Execution Version

 

ASSET PURCHASE AGREEMENT

 

By and among

 

Regenerative Medicine Solutions, LLC, and certain of its subsidiaries,

 

RMS Shareholder, LLC,

 

Medovex Corp.

 

and

 

RMS Acquisition Corp.,

 

dated as of

 

October 15, 2018

 

 

 

 

TABLE OF CONTENTS

 

ARTICLE I DEFINITIONS 1     ARTICLE II PURCHASE AND SALE 11     Section 2.01
Purchase and Sale of Assets 11 Section 2.02 Excluded Assets 12 Section 2.03
Assumed Liabilities 13 Section 2.04 Excluded Liabilities 13 Section 2.05
Purchase Price 14 Section 2.06 Allocation of Purchase Price 16 Section 2.07 Tax
Effect; Withholding Tax 16 Section 2.08 Third Party Consents 16       ARTICLE
III CLOSING 17       Section 3.01 Closing 17 Section 3.02 Closing Deliverables
17 Section 3.03 Liquidation 18       ARTICLE IV REPRESENTATIONS AND WARRANTIES
OF SELLER 18       Section 4.01 Organization and Qualification of Seller 18
Section 4.02 Authority of Seller 18 Section 4.03 No Conflicts; Consents 19
Section 4.04 Financial Statement 19 Section 4.05 Undisclosed Liabilities 20
Section 4.06 Absence of Certain Changes, Events and Condition 20 Section 4.07
Material Contracts 22 Section 4.08 Title to Purchased Assets 23 Section 4.09
Condition and Sufficiency of Assets 23 Section 4.10 Seller Leased Real Property
24 Section 4.11 Intellectual Property 25 Section 4.12 Accounts Receivable 26
Section 4.13 Insurance 26 Section 4.14 Legal Proceedings; Governmental Orders 27
Section 4.15 Compliance With Laws; Permits 27 Section 4.16 Environmental Matters
27 Section 4.17 Employee Benefit Matters 28 Section 4.18 Employment Matters 31
Section 4.19 Taxes 32 Section 4.20 Brokers 32 Section 4.21 Issuance of Exchange
Shares 33

 

 i 

 

 

ARTICLE V REPRESENTATIONS AND WARRANTIES OF MEDOVEX 33       Section 5.01
Organization and Qualification of Buyer 33 Section 5.02 Authority of Buyer 33
Section 5.03 Capitalization 34 Section 5.04 Series C Preferred Stock of Medovex
to be Delivered 35 Section 5.05 No Conflicts; Consents 35 Section 5.06 Brokers
35 Section 5.07 Legal Proceedings 36 Section 5.08 Financial Statement 36 Section
5.09 Undisclosed Liabilities 36 Section 5.10 Current Ratio 36 Section 5.11
Absence of Certain Changes, Events and Condition 37 Section 5.12 Material
Contracts 38 Section 5.13 Medovex Leased Real Property 40 Section 5.14
Intellectual Property 41 Section 5.15 Accounts Receivable 42 Section 5.16
Insurance 43 Section 5.17 Compliance with Laws; Permits 43 Section 5.18 Employee
Benefit Matters 44 Section 5.19 Employment Matters 45 Section 5.20 Taxes 47    
  ARTICLE VI COVENANTS 48       Section 6.01 Conduct of Business Prior to the
Closing 48 Section 6.02 Access to Information 48 Section 6.03 No Solicitation of
Other Bids 49 Section 6.04 Notice of Certain Events 49 Section 6.05 Employees
and Employee Benefits 50 Section 6.06 Confidentiality 51 Section 6.07
Non-Competition; Non-Solicitation 51 Section 6.08 Approvals and Consents 53
Section 6.09 Securities Laws 53 Section 6.10 Books and Records 54 Section 6.11
Medovex Board of Directors 55 Section 6.12 Management Employment Agreement 55
Section 6.13 Closing Conditions 55 Section 6.14 Public Announcements 55 Section
6.15 Bulk Sales Laws 55 Section 6.16 Receivables 55 Section 6.17 Transfer Taxes
55 Section 6.18 Tax Clearance Certificates 56 Section 6.19 Further Assurances 56
Section 6.20 Employee Tax Withholding and Reporting 56       ARTICLE VII
CONDITIONS TO CLOSING 56       Section 7.01 Conditions to Obligations of All
Parties 56 Section 7.02 Conditions to Obligations of Buyer 57 Section 7.03
Conditions to Obligations of Seller 58

 

 ii 

 

 

ARTICLE VIII INDEMNIFICATION 60       Section 8.01 Survival 60 Section 8.02
Indemnification By Seller 61 Section 8.03 Indemnification By Buyer 61 Section
8.04 Certain Limitations 62 Section 8.05 Indemnification Procedures 62 Section
8.06 Payments 64 Section 8.07 Exclusive Source of Recovery 64 Section 8.08 Tax
Treatment of Indemnification Payments 65 Section 8.09 Effect of Investigation 65
Section 8.10 Exclusive Remedies 66       ARTICLE IX TERMINATION 66       Section
9.01 Termination 66 Section 9.02 Effect of Termination 67       ARTICLE X
MISCELLANEOUS 67       Section 10.01 Expenses 67 Section 10.02 Notices 67
Section 10.03 Interpretation 68 Section 10.04 Headings 69 Section 10.05
Severability 69 Section 10.06 Entire Agreement 69 Section 10.07 Successors and
Assigns 69 Section 10.08 No Third-party Beneficiaries 69 Section 10.09 Amendment
and Modification; Waiver 69 Section 10.10 Governing Law; Submission to
Jurisdiction; Waiver of Jury Trial 70 Section 10.11 Specific Performance 71
Section 10.12 Counterparts 71

 

 iii 

 

 

ASSET PURCHASE AGREEMENT

 

This Asset Purchase Agreement (this “Agreement”), dated as of October 15, 2018,
is entered into by and among Regenerative Medicine Solutions LLC, a Delaware
limited liability company (“RMS”), RMS Shareholder, LLC, a Delaware limited
liability company and the sole member of RMS (“RMS Shareholder”), Lung Institute
LLC, a Delaware limited liability company (“Lung Institute”), RMS Lung Institute
Management LLC, a Delaware limited liability company (“RMS Management”),
Cognitive Health Institute Tampa, LLC, a Delaware limited liability company
(“CHIT” and, together with Lung Institute and RMS Management, the “Operating
Subsidiaries”), Medovex Corp., a Nevada corporation (“Medovex”) and RMS
Acquisition Corp., a Nevada corporation (“Buyer”). For purposes of this
Agreement, “Seller” shall mean individually and collectively RMS and the
Operating Subsidiaries, together with any other entity selling or assigning
assets of the Seller Business pursuant to this Agreement.

 

RECITALS

 

WHEREAS, Seller is engaged in the business of (a) developing and marketing a
cellular therapy protocol currently used for the treatment of chronic lung
diseases, and (b) marketing, patient relations and business intelligence
solutions for brands in the field of regenerative medicine (the “Seller
Business”);

 

WHEREAS, Medovex, through its wholly owned subsidiaries, is in the business of
acquiring and developing a diversified portfolio of medical technology products
(the “Medovex Business”);

 

WHEREAS, Seller wishes to sell and assign to Buyer, and Buyer wishes to purchase
and assume from Seller, substantially all the assets, and certain specified
liabilities, of the Seller Business, subject to the terms and conditions set
forth herein; and

 

WHEREAS, Seller and Buyer intend that the transaction contemplated by this
Agreement be treated as a tax-deferred exchange under the RMS plan of
reorganization pursuant to the provisions of Section 368(a)(1)(C) and
368(a)(2)(C) of the Internal Revenue Code of 1986, as amended (the “Code”), on
the terms and conditions set forth in this Agreement;

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

 

ARTICLE I
DEFINITIONS

 

The following terms have the meanings specified or referred to in this ARTICLE
I:

 

“Accounts Receivable” has the meaning set forth in Section 2.01(a).

 

“Acquisition Proposal” has the meaning set forth in Section 6.03(a).

 

 1 

 

 

“Action” means any claim, action, cause of action, demand, lawsuit, arbitration,
inquiry, audit, notice of violation, proceeding, litigation, citation, summons,
subpoena or investigation of any nature, civil, criminal, administrative,
regulatory or otherwise, whether at law or in equity.

 

“Additional Exchange Shares” has the meaning set forth in Section 2.05(f).

 

“Additional Share Issue Dates” has the meaning set forth in Section 2.05(e).

 

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

 

“Agreement” has the meaning set forth in the preamble.

 

“Ancillary Documents” means the Bill of Sale, the Assignment and Assumption
Agreement, Assignment and Assumption of Leases, the Management Employment
Agreement, the Voting Agreement, and the other agreements, instruments and
documents required to be delivered at the Closing.

 

“Assigned Contracts” has the meaning set forth in Section 2.01(b).

 

“Assignment and Assumption Agreement” has the meaning set forth in Section
3.02(a)(ii).

 

“Assignment and Assumption of Leases” has the meaning set forth in Section
3.02(a)(iii)

 

“Assumed Liabilities” has the meaning set forth in Section 2.03.

 

“Audited Medovex Financial Statements” has the meaning set forth in Section
4.04.

 

“Audited RMS Financial Statements” has the meaning set forth in Section 4.04.

 

“Basket” has the meaning set forth in Section 8.04(a).

 

“Bill of Sale” has the meaning set forth in Section 3.02(a)(i).

 

“Books and Records” has the meaning set forth in Section 2.01(h).

 

“Business Day” means any day except Saturday, Sunday or any other day on which
commercial banks located in Florida are authorized or required by Law to be
closed for business.

 

“Buyer” has the meaning set forth in the preamble.

 

“Buyer Closing Certificate” has the meaning set forth in Section 7.03(f).

 

 2 

 

 

“Buyer Fundamental Reps” has the meaning set forth in Section 8.01.

 

“Buyer Indemnitees” has the meaning set forth in Section 8.02.

 

“CHIT” has the meaning set forth in the preamble.

 

“Closing” has the meaning set forth in Section 3.01.

 

“Closing Date” has the meaning set forth in Section 3.01.

 

“Code” has the meaning set forth in the preamble.

 

“Common Stock” has the meaning set forth in Section 5.03.

 

“Contracts” means all contracts, leases, deeds, mortgages, licenses,
instruments, notes, commitments, undertakings, indentures, joint ventures and
all other agreements, commitments and legally binding arrangements, whether
written or oral.

 

“Direct Claim” has the meaning set forth in Section 8.05(c).

 

“Disclosure Schedules” means the Disclosure Schedules delivered by Seller and
Medovex concurrently with the execution and delivery of this Agreement.

 

“Encumbrance” means any charge, claim, community property interest, pledge,
condition, equitable interest, lien (statutory or other), option, security
interest, mortgage, easement, encroachment, right of way, right of first
refusal, or restriction of any kind, including any restriction on use, voting,
transfer, receipt of income or exercise of any other attribute of ownership.

 

“Environmental Claim” means any Action, Governmental Order, lien, fine, penalty,
or, as to each, any settlement or judgment arising therefrom, by or from any
Person alleging liability of whatever kind or nature (including liability or
responsibility for the costs of enforcement proceedings, investigations,
cleanup, governmental response, removal or remediation, natural resources
damages, property damages, personal injuries, medical monitoring, penalties,
contribution, indemnification and injunctive relief) arising out of, based on or
resulting from: (a) the presence, Release of, or exposure to, any Hazardous
Materials; or (b) any actual or alleged non-compliance with any Environmental
Law or term or condition of any Environmental Permit.

 

“Environmental Law” means any applicable Law, and any Governmental Order or
binding agreement with any Governmental Authority: (a) relating to pollution (or
the cleanup thereof) or the protection of natural resources, endangered or
threatened species, human health or safety, or the environment (including
ambient air, soil, surface water or groundwater, or subsurface strata); or (b)
concerning the presence of, exposure to, or the management, manufacture, use,
containment, storage, recycling, reclamation, reuse, treatment, generation,
discharge, transportation, processing, production, disposal or remediation of
any Hazardous Materials.

 

 3 

 

 

“Environmental Notice” means any written directive, notice of violation or
infraction, or notice respecting any Environmental Claim relating to actual or
alleged non-compliance with any Environmental Law or any term or condition of
any Environmental Permit.

 

“Environmental Permit” means any Permit, letter, clearance, consent, waiver,
closure, exemption, decision or other action required under or issued, granted,
given, authorized by or made pursuant to Environmental Law.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and the regulations promulgated thereunder.

 

“ERISA Affiliate” means all employers (whether or not incorporated) that would
be treated together with Seller or any of its Affiliates, or Medovex and any of
its Affiliates, as applicable, as a “single employer” within the meaning of
Section 414 of the Code or Section 4001 of ERISA.

 

“Excluded Assets” has the meaning set forth in Section 2.02.

 

“Excluded Contracts” has the meaning set forth in Section 2.02(a).

 

“Excluded Liabilities” has the meaning set forth in Section 2.04.

 

“FIRPTA Certificate” has the meaning set forth in Section 7.02(k).

 

“GAAP” means United States generally accepted accounting principles in effect
from time to time.

 

“Governmental Authority” means any federal, state, local or foreign government
or political subdivision thereof, or any agency or instrumentality of such
government or political subdivision, or any self-regulated organization or other
non-governmental regulatory authority or quasi-governmental authority (to the
extent that the rules, regulations or orders of such organization or authority
have the force of Law), or any arbitrator, court or tribunal of competent
jurisdiction.

 

“Governmental Order” means any order, writ, judgment, injunction, decree,
stipulation, determination or award entered by or with any Governmental
Authority.

 

“Hazardous Materials” means: (a) any material, substance, chemical, waste,
product, derivative, compound, mixture, solid, liquid, mineral or gas, in each
case, whether naturally occurring or manmade, that is hazardous, acutely
hazardous, toxic, or words of similar import or regulatory effect under
Environmental Laws; and (b) any petroleum or petroleum-derived products, radon,
radioactive materials or wastes, asbestos in any form, lead or lead-containing
materials, urea formaldehyde foam insulation and polychlorinated biphenyls.

 

“Indemnified Party” has the meaning set forth in Section 8.05.

 

“Indemnifying Party” has the meaning set forth in Section 8.05.

 

 4 

 

 

“Intellectual Property” means any and all rights in, arising out of, or
associated with any of the following in any jurisdiction throughout the world:
(a) issued patents and patent applications (whether provisional or
non-provisional), including divisionals, continuations, continuations-in-part,
substitutions, reissues, reexaminations, extensions, or restorations of any of
the foregoing, and other Governmental Authority-issued indicia of invention
ownership (including certificates of invention, petty patents, and patent
utility models) (“Patents”); (b) trademarks, service marks, brands,
certification marks, logos, trade dress, trade names, and other similar indicia
of source or origin, together with the goodwill connected with the use of and
symbolized by, and all registrations, applications for registration, and
renewals of, any of the foregoing (“Trademarks”); (c) copyrights and works of
authorship, whether or not copyrightable, and all registrations, applications
for registration, and renewals of any of the foregoing (“Copyrights”); (d)
internet domain names and social media account or user names (including
“handles”), whether or not Trademarks, all associated web addresses, URLs,
websites and web pages, social media accounts and pages, and all content and
data thereon or relating thereto, whether or not Copyrights; (e) mask works, and
all registrations, applications for registration, and renewals thereof; (f)
industrial designs, and all Patents, registrations, applications for
registration, and renewals thereof; (g) trade secrets, know-how, inventions
(whether or not patentable), discoveries, improvements, technology, business and
technical information, databases, data compilations and collections, tools,
methods, processes, techniques, and other confidential and proprietary
information and all rights therein (“Trade Secrets”); (h) computer programs,
operating systems, applications, firmware and other code, including all source
code, object code, application programming interfaces, data files, databases,
protocols, specifications, and other documentation thereof (“Software”); and (i)
rights of publicity; and (j) all other intellectual or industrial property and
proprietary rights.

 

“Intellectual Property Agreements” means all licenses, sublicenses, consent to
use agreements, settlements, coexistence agreements, covenants not to sue,
waivers, releases, permissions and other Contracts, whether written or oral,
relating to any Intellectual Property that is used or held for use in the
conduct of the Seller Business or Medovex Business, as applicable, as currently
conducted or proposed to be conducted to which Seller or a Medovex Member is a
party, beneficiary or otherwise bound.

 

“Intellectual Property Assets” means all Intellectual Property that is owned and
used or held for use in the conduct of the Seller Business or Medovex Business,
as applicable, as currently conducted or proposed to be conducted, together with
all (a) royalties, fees, income, payments, and other proceeds now or hereafter
due or payable to Seller or Medovex Member, as applicable, with respect to such
Intellectual Property; and (b) claims and causes of action with respect to such
Intellectual Property, whether accruing before, on, or after the date
hereof/accruing on or after the date hereof, including all rights to and claims
for damages, restitution, and injunctive and other legal or equitable relief for
past, present, or future infringement, misappropriation, or other violation
thereof.

 

“Intellectual Property Registrations” means all Intellectual Property Assets
that are subject to any issuance, registration, or application by or with any
Governmental Authority or authorized private registrar in any jurisdiction,
including issued Patents, registered Trademarks, domain names and Copyrights,
and pending applications for any of the foregoing.

 

 5 

 

 

“Interim Medovex Balance Sheet” has the meaning set forth in Section 5.08.

 

“Interim Medovex Balance Sheet Date” has the meaning set forth in Section 5.08.

 

“Interim RMS Balance Sheet” has the meaning set forth in Section 4.04.

 

“Interim RMS Balance Sheet Date” has the meaning set forth in Section 4.04.

 

“Interim Medovex Financial Statements” has the meaning set forth in Section
5.08.

 

“Interim RMS Financial Statements” has the meaning set forth in Section 4.04.

 

“Law” means any statute, law, ordinance, regulation, rule, code, order,
constitution, treaty, common law, judgment, decree, other requirement or rule of
law of any Governmental Authority.

 

“Liabilities” means liabilities, obligations or commitments of any nature
whatsoever, asserted or unasserted, known or unknown, absolute or contingent,
accrued or unaccrued, matured or unmatured or otherwise.

 

“Losses” means losses, damages, liabilities, deficiencies, Actions, judgments,
interest, awards, penalties, fines, costs or expenses of whatever kind,
including reasonable attorneys’ fees and the cost of enforcing any right to
indemnification hereunder and the cost of pursuing any insurance providers;
provided, however, that “Losses” shall not include punitive damages, except to
the extent actually awarded to a Governmental Authority or other third party.

 

“Lung Institute” has the meaning set forth in the preamble.

 

“Management Employment Agreement” has the meaning set forth in Section 6.12.

 

“Material Adverse Effect” means any event, occurrence, fact, condition or change
that is, or could reasonably be expected to become, individually or in the
aggregate, materially adverse to (a) the business, results of operations,
condition (financial or otherwise) or assets of the Seller Business or Medovex
Business, as applicable, (b) in the case of Seller, the value of the Purchased
Assets, or (c) the ability of Seller or Buyer, as applicable, to consummate the
transactions contemplated hereby on a timely basis; provided, however, that
“Material Adverse Effect” shall not include any event, occurrence, fact,
condition or change, directly or indirectly, arising out of or attributable to:
(i) general economic or political conditions; (ii) conditions generally
affecting the industries in which the Seller Business or Medovex Business, as
applicable, operates; (iii) any changes in financial or securities markets in
general; (iv) acts of war (whether or not declared), armed hostilities or
terrorism, or the escalation or worsening thereof; (v) any action required or
permitted by this Agreement, except pursuant to Section 4.03, Section 5.05, and
Section 6.08; (vi) any changes in applicable Laws or accounting rules, including
GAAP; or (vii) the public announcement, pendency or completion of the
transactions contemplated by this Agreement; provided further, however, that any
event, occurrence, fact, condition or change referred to in clauses (i) through
(iv) immediately above shall be taken into account in determining whether a
Material Adverse Effect has occurred or could reasonably be expected to occur to
the extent that such event, occurrence, fact, condition or change has a
disproportionate effect on the Seller Business or Medovex Business, as
applicable, compared to other participants in the industries in which such
business operates.

 

 6 

 

 

“Medovex” has the meaning set forth in the preamble.

 

“Medovex Balance Sheet” has the meaning set forth in Section 5.08.

 

“Medovex Balance Sheet Date” has the meaning set forth in Section 5.08.

 

“Medovex Benefit Plan” means any pension, benefit, retirement, compensation,
employment, consulting, profit-sharing, deferred compensation, incentive, bonus,
performance award, phantom equity, stock or stock-based, change in control,
retention, severance, vacation, paid time off (PTO), medical, vision, dental,
disability, welfare, Code Section 125 cafeteria, fringe-benefit and other
similar agreement, plan, policy, program or arrangement (and any amendments
thereto), in each case whether or not reduced to writing and whether funded or
unfunded, including each “employee benefit plan” within the meaning of Section
3(3) of ERISA, whether or not tax-qualified and whether or not subject to ERISA,
which is or has been maintained, sponsored, contributed to, or required to be
contributed to by any Medovex Member for the benefit of any current or former
employee, officer, director, retiree, independent contractor or consultant of
any Medovex Member or any spouse or dependent of such individual, or under which
any Medovex Member or any of its ERISA Affiliates has or may have any Liability,
or with respect to which Seller or any of its Affiliates would reasonably be
expected to have any Liability, contingent or otherwise.

 

“Medovex Business” has the meaning set forth in the recitals.

 

“Medovex Financial Statements” has the meaning set forth in Section 5.08.

 

“Medovex Insurance Policies” has the meaning set forth in Section 5.17.

 

“Medovex Leased Real Property” has the meaning set forth in Section 5.14(a).

 

“Medovex Leases” has the meaning set forth in Section 5.14(a).

 

“Medovex Material Contracts” has the meaning set forth in Section 5.13(a).

 

“Medovex Member” means Medovex, Buyer, and any other Person that is either owned
or controlled, directly or indirectly through one or more other Persons, by
Medovex.

 

“Medovex’s Knowledge” or any other similar knowledge qualification, means the
actual knowledge of any officer of Medovex, after reasonable inquiry.

 

“Multiemployer Plan” has the meaning set forth in Section 4.17(c).

 

“New Securities” has the meaning set forth in Section 2.05(f)(i).

 

“Operating Subsidiaries” has the meaning set forth in the preamble.

 

 7 

 

 

“Permits” means all permits, licenses, franchises, approvals, authorizations,
registrations, certificates, variances and similar rights obtained, or required
to be obtained, from Governmental Authorities.

 

“Permitted Encumbrances” means:

 

(a) liens for Taxes not yet due and payable;

 

(b) mechanics’, carriers’, workmen’s, repairmen’s or other like liens arising or
incurred in the ordinary course of business consistent with past practice with
amounts that are not delinquent and which are not, individually or in the
aggregate, material to the business or assets of the obligor;

 

(c) easements, rights of way, zoning ordinances and other similar encumbrances
affecting leased real property which are not, individually or in the aggregate,
material to the business or assets of the obligor, which do not prohibit or
interfere with the current operation of the subject leased real property; or

 

(d) liens arising under original purchase price conditional sales contracts and
equipment leases with third parties entered into in the ordinary course of
business consistent with past practice which are not, individually or in the
aggregate, material to the business or the assets of the obligor.

 

“Person” means an individual, corporation, partnership, joint venture, limited
liability company, Governmental Authority, unincorporated organization, trust,
association or other entity.

 

“Pre-Closing Tax Period” means any taxable period ending on or before the
Closing Date and, with respect to any taxable period beginning before and ending
after the Closing Date, the portion of such taxable period ending on and
including the Closing Date.

 

“Purchase Price” has the meaning set forth in Section 2.05.

 

“Purchased Assets” has the meaning set forth in Section 2.01.

 

“Qualified Medovex Benefit Plan” has the meaning set forth in Section 5.19(c).

 

“Qualified Seller Benefit Plan” has the meaning set forth in Section 4.17(c).

 

“Release” means any actual or threatened release, spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching,
dumping, abandonment, disposing or allowing to escape or migrate into or through
the environment (including, without limitation, ambient air (indoor or outdoor),
surface water, groundwater, land surface or subsurface strata or within any
building, structure, facility or fixture).

 

“Representative” means, with respect to any Person, any and all directors,
officers, employees, consultants, financial advisors, counsel, accountants and
other agents of such Person.

 

 8 

 

 

“Restricted Period” has the meaning set forth in Section 6.07(a).

 

“Restricted Persons” has the meaning set forth in Section 6.07(a).

 

“RMS” has the meaning set forth in the preamble.

 

“RMS Balance Sheet” has the meaning set forth in Section 4.04.

 

“RMS Balance Sheet Date” has the meaning set forth in Section 4.04.

 

“RMS Financial Statements” has the meaning set forth in Section 4.04.

 

“RMS Insurance Policies” has the meaning set forth in Section 4.13.

 

“RMS Management” has the meaning set forth in the preamble.

 

“RMS Material Contracts” has the meaning set forth in Section 4.07(a).

 

“RMS Shareholder” has the meaning set forth in the preamble.

 

“Securities Act” has the meaning set forth in Section 4.21.

 

“Seller” has the meaning set forth in the preamble.

 

“Seller Benefit Plan” means any pension, benefit, retirement, compensation,
employment, consulting, profit-sharing, deferred compensation, incentive, bonus,
performance award, phantom equity, stock or stock-based, change in control,
retention, severance, vacation, paid time off (PTO), medical, vision, dental,
disability, welfare, Code Section 125 cafeteria, fringe-benefit and other
similar agreement, plan, policy, program or arrangement (and any amendments
thereto), in each case whether or not reduced to writing and whether funded or
unfunded, including each “employee benefit plan” within the meaning of Section
3(3) of ERISA, whether or not tax-qualified and whether or not subject to ERISA,
which is or has been maintained, sponsored, contributed to, or required to be
contributed to by Seller for the benefit of any current or former employee,
officer, director, retiree, independent contractor or consultant of Seller or
any spouse or dependent of such individual, or under which Seller or any of its
ERISA Affiliates has or may have any Liability, or with respect to which Buyer
or any of its Affiliates would reasonably be expected to have any Liability,
contingent or otherwise.

 

“Seller Business” has the meaning set forth in the recitals.

 

“Seller Closing Certificate” has the meaning set forth in Section 7.02(j).

 

“Seller Fundamental Reps” has the meaning set forth in Section 8.01.

 

“Seller Indemnitees” has the meaning set forth in Section 8.03.

 

“Seller’s Knowledge” or any other similar knowledge qualification means the
actual knowledge of any officer of Seller, after reasonable inquiry.

 

 9 

 

 

“Series B Preferred Stock” has the meaning set forth in Section 5.03(a).

 

“Series C Preferred Stock” has the meaning set forth in Section 5.03(a).

 

“Single Employer Plan” has the meaning set forth in Section 4.17(c).

 

“Seller Leased Real Property” has the meaning set forth in Section 4.10(a).

 

“Seller Leases” has the meaning set forth in Section 4.10(a).

 

“Tampa Litigation” means collectively, (a) that certain Case No.
8:17-cv-3113-7-23-MAP styled Tammy Rivero and Howard Bennett v. Lung Institute,
LLC, filed in the U.S. District Court, Middle District of Florida, Tampa
Division, (b) that certain case styled Charles Dolson v. Regenerative Medicine
Solutions, LLC, Mark Flood, DO, Michael Perry, MD, filed in the Circuit Court of
the Thirteenth Judicial Circuit in and for Hillsborough County, Florida, Civil
Division, (c) claims alleged against Lung Institute, LLC and Regenerative
Medicine Solutions, LLC by Joseph Conti, Bill Boyuk, Beverly McCord, Robert
Worrell, Evelyn Taylor, Robert Shafer, David Piccari, and David Mansell all by
separate letters dated August 6, 2018, each from Vinson Law, and (d) any
subsequent Action resulting from, related to or in connection with said
litigation or any facts or circumstances that gave rise to said litigation.

 

“Tampa Litigation Resolution Date” has the meaning set forth in Section 6.10(a).

 

“Tangible Personal Property” has the meaning set forth in Section 2.01(d).

 

“Taxes” means all federal, state, local, foreign and other income, gross
receipts, sales, use, production, ad valorem, transfer, documentary, franchise,
registration, profits, license, lease, service, service use, withholding,
payroll, employment, unemployment, estimated, excise, severance, environmental,
stamp, occupation, premium, property (real or personal), real property gains,
windfall profits, customs, duties or other taxes, fees, assessments or charges
of any kind whatsoever, together with any interest, additions or penalties with
respect thereto and any interest in respect of such additions or penalties.

 

“Tax Clearance Certificate” has the meaning set forth in Section 6.18.

 

“Tax Return” means any return, declaration, report, claim for refund,
information return or statement or other document relating to Taxes, including
any schedule or attachment thereto, and including any amendment thereof.

 

“Territory” means the United States.

 

“Third Party Claim” has the meaning set forth in Section 8.05(a).

 

“Union” has the meaning set forth in Section 4.18(b).

 

“Voting Agreement” has the meaning set forth in Section 3.02(b)(v).

 

 10 

 

 

“WARN Act” means the federal Worker Adjustment and Retraining Notification Act
of 1988, and similar state, local and foreign laws related to plant closings,
relocations, mass layoffs and employment losses.

 

“Warrants” has the meaning set forth in Section 5.03(a)(v).

 

ARTICLE II
PURCHASE AND SALE

 

Section 2.01 Purchase and Sale of Assets. Subject to the terms and conditions
set forth herein, at the Closing, each Seller shall sell, assign, transfer,
convey and deliver to Buyer, and Buyer shall purchase from each Seller, free and
clear of any Encumbrances other than Permitted Encumbrances, all of Sellers’
right, title and interest in and good and marketable title to all of the assets,
properties and rights of every kind and nature, whether real, personal or mixed,
tangible or intangible (including goodwill), wherever located and whether now
existing or hereafter acquired (other than the Excluded Assets), which relate
to, or are used or held for use in connection with, the Seller Business
(collectively, the “Purchased Assets”), including, without limitation, the
following:

 

(a) all accounts or notes receivable held by Seller, and any security, claim,
remedy or other right related to any of the foregoing (“Accounts Receivable”);

 

(b) all Contracts, including Intellectual Property Agreements, set forth on
Schedule 2.01(b) attached hereto (the “Assigned Contracts”);

 

(c) all Intellectual Property Assets;

 

(d) all furniture, fixtures, equipment, machinery, tools, vehicles, office
equipment, supplies, computers, telephones and other tangible personal property
(the “Tangible Personal Property”);

 

(e) all Seller Leased Real Property;

 

(f) all Permits, including Environmental Permits, to the extent transferable,
which are held by Seller and required for the conduct of the Seller Business as
currently conducted or for the ownership and use of the Purchased Assets,
including, without limitation, those listed on Section 4.16 of the Disclosure
Schedules;

 

(g) all rights to recover under any Actions of any nature available to or being
pursued by Seller to the extent related to the Seller Business, the Purchased
Assets or the Assumed Liabilities, whether arising by way of counterclaim or
otherwise; provided, however, such Actions shall not include any Actions
attributable to the Tampa Litigation;

 

(h) all prepaid expenses, credits, advance payments, claims, security, refunds,
rights of recovery, rights of set-off, rights of recoupment, deposits, charges,
sums and fees (excluding any such item relating to the payment of Taxes);

 

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(i) all of Seller’s rights under warranties, indemnities and all similar rights
against third parties to the extent related to any Purchased Assets;

 

(j) except as provided in Section 2.02(h), all insurance benefits, including
rights and proceeds, arising from or relating to the Seller Business, the
Purchased Assets or the Assumed Liabilities;

 

(k) originals, or where not available, copies, of all books and records,
including, but not limited to, financial and accounting records, equipment
maintenance files, patient information (to the extent lawfully transferable),
quality control records and procedures, patient complaints and inquiry files,
research and development files, all correspondence with any Governmental
Authority, sales and marketing materials, strategic plans, and records relating
to the Intellectual Property Assets and the Intellectual Property Agreements
(“Books and Records”); and

 

(l) the name “Lung Institute” and all derivatives thereof, and all goodwill and
the going concern value of the Seller Business.

 

Section 2.02 Excluded Assets. Notwithstanding the foregoing, the Purchased
Assets shall not include the following assets (collectively, the “Excluded
Assets”):

 

(a) Cash and cash equivalents;

 

(b) Contracts that are not Assigned Contracts (the “Excluded Contracts”), as set
forth on Schedule 2.02(b) attached hereto;

 

(c) the organizational documents, minute books, stock books, Tax Returns or
other records having to do with the corporate organization of Seller;

 

(d) all Seller Benefit Plans and assets attributable thereto;

 

(e) all credits, advance payments, claims, refunds, rights of recovery, rights
of set-off, rights of recoupment and fees to the extent relating to the payment
of Taxes;

 

(f) the assets, properties and rights and liabilities of (i) any and all
operations, treatment protocols or businesses of Seller which have been
discontinued prior to the Closing Date; provided that Buyer and Medovex shall
have the right to use all data and information derived therefrom and related
thereto, and (ii) such other assets specifically set forth on Schedule 2.02(f)
attached hereto;

 

(g) the rights which accrue or will accrue to Seller under this Agreement and
the Ancillary Documents;

 

(h) the issued and outstanding ownership interests of and all operations by the
entities listed on Schedule 2.02(h) attached hereto; and

 

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(i) all directors and officers liability insurance and related insurance
benefits, and all insurance held by one or more of the Sellers providing
benefits related to the Tampa Litigation, and such related insurance benefits.

 

Section 2.03 Assumed Liabilities. Subject to the terms and conditions set forth
herein, Buyer shall assume and agree to pay, perform and discharge only the
following Liabilities of Seller (collectively, the “Assumed Liabilities”), and
no other Liabilities:

 

(a) the trade accounts payable of Seller to third parties in connection with the
Seller Business that remain unpaid and are not more than sixty days (60) past
due as of the Closing Date and which are set forth on Schedule 2.03(a) attached
hereto; and

 

(b) all Liabilities in respect of the Assigned Contracts but only to the extent
that such Liabilities thereunder are required to be performed after the Closing
Date, were incurred in the ordinary course of business, and do not relate to any
failure to perform, improper performance, warranty or other breach, default or
violation by Seller on or prior to the Closing.

 

Section 2.04 Excluded Liabilities. Notwithstanding the provisions of Section
2.03 or any other provision in this Agreement to the contrary, Buyer shall not
assume and shall not be responsible to pay, perform or discharge any Liabilities
of Seller or any of its Affiliates of any kind or nature whatsoever other than
the Assumed Liabilities (the “Excluded Liabilities”). Seller shall, and shall
cause each of its Affiliates to, timely pay and satisfy in due course all
Excluded Liabilities which they are obligated to pay and satisfy. Without
limiting the generality of the foregoing, the Excluded Liabilities shall
include, but not be limited to, the following:

 

(a) any Liabilities of Seller arising or incurred in connection with the
negotiation, preparation, investigation and performance of this Agreement, the
Ancillary Documents and the transactions contemplated hereby and thereby,
including, without limitation, fees and expenses of counsel, accountants,
consultants, advisers and others;

 

(b) any Liability for (i) Taxes of Seller (or any stockholder or Affiliate of
Seller) or relating to the Seller Business, the Purchased Assets or the Assumed
Liabilities for any Pre-Closing Tax Period; (ii) Taxes that arise out of the
consummation of the transactions contemplated hereby or that are the
responsibility of Seller pursuant to Section 6.17; or (iii) other Taxes of
Seller (or any stockholder or Affiliate of Seller) of any kind or description
(including any Liability for Taxes of Seller (or any stockholder or Affiliate of
Seller) that becomes a Liability of Buyer under any common law doctrine of de
facto merger or transferee or successor liability or otherwise by operation of
contract or Law);

 

(c) any Liabilities relating to or arising out of the Excluded Assets;

 

(d) any Liabilities in respect of any pending or threatened Action arising out
of, relating to or otherwise in respect of the operation of the Seller Business
or the Purchased Assets to the extent such Action relates to such operation on
or prior to the Closing Date, including, but not limited to, the Tampa
Litigation;

 

 13 

 

 

(e) any Liabilities of Seller arising under or in connection with any Seller
Benefit Plan providing benefits to any present or former employee of Seller;

 

(f) any Liabilities of Seller for any present or former employees, officers,
directors, retirees, independent contractors or consultants of Seller,
including, without limitation, any Liabilities associated with any claims for
wages or other benefits, bonuses, accrued vacation, workers’ compensation,
severance, retention, termination or other payments;

 

(g) any Environmental Claims, or Liabilities under Environmental Laws, to the
extent arising out of or relating to facts, circumstances or conditions existing
on or prior to the Closing or otherwise to the extent arising out of any actions
or omissions of Seller;

 

(h) any Liabilities associated with debt, loans or credit facilities of Seller
and/or the Seller Business owing to financial institutions; and

 

(i) any Liabilities arising out of, in respect of or in connection with the
failure by Seller or any of its Affiliates to comply with any Law or
Governmental Order.

 

Section 2.05 Purchase Price. Pursuant to the requirements of Section
368(a)(1)(C) of the Code and the regulations promulgated thereunder, as full
consideration for the Purchased Assets:

 

(a) Medovex will issue and Buyer will deliver to Seller at the Closing that
number of shares of Series C Preferred Stock (defined below, such Series C
Preferred Stock, as adjusted pursuant to Section 2.05(f) being referred to as
the “Exchange Shares”) which shall represent the right to convert into and
acquire without further consideration, the excess of:

 

(i) fifty-five percent (55%) of the outstanding Common Stock (defined below) of
Medovex on the Closing Date:

 

(A) including for purposes of calculating the outstanding shares of Common Stock
on the Closing Date (1) all shares of Common Stock that are reserved for
issuance upon conversion of the outstanding Series A Preferred Stock, the Series
B Preferred Stock, and the Series C Preferred Stock (other than the Exchange
Shares), and (2) all shares of Common Stock that are reserved for issuance upon
conversion of the 12% Senior Secured Convertible Notes; but

 

(B) excluding for purposes of calculating the outstanding shares of Common Stock
on the Closing Date (1) all shares of Common Stock that are reserved for
issuance upon exercise of outstanding Warrants (defined below) of Medovex, (2)
all shares of Common Stock that are reserved for issuance upon exercise of
outstanding options to purchase Common Stock under the 2013 Stock Option Plan,
(3) all shares of Common Stock that are reserved for future grants pursuant to
the 2013 Stock Option Plan, and (4) the shares of Common Stock issued and
issuable to William Horne pursuant to the Horne Employment Agreement, less

 

(ii) 583,333 shares of Common Stock;

 

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(b) Medovex will pay to RMS the sum of $350,000;

 

(c) Buyer will assume the Assumed Liabilities; and

 

(d) on each Additional Share Issue Date (defined below), Buyer will issue the
then required Additional Exchange Shares (defined below) and deliver them to
Seller (collectively, the “Purchase Price”).

 

(e) For purposes of this Agreement, the “Additional Share Issue Dates” shall be
each date following the Closing Date that Medovex or any Medovex Member sells or
otherwise issues any of its capital stock, or any obligations, options, warrants
or other rights to acquire shares of any class of capital stock of Medovex, or
any outstanding securities or other instruments convertible into shares of
capital stock of Medovex until all of the Additional Exchange Shares have been
issued and delivered to Seller.

 

(f) The “Additional Exchange Shares” shall be determined on each Additional
Share Issue Date as follows:

 

(i) RMS and Medovex shall determine the aggregate number of shares of Common
Stock that (i) was issued on such date, (ii) could be issued as the result of
the conversion of any Series A Preferred Stock, Series B Preferred Stock, Series
C Preferred Stock, and any other security or other instrument convertible into
shares of Common Stock issued on such date, and (iii) could be issued upon the
exercise of each option, warrant or other right to acquire Common Stock or
capital stock convertible into Common Stock on such date (collectively, the “New
Securities”).

 

(ii) The aggregate number of Exchange Shares shall be re-calculated pursuant to
Section 2.05(a) by including in Section 2.05(a)(i)(A) the aggregate number of
shares of Common Stock issued or issuable as part of the New Securities
determined for the then current Additional Share Issue Date and all prior
Additional Share Issue Dates.

 

(iii) Buyer will deliver to Seller on such Additional Share Issue Date
additional Exchange Shares in an amount equal to the excess of the aggregate
Exchange Shares calculated for the then current Additional Share Issue Date,
less the number of Exchange Shares calculated for the immediately preceding
Additional Share Issue Date (“Additional Exchange Shares”).

 

 15 

 

 

(iv) Notwithstanding the foregoing provisions of this Section 2.05(f), Seller
shall not be entitled to receive, and Buyer shall not be obligated to issue to
Seller, any Additional Exchange Shares following such time as an aggregate of
five million dollars ($5,000,000) of New Securities and shares of capital stock
sold pursuant to Section 7.03(d) (on a fully diluted basis) have been sold by
Medovex or a Medovex Member and included in the calculation of Exchange Shares
or Additional Exchange Shares. For purposes of clarity, it is the intent of
Seller and Buyer that Seller’s Exchange Shares shall not be diluted by the
issuance and sale of New Securities, including shares of capital stock sold
pursuant to Section 7.03(d) (calculated on a fully diluted basis), until
$5,000,000 of New Securities and shares of capital stock sold pursuant to
Section 7.03(d) have been sold by Medovex or a Medovex Member. Thereafter,
Seller and the shareholders of Medovex shall dilute pro rata based upon their
respective ownership percentages.

 

(v) Following the date that the Series C Preferred Stock is convertible into
shares of Common Stock in accordance with its terms, Buyer shall issue to Seller
shares of Common Stock and not Series C Preferred stock as the Additional
Exchange Shares pursuant to this Section 2.05.

 

Attached as Schedule 2.05 is an example of the calculation of the Exchange
Shares based upon the capitalization of Medovex as set forth in Section 5.03 and
assuming the subsequent issuance of New Securities. The Purchase Price shall be
paid as provided in Section 3.02. Immediately after the exchange, Buyer shall
have acquired substantially all of the assets (as required by in Section
368(a)(1)(C) of the Code) of Seller and the Seller Business.

 

Section 2.06 Allocation of Purchase Price. Seller and Buyer agree that the
Purchase Price shall be allocated among the Purchased Assets for all purposes
(including Tax and financial accounting) in accordance with their respective
fair market values, as agreed upon in good faith by RMS and Buyer.

 

Section 2.07 Tax Effect; Withholding Tax. Each Seller acknowledges that it has
received its own independent tax advice with respect to the transactions
contemplated by this Agreement and is not relying on any representations made by
Medovex or Buyer, its counsel or accountants with respect thereto. Buyer shall
be entitled to deduct and withhold from the Purchase Price all Taxes that Buyer
may be required to deduct and withhold under any provision of Tax Law. All such
withheld amounts shall be treated as delivered to Seller hereunder.

 

Section 2.08 Third Party Consents. To the extent that Seller’s rights under any
Contract or Permit constituting a Purchased Asset, or any other Purchased Asset,
may not be assigned to Buyer without the consent of another Person which has not
been obtained, this Agreement shall not constitute an agreement to assign the
same if an attempted assignment would constitute a breach thereof or be
unlawful, and Seller, at its expense, shall use its reasonable best efforts to
obtain any such required consent(s) as promptly as possible. If any such consent
shall not be obtained or if any attempted assignment would be ineffective or
would impair Buyer’s rights under the Purchased Asset in question so that Buyer
would not in effect acquire the benefit of all such rights, Seller, to the
maximum extent permitted by law and the Purchased Asset, shall act after the
Closing as Buyer’s agent in order to obtain for it the benefits thereunder and
shall cooperate, to the maximum extent permitted by Law and the Purchased Asset,
with Buyer in any other reasonable arrangement designed to provide such benefits
to Buyer. Notwithstanding any provision in this Section 2.08 to the contrary,
Buyer shall not be deemed to have waived its rights under Section 7.02(c) hereof
unless and until Buyer either provides written waivers thereof or elects to
proceed to consummate the transactions contemplated by this Agreement at
Closing.

 

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ARTICLE III
CLOSING

 

Section 3.01 Closing. Subject to the terms and conditions of this Agreement, the
consummation of the transactions contemplated by this Agreement (the “Closing”)
shall take place at a location and time mutually agreed upon by Buyer and RMS on
the second Business Day after all of the conditions to Closing set forth in
ARTICLE VII are either satisfied or waived (other than conditions which, by
their nature, are to be satisfied on the Closing Date). The date on which the
Closing is to occur is herein referred to as the “Closing Date”.

 

Section 3.02 Closing Deliverables.

 

(a) At the Closing, RMS shall deliver to Buyer the following:

 

(i) a bill of sale in form and substance satisfactory to Buyer (the “Bill of
Sale”) and duly executed by each Seller, transferring the Tangible Personal
Property included in the Purchased Assets to Buyer or its designated subsidiary;

 

(ii) an assignment and assumption agreement in form and substance satisfactory
to Buyer (the “Assignment and Assumption Agreement”) and duly executed by each
Seller, effecting the assignment to and assumption by Buyer, or its designated
subsidiary, of the Purchased Assets and the Assumed Liabilities;

 

(iii) with respect to each Lease, an Assignment and Assumption of Lease in form
and substance satisfactory to Buyer (each, an “Assignment and Assumption of
Lease”) and duly executed by Seller;

 

(iv) the Seller Closing Certificate;

 

(v) the FIRPTA Certificate;

 

(vi) the Voting Agreement, executed by RMS Shareholder; and

 

(vii) such other customary instruments of transfer, assumption, filings or
documents, in form and substance reasonably satisfactory to Buyer, as may be
required to give effect to this Agreement.

 

 17 

 

 

(b) At the Closing, Buyer shall deliver to RMS the following:

 

(i) a stock certificate representing the Exchange Shares issued to RMS, and
$350,000 by wire transfer of immediately available funds to an account
designated in writing by RMS to Buyer;

 

(ii) the Assignment and Assumption Agreement duly executed by Buyer, or its
designated subsidiary;

 

(iii) with respect to each Lease, an Assignment and Assumption of Lease duly
executed by Buyer or its designated subsidiary;

 

(iv) the Buyer Closing Certificate; and

 

(v) a voting agreement (the “Voting Agreement”) among RMS Shareholder and
holders of at least 30% of the Common Stock outstanding on the date hereof,
agreeing to vote in favor of (1) the authorization of additional shares of
Common Stock of no less than the amount needed for Medovex to issue Common Stock
upon the conversion of all outstanding securities convertible into Common Stock,
including, without limitation, the Series C Preferred Stock, and (2) the
directors for Medovex in accordance with Section 6.11.

 

Section 3.03 Liquidation. Prior to but in conjunction with the Closing, RMS
agrees to adopt a plan of liquidation and distribution that will be effectuated
upon the complete resolution of the Tampa Litigation, and pursuant to which,
prior to the resolution of the Tampa Litigation, the board of managers of RMS
agrees (a) not to acquire any assets or undertake any operations or activities
other than as necessitated by the Tampa Litigation, (b) to distribute to RMS
Shareholder the Exchange Shares, (c) to change Seller names to ones that shall
not be confused with the present name of RMS or any other Seller, and (d) to
dissolve its corporate existence and liquidate its affairs as soon as practical
following the resolution of the Tampa Litigation. RMS shall liquidate in
accordance with the plan of liquidation and distribution to be adopted before
the Closing Date by the board of directors of RMS (a copy of which shall be
supplied to Buyer’s counsel before the Closing Date).

 

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER

 

Except as set forth in the correspondingly numbered Section of the Disclosure
Schedules, Seller represents and warrants to Buyer that the statements contained
in this ARTICLE IV are true and correct as of the date hereof and as of the
Closing Date.

 

Section 4.01 Organization and Qualification of Seller. Each of RMS, the
Operating Subsidiaries and any other entity selling or assigning Purchased
Assets pursuant to this Agreement is a limited liability company duly formed,
validly existing and in good standing under the Laws of the state of Delaware
and has full limited liability company power and authority to own, operate or
lease the properties and assets now owned, operated or leased by it and to carry
on the Seller Business as currently conducted. Section 4.01 of the Disclosure
Schedules sets forth each jurisdiction in which such Seller is licensed or
qualified to do business, and each Seller is duly licensed or qualified to do
business and is in good standing in each jurisdiction in which the ownership of
the Purchased Assets or the operation of the Seller Business as currently
conducted makes such licensing or qualification necessary.

 

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Section 4.02 Authority of Seller. Each of RMS, the Operating Subsidiaries and
any other entity selling or assigning Purchased Assets pursuant to this
Agreement has full limited liability company power and authority to enter into
this Agreement and the Ancillary Documents to which each of them is a party, to
carry out its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. The execution and delivery by each
such entity of this Agreement and any Ancillary Document to which it is a party,
the performance by such entity of its obligations hereunder and thereunder and
the consummation by such entity of the transactions contemplated hereby and
thereby have been duly authorized by all requisite action on the part of such
entity. The sole shareholder of RMS has approved the transactions contemplated
hereby and no shareholder of RMS has any statutory right to dissent or right of
appraisal arising out of the transactions contemplated hereby. This Agreement
has been duly executed and delivered by RMS, the Operating Subsidiaries and any
other entity selling or assigning Purchased Assets pursuant to this Agreement,
and (assuming due authorization, execution and delivery by Buyer and Medovex)
this Agreement constitutes a legal, valid and binding obligation of each of them
enforceable against each of them in accordance with its terms. When each
Ancillary Document to which RMS, the Operating Subsidiaries and any other entity
selling or assigning Purchased Assets pursuant to this Agreement is or will be a
party has been duly executed and delivered by them (assuming due authorization,
execution and delivery by each other party thereto), such Ancillary Document
will constitute a legal and binding obligation of each of them enforceable
against each of them in accordance with its terms.

 

Section 4.03 No Conflicts; Consents. The execution, delivery and performance by
each Seller of this Agreement and the Ancillary Documents to which it or any of
them is a party, and the consummation of the transactions contemplated hereby
and thereby, do not and will not: (a) conflict with or result in a violation or
breach of, or default under, any provision of the organizational documents of
any Seller; (b) conflict with or result in a violation or breach of any
provision of any Law or Governmental Order applicable to any Seller, the Seller
Business or the Purchased Assets; (c) require the consent, notice or other
action by any Person under, conflict with, result in a violation or breach of,
constitute a default or an event that, with or without notice or lapse of time
or both, would constitute a default under, result in the acceleration of or
create in any party the right to accelerate, terminate, modify or cancel any
Contract or Permit to which a Seller is a party or by which a Seller or the
Seller Business is bound or to which any of the Purchased Assets are subject
(including any Assigned Contract), except as set forth in Section 4.03 of the
Disclosure Schedules; or (d) result in the creation or imposition of any
Encumbrance other than Permitted Encumbrances on the Purchased Assets. Except as
set forth in Section 4.03 of the Disclosure Schedules, no consent, approval,
Permit, Governmental Order, declaration or filing with, or notice to, any
Governmental Authority is required by or with respect to any Seller in
connection with the execution and delivery of this Agreement or any of the
Ancillary Documents and the consummation of the transactions contemplated hereby
and thereby.

 

Section 4.04 Financial Statements. Complete copies of the audited financial
statements consisting of the balance sheet of the Seller Business as of December
31, 2016 and December 31, 2017 and the related statements of income and retained
earnings, stockholders’ equity and cash flow for the years then ended (the
“Audited RMS Financial Statements”), and unaudited financial statements
consisting of the balance sheet of the Seller Business as at June 30, 2018 and
the related statements of income and retained earnings, stockholders’ equity and
cash flow for the period then ended (the “Interim RMS Financial Statements” and
together with the Audited Financial Statements, the “RMS Financial Statements”)
have been delivered to Buyer. The RMS Financial Statements have been prepared in
accordance with GAAP applied on a consistent basis throughout the period
involved, subject, in the case of the Interim RMS Financial Statements, to
normal and recurring year-end adjustments (the effect of which will not be
materially adverse) and the absence of notes (that, if presented, would not
differ materially from those presented in the Audited RMS Financial Statements).
The RMS Financial Statements are based on the books and records of the Seller
Business, and fairly present in all material respects the financial condition of
the Seller Business as of the respective dates they were prepared and the
results of the operations of the Seller Business for the periods indicated. The
balance sheet of the Seller Business as of December 31, 2017 is referred to
herein as the “RMS Balance Sheet” and the date thereof as the “RMS Balance Sheet
Date” and the balance sheet of the Seller Business as of June 30, 2018 is
referred to herein as the “Interim RMS Balance Sheet” and the date thereof as
the “Interim RMS Balance Sheet Date”. Except as set forth in Section 4.04 of the
Disclosure Schedules, Seller maintains a standard system of accounting and
internal controls over financial reporting that is sufficient to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements in accordance with GAAP.

 

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Section 4.05 Undisclosed Liabilities. Seller has no Liabilities, except (a)
those which are adequately reflected or reserved against in the RMS Balance
Sheet as of the RMS Balance Sheet Date, and (b) those which have been incurred
in the ordinary course of business consistent with past practice since the RMS
Balance Sheet Date and which are not, individually or in the aggregate, material
in amount.

 

Section 4.06 Absence of Certain Changes, Events and Conditions. Since the RMS
Balance Sheet Date, there has not been any:

 

(a) event, occurrence or development that has had, or could reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect;

 

(b) declaration or payment of any distributions on or in respect of any of
Seller’s limited liability company interests or redemption, purchase or
acquisition of Seller’s limited liability company interests;

 

(c) material change in any method of accounting or accounting practice for the
Seller Business;

 

(d) material change in cash management practices and policies, practices and
procedures with respect to collection of Accounts Receivable, establishment of
reserves for uncollectible Accounts Receivable, accrual of Accounts Receivable,
prepayment of expenses, payment of trade accounts payable, accrual of other
expenses and deferral of revenue;

 

 20 

 

 

(e) entry into any Contract that would constitute a RMS Material Contract;

 

(f) incurrence, assumption or guarantee of any indebtedness for borrowed money
in connection with the Seller Business except unsecured current obligations and
Liabilities incurred in the ordinary course of business consistent with past
practice;

 

(g) transfer, assignment, sale or other disposition of any of the Purchased
Assets shown or reflected in the RMS Balance Sheet;

 

(h) cancellation of any debts or claims or amendment, termination or waiver of
any rights constituting Purchased Assets;

 

(i) transfer or assignment of or grant of any license or sublicense under or
with respect to any Intellectual Property Assets or Intellectual Property
Agreements except non-exclusive licenses or sublicenses granted in the ordinary
course of business consistent with past practice;

 

(j) abandonment or lapse of or failure to maintain in full force and effect any
Intellectual Property Registration, or failure to take or maintain reasonable
measures to protect the confidentiality or value of any Trade Secrets included
in the Intellectual Property Assets;

 

(k) material damage, destruction or loss, or any material interruption in use,
of any Purchased Assets, whether or not covered by insurance;

 

(l) acceleration, termination, material modification to or cancellation of any
Assigned Contract or Permit;

 

(m) material capital expenditures which would constitute an Assumed Liability;

 

(n) imposition of any Encumbrance upon any of the Purchased Assets;

 

(o) (i) grant of any bonuses, whether monetary or otherwise, or increase in any
wages, salary, severance, pension or other compensation or benefits in respect
of any current or former employees, officers, directors, independent contractors
or consultants of the Seller Business, other than as provided for in any written
agreements or required by applicable Law or other than in the ordinary course of
business consistent with past practice, (ii) change in the terms of employment
for any employee of the Seller Business or any termination of any employees, or
(iii) action to accelerate the vesting or payment of any compensation or benefit
for any current or former employee, officer, director, consultant or independent
contractor of the Seller Business;

 

(p) adoption, modification or termination of any: (i) employment, severance,
retention or other agreement with any current or former employee, officer,
director, independent contractor or consultant of the Seller Business, other
than in the ordinary course of business consistent with past practice, or (ii)
Seller Benefit Plan;

 

 21 

 

 

(q) any loan to (or forgiveness of any loan to), or entry into any other
transaction with, any current or former directors, officers or employees of the
Seller Business;

 

(r) adoption of any plan of merger, consolidation, reorganization, liquidation
or dissolution or filing of a petition in bankruptcy under any provisions of
federal or state bankruptcy Law or consent to the filing of any bankruptcy
petition against it under any similar Law;

 

(s) purchase, lease or other acquisition of the right to own, use or lease any
property or assets in connection with the Seller Business;

 

(t) any Contract to do any of the foregoing, or any action or omission that
would result in any of the foregoing.

 

Section 4.07 Material Contracts.

 

(a) Section 4.07(a) of the Disclosure Schedules lists each of the following
Contracts (x) by which any of the Purchased Assets are bound or affected or (y)
to which any Seller is a party or by which it is bound in connection with the
Seller Business or the Purchased Assets (such Contracts, together with all
Contracts concerning the occupancy, management or operation of any Seller Leased
Real Property (including without limitation, brokerage contracts) listed or
otherwise disclosed in Section 4.10 of the Disclosure Schedules and all
Intellectual Property Agreements being “RMS Material Contracts”):

 

(i) all Contracts which, in each case, cannot be cancelled without penalty or
without more than 90 days’ notice;

 

(ii) all Contracts that provide for the indemnification of any Person or the
assumption of any Tax, environmental or other Liability of any Person;

 

(iii) all Contracts that relate to the acquisition or disposition of any
business, a material amount of stock or assets of any other Person or any real
property (whether by merger, sale of stock, sale of assets or otherwise);

 

(iv) all broker, distributor, dealer, manufacturer’s representative, franchise,
agency, sales promotion, market research, marketing, consulting and advertising
Contracts;

 

(v) all employment agreements and Contracts with independent contractors or
consultants (or similar arrangements) and which are not cancellable without
material penalty or without more than 30 days’ notice;

 

(vi) except for Contracts relating to trade receivables, all Contracts relating
to indebtedness (including, without limitation, guarantees);

 

 22 

 

 

(vii) all Contracts that limit or purport to limit the ability of Seller to
compete in any line of business or with any Person or in any geographic area or
during any period of time;

 

(viii) all joint venture, partnership or similar Contracts;

 

(ix) all Contracts for the sale of any of the Purchased Assets or for the grant
to any Person of any option, right of first refusal or preferential or similar
right to purchase any of the Purchased Assets;

 

(x) all powers of attorney with respect to the Seller Business or any Purchased
Asset; and

 

(xi) all other Contracts that are material to the Purchased Assets or the
operation of the Seller Business and not previously disclosed pursuant to this
Section 4.07.

 

(b) Each RMS Material Contract is valid and binding on Seller in accordance with
its terms and is in full force and effect. None of Seller or, to Seller’s
Knowledge, any other party thereto is in breach of or default under (or is
alleged to be in breach of or default under), or has provided or received any
notice of any intention to terminate, any RMS Material Contract. No event or
circumstance has occurred that, with notice or lapse of time or both, would
constitute an event of default under any RMS Material Contract or result in a
termination thereof or would cause or permit the acceleration or other changes
of any right or obligation or the loss of any benefit thereunder. Complete and
correct copies of each RMS Material Contract (including all modifications,
amendments and supplements thereto and waivers thereunder) have been made
available to Buyer. There are no material disputes pending or, to Seller’s
Knowledge, threatened under any Material Contract included in the Purchased
Assets.

 

Section 4.08 Title to Purchased Assets. Seller has good and valid title to, or a
valid leasehold interest in, all of the Purchased Assets. All such Purchased
Assets (including leasehold interests) are free and clear of Encumbrances, other
than Permitted Encumbrances.

 

Section 4.09 Condition and Sufficiency of Assets. The Tangible Personal Property
included in the Purchased Assets are structurally sound, are in good operating
condition and repair, and are adequate for the uses to which they are being put,
and none of such Tangible Personal Property is in need of maintenance or repairs
except for ordinary, routine maintenance and repairs that are not material in
nature or cost. The Purchased Assets are sufficient for the continued conduct of
the Seller Business after the Closing in substantially the same manner as
conducted prior to the Closing and constitute all of the rights, property and
assets necessary to conduct the Seller Business as currently conducted. None of
the Excluded Assets are material to the Seller Business.

 

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Section 4.10 Seller Leased Real Property.

 

(a) Section 4.10(a) of the Disclosure Schedules sets forth each parcel of real
property leased by Seller and used in or necessary for the conduct of the Seller
Business as currently conducted (together with all rights, title and interest of
Seller in and to leasehold improvements relating thereto, including, but not
limited to, security deposits, reserves or prepaid rents paid in connection
therewith, collectively, the “Seller Leased Real Property”), and a true and
complete list of all leases, subleases, licenses, concessions and other
agreements (whether written or oral), including all amendments, extensions
renewals, guaranties and other agreements with respect thereto, pursuant to
which Seller holds any Seller Leased Real Property (collectively, the “Seller
Leases”). Seller has delivered to Buyer a true and complete copy of each Seller
Lease. With respect to each Seller Lease:

 

(i) such Seller Lease is valid, binding, enforceable and in full force and
effect, and Seller enjoys peaceful and undisturbed possession of the Seller
Leased Real Property;

 

(ii) Seller is not in breach or default under such Lease, and no event has
occurred or circumstance exists which, with the delivery of notice, passage of
time or both, would constitute such a breach or default, and Seller has paid all
rent due and payable under such Lease;

 

(iii) Seller has not received nor given any notice of any default or event that
with notice or lapse of time, or both, would constitute a default by Seller
under any of the Seller Leases and, to Seller’s Knowledge, no other party is in
default thereof, and no party to any Lease has exercised any termination rights
with respect thereto;

 

(iv) Seller has not subleased, assigned or otherwise granted to any Person the
right to use or occupy such Seller Leased Real Property or any portion thereof;
and

 

(v) Seller has not pledged, mortgaged or otherwise granted an Encumbrance on its
leasehold interest in any Seller Leased Real Property.

 

(b) Seller has not received any written notice of (i) material violations of
building codes and/or zoning ordinances or other governmental or regulatory Laws
affecting the Seller Leased Real Property, (ii) existing, pending, or, to
Seller’s Knowledge, threatened condemnation proceedings affecting the Seller
Leased Real Property, or (iii) existing, pending or threatened zoning, building
code or other moratorium proceedings, or similar matters which could reasonably
be expected to adversely affect the ability to operate the Seller Leased Real
Property as currently operated. Neither the whole nor any material portion of
any Seller Leased Real Property has been damaged or destroyed by fire or other
casualty.

 

(c) The Seller Leased Real Property is sufficient for the continued conduct of
the Seller Business after the Closing in substantially the same manner as
conducted prior to the Closing and constitutes all of the real property
necessary to conduct the Seller Business as currently conducted.

 

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Section 4.11 Intellectual Property.

 

(a) Section 4.11(a) of the Disclosure Schedules contains a correct, current and
complete list of: (i) all Intellectual Property Registrations, (ii) all
unregistered Trademarks and Trade Secrets included in the Intellectual Property
Assets; (iii) all proprietary Software included in the Intellectual Property
Assets; and (iv) all other Intellectual Property Assets that are used or held
for use in the conduct of the Seller Business as currently conducted or proposed
to be conducted. All required filings and fees related to the Intellectual
Property Registrations have been timely filed with and paid to the relevant
Governmental Authorities and authorized registrars, and all Intellectual
Property Registrations are otherwise in good standing. Seller has provided Buyer
with true and complete copies of file histories, documents, certificates, office
actions, correspondence and other materials related to all Intellectual Property
Registrations.

 

(b) Section 4.11(b) of the Disclosure Schedules contains a correct, current and
complete list of all Intellectual Property Agreements. Seller has provided Buyer
with true and complete copies (or in the case of any oral agreements, a complete
and correct written description) of all such Intellectual Property Agreements,
including all modifications, amendments and supplements thereto and waivers
thereunder.

 

(c) Seller is the sole and exclusive legal and beneficial, and with respect to
the Intellectual Property Registrations, record, owner of all right, title and
interest in and to the Intellectual Property Assets, and has the valid and
enforceable right to use all other Intellectual Property used or held for use in
or necessary for the conduct of the Seller Business as currently conducted or as
proposed to be conducted, in each case, free and clear of Encumbrances other
than Permitted Encumbrances. Seller has entered into binding, valid and
enforceable written Contracts with each current and former employee and
independent contractor whereby such employee or independent contractor (i)
acknowledges Seller’s exclusive ownership of all Intellectual Property Assets
invented, created or developed by such employee or independent contractor within
the scope of his or her employment or engagement with Seller; (ii) grants to
Seller a present, irrevocable assignment of any ownership interest such employee
or independent contractor may have in or to such Intellectual Property; and
(iii) irrevocably waives any right or interest, including any moral rights,
regarding such Intellectual Property, to the extent permitted by applicable Law.
Seller has provided Buyer with true and complete copies of all such Contracts.

 

(d) Neither the execution, delivery or performance of this Agreement, nor the
consummation of the transactions contemplated hereunder, will result in the loss
or impairment of, or payment of any additional amounts with respect to, nor
require the consent of any other Person in respect of, Buyer’s right to own or
use any Intellectual Property Assets or any Intellectual Property subject to any
Intellectual Property Agreement.

 

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(e) All of the Intellectual Property Assets are valid and enforceable, and all
Intellectual Property Registrations are subsisting and in full force and effect.
Seller has taken all necessary steps to maintain and enforce the Intellectual
Property Assets and to preserve the confidentiality of all Trade Secrets
included in the Intellectual Property Assets, including by requiring all Persons
having access thereto to execute binding, written non-disclosure agreements.

 

(f) To Seller’s Knowledge, the conduct of the Seller Business as currently and
formerly conducted and as proposed to be conducted, including the use of the
Intellectual Property Assets and any Intellectual Property licensed under the
Intellectual Property Agreements in connection therewith, and the products,
processes, and services of the Seller Business have not infringed,
misappropriated, or otherwise violated and will not infringe, misappropriate, or
otherwise violate the Intellectual Property or other rights of any Person. To
Seller’s Knowledge, no Person has infringed, misappropriated, or otherwise
violated any Intellectual Property Assets or any Intellectual Property licensed
under the Intellectual Property Agreements.

 

(g) There are no Actions (including any opposition, cancellation, revocation,
review, or other proceeding) settled, pending or, to Seller’s Knowledge,
threatened (including in the form of offers to obtain a license): (i) alleging
any infringement, misappropriation, or other violation of the Intellectual
Property of any Person by Seller in the conduct of the Seller Business; (ii)
challenging the validity, enforceability, registrability, patentability, or
ownership of any Intellectual Property Assets; or (iii) by Seller or any other
Person alleging any infringement, misappropriation, or violation by any Person
of any Intellectual Property Assets. Seller is not aware of any facts or
circumstances that could reasonably be expected to give rise to any such Action.
Seller is not subject to any outstanding Governmental Order (including any
motion or petition therefor) that does or could reasonably be expected to
restrict or impair the use of any Intellectual Property Assets.

 

Section 4.12 Accounts Receivable. The Accounts Receivable reflected on the
Interim RMS Balance Sheet and the Accounts Receivable arising after the date
thereof (a) have arisen from bona fide transactions entered into by Seller
involving the sale of goods or the rendering of services in the ordinary course
of business consistent with past practice; (b) constitute only valid, undisputed
claims of Seller not subject to claims of set-off or other defenses or
counterclaims other than normal cash discounts accrued in the ordinary course of
business consistent with past practice; and (c) subject to a reserve for bad
debts shown on the Interim RMS Balance Sheet or, with respect to Accounts
Receivable arising after the Interim RMS Balance Sheet Date, on the accounting
records of the Seller Business, are collectible in full within 90 days after
billing. The reserve for bad debts shown on the Interim RMS Balance Sheet or,
with respect to Accounts Receivable arising after the Interim RMS Balance Sheet
Date, on the accounting records of the Seller Business have been determined in
accordance with GAAP, consistently applied, subject to normal year-end
adjustments and the absence of disclosures normally made in footnotes.

 

Section 4.13 Insurance. Section 4.13 of the Disclosure Schedules sets forth (a)
a true and complete list of all current policies or binders of fire, liability,
malpractice, umbrella liability, real and personal property, workers’
compensation, vehicular, fiduciary liability and other casualty and property
insurance maintained by Seller or its Affiliates and relating to the Seller
Business, the Purchased Assets or the Assumed Liabilities (collectively, the
“RMS Insurance Policies”); and (b) with respect to the Seller Business, the
Purchased Assets or the Assumed Liabilities, a list of all pending claims and
the claims history for Seller since December 31, 2016. There are no claims
related to the Seller Business, the Purchased Assets or the Assumed Liabilities
pending under any such RMS Insurance Policies as to which coverage has been
questioned, denied or disputed or in respect of which there is an outstanding
reservation of rights. Neither Seller nor any of its Affiliates has received any
written notice of cancellation of, premium increase with respect to, or
alteration of coverage under, any of such RMS Insurance Policies. All premiums
due on such RMS Insurance Policies have either been paid or, if not yet due,
accrued. All such RMS Insurance Policies (a) are in full force and effect and
enforceable in accordance with their terms; (b) are provided by carriers who are
financially solvent; and (c) have not been subject to any lapse in coverage.
None of Seller or any of its Affiliates is in default under, or has otherwise
failed to comply with, in any material respect, any provision contained in any
such RMS Insurance Policy. The RMS Insurance Policies are of the type and in the
amounts customarily carried by Persons conducting a business similar to the
Seller Business and are sufficient for compliance with all applicable Laws and
Contracts to which Seller is a party or by which it is bound. True and complete
copies of the RMS Insurance Policies have been made available to Buyer.

 

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Section 4.14 Legal Proceedings; Governmental Orders. Except for the Tampa
Litigation, there are no Actions pending or, to Seller’s Knowledge, threatened
against or by Seller (a) relating to or affecting the Seller Business, the
Purchased Assets or the Assumed Liabilities; or (b) that challenge or seek to
prevent, enjoin or otherwise delay the transactions contemplated by this
Agreement. No event has occurred or circumstances exist that may give rise to,
or serve as a basis for, any such Action. There are no outstanding Governmental
Orders and no unsatisfied judgments, penalties or awards against, relating to or
affecting the Seller Business.

 

Section 4.15 Compliance With Laws; Permits.

 

(a) To Seller’s Knowledge, Seller has complied, and is now complying, with all
Laws applicable to the conduct of the Seller Business as currently conducted or
the ownership and use of the Purchased Assets.

 

(b) All Permits required for Seller to conduct the Seller Business as currently
conducted or for the ownership and use of the Purchased Assets have been
obtained by Seller and are valid and in full force and effect. All fees and
charges with respect to such Permits as of the date hereof have been paid in
full. Section 4.15(b) of the Disclosure Schedules lists all current Permits
issued to Seller which are related to the conduct of the Seller Business as
currently conducted or the ownership and use of the Purchased Assets, including
the names of the Permits and their respective dates of issuance and expiration.
No event has occurred that, with or without notice or lapse of time or both,
would reasonably be expected to result in the revocation, suspension, lapse or
limitation of any Permit set forth in Section 4.15(b) of the Disclosure
Schedules.

 

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Section 4.16 Environmental Matters. The operations of Seller with respect to the
Seller Business and the Purchased Assets are currently and have been in
compliance with all Environmental Laws. Seller has not received from any Person,
with respect to the Seller Business or the Purchased Assets, any: (i)
Environmental Notice or Environmental Claim; or (ii) written request for
information pursuant to Environmental Law, which, in each case, either remains
pending or unresolved, or is the source of ongoing obligations or requirements
as of the Closing Date. Seller has obtained and is in material compliance with
all Environmental Permits (each of which is disclosed in Section 4.16 of the
Disclosure Schedules) necessary for the conduct of the Seller Business as
currently conducted or the ownership, lease, operation or use of the Purchased
Assets and all such Environmental Permits are in full force and effect and shall
be maintained in full force and effect by Seller through the Closing Date in
accordance with Environmental Law, and Seller is not aware of any condition,
event or circumstance that might prevent or impede, after the Closing Date, the
conduct of the Seller Business as currently conducted or the ownership, lease,
operation or use of the Purchased Assets. Seller has not retained or assumed, by
contract or operation of Law, any liabilities or obligations of third parties
under Environmental Law.

 

Section 4.17 Employee Benefit Matters.

 

(a) Section 4.17(a) of the Disclosure Schedules contains a true and complete
list of each Seller Benefit Plan.

 

(b) With respect to each Seller Benefit Plan, Seller has made available to Buyer
accurate, current and complete copies of each of the following: (i) where the
Seller Benefit Plan has been reduced to writing, the plan document together with
all amendments; (ii) where the Seller Benefit Plan has not been reduced to
writing, a written summary of all material plan terms; (iii) where applicable,
copies of any trust agreements or other funding arrangements, custodial
agreements, insurance policies and contracts, administration agreements and
similar agreements, and investment management or investment advisory agreements,
now in effect or required in the future as a result of the transactions
contemplated by this Agreement or otherwise; (iv) copies of any summary plan
descriptions, summaries of material modifications, summaries of benefits and
coverage, COBRA communications, employee handbooks and any other written
communications (or a description of any oral communications) relating to any
Seller Benefit Plan; (v) in the case of any Seller Benefit Plan that is intended
to be qualified under Section 401(a) of the Code, a copy of the most recent
determination, opinion or advisory letter from the Internal Revenue Service and
any legal opinions issued thereafter with respect to such Seller Benefit Plan’s
continued qualification; (vi) in the case of any Seller Benefit Plan for which a
Form 5500 must be filed, a copy of the two most recently filed Forms 5500, with
all corresponding schedules and financial statements attached; (vii) actuarial
valuations and reports related to any Seller Benefit Plans with respect to the
most recently completed plan years; (viii) the most recent nondiscrimination
tests performed under the Code; and (ix) copies of material notices, letters or
other correspondence from the Internal Revenue Service, Department of Labor,
Department of Health and Human Services, Pension Benefit Guaranty Corporation or
other Governmental Authority relating to the Seller Benefit Plan.

 

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(c) Each Seller Benefit Plan and any related trust (other than any multiemployer
plan within the meaning of Section 3(37) of ERISA (each a “Multiemployer Plan”))
has been established, administered and maintained in accordance with its terms
and in compliance with all applicable Laws (including ERISA, the Code and any
applicable local Laws). Each Seller Benefit Plan that is intended to be
qualified within the meaning of Section 401(a) of the Code (a “Qualified Seller
Benefit Plan”) is so qualified and received a favorable and current
determination letter from the Internal Revenue Service with respect to the most
recent five year filing cycle, or with respect to a prototype or volume
submitter plan, can rely on an opinion letter from the Internal Revenue Service
to the prototype plan or volume submitter plan sponsor, to the effect that such
Qualified Seller Benefit Plan is so qualified and that the plan and the trust
related thereto are exempt from federal income taxes under Sections 401(a) and
501(a), respectively, of the Code, and nothing has occurred that could
reasonably be expected to adversely affect the qualified status of any Qualified
Seller Benefit Plan. Nothing has occurred with respect to any Seller Benefit
Plan that has subjected or could reasonably be expected to subject Seller or any
of its ERISA Affiliates or, with respect to any period on or after the Closing
Date, Buyer or any of its Affiliates, to a penalty under Section 502 of ERISA or
to tax or penalty under Sections 4975 or 4980H of the Code.

 

No pension plan (other than a Multiemployer Plan) which is subject to minimum
funding requirements, including any multiple employer plan, (each a “Single
Employer Plan”) in which employees of the Seller Business or any ERISA Affiliate
participate or have participated has an “accumulated funding deficiency,”
whether or not waived, or is subject to a lien for unpaid contributions under
Section 303(k) of ERISA or Section 430(k) of the Code. No Single Employer Plan
covering employees of the Seller Business which is a defined benefit plan has an
“adjusted funding target attainment percentage,” as defined in Section 436 of
the Code, less than 80%. All benefits, contributions and premiums relating to
each Seller Benefit Plan have been timely paid in accordance with the terms of
such Seller Benefit Plan and all applicable Laws and accounting principles, and
all benefits accrued under any unfunded Seller Benefit Plan have been paid,
accrued or otherwise adequately reserved to the extent required by, and in
accordance with GAAP.

 

(d) Neither Seller nor any of its ERISA Affiliates has (i) incurred or
reasonably expects to incur, either directly or indirectly, any material
Liability under Title I or Title IV of ERISA or related provisions of the Code
or applicable local Law relating to employee benefit plans; (ii) failed to
timely pay premiums to the Pension Benefit Guaranty Corporation; (iii) withdrawn
from any Seller Benefit Plan; (iv) engaged in any transaction which would give
rise to liability under Section 4069 or Section 4212(c) of ERISA; (v) incurred
taxes under Section 4971 of the Code with respect to any Single Employer Plan;
or (vi) participated in a multiple employer welfare arrangements (MEWA).

 

(e) With respect to each Seller Benefit Plan (i) except as set forth in Section
4.17(e) of the Disclosure Schedules, no such plan is a Multiemployer Plan, and
(A) all contributions required to be paid by Seller or its ERISA Affiliates have
been timely paid to the applicable Multiemployer Plan, (B) neither Seller nor
any ERISA Affiliate has incurred any withdrawal liability under Title IV of
ERISA which remains unsatisfied, and (C) a complete withdrawal from all such
Multiemployer Plans at the Effective Time would not result in any material
liability to Seller and no Multiemployer Plan is in critical, endangered or
seriously endangered status or has suffered a mass withdrawal]; (ii) except as
set forth in Section 4.17(e) of the Disclosure Schedules, no such plan is a
“multiple employer plan” within the meaning of Section 413(c) of the Code or a
“multiple employer welfare arrangement” (as defined in Section 3(40) of ERISA);
(iii) no Action has been initiated by the Pension Benefit Guaranty Corporation
to terminate any such plan or to appoint a trustee for any such plan; (iv) no
such plan or the plan of any ERISA Affiliate maintained or contributed to within
the last six (6) years is a Single Employer Plan subject to Title IV of ERISA;
and (v) no “reportable event,” as defined in Section 4043 of ERISA, with respect
to which the reporting requirement has not been waived, has occurred with
respect to any such plan.

 

 29 

 

 

(f) Other than as required under Sections 601 to 608 of ERISA or other
applicable Law, no Seller Benefit Plan or other arrangement provides
post-termination or retiree health benefits to any individual for any reason.

 

(g) There is no pending or, to Seller’s Knowledge, threatened Action relating to
a Seller Benefit Plan (other than routine claims for benefits), and no Seller
Benefit Plan has within the three years prior to the date hereof been the
subject of an examination or audit by a Governmental Authority or the subject of
an application or filing under, or is a participant in, an amnesty, voluntary
compliance, self-correction or similar program sponsored by any Governmental
Authority.

 

(h) There has been no amendment to, announcement by Seller or any of its
Affiliates relating to, or change in employee participation or coverage under,
any Seller Benefit Plan or collective bargaining agreement that would increase
the annual expense of maintaining such plan above the level of the expense
incurred for the most recently completed fiscal year (other than on a de minimis
basis) with respect to any director, officer, employee, consultant or
independent contractor of the Seller Business, as applicable. Neither Seller nor
any of its Affiliates has any commitment or obligation or has made any
representations to any director, officer, employee, consultant or independent
contractor of the Seller Business, whether or not legally binding, to adopt,
amend, modify or terminate any Seller Benefit Plan or any collective bargaining
agreement.

 

(i) Each Seller Benefit Plan that is subject to Section 409A of the Code has
been administered in compliance with its terms and the operational and
documentary requirements of Section 409A of the Code and all applicable
regulatory guidance (including, notices, rulings and proposed and final
regulations) thereunder. Seller does not have any obligation to gross up,
indemnify or otherwise reimburse any individual for any excise taxes, interest
or penalties incurred pursuant to Section 409A of the Code.

 

(j) Except as set forth in Section 4.17(e) of the Disclosure Schedules, neither
the execution of this Agreement nor any of the transactions contemplated by this
Agreement will (either alone or upon the occurrence of any additional or
subsequent events): (i) entitle any current or former director, officer,
employee, independent contractor or consultant of the Seller Business to
severance pay or any other payment; (ii) accelerate the time of payment, funding
or vesting, or increase the amount of compensation (including stock-based
compensation) due to any such individual; (iii) increase the amount payable
under or result in any other material obligation pursuant to any Seller Benefit
Plan; (iv) result in “excess parachute payments” within the meaning of Section
280G(b) of the Code; or (v) require a “gross-up” or other payment to any
“disqualified individual” within the meaning of Section 280G(c) of the Code.
Seller has made available to Buyer true and complete copies of any Section 280G
calculations prepared (whether or not final) with respect to any disqualified
individual in connection with the transactions.

 

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Section 4.18 Employment Matters.

 

(a) Section 4.18(a) of the Disclosure Schedules contains a list of all persons
who are employees, independent contractors or consultants of the Seller Business
as of the date hereof, including any employee who is on a leave of absence of
any nature, paid or unpaid, authorized or unauthorized, and sets forth for each
such individual the following: (i) name; (ii) title or position (including
whether full-time or part-time); (iii) hire or retention date; (iv) current
annual base compensation rate or contract fee; (v) commission, bonus or other
incentive-based compensation; and (vi) a description of the fringe benefits
provided to each such individual as of the date hereof. As of the date hereof,
all compensation, including wages, commissions, bonuses, fees and other
compensation, payable to all employees, independent contractors or consultants
of the Seller Business for services performed on or prior to the date hereof
have been paid in full and there are no outstanding agreements, understandings
or commitments of Seller with respect to any compensation, commissions, bonuses
or fees.

 

(b) Seller is not, and has not been a party to, bound by, or negotiating any
collective bargaining agreement or other Contract with a union, works council or
labor organization (collectively, “Union”), and there is not, and has not been
any Union representing or purporting to represent any employee of Seller, and no
Union or group of employees is seeking or has sought to organize employees for
the purpose of collective bargaining. There has never been, nor has there been
any threat of, any strike, slowdown, work stoppage, lockout, concerted refusal
to work overtime or other similar labor disruption or dispute affecting Seller
or any employees of the Seller Business. Seller has no duty to bargain with any
Union.

 

(c) Seller is and has been in compliance with all applicable Laws pertaining to
employment and employment practices to the extent they relate to employees,
consultants and independent contractors of the Seller Business, including all
Laws relating to labor relations, equal employment opportunities, fair
employment practices, employment discrimination, harassment, retaliation,
reasonable accommodation, disability rights or benefits, immigration, wages,
hours, overtime compensation, child labor, hiring, promotion and termination of
employees, working conditions, meal and break periods, privacy, health and
safety, workers’ compensation, leaves of absence, paid sick leave and
unemployment insurance. All individuals characterized and treated by Seller as
consultants or independent contractors of the Seller Business are properly
treated as independent contractors under all applicable Laws. All employees of
the Seller Business classified as exempt under the Fair Labor Standards Act and
state and local wage and hour laws are properly classified. Seller is in
compliance with and has complied with all immigration laws, including Form I-9
requirements and any applicable mandatory E-Verify obligations. There are no
Actions against Seller pending, or to Seller’s Knowledge, threatened to be
brought or filed, by or with any Governmental Authority or arbitrator in
connection with the employment of any current or former applicant, employee,
consultant or independent contractor of the Seller Business, including, without
limitation, any charge, investigation or claim relating to unfair labor
practices, equal employment opportunities, fair employment practices, employment
discrimination, harassment, retaliation, reasonable accommodation, disability
rights or benefits, immigration, wages, hours, overtime compensation, employee
classification, child labor, hiring, promotion and termination of employees,
working conditions, meal and break periods, privacy, health and safety, workers’
compensation, leaves of absence, paid sick leave, unemployment insurance or any
other employment related matter arising under applicable Laws.

 

(d) Seller has complied with the WARN Act, and it has no plans to undertake any
action in the future that would trigger the WARN Act.

 

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Section 4.19 Taxes.

 

(a) Except as set forth in Section 4.19(a) of the Disclosure Schedules, all Tax
Returns with respect to the Seller Business required to be filed by Seller for
any Pre-Closing Tax Period have been, or will be, timely filed. Such Tax Returns
are, or will be when filed, true, complete and correct in all respects. All
Taxes due and owing by Seller (whether or not shown on any Tax Return) have
been, or will be, timely paid. No claim has ever been made by a taxing authority
in a jurisdiction where Seller does not file Tax Returns that Seller is or may
be subject to taxation by that jurisdiction.

 

(b) Seller has withheld and paid each Tax required to have been withheld and
paid in connection with amounts paid or owing to any Employee, independent
contractor, creditor, patient, shareholder or other party, and complied with all
information reporting and backup withholding provisions of applicable Law.

 

(c) No extensions or waivers of statutes of limitations have been given or
requested with respect to any Taxes of Seller.

 

(d) All deficiencies asserted, or assessments made, against Seller as a result
of any examinations by any taxing authority have been fully paid.

 

(e) Seller is not a party to any Action by any taxing authority. There are no
pending or, to Seller’s Knowledge, threatened Actions by any taxing authority.

 

(f) There are no Encumbrances for Taxes upon any of the Purchased Assets nor, to
Seller’s Knowledge, is any taxing authority in the process of imposing any
Encumbrances for Taxes on any of the Purchased Assets (other than for current
Taxes not yet due and payable).

 

(g) Seller is not a “foreign person” as that term is used in Treasury
Regulations Section 1.1445-2.

 

(h) Seller is not, and has not been, a party to, or a promoter of, a “reportable
transaction” within the meaning of Section 6707A(c)(1) of the Code and Treasury
Regulations Section 1.6011 4(b).

 

(i) Seller (i) has not been a member of an affiliated group within the meaning
of Code Section 1504(a), or any similar group defined under a similar provision
of state, local, or non-U.S. law, filing a consolidated income Tax Return, and
(ii) does not have any liability for the Taxes of any Person under Treasury
Regulation Section 1.1502-6, or any similar provision of state, local, or
non-U.S. law, as a transferor or successor, by contract or otherwise.

 

(j) Seller is not (nor will be as of the Closing Date) subject to levies or
assessments for unclaimed property under applicable escheat or unclaimed
property laws.

 

Section 4.20 Brokers. No broker, finder or investment banker is entitled to any
brokerage, finder’s or other fee or commission in connection with the
transactions contemplated by this Agreement or any Ancillary Document based upon
arrangements made by or on behalf of Seller.

 

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Section 4.21 Issuance of Exchange Shares. Seller acknowledges that the Exchange
Shares are offered pursuant to an exemption from registration under the
Securities Act of 1933, as amended (the “Securities Act”), and applicable State
securities laws. These securities have not been approved or disapproved by the
United States Securities and Exchange Commission, nor has said Commission passed
upon the accuracy or adequacy of any information supplied to Seller. Seller has
consulted its own counsel, accountant and/or other advisors concerning its
acquisition of the Exchange Shares. Seller represents that it is acquiring the
Exchange Shares for its own account for investment purposes. Seller must bear
the economic risk of the investment for an indefinite period of time, as the
Common Stock has not been registered under applicable securities laws and
therefore cannot be sold unless it is subsequently so registered or a
registration exemption is available. A legend will be placed on the stock
certificate representing the Exchange Shares indicating that the Common Stock
has not been registered under any securities law and is subject to restrictions
on transferability and sale and stop transfer instructions will be issued to the
Company’s Transfer Agent with respect to the Common Stock.

 

ARTICLE V
REPRESENTATIONS AND WARRANTIES OF MEDOVEX

 

Except as set forth in the correspondingly numbered Section of the Disclosure
Schedules, Medovex represents and warrants to Seller that the statements
contained in this ARTICLE V are true and correct as of the date hereof and as of
the Closing Date.

 

Section 5.01 Organization and Qualification of Buyer. Buyer is a corporation
duly formed, validly existing and in good standing under the Laws of the state
of Nevada. Medovex is a corporation duly formed, validly existing and in good
standing under the Laws of the state of Nevada and has full corporate power and
authority to own, operate or lease the properties and assets now owned, operated
or leased by each Medovex Member and to carry on the Medovex Business as
currently conducted. Section 4.01 of the Disclosure Schedules sets forth each
jurisdiction in which a Medovex Member is licensed or qualified to do business,
and each Medovex Member is duly licensed or qualified to do business and is in
good standing in each jurisdiction in which the ownership of its respective
assets or the operations as currently conducted makes such licensing or
qualification necessary.

 

Section 5.02 Authority of Buyer. Each of Buyer and Medovex has full corporate
power and authority to enter into this Agreement and the Ancillary Documents to
which each of them is a party, to carry out their respective obligations
hereunder and thereunder and to consummate the transactions contemplated hereby
and thereby. The execution and delivery by each of Buyer and Medovex of this
Agreement and any Ancillary Document to which each of them is a party, the
performance by Buyer and Medovex of their respective obligations hereunder and
thereunder and the consummation by Buyer and Medovex of the transactions
contemplated hereby and thereby have been duly authorized by all requisite
corporate action on the part of Buyer and Medovex. This Agreement has been duly
executed and delivered by Buyer and Medovex, and (assuming due authorization,
execution and delivery by Seller) this Agreement constitutes a legal, valid and
binding obligation of each of Buyer and Medovex enforceable against each of
Buyer and Medovex in accordance with its terms. When each Ancillary Document to
which Buyer or Medovex is or will be a party has been duly executed and
delivered by Buyer or Medovex, as the case may be (assuming due authorization,
execution and delivery by each other party thereto), such Ancillary Document
will constitute a legal and binding obligation of Buyer or Medovex, as the case
may be, enforceable against each of them in accordance with its terms.

 

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Section 5.03 Capitalization.

 

(a) The authorized capital stock of Medovex consists of (i) 49,500,000 shares of
voting common stock, par value $0.001 per share (the “Common Stock”), and (ii)
1,000,000 shares of preferred stock, par value $0.001 per share, of which (A)
45,000 shares of Series A Preferred Stock (the “Series A Preferred Stock”) have
been authorized, (B) 10,000 shares of Series B Preferred Stock (the “Series B
Preferred Stock”) have been authorized, and (C) 45,000 shares of Series C
Convertible Preferred Stock (the “Series C Preferred Stock”) have been
authorized. As of the date of this Agreement:

 

(i) 24,642,327 shares of Common Stock are issued and outstanding, all of which
have been duly authorized and validly issued and are fully paid and
nonassessable;

 

(ii) All shares of Series A Preferred Stock that were issued and outstanding,
have been converted to shares of Common Stock and are included in Section
5.03(a)(i);

 

(iii) 9,250 shares of Series B Preferred Stock are issued and outstanding, all
of which have been duly authorized and validly issued and are fully paid and
nonassessable;

 

(iv) No shares of Series C Preferred Stock are issued and outstanding prior to
the consummation of the Closing, but such number of shares of Series C Preferred
Stock calculated in accordance with Section 2.05 will be issued and outstanding
as a part of the Closing, all of which have been duly authorized and validly
issued and are fully paid and nonassessable;

 

(v) 925,000 shares of Common Stock are reserved for issuance upon conversion of
the outstanding Series B Preferred Stock;

 

(vi) 9,337,548 shares of Common Stock are reserved for issuance upon exercise of
warrants of Medovex that are outstanding as of October 12, 2018 (the
“Warrants”);

 

(vii) 1,960,324 shares of Common Stock are reserved for issuance upon exercise
of outstanding options to purchase Common Stock under the 2013 Stock Option Plan
and 689,676 shares of Common Stock are reserved for future grants pursuant to
the 2013 Stock Option Plan; and

 

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(viii) 1,875,000 shares of Common Stock are reserved for issuance upon
conversion of 12% Senior Secured Convertible Notes.

 

(b) The authorized capital stock of Buyer consists of 1,000 shares of voting
common stock, par value $0.001 per share, of which 1,000 shares are issued and
outstanding and owned by Medovex.

 

Other than as set forth above and as contemplated by Section 6.04(b), as of the
date of this Agreement and as of the Closing Date there are no outstanding
obligations, options, warrants or other rights to acquire shares of any class of
capital stock of Medovex or a Medovex Member or any outstanding securities or
other instruments convertible into shares of capital stock of Medovex or a
Medovex Member.

 

Section 5.04 Series C Preferred Stock of Medovex to be Delivered. The Series C
Preferred Stock and all other Additional Exchange Shares to be delivered by
Buyer to RMS pursuant to this Agreement, when delivered, shall have been duly
and validly authorized and issued by Medovex and shall be fully paid and
nonassessable.

 

Section 5.05 No Conflicts; Consents. The execution, delivery and performance by
each of Buyer and Medovex of this Agreement and the Ancillary Documents to which
each of them is a party, and the consummation of the transactions contemplated
hereby and thereby, do not and will not: (a) conflict with or result in a
violation or breach of, or default under, any provision of the certificate of
incorporation, by-laws or other organizational documents of any Medovex Member;
(b) conflict with or result in a violation or breach of any provision of any Law
or Governmental Order applicable to a Medovex Member; (c) require the consent,
notice or other action by any Person under, conflict with, result in a violation
or breach of, constitute a default or an event that, with or without notice or
lapse of time or both, would constitute a default under, result in the
acceleration of or create in any party the right to accelerate, terminate,
modify or cancel any Contract or Permit to which a Medovex Member is a party or
by which a Medovex Member or its respective business is bound or to which any of
their respective assets are subject (including any contract); or (d) result in
the creation or imposition of any Encumbrance other than Permitted Encumbrances
on any assets of a Medovex Member. Except as set forth in Section 5.05 of the
Disclosure Schedules, no consent, approval, Permit, Governmental Order,
declaration or filing with, or notice to, any Governmental Authority is required
by or with respect to any Medovex Member in connection with the execution and
delivery of this Agreement or any of the Ancillary Documents and the
consummation of the transactions contemplated hereby and thereby.

 

Section 5.06 Brokers. No broker, finder or investment banker is entitled to any
brokerage, finder’s or other fee or commission in connection with the
transactions contemplated by this Agreement or any Ancillary Document based upon
arrangements made by or on behalf of any Medovex Member.

 

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Section 5.07 Legal Proceedings. There are no Actions pending or, to Medovex’s
Knowledge, threatened against or by any Medovex Member or any Affiliate of a
Medovex Member (a) relating to or affecting their business, operations, or
assets, or (b) that challenge or seek to prevent, enjoin or otherwise delay the
transactions contemplated by this Agreement. No event has occurred or
circumstances exist that may give rise or serve as a basis for any such Action.
There are no outstanding Governmental Orders and no unsatisfied judgments,
penalties or awards against, relating to or affecting any Medovex Member.

 

Section 5.08 Financial Statement. Buyer and Medovex have provided Seller true
and complete copies of the Medovex audited consolidated financial statements
consisting of the balance sheet of the Medovex Business as of December 31, 2016
and December 31, 2017 and the related statements of income and retained
earnings, stockholders’ equity and cash flow for the years then ended (the
“Audited Medovex Financial Statements”), and Medovex unaudited consolidated
financial statements consisting of the balance sheet of the Medovex Business as
of June 30, 2018 and the related statements of income and retained earnings,
stockholders’ equity and cash flow for the period then ended (the “Interim
Medovex Financial Statements” and together with the Audited Medovex Financial
Statements, the “Medovex Financial Statements”) have been delivered to Seller.
The Medovex Financial Statements have been prepared in accordance with GAAP
applied on a consistent basis throughout the period involved, subject, in the
case of the Interim Medovex Financial Statements, to normal and recurring
year-end adjustments (the effect of which will not be materially adverse) and
the absence of notes (that, if presented, would not differ materially from those
presented in the Audited Medovex Financial Statements). Except as set forth on
Schedule 5.08, the Medovex Financial Statements are based on the books and
records of the Medovex Business, and fairly present in all material respects the
financial condition of the Medovex Business as of the respective dates they were
prepared and the results of the operations of the Medovex Business for the
periods indicated. Medovex maintains a standard system of accounting and
internal controls over financial reporting that is sufficient to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements in accordance with GAAP. The consolidated
balance sheet of Medovex as of December 31, 2017 is referred to herein as the
“Medovex Balance Sheet” and the date thereof as the “Medovex Balance Sheet Date”
and the consolidated balance sheet of Medovex as of June 30, 2018 is referred to
herein as the “Interim Medovex Balance Sheet” and the date thereof as the
“Interim Medovex Balance Sheet Date.”

 

Section 5.09 Undisclosed Liabilities. No Medovex Member has any Liabilities,
except (a) those which are adequately reflected or reserved against in the
Medovex Balance Sheet as of the Medovex Balance Sheet Date, and (b) those which
have been incurred in the ordinary course of business consistent with past
practice since the Medovex Balance Sheet Date and which are not, individually or
in the aggregate, material in amount.

 

Section 5.10 Current Ratio. On the Closing Date, Medovex will have a ratio on a
consolidated basis of current assets to current liabilities of 1:1, as such
ratio is defined and calculated, on Schedule 7.03, determined without including
the cash on hand required of Medovex to satisfy the requirements of Section
7.03(d). Current ratio is calculated by dividing current assets by current
liabilities, and measures Medovex’s liquidity or ability to pay off short-term
debts.

 

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Section 5.11 Absence of Certain Changes, Events and Condition. Except as set
forth on Schedule 5.11, since the Medovex Balance Sheet Date, there has not been
any:

 

(a) event, occurrence or development that has had, or could reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect;

 

(b) declaration or payment of any distributions on or in respect of any Medovex
Member’s corporate interests or acquisition or disposition of any Medovex
Member’s business (whether by merger, sale of equity, sale of assets, or
otherwise);

 

(c) material change in any method of accounting or accounting practice for the
business of any Medovex Member;

 

(d) material change in cash management practices and policies, practices and
procedures with respect to collection of accounts receivable, establishment of
reserves for uncollectible accounts receivable, accrual of accounts receivable,
prepayment of expenses, payment of trade accounts payable, accrual of other
expenses and deferral of revenue;

 

(e) entry into any Contract by any Medovex Member that would constitute a
Medovex Material Contract;

 

(f) incurrence, assumption or guarantee of any indebtedness for borrowed money
in connection with the business of any Medovex Member except unsecured current
obligations and Liabilities incurred in the ordinary course of business
consistent with past practice;

 

(g) transfer, assignment, sale or other disposition of any Medovex Member’s
assets shown or reflected in the Medovex Balance Sheet;

 

(h) cancellation of any debts or claims or amendment, termination or waiver of
any rights constituting a Medovex Member’s assets;

 

(i) transfer or assignment of or grant of any license or sublicense under or
with respect to any Medovex Member’s Intellectual Property Assets or
Intellectual Property Agreements (except non-exclusive licenses or sublicenses
granted in the ordinary course of business consistent with past practice);

 

(j) abandonment or lapse of or failure to maintain in full force and effect any
Medovex Member’s Intellectual Property Registration, or failure to take or
maintain reasonable measures to protect the confidentiality or value of any
Medovex Member’s Trade Secrets included in the Intellectual Property Assets;

 

(k) material damage, destruction or loss, or any material interruption in use,
of any Medovex Member’s assets, whether or not covered by insurance;

 

(l) acceleration, termination, material modification to or cancellation of any
Medovex Material Contract or Permit;

 

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(m) imposition of any Encumbrance upon any assets of a Medovex Member;

 

(n) (i) grant of any bonuses, whether monetary or otherwise, or increase in any
wages, salary, severance, pension or other compensation or benefits in respect
of any current or former employees, officers, directors, independent contractors
or consultants of any Medovex Member, other than as provided for in any written
agreements or required by applicable Law or other than in the ordinary course of
business consistent with past practice, (ii) change in the terms of employment
for any employee of any Medovex Member or any termination of any employees, or
(iii) action to accelerate the vesting or payment of any compensation or benefit
for any current or former employee, officer, director, consultant or independent
contractor of any Medovex Member;

 

(o) adoption, modification or termination of any: (i) employment, severance,
retention or other agreement with any current or former employee, officer,
director, independent contractor or consultant of a Medovex Member, other than
in the ordinary course of business consistent with past practice, or (ii) a
Medovex Benefit Plan;

 

(p) any loan to (or forgiveness of any loan to), or entry into any other
transaction with, any current or former directors, officers or employees of any
Medovex Member;

 

(q) adoption of any plan of merger, consolidation, reorganization, liquidation
or dissolution or filing of a petition in bankruptcy under any provisions of
federal or state bankruptcy Law or consent to the filing of any bankruptcy
petition against it under any similar Law;

 

(r) purchase, lease or other acquisition of the right to own, use or lease any
property or assets in connection with the business of any Medovex Member; or

 

(s) any Contract to do any of the foregoing, or any action or omission that
would result in any of the foregoing;

 

(t) modification, amendment or restatement of any outstanding option, warrant,
stock options, or other security convertible into Common Stock or Series B
Preferred Stock except as permitted pursuant to Section 6.04(b); or

 

(u) issuance of any capital stock, option, warrant, security, or other right to
acquire capital stock of Medovex that is not Common Stock, or convertible into
or a right to acquire only Common Stock.

 

Section 5.12 Material Contracts.

 

(a) Section 5.12(a) of the Disclosure Schedules lists each of the following
Contracts (x) by which any of the assets of a Medovex Member are bound or
affected or (y) to which any Medovex Member is a party or by which it is bound
in connection with the business of any Medovex Member or the assets of any
Medovex Member (such Contracts, together with all Contracts concerning the
occupancy, management or operation of any Medovex Leased Real Property
(including without limitation, brokerage contracts) listed or otherwise
disclosed in Section 5.13 of the Disclosure Schedules and all Medovex
Intellectual Property Agreements being “Medovex Material Contracts”):

 

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(i) all Contracts which, in each case, cannot be cancelled without penalty or
without more than 90 days’ notice;

 

(ii) all Contracts that provide for the indemnification of any Person or the
assumption of any Tax, environmental or other Liability of any Person;

 

(iii) all Contracts that relate to the acquisition or disposition of any
business, a material amount of stock or assets of any other Person or any real
property (whether by merger, sale of stock, sale of assets or otherwise);

 

(iv) all broker, distributor, dealer, manufacturer’s representative, franchise,
agency, sales promotion, market research, marketing, consulting and advertising
Contracts;

 

(v) all employment agreements and Contracts with independent contractors or
consultants (or similar arrangements) and which are not cancellable without
material penalty or without more than 30 days’ notice;

 

(vi) except for Contracts relating to trade receivables, all Contracts relating
to indebtedness (including, without limitation, guarantees);

 

(vii) all Contracts that limit or purport to limit the ability of any Medovex
Member to compete in any line of business or with any Person or in any
geographic area or during any period of time;

 

(viii) all joint venture, partnership or similar Contracts; and

 

(ix) all other Contracts that are material to the operation of the Medovex
Business and not previously disclosed pursuant to this Section 5.12.

 

(b) Each Medovex Material Contract is valid and binding on the applicable
Medovex Member in accordance with its terms and is in full force and effect. No
Medovex Member or, to Medovex’s Knowledge, any other party thereto is in breach
of or default under (or is alleged to be in breach of or default under), or has
provided or received any notice of any intention to terminate, any Medovex
Material Contract. No event or circumstance has occurred that, with notice or
lapse of time or both, would constitute an event of default under any Medovex
Material Contract or result in a termination thereof or would cause or permit
the acceleration or other changes of any right or obligation or the loss of any
benefit thereunder. Complete and correct copies of each Medovex Material
Contract (including all modifications, amendments and supplements thereto and
waivers thereunder) have been made available to Seller. There are no material
disputes pending or, to Medovex’s Knowledge, threatened under any Medovex
Material Contract.

 

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Section 5.13 Medovex Leased Real Property.

 

(a) Section 5.13(a) of the Disclosure Schedules sets forth each parcel of real
property leased by any Medovex Member and used in or necessary for the conduct
of the business of any Medovex Member as currently conducted (together with all
rights, title and interest of any Medovex Member in and to leasehold
improvements relating thereto, including, but not limited to, security deposits,
reserves or prepaid rents paid in connection therewith, collectively, the
“Medovex Leased Real Property”), and a true and complete list of all leases,
subleases, licenses, concessions and other agreements (whether written or oral),
including all amendments, extensions renewals, guaranties and other agreements
with respect thereto, pursuant to which any Medovex Member holds any Medovex
Leased Real Property (collectively, the “Medovex Leases”). Medovex has delivered
to Seller a true and complete copy of each Medovex Lease. With respect to each
Medovex Lease:

 

(i) such Medovex Lease is valid, binding, enforceable and in full force and
effect, and the applicable Medovex Member enjoys peaceful and undisturbed
possession of the Medovex Leased Real Property;

 

(ii) the applicable Medovex Member is not in breach or default under such
Medovex Lease, and no event has occurred or circumstance exists which, with the
delivery of notice, passage of time or both, would constitute such a breach or
default, and the applicable Medovex Member has paid all rent due and payable
under such Medovex Lease;

 

(iii) the applicable Medovex Member has not received nor given any notice of any
default or event that with notice or lapse of time, or both, would constitute a
default by the applicable Medovex Member under any of the Medovex Leases and, to
the Knowledge of Medovex, no other party is in default thereof, and no party to
any Medovex Lease has exercised any termination rights with respect thereto;

 

(iv) No Medovex Member has subleased, assigned or otherwise granted to any
Person the right to use or occupy such Medovex Leased Real Property or any
portion thereof; and

 

(v) No Medovex Member has pledged, mortgaged or otherwise granted an Encumbrance
on its leasehold interest in any Medovex Leased Real Property.

 

(b) No Medovex Member has received any written notice of (i) material violations
of building codes and/or zoning ordinances or other governmental or regulatory
Laws affecting the Medovex Leased Real Property, (ii) existing, pending, or, to
Medovex’s Knowledge, threatened condemnation proceedings affecting the Medovex
Leased Real Property, or (iii) existing, pending or threatened zoning, building
code or other moratorium proceedings, or similar matters which could reasonably
be expected to adversely affect the ability to operate the Medovex Leased Real
Property as currently operated. Neither the whole nor any material portion of
any Medovex Leased Real Property has been damaged or destroyed by fire or other
casualty.

 

 40 

 

 

(c) The Medovex Leased Real Property is sufficient for the continued conduct of
the business of the applicable Medovex Member after the Closing in substantially
the same manner as conducted prior to the Closing and constitutes all of the
real property necessary to conduct the business of the applicable Medovex Member
as currently conducted.

 

Section 5.14 Intellectual Property.

 

(a) Section 5.14(a) of the Disclosure Schedules contains a correct, current and
complete list of: (i) all Medovex Intellectual Property Registrations, (ii) all
unregistered Medovex Trademarks and Medovex Trade Secrets included in the
Medovex Intellectual Property Assets; (iii) all proprietary software included in
the Medovex Intellectual Property Assets; and (iv) all other Medovex
Intellectual Property Assets that are used or held for use in the conduct of the
business of any Medovex Member as currently conducted or proposed to be
conducted. All required filings and fees related to the Medovex Intellectual
Property Registrations have been timely filed with and paid to the relevant
Governmental Authorities and authorized registrars, and all Medovex Intellectual
Property Registrations are otherwise in good standing. Medovex has provided
Seller with true and complete copies of file histories, documents, certificates,
office actions, correspondence and other materials related to all Medovex
Intellectual Property Registrations.

 

(b) Section 5.14(b) of the Disclosure Schedules contains a correct, current and
complete list of all Medovex Intellectual Property Agreements. Medovex has
provided Seller with true and complete copies (or in the case of any oral
agreements, a complete and correct written description) of all such Medovex
Intellectual Property Agreements, including all modifications, amendments and
supplements thereto and waivers thereunder.

 

(c) The applicable Medovex Member is the sole and exclusive legal and
beneficial, and with respect to the Medovex Intellectual Property Registrations,
record, owner of all right, title and interest in and to the Medovex
Intellectual Property Assets, and has the valid and enforceable right to use all
other Medovex Intellectual Property used or held for use in or necessary for the
conduct of the business of the applicable Medovex Member as currently conducted
or as proposed to be conducted, in each case, free and clear of Encumbrances
other than Permitted Encumbrances. The applicable Medovex Member has entered
into binding, valid and enforceable written Contracts with each current and
former employee and independent contractor whereby such employee or independent
contractor (i) acknowledges the applicable Medovex Member’s exclusive ownership
of all Medovex Intellectual Property Assets invented, created or developed by
such employee or independent contractor within the scope of his or her
employment or engagement with the applicable Medovex Member; (ii) grants to the
applicable Medovex Member a present, irrevocable assignment of any ownership
interest such employee or independent contractor may have in or to such Medovex
Intellectual Property; and (iii) irrevocably waives any right or interest,
including any moral rights, regarding such Medovex Intellectual Property, to the
extent permitted by applicable Law. Medovex has provided Seller with true and
complete copies of all such Contracts.

 

 41 

 

 

(d) Neither the execution, delivery or performance of this Agreement, nor the
consummation of the transactions contemplated hereunder, will result in the loss
or impairment of, or payment of any additional amounts with respect to, nor
require the consent of any other Person in respect of, the applicable Medovex
Member’s right to own or use any Medovex Intellectual Property Assets or any
Medovex Intellectual Property subject to any Medovex Intellectual Property
Agreement.

 

(e) All of the Medovex Intellectual Property Assets are valid and enforceable,
and all Medovex Intellectual Property Registrations are subsisting and in full
force and effect. Medovex has taken all necessary steps to maintain and enforce
the Medovex Intellectual Property Assets and to preserve the confidentiality of
all Medovex Trade Secrets included in the Medovex Intellectual Property Assets,
including by requiring all Persons having access thereto to execute binding,
written non-disclosure agreements.

 

(f) To Medovex’s Knowledge, the conduct of the Medovex Business as currently and
formerly conducted and as proposed to be conducted, including the use of the
Medovex Intellectual Property Assets and any Medovex Intellectual Property
licensed under the Medovex Intellectual Property Agreements in connection
therewith, and the products, processes, and services of the Medovex Business
have not infringed, misappropriated, or otherwise violated and will not
infringe, misappropriate, or otherwise violate the Medovex Intellectual Property
or other rights of any Person. To Medovex’s Knowledge, no Person has infringed,
misappropriated, or otherwise violated any Medovex Intellectual Property Assets
or any Medovex Intellectual Property licensed under the Medovex Intellectual
Property Agreements.

 

(g) There are no Actions (including any opposition, cancellation, revocation,
review, or other proceeding) settled, pending or, to Medovex’s Knowledge,
threatened (including in the form of offers to obtain a license): (i) alleging
any infringement, misappropriation, or other violation of the Medovex
Intellectual Property of any Person by a Medovex Member in the conduct of a
Medovex Member’s business; (ii) challenging the validity, enforceability,
registrability, patentability, or ownership of any Medovex Intellectual Property
Assets; or (iii) by a Medovex Member or any other Person alleging any
infringement, misappropriation, or violation by any Person of any Medovex
Intellectual Property Assets. Medovex is not aware of any facts or circumstances
that could reasonably be expected to give rise to any such Action. No Medovex
Member is subject to any outstanding Governmental Order (including any motion or
petition therefor) that does or could reasonably be expected to restrict or
impair the use of any Medovex Intellectual Property Assets.

 

Section 5.15 Accounts Receivable. Subject to Section 5.15 of the Disclosure
Schedule, the Medovex Accounts Receivable reflected on the Interim Medovex
Balance Sheet and the Medovex Accounts Receivable arising after the date thereof
(a) have arisen from bona fide transactions entered into by the applicable
Medovex Member involving the sale of goods or the rendering of services in the
ordinary course of business consistent with past practice; (b) constitute only
valid, undisputed claims of the applicable Medovex Member not subject to claims
of set-off or other defenses or counterclaims other than normal cash discounts
accrued in the ordinary course of business consistent with past practice; and
(c) subject to a reserve for bad debts shown on the Interim Medovex Balance
Sheet or, with respect to Medovex Accounts Receivable arising after the Interim
Medovex Balance Sheet Date, on the accounting records of the Medovex Business,
are collectible in full within 90 days after billing. The reserve for bad debts
shown on the Interim Medovex Balance Sheet or, with respect to Medovex Accounts
Receivable arising after the Interim Medovex Balance Sheet Date, on the
accounting records of the Medovex Business have been determined in accordance
with GAAP, consistently applied, subject to normal year-end adjustments and the
absence of disclosures normally made in footnotes.

 

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Section 5.16 Insurance. Section 5.16 of the Disclosure Schedule sets forth (a) a
true and complete list of all current policies or binders of fire, liability,
malpractice, umbrella liability, real and personal property, workers’
compensation, vehicular, fiduciary liability and other casualty and property
insurance maintained by a Medovex Member and relating to the Medovex Business
(collectively, the “Medovex Insurance Policies”); and (b) with respect to the
Medovex Business, a list of all pending claims and the claims history for each
Medovex Member since December 31, 2016. There are no claims related to the
Medovex Business pending under any such Medovex Insurance Policies as to which
coverage has been questioned, denied or disputed or in respect of which there is
an outstanding reservation of rights. No Medovex Member nor any of its
Affiliates has received any written notice of cancellation of, premium increase
with respect to, or alteration of coverage under, any of such Medovex Insurance
Policies. All premiums due on such Medovex Insurance Policies have either been
paid or, if not yet due, accrued. All such Medovex Insurance Policies (a) are in
full force and effect and enforceable in accordance with their terms; (b) are
provided by carriers who are financially solvent; and (c) have not been subject
to any lapse in coverage. No Medovex Member is in default under, or has
otherwise failed to comply with, in any material respect, any provision
contained in any such Medovex Insurance Policy. The Medovex Insurance Policies
are of the type and in the amounts customarily carried by Persons conducting a
business similar to the Medovex Business and are sufficient for compliance with
all applicable Laws and Contracts to which the applicable Medovex Member is a
party or by which it is bound. True and complete copies of the Medovex Insurance
Policies have been made available to Seller.

 

Section 5.17 Compliance with Laws; Permits.

 

(a) To Medovex’s Knowledge, each Medovex Member has complied, and is now
complying, with all Laws applicable to the conduct of the Medovex Business as
currently conducted or the ownership and use of its assets.

 

(b) All Permits required for a Medovex Member to conduct its business as
currently conducted or for the ownership and use of its assets have been
obtained by the applicable Medovex Member and are valid and in full force and
effect. All fees and charges with respect to such Permits as of the date hereof
have been paid in full. Section 5.17(b) of the Disclosure Schedules lists all
current Permits issued to the Medovex Members which are related to the conduct
of the Medovex Business as currently conducted, including the names of the
Permits and their respective dates of issuance and expiration. No event has
occurred that, with or without notice or lapse of time or both, would reasonably
be expected to result in the revocation, suspension, lapse or limitation of any
of the Medovex’s Permits.

 

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Section 5.18 Employee Benefit Matters.

 

(a) The only Medovex Benefit Plan maintained by any Medovex Member is a for
health benefits.

 

(b) With respect to the Medovex Benefit Plan, Medovex has made available to
Seller accurate, current and complete copies of each of the following: (i) the
plan document together with all amendments; (ii) copies of any funding
arrangements, custodial agreements, insurance policies and contracts,
administration agreements and similar agreements; (iii) copies of any summary
plan descriptions, summaries of material modifications, summaries of benefits
and coverage, COBRA communications, employee handbooks and any other written
communications relating to the Medovex Benefit Plan; and (iv) copies of material
notices, letters or other correspondence from the Internal Revenue Service,
Department of Labor, Department of Health and Human Services, Pension Benefit
Guaranty Corporation or other Governmental Authority relating to the Medovex
Benefit Plan.

 

(c) The Medovex Benefit Plan has been established, administered and maintained
in accordance with its terms and in compliance with all applicable Laws
(including ERISA, the Code and any applicable local Laws). All benefits,
contributions and premiums relating to the Medovex Benefit Plan have been timely
paid in accordance with the terms of such Medovex Benefit Plan and all
applicable Laws and accounting principles, and all benefits accrued under any
unfunded Medovex Benefit Plan have been paid, accrued or otherwise adequately
reserved to the extent required by, and in accordance with GAAP.

 

(d) Neither Medovex nor any of its ERISA Affiliates has (i) incurred or
reasonably expects to incur, either directly or indirectly, any material
Liability under Title I or Title IV of ERISA or related provisions of the Code
or applicable local Law relating to employee benefit plans; (ii) withdrawn from
any Benefit Plan; (iii) engaged in any transaction which would give rise to
liability under Section 4069 or Section 4212(c) of ERISA; (iv) incurred taxes
under Section 4971 of the Code with respect to any Single Employer Plan; or (v)
participated in a multiple employer welfare arrangements (MEWA).

 

(e) With respect to the Medovex Benefit Plan (i) such plan is not a
Multiemployer Plan; (ii) except as set forth in Section 5.18(e) of the
Disclosure Schedules, no such plan is a “multiple employer plan” within the
meaning of Section 413(c) of the Code or a “multiple employer welfare
arrangement” (as defined in Section 3(40) of ERISA); (iii) no Action has been
initiated by the Pension Benefit Guaranty Corporation to terminate any such plan
or to appoint a trustee for any such plan; (iv) no such plan or the plan of any
ERISA Affiliate maintained or contributed to within the last six (6) years is a
Single Employer Plan subject to Title IV of ERISA; and (v) no “reportable
event,” as defined in Section 4043 of ERISA, with respect to which the reporting
requirement has not been waived, has occurred with respect to any such plan.

 

 44 

 

 

(f) Other than as required under Sections 601 to 608 of ERISA or other
applicable Law, the Medovex Benefit Plan does not provide post-termination or
retiree health benefits to any individual for any reason.

 

(g) There is no pending or, to Medovex’s Knowledge, threatened Action relating
to the Medovex Benefit Plan (other than routine claims for benefits), and the
Medovex Benefit Plan has not within the three years prior to the date hereof
been the subject of an examination or audit by a Governmental Authority or the
subject of an application or filing under, or is a participant in, an amnesty,
voluntary compliance, self-correction or similar program sponsored by any
Governmental Authority.

 

(h) There has been no amendment to, announcement by Medovex or any of its
Affiliates relating to, or change in employee participation or coverage under,
the Medovex Benefit Plan or collective bargaining agreement that would increase
the annual expense of maintaining such plan above the level of the expense
incurred for the most recently completed fiscal year (other than on a de minimis
basis) with respect to any director, officer, employee, consultant or
independent contractor of the business, as applicable. No Medovex Member has any
commitment or obligation or has made any representations to any director,
officer, employee, consultant or independent contractor of the business of any
Medovex Member, whether or not legally binding, to adopt, amend, modify or
terminate any Medovex Benefit Plan or any collective bargaining agreement.

 

(i) The Medovex Benefit Plan is not subject to Section 409A of the Code. No
Medovex Member has any obligation to gross up, indemnify or otherwise reimburse
any individual for any excise taxes, interest or penalties incurred pursuant to
Section 409A of the Code.

 

(j) Neither the execution of this Agreement nor any of the transactions
contemplated by this Agreement will (either alone or upon the occurrence of any
additional or subsequent events): (i) entitle any current or former director,
officer, employee, independent contractor or consultant of the business of any
Medovex Member to severance pay or any other payment; (ii) accelerate the time
of payment, funding or vesting, or increase the amount of compensation
(including stock-based compensation) due to any such individual; (iii) increase
the amount payable under or result in any other material obligation pursuant to
any Medovex Benefit Plan; (iv) result in “excess parachute payments” within the
meaning of Section 280G(b) of the Code; or (v) require a “gross-up” or other
payment to any “disqualified individual” within the meaning of Section 280G(c)
of the Code.

 

Section 5.19 Employment Matters.

 

(a) Section 5.19(a) of the Disclosure Schedules contains a list of all persons
who are employees, independent contractors or consultants of the Medovex Members
as of the date hereof, including any employee who is on a leave of absence of
any nature, paid or unpaid, authorized or unauthorized, and sets forth for each
such individual the following: (i) name; (ii) title or position (including
whether full-time or part-time); (iii) hire or retention date; (iv) current
annual base compensation rate or contract fee; (v) commission, bonus or other
incentive-based compensation; and (vi) a description of the fringe benefits
provided to each such individual as of the date hereof. As of the date hereof,
all compensation, including wages, commissions, bonuses, fees and other
compensation, payable to all employees, independent contractors or consultants
of any Medovex Member for services performed on or prior to the date hereof have
been paid in full and there are no outstanding agreements, understandings or
commitments of any Medovex Member with respect to any compensation, commissions,
bonuses or fees.

 

 45 

 

 

(b) No Medovex Member is, and has not been a party to, bound by, or negotiating
any collective bargaining agreement or other Contract with a union, works
council or labor organization (collectively, “Union”), and there is not, and has
not been any Union representing or purporting to represent any employee of any
Medovex Member, and no Union or group of employees is seeking or has sought to
organize employees for the purpose of collective bargaining. There has never
been, nor has there been any threat of, any strike, slowdown, work stoppage,
lockout, concerted refusal to work overtime or other similar labor disruption or
dispute affecting any Medovex Member or any employees of any Medovex Member. No
Medovex Member has any duty to bargain with any Union.

 

(c) To Medovex’s Knowledge, each Medovex Member is and has been in compliance
with all applicable Laws pertaining to employment and employment practices to
the extent they relate to employees, consultants and independent contractors of
any Medovex Member, including all Laws relating to labor relations, equal
employment opportunities, fair employment practices, employment discrimination,
harassment, retaliation, reasonable accommodation, disability rights or
benefits, immigration, wages, hours, overtime compensation, child labor, hiring,
promotion and termination of employees, working conditions, meal and break
periods, privacy, health and safety, workers’ compensation, leaves of absence,
paid sick leave and unemployment insurance. All individuals characterized and
treated by a Medovex Member as consultants or independent contractors of a
Medovex Member are properly treated as independent contractors under all
applicable Laws. All employees of a Medovex Member classified as exempt under
the Fair Labor Standards Act and state and local wage and hour laws are properly
classified. Each Medovex Member is in compliance with and has complied with all
immigration laws, including Form I-9 requirements and any applicable mandatory
E-Verify obligations. There are no Actions against any Medovex Member pending,
or to the Medovex’s Knowledge, threatened to be brought or filed, by or with any
Governmental Authority or arbitrator in connection with the employment of any
current or former applicant, employee, consultant or independent contractor of
any Medovex Member, including, without limitation, any charge, investigation or
claim relating to unfair labor practices, equal employment opportunities, fair
employment practices, employment discrimination, harassment, retaliation,
reasonable accommodation, disability rights or benefits, immigration, wages,
hours, overtime compensation, employee classification, child labor, hiring,
promotion and termination of employees, working conditions, meal and break
periods, privacy, health and safety, workers’ compensation, leaves of absence,
paid sick leave, unemployment insurance or any other employment related matter
arising under applicable Laws.

 

 46 

 

 

(d) Each Medovex Member has complied with the WARN Act, and it has no plans to
undertake any action in the future that would trigger the WARN Act.

 

Section 5.20 Taxes.

 

(a) All Tax Returns with respect to each Medovex Member required to be filed by
a Medovex Member for any Pre-Closing Tax Period have been, or will be, timely
filed. Such Tax Returns are, or will be when filed, true, complete and correct
in all respects. All Taxes due and owing by each Medovex Member (whether or not
shown on any Tax Return) have been, or will be, timely paid. No claim has ever
been made by a taxing authority in a jurisdiction where no Medovex Member files
Tax Returns that a Medovex Member is or may be subject to taxation by that
jurisdiction.

 

(b) Each Medovex Member withheld and paid each Tax required to have been
withheld and paid in connection with amounts paid or owing to any Employee,
independent contractor, creditor, patient, shareholder or other party, and
complied with all information reporting and backup withholding provisions of
applicable Law.

 

(c) No extensions or waivers of statutes of limitations have been given or
requested with respect to any Taxes of any Medovex Member.

 

(d) All deficiencies asserted, or assessments made, against any Medovex Member
as a result of any examinations by any taxing authority have been fully paid.

 

(e) No Medovex Member is a party to any Action by any taxing authority. There
are no pending or, to Medovex’s Knowledge, threatened Actions by any taxing
authority.

 

(f) There are no Encumbrances for Taxes upon any assets of any Medovex Member
nor, to Medovex’s Knowledge, is any taxing authority in the process of imposing
any Encumbrances for Taxes (other than for current Taxes not yet due and
payable).

 

(g) No Medovex Member is a “foreign person” as that term is used in Treasury
Regulations Section 1.1445-2.

 

(h) No Medovex Member is, and has not been, a party to, or a promoter of, a
“reportable transaction” within the meaning of Section 6707A(c)(1) of the Code
and Treasury Regulations Section 1.60114(b).

 

(i) No Medovex Member is (nor will be as of the Closing Date) subject to levies
or assessments for unclaimed property under applicable escheat or unclaimed
property laws.

 

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ARTICLE VI
COVENANTS

 

Section 6.01 Conduct of Business Prior to the Closing. From the date hereof
until the Closing, except as otherwise provided in this Agreement or consented
to in writing by Seller or Medovex as the case may be (which consent shall not
be unreasonably withheld or delayed), Seller and Medovex shall each (x) conduct
their Seller Business and Medovex Business, as applicable in the ordinary course
of business consistent with past practice; and (y) use reasonable best efforts
to maintain and preserve intact its current business organization, operations
and franchise and to preserve the rights, franchises, goodwill and relationships
of its employees, contractors, patients, lenders, suppliers, regulators and
others having relationships with their business. Seller and Medovex acknowledge
and agree that Medovex may incur accounts payable in the ordinary course of the
Medovex Business that are not paid until Closing; subject to the obligations of
Medovex as set forth in Sections 5.10, 7.03(d) and 7.03(e). Without limiting the
foregoing, from the date hereof until the Closing Date, Seller and Medovex
shall:

 

(a) preserve the ownership and use of their respective assets and maintain all
Permits required for the conduct of their business as currently conducted;

 

(b) pay the debts, Taxes and other obligations of their business when due,
except as otherwise agreed to in this Section 6.01;

 

(c) continue to collect Accounts Receivable in a manner consistent with past
practice, without discounting such Accounts Receivable;

 

(d) maintain their properties and assets in the same condition as they were on
the date of this Agreement, subject to reasonable wear and tear;

 

(e) continue in full force and effect without modification all RMS Insurance
Policies and Medovex Insurance Policies, as applicable, except as required by
applicable Law;

 

(f) defend and protect its properties and assets from infringement or
usurpation;

 

(g) perform all of its obligations under all RMS Material Contracts and Medovex
Material Contracts, as the case may be;

 

(h) maintain its Books and Records in accordance with past practice;

 

(i) comply in all material respects with all Laws applicable to the conduct of
its business or the ownership and use of its assets; and

 

(j) not take or permit any action that would cause any of the changes, events or
conditions described in Section 4.06 or Section 5.11, as applicable, to occur.

 

Section 6.02 Access to Information. From the date hereof until the Closing,
Seller and Medovex shall each (a) afford the other and its Representatives full
and free access to and the right to inspect all of the RMS Leased Real Property
and Medovex Leased Real Property, as applicable, properties, assets, premises,
Books and Records, Contracts and other documents and data related to its
business; (b) furnish the other and its Representatives with such financial,
operating and other data and information related to its business as reasonably
requested, and (c) instruct each of their Representatives to cooperate with the
other in its investigation of the Seller Business or Medovex Business, as
applicable. Any investigation pursuant to this Section 6.02 shall be conducted
in such manner as not to interfere unreasonably with the conduct of the Seller
Business or Medovex Business, as applicable. No investigation by RMS or Medovex,
or other information received by RMS or Medovex shall operate as a waiver or
otherwise affect any representation, warranty or agreement given or made by
Seller, Medovex or Buyer in this Agreement.

 

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Section 6.03 No Solicitation of Other Bids.

 

(a) Seller shall not, and shall not authorize or permit any of its Affiliates or
any of its or their Representatives to, directly or indirectly, (i) encourage,
solicit, initiate, facilitate or continue inquiries regarding an Acquisition
Proposal; (ii) enter into discussions or negotiations with, or provide any
information to, any Person concerning a possible Acquisition Proposal; or (iii)
enter into any agreements or other instruments (whether or not binding)
regarding an Acquisition Proposal. Seller shall immediately cease and cause to
be terminated, and shall cause its Affiliates and all of its and their
Representatives to immediately cease and cause to be terminated, all existing
discussions or negotiations with any Persons conducted heretofore with respect
to, or that could lead to, an Acquisition Proposal. For purposes hereof,
“Acquisition Proposal” means any inquiry, proposal or offer from any Person
(other than Buyer or any of its Affiliates) relating to the direct or indirect
disposition, whether by sale, merger or otherwise, of all or any portion of the
Seller Business or the Purchased Assets.

 

(b) In addition to the other obligations under this Section 6.03, Seller shall
promptly (and in any event within three Business Days after receipt thereof by
Seller or its Representatives) advise Buyer orally and in writing of any
Acquisition Proposal, any request for information with respect to any
Acquisition Proposal, or any inquiry with respect to or which could reasonably
be expected to result in an Acquisition Proposal, the material terms and
conditions of such request, Acquisition Proposal or inquiry, and the identity of
the Person making the same.

 

(c) Seller agrees that the rights and remedies for noncompliance with this
Section 6.03 shall include having such provision specifically enforced by any
court having equity jurisdiction, it being acknowledged and agreed that any such
breach or threatened breach shall cause irreparable injury to Medovex and Buyer
and that money damages would not provide an adequate remedy to Medovex and
Buyer.

 

Section 6.04 Notice of Certain Events.

 

(a) From the date hereof until the Closing, each of Seller and Buyer shall
promptly notify the other in writing of:

 

(i) any fact, circumstance, event or action with respect to such party, the
existence, occurrence or taking of which (A) has had, or could reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect
with respect to such party, (B) has resulted in, or could reasonably be expected
to result in, any representation or warranty made by such party hereunder not
being true and correct or (C) has resulted in, or could reasonably be expected
to result in, the failure of any of the conditions set forth in Section 7.02 to
be satisfied;

 

(ii) any notice or other communication from any Person to such party alleging
that the consent of such Person is or may be required in connection with the
transactions contemplated by this Agreement;

 

 49 

 

 

(iii) any notice or other communication from any Governmental Authority to such
party in connection with the transactions contemplated by this Agreement; and

 

(iv) any Actions commenced or, to Seller’s Knowledge or Medovex’s Knowledge, as
applicable, threatened against, relating to or involving or otherwise affecting
such party or its business, its assets or its liabilities that, if pending on
the date of this Agreement, would have been required to have been disclosed
pursuant to this Agreement or that relates to the consummation of the
transactions contemplated by this Agreement.

 

(b) Subsequent to the execution date of this Agreement, RMS and Medovex agree as
follows:

 

(i) Until such time as all of the Additional Exchange Shares have been issued
and delivered to RMS, Medovex may issue and sell only its Common Stock, warrants
to acquire its Common Stock, Series C Preferred Stock, or warrants to acquire
its Series C Preferred Stock (but not any other series of its capital stock, or
any option, warrant, security, or other right to acquire or convertible into any
other series of capital stock of Medovex; and

 

(ii) If Medovex desires to modify, amend or restate any outstanding option,
warrant, stock option, or other security convertible into Common Stock, Series A
Preferred Stock, Series B Preferred Stock, or Series C Preferred Stock
(exclusive of Exchange Shares), outstanding on the date of this Agreement, then
it can only do so if it first obtains the written consent of the Seller to such
change (with any corresponding conditions imposed by Seller for its consent, if
given), and the Seller agrees to respond to such request within forty-eight
hours of it being presented in writing to the Seller;

 

(c) A party’s receipt of information pursuant to this Section 6.04 shall not
operate as a waiver or otherwise affect any representation, warranty or
agreement given or made by another party in this Agreement (including Section
8.02 and Section 9.01(b)) and shall not be deemed to amend or supplement the
Disclosure Schedules.

 

Section 6.05 Employees and Employee Benefits.

 

(a) Commencing on the Closing Date, Seller shall terminate all employees of the
Seller Business who are actively at work on the Closing Date, and, Buyer will
offer employment, on an “at will” basis, to any or all of such employees who
meet Buyer’s standard employment requirements. Seller shall bear any and all
obligations and liability under the WARN Act resulting from employment losses
pursuant to this Section 6.05.

 

(b) Seller shall be solely responsible, and Buyer shall have no obligations
whatsoever for, any compensation or other amounts payable to any current or
former employee, officer, director, independent contractor or consultant of the
Seller Business, including, without limitation, hourly pay, commission, bonus,
salary, accrued vacation, fringe, pension or profit sharing benefits or
severance pay for any period relating to the service with Seller at any time on
or prior to the Closing Date and Seller shall pay all such amounts to all
entitled persons on or prior to the Closing Date.

 

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(c) Seller shall remain solely responsible for the satisfaction of all claims
for medical, dental, life insurance, health accident or disability benefits
brought by or in respect of current or former employees, officers, directors,
independent contractors or consultants of the Seller Business or the spouses,
dependents or beneficiaries thereof, which claims relate to events occurring on
or prior to the Closing Date. Seller also shall remain solely responsible for
all worker’s compensation claims of any current or former employees, officers,
directors, independent contractors or consultants of the Seller Business which
relate to events occurring on or prior to the Closing Date. Seller shall pay, or
cause to be paid, all such amounts to the appropriate persons as and when due.

 

(d) Effective as soon as practicable following the Closing Date, Seller, or any
applicable Affiliate, shall effect a transfer of assets and liabilities
(including outstanding loans) from the defined contribution retirement plan that
it maintains, to the defined contribution retirement plan maintained by Buyer,
with respect to those employees of the Seller Business who become employed by
Buyer, or an Affiliate of Buyer, in connection with the transactions
contemplated by this Agreement. Any such transfer shall be in an amount
sufficient to satisfy Section 414(l) of the Code. Upon the transfer of assets
and liabilities into Buyer’s plan, all transferred account balances from
Seller’s plan shall become fully vested.

 

Section 6.06 Confidentiality. From and after the Closing, Seller shall, and
shall cause its Affiliates to, hold, and shall use its reasonable best efforts
to cause its or their respective Representatives to hold, in confidence any and
all information, whether written or oral, concerning the Seller Business, except
to the extent that Seller can show that such information (a) is generally
available to and known by the public through no fault of Seller, any of its
Affiliates or their respective Representatives; or (b) is lawfully acquired by
Seller, any of its Affiliates or their respective Representatives from and after
the Closing from sources which are not prohibited from disclosing such
information by a legal, contractual or fiduciary obligation. If Seller or any of
its Affiliates or their respective Representatives are compelled to disclose any
information by judicial or administrative process or by other requirements of
Law, Seller shall promptly notify Buyer in writing and shall disclose only that
portion of such information which Seller is advised by its counsel in writing is
legally required to be disclosed, provided that Seller shall use reasonable best
efforts to obtain an appropriate protective order or other reasonable assurance
that confidential treatment will be accorded such information.

 

Section 6.07 Non-Competition; Non-Solicitation.

 

(a) For a period of two years commencing on the Closing Date (the “Restricted
Period”), the individuals listed on Schedule 6.07 attached hereto (the
“Restricted Persons”) shall not, and shall not permit any of their respective
Affiliates to, directly or indirectly, (i) engage in or assist others in
engaging in the business of any Medovex Member in the Territory; (ii) have an
interest in any Person that engages directly or indirectly in the business of
any Medovex Member in the Territory in any capacity, including as a partner,
shareholder, member, employee, principal, agent, trustee or consultant; or (iii)
cause, induce or encourage any actual or prospective patient, supplier or
licensor of the business of any Medovex Member (including any existing or former
patient of Seller and any Person that becomes a patient of any Medovex Member
after the Closing), or any other Person who has a material business relationship
with the business of any Medovex Member, to terminate or modify any such actual
or prospective relationship. Notwithstanding the foregoing, the Restricted
Persons or their respective Affiliates may own, directly or indirectly, solely
as an investment, securities of any Person traded on any national securities
exchange if the Restricted Person or such Affiliate is not a controlling Person
of, or a member of a group which controls, such Person and does not, directly or
indirectly, own 5% or more of any class of securities of such Person.

 

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(b) During the Restricted Period, the Restricted Persons shall not, and shall
not permit any of their respective Affiliates to, directly or indirectly, hire,
engage or solicit any person who is offered employment or engaged as a
contractor by Buyer pursuant to Section 6.05(a) or is or was an employee or
contractor of the Medovex Business during the Restricted Period, or encourage
any such person to leave such employment or engagement or hire any such employee
or contractor who has left such employment except pursuant to a general
solicitation which is not directed specifically to any such individuals.

 

(c) The Restricted Persons each acknowledge that a breach or threatened breach
of this Section 6.07 would give rise to irreparable harm to Buyer and Medovex,
for which monetary damages would not be an adequate remedy, and hereby each
agree that in the event of a breach or a threatened breach by any Restricted
Person of any such obligations, Buyer and Medovex shall, in addition to any and
all other rights and remedies that may be available to it in respect of such
breach, be entitled to equitable relief, including a temporary restraining
order, an injunction, specific performance and any other relief that may be
available from a court of competent jurisdiction (without any requirement to
post bond).

 

(d) Each Restricted Person acknowledges that the restrictions contained in this
Section 6.07 are reasonable and necessary to protect the legitimate interests of
Medovex and Buyer and constitute a material inducement to Buyer, Medovex and
Seller to enter into this Agreement and consummate the transactions contemplated
by this Agreement. In the event that any covenant contained in this Section 6.07
should ever be adjudicated to exceed the time, geographic, product or service or
other limitations permitted by applicable Law in any jurisdiction, then any
court is expressly empowered to reform such covenant, and such covenant shall be
deemed reformed, in such jurisdiction to the maximum time, geographic, product
or service or other limitations permitted by applicable Law. The covenants
contained in this Section 6.07 and each provision hereof are severable and
distinct covenants and provisions. The invalidity or unenforceability of any
such covenant or provision as written shall not invalidate or render
unenforceable the remaining covenants or provisions hereof, and any such
invalidity or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such covenant or provision in any other jurisdiction.

 

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Section 6.08 Approvals and Consents.

 

(a) Each party hereto shall, as promptly as possible, (i) make, or cause or be
made, all filings and submissions required under any Law applicable to such
party or any of its Affiliates; and (ii) use reasonable best efforts to obtain,
or cause to be obtained, all consents, authorizations, orders and approvals from
all Governmental Authorities that may be or become necessary for its execution
and delivery of this Agreement and the performance of its obligations pursuant
to this Agreement and the Ancillary Documents. Each party shall cooperate fully
with the other party and its Affiliates in promptly seeking to obtain all such
consents, authorizations, orders and approvals. Notwithstanding the foregoing,
nothing in this Section 6.08 shall require, or be construed to require, Buyer or
any of its Affiliates to agree to any material modification or waiver of the
terms and conditions of this Agreement. The parties hereto shall not willfully
take any action that will have the effect of delaying, impairing or impeding the
receipt of any required consents, authorizations, orders and approvals.

 

(b) Seller and Buyer shall use reasonable best efforts to give all notices to,
and obtain all consents from, all third parties that are described in Section
4.03 and Section 5.05 of the Disclosure Schedules, respectively.

 

Section 6.09 Securities Laws.

 

(a) Medovex shall arrange for and manage all necessary procedures under the
requirements of federal and state securities laws and the rules and regulations
promulgated thereunder, and Seller will cooperate with all reasonable requests
of Medovex related to such standards, to the end that the transactions
contemplated by this Agreement take full advantage of any appropriate exemptions
from registration, and to otherwise be in accord with all antifraud restrictions
set forth in such securities laws.

 

(b) Seller understands and agrees that the Exchange Shares to be issued pursuant
to this Agreement will not be registered under the Securities Act in reliance on
exemptions contained in the Securities Act.

 

(c) Seller represents and warrants that it is not acquiring the Exchange Shares
to be issued pursuant to this Agreement with a view to distribution, except for
distribution to RMS Shareholder in liquidation and to RMS Shareholder’s
shareholders as contemplated and permitted hereby. Seller and RMS Shareholder
agree to indemnify Medovex against any liabilities, costs, or expenses,
including counsel fees, that shall arise as a result of a sale or distribution
by Seller or RMS Shareholder of the shares of Exchange Shares in violation of,
or that is claimed to be in violation of, the Securities Act.

 

(d) Seller agrees to deliver to Medovex on the Closing Date a letter in form
satisfactory to Medovex, signed by each of the shareholders of RMS Shareholder:

 

(i) Certifying to Buyer the names of such shareholders;

 

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(ii) Representing and warranting that the Exchange Shares, when distributed to
such shareholders, shall be acquired by them for investment and not with a view
to distribution; and

 

(iii) Indemnifying Buyer and Medovex against all liabilities, costs, or
expenses, including counsel fees, arising as a result of any distribution of any
of the Exchange Shares by such shareholders in actual or claimed violation of
the Securities Act.

 

(e) Medovex is authorized to notify its transfer agent of the status of the
Exchange Shares issued pursuant to the terms of this Agreement, and to take such
other action as shall be reasonable and proper to prevent any violation of the
Securities Act, including, but not limited to, requiring the share certificates
for the Exchange Shares to be endorsed with a legend deemed appropriate by Buyer
and the issuance of stop transfer instructions.

 

(f) RMS Shareholder’s shareholders shall not transfer any of the Exchange Shares
received by them under the provisions of this Agreement without first having
presented to Medovex a written opinion of counsel, in form and substance
satisfactory to Medovex, specifying the nature and circumstances of the proposed
transfer and that the proposed transfer shall not be in violation of any of the
provisions of the Securities Act, specifying the applicable exemption.

 

Section 6.10 Books and Records.

 

(a) In order to facilitate the resolution of any claims made by or against or
incurred by Seller, Medovex or Buyer prior to the Closing, or for any other
reasonable purpose, for a period which is the later of (a) the date that the
Tampa Litigation is resolved by final, non-appealable adjudication or
settlement, both without liability or the creation of a financial or other
obligation on the part of any Medovex Member or its Affiliates and that
provides, in customary form, for the unconditional release of each Medovex
Member and its Affiliates from all liabilities and obligations in connection
with such Tampa Litigation (the “Tampa Litigation Resolution Date”), and (b) two
year following the Closing Date, Seller and Buyer shall each:

 

(i) retain Books and Records (including personnel files) of the Seller Business
relating to periods prior to the Closing in accordance with customary business
practices; and

 

(ii) upon reasonable notice, afford the Seller’s Representatives or Buyer’s
Representatives, as the case may be, reasonable access (including the right to
make, at its own expense, photocopies), during normal business hours, to such
Books and Records.

 

(b) Neither Buyer nor Seller shall be obligated to provide the other party with
access to any books or records (including personnel files) pursuant to this
Section 6.10 where such access would violate any Law.

 

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Section 6.11 Medovex Board of Directors. Subject to the fiduciary duties of the
Board of Directors of Medovex, Medovex shall take all necessary corporate action
to cause the Board of Directors of Medovex to consist of five directors as of
the Closing, and Medovex shall take all commercially reasonable actions
necessary to fill any vacancies on the Medovex Board so that immediately
following the Closing, the Board of Medovex shall consist of:

 

(a) Two directors previously elected by the shareholders of Medovex;

 

(b) Two directors chosen by RMS Shareholder; and

 

(c) William Horne.

 

Section 6.12 Management Employment Agreement. Upon the Closing, subject to the
approval of the Medovex Board of Directors appointed as provided in Section 6.11
above, Medovex shall enter into an employment agreement with James St. Louis in
form and substance satisfactory to both Medovex and Mr. St. Louis (the
“Management Employment Agreement”).

 

Section 6.13 Closing Conditions From the date hereof until the Closing, each
party hereto shall use commercially reasonable efforts to take such actions as
are necessary to satisfy the closing conditions set forth in ARTICLE VII hereof.

 

Section 6.14 Public Announcements. Unless otherwise required by applicable Law
or stock exchange requirements (based upon the reasonable advice of counsel), no
party to this Agreement shall make any public announcements in respect of this
Agreement or the transactions contemplated hereby or otherwise communicate with
any news media without the prior written consent of the other party (which
consent shall not be unreasonably withheld or delayed), and the parties shall
cooperate as to the timing and contents of any such announcement.

 

Section 6.15 Bulk Sales Laws. The parties hereby waive compliance with the
provisions of any bulk sales, bulk transfer or similar Laws of any jurisdiction
that may otherwise be applicable with respect to the sale of any or all of the
Purchased Assets to Buyer; it being understood that any Liabilities arising out
of the failure of Seller to comply with the requirements and provisions of any
bulk sales, bulk transfer or similar Laws of any jurisdiction which would not
otherwise constitute Assumed Liabilities shall be treated as Excluded
Liabilities.

 

Section 6.16 Receivables. From and after the Closing, if Seller or any of its
Affiliates receives or collects any funds relating to any Accounts Receivable or
any other Purchased Asset, Seller or its Affiliate shall remit such funds to
Buyer within five Business Days after its receipt thereof. From and after the
Closing, if Buyer or its Affiliate receives or collects any funds relating to
any Excluded Asset, Buyer or its Affiliate shall remit any such funds to Seller
within five Business Days after its receipt thereof.

 

Section 6.17 Transfer Taxes. All transfer, documentary, sales, use, stamp,
registration, value added and other such Taxes and fees (including any penalties
and interest) incurred in connection with this Agreement and the Ancillary
Documents (including any real property transfer Tax and any other similar Tax)
shall be borne and paid by Seller when due. Seller shall, at its own expense,
timely file any Tax Return or other document with respect to such Taxes or fees
(and Buyer shall cooperate with respect thereto as necessary).

 

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Section 6.18 Tax Clearance Certificates. If requested by Buyer, Seller shall
notify all of the taxing authorities in the jurisdictions that impose Taxes on
Seller or where Seller has a duty to file Tax Returns of the transactions
contemplated by this Agreement in the form and manner required by such taxing
authorities, if the failure to make such notifications or receive any available
tax clearance certificate (a “Tax Clearance Certificate”) could subject Buyer to
any Taxes of Seller. If any taxing authority asserts that Seller is liable for
any Tax, Seller shall promptly pay any and all such amounts and shall provide
evidence to Buyer that such liabilities have been paid in full or otherwise
satisfied.

 

Section 6.19 Further Assurances. Following the Closing, each of the parties
hereto shall, and shall cause their respective Affiliates to, execute and
deliver such additional documents, instruments, conveyances and assurances and
take such further actions as may be reasonably required to carry out the
provisions hereof and give effect to the transactions contemplated by this
Agreement and the Ancillary Documents.

 

Section 6.20 Employee Tax Withholding and Reporting. Buyer and Seller agree to
use the standard procedure set forth in Revenue Procedure 2004-53 with respect
to wage withholding and reporting.

 

ARTICLE VII

CONDITIONS TO CLOSING

 

Section 7.01 Conditions to Obligations of All Parties. The obligations of each
party to consummate the transactions contemplated by this Agreement shall be
subject to the fulfillment, at or prior to the Closing, of each of the following
conditions:

 

(a) No Governmental Authority shall have enacted, issued, promulgated, enforced
or entered any Governmental Order which is in effect and has the effect of
making the transactions contemplated by this Agreement illegal, otherwise
restraining or prohibiting consummation of such transactions or causing any of
the transactions contemplated hereunder to be rescinded following completion
thereof.

 

(b) Seller shall have received all consents, authorizations, orders and
approvals from the Governmental Authorities referred to in Section 4.03 and
Buyer shall have received all consents, authorizations, orders and approvals
from the Governmental Authorities referred to in Section 5.05, in each case, in
form and substance reasonably satisfactory to Buyer and Seller, as the case may
be, and no such consent, authorization, order or approval shall have been
revoked.

 

(c) No Action shall have been commenced against Buyer, Medovex or Seller, which
would prevent the Closing. No injunction or restraining order shall have been
issued by any Governmental Authority, and be in effect, which restrains or
prohibits any transaction contemplated hereby.

 

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Section 7.02 Conditions to Obligations of Buyer. The obligations of Buyer to
consummate the transactions contemplated by this Agreement shall be subject to
the fulfillment or Buyer’s waiver, at or prior to the Closing, of each of the
following conditions:

 

(a) Other than the representations and warranties of Seller contained in Section
4.01, Section 4.02, Section 4.03 and Section 4.20, the representations and
warranties of Seller contained in this Agreement, the Ancillary Documents and
any certificate or other writing delivered pursuant hereto shall be true and
correct in all respects (in the case of any representation or warranty qualified
by materiality or Material Adverse Effect) or in all material respects (in the
case of any representation or warranty not qualified by materiality or Material
Adverse Effect) on and as of the date hereof and on and as of the Closing Date
with the same effect as though made at and as of such date (except those
representations and warranties that address matters only as of a specified date,
the accuracy of which shall be determined as of that specified date in all
respects). The representations and warranties of Seller contained in Section
4.01, Section 4.02, Section 4.03 and Section 4.20 shall be true and correct in
all respects on and as of the date hereof and on and as of the Closing Date with
the same effect as though made at and as of such date (except those
representations and warranties that address matters only as of a specified date,
the accuracy of which shall be determined as of that specified date in all
respects).

 

(b) Seller shall have duly performed and complied in all material respects with
all agreements, covenants and conditions required by this Agreement and each of
the Ancillary Documents to be performed or complied with by it prior to or on
the Closing Date; provided, that, with respect to agreements, covenants and
conditions that are qualified by materiality, Seller shall have performed such
agreements, covenants and conditions, as so qualified, in all respects.

 

(c) All approvals, consents and waivers that are listed on Section 4.03 of the
Disclosure Schedules shall have been received, and executed counterparts thereof
shall have been delivered to Buyer at or prior to the Closing.

 

(d) From the date of this Agreement, there shall not have occurred any Material
Adverse Effect with respect to Seller, nor shall any event or events have
occurred that, individually or in the aggregate, with or without the lapse of
time, could reasonably be expected to result in such a Material Adverse Effect.

 

(e) Prior to the Closing, Buyer shall have received the opinion of Willamette
Management Associates to the effect that, as of the date of this Agreement and
based upon and subject to the qualifications and assumptions set forth therein,
the Purchase Price is fair, from a financial point of view, to the holders of
shares of the Medovex Common Stock, and, as of the date of this Agreement, such
opinion has not been withdrawn, revoked, or modified.

 

(f) Prior to the Closing, Seller shall have obtained an appraisal of the Seller
Business and the Purchased Assets which shall be prepared by a reputable
appraisal firm utilizing industry standard valuation methodologies.

 

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(g) Seller shall have delivered to Buyer duly executed counterparts to the
Ancillary Documents and such other documents and deliveries set forth in Section
3.02(a).

 

(h) Buyer shall have received all Permits that are necessary for it to conduct
the Seller Business as conducted by Seller as of the Closing Date.

 

(i) All Encumbrances relating to the Purchased Assets shall have been released
in full, other than Permitted Encumbrances, and Seller shall have delivered to
Buyer written evidence, in form satisfactory to Buyer in its sole discretion, of
the release of such Encumbrances.

 

(j) Buyer shall have received a certificate, dated the Closing Date and signed
by a duly authorized officer of each Seller (the “Seller Closing Certificate”),
certifying that:

 

(i) each of the conditions set forth in Section 7.02(a) and Section 7.02(b) have
been satisfied;

 

(ii) attached thereto are true and complete copies of all resolutions adopted by
the board of directors of each Seller authorizing the execution, delivery and
performance of this Agreement and the Ancillary Documents and the consummation
of the transactions contemplated hereby and thereby, and that all such
resolutions are in full force and effect and are all the resolutions adopted in
connection with the transactions contemplated hereby and thereby; and

 

(iii) the names and signatures of the officers of each Seller authorized to sign
this Agreement, the Ancillary Documents and the other documents to be delivered
hereunder and thereunder.

 

(k) Buyer shall have received a certificate pursuant to Treasury Regulations
Section 1.1445-2(b) (the “FIRPTA Certificate”) that Seller is not a foreign
person within the meaning of Section 1445 of the Code duly executed by each
Seller.

 

(l) Seller shall have delivered to Buyer such other documents or instruments as
Buyer reasonably requests and are reasonably necessary to consummate the
transactions contemplated by this Agreement.

 

Section 7.03 Conditions to Obligations of Seller. The obligations of Seller to
consummate the transactions contemplated by this Agreement shall be subject to
the fulfillment or Seller’s waiver, at or prior to the Closing, of each of the
following conditions:

 

(a) Other than the representations and warranties of Buyer contained in Section
5.01, Section 5.02, Section 5.05, and Section 5.06, the representations and
warranties of Buyer and Medovex contained in this Agreement, the Ancillary
Documents and any certificate or other writing delivered pursuant hereto shall
be true and correct in all respects (in the case of any representation or
warranty qualified by materiality or Material Adverse Effect) or in all material
respects (in the case of any representation or warranty not qualified by
materiality or Material Adverse Effect) on and as of the date hereof and on and
as of the Closing Date with the same effect as though made at and as of such
date (except those representations and warranties that address matters only as
of a specified date, the accuracy of which shall be determined as of that
specified date in all respects). The representations and warranties of Buyer
contained in Section 5.01, Section 5.02, Section 5.05, and Section 5.06 shall be
true and correct in all respects on and as of the date hereof and on and as of
the Closing Date with the same effect as though made at and as of such date.

 

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(b) Buyer shall have duly performed and complied in all material respects with
all agreements, covenants and conditions required by this Agreement and each of
the Ancillary Documents to be performed or complied with by it prior to or on
the Closing Date; provided, that, with respect to agreements, covenants and
conditions that are qualified by materiality, Buyer shall have performed such
agreements, covenants and conditions, as so qualified, in all respects.

 

(c) All approvals, consents and waivers that are listed on Section 5.05 of the
Disclosure Schedules shall have been received, and executed counterparts thereof
shall have been delivered to Seller at or prior to the Closing.

 

(d) As of the Closing, Medovex shall have $1,650,000 of cash on its balance
sheet (which amount shall include the $350,000 payable to Seller, and all of
which shall be treated as a credit against the $5,000,000 referenced in Section
2.05(f)(iv)), and binding commitments from Persons satisfactory to RMS to invest
cash in Medovex by November 15, 2018, of at least an additional $1,000,000.

 

(e) As of the last calendar day immediately prior to Closing, Medovex shall have
a consolidated balance sheet current ratio of 1:1, as such term is defined, and
such ratio is calculated on Schedule 7.03 attached hereto, determined without
including the cash on hand required of Medovex to satisfy the requirements of
Section 7.03(d).

 

(f) Buyer shall have delivered to Seller duly executed counterparts to the
Ancillary Documents and such other documents and deliveries set forth in Section
3.02(b).

 

(g) Seller shall have received a certificate, dated the Closing Date and signed
by a duly authorized officer of Buyer (the “Buyer Closing Certificate”),
certifying that:

 

(i) each of the conditions set forth in Section 7.03(a) and Section 7.03(b) have
been satisfied.

 

(ii) attached thereto are true and complete copies of all resolutions adopted by
the board of directors of Buyer and Medovex authorizing the execution, delivery
and performance of this Agreement and the Ancillary Documents and the
consummation of the transactions contemplated hereby and thereby, and that all
such resolutions are in full force and effect and are all the resolutions
adopted in connection with the transactions contemplated hereby and thereby; and

 

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(iii) the names and signatures of the officers of Buyer and Medovex authorized
to sign this Agreement, the Ancillary Documents and the other documents to be
delivered hereunder and thereunder.

 

(h) Medovex shall have reduced the number of its Board of Directors to five
members and received the resignations of three board members, to be effective as
of the Closing.

 

(i) From the date hereof until the Closing, no Medovex Member shall amend or
restate any outstanding stock options, warrants, convertible securities,
incentive plans or contracts related thereto.

 

(j) Seller has approved the terms of the Exchange Shares as set forth in the
amended Articles of Incorporation of Medovex.

 

(k) All corporate action required to be taken by Medovex’s board of directors
and shareholders has been taken to authorize and issue the Exchange Shares at
the Closing.

 

(l) Buyer shall have delivered to Seller such other documents or instruments as
Seller reasonably requests and are reasonably necessary to consummate the
transactions contemplated by this Agreement.

 

ARTICLE VIII

INDEMNIFICATION

 

Section 8.01 Survival. Subject to the limitations and other provisions of this
Agreement, the representations and warranties herein (other than those contained
in Sections 4.01, 4.02, 4.03, 4.08, 4.19 and 4.20 (the “Seller Fundamental
Reps”) and Sections 5.01, 5.02, 5.03, 5.04, 5.05 and 5.20 (the “Buyer
Fundamental Reps”)) shall survive the Closing and shall remain in full force and
effect until the date that is 18 months from the Closing Date. The Seller
Fundamental Reps and Buyer Fundamental Reps shall survive the Closing and shall
remain in full force and effect until the expiration of the applicable statute
of limitations for making a claim thereunder. All covenants and agreements of
the parties contained herein shall survive the Closing indefinitely or for the
period explicitly specified therein. The covenants and agreements contained in
Section 2.05 and Section 6.04(b) shall survive the Closing until all Additional
Exchange Shares are issued and delivered to Seller. Notwithstanding the
foregoing, any claims asserted in good faith with reasonable specificity (to the
extent known at such time) and in writing by notice from the non-breaching party
to the breaching party prior to the expiration date of the applicable survival
period shall not thereafter be barred by the expiration of the relevant
representation or warranty and such claims shall survive until finally resolved.

 

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Section 8.02 Indemnification By Seller. Subject to the other terms and
conditions of this ARTICLE VIII, Seller and RMS Shareholder shall indemnify and
defend each of Medovex, Buyer and their Affiliates and Representatives
(collectively, the “Buyer Indemnitees”) against, and shall hold each of them
harmless from and against, and shall pay and reimburse each of them for, any and
all Losses incurred or sustained by, or imposed upon, Buyer Indemnitees based
upon, arising out of, with respect to or by reason of:

 

(a) any inaccuracy in or breach of any of the representations or warranties of
Seller or RMS Shareholder contained in this Agreement, the Ancillary Documents
or in any certificate or instrument delivered by or on behalf of Seller or RMS
Shareholder pursuant to this Agreement;

 

(b) any breach or non-fulfillment of any covenant, agreement or obligation to be
performed by Seller or RMS Shareholder pursuant to this Agreement, the Ancillary
Documents or any certificate or instrument delivered by or on behalf of Seller
or RMS Shareholder pursuant to this Agreement;

 

(c) any Excluded Asset or any Excluded Liability;

 

(d) any Third Party Claim based upon, resulting from or arising out of the
business, operations, properties, assets or obligations of Seller or any of
their Affiliates conducted, existing or arising on or prior to the Closing Date;

 

(e) any Third Party Claim for commissions, finder’s fees or broker’s fees
arising out of the consummation of the transaction contemplated hereby based on
an engagement by Seller; and

 

(f) the Tampa Litigation.

 

Section 8.03 Indemnification By Buyer. Subject to the other terms and conditions
of this ARTICLE VIII, Medovex and Buyer shall indemnify and defend Seller, RMS
Shareholder, and their Affiliates and Representatives (collectively, the “Seller
Indemnitees”) against, and shall hold each of them harmless from and against,
and shall pay and reimburse each of them for, any and all Losses incurred or
sustained by, or imposed upon, the Seller Indemnitees based upon, arising out
of, with respect to or by reason of:

 

(a) any inaccuracy in or breach of any of the representations or warranties of
Buyer or Medovex contained in this Agreement or in any certificate or instrument
delivered by or on behalf of Medovex or Buyer pursuant to this Agreement;

 

(b) any breach or non-fulfillment of any covenant, agreement or obligation to be
performed by Medovex or Buyer pursuant to this Agreement, the Ancillary
Documents or any certificate or instrument delivered by or on behalf of Buyer or
Medovex pursuant to this Agreement on or prior to the Closing Date or during any
period of time that RMS Shareholder or its owners do not control Medovex;

 

(c) any Assumed Liability; and

 

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(d) any Third Party Claim for commissions, finder’s fees or broker’s fees
arising out of the consummation of the transaction contemplated hereby based on
an engagement by Medovex or Buyer.

 

Section 8.04 Certain Limitations. The indemnification provided for in Section
8.02 and Section 8.03 shall be subject to the following limitations:

 

(a) Seller and RMS Shareholder shall not be liable to Buyer Indemnitees for
indemnification under Section 8.02(a) until the aggregate amount of all Losses
in respect of indemnification under Section 8.02(a) exceeds $157,000 (the
“Basket”), in which event Seller and RMS Shareholder shall be required to pay or
be liable for all Losses in excess of the Basket. The aggregate amount of all
Losses for which Seller shall be liable pursuant to Section 8.02(a) shall not
exceed the Purchase Price.

 

(b) Buyer and Medovex shall not be liable to the Seller Indemnitees for
indemnification under Section 8.03(a) until the aggregate amount of all Losses
in respect of indemnification under Section 8.03(a) exceeds the Basket, in which
event Buyer and Medovex shall be required to pay or be liable for all such
Losses in excess of the Basket. The aggregate amount of all Losses for which
Buyer shall be liable pursuant to Section 8.03(a) shall not exceed the Purchase
Price.

 

(c) For purposes of this ARTICLE VIII, any inaccuracy in or breach of any
representation or warranty shall be determined without regard to any
materiality, Material Adverse Effect or other similar qualification contained in
or otherwise applicable to such representation or warranty.

 

Section 8.05 Indemnification Procedures. The party making a claim under this
ARTICLE VIII is referred to as the “Indemnified Party”, and the party against
whom such claims are asserted under this ARTICLE VIII is referred to as the
“Indemnifying Party”.

 

(a) Third Party Claims. If any Indemnified Party receives notice of the
assertion or commencement of any Action made or brought by any Person who is not
a party to this Agreement (a “Third Party Claim”) against such Indemnified Party
with respect to which the Indemnifying Party is obligated to provide
indemnification under this Agreement, the Indemnified Party shall give the
Indemnifying Party reasonably prompt written notice thereof, but in any event
not later than 30 calendar days after receipt of such notice of such Third Party
Claim. The failure to give such prompt written notice shall not, however,
relieve the Indemnifying Party of its indemnification obligations, except and
only to the extent that the Indemnifying Party forfeits rights or defenses by
reason of such failure. Such notice by the Indemnified Party shall describe the
Third Party Claim in reasonable detail, shall include copies of all material
written evidence thereof and shall indicate the estimated amount, if reasonably
practicable, of the Loss that has been or may be sustained by the Indemnified
Party. The Indemnifying Party shall have the right to participate in, or by
giving written notice to the Indemnified Party, to assume the defense of any
Third Party Claim at the Indemnifying Party’s expense and by the Indemnifying
Party’s own counsel, and the Indemnified Party shall cooperate in good faith in
such defense; provided that no Indemnifying Party shall have the right to defend
any Third Party Claim that seeks an injunction or other equitable relief against
the Indemnified Party In the event that the Indemnifying Party assumes the
defense of any Third Party Claim, subject to Section 8.05(b), it shall have the
right to take such action as it deems necessary to avoid, dispute, defend,
appeal or make counterclaims pertaining to any such Third Party Claim in the
name and on behalf of the Indemnified Party. The Indemnified Party shall have
the right to participate in the defense of any Third Party Claim with counsel
selected by it subject to the Indemnifying Party’s right to control the defense
thereof. The fees and disbursements of such counsel shall be at the expense of
the Indemnified Party, provided, that if in the reasonable opinion of counsel to
the Indemnified Party, (A) there are legal defenses available to an Indemnified
Party that are different from or additional to those available to the
Indemnifying Party; or (B) there exists a conflict of interest between the
Indemnifying Party and the Indemnified Party that cannot be waived, the
Indemnifying Party shall be liable for the reasonable fees and expenses of
counsel to the Indemnified Party in each jurisdiction for which the Indemnified
Party determines counsel is required. If the Indemnifying Party elects not to
compromise or defend such Third Party Claim, fails to promptly notify the
Indemnified Party in writing of its election to defend as provided in this
Agreement, or fails to diligently prosecute the defense of such Third Party
Claim, the Indemnified Party may, subject to Section 8.05(b), pay, compromise,
defend such Third Party Claim and seek indemnification for any and all Losses
based upon, arising from or relating to such Third Party Claim. Seller and Buyer
shall cooperate with each other in all reasonable respects in connection with
the defense of any Third Party Claim, including making available (subject to the
provisions of Section 6.06) records relating to such Third Party Claim and
furnishing, without expense (other than reimbursement of actual out-of-pocket
expenses) to the defending party, management employees of the non-defending
party as may be reasonably necessary for the preparation of the defense of such
Third Party Claim.

 

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(b) Settlement of Third Party Claims. Notwithstanding any other provision of
this Agreement, the Indemnifying Party shall not enter into settlement of any
Third Party Claim without the prior written consent of the Indemnified Party,
except as provided in this Section 8.05(b). If a firm offer is made to settle a
Third Party Claim without leading to liability or the creation of a financial or
other obligation on the part of the Indemnified Party and provides, in customary
form, for the unconditional release of each Indemnified Party from all
liabilities and obligations in connection with such Third Party Claim and the
Indemnifying Party desires to accept and agree to such offer, the Indemnifying
Party shall give written notice to that effect to the Indemnified Party. If the
Indemnified Party fails to consent to such firm offer within ten days after its
receipt of such notice, the Indemnified Party may continue to contest or defend
such Third Party Claim and in such event, the maximum liability of the
Indemnifying Party as to such Third Party Claim shall not exceed the amount of
such settlement offer. If the Indemnified Party fails to consent to such firm
offer and also fails to assume defense of such Third Party Claim, the
Indemnifying Party may settle the Third Party Claim upon the terms set forth in
such firm offer to settle such Third Party Claim. If the Indemnified Party has
assumed the defense pursuant to Section 8.05(a), it shall not agree to any
settlement without the written consent of the Indemnifying Party (which consent
shall not be unreasonably withheld or delayed).

 

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(c) Direct Claims. Any Action by an Indemnified Party on account of a Loss which
does not result from a Third Party Claim (a “Direct Claim”) shall be asserted by
the Indemnified Party giving the Indemnifying Party reasonably prompt written
notice thereof, but in any event not later than 30 days after the Indemnified
Party becomes aware of such Direct Claim. The failure to give such prompt
written notice shall not, however, relieve the Indemnifying Party of its
indemnification obligations, except and only to the extent that the Indemnifying
Party forfeits rights or defenses by reason of such failure. Such notice by the
Indemnified Party shall describe the Direct Claim in reasonable detail, shall
include copies of all material written evidence thereof and shall indicate the
estimated amount, if reasonably practicable, of the Loss that has been or may be
sustained by the Indemnified Party. The Indemnifying Party shall have 30 days
after its receipt of such notice to respond in writing to such Direct Claim. The
Indemnified Party shall allow the Indemnifying Party and its professional
advisors to investigate the matter or circumstance alleged to give rise to the
Direct Claim, and whether and to what extent any amount is payable in respect of
the Direct Claim and the Indemnified Party shall assist the Indemnifying Party’s
investigation by giving such information and assistance (including access to the
Indemnified Party’s premises and personnel and the right to examine and copy any
accounts, documents or records) as the Indemnifying Party or any of its
professional advisors may reasonably request. If the Indemnifying Party does not
so respond within such 30-day period, the Indemnifying Party shall be deemed to
have accepted such claim.

 

Section 8.06 Payments. Once a Loss is agreed to, or deemed to be agreed to, by
the Indemnifying Party or finally adjudicated to be payable pursuant to this
ARTICLE VIII, the Indemnifying Party shall satisfy its obligations within ten
Business Days of such final, non-appealable adjudication.

 

Section 8.07 Exclusive Source of Recovery.

 

(a) Escrow of Exchange Shares. RMS shall distribute the Exchange Shares to RMS
Shareholder. Except as otherwise provided in this Section 8.07(a), the Exchange
Shares are required to be held by RMS Shareholder and may not be sold or
transferred by RMS Shareholder. Possession of the Exchange Shares shall be
retained by RMS Shareholder for a period of 48 months following the Closing Date
(or such longer period thereafter as the applicable statute of limitations would
allow Medovex to be named as a party in the Tampa Litigation or any similar case
based upon the activities of Seller) for purposes of satisfying the
indemnification obligations of Seller and RMS Shareholder pursuant to this
Agreement; provided, however, if and only if the Tampa Litigation Resolution
Date occurs prior to the date that is 18 months following the Closing Date, then
all of the Exchange Shares which are not then subject to a claim by a Buyer
Indemnitee in excess of that number of shares equal to five percent (5%) of the
total Exchange Shares issued at Closing, may be distributed by RMS Shareholder
to its owners free and clear of any further claims under this Article VIII, and
said remaining shares shall continue to be held by RMS Shareholder for purposes
hereof. Further, if the Tampa Litigation Resolution Date occurs on or after 18
months following the Closing Date, then all of the Exchange Shares which are not
then subject to a claim by a Buyer Indemnitee may be distributed by RMS
Shareholder to its owners free and clear of any further claims under this
Article VIII. The Exchange Shares shall serve as Buyer’s sole recourse for any
indemnification claims made pursuant to this Article VIII. For purposes of
satisfying any such claims, the Exchange Shares shall be valued at a per share
value equal to $0.60 per share. Notwithstanding anything to the contrary
contained in this Section 8.07 or elsewhere in this Agreement, RMS Shareholder
may, at any time, contribute up to the excess of (a) the entire balance of the
Exchange Shares, less (b) the sum of (i) the Exchange Shares which are not then
subject to an indemnification claim by a Buyer Indemnitee (or the proceeds from
their sale), plus (ii) that number of shares equal to five percent (5%) of the
total Exchange Shares issued at Closing, to RMS if and only if and to the extent
such shares, or the net proceeds from their sale, are used to settle or
otherwise resolve all or a portion of the Tampa Litigation. If it is necessary
for all or any portion of the Exchange Shares to be sold to fully and finally
settle or otherwise resolve all or a portion of the Tampa Litigation, RMS
Shareholder and RMS will use their commercially best efforts to avoid a block
sale of such shares that materially and adversely affects the publicly traded
price of the Common Stock. For purposes of this Section 8.07, the Exchange
Shares shall be deemed to reference the shares of Common Stock into which the
Exchange Shares are converted, following such conversion.

 

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(b) Issuance of Additional Shares. As the sole recourse of any Seller Indemnitee
related to and for the recovery of any Losses arising out of this Agreement,
including the indemnification obligations under this Article VIII, a Seller
Indemnitee shall be entitled to receive additional unregistered shares of Common
Stock of Medovex as compensation for such Loss. For purposes of satisfying any
such claims, the Medovex Common Stock shall be valued at a per share value equal
to $0.60 per share. A Seller Indemnitee’s right to receive such additional
shares shall be subject to the full compliance with all applicable securities
laws related to such issuance. Notwithstanding anything to the contrary herein,
the total number of shares of Common Stock issuable to the Seller Indemnitees
for any and all Losses shall not exceed a number of shares equal to fifteen
percent (15%) of the total Exchange Shares issued to Seller (or the Common
Shares into which such Exchange Shares are convertible, once converted);
provided, however, if the Tampa Litigation Resolution Date occurs prior to 18
months following the Closing Date, then the total number of shares of Common
Stock issuable to the Seller Indemnitees for any and all Losses shall not exceed
a number of shares equal to the sum of (i) such number of shares which are then
subject to an indemnification claim by a Seller Indemnitee, plus (ii) that
number of shares equal to five percent (5%) of the total Exchange Shares issued
at Closing (or the Common Shares into which such Exchange Shares are
convertible, once converted).

 

Section 8.08 Tax Treatment of Indemnification Payments. All indemnification
payments made under this Agreement shall be treated by the parties as an
adjustment to the Purchase Price for Tax purposes, unless otherwise required by
Law.

 

Section 8.09 Effect of Investigation. The representations, warranties and
covenants of the Indemnifying Party, and the Indemnified Party’s right to
indemnification with respect thereto, shall not be affected or deemed waived by
reason of any investigation made by or on behalf of the Indemnified Party
(including by any of its Representatives) or by reason of the fact that the
Indemnified Party or any of its Representatives knew or should have known that
any such representation or warranty is, was or might be inaccurate or by reason
of the Indemnified Party’s waiver of any condition set forth in Section 7.02 or
Section 7.03, as the case may be.

 

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Section 8.10 Exclusive Remedies. Subject to Section 6.07, Section 6.09(c),
Section 9.02 and Section 10.11, the parties acknowledge and agree that their
sole and exclusive remedy with respect to any and all claims (other than claims
arising from fraud, criminal activity or willful misconduct on the part of a
party hereto in connection with the transactions contemplated by this Agreement)
for any breach of any representation, warranty, covenant, agreement or
obligation set forth herein or otherwise relating to the subject matter of this
Agreement, shall be pursuant to the indemnification provisions set forth in this
ARTICLE VIII. In furtherance of the foregoing, each party hereby waives, to the
fullest extent permitted under Law, any and all rights, claims and causes of
action for any breach of any representation, warranty, covenant, agreement or
obligation set forth herein or otherwise relating to the subject matter of this
Agreement it may have against the other parties hereto and their Affiliates and
each of their respective Representatives arising under or based upon any Law,
except pursuant to the indemnification provisions set forth in this ARTICLE
VIII. Nothing in this Section 8.10 shall limit any Person’s right to seek and
obtain any equitable relief to which any Person shall be entitled or to seek any
remedy on account of any party’s fraudulent, criminal or intentional misconduct.

 

ARTICLE IX

TERMINATION

 

Section 9.01 Termination. This Agreement may be terminated at any time prior to
the Closing:

 

(a) by the mutual written consent of Seller and Buyer;

 

(b) by Buyer by written notice to Seller if:

 

(i) Buyer is not then in material breach of any provision of this Agreement and
there has been a breach, inaccuracy in or failure to perform any representation,
warranty, covenant or agreement made by Seller pursuant to this Agreement that
would give rise to the failure of any of the conditions specified in ARTICLE VII
and such breach, inaccuracy or failure has not been cured by Seller within ten
days of Seller’s receipt of written notice of such breach from Buyer; or

 

(ii) any of the conditions set forth in Section 7.01 or Section 7.02 shall not
have been, or if it becomes apparent that any of such conditions will not be,
fulfilled by the 90th day following the effective date of this Agreement, unless
such failure shall be due to the failure of Buyer to perform or comply with any
of the covenants, agreements or conditions hereof to be performed or complied
with by it prior to the Closing;

 

(c) by Seller by written notice to Buyer if:

 

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(i) Seller is not then in material breach of any provision of this Agreement and
there has been a breach, inaccuracy in or failure to perform any representation,
warranty, covenant or agreement made by Buyer pursuant to this Agreement that
would give rise to the failure of any of the conditions specified in ARTICLE VII
and such breach, inaccuracy or failure has not been cured by Buyer within ten
days of Buyer’s receipt of written notice of such breach from Seller; or

 

(ii) any of the conditions set forth in Section 7.01 or Section 7.03 shall not
have been, or if it becomes apparent that any of such conditions will not be,
fulfilled by the 90th day following the effective date of this Agreement, unless
such failure shall be due to the failure of Seller to perform or comply with any
of the covenants, agreements or conditions hereof to be performed or complied
with by it prior to the Closing; or

 

(d) by Buyer or Seller in the event that (i) there shall be any Law that makes
consummation of the transactions contemplated by this Agreement illegal or
otherwise prohibited or (ii) any Governmental Authority shall have issued a
Governmental Order restraining or enjoining the transactions contemplated by
this Agreement, and such Governmental Order shall have become final and
non-appealable.

 

Section 9.02 Effect of Termination. In the event of the termination of this
Agreement in accordance with this Article, this Agreement shall forthwith become
void and there shall be no liability on the part of any party hereto except:

 

(a) as set forth in this ARTICLE IX and Section 6.06 and ARTICLE X hereof;

 

(b) Buyer shall pay to Seller an amount equal to $300,000 if this Agreement is
terminated by Seller pursuant to Section 9.01(c)(i) hereof;

 

(c) Seller shall pay to Buyer an amount equal to $300,000 if this Agreement is
terminated by Buyer pursuant to Section 9.01(b)(i) hereof; and

 

(d) that nothing herein shall relieve any party hereto from liability for any
willful breach of any provision hereof.

 

ARTICLE X

MISCELLANEOUS

 

Section 10.01 Expenses. Except as otherwise expressly provided herein, all costs
and expenses, including, without limitation, fees and disbursements of counsel,
financial advisors and accountants, incurred in connection with this Agreement
and the transactions contemplated hereby shall be paid by the party incurring
such costs and expenses, whether or not the Closing shall have occurred.

 

Section 10.02 Notices. All notices, requests, consents, claims, demands, waivers
and other communications hereunder shall be in writing and shall be deemed to
have been given (a) when delivered by hand (with written confirmation of
receipt); (b) when received by the addressee if sent by a nationally recognized
overnight courier (receipt requested); (c) on the date sent by facsimile or
e-mail of a PDF document (with confirmation of transmission) if sent during
normal business hours of the recipient, and on the next Business Day if sent
after normal business hours of the recipient or (d) on the third day after the
date mailed, by certified or registered mail, return receipt requested, postage
prepaid. Such communications must be sent to the respective parties at the
following addresses (or at such other address for a party as shall be specified
in a notice given in accordance with this Section 10.02):

 

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If to Seller or RMS Shareholder:

 

201 E. Kennedy Blvd

Suite 325

Tampa, Florida 33602

Attn: Jimmy St. Louis

 

with a copy to:

 

9115 Galleria Court

Suite 105

Naples, Fl. 34109

Attn: R. Grammen

 

If to Medovex or Buyer:

 

3060 Royal Blvd South, Suite 150

Alpharetta, GA 30022

Attn: Jesse Crowne

 

with a copy to:

 

Womble Bond Dickinson

Atlantic Station

271 17th Street, NW

Atlanta, GA 30363-1017

Attn: Sharon McBrayer Johnson

 

Section 10.03 Interpretation. For purposes of this Agreement, (a) the words
“include,” “includes” and “including” shall be deemed to be followed by the
words “without limitation”; (b) the word “or” is not exclusive; and (c) the
words “herein,” “hereof,” “hereby,” “hereto” and “hereunder” refer to this
Agreement as a whole. Unless the context otherwise requires, references herein:
(x) to Articles, Sections, Disclosure Schedules and Exhibits mean the Articles
and Sections of, and Disclosure Schedules and Exhibits attached to, this
Agreement; (y) to an agreement, instrument or other document means such
agreement, instrument or other document as amended, supplemented and modified
from time to time to the extent permitted by the provisions thereof and (z) to a
statute means such statute as amended from time to time and includes any
successor legislation thereto and any regulations promulgated thereunder. This
Agreement shall be construed without regard to any presumption or rule requiring
construction or interpretation against the party drafting an instrument or
causing any instrument to be drafted. The Disclosure Schedules and Exhibits
referred to herein shall be construed with, and as an integral part of, this
Agreement to the same extent as if they were set forth verbatim herein.

 

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Section 10.04 Headings. The headings in this Agreement are for reference only
and shall not affect the interpretation of this Agreement.

 

Section 10.05 Severability. If any term or provision of this Agreement is
invalid, illegal or unenforceable in any jurisdiction, such invalidity,
illegality or unenforceability shall not affect any other term or provision of
this Agreement or invalidate or render unenforceable such term or provision in
any other jurisdiction. Except as provided in Section 6.07(d), upon such
determination that any term or other provision is invalid, illegal or
unenforceable, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in a mutually acceptable manner in order that the transactions
contemplated hereby be consummated as originally contemplated to the greatest
extent possible.

 

Section 10.06 Entire Agreement. This Agreement and the Ancillary Documents
constitute the sole and entire agreement of the parties to this Agreement with
respect to the subject matter contained herein and therein, and supersede all
prior and contemporaneous understandings and agreements, both written and oral,
with respect to such subject matter. In the event of any inconsistency between
the statements in the body of this Agreement and those in the Ancillary
Documents, the Exhibits and Disclosure Schedules (other than an exception
expressly set forth as such in the Disclosure Schedules), the statements in the
body of this Agreement will control.

 

Section 10.07 Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and permitted assigns. Neither party may assign its rights or obligations
hereunder without the prior written consent of the other party, which consent
shall not be unreasonably withheld or delayed; provided, however, that prior to
the Closing Date, Buyer may, without the prior written consent of Seller, assign
all or any portion of its rights under this Agreement to one or more of its
direct or indirect wholly-owned subsidiaries. No assignment shall relieve the
assigning party of any of its obligations hereunder.

 

Section 10.08 No Third-party Beneficiaries. Except as provided in ARTICLE VIII,
this Agreement is for the sole benefit of the parties hereto and their
respective successors and permitted assigns and nothing herein, express or
implied, is intended to or shall confer upon any other Person or entity any
legal or equitable right, benefit or remedy of any nature whatsoever under or by
reason of this Agreement.

 

Section 10.09 Amendment and Modification; Waiver. This Agreement may only be
amended, modified or supplemented by an agreement in writing signed by each
party hereto. No waiver by any party of any of the provisions hereof shall be
effective unless explicitly set forth in writing and signed by the party so
waiving. No waiver by any party shall operate or be construed as a waiver in
respect of any failure, breach or default not expressly identified by such
written waiver, whether of a similar or different character, and whether
occurring before or after that waiver. No failure to exercise, or delay in
exercising, any right, remedy, power or privilege arising from this Agreement
shall operate or be construed as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege.

 

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Section 10.10 Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.

 

(a) This Agreement shall be governed by and construed in accordance with the
internal laws of the State of Delaware without giving effect to any choice or
conflict of law provision or rule (whether of the State of Delaware or any other
jurisdiction).

 

(b) ANY LEGAL SUIT, ACTION OR PROCEEDING ARISING OUT OF OR BASED UPON THIS
AGREEMENT, THE ANCILLARY DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY MAY BE INSTITUTED IN THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA
OR THE COURTS OF THE STATE OF FLORIDA IN EACH CASE LOCATED IN THE CITY OF TAMPA,
AND EACH PARTY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS
IN ANY SUCH SUIT, ACTION OR PROCEEDING. SERVICE OF PROCESS, SUMMONS, NOTICE OR
OTHER DOCUMENT BY MAIL TO SUCH PARTY’S ADDRESS SET FORTH HEREIN SHALL BE
EFFECTIVE SERVICE OF PROCESS FOR ANY SUIT, ACTION OR OTHER PROCEEDING BROUGHT IN
ANY SUCH COURT. THE PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY OBJECTION
TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR ANY PROCEEDING IN SUCH COURTS AND
IRREVOCABLY WAIVE AND AGREE NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY
SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.

 

(c) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE
UNDER THIS AGREEMENT OR THE ANCILLARY DOCUMENTS IS LIKELY TO INVOLVE COMPLICATED
AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LEGAL ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE ANCILLARY
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY TO THIS
AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF ANY OTHER
PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT
SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (B) SUCH
PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES THIS
WAIVER VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 10.10(c).

 

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Section 10.11 Specific Performance. The parties agree that irreparable damage
would occur if any provision of this Agreement were not performed in accordance
with the terms hereof and that the parties shall be entitled to specific
performance of the terms hereof, in addition to any other remedy to which they
are entitled at law or in equity.

 

Section 10.12 Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together shall be deemed
to be one and the same agreement. A signed copy of this Agreement delivered by
facsimile, e-mail or other means of electronic transmission shall be deemed to
have the same legal effect as delivery of an original signed copy of this
Agreement.

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date first written above by their respective officers thereunto duly
authorized.

 

  Regenerative Medicine Solutions, LLC         By: /s/ James St. Louis   Name: 
James St. Louis   Title: Chief Executive Officer         RMS Shareholder, LLC  
      By: /s/ James St. Louis   Name: James St. Louis   Title: Chief Executive
Officer         Lung Institute LLC         By: /s/ James St. Louis   Name: James
St. Louis   Title: Chief Executive Officer         RMS Lung Institute Management
LLC         By: /s/ James St. Louis   Name: James St. Louis   Title: Chief
Executive Officer         Cognitive Health Institute Tampa, LLC         By: /s/
James St. Louis   Name: James St. Louis   Title: Chief Executive Officer        
Medovex Corp.         By: /s/ Jesse W. Crowne   Name:  Jesse W. Crowne   Title:
Executive Co-Chairman of the Board         RMS Acquisition Corp.         By: /s/
Jesse W. Crowne   Name: Jesse W. Crowne   Title: Executive Co-Chairman of the
Board

 

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