Bankruptcy Code without
the prior written consent of Purchaser. To the extent that the assignment to the
Purchaser of any Assigned Contract or transfer to Purchaser of any Target Asset
pursuant to this Agreement is not permitted without the consent of a third party
and such restriction cannot be effectively overridden or canceled by the Sale
Order, the Assignment Order or other related order of the Bankruptcy Court, then
this Agreement will not be deemed to constitute an assignment of or an
undertaking or attempt to assign such Contract or Target Asset or any right or
interest therein unless and until such consent is obtained; provided, however,
that the parties will use their commercially reasonable efforts, before the
Closing, to obtain all such consents; provided, further, that if any such
consents are not obtained prior to the Closing Date, the Sellers and the
Purchaser will reasonably cooperate with each other in any lawful and
commercially feasible arrangement designed to provide the Purchaser with the
benefits and obligations of any such Contract or Target Asset, the Purchaser
shall be responsible for performing all obligations under such Contract required
to be performed by the Sellers on or after the Closing Date to the extent set
forth in this Agreement, and, unless reimbursed by Purchaser, Sellers shall not
be required to expend any monetary funds in connection with such efforts or
arrangements.

 

6.4.4 Notice and Reasonable Efforts. Sellers shall provide appropriate notice of
the hearings on the Sale Motion and the Assignment Motion and the Auction, as is
required by the Bankruptcy Code and the Federal Rules of Bankruptcy Procedure to
all parties entitled to notice, including, but not limited to, all parties to
the Assigned Contracts and all taxing and environmental authorities in
jurisdictions applicable to Sellers. Thereafter, Sellers shall undertake all
reasonable efforts in support of the Sale Motion and the Assignment Motion, and
Purchaser agrees to cooperate in such efforts.

 

6.4.5 Defense of Orders. If the Bidding Procedures Order, the Sale Order, the
Assignment Order, or any other order of the Bankruptcy Court relating to this
Agreement (collectively, the “Bankruptcy Orders”) shall be appealed (or a
petition for certiorari or motion for rehearing or reargument shall be filed
with respect thereto), Sellers shall take all steps as may be appropriate to
defend against such appeal, petition or motion, and Purchaser agrees to
cooperate in such efforts, and each of Sellers and Purchaser hereto shall
endeavor to obtain an expedited resolution of such appeal.

 

6.4.6 Books and Records. Purchaser shall make available to Sellers copies of all
books, files, documents and records included as part of the Target Assets as
Sellers may reasonably request for a period of eighteen (18) months
post-Closing. If Sellers desire copies of any of such documents or records, all
copying costs shall be borne by Sellers.

 

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6.4.7 Sellers and Purchaser acknowledge and agree that until the termination of
this Agreement in accordance with its terms, Sellers and their Subsidiaries,
officers, directors, employees, attorneys, investment bankers, accountants and
other agents and representatives shall be permitted to solicit inquiries,
proposals, offers or bids from, and negotiate with, any Person other than
Purchaser relating to the direct or indirect sale, transfer or other
disposition, in one or more transactions, of all or substantially all of the
assets of the Sellers and may take any other affirmative action (including
entering into any agreement or letter-of-intent with respect thereto) to cause,
promote or assist with any Alternative Transaction. Without limiting the
foregoing, Sellers and their Subsidiaries and their respective officers,
directors, employees, attorneys, investment bankers, accountants and other
agents and representatives shall be permitted to supply information relating to
any Seller, the Target Business, the Target Assets or the Assumed Liabilities to
prospective purchasers and their representatives that have executed a
confidentiality agreement with any Seller or its Subsidiaries. None of the
Sellers nor any of their respective Subsidiaries shall have any liability to
Purchaser, either under or relating to this Agreement or any applicable Law, by
virtue of entering into or seeking Bankruptcy Court approval of such definitive
agreement for an Alternative Transaction pursuant to this Section 6.4.7;
provided, that Purchaser is paid any amounts due Purchaser pursuant to Section
10.2.1 at the time provided for therein. Each Seller and Purchaser agree to
comply in all material respects with the terms of the Bidding Procedures Order
and agree that to the extent there is a conflict between this Agreement and the
Bidding Procedures Order, the Bidding Procedures Order shall govern in all
respects.

 

6.5 Transition Services Agreement. At the Closing, Sellers and Purchaser shall
enter into a transition services agreement in the form attached hereto as
Exhibit B, for a reasonable period of time after the Closing and for reasonable
compensation, certain mutually agreeable services necessary, with respect to
Purchaser, for the transition of the Target Assets from Sellers to Purchaser
and, with respect to Sellers, for the ongoing administration of the Bankruptcy
Cases and other transition services (the “Transition Services Agreement”).

 

6.6 Employment of Sellers’ Employees.

 

6.6.1 For the purpose of this Agreement, the term “Active Business Employees”
shall mean all employees of Sellers who are in active employment status in the
Target Business at all locations where Sellers operate (other than the locations
related to the Excluded Business) on the day immediately preceding the Closing
Date, and the term “Active Non-Business Employees” shall mean all employees of
Sellers, other than Active Business Employees, who are in active employment
status on the day immediately preceding the Closing Date. For purposes of this
Section 6.6, the term “active employment status” does not include any individual
not actively at work due to authorized leave of absence, layoff for lack of
work, service in the Armed Forces of the United States, retirement, resignation,
permanent dismissal or long-term disability, illness or injury. Any employee of
Sellers in the Target Business at a location, other than the locations related
to the Excluded Business, who is not in active employment status on the day
immediately preceding the Closing Date (“Non-Active Business Employees”) but who
otherwise has a right to return to employment under the applicable policies of
Sellers or pursuant to any Applicable Law shall be extended an employment offer
by Purchaser on the same basis as Active Business Employees.

 

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6.6.2 Purchaser shall, based on Purchaser’s employee needs, offer employment
(subject to compliance with Purchaser’s customary hiring practices and
conditions) to each of the Active Business Employees and Non-Active Business
Employees set forth on Schedule 6.6.2 effective upon the Closing Date. Purchaser
may, but shall not be required to, offer employment (subject to compliance with
Purchaser’s customary hiring practices) to any Active Non-Business Employee
effective upon the Closing Date. For the purpose of this Agreement, the term
“Hired Employees” shall mean those Active Business Employees, Non-Active
Business Employees and Active Non-Business Employees who accept Purchaser’s
offer of employment. All Hired Employees shall cease their employment with the
applicable Seller effective upon the Closing Date.

 

6.6.3 Sellers shall be responsible for timely providing any plant closing or
similar notices as required under federal, state or local law (including the
Worker Adjustment Retraining Notification Act of 1988, as amended and any
similar Law of any applicable state) (collectively, “WARN Laws”) as a result of
the transactions contemplated by this Agreement. Purchaser shall offer
employment to, and shall retain for such period of time following the Closing
Date such number of Active Business Employees, Non-Active Business Employees,
and Active Non-Business Employees as shall be necessary to avoid any liability
by the Sellers for a violation of the WARN Laws. Purchaser shall be liable and
responsible for any notification required under the WARN Laws after the Closing
Date.

 

6.6.4 Except as set forth in Section 6.7 below with respect to COBRA, the
Purchaser will have no severance or other obligations with respect to anyone who
is/was an employee of a Seller on the day immediately preceding the Closing Date
but who does not become a Hired Active Business Employee, either due to
declining an offer of employment made by Purchaser or due to not receiving an
offer of employment from Purchaser. Except as set forth in Section 6.7 below
with respect to COBRA, all such obligations, if any, shall be the responsibility
of the Sellers.

 

6.7 Salaries and Benefits.

 

6.7.1 Purchaser shall, or shall cause one of its affiliates to, provide the
Hired Employees with, at a minimum, base salary or wage levels and benefits that
are, substantially similar to those of similarly situated employees of
Purchaser. Purchaser shall, for the purposes of eligibility and vesting under
its benefit plans, to the extent permitted by each applicable benefit plan,
recognize employment with Sellers (or their respective predecessors) for
purposes of eligibility and vesting (but not benefit accrual or contributions).
Purchaser shall take commercially reasonable action to waive any preexisting
condition or similar exclusion under such benefit plan or program established or
maintained by Purchaser for any Hired Employees who were not covered by such
exclusion prior to the Closing Date.

 

6.7.2 Sellers shall be responsible for the payment of all wages and other
remuneration due to Active Business Employees and Active Non-Business Employees
with respect to their services as employees of Sellers through the close of
business on the day immediately prior to the Closing Date, including pro rata
bonus payments, any severance or termination payments, and all vacation pay
earned prior to the Closing Date, other than the Assumed PTO and any termination
or severance payments due to Hired Employees by reason of any events occurring
after the Closing. Purchaser shall be responsible for the payment of all wages
and other remuneration due to Hired Employees with respect to their services as
employees of Purchaser on and after the Closing Date and any termination or
severance payments due to Hired Employees under termination or severance
programs or plans, if any, that may be maintained by the Purchaser by reason of
any events occurring on or after the Closing Date.

 

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6.7.3 Purchaser agrees, in accordance with the provisions of Treasury
Regulations Section 54.4980B-9 and any and all applicable Internal Revenue
Service guidance concerning same, to offer COBRA continuation health coverage to
all “M&A qualified beneficiaries,” as defined in Treasury Regulations Section
54.4980B-9 Q&A - 4, as and to the extent such regulations apply to the
transaction set forth in this Agreement. Purchaser acknowledges and agrees that,
subsequent to the Closing Date, it shall be responsible for distributing all
necessary COBRA continuation health coverage documentation and forms to the M&A
qualified beneficiaries, including timely distribution of a COBRA continuation
coverage notice in accordance with the applicable provisions of the Tax Code.
The Disclosure Statement of Private Information previously provided to Purchaser
sets forth, for each employee and each M&A qualified beneficiary, such person’s
full name, address, current type of coverage, current monthly premium paid for
coverage, and, if on COBRA as of the date of this agreement, (i) the type of
initial qualifying event that gave rise to the Sellers’ COBRA obligation, (ii)
the date of such qualifying event, and (iii) the date such coverage was
otherwise scheduled to end.

 

6.7.4 Effective as of the Closing Date, Purchaser shall, or shall cause one of
its affiliates to, have in effect a defined contribution plan within the meaning
of Section 401(k) of the Tax Code (the “Purchaser 401(k) Plan”) providing
benefits as soon as reasonably practicable on or after the Closing Date to the
Hired Active Business Employees who participate in the tax-qualified defined
contribution retirement plan or plans of Sellers (the “Sellers 401(k) Plan”).
Purchaser shall, or shall cause one of its affiliates to, permit Hired Active
Business Employees who have an account balance under Sellers 401(k) Plan to roll
over (whether by direct or indirect rollover, as selected by such Hired Active
Business Employees) his or her “eligible rollover distribution” (as defined
under Section 402(c)(4) of the Tax Code) in the form of cash, a promissory note
(in the case of loans) or any combination thereof from Sellers 401(k) Plan to
the Purchaser 401(k) Plan.

 

6.7.5 Sellers shall be responsible for any payment of accrued but unused
vacation or paid time off to which any employee of the Sellers is entitled,
whether under Applicable Laws or such policies of the Sellers in place prior to
the Closing Date (the “Vacation Policy”), as a result of the consummation of the
transactions contemplated by this Agreement. Notwithstanding the foregoing, in
the Sellers’ discretion, the Purchaser shall assume the accrued but unused
vacation or paid time off for the Hired Active Business Employees (“Assumed
PTO”). The Assumed PTO shall be available for use by the Hired Employees in
accordance with the Purchasers paid time off and vacation policies (“Purchaser
PTO Policies”). The Disclosure Statement of Private Information previously
provided to Purchaser sets forth the accrued but unused vacation or paid time
off for each of the Active Business Employees. Notwithstanding the foregoing,
after the Assumed PTO for a Hired Employee is used by such Hired Employee, such
Hired Active Business Employee will accrue paid time off and leave in accordance
with the Purchaser PTO Policies as may be modified from time to time. For
purposes of determining paid time off or vacation accrual under the Purchaser
PTO Policies, the Purchaser shall give each Hired Employee credit for service
provided to a Seller from the date of his or her most recent hire with such
Seller until the date that is immediately prior to the consummation of the
transactions contemplated by this Agreement.

 

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6.7.6 Sellers shall be liable for any claims made or incurred by Active Business
Employees or Active Non-Business Employees and their beneficiaries through the
Closing Date under the Benefit Plans. For purposes of the immediately preceding
sentence, a charge will be deemed incurred, in the case of hospital, medical or
dental benefits, when the services that are the subject of the charge are
performed and, in the case of other benefits (such as disability or life
insurance), when an event has occurred or when a condition has been diagnosed
that entitles the employee to the benefit.

 

6.7.7 No provision in this Agreement, including without limitation this Section
6.7, shall create any third-party beneficiary rights in any person, entity, or
organization, including without limitation employees or former employees
(including any beneficiary or dependent thereof) of the Sellers, unions or other
representatives of such employees or former employees, or trustees,
administrators, participants, or beneficiaries of any Benefit Plan, and no
provision of this Agreement shall create such third-party beneficiary rights in
any such person or organization in respect of any benefits that may be provided,
directly or indirectly, under any Benefit Plan that is or may in the future be
maintained by the Purchaser. No provision of this Agreement, including without
limitation this Section 6.7, shall be deemed to amend any Benefit Plan that is
or may in the future be maintained by the Purchaser.

 

6.8 ERISA. Purchaser shall not have any responsibility, liability or obligation,
whether to Active Business Employees or Active Non-Business Employees, former
employees, their beneficiaries or to any other person, with respect to any
Benefit Plans, practices, programs or arrangements maintained by Sellers and
shall have no fiduciary obligations or duties with respect to such Benefit Plans
(except with respect to COBRA continuation as described in Section 6.7.3).

 

6.9 Reasonable Access to Records and Certain Personnel. So long as the
Bankruptcy Cases are pending, following the Closing, Purchaser shall provide
Sellers and Sellers’ counsel and other professionals employed in the Bankruptcy
Cases with reasonable access to all documents and records relating to the Target
Assets for the purpose of the continuing administration of the Bankruptcy Cases
(including the pursuit of any avoidance, preference or similar actions), which
access shall include (a) the right of Sellers’ professionals to copy, at
Sellers’ expense, such documents and records as Sellers or Sellers’ may request
in furtherance of the purposes described above, and (b) Purchaser’s copying and
delivering to Sellers or Sellers’ professionals such documents or records as
Sellers or Sellers’ professionals may request, but only to the extent Sellers or
Sellers’ professionals furnish Purchaser with reasonably detailed written
descriptions of the materials to be so copied and Sellers reimburse Purchaser
for the reasonable costs and expenses thereof.

 

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6.10 Audited Financial Statements. Following execution of this Agreement until
the termination of this Agreement or the completion of the financial audit
described herein, Sellers shall cooperate, at the request of Purchaser, to the
extent reasonably necessary to enable the preparation of the financial
statements with respect to the Target Business as of December 31, 2016 and
December 31, 2017 (the “Audited Financials”) to be audited by a firm of
independent accountants selected by Purchaser, and unaudited interim financial
statements with respect to the Target Business by quarter for all quarterly
periods in 2017 through March 31, 2018 and any other calendar quarter which
concludes prior to Closing, all in conformity with GAAP and controlling
requirements of the Securities Exchange Commission. The preparation of such
financial statements and the audit thereof shall be at the expense of Purchaser.
Sellers’ cooperation shall include, without limitation, providing Purchaser with
all financial information available to Sellers with respect to the Target
Business. The Chief Executive Officer and most senior accounting officer of the
Sellers shall deliver at Closing a management representation letter to the
auditors of the Audited Financials (the “Auditors”) containing representations
mutually acceptable to the Chief Executive Officer and most senior accounting
officer, on the one hand, and the Auditors, on the other hand, and, if
necessary, again at completion of the audit; provided that any letter delivered
after the Closing will acknowledge that the Chief Executive Officer and most
senior accounting officer were not involved in any post-Closing activities with
respect to the Target Business and have no duty of inquiry with respect thereto.

 

6.11 Cure Amounts. On or prior to the Closing, pursuant to Section 365 of the
Bankruptcy Code and the Sale Order, (i) the Purchasers shall pay any and all
Assumed Cure Amounts and (ii) the Sellers shall pay any and all Cure Amounts
(other than the Assumed Cure Amounts).

 

6.12 Purchase Price Calculation. Purchaser shall provide Sellers with a
calculation of the Base Purchase Price at least four (4) Business Days prior to
the Auction.

 

Article 7

CONDITIONS PRECEDENT TO PURCHASER’S OBLIGATIONS.

 

The obligation of Purchaser to consummate the transactions contemplated by this
Agreement is subject to the satisfaction (or waiver by Purchaser), prior to or
at Closing, of each of the following conditions:

 

7.1 Conditions Precedent.

 

7.1.1 Representations and Warranties. Each of the representations and warranties
made herein by Sellers shall be true and correct in all material respects
(except for those representations and warranties already qualified by
materiality, which shall be true and correct in all respects) as of the Closing
with the same effect as though made at that time except for changes
contemplated, permitted or required by this Agreement.

 

7.1.2 Performance. Sellers will have performed and complied in all material
respects with all agreements, covenants, and conditions required by this
Agreement to be performed and complied with by it prior to the Closing.

 

7.1.3 Certificate. Purchaser will have received, at the Closing, a certificate
of Sellers, signed by an authorized officer of each Seller, stating that the
preconditions specified in Sections 7.1.1 and 7.1.2 above have been satisfied or
waived.

 

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7.1.4 No Material Adverse Effect. Between the date hereof and the Closing Date,
there shall not have occurred any Material Adverse Effect.

 

7.1.5 No Violation of Applicable Law. No provision of any applicable Law shall
prohibit the consummation of the Closing.

 

7.1.6 No Termination. This Agreement shall not have been terminated pursuant to
Article 10.

 

7.1.7 Sellers’ Deliveries. The Purchaser shall have received the deliveries of
Sellers set forth in Section 9.2.

 

7.2 Court Approval Required.

 

7.2.1 Sale Order. A “Sale Order” is an order of the Bankruptcy Court, acceptable
to Sellers and Purchaser, entered pursuant to sections 105, 363, and 365 of the
Bankruptcy Code (i) approving this Agreement and the transactions contemplated
hereby; (ii) approving the sale and transfer of the Target Assets to Purchaser
free and clear of all liens, claims and interests, pursuant to section 363(f) of
the Bankruptcy Code, (iii) approving the assumption and assignment to Purchaser
of the Assigned Contracts and establishing the Cure Amounts; (iv) requiring
Sellers to comply with its obligations in Section 6.10; (v) finding that
Purchaser is a good-faith purchaser entitled to the protections of section
363(m) of the Bankruptcy Code; (vi) finding that due and adequate notice of the
Sale Motion and the Assignment Motion and an opportunity to be heard were
provided to all Persons entitled thereto, including but not limited to federal,
state and local taxing and regulatory authorities; (vii) confirming that
Purchaser is acquiring the Target Assets free and clear of all liabilities,
other than the Assumed Liabilities; (viii) providing that the provisions of
Federal Rules of Bankruptcy Procedure 6004(h) and 6006(d) are waived and there
will be no stay of execution of the Sale Order under Rule 62(a) of the Federal
Rules of Civil Procedure; and (ix) requiring Sellers to fully satisfy their
post-petition accounts payable with respect to the Target Business as they
become due and payable.

 

7.2.2 Orders. The Bankruptcy Court shall have entered the Sale Order, the
Bidding Procedures Order, and the Assignment Order and each such Order shall
have become a Final Order. Notwithstanding the foregoing, nothing in this
Agreement shall preclude the parties hereto from consummating the transactions
contemplated herein if Purchaser, in its sole discretion, agrees to waive the
requirement that the Sale Order shall have become a Final Order. No notice of
such waiver of this condition or any other condition to the Closing need be
given except to Sellers, it being the intention of the parties that Purchaser
shall be entitled to, and is not waiving, the protection of section 363(m) of
the Bankruptcy Code, the equitable mootness doctrine and any similar statute or
body of Law if the Closing occurs in the absence of the Sale Order becoming a
Final Order.

 

7.2.3 No Injunctions. There shall be no effective injunction, writ or
preliminary restraining order or any order of any nature issued or Applicable
Law passed by a Governmental Authority to the effect that the Closing may not be
consummated.

 

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7.3 Consents to the Transactions. All Licenses, consents and approvals set forth
on Schedule 7.3 will have been obtained by Sellers and delivered to Purchaser;
provided, however, that Sellers shall not be required to obtain any consent,
waiver, or agreement to the consummation of the Acquisition to the extent the
Sale Order provides that such consent, waiver, or agreement is not required or
otherwise as contemplated by Section 6.4.3.

 

Article 8

CONDITIONS PRECEDENT TO SELLERS’ OBLIGATIONS.

 

Each and every obligation of Sellers to consummate the transactions contemplated
by this Agreement is subject to the satisfaction (or waiver by Sellers), prior
to or at Closing, of each of the following conditions:

 

8.1 Representations and Warranties; Performance. Each of the representations and
warranties made herein by Purchaser shall be true and correct in all material
respects as of the Closing with the same effect as though made at that time
except for changes contemplated, permitted or required by this Agreement;
Purchaser will have materially performed and complied with all agreements,
covenants, and conditions required by this Agreement to be performed and
complied with by it prior to the Closing; and Sellers will have received, at the
Closing, a certificate of Purchaser, signed by an authorized officer of
Purchaser, stating that each of the representations and warranties made herein
by Purchaser is true and correct in all material respects as of the Closing
except for changes contemplated, permitted, or required by this Agreement and
that Purchaser has materially performed and complied with all agreements,
covenants, and conditions required by this Agreement to be performed and
complied with by it prior to the Closing.

 

8.2 Orders. The Bankruptcy Court shall have entered the Sale Order, the Bidding
Procedures Order and the Assignment Order, and such Orders shall not have been
reversed, modified, amended or stayed.

 

8.3 Purchaser’s Deliveries. Sellers shall have received the deliveries of the
Purchaser set forth in Section 9.3.

 

8.4 No Termination. This Agreement shall not have been terminated pursuant to
Article 10.

 

8.5 No Injunctions. No Governmental Authority of competent jurisdiction shall
have enacted, issued, promulgated, enforced or entered any Applicable Law that
is in effect on the Closing Date and which prohibits consummation of the
Closing.

 

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Article 9

CLOSING.

 

9.1 Time, Place and Manner of Closing. Unless this Agreement has been terminated
according to Article 10 hereof, and provided that the conditions to the Closing
set forth in Article 7 and Article 8 are satisfied or waived, the closing of the
transactions contemplated by this Agreement (the “Closing”) will be held at the
offices of Sellers’ counsel in New York, New York, at 10:00 a.m. prevailing
local time on the fifth (5th) Business Day after the satisfaction or waiver of
all the conditions set forth in Article 7 and Article 8 (or as soon thereafter
as practicable after the satisfaction or waiver of all such conditions), other
than conditions that, by their nature, will be satisfied at the Closing, but in
any event not later than July 31, 2018, (“Closing Date”). At the Closing, the
parties to this Agreement will exchange certificates and other instruments and
documents in order to determine whether the terms and conditions of this
Agreement have been satisfied. At the Closing, Sellers will deliver to Purchaser
such bills of sale, assignments, deeds, consents, endorsements, drafts or other
instruments as are necessary or appropriate to vest in Purchaser title to the
Target Assets in accordance with the terms of this Agreement. After the Closing,
Sellers will use commercially reasonable efforts to execute, deliver, and
acknowledge all such further instruments of transfer and conveyance and will
perform all such other acts as Purchaser may reasonably request to effectuate
the transfer of the Target Assets to Purchaser.

 

9.2 Closing Deliveries of Sellers. At the Closing, Sellers shall deliver or
cause to be delivered to Purchaser:

 

9.2.1 a bill of sale, for the Target Assets, duly executed by Sellers;

 

9.2.2 an assignment and assumption agreement for the Assigned Contracts and the
Assumed Liabilities, duly executed by Sellers;

 

9.2.3 the Transition Services Agreement, duly executed by Sellers;

 

9.2.4 the Licenses, consents and approvals set forth on Schedule 7.3; provided,
however, that Sellers shall not be required to obtain any such License, consent
or approval to the extent the Sale Order provides that such License, consent or
approval is not required or as contemplated by Section 6.4.3;

 

9.2.5 a copy, certified by an authorized officer of each Seller to be true,
complete and correct as of the Closing Date, of the resolutions of such Seller,
authorizing and approving the transactions contemplated hereby;

 

9.2.6 the certificate required by Section 7.1.3, duly executed by officers of
each of the Sellers;

 

9.2.7 a certificate confirming the Customers in Good Standing as of Closing duly
executed by officers of each of the Sellers;

 

9.2.8 a properly completed and executed Internal Revenue Service Form W-9 from
each Seller (provided Purchaser’s sole remedy for failure to provide such forms
shall be withholding the amounts required to be withheld in accordance with
applicable Law);

 

9.2.9 a non-foreign affidavit with respect to each Seller (or if a Seller is
classified as a disregarded entity for U.S. federal income tax purposes, from
the regarded sole owner of such Seller), dated as of the Closing Date, issued
pursuant to Section 1445 of the Tax Code and the Treasury regulations
promulgated thereunder, stating that such Seller (or its owner, as applicable)
is not a “foreign person” as defined in Section 1445 of the Tax Code (provided
Purchaser’s sole remedy for failure to provide such forms shall be withholding
the amounts required to be withheld in accordance with applicable Law);

 

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9.2.10 the written release of all Encumbrances (other than Permitted
Encumbrances and Encumbrances otherwise eliminated by the Sale Order) relating
to the Target Assets, executed by the holder of or parties to each such
Encumbrances, in form and substance satisfactory to Purchaser and its counsel;

 

9.2.11 the management representation letter described in Section 6.10;

 

9.2.12 copies of the Statements of Income and Cash Flow on a monthly basis for
the period from July 2017 to thirty (30) days prior to the Closing Date;

 

9.2.13 evidence reasonably satisfactory to Purchaser of the satisfaction of all
Cure Amounts (other than the Assumed Cure Amounts); and

 

9.2.14 for all Real Property subject to Real Property Leases, assignments of the
Real Property Leases in form prepared by Purchaser and reasonably satisfactory
to Sellers.

 

9.3 Closing Deliveries of Purchaser. At the Closing, Purchaser shall deliver or
cause to be delivered to Sellers:

 

9.3.1 a bill of sale, for the Target Assets, duly executed by Purchaser and any
other documents, instruments and writings (either executed counterparts or
otherwise) required or reasonably requested by Sellers to be delivered by
Purchaser pursuant to this Agreement for Sellers to transfer and assign the
Target Assets and Assumed Liabilities to Purchaser and for Purchaser to assume
the Target Assets and Assumed Liabilities, each in form and substance reasonably
satisfactory to Sellers and Purchaser;

 

9.3.2 a copy, certified by an authorized officer of Purchaser to be true,
complete and correct as of the Closing Date, of the resolutions of Purchaser,
authorizing and approving the transactions contemplated hereby;

 

9.3.3 the certificate required by Section 8.1, duly executed by an officer of
Purchaser;

 

9.3.4 the Transition Services Agreement, duly executed by Purchaser; and

 

9.3.5 the Closing Payment and, to the extent not already paid, the Assumed Cure
Amounts.

 

9.4 Transfer Taxes. All transfer, documentary, sales, use, stamp, registration
and other similar Taxes and all conveyance fees, recording chargers and other
fees and chargers (including any penalties and interest) incurred in connection
with the consummation of the transactions contemplated by this Agreement
(“Transfer Taxes”) shall be payable by Purchaser. Purchaser will file all
necessary Tax Returns and other documentation with respect to all such Transfer
Taxes, and if required by applicable Law, Sellers will join in the execution of
any such Tax Returns and other documentation. Purchaser and Sellers agree to use
their best efforts to obtain any certificate, including a resale certificate, or
other document from any Governmental Authority as may be necessary to mitigate,
reduce or eliminate any Transfer Tax.

 

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9.5 Proration of Taxes and Charges.

 

9.5.1 Any real or personal property Taxes or similar ad valorem Taxes
attributable to the Target Assets (“Property Taxes”) with respect to a Tax
period commencing on or prior to, and ending after, the Closing Date (a
“Straddle Period”) shall be prorated between Sellers and Purchaser on a per diem
basis. Sellers shall be responsible for the amount apportioned to periods prior
to the Closing Date and Purchaser shall be responsible for the amount
apportioned to periods on or after the Closing Date. The party required by Law
to pay any such Straddle Period Property Taxes (the “Paying Party”), to the
extent such payment exceeds the obligation of the Paying Party hereunder, shall
provide the other party (the “Non-Paying Party”) with proof of payment, and the
Non-Paying Party shall reimburse the Paying Party for the Non-Paying Party’s
share of such Straddle Period Property Taxes. The party required by Law to file
a Tax Return with respect to Straddle Period Property Taxes shall do so within
the time prescribed by Law.

 

9.5.2 Purchaser and the Sellers agree to furnish or cause to be furnished to
each other, upon request, as promptly as practical, such information (including
reasonable access to books and records, Tax Returns and Tax filings) and
assistance as is reasonably necessary for the filing of any Tax Return, the
conduct of any Tax audit, and for the prosecution or defense of any claim, suit
or proceeding relating to any Tax matter related to the Target Assets. Purchaser
and Sellers shall cooperate with each other in the conduct of any Tax audit or
other Tax proceedings and each shall execute and deliver such powers of attorney
and other documents as are necessary to carry out the intent of this Section
9.5.

 

9.6 Consummation of Closing. All acts, deliveries, and confirmations comprising
the Closing regardless of chronological sequence shall be deemed to occur
contemporaneously and simultaneously upon the occurrence of the last act,
delivery, or confirmation of the Closing and none of such acts, deliveries, or
confirmations shall be effective unless and until the last of the same shall
have occurred. Regardless of when the last act, delivery, or confirmation of the
Closing shall take place, however, the transfer of the Target Assets shall be
deemed to occur as of the start of business at the principal office of Orion on
the date of the Closing (the “Effective Time”).

 

Article 10

TERMINATION OF AGREEMENT.

 

10.1 Termination Events. Subject to Section 10.2 of this Agreement, by notice
given prior to or at the Closing, this Agreement may be terminated as follows:

 

10.1.1 by mutual consent of Purchaser and Sellers;

 

10.1.2 subject to Section 10.2, by Purchaser or Sellers, upon Sellers entering
into an agreement providing for an Alternative Transaction;

 

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10.1.3 by Purchaser or Sellers in the event the Closing has not occurred (other
than through failure of any party seeking to terminate this Agreement to have
complied fully with its obligations under this Agreement) on or before July 31,
2018;

 

10.1.4 subject to Section 10.2, by Sellers if, incident to the Bidding
Procedures Order, Sellers accept and close on a competing bid for the purchase
of all or part of the Target Assets;

 

10.1.5 by Purchaser if any of Sellers’ Bankruptcy Cases is dismissed or
converted to one under Chapter 7 of the Bankruptcy Code, if a trustee or an
examiner with expanded powers is appointed in any of the Bankruptcy Cases, or if
a motion for relief from the automatic stay is granted with respect to a
material portion of the Target Assets;

 

10.1.6 by the non-breaching party upon a material breach of any provision of
this Agreement provided that such breach has not been waived by the
non-breaching party and has continued after notice to the breaching party by the
non-breaching party without cure for a period of ten (10) Business Days;

 

10.1.7 by Purchaser if satisfaction of any condition in Article 7 hereof on or
before July 31, 2018, or such later date as the parties may agree upon, becomes
impossible (other than through the failure of Purchaser to comply with its
obligations under this Agreement) or by Sellers if satisfaction of any condition
in Article 8 hereof on or before July 31, 2018 becomes impossible (other than
through the failure of Sellers to comply with their obligations under this
Agreement).

 

10.2 Break-Up Fee; Expense Reimbursement.

 

10.2.1 Break-Up Fee. If this Agreement is terminated pursuant to Section 10.1.2,
10.1.4 or 10.1.6, Purchaser is not then in default under this Agreement, and an
Alternative Transaction is consummated within six (6) months of such
termination, then Purchaser shall be entitled to receive the Break-Up Fee as
provided in Section 6.4.2.5.

 

10.2.2 Expense Reimbursement. If this Agreement is terminated pursuant to
Section 10.1, other than by (1) mutual consent of the parties under Section
10.1.1 or (2) by Sellers pursuant to Section 10.1.6 as a result of Purchaser’s
breach of this Agreement or (3) by Purchaser pursuant to Section 10.1.3, then
Purchaser shall be entitled to receive the Expense Reimbursement, with such
amount being payable on or before the tenth (10th) Business Day after such
termination.

 

10.2.3 Priority and Effect of Payment. The Break-Up Fee and the Expense
Reimbursement shall be entitled to administrative priority under Sections
503(b)(1)(A) and 507 of the Bankruptcy Code. The obligation to pay in full in
cash when due any amount owed by any Seller to Purchaser under this Agreement,
including the Break-Up Fee and the Expense Reimbursement, shall not be
discharged, modified or otherwise affected by any plan of reorganization or
liquidation for Sellers or by any other Order of the Bankruptcy Court.
Notwithstanding anything to the contrary contained in this Agreement, upon
payment of the Break-Up Fee and the Expense Reimbursement in accordance with
this Agreement, Sellers and their Affiliates shall be fully released and
discharged from any liability under or resulting from this Agreement and,
neither Purchaser nor any other Person shall have any other remedy or cause of
action under or relating to this Agreement, including for reimbursement of
expenses.

 

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10.2.4 Exception. Notwithstanding the prior provisions of this Section 10.2, if
(i) Purchaser submits a bid at the Auction in an amount in excess of the
Purchase Price set forth in this Agreement and is designated as the “Next
Highest Bidder” in accordance with the Bidding Procedures Order; and (ii)
Purchaser closes on the terms of the bid submitted by Purchaser at the Auction
as a result of a failure to close on the Alternative Transaction designated as
the winning bid at the Auction, then Sellers shall have no obligation to pay,
and Purchaser shall not be entitled to receive, the Expense Reimbursement or
Break-Up Fee.

 

10.3 Effect of Termination. Each party’s right of termination according to
Section 10.1 of this Agreement is in addition to any other right it may have
under this Agreement or otherwise, and the exercise of a party’s right of
termination will not constitute an election of remedies. If this Agreement is
terminated according to Section 10.1, this Agreement will be of no further force
or effect; provided, however, that (i) this Section 10.3 will survive the
termination of this Agreement and will remain in full force and effect, (ii) the
obligation of Sellers to pay the Break-Up Fee and Expense Reimbursement pursuant
to Section 10.2 will survive the termination of this Agreement and will remain
in full force and effect (iii) the termination of this Agreement will not
relieve any party from any liability for any breach of this Agreement occurring
prior to termination.

 

10.4 Termination Procedure. Any party desiring to exercise its right to
terminate this Agreement shall deliver to the other party notice of termination
in accordance with Section 13.6, stating with a reasonable degree of specificity
the reason relied upon for such termination.

 

Article 11
FURTHER ASSURANCES.

 

11.1 Separate Agreements Executed in Connection with Closing. The parties shall
abide by, and otherwise perform under the terms and conditions of each and every
agreement deemed executed and delivered contemporaneously with the Closing.

 

11.2 Cooperation of the Parties After Closing. Upon the request of any party
hereto after the Closing, any other party will use commercially reasonable
efforts to (i) take all action, (ii) execute all documents and instruments, and
(iii) provide any supplemental information and further assurances necessary or
desirable to consummate and give effect to the transactions contemplated by this
Agreement.

 

11.3 Payroll. Purchaser will furnish to Sellers such payroll and employee
information as Sellers may reasonably require in connection with the preparation
or examination of payroll Tax Returns, workers’ compensation reports and audits,
and qualified plan administration records.

 

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Article 12

DEFINITIONS.

 

“Acquisition” has the meaning set forth in the recitals of this Agreement.

 

“Action” has the meaning set forth in Section 4.4.

 

“Active Business Employees” has the meaning set forth in Section 6.6.1.

 

“Active Contract” means an Assigned Contract between a customer and a Seller,
which (a) has been provided in full form to Purchaser by the Sellers, (b) has at
least six months remaining on its term at Closing and may not otherwise be
terminated sooner, other than for an uncured material breach, (c) designates a
Seller as the exclusive provider of the respective services during the term of
such Assigned Contract, (d) is fully assigned by the Sellers and assumed by
Purchaser at Closing without causing a material breach of such Assigned Contract
and (e) does not exhibit a material decrease in volume or revenue as compared to
its historical pattern, and (f) is listed on Schedule 4.12.2.

 

“Active Non-Business Employees” has the meaning set forth in Section 6.6.1.

 

“Affiliate” means, with respect to any Person, any other Person that, directly
or indirectly through one or more intermediaries, controls, or is controlled by,
or is under common control with, such Person, and the term “control” (including
the terms “controlled by” and “under common control with”) means the possession,
directly or indirectly, of more than fifty percent (50%) of the outstanding
voting power of such Person or the power to direct or cause the direction of the
management and policies of such Person, whether through ownership of voting
securities, by Contract or otherwise.

 

“Allegiance Businesses” means the Target Business of Allegiance Consulting
Associates, LLC and Allegiance Billing & Consulting, LLC.

 

“Allocable Consideration” has the meaning set forth in Section 2.3.

 

“Allocation Schedule” has the meaning set forth in Section 2.3.

 

“Alternative Transaction” has the meaning set forth in Section 6.4.2.5.

 

“Applicable Law” means, with respect to any Person, any Law applicable to such
Person or its business, properties or assets.

 

“Assigned Contracts” has the meaning set forth in Section 1.3.

 

“Assignment Motion” has the meaning set forth in Section 6.4.3.

 

“Assignment Order” has the meaning set forth in Section 6.4.3.

 

“Assumed Cure Amounts” has the meaning set forth in Section 1.3 of this
Agreement.

 

“Assumed Liabilities” has the meaning set forth in Section 1.2.1.

 

“Assumed PTO” has the meaning set forth in Section 6.7.5.

 

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“Auction” has the meaning set forth in Section 6.4.2.2.

 

“Bankruptcy Cases” has the meaning set forth in the recitals.

 

“Bankruptcy Code” has the meaning set forth in the recitals of this Agreement.

 

“Bankruptcy Court” has the meaning set forth in the recitals of this Agreement.

 

“Bankruptcy Estates” has the meaning set forth in the recitals of this
Agreement.

 

“Bankruptcy Orders” has the meaning set forth in Section 6.4.5.

 

“Base Purchase Price” means an amount equal to: the sum of: (A) $840,000, if
Schedule 1.3 contains any Contracts of IPS GPO; plus (B) the sum of $2,260,000,
if Schedule 1.3 contains any Contracts of IPS PM; plus (C) the product of 0.4
and the Good Standing Revenue; plus (D) the product of 0.2 and the Non-Good
Standing Revenue

 

“Benefit Plan(s)” has the meaning set forth in Section 4.10.

 

“Bid Deadline” has the meaning set forth in Section 6.4.2.3.

 

“Bidding Procedures Hearing” has the meaning set forth in Section 6.4.2.

 

“Bidding Procedures Order” has the meaning set forth in Section 6.4.2.

 

“Break-Up Fee” has the meaning set forth in Section 6.4.2.5.

 

“Business Day” means any day of the year, excluding Saturday, Sunday and any
other day on which national banks are required or authorized to close in
Pennsylvania.

 

“Cash Deposit” has the meaning set forth in Section 2.2.1.

 

“Closing” has the meaning set forth in Section 9.1.

 

“Closing Date” has the meaning set forth in Section 9.1.

 

“Closing Payment” has the meaning set forth in Section 2.2.2.

 

“COBRA” means health care continuation coverage under the Consolidated Omnibus
Reconciliation Act of 1985.

 

“Contract” means any written or oral contract, agreement, commitment, purchase
order, license, lease, release, consent, indenture, or evidence of indebtedness.

 

“Cure Amounts” has the meaning set forth in Section 1.3.

 

“Customer in Good Standing” means a RCM Business customer of a Seller that at
Closing (i) is party to one or more Active Contracts , (ii) is not more than 90
days delinquent in its payment obligations to such Seller under any such Active
Contract for customers of Orion, (iii) is not more than 180 days delinquent in
its payment obligations to such Seller under any such Active Contract for
customers of Allegiance Consulting Associates, LLC and Allegiance Billing &
Consulting, LLC, and (iii) does not have an uncured material breach or unrevoked
termination notice with respect to any such Active Contract.

 

“Escrow Agreement” has the meaning set forth in Section 2.2.1.

 

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“Escrow Agent” has the meaning set forth in Section 2.2.1.

 

“Disclosure Statement of Private Information” means the disclosure statement
dated as of the date hereof, delivered by Sellers to Purchaser.

 

“Effective Time” has the meaning set forth in Section 9.6.

 

“Encumbrance” means any lien, mortgage, deed of trust, deed to secure debt,
pledge, restriction on transfer, proxy and voting or other agreement, claim,
charge, security interest, easement, right of way, encroachment, servitude,
right of first option, right of first refusal, preemptive right or similar
restriction, use restriction, or other encumbrance, option or defect in title of
every type and description, whether imposed by law, agreement, understanding or
otherwise, including, without limitation, all liens, encumbrances, and interests
in property as set forth in Section 363 of the Bankruptcy Code.

 

“ERISA” has the meaning set forth in Section 4.10.

 

“ERISA Affiliate” has the meaning set forth in Section 4.10.

 

“Excluded Assets” has the meaning set forth in Section 3.1.

 

“Excluded Business” means Sellers’ independent practice association business,
which is operated by NYNM Acquisitions, LLC and its subsidiaries.

 

“Excluded Liabilities” has the meaning set forth in Section 1.2.2.

 

“Expense Reimbursement” has the meaning set forth in Section 6.4.2.5.

 

“Final Order” means an order of the Bankruptcy Court, the operation or effect of
which has not been stayed, and which is not subject to any pending appeal,
request for leave to appeal or request for reconsideration and as to which the
time for any such appeal, request for leave to appeal or request for
reconsideration has expired.

 

“Financial Statements” has the meaning set forth in Section 4.19.1.

 

“GAAP” means United States generally accepted accounting principles,
consistently applied.

 

“Good Standing Revenue” the revenue from the RCM Businesses attributable to the
twelve (12) full calendar month period that ends not later than fifteen (15)
days prior to the Auction and not earlier than forty-six (46) days prior to the
Auction under each Active Contract to which the applicable customer party
thereto is a Customer in Good Standing.

 

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“Governmental Authority” means any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to any United
States or foreign federal, state or local government, including any governmental
authority (including any bilateral or multilateral governmental authority),
agency, branch, department, board, commission or instrumentality of such
government or any political subdivision thereof, and any tribunal, court or
arbitrator(s) of competent jurisdiction, and shall include the Bankruptcy Court.

 

“Highest or Best Bid” has the meaning set forth in Section 6.4.2.8.

 

“Hired Active Business Employees” has the meaning set forth in Section 6.6.2.

 

“Indebtedness” shall mean, without duplication (i) all indebtedness for borrowed
money, whether current or funded, secured or unsecured including, without
limitation, all indebtedness outstanding pursuant to that certain Credit
Agreement, dated as of January 30, 2017 (as amended, modified or supplemented
from time to time), by and among Orion, the guarantors party thereto, the
lenders party thereto from time to time and Bank of America, N.A., as
Administrative Agent, L/C Issuer and Swingline Lender, (ii) that portion of
obligations with respect to capital leases that is properly classified (or
should be properly classified) as a liability on a balance sheet in conformity
with GAAP (as hereinafter defined); (iii) notes payable and drafts accepted
representing extensions of credit whether or not representing obligations for
borrowed money (for the avoidance of doubt, excluding any trade accounts payable
and checks payable to any Seller, which have been endorsed by a Seller for
collection in the Ordinary Course of Business); (iv) all amounts drawn under
outstanding letters of credit; (v) all interest rate swap, derivative or similar
arrangements; (vi) all obligations for the deferred purchase price of any
property or services (other than trade accounts payable and checks payable to
any Seller which have been endorsed by any Seller for collection in the Ordinary
Course of Business); (vii) guaranties securing indebtedness for borrowed money;
(viii) all deferred compensation obligations, including (A) all payment
obligations under any non-qualified deferred compensation plan of Sellers and
(B) any underfunded pension or post-retirement liabilities of Sellers; (ix) all
costs and obligations incurred in connection with a change of control of Sellers
or the sale of the Target Business; (x) all obligations created or arising under
any conditional sale or other title retention agreement with respect to property
acquired by Sellers (even though the rights and remedies of the seller or lender
under such agreement in the event of a default may be limited to repossession or
sale of such property); (xi) all obligations secured by a purchase money
mortgage or other Encumbrance to secure all or part of the purchase price of
property subject to such mortgage or Encumbrance; (xii) all obligations secured
by Encumbrances on property acquired by any Seller, whether or not such
obligations were assumed by a Seller at the time of acquisition of such
property; (xiii) all obligations in respect of dividends, distributions or
similar payments payable to members; (xiv) all obligations of a type referred to
in clauses (x) -(xiii) which is directly or indirectly guaranteed by a Seller or
which any Seller has agreed (contingently or otherwise) to purchase or otherwise
acquire or in respect of which it has otherwise assured a credit against loss,
and (xv) any refinancings of the foregoing, including principal, interest,
prepayment penalties and similar obligations thereto and Taxes associated with
the payment of any such amount, all as the same may be payable upon the complete
and final payoff thereof, regardless of whether such payoff occurs prior to,
simultaneous with or following the Closing.

 

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“Intellectual Property” means: all rights in intellectual property of any type
throughout the world, including, but not limited to: (i) patents, patent
applications and statutory invention registrations, including, but not limited
to, continuations, continuations-in-part, divisions, provisions, non-provisions,
reexaminations, reissues and extensions; (ii) trademarks, service marks, trade
names, brand names, logos and corporate names, slogans and other indicia of
source of origin, whether or not registered, including all common law rights
thereto and all goodwill associated therewith, and registrations and
applications for registration thereof; (iii) copyrights, whether registered or
common law, and registrations and applications for registration thereof; (iv)
trade secrets, confidential information and know-how; (v) domain names; (vi)
rights of publicity and privacy, rights to personal information and moral
rights; (vii) shop rights; (viii) inventions (whether patentable or
unpatentable), invention disclosures, mask works, industrial design rights,
discoveries, ideas, developments, data, software, confidential or proprietary
technical, business and other information, including, but not limited to
processes, techniques, methods, formulae, designs, algorithms, prospect lists,
customer lists, projections, analyses, and market studies, and all rights
therein and thereto; (ix) all rights to any of the foregoing provided in
international treaties and convention rights; (x) the right and power to assert,
defend and recover title to any of the foregoing; and (xi) all rights to assert,
defend and recover for any future infringement, misuse, misappropriation,
impairment, unauthorized use or other violation of any of the foregoing; and
(xii) all administrative rights arising from the foregoing, including the right
to prosecute applications and oppose, interfere with or challenge the
applications of others, the rights to obtain renewals, continuations, divisions,
and extensions of legal protection pertaining to any of the foregoing.

 

“IPS GPO” means the group purchase organization division of Integrated
Physicians Solutions, Inc.

 

“IPS PM” means the practice management division of Integrated Physicians
Solutions, Inc., which provides practice management services to three practices
through long-term management service agreements.

 

“Knowledge of Sellers” means the actual or constructive knowledge of the
following individuals (after due inquiry): Timothy Dragelin, Truc To, Arvind
Walia, John Esposito and Mark Bellisimo.

 

“Law” means any federal, state or local law (including common law), statute,
code, ordinance, rule, regulation, treaty, convention, decree, order, judgment,
injunction, directive, technical standard or other requirement enacted,
promulgated, issued, entered or enforced by a Governmental Authority.

 

“Liability” means any direct or indirect debt, liability, commitment or
obligation (whether known or unknown, matured or not matured, asserted or
unasserted, absolute or contingent, accrued or unaccrued, liquidated or
unliquidated, incurred or consequential and due or to become due), including any
liability for Taxes, causes of action, contract rights, and claims, to the
fullest extent of the law, in each case, of any kind or nature (including,
without limitation, all “claims” as defined in Bankruptcy Code section 101(5)),
whether imposed by agreement, understanding, law, equity or otherwise.

 

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“Licenses” means all licenses, permits, consents, registrations, certificates
and other governmental or regulatory permits, authorizations, approvals or
agreements issued by or with any Governmental Authority that regulates, licenses
or otherwise has or asserts jurisdiction over the Target Business, the Real
Property included as part of the Target Assets, or Sellers and used in the
operation of the Target Business as presently conducted.

 

“Material Adverse Effect” means (a) any event, change, or matter in respect of
the Target Business that, individually or in the aggregate, results in or would
be reasonably expected to result in a material adverse effect on the results of
operations, revenues, assets or condition (financial or otherwise) or
liabilities of the Target Business or any Seller, excluding any such event,
change or matter to the extent resulting from or arising in connection with the
filing of the Bankruptcy Cases; or (b) any event, condition or matter that would
have a material adverse effect on the legality, validity or enforceability of
this Agreement and the agreements and instruments to be entered into in
connection herewith, or prevents, materially delays or materially impedes the
consummation of the transactions contemplated hereby, or the realization of the
rights and remedies hereunder; provided, that, solely with respect to clause
(a), a “Material Adverse Effect” shall not include circumstances, facts,
developments, changes, events, effects or occurrences (individually or taken
together) resulting from or arising out of (i) changes or conditions generally
affecting the industries or markets in which Sellers and any of their
Subsidiaries operate; (ii) any change in the financial, banking or securities
markets or any change in the general international, national or regional
economic conditions, including as a result of terrorist activity, acts of war or
acts of public enemies; (iii) the execution of this Agreement or announcement or
pendency of the transactions contemplated hereby or any actions expressly
required to be taken pursuant to or in accordance with this Agreement; (iv) the
announcement of this Agreement or the transactions contemplated hereby; (v)
changes after the date hereof in any industry standards, Law, GAAP or regulatory
accounting requirements, or changes in the official interpretation thereof; (vi)
earthquakes, hurricanes, floods, acts of God or other natural disasters, except
to the extent any such occurrence causes physical damage to the Target Assets;
(vii) the failure or inability of any Seller to meet any internal or public
projections, forecasts or estimates of revenues or earnings with respect to the
Target Business (it being understood that the facts or circumstances giving rise
to or contributing to such failure may be deemed to constitute, or be taken into
account in determining whether there has been or will be, a Material Adverse
Effect); or (viii) any action taken by Sellers at the request of, or with the
express written consent of, Purchaser; provided that the exceptions described in
clauses (i), (ii), (iii) and (v) shall apply only to the extent that the changes
described therein do not have a disproportionate impact on Sellers and their
Subsidiaries who operate the Target Business, as compared to other Persons in
the same industry in which Sellers and such Subsidiaries operate with respect to
the Target Business.

 

“Material Permits” has the meaning set forth in Section 4.7.2.

 

“Multiemployer Plan” means a multiemployer plan as defined in ERISA section
3(37)(A).

 

“Next Highest Bid” has the meaning set forth in Section 6.4.2.10.

 

“Next Highest Bidder” has the meaning set forth in Section 10.2.4.

 

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“Non-Active Business Employees” has the meaning set forth in Section 6.6.1 to
this Agreement.

 

“Non-Good Standing Revenue” means the revenue attributable to the twelve (12)
full calendar month period that ends not later than fifteen (15) days prior to
the Auction and not earlier than forty-six (46) days prior to the Auction under
each Assigned Contract with an RCM Business customer party to which the
applicable customer party thereto is not a Customer in Good Standing.

 

“Non-Paying Party” has the meaning set forth in Section 9.5.

 

“Order” has the meaning set forth in Section 4.4.

 

“Ordinary Course of Business” means, subject to any limitations imposed as a
result of the filing of the Bankruptcy Cases, only the ordinary course of
business engaged in by Sellers, consistent with past practices.

 

“Orion” has the meaning set forth in the preamble of this Agreement.

 

“Orion Business” means the Target Business of Orion.

 

“Paying Party” has the meaning set forth in Section 9.5.

 

“Permitted Encumbrances” means (a) all Encumbrances that are disclosed on
Schedule 12 and not otherwise eliminated by the Sale Order, (b) liens relating
to Taxes that are not yet due and payable as of the Closing or that are being
contested in good faith and set forth on Schedule 12(a), and (c) mechanic’s,
materialmen’s, repairmen’s and other statutory liens arising in the Ordinary
Course of Business and securing obligations incurred prior to Closing for
amounts owed but not yet delinquent, for which Sellers are and will remain
responsible for payment and removal of such liens at or after Closing.

 

“Person” means and includes natural persons, corporations, limited partnerships,
general partnerships, limited liability companies, limited liability
partnerships, joint stock companies, joint ventures, associations, companies,
trusts, banks, trust companies, land trusts, business trusts or other
organizations and Governmental Authorities, whether or not legal entities.

 

“Petition Date” means March 16, 2018.

 

“Property Taxes” has the meaning set forth in Section 9.5.1.

 

“Purchase Price” means an amount equal to the greater of (a) $10,000,000 and (b)
the Base Purchase Price.

 

“Purchaser” has the meaning set forth in the preamble of this Agreement.

 

“Purchaser 401(k) Plan” has the meaning set forth in Section 6.7.4.

 

“Purchaser PTO Policies” has the meaning set forth in Section 6.7.5.

 

45

 

 

“Qualifying Bid” has the meaning set forth in Section 6.4.2.8.

 

“RCM Businesses” means the Orion Business and the Allegiance Business.

 

“Real Property” has the meaning set forth in Section 1.1.2.

 

“Real Property Leases” has the meaning set forth in Section 4.11.1.

 

“Sale Hearing” has the meaning set forth in Section 6.4.1.1.

 

“Sale Motion” has the meaning set forth in Section 6.4.1.1.

 

“Sale Order” has the meaning set forth in Section 7.2.1.

 

“Sellers” has the meaning set forth in the preamble of this Agreement.

 

“Sellers 401(k) Plan” has the meaning set forth in Section 6.7.4.

 

“Specifically Excluded Liabilities” has the meaning set forth in Section 1.2.3.

 

“Straddle Period” has the meaning set forth in Section 9.5.

 

“Successful Bidder” has the meaning set forth in the Bidding Procedures Order.

 

“Target Assets” has the meaning set forth in Section 1.1.

 

“Target Business” has the meaning set forth in the recitals of this Agreement.

 

“Tax” and “Taxes” means all taxes, charges, fees, levies, duties or other like
assessments, including without limitation, all federal, state, local, or foreign
(or any governmental unit, agency, or political subdivision of any of the
foregoing) income, gross receipts, license, payroll, employment, excise,
severance, stamp, occupation, premium, windfall profits, environmental
(including taxes under Tax Code Section 59A), customs duties, capital stock,
franchise, profits, withholding, social security, unemployment, disability, real
property, personal property, sales, use, transfer, registration, unclaimed
property and escheat, ad valorem, value added, alternative or add-on minimum,
estimated, or any other governmental charges of the same or similar nature,
including any interest, penalty, or addition thereto.

 

“Tax Code” means the U.S. Internal Revenue Code of 1986, as amended.

 

“Tax Returns” means all returns, reports, certificates, audit reports,
estimates, claims for refund, information statements, elections, statements of
foreign bank and financial accounts and other returns and documents relating to,
filed or required to be filed in connection with any Taxes (whether or not a
payment is required to be made with respect to such filing), including any
schedule or attachment thereto, and including any amendment thereof. Any one of
the foregoing Tax Returns shall be referred to sometimes as a “Tax Return.”

 

“Transfer Taxes” has the meaning set forth in Section 9.4.

 

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“Transition Services Agreement” has the meaning set forth in Section 6.5.

 

“Vacation Policy” has the meaning set forth in Section 6.7.5.

 

“WARN Laws” has the meaning set forth in Section 6.6.3.

 

Article 13

MISCELLANEOUS PROVISIONS.

 

13.1 Nature and Survival of Representations and Warranties. The parties hereto
agree that the representations and warranties of the parties contained in this
Agreement and in any certificate delivered pursuant hereto by any party shall
not survive the Closing.

 

13.2 Exhibits and Schedules. The Exhibits and Schedules (and any supplements
thereto) referred to in this Agreement are a part of this Agreement as if fully
set forth herein. All references to this Agreement shall be deemed to include
such Exhibits and Schedules, unless the context otherwise requires.

 

13.3 Assignment. Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto (whether by
operation of Law or otherwise) without the prior written consent of the other
parties, provided that Purchaser may assign some or all of its rights hereunder
to one or more subsidiaries formed by it prior to Closing, provided that
Purchaser remains liable for its obligations hereunder. Subject to the preceding
sentences, this Agreement shall be binding upon, inure to the benefit of and be
enforceable by the parties and their respective successors and assigns.

 

13.4 Governing Law and Jurisdiction. 

 

13.4.1 The construction, interpretation and enforcement of this Agreement will
be governed by the laws of the State of Delaware without regard to any conflicts
of laws principles thereof.

 

13.4.2 The parties agree that the Bankruptcy Court shall retain exclusive
jurisdiction to resolve any controversy or claim arising out of or relating to
this Agreement or the implementation or breach hereof.

 

13.5 Severability. If any provision of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.

 

13.6 Notices. All notices, requests, demands and other communications under this
Agreement shall be made in writing and will be deemed to have been duly given
(i) when hand delivered (with written confirmation of receipt); (ii) when sent
by facsimile (with written confirmation of receipt), provided that a copy
thereof is sent by another method provided hereunder; or (iii) when received by
the addressee, if sent by United States Certified Mail, Return Receipt
Requested, postage prepaid, or by nationally recognized express delivery service
guaranteeing next Business Day delivery, in each case to the appropriate
address(es) and/or facsimile number(s) set forth below (or to such other address
and facsimile number as a party may hereafter designate by notice to the other
parties):

 

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If intended for Sellers:

 

Orion Healthcorp, Inc.

3200 Wilcrest, Suite 600

Houston, Texas 77042

Attention: Chief Executive Officer and Chief Restructuring Officer

 

With a copy to:

 

Timothy J. Dragelin

FTI Consulting Group

214 N. Tryon Street

Suite 1900

Charlotte, NC 28202

Facsimile: (704) 972-4121

Email: tim.dragelin@fticonsulting.com

 

with a copy (that will not constitute notice) to:

 

DLA Piper LLP (US)

1251 Avenue of the Americas

27th Floor

New York, New York 10020

Attention: Thomas Califano, Esq. and Alec Fraser, Esq.

Facsimile: (212) 884-8526

 

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If intended for Purchaser:

 

Medical Transcription Billing, Corp.

7 Clyde Road

Somerset, NJ 08873

Attention: Shruti Patel, General Counsel

spatel@mtbc.com

Facsimile: 732.227.8575

 

with a copy (that will not constitute notice) to:

 

Bryan Cave Leighton Paisner LLP

Keith Miles Aurzada

2200 Ross Avenue

Suite 3300

Dallas, TX 75201

Keith.aurzada@bclplaw.com

Attention: Keith Miles Aurzada

 

13.7 Public Announcements. Any public announcement, including any press release,
communication to employees, customers, suppliers, or others having dealings with
Sellers or Purchaser, or similar publicity with respect to this Agreement or any
of the transactions contemplated hereby, will be issued at such time, in such
manner, and containing such content as Sellers and Purchaser mutually determine;
provided however, that the parties acknowledge that Purchaser will, in its
reasonable discretion and in consultation with its counsel, provide public
notice as and when appropriate to satisfy its obligations under SEC regulations
and otherwise communicate material matters to its investors.

 

13.8 Expenses. Except as otherwise provided in this Agreement, whether or not
the transactions contemplated by this Agreement are consummated, each of the
parties hereto shall pay the fees and expenses of its respective counsel,
accountants, and other professionals incident to the negotiation and preparation
of this Agreement and the consummation of the transactions contemplated hereby.
All costs and obligations incurred upon a change of control of Sellers will be
borne by the Sellers.

 

13.9 Third Parties. Nothing in this Agreement, whether express or implied, shall
confer any rights or remedies under or by reason of this Agreement on any person
other than the parties to it and their respective successors and permitted
assignees, nor shall any provision in this Agreement relieve or discharge the
obligation or liability of any third person to any party to this Agreement, nor
shall any provision give any third person any right of subrogation or action
over or against any party to this Agreement.

 

13.10 Time of the Essence. Time is of the essence in all dates and time periods
set forth or referred to in this Agreement.

 

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13.11 Construction. The headings used in this Agreement are for convenience of
reference only and are not a part of this Agreement and do not in any way
control, define, limit, or add to the terms and conditions hereof. In the
construction of this Agreement, the singular shall include the plural and the
plural, the singular, unless the context otherwise requires. Further, the use of
the masculine, feminine and/or neuter gender shall include each other gender
where applicable.

 

13.12 Counterparts; Electronic Signatures; Effectiveness of this Agreement.

 

13.12.1 This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original of this Agreement and all of which, when
taken together, will be deemed to constitute one and the same agreement.

 

13.12.2 A manual signature on this Agreement or other documents to be delivered
pursuant to this Agreement, or an image of which shall have been transmitted
electronically, will constitute an original signature for all purposes. The
delivery of copies of this Agreement or other documents to be delivered pursuant
to this Agreement, including executed signature pages where required, by
electronic transmission will constitute effective delivery of this Agreement or
such other document for all purposes.

 

13.13 Remedies Cumulative. The rights and remedies of the parties are cumulative
and not alternative.

 

13.14 Entire Agreement; Amendment; Waiver 

13.14.1 This Agreement constitutes the entire agreement between the parties
pertaining to the subject matter contained in it and supersedes all prior and
contemporaneous agreements, representations and understandings of the parties,
whether written or oral. No supplement, modification, or amendment of this
Agreement shall be binding unless executed in writing by all the parties.

 

13.14.2 No waiver of any of the provisions of this Agreement shall be deemed, or
shall constitute, a waiver of any other provision, whether or not similar, nor
shall any waiver constitute a continuing waiver. No waiver shall be binding
unless executed in writing by the party making the waiver.

 

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13.15 Disclaimer; Non-Recourse. (A) EXCEPT AS OTHERWISE EXPRESSLY PROVIDED
HEREIN, THE ASSETS ARE BEING TRANSFERRED “AS IS, WHERE IS, WITH ALL FAULTS,”
AND, WITHOUT LIMITING THE GENERALITY OF SECTION 1.5, SELLERS EXPRESSLY DISCLAIM
ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND OR NATURE, EXPRESS OR IMPLIED, AS
TO THE CONDITION, VALUE OR QUALITY OF THE ASSETS OR THE PROSPECTS (FINANCIAL OR
OTHERWISE), RISKS AND OTHER INCIDENTS OF THE BUSINESS. EXCEPT AS OTHERWISE
EXPRESSLY PROVIDED HEREIN OR IN THE SELLERS TRANSACTION DOCUMENTS, PURCHASER
WAIVES, RELEASES AND FOREVER DISCHARGES ALL CLAIMS AND RIGHTS OF ACTION, WHETHER
AT LAW OR EQUITY, AGAINST SELLERS OR ITS AFFILIATES TO THE EXTENT ARISING WITH
RESPECT TO THE BUSINESS OR RELATING TO THE TRANSACTIONS UNDER THIS AGREEMENT,
INCLUDING ANY CLAIMS OR RIGHTS OF ACTION UNDER THE COMPREHENSIVE ENVIRONMENTAL
RESPONSE, COMPENSATION AND LIABILITY ACT OR ANY OTHER LAWS. NOTWITHSTANDING
ANYTHING IN THIS AGREEMENT TO THE CONTRARY, NO PARTY SHALL BE LIABLE TO ANY
OTHER PARTY FOR ANY (I) CONSEQUENTIAL, INDIRECT, SPECIAL, PUNITIVE, SPECULATIVE,
EXEMPLARY, TREBLE DAMAGES OR DAMAGES FOR ANY LOST PROFITS OR BUSINESS, LOST
BUSINESS OPPORTUNITY, DIMINUTION IN VALUE OR LOSS OF USE, (II) DAMAGES OR LOSSES
BASED ON OR USING CALCULATION OF LOSS OF FUTURE REVENUE, INCOME OR PROFITS OR
DIMINUTION OF VALUE OR (III) DAMAGES BASED ON A MULTIPLE OF EARNINGS OR OTHER
METRIC OR LOSS OF BUSINESS REPUTATION OR OPPORTUNITY FOR ANY REASON WITH RESPECT
TO ANY MATTER ARISING OUT OF OR RELATING TO THIS AGREEMENT, WHETHER BASED ON
STATUTE, CONTRACT, TORT, OR OTHERWISE AND WHETHER OR NOT ARISING FROM THE OTHER
PARTY’S SOLE, JOINT, OR CONCURRENT NEGLIGENCE, STRICT LIABILITY, OR OTHER FAULT;
PROVIDED, THAT, THE FOREGOING CLAUSES (I), (II) AND (III) SHALL NOT BE
APPLICABLE TO THE EXTENT THAT ANY SUCH DAMAGES (INCLUDING, FOR THE AVOIDANCE OF
DOUBT, LOST PROFITS) ARE THE REASONABLY FORESEEABLE RESULT OF A BREACH OF THIS
AGREEMENT.

 

13.16 Bulk Sales Laws. Each Party hereby waives compliance by the Parties with
the “bulk sales,” “bulk transfers” or similar Laws and all other similar Laws in
all applicable jurisdictions in respect of the transactions contemplated by this
Agreement or any agreement contemplated by this Agreement.

 

13.17 No Right of Set-Off. Except as set forth in this Agreement, Purchaser for
itself and for its Affiliates, successors and assigns hereby unconditionally
and, irrevocably waives any rights of set-off, netting, offset, recoupment, or
similar rights that Purchaser or any of its respective Affiliates, successors
and assigns has or may have with respect to the payment of the Purchase Price or
any other payments to be made by Purchaser pursuant to this Agreement or any
other document or instrument delivered by Purchaser in connection herewith.

 

Signature Page Follows

 

51

 

 

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement, as of
the day and year first above written.

 

PURCHASER:       MEDICAL TRANSCRIPTION BILLING, CORP.         By: /s/ Stephen
Snyder   Name: Stephen Snyder   Title: Chief Executive Officer  

 

[Signature Page to Asset Purchase Agreement]

 

   

 

 

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement, as of
the day and year first above written.

 

SELLERS:               ORION HEALTHCORP, INC.   MEDICAL BILLING SERVICES, INC.  
        By: /s/ Timothy Dragelin   By: /s/ Timothy Dragelin Name: Timothy
Dragelin   Name: Timothy Dragelin Title: Chief Restructuring Officer   Title:
Chief Restructuring Officer           RAND MEDICAL BILLING, INC.   RMI PHYSICIAN
SERVICES CORPORATION           By: /s/ Timothy Dragelin   By: /s/ Timothy
Dragelin Name: Timothy Dragelin   Name: Timothy Dragelin Title: Chief
Restructuring Officer   Title: Chief Restructuring Officer           WESTERN
SKIES PRACTICE MANAGEMENT, INC.   PHYSICIANS PRACTICE PLUS HOLDINGS, LLC        
  By: /s/ Timothy Dragelin   By: /s/ Timothy Dragelin Name: Timothy Dragelin  
Name: Timothy Dragelin Title: Chief Restructuring Officer   Title: Chief
Restructuring Officer           PHYSICIANS PRACTICE PLUS LLC   NEMS ACQUISITION
LLC           By: /s/ Timothy Dragelin   By: /s/ Timothy Dragelin Name: Timothy
Dragelin   Name: Timothy Dragelin Title: Chief Restructuring Officer   Title:
Chief Restructuring Officer

 

[Signature Page to Asset Purchase Agreement]

 

   

 

 

NORTHEAST MEDICAL SOLUTIONS, LLC   NEMS WEST VIRGINIA, LLC           By: /s/
Timothy Dragelin   By: /s/ Timothy Dragelin Name: Timothy Dragelin   Name:
Timothy Dragelin Title: Chief Restructuring Officer   Title: Chief Restructuring
Officer           INTEGRATED PHYSICIAN SOLUTIONS, INC.   VEGA MEDICAL
PROFESSIONALS, LLC           By: /s/ Timothy Dragelin   By: /s/ Timothy Dragelin
Name: Timothy Dragelin   Name: Timothy Dragelin Title: Chief Restructuring
Officer   Title: Chief Restructuring Officer           ALLEGIANCE CONSULTING
ASSOCIATES, LLC   ALLEGIANCE BILLING & CONSULTING, LLC           By: /s/ Timothy
Dragelin   By: /s/ Timothy Dragelin Name: Timothy Dragelin   Name: Timothy
Dragelin Title: Chief Restructuring Officer   Title: Chief Restructuring Officer

 

[Signature Page to Asset Purchase Agreement]