ASSET PURCHASE AGREEMENT

 

THIS ASSET PURCHASE AGREEMENT (this “Agreement”) is dated July 11, 2019 (the
“Execution Date”), by and between (i) Pantheon Medical - Foot & Ankle, LLC, a
Delaware limited liability company (the “Seller”), and (ii) Generex
Biotechnology Corporation, a Delaware corporation (“Parent”) and NuGenerex
Distribution Solutions, LLC, a Delaware limited liability company (collectively,
the “Buyer”). The Seller and the Buyer are referred to collectively herein as
the “Parties” and each a “Party.”

 

RECITALS:

 

A.                 The Seller is engaged in the business of providing medical
and surgical products to health care providers, with a concentration in the foot
and ankle area. To the extent the foregoing activities of Seller are related to
the assets transferred to Buyer under this Agreement, they are collectively
referred to as the “Business”.

 

B.                  The Seller desires to sell, assign and transfer certain
assets, properties and rights of the Seller to the Buyer, and the Buyer desires
to purchase such certain assets, properties and rights from the Seller, on the
terms and conditions hereinafter set forth.

 

C.                  The Buyer desires to assume from the Seller, and the Seller
desires to assign to the Buyer all of the Assumed Liabilities (as defined
herein), on the terms and conditions hereinafter set forth.

 

D.                 As additional consideration, and as a material inducement to
the Buyer to enter into this Agreement and to consummate the transactions
described herein, the Seller desires to make certain representations,
warranties, indemnities, covenants and agreements relating to the sale of the
Business.

 

AGREEMENT:

 

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

 

ARTICLE I DEFINITIONS

In addition to the capitalized terms defined elsewhere in this Agreement, the
following capitalized terms shall

have the meanings specified in this Article I.

 

“Accounts Receivable” means all trade and other accounts and accounts receivable
arising out of the Seller’s conduct of the Business and which are payable to the
Seller, including any security held by the Seller for the payment thereof
existing on the Closing Date, including, without limitation, the detailed
information regarding Accounts Receivable provided in connection with Section
4.8.

 

“Action” means any suit, action, arbitration, cause of action, claim, complaint,
criminal prosecution, investigation, Audit, governmental or other administrative
proceeding, whether at law or at equity, before or by any Court or Governmental
Authority (including the Food and Drug Administration (FDA), Department of
Health and Human Services (DHS), the Drug Enforcement Administration (DEA),
state Medicaid agencies, state pharmacy boards and other federal, state or
county Governmental Authorities with jurisdiction over the dispensing,
compounding, or distribution of pharmaceutical products or over the provision of
health care items or services), or before any arbitrator or other tribunal.

 

“Affiliate” means, with respect to any Person, any other Person: (i) which owns,
directly or indirectly, at least ten percent (10%) of the voting or economic
interests in such Person; (ii) in which such Person owns, directly or
indirectly, more than ten percent (10%) of the voting or economic interests; or
(iii)

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 in which more than ten percent (10%) of the voting or economic interests are
owned, directly or indirectly, by a Person who has a relationship with such
Person described in clause (i) or (ii) above. In addition, any Person who is a
director or executive officer of Seller shall be deemed an Affiliate of Seller.

 

“Affiliated Group” means an affiliated group as defined in Section 1504 of the
Code (or analogous combined, consolidated or unitary group defined under state,
local or foreign income Tax law).

 

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

 

“Asbestos Liabilities” means any Liabilities arising from, relating, to, or
based on the presence or alleged presence of asbestos or asbestos-containing
materials in any product or item designed, sold, marketed, installed, stored,
transported, handled, or distributed at any time, or otherwise based on the
presence or alleged presence of asbestos or asbestos-containing materials at any
property or facility in any structure, including without limitation, any
Liability arising from, relating to or based on any personal or bodily injury or
illness.

 

“Assigned Contract” has the meaning set forth in Section Error! Reference source
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“Assigned Personal Property Lease” has the meaning set forth in Section 4.14.

 

“Assets” has the meaning set forth in Section 2.1(a).

 

“Asset Schedule” has the meaning set forth in Section 2.1(a).

 

“Assumed Liabilities” has the meaning set forth in Section 2.2.

 

“Audit” means (i) any audit or review by a Governmental Authority with respect
to federal and state health care programs or by a health care contractor or (ii)
any audit or review by a Governmental Authority not covered in clause (i) above
that is outside the Ordinary Course of Business.

 

“Bill of Sale” has the meaning set forth in Section 2.5.

 

“Business” has the meaning set forth in the Recitals.

 

“Business Day” means a day other than Saturday, Sunday or a public holiday on
which banks are required or permitted by Law to be closed under the Laws of the
State of Texas.

 

“Business Licenses” has the meaning set forth in Section 4.22.

 

“Buyer” has the meaning set forth in the preamble to this Agreement.

 

“Buyer Disclosure Schedule” has the meaning set forth in the preamble to Article
V.

 

“Buyer Indemnified Parties” has the meaning set forth in Section 10.2.

 

“COBRA” means the requirements of Part 6 of Subtitle B of Title I of ERISA and
Code §4980B and of any similar state Law.

 

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

 

“Closing” has the meaning set forth in Section 3.4.

 

“Closing Assets” has the meaning set forth in Section 2.1(a).

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“Closing Assumed Liabilities” has the meaning set forth in Section 2.2.

 

“Closing Transferring Employees” has the meaning set forth in Section 2.4.

 

“Closing Date” has the meaning set forth in Section 3.4.

 

“Confidential Information” means any information concerning the business and
affairs of the Seller with respect to the Business that (i) is not already
generally available to the public or (ii) after the date of this Agreement, does
not become generally available to the public.

 

“Contracts” means any and all agreements, contracts, commitments, purchase
orders, licenses, leases, notes, bonds and other instruments, whether written or
oral, to which the Seller is a party or by any of the Assets is bound.

 

“Controlled Group” has the meaning set forth in Code §1563.

 

“Disclosure Schedule” has the meaning set forth in the preamble to Article IV.

 

“Eligible Insurance Proceeds” has the meaning set forth in Section 10.5(g).

 

“Employee Benefit Plan” means any written or oral plan, program, arrangement or
agreement which the Seller or any ERISA Affiliate sponsors, maintains or
contributes to or has any obligation to maintain or contribute to, or has any
direct or indirect liability for, whether contingent or otherwise, and under
which any current or former officer or director, employee, leased employee or
consultant (or their respective beneficiaries) of the Seller or any ERISA
Affiliate has any present or future right to receive compensation or other
benefit, including without limitation, (i) any “employee benefit plan” (as such
term is defined in ERISA

§3(3)); (ii) the Veneto Long Term Incentive Compensation Plan; and (iii) any
other employee benefit plan, agreement, program, policy, arrangement or payroll
practice, whether or not subject to ERISA, including any pension,
profit-sharing, savings, retirement, severance pay, termination, executive
compensation, incentive compensation, deferred compensation, bonus, stock
purchase, stock option, phantom stock, other equity- based compensation,
change-in-control, retention, salary continuation, vacation, sick leave,
disability, death benefit, group insurance, hospitalization, medical, dental,
life (including all individual life insurance policies as to which the Seller is
the owner, the beneficiary, or both), Code Section 125 “cafeteria” or “flexible”
benefit, employee loan, educational assistance or other similar benefit plan,
policy or arrangement.

 

“Employee Pension Benefit Plan” has the meaning set forth in ERISA §3(2).

 

“Employee Welfare Benefit Plan” has the meaning set forth in ERISA §3(1).

 

“Environmental, Health, and Safety Requirements” means all federal, state,
local, and foreign statutes, regulations, ordinances, and similar provisions
having the force or effect of Law, all judicial and administrative Orders and
determinations, all contractual obligations, and all common law concerning
public health and safety, worker health and safety, pollution, or protection of
the environment, including, without limitation, all those relating to the
presence, use, production, generation, handling, transportation, treatment,
storage, disposal, distribution, labeling, testing, processing, discharge,
release, threatened release, control, or cleanup of any hazardous materials,
substances, or wastes, chemical substances, or mixtures, pesticides, pollutants,
contaminants, toxic chemicals, petroleum products or byproducts, asbestos,
polychlorinated biphenyls, noise, or radiation.

 

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

 

“ERISA Affiliate” means each entity that is treated as a single employer with
Seller for purposes of Code §414.

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“Excluded Assets” has the meaning set forth in Section 2.1(c).

 

“Excluded Assets Schedule” has the meaning set forth in Section 2.1(c).

 

“Excluded Liabilities” has the meaning set forth in Section 2.3.

 

“Excluded Subsidiaries” means those entities listed in Appendix 1.

 

“Execution Date” has the meaning set forth in the preamble to this Agreement.

 

“FDA Law and Regulation” has the meaning set forth in Section 4.11(j).

 

“Financial Statements” has the meaning set forth in Section 4.8.

 

“GAAP” means U.S. generally accepted accounting principles consistently applied.

 

“GNBT Stock” means shares of the common stock of Parent, par value $0.001 per
share.

 

“Governmental Authority” means any federal, state, local, provincial, municipal,
foreign, or other governmental agency, authority, department, commission, board,
bureau, Court or instrumentality of any country or territory, and includes any
authority having governmental or quasi-governmental powers, including any
administrative or regulatory agency or commission.

 

“Health Care Law” means (a) Title XVIII of the Social Security Act, as amended,
governing the Medicare program, and final rules and final regulations adopted
pursuant thereto; (b) Titles V, XIX, XX and XXI of the Social Security Act; (c)
Section 1128B(b) of the Social Security Act, 42 U.S.C. § 1320a-7b(b), as amended
(Criminal Penalties Involving Medicare or State Health Care Programs), commonly
referred to as the “Anti-Kickback Statute” and the regulations adopted pursuant
thereto and any comparable state or local laws and regulations; (d) 31 U.S.C. §§
3729 et seq. commonly known as the “False Claims Act” and regulations adopted
pursuant thereto and any comparable state or local laws and regulations; (e) 42
U.S.C. § 1395nn, commonly referred to as the “Stark Statute” and regulations
adopted pursuant thereto and any comparable state or local laws and regulations;
(f) 42 U.S.C. § 1320a-7a; 42 U.S.C. § 1320a-7 and the regulations adopted
pursuant thereto; (g) 31 U.S.C. § 3801 et. seq. commonly known as the Federal
Program Fraud Civil Remedies Act and regulations adopted pursuant thereto; (h)
all federal and state laws relating to the administration of health care claims
or benefits or processing or payment for health care services, treatment or
supplies furnished by Providers, including but not limited to those applicable
to Medicare Parts A, B, C, and D, to the State Medicaid Program, and to the SAIF
Program; (i) the regulations, ordinances and rules promulgated pursuant to
Health Care Laws, as amended from time to time, and in existence as of the
Execution Date or subsequently amended or enacted prior to the Closing Date; and
(j) the Health Insurance Portability and Accountability Act of 1996, 42 U.S.C.
§§ 1320d-1329d-8, as amended by the Health Information Technology for Economic
and Clinical Health Act (“HITECH”), enacted as Title XIII of the American
Recovery and Reinvestment Act of 2009, Public Law 111-5, and its implementing
regulations (collectively, “HIPAA”) and any analogous or similar state Law or
regulation.

 

“Indebtedness” means with respect to any Person, without duplication, (i) all
obligations of such Person for borrowed money, whether current or funded,
secured or unsecured, (ii) all obligations of such Person for the deferred
purchase price of any property or services, (iii) all obligations of such Person
created or arising under any conditional sale or other title retention agreement
with respect to property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the event of a default
may be limited to repossession or sale of such property), (iv) all obligations
of such Person secured by a purchase money mortgage or other lien to secure all
or part of the purchase price of property subject to such mortgage or lien, (v)
all obligations under leases which shall have been or should be, in accordance
with GAAP, recorded as capital leases in respect of which such Person is liable
as lessee, (vi) any obligation of such Person in respect of bankers’ acceptances
or letters of credit, (vii) any obligations

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secured by liens on property acquired by such Person, whether or not such
obligations were assumed by such Person at the time of acquisition of such
property, (viii) all obligations of a type referred to in clause (i), (ii),
(iii), (iv), (v), (vi), or (vii) above which is directly or indirectly
guaranteed by such Person or which it has agreed (contingently or otherwise) to
purchase or otherwise acquire or in respect of which it has otherwise assured a
creditor against loss, and (ix) any refinancings of any of the foregoing
obligations. Notwithstanding the foregoing, for the avoidance of doubt,
“Indebtedness” shall not include any trade payables or other current liabilities
reflected in the Financial Statements or incurred by the Seller after the date
of the Most Recent Balance Sheet in the Ordinary Course of Business, to the
extent taken into account in the calculation of Working Capital, or any other
amounts taken into account in the calculation of Working Capital.

 

“Indemnified Party” has the meaning set forth in Section 10.4.

 

“Indemnifying Party” has the meaning set forth in Section 10.4.

 

“Ineligible Person” means any Person that (i) is currently excluded, debarred,
suspended, or otherwise ineligible to participate in the federal health care
programs or federal procurement programs, or

(ii) has been convicted of a criminal offense that falls within the ambit of 42
U.S.C. § 1320a-7(a), but has not yet been excluded, debarred, suspended, or
otherwise declared ineligible.

 

“Intellectual Property” means all intellectual property and other proprietary
rights and Confidential Information relating to the Business or used in the
Business, including, but not limited to, all patents, patent applications,
patent disclosures and inventions (whether or not patentable and whether or not
reduced to practice); all trademarks, service marks, trade dress, trade names,
corporate names; all registered and unregistered statutory and common law
copyrights; all registrations, applications and renewals for any of the
foregoing; all trade secrets, ideas, formulae, compositions, know-how,
proposals, technical and computer data, documentation and software, financial,
business and marketing plans; all supplier lists and related information; all
domain names and web sites; sales data and plans; all customer accounts, lists,
files, programs, plans, data and related information and all other proprietary
rights relating to the Business or used in the Business.

 

“Interim Working Capital” has the meaning set forth in Section Error! Reference
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“Initial Working Capital Shortfall” has the meaning set forth in Section Error!
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“Inventory” means all inventory of the Seller, wherever located and whether held
by Seller or third

parties.

 

“Knowledge” means the actual, conscious knowledge (as distinguished from
implied, imputed or constructive) of any Manager or executive officer of Seller,
without any inquiry and investigation of any kind.

 

“Law” means the common law of any state, or any provision of any foreign,
federal, state or local law, statute, rule, regulation, order, permit, judgment,
injunction, decree or other decision of any Governmental Authority including all
Orders having the effect of law in each such jurisdiction and any Health Care
Law.

 

“Leased Real Property” means all leasehold or sub-leasehold estates and other
rights to use or occupy any land, buildings, structures, improvements, fixtures,
or other interest in real property held by the Seller.

 

“Leases” means all leases, subleases, licenses, concessions and other agreements
(written or oral), including all amendments, extensions, renewals, guaranties,
and other agreements with respect thereto, pursuant to which the Seller holds
any Leased Real Property.

 5 

 

“Letter of Credit” has the meaning set forth in Section 3.1(b).

 

“Liabilities” means any indebtedness, liabilities or obligations of the Seller
of any nature whatsoever (whether accrued, absolute, contingent, direct,
indirect, perfected, inchoate, unliquidated or otherwise, known or unknown,
whether due or to become due), including, but not limited to, all Indebtedness
of the Seller.

 

“Liens” means any claims, liens, charges, rights, restrictions, options,
preemptive rights, mortgages, deeds of trust, easements, leases, hypothecations,
assessments, pledges, encumbrances, claims of equitable interest or security
interests of any kind or nature whatsoever other than Permitted Liens.

 

“Losses” means losses, damages, Liabilities, assessments, costs, penalties and
expenses, but excluding (i) any special, consequential, punitive or exemplary
damages, and (ii) any damages based on multiples of profit, or cash flows, or
similar methodologies.

 

“Material Adverse Effect” or “Material Adverse Change” means any effect or
change that would be materially adverse to the Assets; provided, however, that
the foregoing will not include any event, effect, circumstance, change,
occurrence, fact or development resulting from or relating to (i) general
business or economic conditions, (ii) national or international political or
social conditions, including the engagement by the United States of America in
hostilities, whether or not pursuant to the declaration of a national emergency
or war, or the occurrence of any military or terrorist attack upon the United
States of America or any of its territories, possessions or diplomatic or
consular offices or upon any military installation, equipment or personnel of
the United States of America, (iii) financial, banking or securities markets
(including any disruption thereof and any decline in the price of any security
or any market index), (iv) changes in GAAP,

(v) changes in Law other than Health Care Law, except to the extent that any of
the events, effects, circumstances, changes, occurrences, facts or developments
in the foregoing clauses (i) through (v) has had a disproportionate effect on
the a Party as compared to other participants in the industry in which such
Party operates, (vi) the negotiation, execution, or delivery of this Agreement
or the announcement or consummation of any of the transactions contemplated
hereby, or (vii) any fact or circumstance arising after a Closing with respect
to the Assets transferred during the Closing.

 

“Medical Device” has the meaning set forth in Section 4.11(j).

 

“Most Recent Balance Sheet” has the meaning set forth in Section 4.8.

 

“Non-Breaching Party” has the meaning set forth in Section 6.5

 

“Non-Competition Agreements” has the meaning set forth in Section 8.12.

 

“Offer Letters” has the meaning set forth in Section 8.13.

 

“Order” means any award, decision, injunction, decree, stipulation,
determination, writ, judgment, order, ruling, or verdict ordered, issued, made
or rendered by any court, administrative agency or other Governmental Authority.

 

“Ordinary Course of Business” means the ordinary course of business consistent
with past custom and practice (including with respect to quantity and
frequency). In no event shall (a) any action by the Seller (other than the
placing of a purchase order by such Person or the acquisition of inventory in
the normal course of business) that will result in an obligation of the Seller
to expend more than five thousand dollars ($5,000), or (b) the placing of a
purchase order by the Seller (other than the acquisition of inventory in the
normal course of business) that will result in an obligation of the Seller to
expend more than five thousand dollars ($5,000) be considered to be in the
Ordinary Course of Business.

 6 

 

“Organizational Documents” means (i) in the case of a corporation, its
certificate of incorporation and bylaws and (ii) in the case of a limited
liability company, its certificate of formation and operating agreement, in each
case with all amendments thereto.

 

“Party” or “Parties” has the meaning set forth in the preamble to this
Agreement.

 

“Payment Program” means Medicare, TRICARE, FEHBP, Medicaid, Workers’
Compensation, SAIF, and any and all health maintenance organizations, preferred
provider organizations, health benefit plans, health insurance plans, and other
third-party reimbursement and payment programs, in each case to the extent
applicable to the Business of the Seller.

 

“Permit” means any license, permit, consent, approval, authorization,
registration, filing, waiver, qualification or certification from any
Governmental Authority, including all pending applications therefor or renewals
thereof.

 

“Permitted Liens” means (i) Liens for Taxes and other governmental charges not
yet due and payable or that are being contested in good faith by appropriate
proceedings, which proceedings, if determined adversely, would not have a
Material Adverse Effect on Seller, (ii) landlords’, mechanics’, carriers’,
warehousemen’s, workers’, repairers’ and other similar Liens arising or incurred
in the Ordinary Course of Business relating to obligations which are not
individually, or in the aggregate, material, for sums not yet due and payable or
which are being contested in good faith, (iii) other Liens or imperfections on
property which are not material in amount or do not materially detract from the
value of or materially impair the existing use of the property affected by such
Lien or imperfections, (iv) Liens relating to deposits made in the Ordinary
Course of Business in connection with workers’ compensation, unemployment
insurance and other types of social security or to secure the performance of
leases, trade contracts or other similar agreements,

(v) purchase money security interests in respect of personal property arising or
incurred in the ordinary course of business and listed in the Disclosure
Schedule, (vi) any Liens arising in the Ordinary Course of Business, to the
extent that the related Liability therefor is included in the computation of
Working Capital, (vii) any Liens to be released at Closing, and (viii) Liens
arising as a result of the Buyer’s acts, including any Liens granted to any
lender at the Closing in connection with any financing of the Purchase Price.

 

“Person” means an individual, a partnership, a corporation, a limited liability
company, an association, a joint stock company, a trust, a joint venture, an
unincorporated organization, any other business entity, or a governmental entity
(or any department, agency, or political subdivision thereof).

 

“Personal Property Leases” has the meaning set forth in Section 4.14.

 

“Prepaid Items” means all prepaid items, deposits and other similar assets of
the Seller existing on the Closing Date which are specifically listed in the
Asset Schedule.

 

“Professional Licenses” has the meaning set forth in Section 4.22.

 

“Purchase Price” has the meaning set forth in Section 3.1.

 

“Purchase Price Note” has the meaning set forth in Section 3.1.

 

“Real Property” has the meaning set forth in Section 4.15.

 

“Regulatory Advisories” means (i) any written directives, instructions,
guidelines, bulletins, manuals, requirements, policies and standards issued by
Centers for Medicare and Medicaid Services (CMS), and (ii) orders, decrees,
opinions, instructions, guidance documents, memoranda, manual instructions,
program memoranda, opinion letters, or other public issuances promulgated
pursuant to Health Care Laws, as amended from time to time, and in existence as
of the execution of this Agreement or subsequently amended or enacted prior to
Closing.

 7 

 

“Seller” has the meaning set forth in the preamble to this Agreement.

 

“Seller Employees” has the meaning set forth in Section 2.4.

 

“Seller Indemnified Parties” has the meaning set forth in Section 10.3.

 

“Significant Payment Program” has the meaning set forth in Section 4.11(g).

 

“Significant Payment Program Schedule” has the meaning set forth in Section
4.11(g).

 

“Subsidiary” means, with respect to any Person, any corporation, limited
liability company, partnership, association, or other business entity of which
(i) if a corporation, a majority of the total voting power of shares of stock
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers, or trustees thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof or (ii) if a limited
liability company, partnership, association, or other business entity (other
than a corporation), a majority of the partnership or membership or other
similar ownership interests thereof is at the time owned or controlled, directly
or indirectly, by that Person or one or more Subsidiaries of that Person or a
combination thereof and for this purpose, a Person or Persons own a majority
ownership interest in such a business entity (other than a corporation) if such
Person or Persons shall be allocated a majority of such business entity’s gains
or losses or shall be or control any managing director or general partner of
such business entity (other than a corporation). The term “Subsidiary” shall
include all Subsidiaries of such Subsidiary.

 

“Systems” has the meaning set forth in Section 4.28.

 

“Tax” or “Taxes” means any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code §59A),
customs duties, capital stock, franchise, profits, withholding, social security
(or similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, including any interest, penalty,
or addition thereto, whether disputed or not.

 

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

 

“Terminated Personal Property Lease” shall have the meaning set forth in Section
4.14.

 

“Third-Party Claim” has the meaning set forth in Section 10.4.

 

“Threshold Amount” has the meaning set forth in Section 10.5(a).

 

“Transaction Documents” means each of the agreements, documents, certificates
and instruments being delivered pursuant to this Agreement.

 

“Transfer Tax” means any stamp or other sales, use, transfer or transaction Tax
arising as a result of the consummation of any of the transactions described
herein.

 

“Transferring Employees” has the meaning set forth in Section 2.4.

 

“WARN” means Worker Adjustment and Retraining Notification Act of 1988, as
amended, and its interpretive regulations.

 8 

 

ARTICLE II

 

ASSETS AND LIABILITIES

 

2.1               Acquired Assets.

 

(a)                Subject to the terms and the conditions set forth in this
Agreement and on the basis of the representations and warranties herein, the
Seller agrees to, sell, convey, transfer, assign and deliver to the Buyer, and
the Buyer agrees to purchase, receive and accept, as applicable, from the Seller
all of the right, title and interest in and to the assets and properties of
every kind, character and description, used in or for the benefit of the
Business, whether tangible, intangible, real, personal or mixed, set forth in
Schedule 2.1(a) hereto (collectively referred to hereinafter as the “Assets”)
other than the Excluded Assets (as defined below). Schedule 2.1(a) is referred
to herein as the “Asset Schedule.”

 

(b)                Without limitation of the foregoing, the Assets shall
include, in each case in respect of the Seller, all the tangible property,
furniture, fixtures and equipment, Fifty Percent (50%) cash on hand at the
Closing, Fifty Percent (50%) of the Accounts Receivable (to the extent
transferable under applicable Law), notes receivable (to the extent listed on
the Asset Schedule), inventory (including office supplies), tenant improvements
(to the extent related to a lease which is an Assigned Contract), goodwill,
software, Intellectual Property (other than as set out as an Excluded Asset),
Prepaid Items, Assigned Contracts, Assigned Personal Property Leases, books and
records (including all customer lists and all patient lists to the extent
transferable under applicable Law, but excluding any patient medical records and
files to the extent required to be retained by the Seller and any communications
which are subject to attorney-client privilege), any Seller policies and
procedures relating to the Business, telephone and email addresses, all Permits
and certificates of need to the extent transferable to the Buyer, all benefits,
proceeds and other amounts payable under any Seller policy of insurance to the
extent (i) such amounts are payable for losses suffered or payable by Buyer or
(ii) such amounts are payable with respect to an Assumed Liability or other
liability included in the calculation of Working Capital.

 

(c)                Excluded Assets. Notwithstanding anything contained in
Section 2.1, the Buyer is not purchasing (i) Fifty Percent (50%) of Seller’s
consolidated cash at Closing, (ii) insurance proceeds other than those
specifically identified in Section 2.1(b), (iii) Fifty Percent (50%) of the
Accounts Receivable, (iv) all benefits, proceeds and other amounts payable under
any Seller policy of insurance, (v) Contracts (other than Assigned Contracts),
(vi) any Employee Benefit Plan (other than Assumed Plans, if any), (vii)
Medicare or Medicaid provider numbers, (viii) any claims of the Seller for any
federal, state or local Tax refunds or Tax loss carry-forward benefits,

(ix) the limited liability company books and records of the Seller, (x) any
claims, counterclaims or other rights associated with any Excluded Liability, or
(xi) any of the assets set forth on Schedule 2.1(c), which include items of
Intellectual Property that will be retained by Seller (such assets being
referred to as the “Excluded Assets”).

 

(d)                Nonassignable Assets. Notwithstanding anything to the
contrary in this Agreement, this Agreement shall not constitute an agreement to
assign any interest in any instrument, Contract, Lease or other agreement or
arrangement or any claim, right or benefit, if an assignment without the consent
of a third party would constitute a breach or violation thereof and would
adversely affect the Seller’s ability to convey the interest or impair the
interest as conveyed to the Buyer. If the consent of a third party which is
required in order to assign any such interest is not obtained on or prior to the
Closing Date, or if an attempted assignment would be ineffective or would affect
the Seller’s ability to convey the interest unimpaired, then, at the Buyer’s
request, the Seller shall cooperate with the Buyer in any reasonable
arrangement, including performance by the Seller or the Buyer, as the case may
be, as agent for the other, in order to cause the Buyer to receive the benefits
of such interest, and to accept the burdens and perform the obligations, under
any such instrument, Contract, Lease or other agreement or arrangement or any
such claim, right or benefit all as of the Closing; provided, however, that (i)
such alternative arrangement does not impose any adverse economic consequence to
either the Seller or the Buyer, (ii) such alternative arrangement does not
violate any Law and does not result in the material breach of the arrangement
and (iii) the Parties will continue to use their commercially reasonable efforts
after the Closing to obtain the applicable third party consent. Any transfer or
assignment to the Buyer by the Seller of any interest under any such instrument,
Contract, Lease or other

 9 

 

agreement or arrangement or any such claim, right or benefit that requires the
consent of a third party shall be made subject to such consent or approval being
obtained.

 

2.2               Assumed Liabilities. As of the Closing Date, the Seller shall
assign to the Buyer, and the Buyer shall assume the obligations of the Seller
arising from the use of the Assets on or after the Closing Date and set forth on
attached Schedule 2.2, including obligations under those agreements and
contracts designated specifically on Disclosure Schedule 4.17 as Assigned
Contracts, except to the extent that any such executory obligations result from,
arise out of, relate to, or are caused by, any one or more of the following: (a)
a breach of any of the Assigned Contracts occurring prior to the Closing Date;
(b) a breach of warranty, infringement or violation of Law occurring prior to
the Closing Date; or (c) an event or condition occurring or existing prior to
the Closing Date which, through the passage of time or the giving of notice or
both, would constitute a breach or default by the Seller under any of the
Assigned Personal Property Leases or Assigned Contracts (collectively, the
“Assumed Liabilities”).

 

2.3               Excluded Liabilities. EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT, THE BUYER DOES NOT ASSUME AND SHALL NOT BE LIABLE FOR ANY OF THE
DEBTS, OBLIGATIONS OR LIABILITIES OF THE SELLER, THE BUSINESS OR ANY AFFILIATE
OF THE SELLER, WHENEVER ARISING AND OF WHATEVER TYPE OR NATURE. The Buyer shall
not assume, and shall not be deemed by anything contained in this Agreement to
have assumed, any Liabilities other than the Assumed Liabilities (the “Excluded
Liabilities”). The intent and objective of the Buyer and the Seller is that,
except for the Assumed Liabilities explicitly assumed by the Buyer hereunder,
the Buyer does not assume, and no transferee liability shall attach to the Buyer
pertaining to, any of the Excluded Liabilities.

 

2.4               Employees. Prior to the Closing Date, (a) the Buyer or an
Affiliate of the Buyer shall offer employment, effective as of the Closing Date,
to each employee of the Seller who is principally employed in the Business
(collectively, the “Seller Employees”), provided that such employee (i) is
listed on Schedule 2.4 as prepared by the Buyer and attached hereto, (ii) agrees
to the release of his or her employment files to the Buyer or an Affiliate of
the Buyer prior to the Closing, and (iii) passes a pre-employment drug test
and/or background check conducted at the Buyer’s expense and in a timely manner,
if so requested, and (c) the Seller will terminate in a lawful manner the
employment of the Seller Employees who have accepted the Buyer’s or its
Affiliate’s offer of employment. Those Seller Employees who accept the Buyer’s
or its Affiliate’s offer of employment as of the Closing Date shall be
designated on Schedule 2.4 as “Transferring Employees” and referred to
hereinafter as such and to receive credit from the Buyer or its Affiliate for
prior service to the Seller for all employment-related purposes. The Seller
acknowledges and agrees that it is responsible for paying to the Transferring
Employees all compensation and benefits accrued up to the Closing Date and the
Seller shall pay, or arrange to pay, all such undisputed amounts prior to the
Closing Date. Schedule 2.4 sets forth with respect to each Seller Employee such
person’s position, date of hire, current salary, accrued and maximum PTO and
amount of any other accrued benefits (including, without limitation, bonuses and
vacation) to which such person may be entitled or for which such person has made
written claim to the Seller. If applicable, the Seller shall provide an updated
Schedule 2.4 at the Closing. Except as otherwise provided in the Offer Letters,
all Transferring Employees shall be employees at will, subject to the Buyer’s or
its Affiliate’s employment policies. Nothing herein shall obligate the Buyer or
an Affiliate of the Buyer to employ the Transferring Employees for any specific
time period. Nothing in this Section shall be construed to grant any employee
any rights as a third- party beneficiary. The Seller shall retain all
Liabilities with respect to any and all Seller Employees who are not
Transferring Employees. If applicable, the Seller and its ERISA Affiliates shall
provide coverage under COBRA to all “M&A qualified beneficiaries” associated
with the transactions described in this Agreement in accordance with Treasury
Regulation §54.4980B-9 and any Seller Employees who have a “qualifying event”
under Section 4980B of the Code prior to the Closing Date or who do not become
Transferred Employees in connection with the transactions described in this
Agreement. The Buyer or an Affiliate of the Buyer shall provide coverage under
COBRA to all Transferring Employees and their beneficiaries who have a
“qualifying event” under Section 4980B of the Code following the Closing Date.
The Seller shall be liable for any Liabilities arising under WARN or any similar
foreign, state or local Law for any “plant closing” or “mass layoff” as those
terms are defined in WARN (or the comparable statute) occurring prior to the
Closing Date or in connection with the transactions described in this Agreement.

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2.5               Instruments of Transfer. The sale of the Assets and the
assumption of the Assumed Liabilities as herein provided shall be effected at
each Closing by that certain Assignment and Assumption and Bill of Sale in the
form attached hereto as Exhibit A (the “Bill of Sale”).

 

2.6               Payment of Sales Taxes. The Buyer covenants and agrees to pay
any and all Transfer Taxes payable by reason of the transfer and conveyance of
the Assets hereunder. The Seller will prepare and deliver and if necessary file
at or before the Closing all Transfer Tax returns and other filings necessary to
vest in the Buyer full right, title and interest in the Assets without any
requirement for the Buyer to withhold any consideration in respect of Taxes.

 

ARTICLE III PURCHASE PRICE

3.1Purchase of Assets by the Buyer. Subject to any adjustments set forth in this
Agreement, including

without limitation pursuant to Section 3.2, and in reliance on the Seller’s
representations, warranties and covenants, the purchase price to be paid by the
Buyer to Seller for the Assets and the other rights set forth herein
(collectively with any payments made in connection with any adjustments, the
“Purchase Price”) shall be as follows:

 

(a)                Closing. At the Closing, Buyer shall issue to Seller an
amount of shares of GNBT Stock with a value of One Million Four Hundred Thousand
Dollars ($1,400,000.00) as of the Closing (the “Purchase Shares”).

 

(b)                Waiver of Declared Dividend. Seller hereby agrees to waive
the contemplated 1:1 stock dividend recently announced by the Buyer related to
the successful up-listing to the NASDAQ, if and/or when it happens.

 

(c)                After Closing. In addition to the Buyer delivering the
Purchase Shares at Closing, the Buyer will also potentially pay up to Seven
Hundred Thousand Dollars ($700,000.00) in cash on the first anniversary of the
Closing, if Seller increases the EBITDA related to the Business from Five
Hundred Thousand Dollars ($500,000.00) in EBITDA in 2018 up to One Million
Dollars ($1,000,000.00) in EBITDA for the period comprising the 12 months
following the Closing Date; the cash will be prorated for any partial
achievement over the Five Hundred Thousand Dollars ($500,000.00) in EBITDA
generated in such period. The EBITDA for the purposes of this Section shall not
include increases for any new business directly attributed to Buyer (with no
assistance from Travis Bird) or decreases for payments to Travis Bird or
expenses related to his travel on behalf of the Buyer or its affiliates.

 

(d)                Non-Competition Agreement. Travis Bird will be required to
execute a non-competition agreement with a term of no less than three (3) years
with respect to the existing Business of Seller and excluding other existing
ventures of Mr. Bird, except for those businesses identified in the
non-competition agreement.

 

(e)                For all issuances of GNBT Stock, the GNBT Stock price shall
be the closing price at the time of issuance.

 

(f)                 If at any time within five (5) years after the Closing Date
the Buyer’s CEO, Joseph Moscato, is removed as the Buyer’s CEO, then Seller has
the option to unwind this Agreement and keep all the cash and GNBT Stock
previously received from the Buyer.

 

3.2Reserved.

 

3.3               Allocation of Consideration. The Buyer and the Seller
acknowledge and agree that the consideration shall be allocated to the Assets in
accordance with Section 1060 of the Code, as set forth on Schedule 3.3 hereto.
The Seller further acknowledges and agrees that (a) the covenant not to compete
set forth in the Non-Competition Agreements required to be executed by the
Seller and Travis Bird is a material inducement to the Buyer to enter into this
Agreement, and the Buyer is doing so in reliance upon full compliance by the
Seller agreeing to be bound by such covenant; and (b) in light of such reliance,
the amount allocated herein to the covenant not to compete is not

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intended by the Parties as a measure of damages that might be incurred by the
Buyer in the event of a breach of such covenant. The Buyer and the Seller agree
to report the transactions described in this Agreement for federal and state
income Tax purposes in accordance with such allocation. The Parties shall
execute all forms required to be filed for Tax purposes with any taxing
authority in a manner consistent with the allocation on Schedule 3.3 hereto. The
Parties agree to amend Schedule 3.3 to reflect changes arising from any Purchase
Price adjustments under Section 3.2 above, provided any such changes to Schedule
3.3 will be mutually agreeable to the Parties hereto.

 

3.4               Closing. The sale of the Assets and assumption of the Assumed
Liabilities shall be consummated and effective at a closing (the “Closing”),
held on August 1, 2019 (the “Closing Date”). At the Closing, the Seller and
Buyer will provide the other with the closing deliveries applicable to the
Assets and Assumed Liabilities and set forth on Schedule 3.4. To the extent
practicable, the Closing shall occur electronically, with the parties exchanging
all signature pages to the documents specified herein via email delivery and by
an exchange of executed counterpart copies of this Agreement and the other
Closing documents via email and overnight courier between counsel for the Seller
and counsel for the Buyer. The Closing shall be effective as of 12:01 a.m. on
the Closing Date.

 

ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES OF THE SELLER

 

The Seller represents and warrants to the Buyer that the statements contained in
this Article IV are true and correct in all material respects as of the date of
this Agreement and will be true and correct in all material respects as of the
Closing Date (as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this Article IV), except
as set forth in the Disclosure Schedule delivered by the Seller to the Buyer on
the Execution Date (the “Disclosure Schedule”). The Disclosure Schedule will be
arranged in paragraphs corresponding to the lettered and numbered paragraphs
contained in this Article IV and shall apply to the specific representation or
warranty to which such lettered or numbered paragraphs of the Disclosure
Schedule applies and any other paragraph in this Article IV to which the
application of such disclosure is reasonably apparent on its face. Unless the
context otherwise requires, all references to the Seller, Seller’s conduct of
the Business, its financial condition, assets, liabilities and operation shall
include the Seller’s applicable Subsidiaries (other than Excluded Subsidiaries).

 

4.1               Organization, Qualification, and Power. The Seller is a
limited liability company duly formed and in good standing under the Laws of the
jurisdiction of its formation. The Seller is duly authorized to conduct business
and in good standing under the Laws of each jurisdiction where such
qualification is required, except where the failure to be so qualified would not
have a Material Adverse Effect on the Seller or Business. The Seller has the
limited liability company power and authority to carry on the Business and to
own and use the properties owned and used by it. Disclosure Schedule 4.1 lists
the managers and officers of the Seller. The Seller has delivered or made
available to counsel to the Buyer true and correct copies of the Organizational
Documents of Seller.

 

4.2               Evaluation and Authorization of the Transaction. The Seller
expressly confirms that it has negotiated, at arm’s length, the terms of this
Agreement. The Seller has such knowledge and experience in financial and
business matters as to be capable of evaluating the merits, risks and
suitability of the transactions contemplated by this Agreement and is entering
into this Agreement with a full understanding of all of the attendant terms,
conditions and risks and willingly assumes those terms, conditions and risks.
The Seller has had the opportunity to conduct its own due diligence prior to
executing this Agreement and has evaluated the merits and risks of the
transactions contemplated by this Agreement based exclusively on its own
independent review and consultations with such investment, legal, tax,
accounting and other advisers as it deemed necessary and has made its own
decisions concerning this Agreement and the transactions contemplated hereby.
The Seller has full limited liability company power and authority to execute and
deliver this Agreement, each of the Transaction Documents to which Seller is a
party and to perform its obligations hereunder and thereunder. This Agreement
and each Transaction Document to which Seller is a party constitutes the valid
and legally binding obligation of the Seller, enforceable in accordance with its
terms and conditions, except as limited by (i) applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or other Laws of
general application relating to or affecting the enforcement of creditors’

 12 

 

rights generally, or (ii) Laws relating to the availability of specific
performance, injunctive relief or other equitable remedies. Except as set forth
on Disclosure Schedule 4.2, the Seller does not need to give any notice to, make
any filing with, or obtain any authorization, consent, or approval of any
Governmental Authority in order to execute and deliver this Agreement and the
Transaction Documents or for the Seller to consummate the transactions described
in this Agreement or the Transaction Documents. The execution, delivery and
performance of this Agreement and the Transaction Documents and all other
agreements described herein have been duly authorized by the Seller.

 

4.3Intentionally Left Blank.

 

4.4               Non-contravention. Except as set forth in Disclosure Schedule
4.4, neither the execution and the delivery of this Agreement and the
Transaction Documents, nor the consummation of the transactions described herein
including without limitation the transfer of the Assets, will (a) violate in any
material respect any applicable Law, constitution, injunction, Order, ruling,
charge, or other restriction of any Governmental Authority to which the Seller
is subject or any provision of the Seller’s organizational documents, if
applicable, (b) in any material respect conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, license, instrument, or other arrangement
to which the Seller is a party or by which it is bound or to which any of its
assets is subject (or result in the imposition of any Lien upon any of its
assets), except where the violation, conflict, breach, default, acceleration,
termination, modification, cancellation, failure to give notice, or Lien would
not have a Material Adverse Effect, or (c) result in the creation or imposition
of any Lien upon the Assets that will not be discharged at Closing by Seller. To
the Knowledge of the Seller, the execution and delivery of this Agreement and
the Transaction Documents, and the performance of the Seller hereunder and
thereunder, will not materially reduce or delay receipt of the ongoing Medicare,
Medicaid, insurance carrier, managed care organization or other third-party
payments or reimbursements which the Seller is receiving as of the date hereof.

 

4.5               Brokers’ Fees. The Seller has no liability or obligation to
pay any fees or commissions to any broker, finder, or agent with respect to the
transactions described in this Agreement.

 

4.6               Title to Assets. The Seller is the sole and exclusive legal,
equitable and beneficial owner of all right, title and interest in, and have
good and marketable title to, all of the Assets free of all Liens, other than
Permitted Liens. The Assets are all of the assets, properties and rights the
Seller uses in connection with all of the business operations of Seller as
currently conducted (other than the Excluded Assets). To the Knowledge of the
Seller, all of the Assets have been maintained in accordance with normal
industry practice, and are in reasonably good operating condition and repair,
ordinary wear and tear excepted. During the past three (3) years, there has not
been any Material Adverse Effect on the operations of the Business due to the
condition of any of the Assets. The Seller will convey to the Buyer on the
Closing Date all of the Assets free and clear of any Lien other than Permitted
Liens.

 

4.7               Subsidiaries. The Seller does not have, and in the past twelve
(12) months has not had any Subsidiaries.

 

4.8               Financial Statements. Attached hereto as Disclosure Schedule
4.8 are the following financial statements (collectively the “Financial
Statements”): (a) the unaudited balance sheet of the Seller and its Subsidiaries
on a consolidated basis as of December 31, 2016 and December 31, 2017 and the
related statement of income and cash flows for the years then ended and the
related statement of income and cash flows for the twelve-month period then
ended, (b) the unaudited balance sheet of the Business (giving pro forma effect
to the elimination of the Excluded Assets and Excluded Liabilities) on a
consolidated basis as of December 31, 2018 (the “Most Recent Balance Sheet”) and
the related statement of income and cash flows for the seven-month period then
ended; and (c) net Accounts Receivable aging and the net accounts payable aging
of the Business, both as of December 31, 2018. The Financial Statements
(including the notes thereto) in all material respect present fairly the
financial condition, including the Assets and Liabilities, of the Business as of
such dates and the results of operations of the Business for such periods,
provided, however, that the Financial Statements are subject to normal year-end
adjustments (which will not be material individually or in the aggregate) and
lack footnotes and other presentation items.

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4.9               Events Subsequent to Most Recent Fiscal Year End. Since
December 31, 2018, there has not been any Material Adverse Change. Without
limiting the generality of the foregoing, except as set forth on Disclosure
Schedule 4.9 or in the Ordinary Course of Business, since that date:

 

(a)                The Seller has not sold, leased, transferred, or assigned any
assets used in the Business, tangible or intangible, outside the Ordinary Course
of Business;

 

(b)                Except for this Agreement and the Transaction Documents, the
Seller has not entered into any agreement, contract, lease, or license outside
the Ordinary Course of Business;

 

(c)                The Seller has not accelerated, terminated, made material
modifications to, or canceled any agreement, contract, lease, license or Permit
relating to the Business and to which the Seller is a party or by which it is
bound other than in accordance with their respective terms or in the Ordinary
Course of Business;

 

(d)                The Seller has not imposed any Lien upon any of the Assets,
tangible or intangible, other than in the Ordinary Course of Business;

 

(e)                The Seller has not made any material capital expenditures in
respect of the Business outside the Ordinary Course of Business;

 

(f)                 The Seller has not transferred, assigned, or granted any
license or sublicense of any rights under or with respect to any Intellectual
Property included in the Assets;

 

(g)                The Seller has not experienced any material damage,
destruction, or loss (whether or not covered by insurance) to the Assets;

 

(h)                The Seller has not made any loan to, or entered into any
other transaction with, any of its directors, managers, officers, contractors,
consultants or employees outside the Ordinary Course of Business;

 

(i)                 The Seller has not entered into any employment contract or
collective bargaining agreement, written or oral, or modified the terms of any
existing such contract or agreement other than in accordance with their
respective terms or consistent with past practice;

 

(j)                 The Seller has not granted any increase in excess of two
percent (2%) in the base compensation of any of the Transferring Employees;

 

(k)                The Seller has not made any other change in material
employment terms for any of the Transferring Employees outside the Ordinary
Course of Business;

 

(l)                 The Seller has not conducted its cash management customs and
practices (including, but not limited to, the timing of collection of
receivables and payment of payables and other current liabilities) and
maintained its books and records other than in the Ordinary Course of Business
consistent with past custom and practice;

 

(m)The Seller has not changed any accounting policy or tax elections or
practices; and

 

(n)The Seller has not committed to any of the foregoing.

 

4.10           Undisclosed Liabilities. Except as set forth on Disclosure
Schedule 4.10, to the Knowledge of the Seller, the Seller does not have any
material Liability (whether known or unknown, whether asserted or unasserted,
whether absolute or contingent, whether accrued or unaccrued, whether liquidated
or unliquidated, and whether due or to become due, including any Liability for
Taxes) of the nature that would require disclosure on a balance sheet prepared
in accordance with GAAP, including without limitation any Liability relating to
or arising from sexual harassment claims or non-compliance with applicable Law,
except for (a) Liabilities set forth on the face of the Most

 14 

 

Recent Balance Sheet (rather than in any notes thereto) and (b) Liabilities that
have arisen after the date of the Most Recent Balance Sheet in the Ordinary
Course of Business. Except as set forth on Disclosure Schedule 4.10, as of the
Closing, the Seller will not have and will not be subject to any Indebtedness.

 

4.11Compliance with Laws.

 

(a)                To the Seller’s Knowledge, the Seller is, at each Closing
Date, in compliance in all material respects with all Laws with respect to the
operation of the Business. Except as set forth on Disclosure Schedule 4.11, the
Seller has not received any written notice to the effect that, or otherwise been
advised that, it is not in any material respect not in compliance with Laws
applicable operation of the Business, including without limitation any written
notice to the effect that each is not in compliance in any material respect with
any Health Care Law or written notice to the effect that each is the subject of
any health care plan Audit or review; the Seller has not entered into any
settlement or agreement with any Governmental Authority, Governmental Authority
contractor or private payor with respect to any Audit, review or alleged
non-compliance with any applicable Health Care Law, and the Seller is not
presently subject to any settlement to pay/withhold payments for health care
items or services with a Governmental Authority, Governmental Authority
contractor, or third-party payor.

 

(b)                Except as set forth in Disclosure Schedule 4.11, neither the
Seller nor to the Knowledge of the Seller, its shareholders, partners, members,
owners, directors, officers, employees, contractors, agents, or any health care
provider with which the Seller maintains a Contract, (i) is an Ineligible
Person, (ii) has been assessed a civil monetary penalty under Section 1128A of
the Social Security Act or any regulations promulgated thereunder,

(iii) has been convicted of any criminal offense relating to the delivery of any
item or service under a federal health care program relating to the unlawful
manufacture, distribution, prescription, or dispensing of a prescription drug or
a controlled substance, or (iv) is a party to or subject to any investigation,
audit, review, action or proceeding concerning any of the matters described
above in clauses (i) through (iii). Notwithstanding anything contained in this
Agreement to the contrary, the Seller has advised the Buyer that, in the
Ordinary Course of Business, (i) commercial payors routinely audit and/or
challenge claims for payment, and (ii) Governmental Authorities routinely
perform unannounced and periodic inspections of licensed facilities, consistent
with standard industry practices; and accordingly, the Seller’s representations
and warranties contained in this Agreement regarding payment for health care
items and related audits and reviews are qualified to such extent.

 

(c)                To the Knowledge of the Seller, the Seller is in compliance
in all material respects with the following Laws, in each case to the extent
applicable to the Business: (i) all federal Laws relating to health care fraud
and abuse, including: the Anti-Kickback Law, 42 U.S.C. § 1320a-7b, 42 C.F.R. §
1001.952, the Civil Monetary Penalties Act, 42 U.S.C. § 1320a-7a, the federal
physician self-referral prohibition, 42 U.S.C. § 1395nn, 42 C.F.R. §

411.351 et seq., the False Claims Act, 31 U.S.C. § 3729 et seq.; (ii) any and
all state Laws relating to health care fraud and abuse; (iii) all Laws of the
Medicare and Medicaid programs applicable to the Business as presently
conducted, including the Medicare Part D program, Medicare Advantage program,
and any other federally funded health care program; (iv) state Laws relating to
Medicaid, Workers’ Compensation/SAIF or any other state health care or health
insurance programs; (v) federal or state Laws relating to billing or claims for
reimbursement submitted to any third-party payor; and (vi) any other federal or
state Laws relating to fraudulent, abusive or unlawful practices connected in
any way with the provision of health care items or services, or the billing for
or claims for reimbursement for such items or services provided to a beneficiary
of any state, federal or other governmental health care or health insurance
program or any private payor.

 

(d)                To the extent Seller is not in compliance with Regulatory
Advisories material to the Business, Seller has not received written notice from
any Government Authority, accrediting organization or third- party payor that
Seller’s noncompliance violates a Health Care Law.

 

(e)                The Seller has maintained all records in all material
respects as required by applicable federal and state agencies and private
entities with which the Seller has contracted including, without limitation, the
federal and state Medicare and Medicaid programs and other governmental agencies
and private entities in connection with its operation of the Business.

 15 

 

(f)                 Except as set forth on Disclosure Schedule 4.11, there is no
pending, outstanding, open, assessed, concluded or, to the Knowledge of the
Seller, credibly threatened in writing, Audit, review, investigation, or civil,
administrative or criminal proceeding relating to the Seller or its
participation in any Payment Program from which the Seller received more than
10% of its revenue during 2017 and 2018, including any audit or review by any
State Medicaid Agency, Medicaid Integrity Contractor, Recovery Audit
Contractors, Zone Program Integrity Contractor, Part D or other Medicare
contractor. The Seller is not subject to, nor has Seller been subjected to, any
pre-payment utilization review by any Governmental Authority, Governmental
Authority contractor, or third-party payor. No Payment Program has requested or,
to the Knowledge of the Seller, credibly threatened in writing any unresolved
recoupment, refund, or set-off from the Seller and to the Knowledge of the
Seller there is no basis for any such demand. Except as set forth on Disclosure
Schedule 4.11, other than in the Ordinary Course of Business, no Payment Program
has imposed an unresolved fine, penalty or other sanction on the Seller and no
past overpayment or audit assessments are outstanding or still being paid off.
None of the Seller or the Seller’s employees (while employed by the Seller) has
been excluded from participation in any Payment Program. To the Knowledge of the
Seller, none of the Seller or Seller’s employees or contractors has submitted to
any Payment Program any intentionally false or fraudulent claim for payment,
nor, to the Knowledge of Seller, has the Seller or any of the Seller’s employees
at any time knowingly violated in any material respect any condition for
participation, or any rule, regulation, policy or standard of, any Payment
Program. To the Knowledge of the Seller, all billing practices of the Seller
with respect to all Payment Programs have been in compliance in all material
respects with all applicable Laws, and all regulations and policies of all such
Payment Programs. To the Knowledge of the Seller, neither the Seller nor any of
its employees has billed for or received any payment or reimbursement materially
in excess of amounts permitted by Law or the rules and regulations of Payment
Programs or contracts therewith.

 

(g)                All agreements between the Seller and any Payment Program
from which the Seller received more than $10,000 in 2018 were entered into in
the Ordinary Course of Business and Disclosure Schedule 4.11(g) sets forth and
true and correct list of all such agreements between the Seller and Payment
Programs. The Seller has provided access to the Buyer true and correct copies of
all such agreements in its possession or control. Except as set forth on
Disclosure Schedule 4.11(g), the Seller is in compliance in all material
respects with each Payment Program’s agreements, and to the Knowledge of the
Seller the Seller has properly charged and billed in all material respects in
accordance with the terms of those agreements. Except as set forth on Disclosure
Schedule 4.11(g), the Seller has not received written notice of cancellation of
or intent to cancel, or written notice to make a material modification or intent
to make a material modification of any of Seller’s current Payment Program
agreements during the twelve (12) months prior to the Execution Date. Disclosure
Schedule 4.11(g) contains a “Significant Payment Program Schedule” showing those
entities that were the ten (10) largest sources of revenue to the Business
during the twelve (12) month period ended December 31, 2018 (each, a
“Significant Payment Program”). Except as set forth in the Significant Payment
Program Schedule, during the twelve (12) months prior to the Closing Date, no
Significant Payment Program has terminated or adversely altered in any material
respect its business relationship with the Seller or, except in connection with
negotiations of new or extended contracts with Significant Payment Programs in
the Ordinary Course of the Business, given written or to the Knowledge of the
Seller, oral notice to any entity or Person involved in the Business of its
intention to terminate or materially alter its business relationship with the
Seller.

 

(h)                To the Knowledge of the Seller, in light of its size and
scope of the Business, the Seller has implemented reasonable policies,
procedures, and training programs, including a corporate compliance program,
designed for its agents and employees to comply with all applicable Laws,
including laws, regulations, directives and opinions of Governmental
Authorities.

 

(i)                 The Seller has filed all regulatory reports, schedules,
statements, documents, filings, submissions, forms, registrations and other
documents, together with any amendments required to be made with respect
thereto, that it was required to file with any Governmental Authority, including
state boards of medicine, pharmacy, health and insurance regulatory authorities,
and any applicable federal regulatory authorities, and has timely paid all fees
and assessments due and payable in connection therewith, the failure of which
would have a Material Adverse Effect on the Business.

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(j)                 The Seller is conducting its business and operations in
material compliance with the Federal Food, Drug, and Cosmetic Act (the “FD&C
Act”), 21 U.S.C. §301 et. seq., and applicable regulations promulgated
thereunder by the United States Food and Drug Administration (“FDA”)
(collectively, “FDA Law and Regulation”). Each Medical Device, as that term is
defined in 21 U.S.C. § 321(h) of the FD&C Act, that is manufactured, tested,
distributed and/or marketed by the Seller, is being manufactured, tested,
distributed and/or marketed by the Seller in material compliance with applicable
FDA Law and Regulation, including those relating to: good manufacturing
practices; regulatory approvals or clearances to market Medical Devices in the
United States; investigational studies; labeling; record keeping; and filing of
reports to FDA. The Seller has not received any notice or communication from the
FDA alleging material noncompliance with any applicable FDA Law and Regulation.
The Seller is aware of no pending or completed FDA proceedings seeking the
recall, withdrawal, suspension or seizure of any Medical Device against the
Seller. To the Knowledge of the Seller, the Seller is not the subject of any
current enforcement proceedings by the FDA.

 

(k)                To the Knowledge of the Seller, no officer, employee or agent
of the Seller has: made any untrue statement of material fact or fraudulent
statement to the FDA or any other Governmental Authority; failed to disclose a
material fact required to be disclosed to the FDA or any other Governmental
Authority; or committed an act, made a statement, or failed to make a statement
that would reasonably be expected to provide the basis for the FDA or any other
Governmental Authority to invoke its policy respecting “Fraud, Untrue Statements
of Material Facts, Bribery, and Illegal Gratuities,” as set forth in 56 Fed.
Reg. 46191 (September 10, 1991). To the Knowledge of the Seller, no officer,
employee or agent of the Seller has been convicted of any crime or engaged in
any conduct for which debarment is mandated or permitted by 21 U.S.C. § 335a.

 

(l)                 The Seller has complied in all material respects with all
applicable requirements of the Occupational Safety and Health Act and all
applicable state equivalents, and with all applicable regulations promulgated
under any such legislation, and with all orders, judgments, and decrees of any
tribunal under such legislation, that apply to the Business and, except as set
forth on Disclosure Schedule 4.11(i), the Seller has not received any written
notice alleging any violation thereof.

 

(m)              Notwithstanding any provision to the contrary, Buyer
recognizes, acknowledges, and agrees that no matter that is disclosed on
Schedule 4.11 shall serve as a basis for any claim that Seller has breached any
warranty or representation under this Agreement.

 

4.12Tax Matters.

 

(a)                All Tax Returns required to be filed by or with respect to
the Seller or the Business have been filed or an extension to file has been
timely filed. All such Tax Returns were true and correct in all material
respects. All Taxes due and owing by the Seller (whether or not shown on any Tax
Return) have been paid or timely contested. There are no Liens for Taxes (other
than Taxes not yet due and payable) upon any of the assets of the Business.

 

(b)                There is no material dispute or claim currently pending
concerning any Tax liability of the Seller either (i) claimed or raised by any
Governmental Authority in writing or (ii) as to which the Seller has Knowledge
based upon personal contact with any agent of such Governmental Authority.

 

(c)The Seller is not a party to or bound by any Tax allocation or sharing
agreement. The Seller

(i) has not been a member of an Affiliated Group filing a consolidated federal
Income Tax Return (other than a group the common parent of which was Target) and
(ii) does not have any liability for the Taxes of any Person (other than Seller)
under Reg. §1.1502-6 (or any similar provision of state, local, or foreign Law),
as a transferee or successor.

 

(d)                All Taxes required to be withheld with respect to any
payments made by the Seller have been withheld and paid over to the appropriate
Governmental Authority or are held in separate accounts for such purpose.

 

(e)The Seller is not a foreign person within the meaning of section 1445(f)(3)
of the Code.

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(f)                 None of the Assets: (i) is property required to be treated
as owned by another Person pursuant to former Section 168(f)(8) of the Code;
(ii) is “tax-exempt use property” within the meaning of Section 168(h) of the
Code; or (iii) directly or indirectly secures any debt the interest on which is
excludable from gross income under Section 103(a) of the Code.

 

4.13           Intellectual Property. Disclosure Schedule 4.13 contains a true
and correct list of all of the Intellectual Property, including, but not limited
to, all trade and corporate names and registered and unregistered product names
and trademarks used by the Seller in connection with the Business or the
products used during the past three (3) years, all licenses and other rights
granted by the Seller to any third party with respect to such Intellectual
Property and all such licenses and other rights granted by any third party to
the Seller except for licenses covering “off the shelf” or downloadable software
that is generally available to the public and has not been materially modified
or customized. Except as set forth on Disclosure Schedule 4.13, (a) the Seller
owns and possesses all right, title and interest in and to, or has a valid
license to, all of the Intellectual Property necessary for the operation of the
Business as presently conducted and none of such Intellectual Property has been
abandoned; (b) no claim by any third party contesting the validity,
enforceability, use or ownership of any such Intellectual Property has been made
against the Seller, is currently outstanding or, to the Knowledge of the Seller,
is credibly threatened in writing, and to the Knowledge of the Seller, there is
no reasonable basis for any such claim; (c) none of the Seller or any registered
agent thereof has received any written notices of an allegation of any
infringement or misappropriation by, or other conflict with, any third party
with respect to such Intellectual Property, nor has any such Person received any
claims of infringement or misappropriation of or other conflict with any
Intellectual Property of any third party; (d) to the Knowledge of the Seller,
the Seller has not infringed, misappropriated or otherwise violated in any
material respect any Intellectual Property of any third party, nor to the
Knowledge of the Seller will any infringement, misappropriation or other
conflict with respect to the Intellectual Property occur as a result of the
transactions described herein; and (e) to the Knowledge of the Seller, no other
Person is infringing, misappropriating or otherwise violating, or has infringed,
misappropriated or otherwise violated, such Intellectual Property.

 

4.14           Leases of Personal Property. For the purposes of this Agreement,
“Personal Property Leases” means any lease, conditional or installment sale
contract, Lien or similar arrangement to which any tangible personal property
used by the Seller in connection with the operation of the Business is subject.
Except as set forth on Disclosure Schedule 4.14, none of the tangible personal
property used by the Seller in connection with the operation of the Business is
subject to a Personal Property Lease. The Seller has delivered or made available
to the Buyer a true and correct copy of each Personal Property Lease listed on
Disclosure Schedule 4.14. All of such Personal Property Leases are valid,
binding and enforceable against the Seller in all material respects in
accordance with their respective terms and are in full force and effect in
accordance with their terms, except as limited by (i) applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or other Laws of
general application relating to or affecting the enforcement of creditors’
rights generally, or (ii) Laws relating to the availability of specific
performance, injunctive relief or other equitable remedies. The Seller is not in
material default under any of such Personal Property Leases and there has not
been asserted in writing, either by or against the Seller under any of such
Personal Property Leases, any written notice of default, set-off or claim of
default. To the Knowledge of the Seller, the parties to such Personal Property
Leases other than the Seller are not in default of their respective obligations
under any of such Personal Property Leases. To the Knowledge of the Seller,
there has not occurred any event which, with the passage of time or giving of
notice (or both), would constitute such a default or breach under any of such
Personal Property Leases by any party thereto. Each Personal Property Lease is
separately designated on Disclosure Schedule 4.14, as either a Personal Property
Lease that the Seller has agreed to assign and that the Buyer has agreed to
assume (each, an “Assigned Personal Property Lease”) or as a Personal Property
Lease that shall be paid off by the Seller prior to Closing at its own expense
or paid off at Closing with a portion of the Purchase Price (each, a “Terminated
Personal Property Lease”).

 

4.15           Real Property. The Seller does not own any Real Property.
Disclosure Schedule 4.15 sets forth a true and correct description of all Leased
Real Property used in connection with the Business (the “Real Property”). The
Seller has the right to use the Real Property which it leases from third parties
to conduct the Business as currently conducted. The possession of the Real
Property by the Seller has not been disturbed and the Seller has not received in
writing any claim adverse to the Seller’s rights in such Real Property. To the
Knowledge of the Seller, all

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improvements, fixtures and all structures on the Real Property installed by the
Seller and the current uses of the Real Property conform in all material
respects to all applicable federal, state and local laws, building, health and
safety and other ordinances, laws, rules and regulations. To the Knowledge of
the Seller, applicable zoning laws permit the presently existing improvements
and the conduct and continuation of the Business as being conducted on the Real
Property.

 

4.16           Tangible Assets. To the Knowledge of the Seller, the buildings,
machinery, equipment, and other tangible assets owned or leased by the Seller
and to the extent included in the Assets, considered as a whole and not on an
asset by asset basis, are free from material defects (patent and latent), have
been maintained in accordance with normal industry practice, and are in good
operating condition and repair (subject to normal wear and tear).

 

4.17           Contracts. Disclosure Schedule 4.17 lists each Contract that the
Seller has agreed to assign and that the Buyer has agreed to assume in
connection with the transactions contemplated herein (each, an “Assigned
Contract”) and provides with respect to each Assigned Contract (i) the names of
the contracting parties, (ii) the effective date, and (iii) the name of the
Contract. The Seller has made available to the Buyer a true and correct copy of
each written agreement listed in Disclosure Schedule 4.17 (as amended to date).
With respect to each Assigned Contract: (A) the agreement is legal, valid,
binding, enforceable, against the Seller and in full force and effect in
accordance with their terms in all material respects; (B) the Seller is not, and
to the Knowledge of the Seller, no other Party is, in material breach or
default, and to the Knowledge of the Seller no event has occurred that with
notice or lapse of time would constitute a material breach or default, or permit
termination, modification, or acceleration, under the agreement; and, (C) to the
Knowledge of the Seller, no other Party has repudiated any material provision of
the agreement. Each of the Assigned Contracts listed in Disclosure Schedule 4.17
may be assigned to Buyer hereunder without any change or modification after the
consummation of the transactions described in this Agreement, without obtaining
any consent, approval, novation or waiver of any third party, other than the
consents, approvals, novations and waivers set forth on Disclosure Schedule
4.17.

 

4.18           Accounts Receivable. All Accounts Receivable of the Seller
included as part of Working Capital are reflected properly on the Seller’s books
and records, are valid receivables for services or items rendered, subject to
the reserve, if any, for bad debts set forth on the face of the Most Recent
Balance Sheet (rather than in any notes thereto) as adjusted for operations and
transactions through the Closing Date in accordance with the past custom and
practice of the Business. As of the date of this Agreement, except as set forth
on Disclosure Schedule 4.18, the Seller has not received any written notice of
any unresolved demand for recoupment, overpayment, set-off, penalty, or fine
arising in connection with Audits or reviews conducted by Medicare, Medicaid,
Workers’ Compensation/SAIF, government contractor or any other Payment Program
and, the Seller does not have any Knowledge that there is any basis for any such
recoupment, overpayment, set-off, penalty or fine. Since December 31, 2018, the
Seller has not changed any principle or practice with respect to the recordation
of Accounts Receivable or the calculation of reserves therefor, or any material
collection, discount or write-off policy or procedure, except as may have been
required by changes in GAAP.

 

4.19           Powers of Attorney. There are no outstanding powers of attorney
executed on behalf of the Seller relating to the conduct of the Business or the
ownership of the Assets.

 

4.20           Insurance. Disclosure Schedule 4.20 sets forth the following
information with respect to each material insurance policy (including policies
providing property, casualty, liability, and workers’ compensation coverage and
bond and surety arrangements), to the extent being assigned to the Buyer at the
Closing, with respect to which either the Seller is a party, a named insured, or
otherwise the beneficiary of coverage:

 

(a)the name, address, and telephone number of the agent;

 

(b)the name of the insurer, the name of the policyholder, and the name of each
covered insured;

 

(c)the policy number and the period of coverage;

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(d)                the scope (including an indication of whether the coverage is
on a “claims made”, occurrence, or other basis) and amount (including a
description of how deductibles and ceilings are calculated and operate) of
coverage; and

 

(e)a description of any retroactive premium adjustments or other material
loss-sharing

arrangements.

 

With respect to each such insurance policy: (A) to the Knowledge of the Seller
the policy is legal, valid, binding enforceable, and in full force and effect in
accordance with their terms in all material respects; (B) neither the Seller
nor, to the Knowledge of the Seller, any other party to the policy is in
material breach or default (including with respect to the payment of premiums or
the giving of notices), and to the Knowledge of the Seller no event has occurred
that, with notice or the lapse of time, would constitute such a material breach
or default, or permit termination, modification or acceleration, under the
policy; and (C) to the Knowledge of the Seller no party to the policy has
repudiated any material provision thereof.

 

4.21           Legal Proceedings. Except as disclosed in Schedule 4.21, there is
no Action pending or, to the Knowledge of the Seller credibly threatened in
writing, against the Seller or any of Seller’s officers or directors (in their
capacities as such), and the Seller has not received any written claim,
complaint, incident, report, audit, review, threat or written notice of any such
Action. Disclosure Schedule 4.21 also sets forth any Actions relating to the
Business or the Assets against the Seller and its officers or directors (in
their capacities as such) that have been concluded or settled since December 31,
2018. The Seller has heretofore made available to the Buyer a list setting forth
generally a description of all pending settlements regarding such actual or
credibly threatened in writing Actions binding on the Seller and relating to the
Business or the Assets. There are no outstanding Orders against, involving or
affecting the Business or the Assets.

 

4.22           Licenses and Permits. Disclosure Schedule 4.22 contains a true
and correct list of all Permits that have been issued, granted or otherwise made
available to the Seller and necessary in connection with the Business (the
“Business Licenses”), other than Permits the failure to have obtained do not
have a Material Adverse Effect. Each Business License is valid and in full force
and effect in accordance with its terms, no Business License is subject to any
Lien, limitation, restriction, probation or other qualification other than under
applicable Law or the terms of the Business License, and the Seller has not
received any written notice of default under any Business License or, to the
Knowledge of the Seller, any basis for the assertion of any default thereunder.
Disclosure Schedule 4.22 specifies the holder of each Business License. The
Seller has not received written notice of any Action, and there is no Action
pending or, to the Knowledge of the Seller, credibly threatened in writing that
would reasonably be expected to result in the termination, revocation,
limitation, suspension, restriction or impairment of any Business License the
effect of which would have a Material Adverse Effect or the imposition of any
material fine, penalty or other sanctions for violation of any legal or
regulatory requirements relating to any Business License nor, to the Knowledge
of the Seller, is there any basis therefor. To the Knowledge of the Seller, the
Seller has, and has had at all relevant times, all Permits that are or were
necessary in order to enable the Seller to own, operate and conduct the
Business. None of the Business Licenses will be adversely affected by the
consummation of the transactions described herein, but the Seller makes no
representation or warranty regarding the transferability of any Business
License.

 

4.23           HIPAA Compliance.

 

(a)                To the Knowledge of the Seller, the Seller has at all times
been in compliance in all material respects with all applicable Laws relating to
privacy, security, data protection, and the collection and use of health
information and personal data gathered, accessed, collected, or used in the
course of the operations of the Seller, including HITECH and HIPAA; and all
applicable state and federal Laws regarding the privacy and security of health
information and personal data. To the Knowledge of the Seller, the Seller has
the necessary agreements with all of the Seller’s “business associates” as such
term is defined by and as such agreements are required by HIPAA. No Action has
been asserted in writing or, to the Knowledge of the Seller, has been credibly
threatened in writing or commenced against the Seller alleging non-compliance in
any material respect with HIPAA, a data security violation, or a violation of
any Person’s privacy, personal information, or data rights. To the Knowledge of
the Seller, the Seller

 20 

 

has at all times complied in all material respects with all rules, policies, and
procedures established by the Seller from time to time and as applicable with
respect to privacy, security, data protection, or the collection and use of
health information or personal data gathered or accessed in the course of the
operations of the Seller. No Actions have been asserted in writing or, to the
Knowledge of the Seller, credibly threatened in writing against the Seller by
any Person alleging a violation of such Person’s privacy, personal, or
confidentiality rights under any such rules, policies, or procedures. The Seller
is in compliance in all material respects with the terms of all business
associate and business associate subcontractor agreements to which it is a
party.

 

(b)                With respect to all health information and personal data
described in Section (a), to the Knowledge of the Seller, the Seller has taken
all material steps reasonably intended (including implementing and monitoring
compliance with adequate measures with respect to technical and physical
security) to protect such information against loss and against unauthorized
access, use, modification, disclosure, or other misuse. To the Knowledge of the
Seller, there has been no unauthorized access to or other misuse of such
information which would reasonably be expected to adversely impact the Business.
To the Knowledge of the Seller, the Seller maintains systems, policies and
procedures reasonably intended to respond to complaints received alleging
violation of applicable privacy or security standards and to identify and report
all Breaches of Unsecured Protected Health Information as defined by HIPAA, all
material respects in accordance with Seller’s legal and contractual obligations.
To the Knowledge of the Seller, all breaches of Unsecured Protected Health
Information have been documented and reported to affected individuals and to
federal and state authorities in compliance in all material respects with
applicable Law.

 

4.24Employees.

 

(a)                The Seller is not a party to or bound by any collective
bargaining agreement, nor has the Seller experienced any strike or labor
grievance, claim of unfair labor practices, or other collective bargaining
dispute within the three (3) years preceding the Closing Date. To the Knowledge
of the Seller, the Seller has not committed any material unfair labor practice.
To the Knowledge of the Seller, no organizational effort is presently being made
by any Transferring Employees or any union or labor organization to represent
all or any portion of the Transferring Employees, and, the Seller does not have
any Knowledge of any such organizational effort being credibly threatened in
writing.

 

(b)                With respect to this transaction, any notice required under
any Law or collective bargaining agreement has been given, and all bargaining
obligations with any employee representative have been, or prior to the Closing
Date will be, satisfied.

 

(c)                Within the past three (3) years, the Seller has not
implemented any “plant closing” or “mass layoff” (as those terms are defined in
WARN or a similar foreign, state or local Law) that would implicate WARN or any
similar foreign, state, or local Law and no such action will be implemented
without advance notification to the Buyer.

 

(d)                To the Knowledge of the Seller, the Seller has complied in
all material respects with all applicable Laws relating to the employment and
employment practices relating to the Transferring Employees, including
provisions thereof relating to income and payroll Taxes, wages, work hours,
overtime, minimum wage, worker and employee classification, occupational safety
and health, equal opportunity, discrimination, harassment, immigration,
occupational safety and health and collective bargaining.

 

(e)                Except as set forth on Disclosure Schedule 4.24, there are no
administrative charges or complaints pending or, to the Knowledge of the Seller,
credibly threatened in writing by any current or former employee or independent
contractor of the Seller in connection with the Business or the Assets
concerning employment and employment practices before any federal or state
court, the U.S. Equal Employment Opportunity Commission, the U.S. Department of
Labor, the Internal Revenue Service, any similar state or local agency or any
arbitral authority.

 21 

 

(f)                 The Seller has maintained all employee files relating to the
Transferring Employees in a true and correct manner, and to the Knowledge of the
Seller such files contain all materials that the Seller is required by Law to
maintain. To the Knowledge of the Seller, the Seller has obtained and retained
I-9 forms for all Transferring Employees. To the Knowledge of the Seller, all of
the Transferring Employees are lawfully authorized to work in the United States.

 

(g)                Set forth on Schedule 2.4 is a list of the names of the
employees and consultants of the Business as of the date hereof, together with
the title or job classification of each such person and the total compensation
(with wages and bonuses, if any, separately detailed) paid in 2018 (if
applicable), and the current rate of pay for each such person on the date of
this Agreement. Except as set forth on Schedule 2.4, the employment or services
of all of the Transferring Employees listed on Schedule 2.4 are employed or
provide services “at will” and, except as set forth on Schedule 2.4, none of the
Transferring Employees has an employment agreement or understanding, whether
oral or written, with the Seller which is not terminable on notice by the Seller
without cost or other liability to the Seller other than costs or restrictions
imposed by applicable Law. Except as set forth on Schedule 2.4, no Transferring
Employee listed thereon has received any bonus or increase in compensation in
the past twelve (12) months and, other than as set forth on Schedule 2.4, there
has been no “general increase” in the compensation or rate of compensation
payable to any Transferring Employees of the Seller in the past twelve (12)
months. In the past twelve (12) months there has been no promise to any
Transferring Employee of the Seller orally or in writing of any bonus or
increase in compensation, except for increases in the Ordinary Course of
Business consistent with the past compensation practices of the Seller and
obligations incurred under existing Employee Benefit Plans. As of the Closing,
the Seller will not have any accrued but unpaid bonuses to any Transferring
Employees that will not be paid or provided for by the Seller in connection with
the Closing.

 

(h)                In the 12-month period immediately preceding the Closing
Date, to the Knowledge of the Seller, the Seller has had reasonably adequate
levels of employee staffing to conduct the Business as currently conducted in
accordance with the Seller’s historical staffing patterns and practices.

 

4.25           Employee Benefits.

 

(a)                Disclosure Schedule 4.25 lists each and every Employee
Benefit Plan currently maintained and offered by the Seller that is being
assigned to the Buyer at the Closing. The Seller has delivered or made available
to the Buyer true and correct copies (or in the case of an unwritten Employee
Benefit Plan, a written description) of all Employee Benefit Plans currently
offered and maintained by the Seller, along with, to the extent applicable to
each such Employee Benefit Plan: (i) the most recent summary plan description
and all summaries of material modifications related to it; (ii) all contracts
and agreements relating to the administration or funding of each such Employee
Benefit Plan, including without limitation, all trust agreements, third party
administrator agreements, service provider agreements and insurance contracts;
(iii) COBRA forms and related notices used by the Seller; (iv) for the prior
three plan years, Form 5500; (v) the most recent determination or opinion
letter, if any, issued by the Internal Revenue Service; (vi) the most recent
nondiscrimination tests performed under the Code (including 401(k) and 401(m)
tests), if any; and (vii) for the three years prior to the Closing Date, all
written correspondence to from any Governmental Authority (other than routine
correspondence in the Ordinary Course of Business).

 

(b)                Each such Employee Benefit Plan that is being assigned to the
Buyer at the Closing (and each related trust, insurance contract, or fund) to
the Knowledge of the Seller has been maintained, funded and administered in all
material respects in accordance with the terms of such Employee Benefit Plan and
complies in form and in operation in all material respects with the applicable
requirements of ERISA, the Code, and other applicable Laws.

 

(c)                To the Knowledge of the Seller, all required reports and
descriptions (including Form 5500 annual reports, summary annual reports, and
summary plan descriptions) have been timely filed and/or distributed in
accordance in all material respects in compliance with the applicable
requirements of ERISA and the Code with respect to each such Employee Benefit
Plan currently offered and maintained by the Seller. To the Knowledge of

 22 

 

the Seller, the requirements of COBRA have been met in all material respects
with respect to each such Employee Benefit Plan.

 

(d)                To the Knowledge of the Seller, all contributions (including
all employer contributions and employee salary reduction contributions) that are
due have been made within the time periods prescribed by ERISA and the Code to
each such Employee Benefit Plan that is an Employee Pension Benefit Plan and
that is being assigned to the Buyer and all contributions for any period ending
on or before the Closing Date that are not yet due have been made to each such
Employee Pension Benefit Plan or accrued in accordance with the past custom and
practice of the Business. All premiums or other payments for all periods ending
on or before the Closing Date have been paid with respect to each such Employee
Benefit Plan that is an Employee Welfare Benefit Plan and that is being assigned
to the Buyer.

 

(e)                To the Knowledge of the Seller, each such Employee Benefit
Plan that is being assigned to the Buyer and that is intended to meet the
requirements of a “qualified plan” under Code §401(a) has received a
determination from the Internal Revenue Service that such Employee Benefit Plan
is so qualified, and no facts or circumstances exist that would adversely affect
the qualified status of any such Employee Benefit Plan.

 

(f)                 To the Knowledge of the Seller, there have been no
Prohibited Transactions with respect to any Employee Benefit Plan currently
maintained or offered by the Seller or any ERISA Affiliate under Section 4975 of
the Code or Section 502(i) of ERISA. To the Knowledge of the Seller, no
Fiduciary has any liability for material breach of fiduciary duty or any other
material failure to act or comply in connection with the administration or
investment of the assets of any such Employee Benefit Plan. No Action with
respect to the administration or the investment of the assets of any such
Employee Benefit Plan (other than routine claims for benefits) is pending or, to
the Knowledge of the Seller, credibly threatened in writing.

 

(g)                Neither the Seller nor any ERISA Affiliate has ever
maintained, established, sponsored, participated in or contributed to, or is
obligated to contribute to, or otherwise incurred any Liabilities under, any (i)
“multiemployer plan” within the meaning of Section 3(37) of ERISA, (ii) an
Employee Benefit Plan that is subject to Section 302 of ERISA, Title IV of ERISA
or Section 412 of the Code, (iii) “multiple employer plan” within the meaning of
Section 413(c) of the Code, (iv) “multiple employer welfare arrangement” within
the meaning of Section 3(40) of ERISA, or (v) Employee Benefit Plan that
provides post-employment or retiree life insurance, health benefits or other
welfare benefits to any person after such person’s termination of service with
the Seller, except as may be required by applicable Law.

 

(h)                The Seller does not sponsor, maintain or contribute to, or
have any Liabilities under, any Employee Benefit Plans outside of the United
States.

 

(i)                 To the Knowledge of the Seller, the Seller is not currently
liable for any payment to any trust or other fund or to any Governmental
Authority with respect to unemployment compensation benefits, social security,
disability benefits, workers’ compensation or other benefits or obligations for
current or former employees (other than routine payments to be made in the
normal course of business, consistent with the Seller’s Ordinary Course of
Business).

 

(j)                 Neither the execution and delivery of this Agreement nor the
consummation of the transactions described in this Agreement will: (i) entitle
any Transferring Employee to severance pay or any other payment (including
forgiven debt) from the Seller, the Buyer or any Employee Benefit Plan currently
offered or maintained by the Seller; (ii) result in a benefit payable to any
person that would constitute an “excess parachute payment” (as defined in
Section 280G(b)(1) of the Code); (iii) result in any benefit or right becoming
established or increased, or accelerate the time of payment or vesting of any
benefit, under any such Employee Benefit Plan, including without limitation any
gross up payment with respect to liability for excise taxes under Sections 409A
or 4999 of the Code; or (iv) require the Seller or the Buyer to transfer or set
aside any assets to fund or otherwise provide any benefits for any Transferring
Employee.

 23 

 

4.26           Guaranties. The Seller is not a guarantor or otherwise is
responsible for any liability or obligation (including indebtedness) of any
other Person, in each case to the extent that such liability would have Material
Adverse Effect on the Business or the Assets.

 

4.27Environmental, Health, and Safety Matters.

 

(a)                Each of the Seller and its predecessors and Subsidiaries has
complied and are in compliance, in each case in all material respects, with all
Environmental, Health, and Safety Requirements applicable to the Business.

 

(b)                Without limiting the generality of the foregoing, the Seller
has obtained, has complied, and is in compliance with, in each case in all
material respects, all material Permits, licenses and other authorizations that
are required pursuant to Environmental, Health, and Safety Requirements for the
occupation of the facilities included in the Assets and the operation of the
Business; and a list of all such material Permits, licenses and other
authorizations is set forth on Disclosure Schedule 4.27.

 

(c)                The Seller has not received any written notice, report or
other information regarding any actual or alleged material violation of
Environmental, Health, and Safety Requirements, or any material liabilities or
potential material liabilities (whether accrued, absolute, contingent,
unliquidated or otherwise), including any material investigatory, remedial or
corrective obligations, relating to any of the facilities included in the Assets
arising under Environmental, Health, and Safety Requirements.

 

(d)                Except as set forth on Disclosure Schedule 4.27, none of the
following exists at any property or facility operated by the Seller that is
included in the Assets: (1) underground storage tanks, (2) asbestos-containing
material in any friable and damaged form or condition, (3) materials or
equipment containing polychlorinated biphenyls, or (4) landfills, surface
impoundments, or disposal areas, in case other than in material compliance with
applicable Law.

 

(e)                In connection with its conduct of the Business, none of the
Seller, nor, to the Knowledge of the Seller, any of its predecessors has
treated, stored, disposed of, arranged for or permitted the disposal of,
transported, handled, manufactured, distributed, or released any substance,
including without limitation any hazardous substance, or owned or operated any
property or facility (and no such property or facility is contaminated by any
such substance) other than in material compliance with applicable Laws,
including any material liability for fines, penalties, response costs,
corrective action costs, personal injury, property damage, natural resources
damages or attorneys’ fees, pursuant to the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (“CERCLA”) or the
Solid Waste Disposal Act, as amended or any other Environmental, Health, and
Safety Requirements.

 

(f)                 To the Knowledge of the Seller, neither this Agreement nor
the consummation of the transactions that are the subject of this Agreement will
result in any material obligations for site investigation or cleanup, or
notification to or consent of government agencies or third parties, pursuant to
any of the so-called “transaction-triggered” or “responsible property transfer”
Environmental, Health, and Safety Requirements.

 

(g)                None of the Seller nor, to the Knowledge of the Seller, its
predecessors has designed, manufactured, sold, marketed, installed, or
distributed products or other items containing asbestos at any facility included
in the Assets, and none of such entities is or will become subject to any
Asbestos Liabilities, in case other than in material compliance with applicable
Law.

 

(h)                The Seller has furnished or made available to the Buyer all
environmental audits, reports and other material environmental documents in the
possession or under the reasonable control of Seller that relate to any facility
included in the Assets.

 

4.28           Business Continuity. The Seller has not experienced bugs,
failures, breakdowns, or continued substandard performance in the past twelve
(12) months that has caused any substantial and material disruption or

 24 

 

interruption in or to the use of any of the computer software, computer hardware
(whether general or special purpose), telecommunications capabilities (including
all voice, data and video networks) and other similar or related items of
automated, computerized, and/or software systems and any other networks or
systems and related services that are included in the Assets (collectively, the
“Systems”). The Seller has not received written notice of failure to have
secured, and to the Knowledge of the Seller, the Seller has obtained and
possesses valid licenses (including a sufficient number of licenses) to use all
of the software programs presently on the computers and other software-enabled
electronic devices that it owns or leases or that it has otherwise provided to
any of the Transferring Employees for their use in connection with the Business,
and the Seller is using the most recent versions of such software programs that
are reasonably suitable for operation of the Business.

 

4.29           Certain Business Relationships. None of the Seller and its
members, as the case may be, has been involved in any material business
arrangement or relationship with the Seller within the past 12 months other than
as reflected in the Financial Statements, and the Assets do not include any
material asset, tangible or intangible, that is used in the business of any
other such party that has had a material business arrangement or relationship
with the Seller within the past 12 months.

 

4.30           Solvency and Value of Transfer. There is no bankruptcy or
insolvency proceeding of any character including without limitation, bankruptcy,
receivership, reorganization, dissolution or arrangement with creditors
voluntary or involuntary, by or, to the Knowledge of the Seller, against the
Seller, and the Seller has not taken any action to institute any such
proceedings. The Seller is not insolvent under any bankruptcy, receivership, or
insolvency law. The Seller’s sale of the Assets has not been undertaken with the
intention to hinder, delay or defraud the Seller’s current or future creditors.

 

EXCEPT AS SPECIFICALLY SET FORTH IN THIS ARTICLE IV OR IN ANY CERTIFICATES OR
OTHER DOCUMENTS DELIVERED AT THE CLOSING, THE BUYER ACKNOWLEDGES AND AGREES THAT
THE CONTEMPLATED TRANSACTIONS SHALL BE WITHOUT REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED.

WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, EXCEPT AS SO SPECIFICALLY SET
FORTH, THE SELLER HAS NOT MADE, AND THE SELLER SHALL NOT BE DEEMED TO HAVE MADE,
ANY REPRESENTATION OR WARRANTY IN ANY OTHER VERBAL OR WRITTEN COMMUNICATION OR
WRITTEN DOCUMENT RELATING TO THE ASSETS OR THE BUSINESS, INCLUDING BUT NOT
LIMITED TO, ANY OFFERING MEMORANDUM, INFORMATION

MEMORANDUM OR SIMILAR DOCUMENT, WHETHER PREPARED OR TRANSMITTED BY THE SELLER OR
ANY

REPRESENTATIVE OF THE SELLER (SUCH OTHER VERBAL OR WRITTEN COMMUNICATIONS OR
WRITTEN DOCUMENTS ARE REFERRED TO COLLECTIVELY AS THE “COMMUNICATIONS”).

NO COST ESTIMATE, PROJECTIONS OR OTHER PREDICTIONS, DATA OR OTHER STATEMENT
CONTAINED IN ANY COMMUNICATIONS SHALL BE DEEMED TO BE A REPRESENTATION OR
WARRANTY HEREUNDER OR OTHERWISE.

NO PERSON HAS BEEN AUTHORIZED BY THE SELLER TO MAKE ANY REPRESENTATION OR
WARRANTY (OTHER THAN THOSE CONTAINED IN THIS SECTION) RELATING TO THE SELLER,
THE ASSETS OR THE BUSINESS, OR OTHERWISE IN CONNECTION WITH THE CONTEMPLATED
TRANSACTIONS HEREIN, AND, IF MADE, SUCH REPRESENTATION OR WARRANTY MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE SELLER.

IN PARTICULAR, AND WITHOUT LIMITING IN ANY WAY THE GENERALITY OF THE FOREGOING,
BUYER EXPRESSLY ACKNOWLEDGES THAT, EXCEPT AS EXPRESSLY SET FORTH HEREIN, THE
ASSETS ARE SOLD ON AN “AS-IS,” “WHERE-IS” BASIS WITH ALL DEFECTS, AND NO
REPRESENTATION OR WARRANTY IS MADE BY THE SELLER WITH RESPECT TO (I) THE
CONDITION, FITNESS FOR A PARTICULAR PURPOSE, MERCHANTABILITY, SUITABILITY,
FUNCTIONALITY OR LACK OF DEFECTS OF THE ASSETS, (II) POST-CLOSING MATTERS,
INCLUDING FUTURE OR FORECASTED COSTS, REVENUES OR PROFITS THAT MAY BE GENERATED
FROM THE BUSINESS OR (III) MARKETS, CUSTOMERS OR SUPPLIERS.

 

ARTICLE V

 

BUYER’S REPRESENTATIONS AND WARRANTIES

 25 

 

The Buyer represents and warrants to the Seller that the statements contained in
this Article V are true and correct as of the date of this Agreement and will be
true and correct as of the Closing Date (as though made then and as though the
Closing Date were substituted for the date of this Agreement throughout this
Article V), except as set forth in the Disclosure Schedule delivered by the
Buyer to the Seller on the date hereof (the “Buyer Disclosure Schedule”). The
Disclosure Schedule will be arranged in paragraphs corresponding to the lettered
and numbered paragraphs contained in this Article V and shall apply solely to
the specific representation or warrant to which such lettered or numbered
paragraphs of the Disclosure Schedule applies, except as explicitly set forth
therein (i.e., explicit cross-references).

 

5.1               Organization of the Buyer. The Buyer is duly organized,
validly existing, and in good standing under the Laws of the jurisdiction of its
formation or incorporation.

 

5.2               Authorization of Transaction. The Buyer has full power and
authority (including full corporate or other entity power and authority, as
applicable) to execute and deliver this Agreement, each of the Transaction
Documents to which the Buyer is a party and to perform its obligations hereunder
and thereunder. The Buyer has full power and authority to carry on the Business
on and after the Closing Date. Disclosure Schedule 3.1 lists the directors and
officers of the Buyer. The Buyer has delivered or made available to counsel to
the Seller true and correct copies of the Organizational Documents of the Buyer.
This Agreement and each Transaction Document to which the Buyer is a party
constitutes the valid and legally binding obligation of the Buyer, enforceable
in accordance with its terms and conditions. The Buyer need not give any notice
to, make any filing with, or obtain any authorization, consent, or approval of
any Governmental Authority in order to execute and deliver this Agreement and
the Transaction Documents or for Buyer to consummate the transactions described
in this Agreement. The execution, delivery and performance of this Agreement and
the Transaction Documents and all other agreements described herein have been
duly authorized by the Buyer.

 

5.3               Non-contravention. Neither the execution and delivery of this
Agreement and the Transaction Documents, nor the consummation of the
transactions described herein, will (a) violate any Law constitution,
injunction, Order, ruling, charge, or other restriction of any Governmental
Authority to which the Buyer is subject or any provision of the Buyer’s
organizational documents, if applicable, or (b) conflict with, result in a
breach of, constitute a default under, result in the acceleration of, create in
any party the right to accelerate, terminate, modify, or cancel, or require any
notice under any agreement, contract, lease, license, instrument, or other
arrangement to which the Buyer is a party or by which it is bound or to which
any of its assets are subject. The Buyer does not need to give any notice to,
make any filing with, or obtain any authorization, consent, or approval of any
Governmental Authority in order to execute and delivery this Agreement and the
Transaction Documents or for the Parties to consummate the transactions
described in this Agreement and the Transaction Documents, except where the
failure to give notice, to file, or to obtain any authorization, consent, or
approval would not have a Material Adverse Effect.

 

5.4               Brokers’ Fees. The Buyer has no liability or obligation to pay
any fees or commissions to any broker, finder, or agent with respect to the
transactions described in this Agreement save and except for the payment of an
advisory fee to Brooks, Houghton & Company, Inc., for which Buyer is solely
responsible.

 

5.5               Litigation. There is no pending or threatened Action against
the Buyer or any Affiliate of the Buyer that could materially interfere with the
Buyer’s ability to perform its obligations under this Agreement.

 

5.6               Due Diligence. The Buyer acknowledges and agrees that, prior
to executing this Agreement, the Seller has afforded to the Buyer free and full
access to the books, records and facilities of the Seller, that the Buyer has
had ample opportunity to conduct such due diligence investigation and that the
Buyer has made such investigations and conducted such due diligence of the
Business and the Assets as the Buyer deems necessary or appropriate.

 

5.7               Extent of the Seller’s Representations. The Buyer acknowledges
that the Seller has made no representations and/or warranties (a) regarding the
continued profitability of the Business following the Closing or

(b) except as expressly set forth in this Agreement, with respect to the
condition or character of the Assets or the use

 26 

 

or uses to which the Assets may be put. Except as expressly provided herein, the
Assets are hereby sold in “AS IS, WHERE IS” condition and the Seller hereby
disclaims any and all warranties as to the condition of the Assets. The Buyer
has not relied upon the accuracy or completeness of any express or implied
representation, statement or information of any nature made or provided by or on
behalf of the Seller or the Business, except for the representations and
warranties expressly set forth in Article IV of this Agreement or in any of the
other Transaction Documents.

 

5.8               Undertakings to Close Hereunder. The Buyer shall use its best
efforts to perform and fulfill all conditions and obligations on its part to be
performed and fulfilled under this Agreement.

 

ARTICLE VI

 

PRE-CLOSING COVENANTS

 

 

[Intentionally Deleted]

 

ARTICLE VII

 

POST-CLOSING COVENANTS

 

7.1               General. In case at any time after Closing any further actions
are necessary to carry out the purposes of this Agreement, each of the Parties
will take such further actions (including the execution and delivery of such
further instruments and documents) as any other Party may reasonably request,
all at the sole cost and expense of the requesting Party (unless the requesting
Party is entitled to indemnification therefor under Article X below). The Seller
acknowledges and agrees that from and after each Closing, the Buyer will be
entitled to possession of all documents, books, records, agreements, and
financial data of any sort relating to the Assets acquired by the Buyer,
including without limitation the documents, books, records, agreements and
financial data of any sort relating to the Assets so acquired, but Buyer agrees
to provide the Seller and its professional advisors or representative reasonable
access to all such documents, books, records, agreements and financial data so
transferred to Buyer, and to make copies thereof, to file or pay taxes, to
defend or bring an Action, or for any other reasonable purpose.

 

7.2               Litigation Support. In the event and for so long as any Party
actively is contesting or defending against any Action, charge, complaint,
claim, or demand in connection with (a) any transaction described in this
Agreement or (b) any fact, situation, circumstance, status, condition, activity,
practice, plan, occurrence, event, incident, action, failure to act, or
transaction on or prior to the Closing Date involving the Business, the Parties
will cooperate with each other and their respective counsel in the contest or
defense, make available their personnel, and provide such testimony and access
to their books and records as shall be necessary in connection with the contest
or defense, all at, the sole cost and expense of the contesting or defending
Party (unless the contesting or defending Party is entitled to indemnification
therefor under Article X below).

 

7.3               Transition. The Seller shall use commercially reasonable
efforts to refrain from taking take any action that is designed or intended to
discourage any lessor, licensor, customer, supplier, or other business associate
of the Business from maintaining the same business relationships with the
Business after the Closing as it maintained with the Business prior to the
Closing.

 

7.4               Rent Reimbursement. On a monthly basis after the Closing, the
Buyer will reimburse the Seller for the rent expense (including all triple net
charges incident to rent under the lease agreement) at its administrative
headquarters in Dallas, Texas through December 31, 2019.

 27 

 

ARTICLE VIII

 

CONDITIONS TO OBLIGATION OF THE BUYER TO CLOSING

 

The obligation of the Buyer to consummate the transactions to be performed by it
in connection with the Closing is subject to satisfaction of the conditions set
forth below.

 

8.1               Representations and Warranties. The representations and
warranties set forth in Article IV above shall be true and correct in all
material respects at and as of the Closing Date, except to the extent that such
representations and warranties are qualified by the term “material,” or contain
terms such as “Material Adverse Effect” or “Material Adverse Change,” in which
case such representations and warranties (as so written, including the term
“material” or “Material”) shall be true and correct in all respects at and as of
the Closing Date;

 

8.2               Compliance. The Seller shall have performed and complied with
all of its covenants hereunder in all material respects through the Closing,
except to the extent that such covenants are qualified by the term “material,”
or contain terms such as “Material Adverse Effect” or “Material Adverse Change,”
in which case the Seller shall have performed and complied with all of such
covenants (as so written, including the term “material” or “Material”) in all
respects through the Closing.

 

8.3               Third Party Consents. The Seller shall have procured all of
the respective third-party consents, releases and pay-off letters specified on
Schedule 8.3; Seller shall have assigned, or Buyer shall have obtained, the
material Permits necessary for Buyer to operate the Business and the Assets as
operated by Seller prior to the Closing; it being understood that the consent to
assignment of certain Permits will be obtained subsequent to the Closing in
accordance with industry practice, and that such assignments are subject to all
applicable laws and regulations.

 

8.4               No Action. No Action shall be pending before any court or
quasi-judicial or administrative agency of any federal, state, local, or foreign
jurisdiction or before any arbitrator wherein an unfavorable injunction,
judgment, order, decree, ruling, or charge would (a) prevent consummation of any
of the transactions described in this Agreement, (b) cause any of the
transactions described in this Agreement to be rescinded following consummation,
or (c) materially and adversely affect the right of the Buyer to own the Assets
and to operate the Business (and no such injunction, judgment, Order or charge
shall be in effect);

 

8.5               Seller Certificate. The Seller shall have delivered to the
Buyer a certificate to the effect that each of the conditions specified above in
Sections 8.1 through 8.4 are satisfied as set forth in such Sections;

 

8.6               Consents and Approvals. The Parties shall have received all
authorizations, consents, licenses and approvals of governments and governmental
agencies identified on Schedule 8.6 hereto;

 

8.7               Other Actions. All actions to be taken by the Seller in
connection with consummation of the transactions described herein and all
certificates, instruments, and other documents required to effect the
transactions described herein will be reasonably satisfactory in form and
substance to the Buyer;

 

8.8               Good Standing. The Seller shall have delivered to the Buyer a
copy of a good standing certificate of the Seller issued no less than 10 days
prior to the Closing Date by the Secretary of State of the State of Delaware.

 

8.9               Secretary Certificate. The Seller shall have delivered to the
Buyer a certificate of the CEO of the Seller, dated as of the Closing Date, in
form and substance reasonably satisfactory to the Buyer, as to: (a) the
resolutions of the board of managers authorizing the execution, delivery, and
performance of this Agreement and the transactions described herein; and (b)
incumbency and signatures of the officers of the Seller executing this Agreement
or any other agreement contemplated by this Agreement.

 

8.10Intentionally Left Blank.

 28 

 

8.1               Non-Competition Agreements. As of the Closing Date, each of
the Seller and Travis Bird shall have entered into a Non-Competition Agreement
with the Buyer (the “Non-Competition Agreement”) agreed upon by the parties; the
Non-Competition Agreement will expire upon termination of this Agreement other
than pursuant to clause

(i) of paragraph (b) of Article XI.

 

8.2               Offer Letters. As of the Closing Date, each of the members of
the Management Team shall have entered into an offer letter with the Buyer (the
“Offer Letters”).

 

8.3               Insurance. Solely to the extent that the same are being
assigned to the Buyer at the Closing, insurance policies for the Seller
effective following the Closing shall be available covering workers’
compensation, commercial general liability and umbrella coverage, property and
crime, business auto, professional liability, and directors and officers;

 

8.4               Material Adverse Change to Business. There shall not have been
a Material Adverse Change to the Business or operations of the Seller.

 

8.5Bill of Sale. The Seller shall have executed and delivered the Bill of Sale.

 

8.6               FIRPTA Affidavit. The Seller shall have delivered to Buyer an
affidavit in form and substance satisfactory to Buyer that Seller is not a
foreign person within the meaning of Section 1443(f)(3) of the Code; and

 

The Buyer may waive any condition specified in this Article VIII on behalf of
the Buyer if it executes a writing so stating at or prior to the Closing. The
Seller shall immediately notify Buyer in writing if it reasonably determines
that any of the conditions to the Closing under this Agreement will not be
satisfied.

 

ARTICLE IX

 

CONDITIONS TO OBLIGATION OF THE SELLER TO CLOSING

 

The obligation of the Seller to consummate the transactions to be performed by
them in connection with the Closing is subject to satisfaction of the conditions
set forth below.

 

9.1               Representations and Warranties. The representations and
warranties set forth in Article V above shall be true and correct in all
material respects at and as of the Closing Date, except to the extent that such
representations and warranties are qualified by the terms “material,” or contain
terms such as “Material Adverse Effect” or “Material Adverse Change,” in which
case such representations and warranties (as so written, including the term
“material” or “Material”) shall be true and correct in all respects at and as of
the Closing Date.

 

9.2               Compliance. The Buyer shall have performed and complied with
all of its covenants hereunder in all material respects through the Closing,
except to the extent that such covenants are qualified by the term “material,”
or contain terms such as “Material Adverse Effect” or “Material Adverse Change,”
in which case the Buyer shall have performed and complied with all of such
covenants (as so written, including the term “material” or “Material”) in all
respects through the Closing.

 

9.3               No Actions. No action, suit, or proceeding shall be pending
before any court or quasi-judicial or administrative agency of any federal,
state, local, or foreign jurisdiction or before any arbitrator wherein an
unfavorable injunction, judgment, order, decree, ruling, or charge would (A)
prevent consummation of any of the transactions described in this Agreement, or
(B) cause any of the transactions described in this Agreement to be rescinded
following consummation.

 

9.4               Buyer Certificate. The Buyer shall have delivered to the
Seller a certificate to the effect that each of the conditions specified above
in Sections 9.1 through 9.3 are satisfied.

 29 

 

9.5               Consents and Approvals. The Parties shall have received all
authorizations, consents, and approvals of governments and governmental agencies
referred to in Annex 9.5 hereto.

 

9.6Bill of Sale. The Buyer shall have executed and delivered the Bill of Sale.

 

9.7Offer Letters. The Management Team and the Buyer shall have entered into the
Offer Letters.

 

9.8Stock Price. The trading price of the common stock of Parent shall not be
below $1.00.

 

9.9               Other Actions. All actions to be taken by the Buyer in
connection with consummation of the transactions described herein and all
certificates, instruments, and other documents required to effect the
transactions described herein will be reasonably satisfactory in form and
substance to the Seller.

 

Seller may waive any condition specified in this Article IX on behalf of the
Seller if it executes a writing so stating at or prior to the Closing. The Buyer
shall immediately notify the Seller in writing if it reasonably determines that
any of the conditions to closing under this Agreement will not be satisfied.

 

ARTICLE X

 

SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION

 

10.1           Survival of Representations and Warranties. No claim or suit for
Losses arising from a breach of the representations and warranties of the Seller
or the Buyer contained in this Agreement shall be brought more than six

(6) months after the Closing Date. If a Party hereto determines that there has
been a breach by any other Party hereto of any such representation or warranty
and notifies the breaching Party in writing reasonably promptly after learning
of such breach, such representation or warranty and liability therefor shall
survive with respect to the specified breach until such breach has been
resolved, but no Party shall have any liability after such six (6) month period
for any matters not specified in a writing delivered within such six (6) month
period. Notwithstanding any term in this Section 10.1, (a) the applicable
statute of limitations shall be the survival period for any matter relating to
(i) any alleged or actual violation of the representations and warranties made
in Section 4.12 (Tax Matters), or (ii) fraud or willful or intentional
misrepresentation or willful omission of a material fact by a Party in
connection with this Agreement and the transactions described herein, and (b)
all covenants and any alleged or actual violation of the representations and
warranties made in any of the following sections of this Agreement shall survive
indefinitely: Sections 4.1 (Organization, Qualification, and Power), 4.2
(Authorization of the Transaction), 4.6 (Title to Assets, first and last
sentences only), Sections 5.1 (Organization of the Buyer) and 5.2 (Authorization
of the Transaction).

 

10.2           Indemnification by the Seller. Subject to the provisions of
Sections 10.4 and 10.5 below, the Seller, on behalf of itself and its successors
and assigns, agrees to indemnify, defend and hold the Buyer and its Affiliates,
members, managers, officers, directors, employees, agents, representative,
successors and permitted assigns (collectively the “Buyer Indemnified Parties”),
harmless, from and against the following:

 

(a)                Any and all Losses which arise out of or result from or as a
consequence of (i) any breach of a representation or warranty made by or on
behalf of the Seller in this Agreement; and (ii) any failure by the Seller to
perform, comply with or observe any one or more of its covenants, agreements or
obligations contained in this Agreement or in any other agreement, instrument or
document delivered to the Buyer or any of its Affiliates in connection with this
Agreement or any of the transactions described in this Agreement or any of the
transactions described in this Agreement.

 

(b)                Any and all Losses which may at any time or from time to time
arise out of or result from or as a consequence of the operation of the Business
prior to the Closing Date (other than Assumed Liabilities), including without
limitation: (i) any Excluded Liability or Excluded Assets; (ii) relating to, or
the failure to discharge, any obligations of the Seller, which were incurred by
them, on account of the period prior to the Closing Date (except for the Assumed
Liabilities), including without limitation any and all federal, state or local
Taxes due from the Seller in

 30 

 

connection with the Business, or with respect to the assets thereof, applicable
to or arising from any period prior to the Closing Date.

 

With respect to the indemnification obligations of the Seller pursuant to this
Section 10.2, a Buyer Indemnified Party may proceed against the Seller for
indemnification pursuant to this Article X.

 

10.3           Indemnification by Buyer. Subject to the provisions of Sections
10.4 and 10.5 below, the Buyer, on behalf of itself and its successors and
assigns, agrees unconditionally to indemnify, defend and hold the Seller and its
permitted successors and assigns their Affiliates, members, managers, officers,
directors, employees, agents, representatives, successors and permitted assigns
(collectively the “Seller Indemnified Parties”) harmless, on demand, from and
against the following:

 

(a)                Any and all Losses of every kind, nature or description which
arise out of or result from or as a consequence of (i) the Buyer’s use or
operation of the Assets on and after the Closing Date; (ii) any breach of a
representation or warranty made by or on behalf of the Buyer in this Agreement
(including the Exhibits and Schedules hereto) or in any of the Transaction
Documents; or (iii) any failure by the Buyer to perform, comply with or observe
any one or more of its covenants, agreements, or obligations contained in this
Agreement or in any other agreement, instrument or document delivered to the
Seller in connection with this Agreement or any of the transactions described in
this Agreement; and

 

(b)                Any and all Losses which may at any time or from time to time
arise out of or result from or as a consequence of (i) any Assumed Liability;
and (ii) relating to, or the failure by the Buyer to discharge, any obligations
of the Buyer which were incurred by the Buyer on or after the Closing Date
(except for the Excluded Liabilities).

 

10.4           Indemnification Process. Any Party seeking indemnification under
this Article X (an “Indemnified Party”) shall give each Party from whom
indemnification is being sought (each, an “Indemnifying Party”) notice of any
matter which such Indemnified Party has determined has given rise to or would
give rise to a right of indemnification under this Agreement, stating the amount
of the Losses, if known, and method of computation thereof, and containing a
reference to the provisions of this Agreement in respect of which such right of
indemnification is claimed or arises. The obligations and liabilities of an
Indemnifying Party under this Article X with respect to Losses arising from
claims of any third party which are subject to the indemnification provided for
in this Article X (“Third Party Claims”) shall be governed by and contingent
upon the following additional terms and conditions:

 

(a)                If any Indemnified Party shall receive notice of any Third
Party Claim, the Indemnified Party shall give the Indemnifying Party notice of
such Third Party Claim promptly following receipt by the Indemnified Party of
such notice to avoid actual prejudice; provided, however, that the failure to
provide such notice shall not release the Indemnifying Party from any of its
obligations under this Article X except to the extent the Indemnifying Party is
prejudiced by such failure.

 

(b)                The Indemnifying Party shall be entitled to assume and
control the defense of such Third Party Claim at its sole expense and through
counsel of its choice if it gives notice of its intention to do so to the
Indemnified Party to avoid actual prejudice to the Indemnified Party; provided,
further however, that if counsel to the Indemnifying Party advises that a
conflict of interest precludes its representation of both the Indemnified Party
and the Indemnifying Party, then the Indemnified Party shall be entitled to
retain one firm of attorneys at the expense of the Indemnified Party.

 

(c)                In the event the Indemnifying Party exercises the right to
undertake any such defense against any such Third Party Claim as provided above,
the Indemnified Party shall cooperate with the Indemnifying Party in such
defense and make available to the Indemnifying Party, at the Indemnifying
Party’s expense, all witnesses, pertinent records, materials and information in
the Indemnified Party’s possession or under the Indemnified Party’s control
relating thereto as is reasonably required by the Indemnifying Party. Similarly,
in the event the Indemnifying Party declines to take such defense and the
Indemnified Party is, directly or indirectly, conducting the defense against

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any such Third Party Claim, the Indemnifying Party shall cooperate with the
Indemnified Party in such defense and make available to the Indemnified Party,
at the Indemnifying Party’s expense, all such witnesses, records, materials and
information in the Indemnifying Party’s possession or under the Indemnifying
Party’s control relating thereto as is reasonably required by the Indemnified
Party.

 

(d)                If the Indemnifying Party shall have failed to assume the
defense of any claim in accordance with the provisions of this Article (i.e., in
time to avoid prejudice to the Indemnified Party), then the Indemnified Party
shall have the right to control the defense of such claim and, if and when it is
finally determined that the Indemnified Party is entitled to indemnification
from the Indemnifying Party hereunder, the actual and reasonable fees and
expenses of the Indemnified Party’s counsel shall be borne by the Indemnifying
Party and paid by the Indemnifying Party to the Indemnified Party promptly
following written demand therefor, but the Indemnifying Party shall be entitled,
at its own expense, to participate in (but not control) such defense.

 

(e)                So long as the Indemnifying Party has assumed and is
conducting the defense of the Third Party Claim in accordance with Section
10.4(b) above, (i) the Indemnifying Party will not consent to the entry of any
judgment or enter into any settlement with respect to the Third Party Claim
without the prior written consent of the Indemnified Party (not to be
unreasonably withheld, delayed or conditioned, provided that the Indemnified
Party is completely released from all claims) unless the judgment or proposed
settlement involves only the payment of money damages by the Indemnifying Party
and does not impose an injunction or other equitable relief upon the Indemnified
Party, and (ii) the Indemnified Party will not consent to the entry of any
judgment or enter into any settlement with respect to the Third Party Claim
without the prior written consent of the Indemnifying Party (not to be withheld,
conditioned or delayed unreasonably).

 

10.5Limitations on Indemnification.

 

(a)                Threshold Amount. Except as otherwise provided in Section
10.5(c) below, the Seller will not have any liability to the Buyer Indemnified
Parties pursuant to the indemnification obligations of Section 10.2(a)(ii)
above, and the Buyer will not have any liability to the Seller Indemnified
Parties pursuant to the indemnification obligations of Section 10.3 above, as
the case may be, for Losses payable pursuant to their respective indemnification
obligations until the total of all such Losses incurred by the Indemnified Party
pursuant to this Agreement collectively exceeds $100,000 in the aggregate (the
“Threshold Amount”), and then (subject to the terms of this Section 10.5) such
indemnification by the Indemnifying Party shall apply to all such Losses
(including the Threshold Amount) incurred pursuant to this Agreement.

 

(b)                Cap. Except as otherwise provided in Section 10.5(c) below,
(i) the Seller will not have any liability to the Buyer Indemnified Parties
pursuant to the indemnification obligations of Section 10.2 above for Losses
that exceed $700,000, and (ii) the Buyer will not have any liability to the
Seller Indemnification Parties pursuant to the indemnification obligations of
Section 10.3 above for Losses paid by Buyer that exceed $700,000.

 

(c)                All Losses of Buyer paid by the Seller under this Agreement
shall be paid by the transfer of shares of GNBT stock to Buyer, which shares of
GNBT stock shall be priced for the purposes of any indemnification Losses at the
greater of (A) the price at which shares of the GNBT stock are currently
trading, or (B) the price at which shares of GNBT stock were issued at the
Closing (subject to adjustment if additional shares are issued based on downside
protection).

 

(d)                Fraud and Other Exceptions. The limitation on the
indemnification responsibilities of the Parties set forth in Sections 10.5(a)
and 10.5(b) shall not apply to any claim that is brought within one (1) year of
the Closing that is based on (i) any fraud or intentional breach by the Seller
or the Buyer, as the case may be, (ii) breach of the Seller’s representations
and warranties contained in Sections 4.1 (Organization, Qualification, and
Power), 4.2 (Authorization of the Transaction), 4.6 (Title to Assets, last
sentence only) and 4.12 (Tax Matters) hereof, (iii) breach of the Buyer’s
representations and warranties contained in Sections 5.1 (Organization of the
Buyer) and 5.2 (Authorization of the Transaction) hereof, (iv) contractual
payment obligations related to the Excluded Liabilities,

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(v) the Buyer’s obligation to pay the Purchase Price, or (vi) any adjustments to
the Purchase Price or other payments under Section 3.2.

 

(e)                Certain Damages. Notwithstanding anything to the contrary in
this Article X, no Party shall be liable to any other Party for indirect,
incidental, consequential, punitive or special damages, loss of profits or
diminution of value arising from, in connection with, or with respect to an
indemnification obligation under this Article X other than incidental,
consequential, punitive or special damages resulting from fraud by a Party.

 

(f)                 Purchase Price Adjustment. For Tax purposes, the Parties
agree that any payment under Section 10.2 hereof shall be treated as an
adjustment to the Purchase Price.

 

(g)                Eligible Insurance Proceeds. If any portion of Losses to be
reimbursed by the Indemnifying Party shall be covered, in whole or in part, by
third party insurance coverage (including the insurance policies maintained for
the benefit of Seller prior to the Closing), then any such insurance proceeds
actually received by the Indemnified Party, net of third party costs reasonably
incurred by the Indemnified Party in seeking such collection, shall be
considered “Eligible Insurance Proceeds.” For purposes of this Article X, all
Losses shall be net of any Eligible Insurance Proceeds; and each Indemnified
Party shall use its reasonable efforts to make any insurance claim to recover
Eligible Insurance Proceeds. Any amount payable by an Indemnifying Party
pursuant to this Article X shall be paid promptly and payment shall not be
delayed pending any determination of Eligible Insurance Proceeds. In any case
where an Indemnified Party recovers any Eligible Insurance Proceeds in respect
of any Loss for which an Indemnifying Party has actually reimbursed it pursuant
to this Article X, such Indemnified Party shall promptly pay over to the
Indemnifying Party the amount of such Eligible Insurance Proceeds, but not in
excess of the sum of

(i) any amount previously paid by the Indemnifying Party to or on behalf of the
Indemnified Party in respect of such claim, and (ii) any amount expended by the
Indemnifying Party in pursuing or defending any claim arising out of such
matter.

 

(h)                Exclusive Remedy. Absent fraud, and except (i) with respect
to the availability of specific performance or other equitable remedies for
breach or non-compliance, and (ii) for the enforcement of rights under the
documents and instruments executed and delivered by the parties hereto at the
Closing, following the Closing, the indemnification provided by this Article X
shall be the sole remedy of the parties hereto with respect to claims relating
to the subject matter of this Agreement.

 

ARTICLE XI TERMINATION OF CLOSING

The Parties may terminate the obligation to consummate the Closing as provided
below:

 

(a)                The Buyer and the Seller may terminate the consummation of
the Closing by mutual written consent at any time prior to the Closing;

 

(b)                The Buyer may terminate the consummation of the Closing by
giving written notice to the Seller at any time prior to the Closing (i) in the
event Seller has breached any material representation, warranty, or covenant
contained in this Agreement in any material respect, the Buyer has notified the
Seller of the breach, and the breach has continued without cure for a period of
30 days after the notice of breach or (ii) if the Closing shall not have
occurred on or before April 1, 2019, by reason of the failure of any condition
precedent under Article VIII hereof (unless the failure results primarily from
the Buyer breaching any representation, warranty, or covenant contained in this
Agreement); and

 

(c)                The Seller may terminate the consummation of the Closing by
giving written notice to the Buyer at any time prior to the Closing (i) in the
event the Buyer has breached any material representation, warranty, or covenant
contained in this Agreement in any material respect, the Seller has notified the
Buyer of the breach, and the breach has continued without cure for a period of
30 days after the notice of breach, (ii) if the Closing shall not have occurred
on or before April 1, 2019, by reason of the failure of any condition precedent
under Article IX hereof

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(unless the failure results primarily from the Seller breaching any
representation, warranty, or covenant contained in this Agreement), or (iii) for
any or no reason if the Closing has not occurred by May 1, 2019.

 

ARTICLE XII MISCELLANEOUS

12.1Press Releases and Public Announcements. No Party shall issue any press
release or make any public

announcement relating to the subject matter of this Agreement prior to the
Closing without the prior written approval of the Buyer and the Seller;
provided, however, that any Party may make any public disclosure it believes in
good faith is required by applicable Law (in which case the disclosing Party
will use its reasonable best efforts to advise the other Parties prior to making
the disclosure).

 

12.2           No Third-Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any Person other than the Parties and their respective
successors and permitted assigns. Notwithstanding the foregoing, the Buyer
Indemnified Parties and Seller Indemnified Parties, and their permitted
successors and assigns, are intended third-party beneficiaries of Article X
(Survival of Representations and Warranties; Indemnification), and shall be
entitled to enforce the provisions of such Section as if a party to this
Agreement.

 

12.3           Entire Agreement. This Agreement (including the documents
referred to herein) constitutes the entire agreement among the Parties and
supersedes any prior understandings, agreements, or representations by or among
the Parties, written or oral, to the extent they relate in any way to the
subject matter hereof.

 

12.4           Succession and Assignment. This Agreement shall be binding upon
and inure to the benefit of the Parties named herein and their respective
successors and permitted assigns. No Party may assign either this Agreement or
any of his or its rights, interests, or obligations hereunder without the prior
written approval of the Buyer and Seller; provided, however, that the Buyer may
(a) assign any or all of its rights and interests hereunder to one or more of
its Affiliates in which it owns more than 51% of the voting equity, and (b)
designate one or more of its Affiliates to perform its obligations hereunder (in
any or all of which cases the Buyer nonetheless shall remain responsible for the
performance of all of its obligations hereunder).

 

12.5           Counterparts. This Agreement may be executed in one or more
counterparts (including by means of email), each of which shall be deemed an
original but all of which together will constitute one and the same instrument.
Counterparts may be delivered via facsimile or electronic mail, and any
counterpart so delivered shall be deemed to have been duly and validly delivered
and be valid and effective for all purposes. At the request of any Party hereto
or to any such agreement or instrument, each other Party will re-execute
original forms thereof and deliver them to all other Parties. No Party hereto or
to any such agreement or instrument will raise the use of electronic delivery to
deliver a signature or the fact that any signature or agreement or instrument
was transmitted or communicated through the use of electronic delivery as a
defense to the formation of a contract, and each such Party forever waives any
such defense, except to the extent such defense related to lack of authenticity.

 

12.6           Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.

 

12.7           Notices. All notices, requests, demands, claims, and other
communications hereunder shall be in writing and must be delivered by either (i)
personal delivery or (ii) reputable overnight courier service, charges prepaid,
providing proof of delivery. Any notice, request, demand, claim, or other
communication hereunder and shall be deemed to have been duly received (i) on
the date of delivery thereof, if personally delivered, or (ii) on the next
business day after the sending thereof, if sent by reputable overnight courier
service, and must be addressed to the intended recipient as set forth below:

 

If to the Seller:

 

Pantheon Medical – Foot & Ankle, LLC

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1505 Federal Street, Suite 300

Dallas, Texas 75201

Attention: Travis H. Bird,

Chief Executive Officer

Email: travis.bird@medisourcepartners.com If to the Buyer:

NuGenerex Distribution Solutions, LLC

10102 USA Today Way Miramar, Florida 33025 Attention: Joe Moscato,

Chief Executive Officer

Email: jmoscato@generex.com

 

Any Party may change the address to which notices, requests, demands, claims,
and other communications hereunder are to be delivered by giving the other
Parties notice in the manner herein set forth.

 

12.8           Governing Law; Arbitration. This Agreement shall be governed by
and construed in accordance with the domestic 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) that would cause
the application of the laws of any jurisdiction other than the State of
Delaware. The Parties hereto agree that all disputes or controversies arising
out of or relating to this Agreement shall be resolved by binding arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association (the “AAA”), and judgment upon the award rendered by the arbitrator
may be entered in any court having jurisdiction thereof. Either Party may
initiate arbitration by sending written notice of its intention to arbitrate to
the other Party. Such written notice will contain a reasonably detailed
description of the dispute and the remedy sought. The confidential arbitration
proceeding will be conducted in Miami, Florida before an independent and
impartial arbitrator mutually acceptable to the Parties. In the event that the
Parties have not mutually agreed on an acceptable arbitrator within thirty (30)
days after the demand for arbitration is filed, the arbitrator shall be
appointed in the manner provided by Rule 13 of the Commercial Arbitration Rules
of the AAA. The decision of the arbitrator will be final and binding on the
Parties and their respective successors and permitted assigns. The Parties
intend that this agreement to arbitrate be irrevocable. In providing a remedy
under this Section 12.8, the Parties agree that the arbitrator shall not award
punitive damages against either Party, and the Parties hereby mutually waive any
claim for punitive damages which may be awarded in connection with any dispute
subject to arbitration under this Agreement.

 

12.9           Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by the
Buyer and Seller. No waiver by any Party of any provision of this Agreement or
any default, misrepresentation, or breach of warranty or covenant hereunder,
whether intentional or not, shall be valid unless the same shall be in writing
and signed by the Party making such waiver nor shall such waiver be deemed to
extend to any prior or subsequent default, misrepresentation, or breach of
warranty or covenant hereunder or affect in any way any rights arising by virtue
of any prior or subsequent such occurrence.

 

12.10        Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.

 

12.11        Expenses. Each of the Buyer and the Seller will bear its own costs
and expenses (including legal fees and expenses) incurred in connection with
this Agreement and the transactions described herein (except as otherwise
expressly provided in this Agreement).

 

12.12        Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted

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jointly by the Parties and no presumption or burden of proof shall arise
favoring or disfavoring any Party by virtue of the authorship of any of the
provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word “including” shall mean including without limitation.

 

12.13        Incorporation of Exhibits, Annexes, and Schedules. The Exhibits,
Annexes, and Schedules identified in this Agreement are incorporated herein by
reference and made a part hereof.

 

* * * * *

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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
date first above written.

 

    Pantheon Medical - Foot & Ankle, LLC         By: /s/ TravisBird   Name:
Travis H. Bird   Title: Chief Executive Officer                 NuGenerex
Distribution Solutions, LLC         By: /s/ Joseph Moscato   Name: Joseph
Moscato   Title: Chief Executive Officer                 Generex Biotechnology
Corporation         By: /s/ Joseph Moscato   Name: Joseph Moscato   Title: Chief
Executive Officer

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