EXHIBIT 10.1

 

 

 

 

 

ASSET PURCHASE AGREEMENT

 

among:

 

Gulf Coast Billing, Inc.,

 

a Texas corporation,

 

Rhonda Roberts-Turner,

 

an Individual,

 

and

 

Medical Transcription Billing, Corp.,

 

a Delaware corporation

 

____________________________

 

Dated on February 15, 2016

 

____________________________

 

 

 

 

 

 

 

 

 

 

 

TABLE OF CONTENTS

 

 

    Page 1. Sale of Assets; Related Transactions. 1 1.1 Purchase and Sale of the
Purchased Assets. 1 1.2 Purchase Price 2 1.3 Certain Post-Closing Rights and
Responsibilities; Adjustments. 2 1.4 Payment of the Purchase Price. 2 1.5
Reporting. 3 1.6 Sales Taxes 3 1.7 Closing 3       2. Representations and
Warranties of the Seller and Shareholders. 4 2.1 Corporate Representations and
Warranties. 4 2.2 Financial Statements 5 2.3 Absence Of Changes 6 2.4 Title To
Purchased Assets 7 2.5 Receivables 7 2.6 Clients 7 2.7 Intellectual Property;
Privacy 8 2.8 Contracts 10 2.9 Liabilities 11 2.10 Compliance with Legal
Requirements 11 2.11 Governmental Authorizations 13 2.12 Tax Matters 14 2.13
Employee and Labor Matters 14 2.14 Insurance 15

 

 - i - 

 

 

2.15 Certain Payments, Etc. 16 2.16 Proceedings; Orders 16 2.17 Authority;
Binding Nature of Agreements 17 2.18 Non-Contravention; Consents 17 2.19 Brokers
18 2.20 Full Disclosure 18       3. Representations and Warranties of the
Purchaser. 18 3.1 Representations and Warranties of the Purchaser. 18 3.2
Authority; Binding Nature Of Agreements 20 3.3 Non-Contravention 20       4.
Indemnification, Etc. 20 4.1 Survival of Representations and Covenants 20 4.2
Indemnification By the Seller and Shareholder. 20 4.3 Indemnification By The
Purchaser. 21 4.4 Conditions of Indemnification 22       5. Certain Post-Closing
Covenants. 22 5.1 Further Actions 22 5.2 Confidentiality; Publicity 23 5.3
Employees. 23 5.4 Accounts Receivable 24 5.5 Non-Solicitation 24 5.6 Change of
Name. 24       6. Miscellaneous Provisions. 24 6.1 Further Assurances 24 6.2
Sole Representations and Warranties 24 6.3 Fees and Expenses 25

 

 - ii - 

 

 

6.4 Notices 25 6.5 Headings 25 6.6 Counterparts 25 6.7 Unattached Exhibits 25
6.8 Remedies Cumulative; Specific Performance. 26 6.9 Waiver. 26 6.10 Amendments
26 6.11 Severability 26 6.12 Entire Agreement 26 6.13 Knowledge 27 6.14
Construction 27 6.15 Choice 27

 

 

 

 

 

 

 

 - iii - 

 

 

ASSET PURCHASE AGREEMENT

 

This Asset Purchase Agreement is entered into on February 15, 2016, by and
among: Gulf Coast Billing, Inc., a Texas corporation (the “Seller”), Rhonda
Roberts-Turner (the “Shareholder”) and Medical Transcription Billing, Corp., a
Delaware corporation (the “Purchaser”). Certain capitalized terms used in this
Agreement are defined in Exhibit “A”.

 

Recitals

 

Whereas, the Purchaser desires to purchase the assets of the Seller, which is
engaged in the business of providing Medical Billing Services (“Business”).

 

Whereas, Seller wishes to provide for the sale of substantially all of the
assets of the Seller to the Purchaser on the terms set forth in this Agreement.

 

Now Therefore, in consideration of the respective covenants, agreements,
representations, warranties and indemnities herein contained and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties hereby covenant and agree as follows:

 

Agreement

 

The parties to this Agreement, intending to be legally bound, agree as follows:

 

1.Sale of Assets; Related Transactions.

 

1.1  Purchase and Sale of the Purchased Assets. As of the Closing Date, and on
the terms and subject to the fulfillment of the conditions of this Agreement,
the Seller agrees to sell, assign and transfer all rights, title and interest in
and to certain tangible and intangible assets of the Seller to the Purchaser,
and the Purchaser agrees to purchase from the Seller the Purchased Assets, free
and clear of all Encumbrances. The Purchased Assets consist of: (a) all of the
Seller’s rights and remedies, as of and from the Closing Date, concerning each
Medical Billing Agreement; (b) all goodwill of Seller related to the Medical
Billing Agreements and other Purchased Assets; (c) all software programs and/or
applications owned by Seller (including any associated licenses which are
assignable); (d) any other assets that are owned by Seller that are needed for
the conduct of the business of the Seller, provided that the Purchased Assets
shall not include any Excluded Assets; and (e) all Intellectual Property of
Seller, including such right, title and interest in and to the name “Gulf Coast
Billing Services” as Seller possess.

 

(b)               Excluded Assets. The Purchased Assets shall not include any
property listed on Exhibit “B”.

 

1.2  Purchase Price.

 

The aggregate consideration payable by the Purchaser to the Seller for the
Purchased Assets (the “Purchase Price”) will, subject to adjustment in
accordance with Section 1.3, be:

 

 A-1 

 

(a)                Initial Payment on the Closing Date. The first payment amount
will be One Million, Two Hundred and Fifty Thousand Dollars ($1,250,000)
(“Initial Payment”); plus

 

(b)               Installment Payments. Twelve consecutive quarterly payments
(“Installment Payments”) equal to twenty-eight percent (28%) of all fees, if
any, that are earned between March 1, 2016 and February 28, 2019 by Purchaser
from Clients and received during the respective quarter, less 1/12th of the
Initial Payment.

 

(c)                February Revenue. Contemporaneous with the first Installment
Payment, Purchaser shall also pay Seller an amount equal to 50% of all fees
earned and received by Seller relative to Medical Billing Services performed
during February 2016.

 

 

 

1.3  Certain Post-Closing Rights and Responsibilities; Adjustments.

 

(a)                Except as otherwise set forth herein:

 

(i)                 Seller will be solely responsible for all expenses that
accrue relative to the Business and Purchased Assets though 11:59 P.M. Eastern
Time on February 29, 2016;

 

(ii)               Subject to Section 1.2 above, from and after the Closing
Date, Purchaser will receive all revenues relating to the Business, Purchased
Assets and Assumed Liabilities and shall be responsible for issuing monthly
invoices at the end of February 2016 and thereafter; and

 

(b)               Any Adjustments may be adjusted directly between the Parties
at the time of the payment of the Installment Payments or such other time as
mutually agreed upon by the Parties.

 

1.4  Payment of the Purchase Price. Purchaser shall pay the Purchase Price to
Seller as follows:

 

(a)                The Initial Payment shall be paid by Purchaser to Seller on
the Closing Date;

 

(b)               The first of twelve consecutive quarterly Installment Payments
shall be paid by Purchaser to Seller on or before July 20, 2016 for relevant
payments received by Purchaser from the Clients on or before June 30, 2016, with
subsequent payments to be received within 20 days of the end of each respective
quarter (the first Installment Payment shall cover the period of February 15,
2016 through June 30, 2016; thereafter installment payments will be made on a
calendar quarterly basis).

 

1.5  Reporting. Seller and its agents shall have the right to review, copy and
audit the Purchaser’s relevant financial records from time to time to the extent
reasonably required to enable Purchaser to determine if the Installment Payments
and the and February Revenue payment were computed correctly. Each party shall
bear its own costs and expenses as it relates to any such review or audit.

 

 A-2 

 

1.6  Sales Taxes. The Seller shall bear and pay, and shall reimburse the
Purchaser and the Purchaser’s affiliates for, any sales taxes, transfer taxes,
documentary charges, recording fees or similar taxes that may become payable in
connection with the sale of the Purchased Assets to the Purchaser.

 

1.7  Closing.

 

(a)                The closing of the sale of the Purchased Assets to the
Purchaser (the “Closing”) shall take place at the offices of Purchaser in
Somerset, New Jersey as of Noon, Eastern Time, on February 15, 2016, or at such
other place and/or date as the Purchaser and Seller may agree upon.

 

(b)               At the Closing:

 

(i)                 The Seller shall execute and deliver to the Purchaser such
bills of sale (in the form attached as Exhibit “C”), endorsements, and other
documents as may (in the reasonable judgment of the Purchaser or its counsel) be
necessary or appropriate to convey, transfer and deliver to the Purchaser good
and valid title to the Purchased Assets free of any Encumbrances;

 

(ii)               The Purchaser shall pay the Initial Payment amount;

 

(iii)             The Purchaser shall execute and deliver to the Seller the
Assumption Agreement (in the form attached as Exhibit “D”);

 

(iv)             Seller shall deliver to Purchaser possession and custody of all
medical and financial records in Seller’s possession for the Seller’s current
and former Clients, and Purchaser shall maintain such records in compliance with
all applicable laws and the Seller’s Medical Billing Agreements.

 

2.Representations and Warranties of th e Seller and Shareholders.

 

The Seller and Shareholder represent, jointly and severally, and warrants to the
Purchaser as follows:

 

2.1  Corporate Representations and Warranties.

 

(a)                Organization and Existence of the Seller. The Seller is a
corporation organized and validly existing under the Laws of Texas.

 

(b)               Corporate Power and Capacity. The Seller has the corporate
power, authority and capacity to own or lease its assets, including the
Purchased Assets, and to carry on the Business as now being conducted by it.

 

 A-3 

 

(c)                Validity of Agreement.

 

(i)                 The Seller has all necessary corporate power, authority and
capacity to enter into and perform its obligations under this Agreement and any
other agreements or instruments to be delivered or given by it pursuant to this
Agreement.

 

(ii)               The execution, delivery and performance by the Seller and
Shareholder of this Agreement and the consummation of the Transactions have been
duly authorized by all necessary corporate action on the part of the Seller.

 

(iii)             This Agreement and any other agreements entered into pursuant
to this Agreement to which the Seller and Shareholder is a party constitute or
will constitute legal, valid and binding obligations of the Seller and
Shareholder enforceable against the Seller and Shareholder in accordance with
their respective terms, except as enforcement may be limited by bankruptcy,
insolvency or other Laws affecting the rights of creditors generally and except
that equitable remedies may be granted only in the discretion of a court of
competent jurisdiction.

 

(d)               Authorizations. There is no requirement for the Seller or
Shareholder to make any filing with, give any notice to or obtain any consent or
Authorization from any Governmental Agency as a condition to the lawful
consummation of the Transactions.

 

(e)                No Violation. The execution and delivery of this Agreement by
the Seller and the Shareholder the consummation of the Transactions and the
fulfillment by the Seller and Shareholder of the terms, conditions and
provisions hereof will not (with or without the giving of notice or lapse of
time, or both):

 

(i)                 contravene or violate or result in a breach or a default
under or give rise to a right of termination, amendment or cancellation or the
acceleration of any obligations of the Seller under:

 

A.                any Law;

 

B.                 any judgment, order, writ, injunction or decree of any
Governmental Agency having jurisdiction over the Seller;

 

C.                 the constating documents or any resolutions of the Seller; or

 

(ii)               result in the creation or imposition of any Encumbrance on
any of the Purchased Assets.

 

(f)                No Other Agreements to Purchase. Except for the Purchaser’s
rights pursuant to this Agreement, no Person has any option, warrant, right,
call, commitment, conversion right, right of exchange or other Contract or any
right or privilege (whether by Law, pre-emptive or contractual) capable of
becoming an option, commitment, conversion right, right of exchange or other
Contract for the purchase from the Seller of any of the Purchased Assets.

 

 A-4 

 

2.2  Financial Statements. The Seller and Shareholder delivered to the Purchaser
the following financial statements (collectively, the “Financial Statements”):
(a) the unaudited balance sheets of the Seller as of December 31, 2014 and 2015
by quarter and as of the Closing Date, the related statements of income and
retained earnings for 2014 by quarter and 2015 by quarter and as of the Closing
Date, and the statements of cash flows for the years 2014 and 2015 and as of the
Closing Date. The Financial Statements are accurate and complete in all material
respects, have been prepared in accordance with generally accepted accounting
principles (“GAAP”) applied on a consistent basis throughout the periods covered
(except that the interim financial statements referred to in clause “(a)”of this
Section 2.2 do not have notes) and present fairly in all material respects the
financial position of the Seller as of the respective dates thereof and the
results of operations and cash flows of the Seller for the periods covered
thereby.

 

Seller shall deliver completed Financial Statements for the years 2014, 2015 and
through the Closing Date by April 1, 2016. Seller shall be responsible for
paying any necessary fees to Seller’s accounting firm for the preparation of
such Financial Statements.

 

Purchaser will have the option, at its sole expense, to audit or review such
statements internally or retain a public accounting firm to audit or review such
statements for the purpose of complying with SEC requirements and Seller will
provide full cooperation and access to work papers and support materials as
requested for such audit or review. Depending on the Sellers’ Financial
Statements, Purchaser may be required to file audited financial statements with
the SEC within 74 days of closing.

 

Seller shall also provide Purchaser with the following on or before Closing:
contracts with all current customers and suppliers, copies of invoices for each
customer for the last 6 months, along with copies of all reports sent to
customers on a regular basis, any special invoicing instructions, vendor
invoices and contracts, leases, personnel records for all employees being hired,
and all documentation for software and systems used in the business. Subject to
the mutual consent of the Parties, some of the aforementioned documents maybe
provided at a later date.

 

2.3  Absence Of Changes. Except as set forth in Part 2.3 of the Disclosure
Schedule since the date of the Financial Statements:

 

(a)                there has not been any adverse change in, and no event has
occurred that might have an adverse effect on, the business, condition, assets,
liabilities, operations, financial performance, net income or prospects of the
Seller;

 

(b)               there has not been any loss, damage or destruction to, or any
interruption in the use of, any of the assets of the Seller (whether or not
covered by insurance);

 

(c)                the Seller and Shareholder has not purchased or otherwise
acquired any asset from any other Person, except for supplies acquired by the
Seller in the Ordinary Course of Business;

 

(d)               the Seller has not leased or licensed any asset from any other
Person;

 

 A-5 

 

(e)                the Seller has not made any capital expenditure;

 

(f)                the Seller has not sold or otherwise transferred, or leased
or licensed, any asset to any other Person;

 

(g)               the Seller has not written off as uncollectible, or
established any extraordinary reserve with respect to, any account receivable or
other indebtedness;

 

(h)               the Seller has not made any loan or advance to any other
Person;

 

(i)                 the Seller and Shareholder has not (i) established or
adopted any Seller Employee Plan, or (ii) paid any bonus or made any
profit-sharing or similar payment to, or increased the amount of the wages,
salary, commissions, fees, fringe benefits or other compensation or remuneration
payable to, any of its directors, officers, employees or independent
contractors;

 

(j)                 no Contract by which the Seller and Shareholder or any of
the assets owned or used by the Seller and Shareholder is or was bound, or under
which the Seller and Shareholder has or had any rights or interest, including
any Medical Billing Agreement, have been amended or terminated and the Seller
and Shareholder has no knowledge of any pending amendments or terminations
contemplated by Seller’s Clients;

 

(k)               the Seller and Shareholder has not incurred, assumed or
otherwise become subject to any Liability, other than accounts payable (of the
type required to be reflected as current liabilities in the “liabilities” column
of a balance sheet prepared in accordance with GAAP) incurred by the Seller in
bona fide transactions entered into in the Ordinary Course of Business;

 

(l)                 the Seller and Shareholder has not discharged any
Encumbrance or discharged or paid any indebtedness or other Liability, except
for accounts payable that (i) are reflected as current liabilities in the
“liabilities” column of the Unaudited Interim Balance Sheet or have been
incurred by the Seller since the date of the Unaudited Interim Balance Sheet, in
bona fide transactions entered into in the Ordinary Course of Business, and
(ii) have been discharged or paid in the Ordinary Course of Business;

 

(m)             the Seller and Shareholder has not forgiven any debt or
otherwise released or waived any right or claim;

 

(n)               the Seller and Shareholder has not changed any of its methods
of accounting or accounting practices in any respect;

 

(o)               the Seller and Shareholder has not entered into any
transaction or taken any other action outside the Ordinary Course of Business;
and

 

(p)               the Seller and Shareholder has not agreed, committed or
offered (in writing or otherwise) to take any of the actions referred to in
clauses “(c)”through “(o)”above.

 

 A-6 

 

2.4  Title To Purchased Assets. The Seller and Shareholder owns, and has good
and valid title to, all of the Purchased Assets purported to be owned by it,
including: all Purchased Assets identified in Section 1.1 of this Agreement; all
Purchased Assets reflected on the Unaudited Interim Balance Sheet; all Purchased
Assets acquired by the Seller and Shareholder since the date of the Unaudited
Interim Balance Sheet; all rights of the Seller and Shareholder under Seller
Contracts; and all other Purchased Assets reflected in the books and records of
the Seller and Shareholder as being owned by the Seller and Shareholders. All of
said Purchased Assets are owned by the Seller and Shareholder free and clear of
any Encumbrances. Part 2.4 of the Disclosure Schedule identifies all of the
Purchased Assets that are being leased or licensed to the Seller and
Shareholders. The Purchased Assets will collectively constitute, as of the
Closing Date, all of the properties, rights, interests and other tangible and
intangible assets necessary to enable the Seller and Shareholder to conduct the
Business in the manner in which such business is currently being conducted.

 

2.5  Receivables. Part 2.5 of the Disclosure Schedule provides an accurate and
complete breakdown and aging of all accounts receivable, notes receivable and
other receivables of the Seller as of February 12, 2016, all of which are
Excluded Assets. Seller shall provide an updated Disclosure within fifteen (15)
days post-closing.

 

2.6  Clients. Part 2.6 of the Disclosure Schedule accurately identifies, and
provides an accurate and complete breakdown of the revenues received during the
period January 1, 2015 through the Closing Date from each Client. Except as set
forth in Part 2.6 of the Disclosure Schedule, Seller and Shareholder has not
received any notice or other communication (in writing or otherwise), and the
Seller and Shareholder has not received any other information, indicating that
any Client identified or required to be identified in Part 2.6 of the Disclosure
Schedule may cease doing business with the Seller and Shareholder or may
otherwise reduce the volume of business transacted by such Person with the
Seller and Shareholder below historical levels.

 

2.7  Intellectual Property; Privacy.

 

(a)                Products and Services. Part 2.7(a) of the Disclosure Schedule
accurately identifies and describes each Seller and Shareholder Product
currently being designed, developed, marketed, distributed, provided, licensed,
or sold by the Seller and Shareholders.

 

(b)               Registered IP. Part 2.7(b) of the Disclosure Schedule
accurately identifies: (a) each item of Registered IP in which the Seller and
Shareholder has or purports to have an ownership interest of any nature (whether
exclusively, jointly with another Person, or otherwise); (b) the jurisdiction in
which such item of Registered IP has been registered or filed and the applicable
registration or serial number; (c) any other Person that has an ownership
interest in such item of Registered IP and the nature of such ownership
interest; and (d) each Seller Product identified in Part 2.7(b) of the
Disclosure Schedule that embodies, utilizes, or is based upon or derived from
(or, with respect to Seller Products currently under development, that is
expected to embody, utilize, or be based upon or derived from) such item of
Registered IP. The Seller has provided to the Purchaser complete and accurate
copies of all applications, correspondence with any Governmental Body, and other
material documents related to each such item of Registered IP.

 

 A-7 

 

(c)                Inbound Licenses. Part 2.7(c) of the Disclosure Schedule
accurately identifies: (a) each Contract pursuant to which any Intellectual
Property Right or Intellectual Property is or has been licensed, sold, assigned,
or otherwise conveyed or provided to the Seller (other than (i) agreements
between the Seller and its employees in the Seller’s standard form thereof and
(ii) non-exclusive licenses to third-party software that is not incorporated
into, or used in the development, testing, distribution, maintenance, or support
of, any Seller Product and that is not otherwise material to the Seller’s
business); and (b) whether the licenses or rights granted to Seller in each such
Contract are exclusive or non-exclusive.

 

(d)               Outbound Licenses. Part 2.7(d) of the Disclosure Schedule
accurately identifies each Contract pursuant to which any Person has been
granted any license under, or otherwise has received or acquired any right
(whether or not currently exercisable) or interest in, any Seller IP. The Seller
is not bound by, and no Seller IP is subject to, any Contract containing any
covenant or other provision that in any way limits or restricts the ability of
the Seller to use, exploit, assert, or enforce any Seller IP anywhere in the
world.

 

(e)                Royalty Obligations. Part 2.7(e) of the Disclosure Schedule
contains a complete and accurate list and summary of all royalties, fees,
commissions, and other amounts payable by the Seller to any Person (other than
sales commissions paid to employees according to the Seller’s standard
commissions plan) upon or for the sale, or distribution of any Seller Product or
the use of any Seller IP.

 

(f)                Ownership Free and Clear. The Seller exclusively owns all
right, title, and interest to and in the Seller IP free and clear of any
Encumbrances (other than licenses and rights granted pursuant to the Contracts
identified in Part 2.7(f) of the Disclosure Schedule).

 

(g)               Protection of Proprietary Information. The Seller has taken
all reasonable steps to maintain the confidentiality of and otherwise protect
and enforce their rights in all proprietary information pertaining to the Seller
or any Seller Product. Without limiting the generality of the foregoing, no
portion of the source code for any software ever owned or developed by the
Seller has been disclosed or licensed to any escrow agent or other Person.

 

(h)               Sufficiency. The Seller owns or otherwise has, and after the
Closing the Purchaser will have, all Intellectual Property Rights needed to
conduct its business as currently conducted and planned to be conducted.

 

(i)                 Harmful Code. The Seller Products do not contain any
“viruses,” “worms,” “time-bombs,” “key-locks,” or any other devices that could
disrupt or interfere with the operation of the Seller Products or equipment upon
which the Seller Products operate.

 

(j)                 Valid and Enforceable; No Infringement. All Seller IP is
valid, subsisting, and enforceable. To the best of the Seller’s Knowledge, no
Person has infringed, misappropriated, or otherwise violated, and no Person is
currently infringing, misappropriating, or otherwise violating, any Seller IP.
Part 2.7(j) of the Disclosure Schedule accurately identifies (and the Seller has
provided to the Purchaser a complete and accurate copy of) each letter or other
written or electronic communication or correspondence that has been sent or
otherwise delivered by or to the Seller or any representative of the Seller
regarding any actual, alleged, or suspected infringement or misappropriation of
any Seller IP, and provides a brief description of the current status of the
matter referred to in such letter, communication, or correspondence.

 

 A-8 

 

(k)               No Infringement of Third Party IP Rights. The Seller has never
infringed (directly, contributorily, by inducement, or otherwise),
misappropriated, or otherwise violated or made unlawful use of any Intellectual
Property Right of any other Person or engaged in unfair competition. No Seller
Product, and no method or process used or incorporated in any Seller Product,
infringes, violates, or makes unlawful use of any Intellectual Property Right
of, or contains any Intellectual Property misappropriated from, any other
Person. There is no legitimate basis for a claim that the Seller or any Seller
Product has infringed or misappropriated any Intellectual Property Right of
another Person or engaged in unfair competition or that any Seller Product, or
any method or process used or incorporated in any Seller Product, infringes,
violates, or makes unlawful use of any Intellectual Property Right of, or
contains any Intellectual Property misappropriated from, any other Person, and
no such claim is pending or, to the best of the Seller’s Knowledge, threatened
against the Seller. The Seller has never received any notice or other
communication (in writing or otherwise) relating to any actual, alleged, or
suspected infringement, misappropriation, or violation by the Seller, any of
their employees or agents, or any Seller Product of any Intellectual Property
Rights of another Person, including any letter or other communication suggesting
or offering that the Seller obtain a license to any Intellectual Property Right
of another Person.

 

2.8  Contracts.

 

(a)                Part 2.8(a) of the Disclosure Schedule identifies each
Medical Billing Agreement and each other Seller Contract. The Seller has
delivered to the Purchaser accurate and complete copies of all written Seller
Contracts identified in Part 2.8(a) of the Disclosure Schedule, including all
amendments thereto. Each Seller Contract is valid and in full force and effect.

 

(b)               Except as set forth in Part 2.8(b) of the Disclosure Schedule:
(i) no Person has violated or breached, or declared or committed any default
under, any Seller Contract; (ii) no event has occurred, and no circumstance or
condition exists, that might (with or without notice or lapse of time)
(A) result in a violation or breach of any of the provisions of any Seller
Contract, (B) give any Person the right to declare a default or exercise any
remedy under any Seller Contract, (C) give any Person the right to accelerate
the maturity or performance of any Seller Contract, or (D) give any Person the
right to cancel, terminate or modify any Seller Contract; (iii) the Seller has
not received any notice or other communication (in writing or otherwise)
regarding any actual, alleged, possible or potential termination, violation or
breach of, or default under, or intention to reduce or limit the scope of
services or reduce the volume of the business under any Seller Contract; and
(iv) the Seller has not waived any right under any Seller Contract.

 

(c)                To the best of the knowledge of the Seller and Shareholder
each Person against which the Seller has any rights under any Seller Contract is
solvent and is able to satisfy all of such Person’s current monetary obligations
and other obligations and Liabilities thereunder.

 

 A-9 

 

(d)               Except as set forth in Part 2.8(d) of the Disclosure Schedule,
the Seller has never guaranteed or otherwise agreed to cause, insure or become
liable for, and the Seller has never pledged any of its assets to secure, the
performance or payment of any obligation or other Liability of any other Person.

 

(e)                The performance of the Seller Contracts will not result in
any violation of or failure to comply with any Legal Requirement.

 

(f)                No Person is renegotiating, or has the right to renegotiate,
any amount paid or payable to the Seller under any Seller Contract or any other
term or provision of any Seller Contract.

 

(g)               The Seller has no knowledge of any basis upon which any party
to any Seller Contract may object to (i) the assignment to the Purchaser of any
right under such Seller Contract, or (ii) the delegation to or performance by
the Purchaser of any obligation under such Seller Contract.

 

(h)               The Assumed Contracts included in Part 2.8(h) of the
Disclosure Schedule collectively constitute all of the Contracts necessary to
enable the Seller to conduct its business in the manner in which such business
is currently being conducted.

 

(i)                 The Seller and Shareholder have provided Purchaser with
complete copies of all written Medical Billing Agreements, including any and all
addenda thereto, with the Closing Date Clients, which are freely assignable to
Purchaser without the need to obtain any approval or consents from Clients or
other parties.

 

2.9  Liabilities.

 

(a)                Except as set forth in Part 2.9(a) of the Disclosure
Schedule, the Seller has no Liabilities, except for: (i) liabilities identified
as such in the “liabilities” columns of the Unaudited Interim Balance Sheet;
(ii) accounts payable (of the type required to be reflected as current
liabilities in the “liabilities” column of a balance sheet prepared in
accordance with GAAP) incurred by the Seller in bona fide transactions entered
into in the Ordinary Course of Business since the date of the Unaudited Interim
Balance Sheet; and (iii) obligations under the Contracts listed in Part 2.9(a)
of the Disclosure Schedule, to the extent that the existence of such obligations
is ascertainable solely by reference to such Contracts.

 

(b)               The Seller has not, at any time, (i) made a general assignment
for the benefit of creditors, (ii) filed, or had filed against it, any
bankruptcy petition or similar filing, (iii) suffered the attachment or other
judicial seizure of all or a substantial portion of its assets, (iv) admitted in
writing its inability to pay its debts as they become due, (v) been convicted
of, or pleaded guilty or no contest to, any felony, or (vi) taken or been the
subject of any action that may have an adverse effect on its ability to comply
with or perform any of its covenants or obligations under any of the
Transactional Agreements.

 

 A-10 

 

2.10           Compliance with Legal Requirements.

 

(a)                Except as set forth in Part 2.10(a) of the Disclosure
Schedule: (a) the Seller is in full compliance with each Legal Requirement that
is applicable to it or to the conduct of its business or the ownership or use of
any of its assets; (b) the Seller has at all times been in full compliance with
each Legal Requirement that is or was applicable to it or to the conduct of its
business or the ownership or use of any of its assets; (c) no event has
occurred, and no condition or circumstance exists, that might (with or without
notice or lapse of time) constitute or result directly or indirectly in a
violation by the Seller of, or a failure on the part of the Seller to comply
with, any Legal Requirement; and (d) the Seller has not received, at any time,
any notice or other communication (in writing or otherwise) from any
Governmental Body or any other Person regarding (i) any actual, alleged,
possible or potential violation of, or failure to comply with, any Legal
Requirement, or (ii) any actual, alleged, possible or potential obligation on
the part of the Seller to undertake, or to bear all or any portion of the cost
of, any cleanup or any remedial, corrective or response action of any nature,
(d) to the best knowledge of Seller, none of Seller’s Clients are currently
subject to or have received notice concerning an impending claim, audit or
review by a governmental or commercial payor, and the Seller and Shareholder has
delivered to the Purchaser an accurate and complete copy of each report, study,
survey or other document to which or the Seller has possession that addresses or
otherwise relates to the compliance of the Seller with, or the applicability to
the Seller of, any Legal Requirement.

 

(b)               None of the Seller, any officer, director, manager, member or
Shareholder or, to the Seller’s Knowledge, any agent, employee or independent
contractor of the Seller has submitted any claims for reimbursement that are in
violation of, nor has engaged in any activity that is in violation of, the
federal Medicare or federal or state Medicaid statutes, the federal TRICARE
statute (10 U.S.C. § 1071 et seq.), the civil False Claims Act of 1863
(31 U.S.C. § 3729 et seq.), criminal false claims statutes (e.g., 18 U.S.C.
§§ 287 and 1001), the Federal Health Care Program Anti-Kickback Statute (42
U.S.C. § 1320a-7b(b)), the Program Fraud Civil Remedies Act of 1986 (31 U.S.C.
§ 3801 et seq.), Section 14 of Public Law 100-93, the anti-fraud and related
provisions of HIPAA, or related regulations or other related or similar federal
or state laws and regulations (collectively, “Health Care Program Laws”),
including, without limitation, the following:

 

(i)                 making or causing to be made a false statement or
representation in any application for any benefit or payment;

 

(ii)               making or causing to be made a false statement or
representation for use in determining rights to any benefit or payment;

 

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

 

 A-11 

 

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

 

(v)               any other activity that violates any state or federal Legal
Requirements, Permit requirements or Payor contractual obligations, if any,
relating to prohibiting fraudulent, abusive or unlawful practices connected in
any way with the provision of health care items or services or the billing for
such items or services provided to a beneficiary of any Federal Health Care
Program.

 

(c)                The Seller is, and has at all times been, in all material
respects in compliance with HIPAA and Subtitle D of the Health Information
Technology for Economic and Clinical Health Act (including all rules and
regulations thereunder) (the “HITECH Act”) and comparable state privacy and data
security laws and regulations applicable to the Seller. The Seller has used and
disclosed, and uses and discloses, Protected Health Information (as defined in
45 C.F.R. § 160.103) (i) to the extent applicable, in accordance with any
limitations set forth in its customer or Payor agreements; and (ii) to perform
functions, activities or services in accordance with the limitations set forth
in HIPAA, the HITECH Act, and applicable state privacy and data security laws
and regulations (to the extent not preempted by federal law). The Seller has not
received, at any time, any written notice from any Governmental Body or any
other Person regarding any actual or suspected violation of, or failure to
comply with, HIPAA, the HITECH Act or applicable state privacy and data security
laws and regulations. No breach has occurred with respect to any unsecured
Protected Health Information maintained by the Seller that is subject to the
notification requirements of 45 C.F.R. part 164, Subpart D, and no information
security or privacy breach event has occurred that would require notification
under any comparable state laws applicable to the Seller. With regard to
compliance with HIPAA, the HITECH Act, or applicable state privacy and data
security laws and regulations, the Seller has no obligation to undertake, or to
bear all or any portion of the cost of, any mitigation, notifications or any
remedial, corrective or response action of any nature. The Seller Products
comply with HIPAA, the HITECH Act and applicable state privacy and data security
laws and regulations.

 

2.11                      Governmental Authorizations. Part 2.11 of the
Disclosure Schedule identifies: (a) each Governmental Authorization that is held
by the Seller; and (b) each other Governmental Authorization that, to the best
of the knowledge of the Seller and Shareholder is held by any employee of the
Seller and relates to or is useful in connection with the business of the
Seller. The Shareholder and the Seller has delivered to the Purchaser accurate
and complete copies of all of the Governmental Authorizations identified in Part
2.11 of the Disclosure Schedule, including all renewals thereof and all
amendments thereto. Each Governmental Authorization identified or required to be
identified in Part 2.11 of the Disclosure Schedule is valid and in full force
and effect. Except as set forth in Part 2.11 of the Disclosure Schedule, to the
best knowledge of Seller: (i) the Seller is and has at all times been in full
compliance with all of the terms and requirements of each Governmental
Authorization identified or required to be identified in Part 2.11 of the
Disclosure Schedule; (ii) no event has occurred, and no condition or
circumstance exists, that might (with or without notice or lapse of time)
(A) constitute or result directly or indirectly in a violation of or a failure
to comply with any term or requirement of any Governmental Authorization
identified or required to be identified in Part 2.11 of the Disclosure Schedule,
or (B) result directly or indirectly in the revocation, withdrawal, suspension,
cancellation, termination or modification of any Governmental Authorization
identified or required to be identified in Part 2.11 of the Disclosure Schedule;
(iii) the Seller has never received any notice or other communication (in
writing or otherwise) from any Governmental Body or any other Person regarding
(A) any actual, alleged, possible or potential violation of or failure to comply
with any term or requirement of any Governmental Authorization, or (B) any
actual, proposed, possible or potential revocation, withdrawal, suspension,
cancellation, termination or modification of any Governmental Authorization; and
(iv) all applications required to have been filed for the renewal of the
Governmental Authorizations required to be identified in Part 2.11 of the
Disclosure Schedule have been duly filed on a timely basis with the appropriate
Governmental Bodies, and each other notice or filing required to have been given
or made with respect to such Governmental Authorizations has been duly given or
made on a timely basis with the appropriate Governmental Body. The Governmental
Authorizations identified in Part 2.11 of the Disclosure Schedule constitute all
of the Governmental Authorizations necessary (i) to enable the Seller to conduct
its business in the manner in which such business is currently being conducted,
and (ii) to permit the Seller to own and use its assets in the manner in which
they are currently owned and used.

 

 A-12 

 

2.12                      Tax Matters.

 

(a)                The Seller has filed all Tax Returns that it was required to
file under applicable Legal Requirements. All such Tax Returns were correct and
complete in all respects and have been prepared in substantial compliance with
all applicable Legal Requirements. All Taxes due and owing by the Seller
(whether or not shown on any Tax Return) have been paid. The Seller is not
currently the beneficiary of any extension of time within which to file any Tax
Return. No claim has ever been made by an authority in a jurisdiction where the
Seller does not file Tax Returns that it is or may be subject to taxation by
that jurisdiction. There are no Liens for Taxes (other than Taxes not yet due
and payable) upon any of the assets of the Seller.

 

(b)               The Seller has withheld and paid all Taxes required to have
been withheld and paid in connection with any amounts paid or owing to any
employee, independent contractor, creditor, stockholder, or other third party.

 

(c)                No director or officer (or employee responsible for Tax
matters) of the Seller expects any authority to assess any additional Taxes for
any period for which Tax Returns have been filed. No Proceedings are pending or
being conducted with respect to the Seller. The Seller has not received from any
Governmental Body any (i) notice indicating an intent to open an audit or other
review, (ii) request for information related to Tax matters, or (iii) notice of
deficiency or proposed adjustment of or any amount of Tax proposed, asserted, or
assessed by any Governmental Body against the Seller.

 

 A-13 

 

(d)               The Seller has not waived any statute of limitations in
respect of Taxes or agreed to any extension of time with respect to a Tax
assessment or deficiency.

 

2.13                      Employee and Labor Matters.

 

(a)                Part 2.13(a) of the Disclosure Schedule accurately sets
forth, with respect to each employee of the Seller (including any employee of
the Seller who is on a leave of absence or on layoff status):

 

(i)                 the name of such employee and the date as of which such
employee was originally hired by the Seller;

 

(ii)               such employee’s title, and a description of such employee’s
duties and responsibilities;

 

(iii)             the aggregate dollar amount of the compensation (including
wages, salary, commissions, director’s fees, fringe benefits, bonuses,
profit-sharing payments and other payments or benefits of any type) received by
such employee from the Seller with respect to services performed in 2015;

 

(iv)             such employee’s annualized compensation as of the date of this
Agreement;

 

(v)               each Seller Employee Plan in which such employee participates
or is eligible to participate; and

 

(vi)             any Governmental Authorization that is held by such employee
and that relates to or is useful in connection with the Seller’s business.

 

(b)               The employment of each of the Seller’s employees is terminable
by the Seller at will. The Seller has delivered to the Purchaser accurate and
complete copies of all employee manuals and handbooks, disclosure materials,
policy statements and other materials relating to the employment of the current
and former employees of the Seller.

 

(c)                Part 2.13(c) of the Disclosure Schedule accurately sets
forth, with respect to each independent contractor of the Seller (exclusive of
attorneys, accountants, insurance agents and other professionals who have
provided services to Seller):

 

(i)                 the name of such independent contractor and the date as of
which such independent contractor was originally hired by the Seller;

 

(ii)               a description of such independent contractor duties and
responsibilities;

 

(iii)             the aggregate dollar amount of the compensation (including all
payments or benefits of any type) received by such independent contractor from
the Seller with respect to services performed in 2015;

 

 A-14 

 

(iv)             the terms of compensation of such independent contractor; and

 

(v)               any Governmental Authorization that is held by such
independent contractor and that relates to or is useful in connection with the
Seller’s business.

 

(d)               Except as set forth in Part 2.13(d) of the Disclosure
Schedule, the Seller is not a party to or bound by, and the Seller has never
been a party to or bound by, any employment agreement or any union contract,
collective bargaining agreement or similar Contract.

 

(e)                None of the current or former independent contractors of the
Seller could be reclassified as an employee. The Seller has never had any
temporary or leased employees. No independent contractor of the Seller is
eligible to participate in any Seller Employee Plan.

 

2.14                      Insurance. Seller maintains insurance policies of a
character and in such amounts as are customarily insured against by similarly
situated companies in the same or similar businesses. No insurer under any such
insurance policy has canceled or generally disclaimed Liability under any such
policy and no notice of cancellation or termination has been received. Part 2.14
of the Disclosure Schedule accurately sets forth, with respect to each such
insurance policy maintained by or at the expense of, or for the direct or
indirect benefit of, the Seller: (i) the name of the insurance carrier that
issued such policy and the policy number of such policy; (ii) whether such
policy is a “claims made”or an “occurrences”policy; (iii) a description of the
coverage provided by such policy and the material terms and provisions of such
policy (including all applicable coverage limits, deductible amounts and
co-insurance arrangements and any non-customary exclusions from coverage); (iv)
the annual premium payable with respect to such policy; and (v) a description of
any claims pending, and any claims that have been asserted in the past, with
respect to such policy or any predecessor insurance policy.

 

2.15                      Certain Payments, Etc. The Seller has not, and no
officer, employee, agent or other Person associated with or acting for or on
behalf of the Seller has, at any time, directly or indirectly: (a) used any
corporate funds (i) to make any unlawful political contribution or gift or for
any other unlawful purpose relating to any political activity, (ii) to make any
unlawful payment to any governmental official or employee, or (iii) to establish
or maintain any unlawful or unrecorded fund or account of any nature; (b) made
any false or fictitious entry, or failed to make any entry that should have been
made, in any of the books of account or other records of the Seller; (c) made
any payoff, influence payment, bribe, rebate, kickback or unlawful payment to
any Person; (d) performed any favor or given any gift which was not deductible
for federal income tax purposes; (e) made any payment (whether or not lawful) to
any Person, or provided (whether lawfully or unlawfully) any favor or anything
of value (whether in the form of property or services, or in any other form) to
any Person, for the purpose of obtaining or paying for (i) favorable treatment
in securing business, or (ii) any other special concession; or (f) agreed,
committed or offered (in writing or otherwise) to take any of the actions
described in clauses “(a)”through “(e)”above.

 

2.16                      Proceedings; Orders. Except as set forth in Part 2.16
of the Disclosure Schedule, there is no pending Proceeding, and no Person has
threatened in writing during the 12 months preceding the date of this Agreement
to commence any Proceeding: (i) that involves the Seller or that otherwise
relates to or might affect the business of the Seller or any of the Purchased
Assets (whether or not the Seller is named as a party thereto); or (ii) that
challenges, or that may have the effect of preventing, delaying, making illegal
or otherwise interfering with, any of the Transactions. Except as set forth in
Part 2.16 of the Disclosure Schedule, to the best knowledge of Seller, no event
has occurred, and no claim, dispute or other condition or circumstance exists,
that might directly or indirectly give rise to or serve as a basis for the
commencement of any such Proceeding. Except as set forth in Part 2.16 of the
Disclosure Schedule, no Proceeding has been commenced by or against the Seller
during the 12 months preceding the date of this Agreement, and the Seller and
Shareholder has delivered to the Purchaser accurate and complete copies of all
pleadings, correspondence and other written materials (to which the Seller has
access) that relate to the Proceedings identified in Part 2.16 of the Disclosure
Schedule. There is no Order to which the Seller and Shareholder or any of the
assets owned or used by the Seller, is subject. To the best of the knowledge of
the Seller, no employee of the Seller is subject to any Order that may prohibit
employee from engaging in or continuing any conduct, activity or practice
relating to the business of the Seller. There is no proposed Order that, if
issued or otherwise put into effect, (i) may have an adverse effect on the
business, condition, assets, liabilities, operations, financial performance, net
income or prospects of the Seller or on the ability of Seller or Shareholder to
comply with or perform any covenant or obligation under any of the Transactional
Agreements, or (ii) may have the effect of preventing, delaying, making illegal
or otherwise interfering with any of the Transactions.

 

 A-15 

 

2.17                      Authority; Binding Nature of Agreements.

 

(a)                The Seller has the absolute and unrestricted right, power and
authority to enter into and to perform its obligations under each of the
Transactional Agreements to which it is or may become a party; and the
execution, delivery and performance by the Seller of the Transactional
Agreements to which it is or may become a party have been duly authorized by all
necessary action on the part of the Seller and its members, manager and
officers. This Agreement constitutes the legal, valid and binding obligation of
the Seller, enforceable against the Seller in accordance with its terms. Upon
the execution of each of the other Transactional Agreements at the Closing, each
of such other Transactional Agreements to which the Seller is a party will
constitute the legal, valid and binding obligation of the Seller and will be
enforceable against the Seller in accordance with its terms.

 

(b)               The Shareholder has the absolute and unrestricted right, power
and capacity to enter into and to perform his obligations under each of the
Transactional Agreements to which he is or may become a party. This Agreement
constitutes the legal, valid and binding obligation of the Shareholder
enforceable against the Shareholder and Seller in accordance with its terms.
Upon the execution of each of the other Transactional Agreements at the Closing,
each of such other Transactional Agreements to which the Shareholder and Seller
is a party will constitute the legal, valid and binding obligation the
Shareholder and will be enforceable against the Shareholder and Seller in
accordance with its terms.

 

2.18                      Non-Contravention; Consents. Except as set forth in
Part 2.18 of the Disclosure Schedule, neither the execution and delivery of any
of the Transactional Agreements by Shareholder and the Seller, nor the
consummation or performance by the Seller and Shareholder of any of the
Transactions, or the sale and assignment of the Purchased Assets to Purchaser,
will directly or indirectly (with or without notice or lapse of time):

 

 A-16 

 

(a)                contravene, conflict with or result in a violation of, the
certificate of formation, operating agreement or other organizational documents
of Seller;

 

(b)               contravene, conflict with or result in a violation of, or give
any Governmental Body or other Person the right to challenge any of the
Transactions or to exercise any remedy or obtain any relief under, any Legal
Requirement or any Order to which the Seller, or any of the assets of the
Seller, is subject;

 

(c)                cause any of the Purchased Assets to be reassessed or
revalued by any taxing authority or other Governmental Body;

 

(d)               contravene, conflict with or result in a violation of any of
the terms or requirements of, or give any Governmental Body the right to revoke,
withdraw, suspend, cancel, terminate or modify, any Governmental Authorization
that is to be included in the Purchased Assets or is held by the Seller or any
employee of the Seller;

 

(e)                contravene, conflict with or result in a violation or breach
of, or result in a default under, any provision of any of Seller’s Contracts;

 

(f)                give any Person the right to (i) declare a default or
exercise any remedy under any of Seller’s Contracts, (ii) accelerate the
maturity or performance of any Contract, or (iii) cancel, terminate or modify
any such Contract; or

 

(g)               result in the imposition or creation of any Encumbrance upon
or with respect to any of the Purchased Assets.

 

Except as set forth in Part 2.18 of the Disclosure Schedule, the Seller nor the
Shareholder was not and will not be required to make any filing with or give any
notice to, or to obtain any Consent from, any Person in connection with the
execution and delivery of any of the Transactional Agreements or the
consummation or performance of any of the Transactions.

 

2.19                      Brokers. Purchaser has retained Corporate Finance
Advisors, Inc. (Ron Salupo) as the “retained broker”and shall be liable for
brokerage fees due to same. Seller and Shareholder represents that it has not
engaged any other broker in respect of the Transactions. Seller and Purchaser
shall each indemnify and hold the other harmless from and against any and all
claims, demands, causes of action, debts or liabilities arising out of or on
account of a claim by any other broker, finder, investment banker or agent that
he, she or it is entitled to a commission or fees as a result of being retained
or used by the other party.

 

2.20                      Full Disclosure. None of the Transactional Agreements
contains or will contain any untrue statement of any material fact; and none of
the Transactional Agreements omits or will omit to state any fact necessary to
make any of the representations, warranties or other statements or information
contained therein not materially misleading. All of the information set forth in
the Disclosure Schedule, and all other information regarding the Seller and its
business, condition, assets, liabilities, operations, financial performance, net
income and prospects that has been furnished to the Purchaser or any of the
Purchaser’s Representatives by or on behalf of Seller or Shareholder or by any
Representative of the Seller or Shareholder is accurate and complete in all
material respects.

 

 A-17 

 

3.Representations and Warranties of the Purchaser.

 

The Purchaser represents and warrants, to and for the benefit of the Seller, as
follows:

 

3.1  Representations and Warranties of the Purchaser.

 

The Purchaser represents and warrants to the Seller and Shareholder as of the
date of this Agreement as follows:

 

(a)                Incorporation and Existence of the Purchaser. The Purchaser
is a corporation duly formed and validly existing under the Laws of State of
Delaware.

 

(b)               Validity of Agreement.

 

(i)                 The Purchaser has all necessary corporate power to enter
into and perform its obligations under this Agreement and any other agreements
or instruments to be delivered or given by it pursuant to this Agreement.

 

(ii)               The execution, delivery and performance by the Purchaser of
this Agreement and the consummation of the Transactions have been duly
authorized by all necessary corporate action on the part of the Purchaser.

 

(iii)             This Agreement and any other agreements entered into pursuant
to this Agreement to which the Purchaser is a party constitute or will
constitute legal, valid and binding obligations of the Purchaser, enforceable
against the Purchaser in accordance with their respective terms, except as
enforcement may be limited by bankruptcy, insolvency or other Laws affecting the
rights of creditors generally and except that equitable remedies may be granted
only in the discretion of a court of competent jurisdiction.

 

(c)                Authorizations. There is no requirement for the Purchaser to
make any filing with, give any notice to or obtain any consent or Authorization
from any Governmental Agency or any other Third Party as a condition to the
lawful consummation of the Transactions.

 

(d)               No Violation. The execution and delivery of this Agreement by
the Purchaser, the consummation of the Transactions and the fulfillment by the
Purchaser of the terms, conditions and provisions hereof will not (with or
without the giving of notice or lapse of time, or both) contravene or violate or
result in a breach or a default under or give rise to a right of termination,
amendment or cancellation or the acceleration of any obligations of the
Purchaser under:

 

(i)                 any Law;

 

 A-18 

 

(ii)               any judgment, order, writ, injunction or decree of any
Governmental Agency having jurisdiction over the Purchaser;

 

(iii)             the constating documents or any resolutions of the board of
directors or Shareholder of the Purchaser; or

 

(iv)             the provisions of any Contract to which the Purchaser is a
party or by which it is, or any of its properties or assets are, bound.

 

(e)                No Knowledge of Inaccuracy of Seller’s Representations and
Warranties. The Purchaser does not have any knowledge that any of the
representations or warranties of the Seller as set forth in this Agreement is in
any way inaccurate or untrue.

 

3.2  Authority; Binding Nature Of Agreements. The Purchaser has the absolute and
unrestricted right, power and authority to enter into and perform its
obligations under this Agreement, and the execution and delivery of this
Agreement by the Purchaser have been duly authorized by all necessary action on
the part of the Purchaser and its board of directors. The Purchaser has the
absolute and unrestricted right, power and authority to enter into and perform
its obligations under the Transactional Agreements to which it is or may become
a party, and the execution, delivery and performance of the Transactional
Agreements by the Purchaser have been duly authorized by all necessary action on
the part of the Purchaser and its board of directors. This Agreement constitutes
the legal, valid and binding obligation of the Purchaser, enforceable against it
in accordance with its terms. Upon the execution and delivery of the
Transactional Agreements at the Closing, the Transactional Agreements will
constitute the legal, valid and binding obligations of the Purchaser,
enforceable against the Purchaser in accordance with their terms.

 

3.3  Non-Contravention. Neither the execution and delivery by Purchaser of any
of the Transactional Agreements nor the consummation or performance by the
Purchaser of the Transactions will directly or indirectly (with or without
notice or lapse of time): (i) contravene, conflict with or result in a violation
of, the certificate of incorporation or by-laws of Purchaser; (ii) contravene,
conflict with or result in a violation of, or give any Governmental Body or
other Person the right to challenge any of the Transactions or to exercise any
remedy or obtain any relief under, any Legal Requirement or any Order to which
the Purchaser is subject; or (iii) contravene, conflict with or result in a
violation or breach of, or result in a default under, any provision of any
material Contract to which the Purchaser is a party.

 

4.Indemnification, Etc.

 

4.1  Survival of Representations and Covenants. Subject to the limitations and
other provisions of this Agreement, the representations, warranties, and
covenants contained herein shall survive the Closing and shall remain in full
force and effect through the applicable statute of limitations from the Closing
Date. All covenants and agreements of the parties contained herein shall survive
the Closing indefinitely or for the period explicitly specified therein.
Notwithstanding the foregoing, any claims asserted in good faith with reasonable
specificity (to the extent known at such time) and in writing by notice from the
non-breaching party to the breaching party prior to the expiration date of the
applicable survival period shall not thereafter be barred by the expiration of
the relevant representation or warranty and such claims shall survive until
finally resolved.

 

 A-19 

 

4.2  Indemnification By the Seller and Shareholder.

 

(a)                The Seller and Shareholder jointly and severally, shall hold
harmless and indemnify each of the Indemnitees from and against, and shall
compensate and reimburse each of the Indemnitees for, any Damages that are
directly or indirectly suffered or incurred by any of the Indemnitees or to
which any of the Indemnitees may otherwise become subject at any time
(regardless of whether or not such Damages relate to any third-party claim) and
that arise directly or indirectly from or as a direct or indirect result of, or
are directly or indirectly connected with:

 

(i)                 any Breach of any of the representations or warranties of
Seller or Shareholder contained in this Agreement, the other Transactional
Agreements, or instrument delivered by or on behalf of Seller or Shareholder
pursuant to this Agreement, as of the date such representation or warranty was
made or as if such representation or warranty was made on and as of the Closing
Date (except for representations and warranties that expressly relate to a
specified date, the inaccuracy in or breach of which will be determined with
reference to such specified date);

 

(ii)               any Breach or non-fulfillment of any covenant, agreement or
obligation to be performed by Seller or Shareholder pursuant to this Agreement,
the other Transactional Agreements or any certificate or instrument delivered by
or on behalf of Seller or Shareholder pursuant to this Agreement;

 

(iii)             any Excluded Asset or any Liability of the Seller or
Shareholder or of any Related Party, other than the Assumed Liabilities; or

 

(iv)             any claim or Proceeding against the Purchaser or any other
Indemnitee by any Person based upon, resulting from or arising out of the
business, operations, properties, assets or obligations of Seller or Shareholder
or any of its Affiliates conducted, existing or arising on or prior to the
Closing Date, other than the Assumed Liabilities.

 

(b)               Subject to Section 4.2(c), Seller or Shareholder shall not be
required to make any indemnification payment pursuant to Sections 4.2(a)(i) or
4.2(a)(ii) for any Breach as set forth in such Sections until such time as the
total amount of all Damages (including the Damages arising from such Breach and
all other Damages arising from any other Breaches of any representations or
warranties) that have been directly or indirectly suffered or incurred by any
one or more of the Indemnitees, or to which any one or more of the Indemnitees
has or have otherwise become subject, exceeds $5,000. If the total amount of
Damages exceeds $5,000, the Indemnitees shall be entitled to be indemnified
against and compensated and reimbursed for the entire amount of Damages.

 

 A-20 

 

4.3  Indemnification By The Purchaser.

 

(a)                The Purchaser shall hold harmless and indemnify the Seller
and Shareholder from and against, and shall compensate and reimburse the Seller
for, any Damages that are directly suffered or incurred by the Seller or
Shareholder or to which the Seller or Shareholder may otherwise become subject
at any time (regardless of whether or not such Damages relate to any third-party
claim) and that arise directly or indirectly from or as a direct or indirect
result of, or are directly or indirectly connected with:

 

(i)                 any Breach of any of the representations or warranties of
the Purchaser contained in this Agreement, the other Transactional Agreements or
in any certificate or instrument delivered by or on behalf of the Purchaser
pursuant to this Agreement, as of the date such representation or warranty was
made or as if such representation or warranty was made on and as of the Closing
Date (except for representations and warranties that expressly relate to a
specified date, the inaccuracy in or breach of which will be determined with
reference to such specified date);

 

(ii)               any Breach or non-fulfillment of any covenant, agreement or
obligation to be performed by the Purchaser pursuant to this Agreement, the
other Transactional Agreements or any certificate or instrument delivered by or
on behalf of the Purchaser pursuant to this Agreement;

 

(iii)             any claim or Proceeding against the Seller of Shareholder by
any Person based upon, resulting from or arising out of the business,
operations, properties, assets or obligations of Purchaser or any of its
Affiliates conducted, existing or arising after the Closing Date;

 

(iv)             Purchaser’s use of Seller’s Medicare or Medicaid Provider or
submitter numbers after the Closing Date to submit claims for services provided
by Seller after the Closing Date; or

 

(v)               any failure on the part of the Purchaser to perform and
discharge the assumed liabilities on a timely basis.

 

(b)               Subject to Section 4.3(c), the Purchaser shall not be required
to make any indemnification payment pursuant to Section 4.3(a) for any Breach of
any of its representations and warranties until such time as the total amount of
all Damages (including the Damages arising from such Breach and all other
Damages arising from any other Breaches of its representations or warranties)
that have been directly or indirectly suffered or incurred by the Seller, or to
which the Seller has otherwise become subject, exceeds $5,000 in the aggregate.
If the total amount of such Damages exceeds $5,000 in the aggregate, the Seller
shall be entitled to be indemnified against and compensated and reimbursed for
the entire amount of such Damages, and not merely the portion of such Damages.

 

4.4  Conditions of Indemnification. The obligations and liabilities of the
Purchaser and Seller under Section 4.2 and 4.3, respectively, shall be subject
to the terms and conditions set forth on Exhibit “H”. (see change to Exhibit H)

 

 A-21 

 

5.Certain Post-Closing Covenants.

 

5.1  Further Actions. From and after the Closing Date, the Seller shall
cooperate with the Purchaser and the Purchaser’s affiliates and Representatives,
and shall execute and deliver such documents and take such other actions as the
Purchaser may reasonably request, for the purpose of evidencing the Transactions
and putting the Purchaser in possession and control of all of the Purchased
Assets. Without limiting the generality of the foregoing, from and after the
Closing Date, the Purchaser shall promptly remit to the Seller any funds that
are received by the Purchaser that clearly represents payment of receivables for
services provided by Seller prior to the Closing Date. The Seller: hereby
irrevocably nominates, constitutes and appoints the Purchaser as the true and
lawful attorney-in-fact of the Seller (with full power of substitution)
effective as of the Closing Date, and hereby authorizes the Purchaser, in the
name of and on behalf of the Seller, to execute, deliver, acknowledge, certify,
file and record any document, to institute and prosecute any Proceeding and to
take any other action (on or at any time after the Closing Date) that the
Purchaser may deem appropriate for the purpose of (i) collecting, asserting,
enforcing or perfecting any claim, right or interest of any kind that is
included in or relates to any of the Purchased Assets, (ii) defending or
compromising any claim or Proceeding relating to any of the Purchased Assets, or
(iii) otherwise carrying out or facilitating any of the Transactions. The power
of attorney referred to in the preceding sentence is and shall be coupled with
an interest and shall be irrevocable, and shall survive the dissolution or
insolvency of the Seller. Except as set forth above, in the event that fees or
any other charges are remitted by a Client to Seller or Shareholder for Medical
Billing Services, all such payments shall promptly be remitted to the Purchaser.
Seller shall maintain sufficient funds and pay any necessary fees in the event
of recoupment of receivables related to activities prior to the Closing Date. In
the event Seller fails to pay the recoupment Purchaser’s remedies shall not be
limited by Sections 4.2, 6.15, and Exhibit H.

 

5.2  Confidentiality; Publicity.

 

(a)                Seller and Shareholder recognizes and acknowledges that it
had in the past, currently has, and in the future may have, access to certain
confidential information of the Seller and the Purchaser regarding the Business
and process that are valuable, special and unique assets of Seller and the
Purchaser. Seller and Shareholder agrees that it will not disclose such
confidential information to any person for any purpose or reason whatsoever,
unless (i) such information becomes known to the public generally through no
fault of the Seller or (ii) disclosure is required by law or the order of any
Government Body under color of law; provided, that prior to disclosing any
information pursuant to this clause (ii); provided that Seller shall give prior
written notice thereof to the Purchaser and provide the Purchaser with the
opportunity to contest such disclosure. Because of the difficulty of measuring
economic losses as a result of the breach of the covenants in this Section 5.2,
and because of the immediate and irreparable damage that would be caused for
which no other adequate remedy exists, Seller and Shareholder agrees that, in
the event of a breach by it of the foregoing covenants, the covenant may be
enforced against the Purchaser by injunction and restraining order, without the
necessity of posting a bond.

 

 A-22 

 

(b)               Seller shall ensure that, on and at all times after the
Closing Date no press release or other publicity concerning any of the
Transactions is issued or otherwise disseminated by or on behalf of Seller
without the Purchaser’s prior written consent.

 

5.3  Employees. Seller agrees to permit Purchaser to utilize the Retained
Employees to conduct the business acquired by it pursuant to this Agreement
through a date to be mutually agreed upon by the Parties during the post-closing
transition period. The Retained Employees shall report to a Purchaser employee
or representative. In consideration of Purchaser’s utilization of the Retained
Employees, Purchaser agrees to reimburse Seller for the Transitional Costs that
accrue during the period of utilization of the respective Retained Employees.
Purchaser shall have the right to direct Seller to terminate the employment of
any or all of the Retained Employees on forty-eight (48) hours written notice to
Seller and Purchaser’s obligation to reimburse Seller for future wages and
related expenses with respect to such terminated Retained Employees shall end at
the end of such 48 hour notice period.

 

5.4  Accounts Receivable. Promptly after the Closing, Seller shall deliver to
Purchaser an updated schedule listing an accurate and complete breakdown and
aging of all accounts receivable, notes receivable and other receivables of the
Seller as of the Closing Date.

 

5.5  Non-Solicitation.

 

(a)                Seller and Shareholder covenant that for a period of five (5)
years following the Closing Date neither shall directly or indirectly induce or
seek to (i) influence any employee of the Purchaser or any of its affiliates to
terminate his or her employment; (ii) knowingly hire and/or aid a competitor of
the Purchaser in hiring a current or former employee of the Purchaser; or (iii)
induce or seek to influence any Clients to reduce the volume of their business
with Purchaser or not to do business with the Purchaser.

 

(b)               Seller and Shareholder acknowledge that the restrictive period
contained in Section 5.5(a) is reasonable under the circumstances. Moreover, it
is the desire and intent of the parties that the provisions of Section 5.54(a)
be enforceable to the fullest extent permissible under the legal requirements
and public policies applied in each jurisdiction in which enforcement is sought.
Seller and Shareholder specifically agree that, in the event of a breach or
threatened breach of Section 5.5(a), the Purchaser would suffer irreparable
injury and damages at law would be an insufficient remedy, and the Purchaser
shall be entitled to seek equitable relief by way of temporary or permanent
injunction (or any other equitable remedies), without proof of actual damages
and without the need to post bond or other security.

 

5.6  Change of Name. Immediately after the Closing, the Seller shall change its
name to a name that is reasonably satisfactory to Purchaser.

 

6.Miscellaneous Provisions.

 

6.1  Further Assurances. Each party hereto shall execute and/or cause to be
delivered to each other party hereto such instruments and other documents, and
shall take such other actions, as such other party may reasonably request (prior
to, at or after the Closing) for the purpose of carrying out or evidencing any
of the Transactions.

 

 A-23 

 

6.2  Sole Representations and Warranties. The Parties make no representations or
warranties of any kind or nature, express or implied, at law or in equity,
except as expressly set forth in this Agreement or in any certificate executed
and delivered pursuant to this Agreement. Each Party hereby expressly negates
and disclaims, and will not be liable for, any and all representations or
warranties which may have been made or alleged to have been made in any other
document or instrument or in any statement or information made or communicated
to any other Party in any manner that is not expressly set forth in this
Agreement or any a certificate executed and delivered pursuant to this
Agreement.

 

6.3  Fees and Expenses. Each party shall be responsible for their respective
fees and expenses incurred in connection with the Transactions.

 

6.4  Notices. Any notice or other communication required or permitted to be
delivered to any party under this Agreement shall be in writing and shall be
deemed properly delivered, given and received when delivered (by hand, by
registered mail, by courier or express delivery service or by facsimile) to the
address or facsimile telephone number set forth beneath the name of such party
below (or to such other address or facsimile telephone number as such party
shall have specified in a written notice given to the other parties hereto):

 

if to the Seller or Shareholders:

 

 

Rhonda Roberts-Turner

Address: 18302 Noyce Road Crosby, Texas

Email: Rhondaroberts@gulfcoastbilling.com

 

 

 

if to the Purchaser:

 

MTBC
7 Clyde Road
Somerset, NJ 08873
Attn: Amritpal Deol
Facsimile: 732-964-9036

 

6.5  Headings. The underlined headings contained in this Agreement are for
convenience of reference only, shall not be deemed to be a part of this
Agreement and shall not be referred to in connection with the construction or
interpretation of this Agreement.

 

6.6  Counterparts. This Agreement may be executed in several counterparts, each
of which shall constitute an original and all of which, when taken together,
shall constitute one agreement.

 

6.7  Unattached Exhibits. The parties acknowledge that certain exhibits and
schedules to this Agreement to be prepared by Seller or Purchaser have not been
prepared or are incomplete at the time of execution of this Agreement. Seller
and Purchaser shall proceed with diligence and in good faith to prepare said
exhibits and schedules and shall present same to the other party for its review
and approval. All exhibits and schedules so approved shall be initialed by each
party and attached to this Agreement prior to the Closing.

 

 A-24 

 

6.8 Remedies Cumulative; Specific Performance. The rights and remedies of the
parties hereto shall be cumulative (and not alternative) and Seller agrees that:
(a) in the event of any Breach or threatened Breach by Seller of any covenant,
obligation or other provision set forth in this Agreement, the Purchaser shall
be entitled (in addition to any other remedy that may be available to it) to
(i) a decree or order of specific performance or mandamus to enforce the
observance and performance of such covenant, obligation or other provision, and
(ii) an injunction restraining such Breach or threatened Breach; and (b) neither
the Purchaser nor any other Indemnitee shall be required to provide any bond or
other security in connection with any such decree, order or injunction or in
connection with any related action or Proceeding.

 

6.9  Waiver.

 

(a)                No failure on the part of any Person to exercise any power,
right, privilege or remedy under this Agreement, and no delay on the part of any
Person in exercising any power, right, privilege or remedy under this Agreement,
shall operate as a waiver of such power, right, privilege or remedy; and no
single or partial exercise of any such power, right, privilege or remedy shall
preclude any other or further exercise thereof or of any other power, right,
privilege or remedy.

 

(b)               No Person shall be deemed to have waived any claim arising out
of this Agreement, or any power, right, privilege or remedy under this
Agreement, unless the waiver of such claim, power, right, privilege or remedy is
expressly set forth in a written instrument duly executed and delivered on
behalf of such Person; and any such waiver shall not be applicable or have any
effect except in the specific instance in which it is given.

 

6.10                      Amendments. This Agreement may not be amended,
modified, altered or supplemented other than by means of a written instrument
duly executed and delivered on behalf of the Purchaser and the Seller.

 

6.11                      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. If the final judgment of a
court of competent jurisdiction declares that any term or provision hereof is
invalid or unenforceable, the parties hereto agree that the court making such
determination shall have the power to limit the term or provision, to delete
specific words or phrases, or to replace any invalid or unenforceable term or
provision with a term or provision that is valid and enforceable and that comes
closest to expressing the intention of the invalid or unenforceable term or
provision, and this Agreement shall be enforceable as so modified. In the event
such court does not exercise the power granted to it in the prior sentence, the
parties hereto agree to replace such invalid or unenforceable term or provision
with a valid and enforceable term or provision that will achieve, to the extent
possible, the economic, business and other purposes of such invalid or
unenforceable term.

 

 A-25 

 

6.12                      Entire Agreement. The Transactional Agreements set
forth the entire understanding of the parties relating to the subject matter
thereof and supersede all prior agreements and understandings among or between
any of the parties relating to the subject matter thereof.

 

6.13                      Knowledge. For purposes of this Agreement, a Person
shall be deemed to have “knowledge” of a particular fact or other matter if any
Representative of such Person has knowledge of such fact or other matter.

 

6.14                      Construction.

 

(a)                For purposes of this Agreement, whenever the context
requires: the singular number shall include the plural, and vice versa; the
masculine gender shall include the feminine and neuter genders; the feminine
gender shall include the masculine and neuter genders; and the neuter gender
shall include the masculine and feminine genders.

 

(b)               The parties hereto agree that any rule of construction to the
effect that ambiguities are to be resolved against the drafting party shall not
be applied in the construction or interpretation of this Agreement.

 

(c)                As used in this Agreement, the words “include” and
“including,” and variations thereof, shall not be deemed to be terms of
limitation, but rather shall be deemed to be followed by the words “without
limitation.”

 

(d)               Except as otherwise indicated, all references in this
Agreement to “Sections” and “Exhibits” are intended to refer to Sections of this
Agreement and Exhibits to this Agreement.

 

6.15                      Choice of Law and Venue. This Agreement shall be
interpreted, construed and enforced in all respects in accordance with the laws
of the State of New Jersey, with the exception of its conflict of laws rules.
The Parties will attempt to settle any dispute, claim or controversy arising out
of this Agreement through consultation and negotiation in good faith and in a
spirit of mutual cooperation. In the event of any dispute which the Parties
cannot resolve between them through negotiation, the Parties shall attempt to
resolve the dispute through non-binding mediation. Parties shall select a
mutually-acceptable mediator ten (10) days after written notice by either Party
demanding mediation with venue in the County of Somerset, New Jersey. Neither
Party may unreasonably withhold its consent to the selection of a mediator, and
the Parties will share the costs of the mediation (or other ADR) equally. ’By
mutual agreement, however, the Parties may postpone mediation until each has
completed some specified but limited discovery about the dispute. The Parties
may also agree to replace mediation with some other form of ADR, such as neutral
fact-finding or a minitrial. If the non-binding mediation or other agreed to ADR
mechanism does not resolve the dispute, claim or controversy arising out of this
agreement, either Party may pursue or exhaust any remedy, including any legal or
equitable relief. Purchaser may place payments under the Transaction Agreement
in an escrow account pending final resolution of any dispute.

 

 A-26 

 

The use of any ADR procedure will not be construed under the doctrines of
laches, waiver or estoppel to affect adversely the rights of either Party, and
nothing in this Section 6.15 will prevent either Party from resorting to
judicial proceedings if (1) good faith efforts to resolve the dispute under
these procedures have been unsuccessful, or (2) interim relief from a court is
necessary to prevent irreparable injury to one Party or to others.

 

The parties to this Agreement have caused this Agreement to be executed and
delivered as of February 15, 2016.

 

  Gulf Coast Billing, Inc.     a Texas Company                     By:  /s/
Rhonda Roberts-Turner       Rhonda Roberts-Turner, CEO                          
  /s/ Rhonda Roberts-Turner     Rhonda Roberts-Turner, Shareholder              
            Medical Transcription Billing, Corp.,     a Delaware corporation    
                By:  /s/ Stephen Snyder     Name:   Stephen Snyder      Title:  
President   

 

 

 

 

 A-27 

 

EXHIBIT A

 

CERTAIN DEFINITIONS

 

For purposes of the Agreement (including this Exhibit “A”):

 

Acquisition Transaction. “Acquisition Transaction” shall mean any transaction
involving: (a) the sale or other disposition of all or any portion of the
business or assets of the Seller (other than in the Ordinary Course of
Business); (b) the issuance, sale or other disposition of (i) any capital stock
or other securities of the Seller, (ii) any option, call, warrant or right
(whether or not immediately exercisable) to acquire any capital stock or other
securities of the Seller, or (iii) any security, instrument or obligation that
is or may become convertible into or exchangeable for any capital stock or other
securities of the Seller; or (c) any merger, consolidation, business
combination, share exchange, reorganization or similar transaction involving the
Seller.

 

Adjustment. “Adjustment” shall mean indemnification under Section 4 of this
agreement and such expense reimbursements or reconciliation as are set forth in
this Agreement.

 

Agreement. “Agreement” shall mean the Asset Purchase Agreement to which this
Exhibit “A” is attached (including the Disclosure Schedule), as it may be
amended from time to time.

 

Assumed Contracts. “Assumed Contracts” shall mean all Medical Billing Agreements
and all other Seller Contracts listed on Part 2.8 of the Disclosure Schedule
unless identified as an Excluded Asset on Exhibit “G”.

 

Assumed Liabilities. “Assumed Liabilities” shall mean all obligations that
accrue from and after March 1, 2016 relative to the Purchased Assets inclusive
of the Assumed Contracts..

 

Best Efforts. “Best Efforts” shall mean the commercially reasonable efforts that
a prudent Person desiring to achieve a particular result would use in order to
ensure that such result is achieved as expeditiously as possible.

 

Breach. There shall be deemed to be a “Breach” of a representation, warranty,
covenant, obligation or other provision if there is or has been any inaccuracy
in or breach (including any inadvertent or innocent breach) of, or any failure
(including any inadvertent failure) to comply with or perform, such
representation, warranty, covenant, obligation or other provision,; and the term
“Breach” shall be deemed to refer to any such inaccuracy, failure, claim or
circumstance.

 

Business. “Business” shall have the meaning ascribed thereto in the recital of
this Agreement.

 

Client. “Client” shall mean each Closing Date Client and each Pipeline Client.

 

Closing Date. “Closing Date” shall mean February 15, 2016 12:01 A.M. EST.

 

 A-28 

 

Closing Date Clients. “Closing Date Clients” shall mean those Persons listed on
Exhibit “E” under the heading “Closing Date Clients” to whom Seller is providing
Medical Billing Services and remain in good standing on the Closing Date.

 

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

 

Consent. “Consent” shall mean any approval, consent, ratification, permission,
waiver or authorization (including any Governmental Authorization).

 

Contract. “Contract” shall mean any written, oral, implied or other agreement,
contract, understanding, arrangement, instrument, note, guaranty, indemnity,
representation, warranty, deed, assignment, power of attorney, certificate,
purchase order, work order, insurance policy, benefit plan, commitment,
covenant, assurance or undertaking of any nature.

 

Customer Data. “Customer Data” shall mean all data maintained by or on behalf of
Seller with respect to Seller’s Clients and the patients of such Clients,
including all Personal Data and health care records of such patients, and
medical insurance coverage and provider information relating to such patients.

 

Damages. “Damages” shall include any loss, damage, injury, decline in value,
lost opportunity, Liability, claim, demand, settlement, judgment, award, fine,
penalty, Tax, fee (including any legal fee, expert fee, accounting fee or
advisory fee), charge, cost (including any cost of investigation) or expense of
any nature; but shall not include consequential damages or damages that are paid
by any insurance policy.

 

Disclosure Schedule. “Disclosure Schedule” shall mean the schedule (dated as of
the date of the Agreement) delivered to the Purchaser on behalf of Seller, a
copy of which is attached to the Agreement and incorporated in the Agreement by
reference.

 

Encumbrance. “Encumbrance” shall mean any lien, pledge, hypothecation, charge,
mortgage, security interest, encumbrance, equity, trust, equitable interest,
claim, preference, right of possession, lease, tenancy, license, encroachment,
covenant, infringement, interference, Order, proxy, option, right of first
refusal, preemptive right, community property interest, legend, defect,
impediment, exception, reservation, limitation, impairment, imperfection of
title, condition or restriction of any nature (including any restriction on the
transfer of any asset, any restriction on the receipt of any income derived from
any asset, any restriction on the use of any asset and any restriction on the
possession, exercise or transfer of any other attribute of ownership of any
asset).

 

Entity. “Entity” shall mean any corporation (including any non-profit
corporation), general partnership, limited partnership, limited liability
partnership, joint venture, estate, trust, cooperative, foundation, society,
political party, union, company (including any limited liability company or
joint stock company), firm or other enterprise, association, organization or
entity.

 

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

 

 A-29 

 

Excluded Assets. “Excluded Assets” shall mean the assets identified on
Exhibit “G”(to the extent owned by the Seller on the Closing Date).

 

Former Clients. “Former Client” shall mean a Person (other than a Closing Date
Client) to whom Seller has provided Medical Billing Services before the Closing
Date.

 

GAAP. “GAAP” shall mean generally accepted accounting principles.

 

Governmental Authorization. “Governmental Authorization” shall mean any: (a)
permit, license, certificate, franchise, concession, approval, consent,
ratification, permission, clearance, confirmation, endorsement, waiver,
certification, designation, rating, registration, qualification or authorization
issued, granted, given or otherwise made available by or under the authority of
any Governmental Body or pursuant to any Legal Requirement; or (b) right under
any Contract with any Governmental Body.

 

Governmental Body. “Governmental Body” shall mean any: (a) nation, principality,
state, commonwealth, province, territory, county, municipality, district or
other jurisdiction of any nature; (b) federal, state, local, municipal, foreign
or other government; (c) governmental or quasi-governmental authority of any
nature (including any governmental division, subdivision, department, agency,
bureau, branch, office, commission, council, board, instrumentality, officer,
official, representative, organization, unit, body or Entity and any court or
other tribunal); (d) multi-national organization or body; or (e) individual,
Entity or body exercising, or entitled to exercise, any executive, legislative,
judicial, administrative, regulatory, police, military or taxing authority or
power of any nature.

 

Hazardous Material. “Hazardous Material” shall include: (a) any petroleum, waste
oil, crude oil, asbestos, urea formaldehyde or polychlorinated biphenyl; (b) any
waste, gas or other substance or material that is explosive or radioactive; (c)
any “hazardous substance,” “pollutant,” “contaminant,” “hazardous waste,”
“regulated substance,” “hazardous chemical” or “toxic chemical” as designated,
listed or defined (whether expressly or by reference) in any statute, regulation
or other Legal Requirement (including CERCLA and any other so-called “superfund”
or “superlien” law and the respective regulations promulgated thereunder); (d)
any other substance or material (regardless of physical form) or form of energy
that is subject to any Legal Requirement which regulates or establishes
standards of conduct in connection with, or which otherwise relates to, the
protection of human health, plant life, animal life, natural resources, property
or the enjoyment of life or property from the presence in the environment of any
solid, liquid, gas, odor, noise or form of energy; and (e) any compound,
mixture, solution, product or other substance or material that contains any
substance or material referred to in clause “(a)”, “(b)”, “(c)”or “(d)”above.

 

HIPAA. “HIPAA” shall mean the Health Insurance Portability and Accountability
Act of 1996, as amended.

 

Indemnitees. “Indemnitees” shall mean the following Persons: (a) the Purchaser;
(b) the Purchaser’s current and future affiliates; (c) the respective
Representatives of the Persons referred to in clauses “(a)”and “(b)”above; and
(d) the respective successors and assigns of the Persons referred to in clauses
“(a)”, “(b)”and “(c)”above.

 

 A-30 

 

Initial Payment. “Initial Payment”shall having the meaning ascribed thereto in
section 1.2 hereof.

 

Installment Payment. “Installment Payment” shall having the meaning ascribed
thereto in section 1.2 hereof.

 

Intellectual Property. “Intellectual Property” shall mean and include all
internal billing processes, template appeals letters, algorithms, application
programming interfaces, apparatus, assay components, biological materials, cell
lines, clinical data, chemical compositions or structures, circuit designs and
assemblies, databases and data collections, diagrams, formulae, gate arrays, IP
cores, inventions (whether or not patentable), know-how, logos, marks (including
brand names, product names, logos, and slogans), methods, network configurations
and architectures, net lists, photomasks, processes, proprietary information,
protocols, schematics, specifications, software, software code (in any form
including source code and executable or object code), subroutines, test results,
test vectors, user interfaces, techniques, URLs, web sites, works of authorship,
and other forms of technology (whether or not embodied in any tangible form and
including all tangible embodiments of the foregoing such as instruction manuals,
laboratory notebooks, prototypes, samples, studies, and summaries).

 

Intellectual Property Rights. “Intellectual Property Rights” shall mean and
include all rights of the following types, which may exist or be created under
the laws of any jurisdiction in the world: (a) rights associated with works of
authorship, including exclusive exploitation rights, copyrights, moral rights,
and mask works; (b) trademark and trade name rights and similar rights; (c)
trade secret rights; (d) patents and industrial property rights; (e) other
proprietary rights in Intellectual Property of every kind and nature; and (f)
all registrations, renewals, extensions, continuations, divisions, or reissues
of, and applications for, any of the rights referred to in clauses (a) through
(e) above.

 

IRS. “IRS” shall mean the United States Internal Revenue Service.

 

Legal Requirement. “Legal Requirement” shall mean any federal, state, local,
municipal, foreign or other law, statute, legislation, constitution, principle
of common law, resolution, ordinance, code, edict, decree, proclamation, treaty,
convention, rule, regulation, ruling, directive, pronouncement, requirement,
specification, determination, decision, opinion or interpretation issued,
enacted, adopted, passed, approved, promulgated, made, implemented or otherwise
put into effect by or under the authority of any Governmental Body.

 

Liability. “Liability” shall mean any debt, obligation, duty or liability of any
nature (including any unknown, undisclosed, unmatured, unaccrued, unasserted,
contingent, indirect, conditional, implied, vicarious, derivative, joint,
several or secondary liability), regardless of whether such debt, obligation,
duty or liability would be required to be disclosed on a balance sheet prepared
in accordance with generally accepted accounting principles and regardless of
whether such debt, obligation, duty or liability is immediately due and payable.

 

Medical Billing Agreement. “Medical Billing Agreement” shall mean each Contract
pursuant to which the Seller provides Medical Billing Services to its Clients.

 

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Medical Billing Services. “Medical Billing Services” shall mean any and all
actions relating to the management of a healthcare provider’s revenue cycle,
including, without limitation, enrollment, credentialing, claims submission,
claims follow-up, collections, eligibility verification, patient billing,
revenue cycle analysis and consultation, together with the provision of related
practice management services or products including, without limitation,
electronic medical record software, office scheduling software, transcription
services, coding services, medical collections and practice consultation.

 

Order. “Order” shall mean any: (a) order, judgment, injunction, edict, decree,
ruling, pronouncement, determination, decision, opinion, verdict, sentence,
subpoena, writ or award issued, made, entered, rendered or otherwise put into
effect by or under the authority of any court, administrative agency or other
Governmental Body or any arbitrator or arbitration panel; or (b) Contract with
any Governmental Body entered into in connection with any Proceeding.

 

Ordinary Course of Business. An action taken by or on behalf of the Seller shall
not be deemed to have been taken in the “Ordinary Course of Business” unless:

 

(a)    such action is recurring in nature, is consistent with the past practices
of the Seller and is taken in the ordinary course of the normal day-to-day
operations of the Seller;

 

(b)    such action is taken in accordance with sound and prudent business
practices;

 

(c)    such action is not required to be authorized by the Seller, the board of
directors of the Seller or any committee of the board of directors of the Seller
and does not require any other separate or special authorization of any nature;
and

 

(d)    such action is similar in nature and magnitude to actions customarily
taken, without any separate or special authorization, in the ordinary course of
the normal day-to-day operations of Entities in the business of providing
Medical Billing Services.

 

Payor. “Payor” shall mean any health maintenance organization, preferred
provider organization, other prepaid plan, health care service plan, or worker’s
compensation or personal injury program or plan, including any Governmental Body
under any Legal Requirement or any person acting on behalf of a third party
payor, responsible for making payments for healthcare products or services on
behalf of another Person.

 

Parties. “Parties” shall mean, collectively, Seller, Purchaser and Shareholder.

 

Person. “Person” shall mean any individual, Entity or Governmental Body.

 

Personal Data. “Personal Data” shall mean a natural person’s name, street
address, telephone number, e-mail address, photograph, social security number,
driver’s license number, passport number, or customer or account number, or any
other piece of information that allows the identification of a natural person.

 

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Pipeline Client. “Pipeline Client” shall mean each prospective client listed on
Exhibit “E” under the heading “Pipeline Clients.”

 

Proceeding. “Proceeding” shall mean any action, suit, litigation, arbitration,
proceeding (including any civil, criminal, administrative, investigative or
appellate proceeding and any informal proceeding), prosecution, contest,
hearing, inquiry, inquest, audit, examination or investigation commenced,
brought, conducted or heard by or before, or otherwise involving, any
Governmental Body or any arbitrator or arbitration panel.

 

Purchased Assets. “Purchased Assets” shall have the meaning set forth in Section
1.1, which is entitled “Purchase and Sale of the Purchased Assets.”

 

Registered IP. “Registered IP” shall mean all Intellectual Property Rights that
are registered, filed, or issued under the authority of any Governmental Body,
including all patents, registered copyrights, registered mask works, and
registered trademarks and all applications for any of the foregoing.

 

Related Party. Each of the following shall be deemed to be a “Related Party”:
(a) each individual who is, or who has at any time been, an officer of the
Seller; (b) each member of the family of each of the individuals referred to in
clause “(a)”above; and (c) any Entity (other than the Seller) in which any one
of the individuals referred to in clauses “(a)”and “(b)”above holds or held (or
in which more than one of such individuals collectively hold or held),
beneficially or otherwise, a controlling interest or a material voting,
proprietary or equity interest.

 

Representatives. “Representatives” shall mean officers, directors, managers,
employees, agents, attorneys, accountants and advisors.

 

Seller Affiliate. “Seller Affiliate” shall mean any Person under common control
with the Seller within the meaning of Sections 414(b), (c), (m) and (o) of the
Code, and the regulations issued thereunder.

 

Seller Contract. “Seller Contract” shall mean any Medical Billing Agreement and
each other Contract: (a) to which the Seller is a party; (b) by which the Seller
or any of its assets is or may become bound or under which the Seller has, or
may become subject to, any obligation; or (c) under which the Seller has or may
acquire any right or interest.

 

Seller Employee. “Seller Employee” shall mean any current or former employee,
independent contractor or director of the Seller or any Seller Affiliate.

 

Seller IP. “Seller IP” shall mean (a) all Intellectual Property Rights in or
pertaining to the Seller Products or methods or processes used or incorporated
in the Seller Products, and (b) all other Intellectual Property Rights owned by
or exclusively licensed to the Seller.

 

Seller IP Contract. “Seller IP Contract” shall mean any Contract to which the
Seller is a party or by which the Seller is bound, that contains any assignment
or license of, or covenant not to assert or enforce, any Intellectual Property
Right or that otherwise relates to any Seller IP or any Intellectual Property
developed by, with, or for the Seller.

 

 A-33 

 

Seller Product. “Seller Product” shall mean any product or service designed,
developed, marketed, distributed, provided, licensed, or sold at any time by the
Seller.

 

Tax. “Tax” shall mean any tax (including any income tax, franchise tax, capital
gains tax, estimated tax, gross receipts tax, value-added tax, surtax, excise
tax, ad valorem tax, transfer tax, stamp tax, sales tax, use tax, property tax,
business tax, occupation tax, inventory tax, occupancy tax, withholding tax or
payroll tax), levy, assessment, tariff, impost, imposition, toll, duty
(including any customs duty), deficiency or fee, and any related charge or
amount (including any fine, penalty or interest), that is, has been or may in
the future be (a) imposed, assessed or collected by or under the authority of
any Governmental Body, or (b) payable pursuant to any tax-sharing agreement or
similar Contract.

 

Tax Return. “Tax Return” shall mean any return (including any information
return), report, statement, declaration, estimate, schedule, notice,
notification, form, election, certificate or other document or information that
is, has been or may in the future be filed with or submitted to, or required to
be filed with or submitted to, any Governmental Body in connection with the
determination, assessment, collection or payment of any Tax or in connection
with the administration, implementation or enforcement of or compliance with any
Legal Requirement relating to any Tax.

 

Term. “Term” shall mean the period commencing on February 15, 2016 and ending on
March 1, 2019.

 

Transactional Agreements. “Transactional Agreements” shall mean this Agreement,
the bill of sale, assumption agreement and the other agreements that are
executed and delivered by the parties at the Closing.

 

Transactions. “Transactions” shall mean (a) the execution and delivery of the
respective Transactional Agreements, and (b) all of the transactions
contemplated by the respective Transactional Agreements, including: (i) the sale
of the Purchased Assets by the Seller to the Purchaser in accordance with the
Agreement; (ii) the assumption of the Assumed Liabilities by the Purchaser
pursuant to the Assumption Agreement; and (iii) the performance by the Seller,
and the Purchaser of their respective obligations under the Transactional
Agreements, and the exercise by the Seller and the Purchaser of their respective
rights under the Transactional Agreements.

 

Transitional Costs. “Transitional Costs” shall mean all costs incurred by Seller
that are identified in Exhibit “J”.

 

 

 

 

 

 

 

 

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