Exhibit 10.121

 

 

 

 

 

ASSET PURCHASE AGREEMENT

 

BY AND AMONG

 

PIONEER HEALTH SERVICES OF ONEIDA LLC,

 

PIONEER HEALTH SERVICES OF ONEIDA REAL ESTATE LLC,

 

AND

 

RENNOVA HEALTH, INC.

 

 

 

 

 

 

October 26, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

TABLE OF CONTENTS

 

ARTICLE I PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES 1 1.1 Purchase
and Sale of Assets 1 1.2 Excluded Assets 2 1.3 Assumption of Liabilities 3 1.4
Excluded Liabilities 4 1.5 Assigned Contracts and Cure Amounts 4 1.6 Further
Conveyances and Assumptions 5 1.7 Bulk Sales Laws 5       ARTICLE II
CONSIDERATION 5 2.1 Purchase Price 5 2.2 Deposit 6 2.3 Payment of Consideration
6       ARTICLE III CLOSING AND TERMINATION 6 3.1 Closing Date 6 3.2 Deliveries
by Sellers 6 3.3 Deliveries by Purchaser 7 3.4 Termination of Agreement 8 3.4
Procedure For Termination 9 3.6 Effect of Termination 9       ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLERS 10 4.1 Organization and Good Standing
10 4.2 Authorization of Agreement; No Conflict 10 4.3 Intentionally Omitted 10
4.4 Title to Purchased Assets; Condition and Adequacy 10 4.5 Litigation 10 4.6
Permits 11 4.7 Environmental Matters 11 4.8 Insurance Policies 11 4.9 Real
Property 11 4.10 Intentionally Omitted 11 4.11 Intentionally Omitted 11 4.12
Intentionally Omitted 12 4.13 Employees 12 4.14 Intentionally Omitted 12 4.15
Reimbursement 12 4.16 Intentionally Omitted 12 4.17 Intentionally Omitted 12
4.18 Brokers or Finders 12       ARTICLE V REPRESENTATIONS AND WARRANTIES OF
PURCHASER 12 5.1 Organization and Good Standing 12 5.2 Authorization of
Agreement 12

 

 

 

 

 

 

 i 

 

 

5.3 Conflicts; Consents of Third Parties 13 5.4 Litigation 13 5.5 Financial
Advisors 13 5.6 Financial Ability to Close 13       ARTICLE VI BANKRUPTCY COURT
MATTERS 13 6.1 Bankruptcy Status 13 6.2 Bankruptcy Court Filings 14 6.3 Notice
14 6.4 Competing Transaction 14 6.5 Purchaser Termination Fee 15       ARTICLE
VII COVENANTS 15 7.1 Access to Information 15 7.2 Conduct of the Business
Pending the Closing 16 7.3 Consents and Permits; Insurance 16 7.4 Regulatory
Approval 17 7.5 Further Assurances 17 7.6 Confidentiality 17 7.7 Intentionally
Omitted 17 7.8 Publicity 17 7.9 Intentionally Omitted 18 7.10 Intentionally
Omitted 18 7.11 Cooperation 18 7.12 Intentionally Omitted 18 7.13 Intentionally
Omitted 18 7.14 Misdirected Payments, Etc 18 7.15 Notice of Developments 18 7.16
Release of Guarantor 18 7.17 Non-Competition 18       ARTICLE VIII CONDITIONS TO
CLOSING 19 8.1 Conditions Precedent to Obligations of Purchaser 19 8.2
Conditions Precedent to Obligations of Sellers 19 8.3 Conditions Precedent to
Obligations of Purchaser and Sellers 20 8.4 Frustration of Closing Conditions 20
      ARTICLE IX TAXES 20 9.1 Transfer Taxes 20 9.2 Prorations 20 9.3 Purchase
Price Allocation 21 9.4 Cooperation on Tax Matters 21       ARTICLE X
MISCELLANEOUS 21 10.1 Expenses 21 10.2 Other Definitional and Interpretive
Matters 21 10.3 Injunctive Relief 22 10.4 Submission to Jurisdiction; Consent to
Service of Process 22

 

 

 

 

 

 ii 

 

 

10.5 Entire Agreement: Amendments and Waivers 23 10.6 Governing Law 23 10.7
Notice 23 10.8 Severability 24 10.9 Binding Effect; Assignment 24 10.10 No
Personal Liability 24 10.11 Counterparts 24 10.12 Acknowledgment by Purchaser 24

 

List of Disclosure Schedules, Annexes and Exhibits.

 

Schedule 1.1(b) Purchased Personal Property Schedule 1.1(d) Assigned Contracts
Schedule 1.1(f) Permits Schedule 1.2(b) Excluded Deposit Accounts Schedule
1.2(l) Transferred Property Schedule 4.2(b) Contravention Schedule 4.4 Purchased
Assets (w/Liens) Schedule 4.5 Legal Proceedings Schedule 4.7 Environmental
Matters Schedule 4.8 Insurance Policies Schedule 4.9 Real Estate and Real
Property Leases Schedule 4.18 Brokers Schedule 5.3(a) Purchaser’s Required
Consents/Approvals Schedule 5.3(b) Conflicts Schedule 5.4 Orders Schedule
11.1(a) “Knowledge” Officers/Managers of Purchaser and Sellers Schedule 11.1(b)
Permitted Exceptions

 

 

Annex 1 Definitions     Exhibit A Legal Description for Real Estate Exhibit B
Form of Bill of Sale Exhibit C Form of Assignment and Assumption Agreement
Exhibit D Form of Special Warranty Deed Exhibit E Form of FIRPTA Exhibit F Sale
Order

 

 

 

 

 

 

 iii 

 

 

ASSET PURCHASE AGREEMENT

 

THIS ASSET PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of
October 26, 2016, among PIONEER HEALTH SERVICES OF ONEIDA LLC, a Mississippi
limited liability company (“Hospital Seller”), PIONEER HEALTH SERVICES OF ONEIDA
REAL ESTATE LLC, a Mississippi limited liability company (“Real Estate Seller,”
each individually a “Seller” and, collectively with Hospital Seller, the
“Sellers”), and RENNOVA HEALTH, INC., a Delaware corporation (“Rennova” or
“Purchaser”). Capitalized terms used herein are defined in Annex 1 attached
hereto.

 

WHEREAS, Hospital Seller presently owns and previously operated a hospital
located at 18797 Alberta Street, Oneida, Tennessee 37841, known as Pioneer
Community Hospital of Scott (the “Hospital”) and Real Estate Seller owns that
certain real property identified by tax parcel identification number
052H_F_014.00 and located at 18797 Alberta Street, Oneida, Tennessee 37841 and
more fully described on Exhibit A attached hereto (the “Real Estate”) (the
Hospital and the services and programs provided thereat and the Real Estate are
collectively referred to as the “Business”); and

 

WHEREAS, Sellers desire to sell, transfer and assign to Purchaser, and Purchaser
desires to purchase, acquire and assume from Sellers pursuant to this Agreement,
the Sale Order, the Sale Motion and Sections 105, 363 and 365 of Title 11 of the
United States Code, 11 U.S.C. Section 101 et seq. (the “Bankruptcy Code”) all of
the Purchased Assets and Assumed Liabilities, all as more specifically provided
herein.

 

NOW, THEREFORE, for and in consideration of the promises, agreements, covenants,
representations and warranties hereinafter contained and other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged, the
parties hereto, intending to be legally bound, hereby agree as follows:

 

ARTICLE I

PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES

 

1.1               Purchase and Sale of Assets. On the terms and subject to the
conditions set forth in this Agreement, at the Closing and subject to entry of
the Sale Order, Purchaser shall purchase, acquire and accept from Sellers, and
Sellers shall sell, transfer, assign, convey and deliver to Purchaser (the
“Contemplated Transactions”) all of Sellers’ respective right, title and
interest in, to and under the Purchased Assets, free and clear of any and all
Liens, other than Permitted Exceptions (but excluding the Permitted Exceptions
described in clause (vii) of the definition of Permitted Exceptions and as noted
in Schedule 4.4). “Purchased Assets” means the following assets of the Sellers,
wherever located and whether or not carried or reflected on the books and
records of Sellers, excluding the Excluded Assets:

 

(a)       (i) all right, title and interest of Sellers in and to the Real Estate
together with all improvements and fixtures thereto and other appurtenances and
rights in respect thereof and (ii) all right, title and interest of Sellers
under any Real Property Leases included among the Contracts listed in Schedule
1.1(d) (collectively, the “Purchased Real Property”);

 

(b)       (i) the Furniture and Equipment and (ii) the tools, spare parts,
supplies (including all of Sellers’ Inventory) and all other tangible personal
property owned by Sellers or used by Sellers in the conduct of the Business and
located in the Ordinary Course of Business at the Purchased Real Property or the
Hospital as set forth on Schedule 1.1(b) (collectively, the “Purchased Personal
Property”);

 

(c) [intentionally omitted];

 

 

 

 

 

   

 

 

(d)       the Contracts listed on Schedule 1.1(d) hereto, which Contracts will
be assumed by Sellers and assigned and sold to Purchaser pursuant to Section 365
of the Bankruptcy Code, and which schedule may be supplemented and/or modified
by the Purchaser up to twenty-one (21) days prior to the hearing by the
Bankruptcy Court to approve this Agreement, which is anticipated to occur on
November 18, 2016 (the “Assigned Contracts”);

 

(e)       to the extent transferable, all Documents that are solely used in,
held for use in or intended to be used in, or that arise primarily out of, the
Business, including Documents relating to the services provided by the Business,
the marketing of the Business’ services (including advertising and promotional
materials), personnel files for Employees of Sellers and files including credit
information and supplier lists, to the extent physically located at the
Facilities, and copies of all Medical Records regardless of where they are
located, but excluding any Documents described in Section 1.2(f);

 

(f)          except as set forth in Section 1.2(d), to the extent transferable,
all Permits that remain valid and that are listed in Schedule 1.1(f);

 

(g)       to the extent transferable, all rights of each Seller under
non-disclosure or confidentiality, non-compete, or non-solicitation agreements
with employees and agents of such Seller or with third parties to the extent
relating to the Business or the Purchased Assets (or any portion thereof);

 

(h)       to the extent transferable, all rights of each Seller under or
pursuant to all warranties, representations and guarantees made by suppliers,
manufacturers and contractors to the extent relating to services provided to
such Seller after the Closing or to the extent affecting any Purchased Assets,
other than any warranties, representations and guarantees pertaining to any
Excluded Assets;

 

(i)         all goodwill and other intangible assets (other than Intellectual
Property Rights) owned by each Seller and associated with the Business,
including customer and supplier lists; and

 

(j)         to the extent transferable, all telephone numbers and facsimile
numbers, and domain names and email addresses.

 

1.2               Excluded Assets. Nothing herein contained shall be deemed to
sell, transfer, assign or convey the Excluded Assets to Purchaser, and Sellers
shall retain all right, title and interest to, in and under the Excluded Assets.
“Excluded Assets” shall mean any assets of the Sellers that are not Purchase
Assets, including the following assets, properties, interests and rights of the
respective Sellers:

 

(a)       the Excluded Contracts, including any Contract not listed in Schedule
1.1(d);

 

(b)       all deposit accounts listed on Schedule 1.2(b) hereto, all cash, cash
equivalents, bank deposits or similar cash items of each Seller, all marketable
securities owned by each Seller and all Documents related thereto;

 

(c) all accounts receivable of Sellers;

 

(d)       any and all Medicare and Medicaid provider numbers of Sellers or the
Business and any corresponding provider agreements with CMS or any state
Medicaid agency;

 

(e)       any other Contract to which a Seller is a party or under which it has
rights that is not used primarily in the Business;

 

 

 

 

 

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(f)        any (i) other books and records that Sellers are required by Law to
retain; provided, however, that Purchaser shall have the right to make copies of
any portions of such retained books and records that relate to the Business as
conducted before the Closing (except as prohibited by Law) or that relate to any
of the Purchased Assets; (ii) Documents which any Seller is not permitted to
transfer pursuant to any contractual confidentiality obligation owed to any
third party (other than any patient confidentiality obligation referred to in
the foregoing clause (i)); (iii) books and records and other Documents related
to malpractice prevention programs, credentialing, incident reporting or quality
assurance to the extent confidential under applicable Law that a Seller elects
or is required to retain; and (iv) any Documents primarily related to or that
are required to realize the benefits of any Excluded Assets;

 

(g)       any claim, right or interest of a Seller in or to any refund, rebate,
abatement or other recovery for Taxes, together with any interest due thereon or
penalty rebate arising therefrom;

 

(h)       all insurance policies or rights to proceeds with respect to Excluded
Assets and in respect of tort liabilities and other Excluded Liabilities;

 

(i)         all of Sellers’ deposits or prepaid charges and expenses paid in
connection with or relating to any Excluded Assets;

 

(j) all rights in connection with and assets of any Employee Benefit Plans;

 

(k)       all deposits remaining at the Closing Date (including customer
deposits and security deposits for rent, electricity, telephone or other
utilities and deposits posted under any Assigned Contract) and prepaid charges
and expenses of Sellers, other than any deposits or prepaid charges and expenses
paid in connection with or relating to any Excluded Assets or which have been or
will be netted by the holder thereof against any unpaid pre-petition or
post-petition liability of Sellers;

 

(l)         all supplies and equipment that were transferred from the Newton
Hospital (the “Transferred Property”) to the Business as set forth on Schedule
1.2(l);

 

(m) the name “Pioneer Community Hospital of Scott”;

 

(n) the Intellectual Property; and

 

(o) all other rights of Sellers under this Agreement and the Contemplated
Transactions.

 

1.3               Assumption of Liabilities. Purchaser will not assume or
otherwise be responsible for any Liabilities of Sellers, except that from and
after the Closing, Purchaser shall assume as and when due, the following
Liabilities (collectively, the “Assumed Liabilities”) and no others:

 

(a)       Indebtedness of Sellers under the First Deed of Trust, the amount of
which shall not exceed $450,000 as of the Closing, and any fees or expenses
charged by the lender for the assumption of the First Deed of Trust (the
“Assumed Indebtedness”);

 

(b) all Liens encumbering the Real Estate;

 

(c)       all Liabilities, including continuing performance obligations, first
accruing from and after the Closing with respect to the Assigned Contracts
(other than the Assumed Indebtedness);

 

(d)       all Cure Amounts; and

 

 

 

 

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(e)       all Liabilities of any kind or nature arising out of or in connection
with the ownership of the Purchased Assets by Purchaser after the Closing Date.

 

1.4               Excluded Liabilities. Except for the Assumed Liabilities,
Purchaser shall not assume or become liable for the payment or performance of
any Liability of any Seller, which shall remain Liabilities of the respective
Seller (the “Excluded Liabilities”), including the following:

 

(a)       any Liability based upon any act or omission of a Seller, including
trade payables;

 

(b)       except as otherwise provided in Article IX, any Liability for Taxes of
a Seller arising from the operation of the Business or any Taxes in the nature
of income tax imposed upon Sellers in connection with the sale of the Purchased
Assets contemplated hereby;

 

(c) any Liability associated with any Excluded Assets;

 

(d)       any Liability relating to any breach of contract, breach of warranty,
tort, infringement or violation of Law by a Seller;

 

(e)       any Liability arising out of events, acts or omissions occurring prior
to the Closing Date from or relating to any overpayment, duplicate payment,
refunds, discounts or adjustments due to any private sector healthcare cost
reimbursement program or insurance coverage or in connection with Healthcare
Programs, including Liabilities related to Cost Report settlement payables
arising from Cost Report periods ending prior to the Closing Date;

 

(f)        any Liability related to claims of medical malpractice and/or other
professional Liability of a Seller, or any of its employees, attending
physicians, agents or independent contractors;

 

(g)       any Liability arising out of or in connection with any Legal
Proceedings (whether instituted prior to or after Closing) to the extent arising
from acts or omissions which occurred or are alleged to have occurred prior to
the Closing Date;

 

(h)       any Liability related to penalties, fines, settlements, interest,
costs and expenses to the extent arising out of or incurred as a result of any
violation by a Seller of any Law or Order;

 

(i) all Liabilities relating to amounts required to be paid by Sellers
hereunder;

 

(j)         all claims, demands, Liabilities or obligations arising out of any
duty or violation of any applicable Environmental Law, rules, regulations or
obligations by Sellers or the Business, or related to the Purchased Assets,
including, but not limited to, any release of Hazardous Materials occurring
after the Closing Date if the Hazardous Materials were disposed of by or for
Sellers prior to the Closing Date;

 

(k)       all Liabilities relating to Employees (including the termination
thereof) and Employee Benefit Plans; and

 

(l)         all Liabilities and obligations of Sellers to Purchaser under this
Agreement or with respect to or arising out of the transactions contemplated
hereby.

 

1.5               Assigned Contracts and Cure Amounts. Pursuant to Section 365
of the Bankruptcy Code, Sellers shall assign to Purchaser, and Purchaser shall
assume from Sellers, the Assigned Contracts listed in Schedule 1.1(d). The cure
amounts, if any, as determined by the Bankruptcy Court, necessary to allow
assumption and assignment under Section 365 of the Bankruptcy Code of the
Assigned Contracts shall be

 

 

 

 

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paid by Purchaser (or Purchaser shall have delivered into escrow on terms
reasonably acceptable to Sellers and Purchaser amounts sufficient to pay any
claim therefore that remains disputed as of the Closing, as such amount shall
have been determined by the Bankruptcy Court) at or before the Closing (except
as otherwise agreed to by the other party to the Assigned Contracts), and,
except as set forth below, Sellers shall have no liability for any such cure
amount. The cure amounts to be paid by Purchaser in accordance with the
foregoing provisions of this Section 1.5 are hereinafter sometimes referred to
as the “Cure Amounts.” Notwithstanding anything to the contrary herein,
Purchaser’s obligation to pay Cure Amounts shall not exceed $0.00 in the
aggregate (the “Cure Cap”). Notwithstanding the foregoing, Purchaser, at its
option, may elect to terminate this Agreement or to pay Cure Amounts in excess
of the Cure Cap; provided, however, Purchaser shall not have the right to
terminate this Agreement with respect to any Contracts added to Schedule 1.1(d)
after the date hereof.

 

1.6           Further Conveyances and Assumptions.

 

(a)                From time to time following the Closing, each party shall,
and shall cause their respective Affiliates to, execute, acknowledge and deliver
all such further conveyances, notices, assumptions, releases and acquaintances
and such other instruments, and shall take such further actions, as may be
reasonably necessary or appropriate to convey and assign fully to Purchaser and
its respective successors or assigns, all of the properties, rights, titles,
interests, estates, remedies, powers and privileges intended to be conveyed to
Purchaser under this Agreement and Seller Documents and to assure fully to each
Seller and its Affiliates and their successors and assigns, the assumption of
the liabilities and obligations intended to be assumed by Purchaser under this
Agreement and Seller Documents, and to otherwise make effective the transactions
contemplated hereby and thereby. In the event that Purchaser or its Affiliates
receives any Excluded Assets (or any payments or proceeds related thereto)
following the Closing, Purchaser shall promptly deliver such Excluded Assets (or
any payments or proceeds related thereto) to Sellers. In the event that any
Seller or its Affiliates receives any Purchased Assets (or any payments or
proceeds related thereto) following the Closing, such Seller shall promptly
deliver such Purchased Assets (or any payments or proceeds related thereto) to
Purchaser.

 

(b)                To the extent that the assignment of any Purchased Asset
shall require the consent of any other party and such consent shall still be
required notwithstanding the Sale Order and Sections 363 and 365 of the
Bankruptcy Code (each, a “Nonassignable Asset”), nothing in this Agreement nor
the consummation of the transactions contemplated hereby shall be construed as
an attempt or agreement to assign such Nonassignable Asset unless and until such
consent shall have been obtained. If any such consent is not obtained, or if an
attempted assignment would adversely affect the rights or increase the
obligations of Purchaser such that Purchaser would not receive all such rights
as they exist prior to such attempted assignment, Sellers and Purchaser shall
enter into such reasonable cooperative arrangements as are reasonably acceptable
to Sellers and Purchaser to provide for Purchaser the benefit of such
Nonassignable Asset, and any transfer to Purchaser of any Nonassignable Asset.

 

1.7               Bulk Sales Laws. The parties hereto hereby waive compliance by
Sellers with the requirements and provisions of any “bulk-transfer” Laws of any
jurisdiction that may otherwise be applicable with respect to the sale and
transfer of any or all of the Purchased Assets to Purchaser.

 

ARTICLE II

CONSIDERATION

 

2.1               Purchase Price. The consideration for the Purchased Assets
shall be comprised of the following: (a) the Assumed Indebtedness; plus (b) the
assumption by Purchaser of the other Assumed Liabilities; plus (c) $600,000 (the
“Cash Purchase Price”); plus (d) the aggregate Cure Amounts (the “Purchase
Price”).

 

 

 

 

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2.2               Deposit. As promptly as possible, but in any event within
three (3) Business Days after the execution of this Agreement, Purchaser shall
deposit with the Law Offices of Craig M. Geno, PLLC in its capacity as escrow
agent (the “Escrow Agent”), pursuant to that certain Escrow Agreement, dated as
of the date hereof, by and among Purchaser, Sellers and the Escrow Agent (the
“Deposit Escrow Agreement”) by wire transfer of immediately available funds, an
amount equal to ten percent (10%) of the Cash Purchase Price (the “Deposit
Escrowed Funds”), such deposit to be released by the Escrow Agent and delivered
to either Purchaser or Sellers, in accordance with the provisions of the Deposit
Escrow Agreement.

 

2.3               Payment of Consideration. On the Closing Date, Purchaser shall
pay to Sellers by wire transfer of immediately available funds into accounts
designated by Sellers, the Cash Purchase Price minus (a) the amount of the
Deposit Escrowed Funds (which shall be delivered to Sellers by the Escrow Agent
as described in the Deposit Escrow Agreement), minus, (b) a portion of the Cash
Purchase Price equal to the sum of (i) 2% of the Purchase Price (the “Success
Fee”) plus, (ii) 20% of the Purchase Price (the “Minimum Reserve Fee”) (the
Success Fee and the Minimum Reserve Fee shall be paid by the Purchaser on behalf
of Sellers directly to Solic Capital Advisors, LLC at the Closing), plus (c) the
aggregate of the Cure Amounts (the “Closing Cash Payment”).

 

ARTICLE III

CLOSING AND TERMINATION

 

3.1               Closing Date. The closing of the purchase and sale of the
Purchased Assets and the assumption of the Assumed Liabilities provided for in
Article I hereof (the “Closing”) shall take place remotely via electronic
exchange of documents and signature pages at 10:00 a.m. (Central time) on a date
that is no less than two (2) Business Days following the satisfaction or waiver
of the conditions set forth in Article VIII (other than conditions that by their
nature are to be satisfied at the Closing, but subject to the satisfaction or
waiver of such conditions). The date on which the Closing shall be held is
referred to in this Agreement as the “Closing Date”. Unless otherwise agreed by
Sellers and Purchaser in writing, regardless of the time at which the Closing is
completed, the Closing shall be deemed effective and all right, title and
interest of Sellers in any asset to be acquired by Purchaser hereunder, and any
Assumed Liability and all risk of loss with respect to the Business, shall be
considered to have passed to Purchaser as of 12:01 a.m. (Central time) on the
Closing Date.

 

3.2             Deliveries by Sellers. At the Closing, Sellers shall deliver to
Purchaser:

 

(a)       certificates of good standing of each Seller from the State of
Mississippi and evidence of the qualification to do business in the State of
Tennessee;

 

(b)       a true and complete copy of the certificate of formation or other
governing document of Real Estate Seller and all amendments thereto, certified
by the State of Mississippi, dated within five Business Days prior to the
Closing Date;

 

(c)       true and complete copies of the operating agreement or similar
governing documents of Real Estate Seller, certified by an authorized officer of
Real Estate Seller;

 

(d)       true and complete copies of the resolutions of the board of directors
(or other similar governing body) of Real Estate Seller, certified by an
authorized officer of Real Estate Seller, authorizing the execution, delivery
and performance of this Agreement and all instruments and documents to be
delivered in connection herewith, and the transactions contemplated hereby;

 

 

 

 

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(e)       certificates from the secretary of each Seller as to the incumbency
and signatures of each officer of such Seller executing this Agreement and any
other documents required under this Agreement;

 

(f)         a duly executed bill of sale in substantially the form of Exhibit B
hereto;

 

(g)       a duly executed assignment and assumption agreement in substantially
the form of Exhibit C hereto (the “Assignment and Assumption Agreement”);

 

(h)       A duly executed special warranty deed with respect to the Purchased
Real Property substantially in the form of Exhibit D hereto;

 

(i)         [intentionally omitted];

 

(j)         possession of the Medical Records, in the possession or control of
Hospital Seller;

 

(k)        [intentionally omitted];

 

(l)         an affidavit in substantially the form of Exhibit E hereto, executed
by Real Estate Seller, (and any similar affidavit that may be required under
state law);

 

(m)      all instruments and documents reasonably required by the Title Company
to issue a standard owner’s title insurance policy with no exceptions other than
Permitted Exceptions for the Purchased Real Property;

 

(n)       a certificate of an authorized officer of each Seller certifying that
each of the conditions contained in Section 8.1 has been fulfilled;

 

(o) [intentionally omitted]; and

 

(p)       a certified copy of the Sale Order having been entered by the
Bankruptcy Court and docketed, in form and substance reasonably acceptable to
Purchaser and Hospital Seller.

 

3.3           Deliveries by Purchaser. At the Closing, Purchaser shall deliver
to Sellers:

 

(a)       the Closing Cash Payment as set forth in Section 2.3 hereof;

 

(b)       a duly executed Assignment and Assumption Agreement;

 

(c)       a certificate of good standing of Purchaser from the State of Florida,
together with evidence of Purchaser’s qualifications to do business in the State
of Tennessee;

 

(d)       true and complete copies of the certificate of incorporation of
Purchaser and all amendments thereto, certified by the State of Florida, dated
within five (5) Business Days prior to the Closing Date;

 

(e)       true and complete copies of the resolutions of the board of directors
of Purchaser and Rennova, or similar governing body, certified by Purchaser’s
and Rennova’s secretary, as applicable, authorizing the execution, delivery and
performance of this Agreement and all instruments and documents to be delivered
in connection herewith, and the transactions contemplated hereby by Purchaser
and Rennova;

 

 

 

 

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(f)        certificates from the secretary of Purchaser and Rennova, as
applicable, as to the incumbency and signatures of each officer of Purchaser and
Rennova executing this Agreement and any other documents required under this
Agreement;

 

(g)       [intentionally omitted];

 

(h)       a certificate of an officer of Purchaser certifying that each of the
conditions contained in Section 8.2 has been fulfilled; and

 

(i)        such other documents, instruments and certificates as Sellers may
reasonably request.

 

3.4               Termination of Agreement. In respect of the Contemplated
Transactions, this Agreement may be terminated prior to the Closing as follows:

 

(a)       Termination by Purchaser. Purchaser may terminate this Agreement upon
the occurrence of any of the following:

 

(i)         if any of the conditions to the obligations of Purchaser to close
that are set forth in Sections 8.1 and 8.3 (other than those that are to be
satisfied at Closing) shall have become incapable of fulfillment other than as a
result of a breach by Purchaser of any representation, warranty, covenant or
agreement contained in this Agreement, and such condition is not waived by
Purchaser;

 

(ii)          if there shall be a material breach by Sellers of any
representation or warranty, or if Sellers shall fail to perform in any material
respect any covenant or agreement contained in this Agreement which breach or
nonperformance cannot be cured or has not been cured within ten (10) Business
Days after the giving of written notice by Purchaser to Sellers of such breach
or nonperformance;

 

(iii)           if Purchaser elects to terminate in accordance with Section 1.5
hereof;

 

(iv)          if either or both of the Sellers enter into a definitive agreement
with a third party for an Alternative Transaction;

 

(v)           if the Bankruptcy Court enters any Order approving any Alternative
Transaction or confirming any Chapter 11 Plan involving any Alternative
Transaction;

 

(vi)          so long as Purchaser is not then in breach of its obligations
under this Agreement in any material respect, if the Sale Order is not entered
within forty-five (45) days after the date hereof;

 

(vii)         conversion of the Bankruptcy Case to one under Chapter 7 of the
Bankruptcy Code;

 

(viii)         [intentionally omitted]; or

 

(ix)           upon written notice to Sellers if the Closing shall not have
occurred by the close of business on December 31, 2016 (the “Outside Date”).

 

 

 

 

 -8- 

 

 

(b)       Termination by Sellers. Sellers may terminate this Agreement upon the
occurrence of any of the following:

 

(i)           if any of the conditions to the obligations of Sellers to close
that are set forth in Sections 8.2 and 8.3 (other than those that are to be
satisfied at Closing) shall have become incapable of fulfillment other than as a
result of a breach by Sellers of any representation, warranty, covenant or
agreement contained in this Agreement, and such condition is not waived by
Sellers; or

 

(ii)          if there shall be a material breach by Purchaser of any
representation or warranty, or if Purchaser shall fail to perform in any
material respect any covenant or agreement contained in this Agreement, which
breach or nonperformance cannot be cured or has not been cured within ten (10)
Business Days after the giving of written notice by Sellers to Purchaser of such
breach or nonperformance.

 

(c)       Termination by Purchaser or Hospital Seller. Either Purchaser or
Hospital Seller may terminate this Agreement upon the occurrence of any of the
following:

 

(i)           by mutual written consent of Hospital Seller and Purchaser; or

 

(ii)          if the Bankruptcy Court shall enter an order approving a Competing
Bid or Alternative Transaction, provided that such termination shall be
contingent upon Purchaser’s right to payment of the Purchaser Termination Fee in
accordance with this Agreement.

 

(d)       [intentionally omitted].

 

3.5               Procedure For Termination. In the event of termination of this
Agreement by Purchaser or either Seller, or both, pursuant to Section 3.4,
written notice thereof shall forthwith be given to the other parties, and upon
the giving of such notice (or at such time as specified in the particular
termination right set forth in Section 3.4), the Contemplated Transactions shall
be abandoned and this Agreement shall terminate to the extent and with the
effect provided by Section 3.6 without further action by the parties.

 

3.6               Effect of Termination. In the event that this Agreement is
validly terminated as provided herein, then each of the parties shall be
relieved of its duties and obligations arising under this Agreement after the
date of such termination and such termination shall be without liability to any
party; provided, however, that nothing in this Section 3.6 shall relieve the
parties of any liability for a breach of this Agreement prior to the date of
termination; and provided, further, however, that the obligations of the parties
set forth in the Deposit Escrow Agreement and Sections 2.2, 3.6, 6.4 and 6.5 of
this Agreement, and to the extent necessary to effectuate the foregoing
enumerated provisions, Section 10.2, shall survive any such termination and
shall be enforceable in accordance with their terms. In addition, if this
Agreement is terminated as provided herein, each party shall upon request
redeliver or destroy as soon as practicable any or all documents, work papers
and other material of any other party relating to its business or affairs or the
transactions contemplated hereby, whether obtained before or after the execution
hereof, to the party furnishing the same, other than any material which is of
public record.

 

 

 

 

 

 

 

 -9- 

 

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF SELLERS

 

Each Seller hereby represents and warrants to Purchaser that:

 

4.1               Organization and Good Standing. Each Seller is a limited
liability company duly organized or formed, validly existing and in good
standing under the laws of the jurisdiction of its organization or formation,
with full limited liability company power and authority to conduct its business
as it is now being conducted, to own or use the properties and assets that it
purports to own or use, and to execute and deliver this Agreement and perform
its obligations hereunder. Each Seller is duly qualified to do business and is
in good standing in every domestic or foreign jurisdiction in which its
ownership of property or the conduct of businesses as now conducted requires it
to qualify, except with the failure to be so qualified would not be material to
such Seller or have a material and adverse effect on such Seller’s ability to
perform its obligations under this Agreement or to consummate the transactions
contemplated hereby. Complete and accurate copies of the organizational
documents of each Seller have been delivered to Purchaser.

 

4.2            Authorization of Agreement; No Conflict.

 

(a)       Except for such authorization as is required by the Bankruptcy Court
(as hereinafter provided for) each Seller has all requisite power and authority
to execute and deliver and perform its obligations under and has taken all
limited liability company action, including approval of its directors, members
and/or trustees (as applicable), necessary, if any, for it to validly execute
and deliver and (assuming the due authorization, execution and delivery by the
other parties hereto and thereto) perform its obligations under this Agreement
and each other agreement, document, or instrument or certificate contemplated by
this Agreement to be executed and delivered by such Seller in connection with
this Agreement.

 

(b)       Except as set forth on Schedule 4.2(b), neither the execution and
delivery of this Agreement by Sellers nor the consummation or performance of the
transactions contemplated hereby by Sellers will, directly or indirectly (with
or without notice or lapse of time): (i) contravene, conflict with or result in
a violation of any provision of the organizational documents of any Seller; (ii)
contravene, conflict with, or result in a violation of any Law or any Order of
any Governmental Body, to which any Seller is subject; (iii) 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 government authorization that is held by any Seller or
that otherwise relates to the Purchased Assets; (iv) breach any provision of,
give any Person the right to declare a default or exercise any remedy under,
accelerate the maturity or performance of or payment under, or cancel, terminate
or modify any, Assigned Contract; or (v) result in the creation or imposition of
any Lien upon any of the Purchased Assets.

 

4.3           Intentionally Omitted.

 

4.4           Title to Purchased Assets; Condition and Adequacy. Except as set
forth in Schedule 4.4 and other than the Real Estate, Hospital Seller owns good
and transferable title to all of the Purchased Assets free and clear of any
Liens, other than Permitted Exceptions.

 

4.5           Litigation.

 

(a)       Except for proceedings before the Bankruptcy Court or Legal
Proceedings that have been stayed as set forth on Schedule 4.5, there are no
Legal Proceedings pending (i) by or against any Seller or that otherwise relate
to or may affect the Business or any of the Purchased Assets or (ii) that
challenge, or that may have the effect of preventing, delaying, making illegal
or otherwise interfering with, the transactions contemplated hereby. To the
Knowledge of each Seller, no such Legal Proceeding has been threatened, in
writing, except as set forth on Schedule 4.5.

 

 

 

 

 -10- 

 

 

(b)       Except for proceedings before the Bankruptcy Court, there are no
Orders outstanding (i) against any Seller or that otherwise relate to or may
affect the Business of Sellers or any of the Purchased Assets or (ii) that
challenge, or that may have the effect of preventing, delaying, making illegal
or otherwise interfering with, the transactions contemplated hereby.

 

4.6               Permits. Prior to the closure of the Hospital on June 26,
2016, the Hospital was eligible to receive payment certified as a Medicare
Critical Access Hospital pursuant to 42 CFR Part 485, Subpart F. Hospital
Seller’s hospital license from the Tennessee Department of Health has been
placed on “inactive” status until the February 2017 meeting of the Tennessee
Board for Licensing Health Care Facilities.

 

4.7               Environmental Matters. Except as set forth on Schedule 4.7
hereto:

 

(a)                No Seller is the subject of any outstanding Order, notice,
directive or other writing from or Contract with any Governmental Body
respecting (i) Environmental Laws, (ii) Remedial Action or (iii) any Release or
threatened Release, in each case, relating to the operation of the Business or
to any Purchased Asset; and

 

(b)                To the Knowledge of each Seller, such Seller has not received
any written communication or other notice alleging that such Seller may be in
violation of any Environmental Law, or any Permit issued pursuant to any
Environmental Law, or may have any liability under any Environmental Law, in
each case related to the Business or to any Purchased Assets.

 

(c)                To the Knowledge of each Seller, (i) no Hazardous Material
has been Released at, on, under, to or from any Real Estate in an amount, manner
or condition that, and (ii) no friable asbestos is contained in any equipment or
any building materials at any Real Estate that in its current state, in the case
of each of clauses (i) and (ii), would reasonably be expected to result in
material liabilities under Environmental Law.

 

4.8               Insurance Policies. Schedule 4.8 sets forth a complete and
accurate list of all insurance policies under which any of the assets or
properties of any Seller are covered or otherwise relating to the Business, and
indicates the insurer’s name, policy number, expiration date, amount and type of
coverage.

 

4.9               Real Property. Real Estate Seller represents and warrants that
(a) Schedule 4.9 sets forth a correct street address of each parcel of Real
Estate and (b) Real Estate Seller is not a party to any Real Property Lease
other than the lease of the Real Estate to Hospital Seller, as tenant. Hospital
Seller represents that Schedule 4.9 sets forth a list of all Real Property
Leases to which Hospital Seller is a party. Except for the Real Estate and the
lease of the Real Estate to Hospital Seller, as tenant, Real Estate Seller does
not own any interest (fee, leasehold or otherwise) in any real property. Except
for the Real Property Leases described in Schedule 4.9, Hospital Seller does not
own any interest (fee, leasehold or otherwise) in any real property. Except as
set forth in Schedule 4.9, Real Estate Seller owns good and marketable title to
the Real Estate, free and clear of any Liens other than the Permitted
Exceptions.

 

4.10           Intentionally Omitted.

 

4.11           Intentionally Omitted.

 

 

 

 

 

 

 -11- 

 

 

4.12           Intentionally Omitted.

 

4.13           Employees. Hospital Seller has terminated all Employees.

 

4.14           Intentionally Omitted.

 

4.15           Reimbursement.

 

(a)                To the Knowledge of each Seller, neither Sellers nor any of
Sellers’ managers, equity holders or managing employees is excluded from
participation in any Healthcare Program, and no Seller has received any written
notice from the applicable Governmental Body that any such exclusion is
threatened.

 

(b)                Hospital Seller’s provider agreement with Medicare will be
voluntarily terminated on the effective date of the Closing.

 

4.16           Intentionally Omitted.

 

4.17           Intentionally Omitted.

 

4.18           Brokers or Finders. Except as set forth on Schedule 4.18, neither
Sellers nor any of their respective officers, directors, employees or agents
have incurred any liability or obligation for brokerage or finders’ fees or
agents’ commissions or other similar payment in connection with the sale of the
Purchased Assets or the transactions contemplated hereby.

 

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF PURCHASER

 

Purchaser hereby represents and warrants to Sellers that:

 

5.1               Organization and Good Standing. Purchaser is a corporation
duly organized or formed, validly existing and in good standing under the laws
of the jurisdiction of its organization or formation, with full power and
authority to conduct its business as it is now being conducted, to own or use
the properties and assets that it purports to own or use, and to execute and
deliver this Agreement and perform its obligations hereunder. Purchaser is duly
qualified to do business and is in good standing in every domestic or foreign
jurisdiction in which its ownership of property or the conduct of businesses as
now conducted requires it to qualify, except when the failure to be so qualified
would not have a material and adverse effect on Purchaser’s ability to perform
its obligations under this Agreement or consummate the transactions contemplated
hereby.

 

5.2               Authorization of Agreement. Purchaser has full corporate power
and authority to execute and deliver this Agreement and each other agreement,
document, instrument or certificate contemplated by this Agreement or to be
executed by it in connection with the consummation of the transactions
contemplated hereby and thereby (the “Purchaser Documents”) and to consummate
the transactions contemplated hereby and thereby. The execution, delivery and
performance by Purchaser of this Agreement and Purchaser Documents have been
duly authorized by all necessary corporate action on behalf of Purchaser. Upon
the execution and delivery by Purchaser of this Agreement and the Purchaser
Documents, this Agreement and the Purchaser Documents (assuming the due
authorization, execution and delivery by the other parties hereto and thereto)
will constitute, the legal, valid and binding obligations of Purchaser,
enforceable against Purchaser in accordance with their respective terms, subject
to applicable bankruptcy, insolvency, reorganization, moratorium and similar
laws affecting creditors’ rights and remedies generally, and subject, as to
enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity).

 

 

 

 

 -12- 

 

 

5.3           Conflicts; Consents of Third Parties.

 

(a)       Except as described on Schedule 5.3(a), Purchaser is not required to
obtain any consent, approval, authorization, waiver, Order, license or Permit of
or from, or to make any declaration or filing with, or to give any notification
to, any Person (including any Governmental Body) in connection with the
execution and delivery of this Agreement or the Purchaser Documents by
Purchaser, the compliance by Purchaser with any of the provisions hereof or
thereof; the consummation of the transactions contemplated hereby or thereby or
the taking by Purchaser of any other action contemplated hereby or thereby.

 

(b)       Except as set forth on Schedule 5.3(b), none of the execution and
delivery by Purchaser of this Agreement or any of the Purchaser Documents, the
consummation of the Contemplated Transactions by Purchaser or compliance by
Purchaser with any of the provisions hereof or thereof will conflict with, or
result in any violation of or a default (with or without notice or lapse of
time, or both) under, or give rise to a right of termination or cancellation
under any provision of, any Contract or Permit to which Purchaser is a party or
by which any of the properties or assets of Purchaser are bound, other than any
such conflicts, violations, defaults, terminations or cancellations that would
not have a material and adverse effect on the ability of Purchaser to perform
its obligations under this Agreement or consummate the transactions contemplated
hereby.

 

5.4               Litigation. There are no Legal Proceedings pending or, to the
Knowledge of Purchaser, threatened against Purchaser, or, to the Knowledge of
Purchaser, to which Purchaser otherwise is a party before any Governmental Body,
which, if adversely determined, would reasonably be expected to have a material
and adverse effect on the ability of Purchaser to perform its obligations under
this Agreement or consummate the transactions contemplated hereby. Other than as
set forth in Schedule 5.4, Purchaser is not subject to any Order of any
Governmental Body except to the extent the same would not reasonably be expected
to have a material and adverse effect on the ability of Purchaser to perform its
obligations under this Agreement or consummate the transactions contemplated
hereby.

 

5.5               Financial Advisors. No Person has acted, directly or
indirectly, as a broker, finder or financial advisor for Purchaser in connection
with the transactions contemplated by this Agreement and no Person is entitled
to any fee or commission or like payment in respect thereof.

 

5.6               Financial Ability to Close. Purchaser has sufficient funds in
cash or from existing available borrowing capacity in an amount equal to the
Cash Purchase Price presently available and will at the Closing have immediately
available funds in cash or from existing available borrowing capacity which are
sufficient to pay the Cash Purchase Price and to pay any other amounts payable
by Purchaser pursuant to this Agreement and to consummate the transactions
contemplated by this Agreement. Purchaser has provided Sellers with evidence of
the availability of such funds.

 

ARTICLE VI

BANKRUPTCY COURT MATTERS

 

6.1               Bankruptcy Status. Hospital Seller shall be and remain
throughout the term of this Agreement a debtor and debtor-in-possession in
Chapter 11 bankruptcy proceedings in the Bankruptcy Case.

 

 

 

 

 

 -13- 

 

 

6.2               Bankruptcy Court Filings. As promptly as practicable following
the execution of this Agreement, but in no event later than two (2) Business
Days after the execution of this Agreement, Hospital Seller shall file the Sale
Motion and subsequently use its best efforts to seek the approval of the
Bankruptcy Court of the Sale Order. Purchaser agrees that it will promptly take
such actions as are reasonably requested by Hospital Seller to assist in
obtaining entry of the Sale Order and a finding of adequate assurance of future
performance by Purchaser, including, without limitation, furnishing affidavits
or other documents or information for filing with the Bankruptcy Court for the
purposes, among others, of providing necessary assurances of performance by
Purchaser under this Agreement and demonstrating that Purchaser is a “good
faith” purchaser under Section 363(m) of the Bankruptcy Code. In the event the
entry of the Sale Order shall be appealed, each party shall use their respective
commercially reasonable efforts to defend against such appeal. In the event that
an appeal is taken, or a stay pending appeal is requested from the Sale Order,
Sellers shall promptly notify Purchaser of such appeal or stay request and shall
provide Purchaser within three (3) Business Days a copy of the relevant notice
of appeal or order of stay. Sellers shall also provide Purchaser with written
notice of any motion or application filed in connection with any appeal from
either of such orders. If no stay pending appeal is granted, the Purchaser and
the Sellers may mutually determine to close the Contemplated Transactions.

 

6.3               Notice. Notice of the Contemplated Transactions, the Sale
Motion and the Sale Order shall be in a form reasonably acceptable to Purchaser
and Hospital Seller and shall be served by the Hospital Seller to the reasonable
satisfaction of Purchaser in accordance with applicable Law (including, to the
extent applicable, Rules 2002, 3016, 3017 and 6004 of the Federal Rules of
Bankruptcy Procedure and any local rules or orders of the Bankruptcy Court) on
all Persons required to receive notice under applicable Law.

 

6.4               Competing Transaction.

 

(a)       This Agreement is subject to approval by the Bankruptcy Court and the
consideration by Hospital Seller of higher or otherwise better competing bids
(each a “Competing Bid”).

 

(b)       [Intentionally Omitted].

 

(c)       Until the Contemplated Transactions are consummated, and subject to
the bid procedures set forth in Section 6.4(d), Hospital Seller is permitted to
cause its Representatives to market and initiate contact with, solicit or
encourage submission of any inquiries, proposals or offers by, any Person (in
addition to Purchaser and its Representatives) in connection with any sale or
other disposition of all or any part of the Purchased Assets, alone or in
connection with the sale or other disposition of any other asset of such Seller.
In addition, during such time period, each Seller has the responsibility and
obligation to respond to any inquiries or offers to purchase all or any part of
the Purchased Assets and perform any and all other acts related thereto which
are required under the Bankruptcy Code or other applicable law, including
supplying information relating to the Business and the assets of such Seller to
prospective purchasers.

 

(d)         Seller agrees to the following bid procedures and shall use its best
efforts to cause such procedures to be adhered to and, if necessary, approved by
the Bankruptcy Court:

 

(i)              initial minimum overbid by a Competing Bid of $100,000 (the
Purchaser Termination Fee of $50,000 plus the incremented bid of $50,000 as set
forth below);

 

(ii)             incremented bids by Qualified Bidders of no less than $50,000;

 

(iii)            right of Purchaser to credit bid its Purchaser Termination Fee;

 

 

 

 

 -14- 

 

 

(iv)           payment of the Purchaser Termination Fee, if applicable, in
accordance with Section 6.5;

 

(v)            deadline to qualify Competing Bids of a date no later than
November 2, 2016;

 

(vi)           conducting an auction in the event of any qualified Competing
Bids no later than November 15, 2016; and

 

(vii)           commencement of a hearing before the Bankruptcy Court to approve
the Transaction and seek entry of Sale Order no later than November 30, 2016.

 

6.5               Purchaser Termination Fee. Sellers agree and acknowledge that
Purchaser’s negotiation and execution of this Agreement have required a
substantial investment of management time and significant commitment of
financial and other resources of Purchaser, and that the negotiation and
execution of this Agreement have provided significant value to Sellers.
Therefore, if the Bankruptcy Court fails to approve this Agreement because
another offer for the purchase of the Business has been received and is approved
by the Bankruptcy Court, then, in such event, and if thereafter any Purchaser
Termination Event (as hereinafter defined) occurs, Sellers will pay to Purchaser
a termination fee, which will include reimbursement of Purchaser’s costs and
expenses in connection with the negotiation of and activities incident to this
Agreement, in an amount equal to $50,000 (the “Purchaser Termination Fee”). The
Purchaser Termination Fee will be paid upon the closing of the sale of the
Business (or of the Purchased Assets thereof) to a third party. A Purchaser
Termination Event means the consummation of any Alternative Transaction
including a sale of all or a substantial portion of the Purchased Assets by a
Competing Bid from a party other than the Purchaser, or the confirmation of any
Chapter 11 Plan, within 180 days of the execution of this Agreement. Sellers
shall pay the Purchaser Termination Fee on the earlier of (a) the date of the
consummation of an Alternative Transaction or (b) on the effective date of the
confirmation by the Bankruptcy Court of any Chapter 11 Plan, such date not to
exceed fifteen (15) days from the date of such confirmation. Sellers’ obligation
to pay the Purchaser Termination Fee shall constitute and be treated as a
superpriority administrative expense of Sellers under Sections 503(b) and 507(b)
of the Bankruptcy Code and paid in cash immediately when due. The parties agree
that such sum is a reasonable estimate of Purchaser’s costs, expenses, and loss,
and is fair consideration to induce Purchaser to enter into this Agreement.

 

ARTICLE VII

COVENANTS

 

7.1               Access to Information. Subject to the provisions of this
Section 7.1, each Seller agrees that, prior to the Closing Date, Purchaser shall
be entitled, through its Representatives, to make such investigation of the
assets, properties and operations of the Business, including a survey and
inspection of the Real Estate and the Facilities, and such examination of the
books and records of Sellers pertaining to the Business, the Purchased Assets
and the Assumed Liabilities as it reasonably requests and to make extracts and
copies of such books and records. Any such investigation and examination shall
be conducted during regular business hours upon reasonable advance notice and
under reasonable circumstances. Each Seller shall cause its Representatives to
cooperate with Purchaser and its Representatives in connection with such
investigation and examination, and Purchaser and its Representatives shall
cooperate with each Seller and its Representatives and shall use its
commercially reasonable efforts to minimize any disruption to Sellers’ business
and operations, including the Business. Notwithstanding the foregoing, if
permitted by applicable Law, Sellers shall disclose to Purchaser the subject
matter of the information or books, records or Documents not required to be made
available hereunder and why such items should not be delivered. If requested by
Purchaser, Sellers shall seek such consents as may be needed to enable Sellers
to make such information available to Purchaser.

 

 

 

 

 -15- 

 

 

7.2           Conduct of the Business Pending the Closing.

 

(a)       Prior to the Closing, except (1) as required by applicable Law or the
Bankruptcy Court, (2) as otherwise expressly contemplated by this Agreement or
(3) with the prior written consent of Purchaser (which consent shall not be
unreasonably withheld, delayed or conditioned):

 

(i)                         Real Estate Seller shall maintain the insurance
coverage currently in place with respect to the Real Estate (or comparable
replacement coverage); and

 

(ii)                         Hospital Seller shall comply in all material
respects with all Laws and Orders pertaining to the Business.

 

(b)       Except (1) as required by applicable Law or the Bankruptcy Court, (2)
as otherwise expressly contemplated by this Agreement or (3) with the prior
written consent of Purchaser (which consent shall not be unreasonably withheld,
delayed or conditioned), no Seller shall, solely as it relates to the Business:

 

(i)                         subject any of the Purchased Assets to any Lien
(other than Permitted Exceptions);

 

(ii)                         acquire or lease any material properties or assets
or sell, assign, license, transfer, convey, lease or otherwise dispose of any
assets of the type that would be of the Purchased Assets (except pursuant to an
existing (as of the date of this Agreement) Contract for fair consideration in
the Ordinary Course of Business or for the purpose of disposing of obsolete or
worthless assets);

 

(iii)                        [intentionally omitted];

 

(iv)                       [intentionally omitted];

 

(v)                        [intentionally omitted]; or

 

(vi)                      agree to do anything prohibited by this Section
7.2(b).

 

7.3               Consents and Permits; Insurance. Each Seller shall use its
commercially reasonable efforts, and Purchaser shall cooperate with Sellers,
including, without limitation, by taking the actions referred to in Section 7.4,
to obtain at the earliest practicable date all consents, approvals,
authorizations, waiver and Orders required to be obtained by Sellers and to give
at the earliest practicable date any notices required to be given by Sellers, in
order for Sellers to consummate the transactions contemplated by this Agreement
on the terms and in the manner provided hereby. Purchaser shall use its
commercially reasonable efforts, and Sellers shall cooperate with Purchaser,
including by taking the actions referred to in Section 7.4 to obtain at the
earliest practicable date all consents, approvals, authorizations, waivers,
Orders, licenses and Permits required to be obtained by Purchaser, and to give
at the earliest practicable date any notices required to be given by Purchaser,
in order for Purchaser to consummate the transactions contemplated by this
Agreement on the terms and in the manner provided hereby and to operate the
Business after the Closing; provided, however, that Sellers shall not be
obligated to pay any consideration therefor to any third party from whom any
such item is requested or to initiate any litigation or legal proceedings to
obtain any such consent or approval except as otherwise provided by Section 7.4.

 

 

 

 -16- 

 

 

7.4             Regulatory Approval.

 

(a)       The parties recognize and agree that time is of the essence for the
closing of the Contemplated Transactions. Purchaser and Sellers will cooperate
in making all required notices and applications, so that the parties may receive
all approvals required to consummate the Contemplated Transactions.

 

(b)       Each party shall use its reasonable efforts to furnish to each other
all information required for any application or other filing to be made pursuant
to any applicable Law in connection with the Contemplated Transactions
contemplated by this Agreement. Each such party shall promptly inform the other
parties of any material oral communication with, and provide copies of written
communications with, any Governmental Body regarding any such filings or any
such transaction. No such party shall independently participate in any formal
meeting with any Governmental Body in respect of any such filings,
investigation, or other inquiry without giving the other parties prior notice of
the meeting and, to the extent permitted by such Governmental Body, the
opportunity to attend and/or participate.

 

7.5               Further Assurances. Each party shall use its reasonable
efforts to (i) take all actions necessary or appropriate to consummate the
transactions contemplated by this Agreement and (ii) cause the fulfillment at
the earliest practicable date of all of the conditions to their respective
obligations to consummate the transactions contemplated by this Agreement.
Notwithstanding anything herein to the contrary, Purchaser hereby acknowledges
that Hospital Seller’s hospital license issued by the Tennessee Department of
Health has been placed on “inactive” status until the February 2017 meeting of
the Tennessee Board for Licensing Health Care Facilities and the understands
that the any transfer, if possible, of the license shall be the sole
responsibility of Purchaser.

 

7.6               Confidentiality. From and after the date hereof, Purchaser
shall, and shall cause its Representatives to maintain in confidence, not
disclose to any third party, except as necessary to effect the Contemplated
Transactions, without the prior written consent of Sellers, and not use to the
detriment of any Seller, any Seller Confidential Information relating to or
obtained from any Seller or its Representatives; provided, however, if
Purchaser, its Representatives or anyone to whom such parties have transmitted
any Seller Confidential Information become legally compelled to disclose any
such Seller Confidential Information, Purchaser shall provide the respective
Seller with prompt notice of such legal obligation. Upon the Closing by
Purchaser, the restrictions contained in this Section 7.6 shall not apply to
confidential or proprietary information related primarily to the Purchased
Assets, the Assumed Liabilities or the Business and shall not apply to
Purchaser’s actions to enforce any rights or claims of Purchaser under this
Agreement or performing Purchaser’s obligations under this Agreement. Purchaser
may disclose any Seller Confidential Information to its Representatives who need
to know it for the purpose of effectuating the Contemplated Transactions.
Purchaser shall inform its Representatives having access to Seller Confidential
Information of such obligation of confidentiality.

 

7.7               Intentionally Omitted.

 

7.8               Publicity. Except in connection with the Bankruptcy Case, each
of party agrees that it shall not issue any written press release concerning
this Agreement or the transactions contemplated hereby without obtaining the
prior written approval of either Purchaser or Sellers, as applicable, which
approval will not be unreasonably withheld, delayed or conditioned, unless, in
the judgment of such issuing party upon advice of counsel, disclosure is
otherwise required by applicable Law or by the Bankruptcy Court with respect to
filings to be made with the Bankruptcy Court in connection with this Agreement;
provided, that such party that intends to make such release shall use its
commercially reasonable efforts consistent with such applicable Law or
Bankruptcy Court requirement to consult with the other parties with respect to
the text thereof.

 

 

 

 -17- 

 

 

7.9            Intentionally Omitted.

 

7.10           Intentionally Omitted.

 

7.11           Cooperation. Each Seller and Purchaser agrees to reasonably
cooperate with each other, from the date hereof up through and following the
Closing Date, in good faith, in an effort to satisfy all further conditions,
undertakings and agreements contained in this Agreement.

 

7.12          Intentionally Omitted.

 

7.13          Intentionally Omitted.

 

7.14           Misdirected Payments, Etc. Purchaser and Sellers covenant and
agree to remit, with reasonable promptness, to the other any payments received
by them or their affiliates, which payments are on or in respect of accounts or
notes receivable owned by (or are otherwise payable to) Sellers or Purchaser, as
applicable.

 

7.15           Notice of Developments. Sellers and Purchaser will give prompt
written notice to the other party of any facts that become known or any
development that constitutes or causes a breach of any representation, warranty
or agreement herein; provided that no disclosure shall be deemed to supplement
any schedule or prevent or cure any breach or misrepresentation.

 

7.16           Release of Guarantor. Purchaser shall use commercially reasonable
efforts to obtain a release of the guarantor under the First Deed of Trust upon
assumption by Purchaser of the First Deed of Trust.

 

7.17           Non-Competition.

 

(a)       In partial consideration of Purchaser’s agreement to assume and agree
to pay the Purchase Price and pay, perform and discharge when due, and hold
Sellers harmless from and against, the Assumed Liabilities, each Seller agrees
that without Purchaser’s prior written consent, (x) during the period commencing
on the Closing Date and ending on the fifth (5th) anniversary of the Closing
Date and so long as Purchaser continues to operate the Hospital, they shall not
(i) engage in the operation of any Competing Business within a thirty-five (35)
mile radius of the Hospital (the “Restricted Area”), or (ii) acquire, lease, own
or be a shareholder, partner, member or equity holder of, exercise management
control over, provide consulting services for, or acquire or maintain a
controlling interest in, any Competing Business that is located in the
Restricted Area. For purposes of this Section, the term “Competing Business”
means the business of owning and operating hospitals, ambulatory surgical
centers, medical clinics, freestanding emergency rooms, urgent care clinics,
behavioral health centers and all other healthcare facilities and services.

 

(b)       Sellers recognize that the covenants in this Section 7.17, and the
territorial, time and other limitations with respect thereto, are reasonable and
properly required for the adequate protection of the acquisition of the Business
by Purchaser, and agree that such limitations are reasonable with respect to its
activities, business and public purpose. Sellers agree and acknowledge that the
violation of the covenants or agreements in this Section 7.17 would cause
irreparable injury to Purchaser and that the remedy at law for any violation or
threatened violation thereof would be inadequate and that, in addition to
whatever other remedies may be available at law or in equity, Purchaser shall be
entitled to temporary and permanent injunctive or other equitable relief without
the necessity of proving actual damages or posting bond. The parties hereto also
waive any requirement of proving actual damages in connection with the obtaining
of any such injunctive or other equitable relief. In addition to any injunctive
relief or specific performance, Purchaser may pursue such other remedies to
which it may be entitled under applicable Law.

 

 

 

 -18- 

 

 

ARTICLE VIII

CONDITIONS TO CLOSING

 

8.1               Conditions Precedent to Obligations of Purchaser. The
obligations of Purchaser to consummate the Contemplated Transactions as provided
by this Agreement is subject to the fulfillment, on or prior to the Closing
Date, of each of the following conditions (any or all of which may be waived by
Purchaser in whole or in part to the extent permitted by applicable Law):

 

(a)       the representations and warranties of Sellers contained in this
Agreement and in any document, instrument or certificate delivered hereunder (i)
that are not qualified by materiality will be true and correct in all material
respects at and as of the Closing with the same force and effect as if made as
of the Closing and (ii) that are qualified by materiality will be true and
correct in all respects at and as of the Closing with the same force and effect
as if made as of the Closing, in each case, other than representations and
warranties that expressly speak only as of a specific date or time, which will
be true and correct as of such specified date or time;

 

(b)       Sellers shall have performed and complied in all material respects
with all obligations and agreements required in this Agreement to be performed
or complied with by them prior to the Closing Date;

 

(c)       Purchaser shall have received a Phase I Environmental Site Assessment
Report with respect to the Real Estate (which report must cover mold, asbestos,
radon and lead-based paint as well as environmental matters customarily
addressed in a Phase I Environmental Site Assessment Report), which report must
be acceptable to Purchaser in its reasonable discretion;

 

(d)        Intentionally Omitted;

 

(e)       The Title Company shall have issued and delivered to Purchaser an
irrevocable commitment for a standard owner’s title insurance policy with no
exceptions other than Permitted Exceptions that do not have a material and
adverse effect on the ability of Purchaser to conduct the Business for the
Purchased Real Properties;

 

(f)        Sellers shall have delivered, or caused to be delivered, to Purchaser
all of the items set forth in Section 3.2;

 

(g)        Intentionally Omitted;

 

(h)        Intentionally Omitted;

 

(i)         Intentionally Omitted; and

 

(j)         Real Estate Seller shall have effectively assigned, with all
required consents having been obtained, the Landing Rights Agreement to
Purchaser.

 

8.2               Conditions Precedent to Obligations of Sellers. The obligation
of Sellers to consummate the Contemplated Transactions as provided by this
Agreement are subject to the fulfillment, prior to or on the Closing Date, of
each of the following conditions (any or all of which may be waived by Sellers
in whole or in part to the extent permitted by applicable Law):

 

 

 -19- 

 

 

 

(a)       the representations and warranties of Purchaser contained in this
Agreement and in any document, instrument or certificate delivered hereunder (i)
that are not qualified by materiality will be true and correct in all material
respects at and as of the Closing with the same force and effect as if made as
of the Closing and (ii) that are qualified by materiality will be true and
correct in all respects at and as of the Closing with the same force and effect
as if made as of the Closing, in each case, other than representations and
warranties that expressly speak only as of a specific date or time, which will
be true and correct as of such specified date or time;

 

(b)       Purchaser shall have performed and complied in all material respects
with all obligations and agreements required by this Agreement to be performed
or complied with by them on or prior to the Closing Date; provided, however,
that the condition set forth in this Section 8.2(b) shall be deemed satisfied
unless all such failures to so perform or comply taken together prevent or
materially delay the ability of Purchaser to perform its obligations under this
Agreement or the ability of Purchaser to consummate the Contemplated
Transactions; and

 

(c)       Purchaser shall have delivered, or caused to be delivered, to Sellers
all of the items set forth in Section 3.3.

 

8.3               Conditions Precedent to Obligations of Purchaser and Sellers.
The respective obligations of the parties to consummate the Contemplated
Transactions as provided by this Agreement are subject to the fulfillment, on or
prior to the Closing Date, of each of the following conditions (any or all of
which may be waived by Purchaser and Sellers in whole or in part to the extent
permitted by applicable Law):

 

(a)       There shall not be in effect any Order by a Governmental Body of
competent jurisdiction restraining, enjoining or otherwise prohibiting the
consummation of the Contemplated Transactions;

 

(b)        Intentionally Omitted; and

 

(c)       The Bankruptcy Court shall have entered the Sale Order, and the Sale
Order shall have become a Final Order not subject to any stay.

 

8.4               Frustration of Closing Conditions. No party may rely on the
failure of any condition set forth in Sections 8.1, 8.2 or 8.3, as the case may
be, to excuse it from consummating the Contemplated Transactions if such failure
was caused by such party’s failure to comply with any provision of this
Agreement.

 

ARTICLE IX

TAXES

 

9.1               Transfer Taxes. Purchaser shall pay any sales, use, stamp,
documentary stamp, filing, recording, transfer or similar fees or taxes or
governmental charges (including any interest and penalty thereon) payable in
connection with the transactions contemplated by this Agreement, if any
(“Transfer Taxes”). Sellers shall seek to include in the Sales Order a provision
that provides that the transfer of the Purchased Assets shall be free and clear
of any Transfer Taxes under Bankruptcy Code Section 1146(c). The parties shall
cooperate and otherwise take commercially reasonable efforts to obtain any
available refunds for Transfer Taxes, including a refund available under Section
1146(c) of the Bankruptcy Code.

 

9.2               Prorations. All real and personal property Taxes or similar ad
valorem obligations levied with respect to the Purchased Assets for any taxable
period that includes the Closing Date and ends after the Closing Date, whether
imposed or assessed before or after the Closing Date, shall be prorated between
Sellers and Purchaser as of 12:01 a.m. (Central time) on the day after the
Closing Date. If any Taxes subject to pro-ration are paid by Purchaser, on the
one hand, and Sellers, on the other hand, the proportionate amount of such Taxes
paid (or in the event of a refund of any portion of such Taxes previously paid
is received, such refund) shall be paid promptly by (or to) the other after the
payment of such Taxes (or promptly following the receipt of any such refund).

 

 

 

 

 

 -20- 

 

 

9.3               Purchase Price Allocation. The Purchase Price shall be
allocated between the Hospital Seller and the Real Estate Seller as follows: (i)
the Cash Purchase Price less an amount equal to any outstanding real estate
Taxes owed with respect to the Real Estate shall be allocated to the Hospital
Seller and (ii) the Assumed Indebtedness plus an amount in cash equal to the
amount necessary to pay any outstanding real estate Taxes owed with respect to
the Real Estate shall be allocated to the Real Estate Seller. For tax purposes
only, prior to the Closing Date, Sellers and Purchaser shall agree in good faith
upon an allocation of the purchase price and other consideration delivered
hereunder (including the Assumed Liabilities) among the Purchased Assets in
accordance with Section 1060 of the Code and, in accordance with such
allocation, Purchaser shall prepare and deliver to Sellers copies of Form 8594
and any required exhibits thereto (the “Asset Acquisition Statement”). Purchaser
shall prepare and deliver to Sellers from time to time revised copies of the
Asset Acquisition Statement (the “Revised Statements”) so as to report any
matters on the Asset Acquisition Statement that need updating (including
purchase price adjustments, if any) consistent with the agreed upon allocation.
To the extent that Sellers disagree with Purchaser’s allocation in the Asset
Acquisition Statement or the Revised Statements, Sellers and Purchaser shall
work in good faith to resolve any such disagreements. If Purchaser and Sellers
cannot reach a final resolution of the matter, Purchaser and Sellers will
jointly retain an independent financial expert to resolve any remaining
disagreements, the cost of which shall be borne equally by the parties. The
purchase price for the Purchased Assets shall be allocated in accordance with
the Asset Acquisition Statement or, if applicable, the last Revised Statements,
provided by Purchaser to Sellers, and all income Tax Returns and reports filed
by Purchaser and Sellers shall be prepared consistently with such allocation.

 

9.4               Cooperation on Tax Matters. The parties shall furnish or cause
to be furnished to each other, as promptly as practicable, such information and
assistance relating to the Purchased Assets and the Assumed Liabilities as is
reasonably necessary for the preparation and filing of any Tax Return, claim for
refund or other filings relating to Tax matters, for the preparation for any Tax
audit, for the preparation for any Tax protest, for the prosecution or defense
of any suit or other proceeding relating to Tax matters.

 

ARTICLE X

MISCELLANEOUS

 

10.1           Expenses. Except as otherwise expressly provided in this
Agreement, each party shall bear its own expenses incurred in connection with
the negotiation and execution of this Agreement and each other agreement,
document and instrument contemplated by this Agreement and the consummation of
the transactions contemplated hereby and thereby.

 

10.2           Other Definitional and Interpretive Matters. Unless otherwise
expressly provided, for purposes of this Agreement, the following rules of
interpretation shall apply:

 

(a)       When calculating the period of time before which, within which or
following which any act is to be done or step taken pursuant to this Agreement,
the date that is the reference date in calculating such period shall be
excluded. If the last day of such period is a non-Business Day, the period in
question shall end on the next succeeding Business Day.

 

(b)       Any reference in this Agreement to $ shall mean U.S. dollars.

 

 

 

 

 -21- 

 

 

(c)       All Exhibits and Schedules annexed hereto or referred to herein are
hereby incorporated in and made a part of this Agreement as if set forth in full
herein. Any matter or item disclosed on one Schedule shall be deemed to have
been disclosed on each other Schedule to the extent it is reasonably apparent
that it is pertinent to the subject matter of such other Schedule. Any
capitalized terms used in any Schedule or Exhibit but not otherwise defined
therein shall be defined as set forth in this Agreement.

 

(d)       Any reference in this Agreement to gender shall include all genders,
and words imparting the singular number only shall include the plural and vice
versa.

 

(e)       The provision of a Table of Contents, the division of this Agreement
into Articles, Sections and other subdivisions and the insertion of headings are
for convenience of reference only and shall not affect or be utilized in
construing or interpreting this Agreement. All references in this Agreement to
any “Section” are to the corresponding Section of this Agreement unless
otherwise specified.

 

(f)        The words such as “herein,” “hereinafter,” “hereof” and “hereunder”
refer to this Agreement as a whole and not merely to a subdivision in which such
words appear unless the context otherwise requires.

 

(g)       The word “including” or any variation thereof means “including,
without limitation” and shall not be construed to limit any general statement
that it follows to the specific or similar items or matters immediately
following it.

 

(h)       The phrase “made available to Purchaser” shall mean made available to
Purchaser through posting in an electronic data room, via email, facsimile or
other electronic transfer or through other written means for all purposes of
this Agreement.

 

(i)         Intentionally Omitted.

 

(j)         The parties hereto have been advised by experienced counsel, and
have participated jointly, in the negotiation and drafting of this Agreement
and, in the event an ambiguity or question of intent or interpretation arises,
this Agreement shall be construed as jointly drafted in its entirety by the
parties hereto and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provision of this
Agreement.

 

10.3           Injunctive Relief. Damages at law may be an inadequate remedy for
the breach of any of the covenants, promises and agreements contained in this
Agreement, and, accordingly, any party hereto shall be entitled to injunctive
relief with respect to any such breach, including specific performance of such
covenants, promises or agreements or an order enjoining a party from any
threatened, or from the continuation of any actual breach of the covenants,
promises or agreements contained in this Agreement. The rights set forth in this
Section 10.3 shall be in addition to any other rights which a party may have at
law or in equity pursuant to this Agreement.

 

10.4           Submission to Jurisdiction; Consent to Service of Process.
Without limiting any party’s right to appeal any order of the Bankruptcy Court,
(i) the Bankruptcy Court shall retain exclusive jurisdiction to enforce the
terms of this Agreement and to decide any claims or disputes which may arise or
result from, or be connected with, this Agreement, any breach or default
hereunder, or the transactions contemplated hereby, and (ii) any and all
proceedings related to the foregoing shall be filed and maintained only in the
Bankruptcy Court, and the parties hereby consent to and submit to the
jurisdiction and venue of the Bankruptcy Court and shall receive notices at such
locations as indicated in Section 10.7 hereof. The parties hereby irrevocably
waive, to the fullest extent permitted by applicable law, any objection which
they may now or hereafter have to the laying of venue of any such dispute
brought in such court or any defense of inconvenient forum for the maintenance
of such dispute. Each of the parties hereto agrees that a judgment in any such
dispute may be enforced in other jurisdictions by suit on the judgment or in any
other manner provided by law. Each of the parties hereto hereby consents to
process being served by any party to this Agreement in any suit, action or
proceeding by delivery of a copy thereof in accordance with the provisions of
Section 10.7.

 

 

 

 

 -22- 

 

 

10.5           Entire Agreement: Amendments and Waivers. This Agreement
(including the Disclosure Schedules and Exhibits hereto) and the Deposit Escrow
Agreement represent the entire understanding and agreement between the parties
hereto with respect to the subject matter hereof. This Agreement can be amended,
supplemented or changed, and any provision hereof can be waived, only by written
instrument making specific reference to this Agreement signed by the party
against whom enforcement of any such amendment, supplement, modification or
waiver is sought. No action taken pursuant to this Agreement, including any
investigation by or on behalf of any party, shall be deemed to constitute a
waiver by the party taking such action of compliance with any representation,
warranty, covenant or agreement contained herein. The waiver by any party hereto
of a breach of any provision of this Agreement shall not operate or be construed
as a further or continuing waiver of such breach or as a waiver of any other or
subsequent breach. No failure on the part of any party to exercise, and no delay
in exercising, any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of such right, power or remedy
by such party preclude any other or further exercise thereof or the exercise of
any other right, power or remedy. All remedies hereunder are cumulative and are
not exclusive of any other remedies provided by law.

 

10.6           Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Mississippi applicable to contracts
made and performed in such State.

 

10.7           Notice. All notices and other communications under this Agreement
shall be in writing and shall be deemed given (i) when delivered personally by
hand (with written confirmation of receipt) or sent by facsimile (hard copy to
follow) or (ii) one business day following the day sent by overnight courier
(with written confirmation of receipt), in each case at the following addresses
(or to such other address as a party may have specified by notice given to the
other party pursuant to this provision):

 

If to Purchaser to: If to Sellers, to:     Rennova Health, Inc. Pioneer Health
Services, Inc. Victoria Nemerson 110 Pioneer Way General Counsel Magee, MS 39111
400 South Australian Avenue Attn: Scott Phillips West Palm Beach, FL 33401
          Michael Morgan Facsimile: (561) 584-6835 Facsimile:  (215) 689-4386  
      With a copy (which shall not constitute notice) to: With a copy (which
shall not constitute notice) to:     Bass, Berry & Sims PLC Law Offices of Craig
M. Geno, PLLC 150 Third Avenue S, Suite 2800 587 Highland Colony Pkwy Nashville,
TN  37201 Ridgeland, MS 39157 Attn: Elizabeth S. Warren Attn: Craig M. Geno,
Esq. Facsimile: (615) 742-7719 Facsimile:  (601) 427-0050

 

 

 

 

 -23- 

 

 

      With a copy (which shall not constitute notice) to:       Counsel to
Unsecured Creditor’s Committee   Arnall Golden Gregory LLP   171 17th Street, NW
  Suite 2100   Atlanta, Georgia 30338   Attn: Darryl S. Laddin, Esq.  
Facsimile:  (404) 873-8121

 

10.8           Severability. If any term or other provision of this Agreement is
invalid, illegal, or incapable of being enforced by any law or public policy,
all other terms or provisions of this Agreement shall nevertheless remain in
full force and effect so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal, or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner in order
that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible.

 

10.9           Binding Effect; Assignment. This Agreement shall be binding upon
and inure to the benefit of the parties and their respective successors and
permitted assigns. Nothing in this Agreement shall create or be deemed to create
any third party beneficiary rights in any Person or entity not a party to this
Agreement except as provided below. No assignment of this Agreement or of any
rights or obligations hereunder may be made by any party (by operation of law or
otherwise) without the prior written consent of Purchaser and Sellers and any
attempted assignment without the required consents shall be void; provided,
however, that Purchaser may assign its right to acquire any or all of the
Purchased Assets and its other rights hereunder to an entity wholly owned by it
that also assumes all of Purchaser’s obligations hereunder (but such assumption
shall not relieve Purchaser of its obligations hereunder) with the consent of
Sellers, which shall not be unreasonably withheld; and provided, further,
Purchaser may assign its right to acquire any or all of the Purchased Assets to
a third Person at Closing. Upon any such permitted assignment, the references in
this Agreement to Purchaser shall also apply to any such assignee unless the
context otherwise requires. No permitted assignment of any rights hereunder
and/or assumption of obligations hereunder shall relieve the parties hereto of
any of their obligations.

 

10.10        No Personal Liability. In entering into this Agreement, the parties
understand, agree and acknowledge that no director, trustee, officer, manager,
member, employee, shareholder, attorney, accountant, advisor or agent of any
party hereto shall be personally liable or responsible to any other party or its
Affiliates, directors, trustees, officers, managers, members, employees,
shareholders, attorneys, accountants, advisors or agents for the performance of
any obligation under this Agreement of any party to this Agreement or the truth,
completeness or accuracy of any representation or warranty contained in, or
statement made in, this Agreement or any document prepared pursuant hereto and
that all obligations hereunder are those of the named parties only (but nothing
contained herein shall limit the liability of any person for his or her
fraudulent acts).

 

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

 

10.12        Acknowledgment by Purchaser. Purchaser acknowledges that it has
conducted to its satisfaction an independent investigation and verification of
the Purchased Assets, liabilities, properties and operations of Sellers and, in
making its determination to proceed with the transactions contemplated by this
Agreement, Purchaser has relied on the results of its own independent
investigation and

 

 

 

 

 

 -24- 

 

 

verification and the representations and warranties of Sellers expressly and
specifically set forth in this Agreement, including the Disclosure Schedules.
SUCH REPRESENTATIONS AND WARRANTIES BY SELLERS CONSTITUTE THE SOLE AND EXCLUSIVE
REPRESENTATIONS AND WARRANTIES OF SELLERS TO PURCHASER IN CONNECTION WITH THE
TRANSACTIONS CONTEMPLATED HEREBY, AND PURCHASER UNDERSTANDS, ACKNOWLEDGES AND
AGREES THAT ALL OTHER REPRESENTATIONS AND WARRANTIES OF ANY KIND OR NATURE,
EXPRESS OR IMPLIED (INCLUDING, BUT NOT LIMITED TO, ANY RELATING TO THE ASSETS OR
LIABILITIES OF SELLERS) ARE SPECIFICALLY DISCLAIMED BY SELLERS. EXCEPT FOR THE
EXPRESS REPRESENTATIONS AND WARRANTIES CONTAINED HEREIN, THE PURCHASED ASSETS
ARE BEING SOLD “AS IS, WHERE IS, AND WITH ALL FAULTS,” AND SELLERS EXPRESSLY
DISCLAIM ANY AND ALL OTHER REPRESENTATIONS AND WARRANTIES, WHETHER EXPRESS OR
IMPLIED, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.

 

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 -25- 

 

 

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

 

 

SELLERS:   PIONEER HEALTH SERVICES OF ONEIDA LLC                 By: /s/ Scott
Phillips                                   Name: Scott Phillips     Title: CRO  
              PIONEER HEALTH SERVICES OF ONEIDA REAL ESTATE LLC           By:
/s/ Joseph S. McNulty III                     Name: Joseph S. McNulty III    
Title: Chairman/CEO             PURCHASER:   RENNOVA HEALTH, INC.              
  By: /s/ Seamus Lagan                                Name: Seamus Lagan    
Title: Chief Executive Officer

 

 

 

 

 

 

[SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT]

   

 

ANNEX 1

 

Defined Terms

 

Capitalized terms used herein are defined as set forth below:

 

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

 

“Agreement” shall have the meaning set forth in the Preamble of this Agreement.

 

“Alternative Transaction” means any agreement or transaction involving the sale
(in a single transaction or a series of related transactions) of all or
substantially all of the Purchased Assets, or the issuance or sale (in a single
transaction or series of related transactions) of all or substantially all of
the equity interests, of Sellers or any of their successors, to any party other
than Purchaser or a designee of Purchaser.

 

“Asset Acquisition Statement” shall have the meaning set forth in Section 9.3 of
this Agreement.

 

“Assigned Contracts” shall have the meaning set forth in Section 1.1(d) of this
Agreement.

 

“Assignment and Assumption Agreement” shall have the meaning set forth in
Section 3.2(g) of this Agreement.

 

“Assumed Indebtedness” shall have the meaning set forth in Section 1.3(a) of
this Agreement.

 

“Assumed Liabilities” shall have the meaning set forth in Section 1.3 of this
Agreement.

 

“Bankruptcy Case” means the voluntary petition for relief under Chapter 11 of
the Bankruptcy Code filed by Seller on March 30, 2016 in the Bankruptcy Court,
In re Pioneer Health Services of Oneida LLC, Case No. 16-01124-NPO, jointly
administered with In re Pioneer Health Services, Inc., Case No. 16-0119-NPO.

 

“Bankruptcy Code” shall have the meaning set forth in the Recitals of this
Agreement.

 

“Bankruptcy Court” means the United States Bankruptcy Court for the Southern
District of Mississippi.

 

“Business” shall have the meaning set forth in the Recitals of this Agreement.

 

“Business Day” means any day of the year on which national banking institutions
in Tennessee are open to the public for conducting business and are not required
or authorized to close.

 

“Purchaser Termination Fee” shall have the meaning set forth in Section 6.5 of
this Agreement.

 

“Cash Purchase Price” shall have the meaning set forth in Section 2.1 of this
Agreement.

 

“Closing” shall have the meaning set forth in Section 3.1 of this Agreement.

 

 

 

 

 27 

 

 

“Closing Cash Payment” shall have the meaning set forth in Section 2.3 of this
Agreement.

 

“Closing Date” shall have the meaning set forth in Section 3.1 of this
Agreement.

 

“CMS” means the Centers for Medicare and Medicaid Services.

 

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

 

“Competing Bid” shall have the meaning set forth in Section 6.4(a) of this
Agreement.

 

“Competing Business” shall have the meaning set forth in Section 7.17(a) of this
Agreement.

 

“Contemplated Transactions” shall have the meaning set forth in Section 1.1 of
this Agreement.

 

“Contract” means any written contract, indenture, note, bond, lease, license or
other agreement, other than a real property lease, a personal property lease or
an Intellectual Property License.

 

“Copyrights” means all copyrights and registrations and applications therefor
and works of authorship, and mask work rights.

 

“Cost Reports” means all cost and other reports filed pursuant to the
requirements of Healthcare Programs for payment or reimbursement of amounts due
from such programs for services provided.

 

“Cure Amounts” shall have the meaning set forth in Section 1.5 of this
Agreement.

 

“Cure Cap” shall have the meaning set forth in Section 1.5 of this Agreement.

 

“Deposit Escrow Agreement” shall have the meaning set forth in Section 2.2 of
this Agreement.

 

“Deposit Escrowed Funds” shall have the meaning set forth in Section 2.2 of this
Agreement.

 

“Documents” means all files, documents, instruments, papers, books, reports,
records, tapes, microfilms, photographs, letters, budgets, forecasts, ledgers,
journals, title policies, customer lists, regulatory filings, operating data and
plans, technical documentation (design specifications, functional requirements,
operating instructions, logic manuals, flow charts, etc.), user documentation
(installation guides, user manuals, training materials, release notes, working
papers, etc.), marketing documentation (sales brochures, flyers, pamphlets, web
pages, etc.), and other similar materials related to the Business or the
Purchased Assets in each case whether or not in electronic form, other than
Patient Records.

 

“Employee Benefit Plans” means all deferred compensation, incentive
compensation, stock purchase, stock option or other equity-based, retention,
change in control, severance or termination pay, hospitalization or other
medical, life, dental, vision, disability or other insurance, supplemental
unemployment benefits, profit-sharing, pension or retirement plans, programs,
agreements or arrangements, and each other fringe or other employee benefit
plan, program, agreement or arrangement (including any “employee benefit plan”,
within the meaning of Section 3(3) of ERISA), sponsored, maintained or
contributed to or required to be contributed to by any Seller or by any ERISA
Affiliate of any Seller for the benefit of any current or former employee,
independent contractor or director (and/or their dependents or beneficiaries) of
any Seller, or with respect to which any Seller or any ERISA Affiliate of any
Seller otherwise has any liabilities or obligations.

 

“Employees” means all individuals, as of any date specified herein, whether or
not actively at work as of such date, who are or were employed by Sellers in the
conduct of the Business, together with individuals who are hired in respect of
the conduct of the Business after the date hereof and prior to the Closing.

 

 

 

 

 -2- 

 

 

“Environmental Law” means any federal, state or local statute, law, regulation,
code, ordinance, or rule of common law currently in effect relating to the
protection of human health and safety or the environment or natural resources,
including the Comprehensive Environmental Response, Compensation and Liability
Act (42 U.S.C. § 9601 et seq.), the Hazardous Materials Transportation Act (49
U.S.C. App. § 1801 et seq.), the Resource Conservation and Recovery Act (42
U.S.C. § 6901 et seq.), the Clean Water Act (33 U.S.C. § 1251 et seq.), the
Clean Air Act (42 U.S.C. § 7401 et seq.) the Toxic Substances Control Act (15
U.S.C. § 2601 et seq.), the Federal Insecticide, Fungicide, and Rodenticide Act
(7 U.S.C. § 136 et seq.), and the Occupational Safety and Health Act (29 U.S.C.
§ 651 et seq.), and the regulations promulgated pursuant thereto.

 

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

 

“ERISA Affiliate” means any entity that would be deemed to be a
“single-employer” with any Seller under Section 414(b), (c), (m) or (o) of the
Code or Section 4001 of ERISA.

 

“Escrow Agent” shall have the meaning set forth in Section 2.2 of this
Agreement.

 

“Excluded Assets” shall have the meaning set forth in Section 1.2 of this
Agreement.

 

“Excluded Contracts” means every Contract that is not listed on Schedule 1.1(d)
hereto.

 

“Excluded Liabilities” shall have the meaning set forth in Section 1.4 of this
Agreement.

 

“expenses” means any and all costs and expenses, including attorneys’ and other
professionals’ fees and disbursements sustained or reasonably incurred incident
to investigating, responding to or defending against any claim, investigation,
action, suit or proceeding relating to a matter subject to indemnification under
this Agreement.

 

“Facilities” means the healthcare facilities utilized in the Business and
included among the Purchased Assets as further identified in Section 1.1 of this
Agreement.

 

“Final Order” means an order of the Bankruptcy Court that has not been reversed,
modified or stayed, and as to which the time for appeal has expired, and the
deadline for filing any motion or petition for review, rehearing or certiorari
has expired, and as to which no appeal, motion or petition for review, rehearing
or certiorari is pending.

 

“First Deed of Trust” shall mean that certain Deed of Trust dated July 10, 2015,
executed by Real Estate Seller in favor of First National Bank of Oneida.

 

“Furniture and Equipment” means all furniture, fixtures, furnishings, machinery,
appliances and other equipment (including medical equipment) and leasehold
improvements owned by Sellers, used by Sellers in the conduct of the Business
and located in the Ordinary Course of Business at the Purchased Real Property,
including all such desks, chairs, tables, Hardware, copiers, telephone lines,
telecopy machines and other telecommunication equipment (and, to the extent
assignable by Sellers, the telephone numbers associated therewith used in the
Ordinary Course of Business), cubicles and miscellaneous office furnishings.

 

 

 

 -3- 

 

 

“Governmental Body” means any government or governmental or regulatory body
thereof, or political subdivision thereof, whether foreign, federal, state, or
local, or any agency, instrumentality or authority thereof, or any court or
arbitrator (public or private).

 

“Hardware” means any and all computer and computer-related hardware, including
computers, file servers, facsimile servers, scanners, color printers, laser
printers and networks.

 

“Hazardous Material” means any substance, material or waste which is regulated
by any Government Body including petroleum and its by-products, asbestos,
biomedical waste, medical waste and any chemical, material or substance which is
defined as a “hazardous waste,” “hazardous substance,” “hazardous material,”
“restricted hazardous waste,” “industrial waste,” “solid waste,” “contaminant,”
“pollutant,” “toxic waste” or “toxic substance” under any provision of
Environmental Law.

 

“Healthcare Programs” means Medicare, Medicaid, CHAMPUS/TRICARE programs, any
other federal health care program (as defined in 42 U.S.C. § 1320a-7b(f)) and
any other healthcare programs administered or funded by a Governmental Body or
contractor thereof.

 

“Healthcare Program Laws” means the Laws governing the Healthcare Programs,
including: 42 U.S.C. §§ 1320a-7, 1320a-7a, 1320a-7b and 1395nn; the False Claims
Act (31 U.S.C. § 3729 et seq.); the False Statements Act (18 U.S.C. § 1001); the
Program Fraud Civil Penalties Act (31 U.S.C. § 3801 et seq.); 18 U.S.C. § 1347,
18 U.S.C. § 669, 18 U.S.C. § 1035, 18 U.S.C. § 1518; and the corresponding fraud
and abuse, false claims and anti-self-referral Laws of any other Governmental
Body.

 

“HIPAA” means the Health Insurance Portability and Accountability Act of 1996
(Pub. L. No. 104-191), as amended by the Health Information Technology for
Economic and Clinical Health Act, enacted as part of the American Recovery and
Reinvestment Act of 2009, and all regulations, rules, interpretations and orders
promulgated thereunder, including but not limited to the regulations set forth
at 45 CFR Part 160 and Part 164.

 

“Hospital” shall have the meaning set forth in the Recitals of this Agreement.

 

“Hospital Seller” shall have the meaning set forth in the Preamble of this
Agreement.

 

“Indebtedness” means, with respect to any Person, (i) indebtedness of such
Person for borrowed money, whether secured or unsecured, (ii) obligations of
such Person evidenced by notes, bonds, debentures or other similar instruments,
(iii) obligations of such Person under conditional sale or other title retention
agreements relating to property purchased by such Person, (iv) capital lease
obligations of such Person, (v) obligations of such Person under acceptance,
letter of credit or similar facilities, (vi) obligations of such Person under
interest rate cap, swap, collar or similar transaction or currency hedging
transactions, and (vii) guarantees of such Person of any such indebtedness
referred to in clauses (i)-(vi) of any other Person.

 

“Intellectual Property” means all Intellectual Property Rights owned by Sellers
and/or used by Sellers in connection with the Business, including any in the
form of or arising from or in respect of Patents, Marks, Copyrights, Software or
Technology.

 

“Intellectual Property License” means any grant to Sellers of a right to use in
connection with the Business any Intellectual Property Rights owned by any other
Person (other than Seller Marks), to the extent, and only to the extent, such
right is transferable by a Seller.

 

 

 

 

 -4- 

 

 

“Intellectual Property Rights” means all patents, trademarks, service marks,
trade names, trade secrets, domain names, computer software, copyrights,
inventions, processes, discoveries, formulae, research and development and
applications and registrations for any of the foregoing that Sellers own,
license or otherwise possess the right to use.

 

“Inventory” means all medical supplies, drugs, medications, food, janitorial,
housekeeping and office supplies and other consumables located in or used in
connection with the operation of the Business.

 

“Knowledge” (and any similar expression) means any matters known by, or which
should be known following reasonable inquiry by those officers of Purchaser or
of those officers of a Seller or senior managers of the Business as of or prior
to the Closing, as applicable, each of which is identified on Schedule 11.1(a).

 

“Landing Rights Agreements” means that certain Landing Rights Agreement for Use
of Helipad, dated as of December 2, 2013, by and between Pioneer Health Services
of Oneida Real Estate, LLC, a Mississippi limited liability company, and Scott
County, Tennessee, a Tennessee governmental entity.

 

“Law” means any domestic or foreign federal, state, provincial, local or
municipal law, statute, code, ordinance, rule or principle of common law,
regulation, Order or directive.

 

“Legal Proceeding” means any judicial, administrative or arbitral actions,
suits, alternative dispute resolution, proceedings (public or private) or claims
or any proceedings by or before a Governmental Body or the Bankruptcy Case,
including but not limited to any audit hearing or investigation.

 

“Liability” means any debt, liability or obligation (whether direct or indirect,
known or unknown, absolute or contingent, accrued or unaccrued, liquidated or
unliquidated, or due or to become due), and including all fines, penalties,
costs and expenses relating thereto.

 

“Lien” means any lien, encumbrance, pledge, mortgage, deed of trust, security
interest, encroachment, claim, lease, charge, option, right of first refusal,
easement, servitude, proxy, voting trust or agreement, equitable interest, and
transfer restriction under any agreement, or restrictions of any kind or nature,
known or unknown.

 

“Marks” means all trademarks, service marks, trade names, service names, brand
names, all trade dress rights, logos, Internet domain names and corporate names
and general intangibles of a like nature, together with the goodwill associated
with any of the foregoing, and all applications, registrations and renewals
thereof.

 

“Medicaid” means any state program for medical assistance administered under
Title XIX of the Social Security Act.

 

“Medical Records” means those Patient Records constituting “Hospital Records” as
defined at Tenn. Code Ann. §68-11-302 for patients who have received services
from the Business at any time during the two (2) year period prior to the
closure of the Hospital on July _, 2016 and billing records related to such
patients, whether in paper or electronic form.

 

“Medicare” means the health insurance program administered under Title XVIII of
the Social Security Act.

 

“Nonassignable Asset” shall have the meaning set forth in Section 1.6(b) of this
Agreement.

 

 

 

 

 -5- 

 

 

“Order” means any order, injunction, judgment, decree, ruling, consent,
approval, writ, assessment or arbitration award of a Governmental Body.

 

“Ordinary Course of Business” means the ordinary and usual course of normal
day-to-day operations of the Business through the date hereof consistent with
past practice, subject to those actions necessary and incident to the Bankruptcy
Code.

 

“Outside Date” shall have the meaning set forth in Section 3.4(a)(ix) of this
Agreement.

 

“Owned Properties” means all real property and interest in real property owned
in fee by a Seller and used in any material degree in the Business.

 

“Patents” means all patents and applications therefor, including continuations,
divisionals, continuations-in-part, or reissues of patent applications and
patents issuing thereon.

 

“Patient Records” shall mean any documents containing information concerning
medical, health care or behavioral health services provided to, or the medical,
health care or behavioral health of any individual, or that are otherwise
subject to regulation under applicable Law, including HIPAA.

 

“Permits” means any approvals, authorizations, consents, licenses, permits,
certificates of need, certificates of exemption, franchises, accreditations,
registrations or certificates of a Governmental Body or other regulatory entity.

 

“Permitted Exceptions” means (i) all defects, exceptions, restrictions,
easements, encroachments, covenants, reservations, declarations, state of facts,
rights of way and encumbrances disclosed in policies of title insurance, surveys
and other documentation related to such policies and surveys set forth on
Schedule 11.1(b) or set forth in the title commitment referenced in Section
8.1(e); (ii) statutory liens for current Taxes, assessments or other
governmental charges not yet due and payable or the amount or validity of which
is being contested in good faith by appropriate proceedings, provided the same
could not reasonably be expected to result in a loss of the property and an
appropriate reserve is established therefore; (iii) mechanics’, carriers’,
workers’, repairers’, and similar Liens arising or incurred in the Ordinary
Course of Business for sums not yet due and payable; (iv) zoning, entitlement
and other land use and environmental regulations or designations by any
Governmental Body provided that such regulations or designations have not been
violated; (v) title of a lessor under a capital or operating lease; (vi) the
First Deed of Trust and (vii) Liens set forth on Schedule 4.4.

 

“Person” means any individual, corporation, limited liability company,
partnership, firm, joint venture, association, joint-stock company, trust,
unincorporated organization, association, estate, Governmental Body or other
entity.

 

“Personal Property Leases” means all tangible personal property and interests in
tangible personal property leased, licensed or otherwise possessed by a Seller
and used in any material degree in the Business, as lessee, lessor, licensee,
licensor or otherwise.

 

“Plan” means any material “employee benefit plan” within the meaning of Section
3(3) of ERISA and any other material bonus, profit sharing, pension, severance,
deferred compensation, fringe benefit (as described in Code Section 132),
insurance, welfare, post-retirement, health, life, tuition refund, service
award, company car, scholarship, relocation, disability, accident, sick,
vacation, holiday, unemployment, incentive, commission, retention, change in
control, non-competition, and other plans, agreements, policies trust funds (a)
established, maintained, sponsored or contributed to (or with respect to which
any obligation to contribute has been undertaken) by a Seller or any ERISA
Affiliate or (b) with respect to which a Seller or any ERISA Affiliate has or
has had any obligation, in each case, under which any Transferred Employee may
receive benefits or may otherwise be subject.

 

 

 

 

 

 -6- 

 

 

“Purchase Price” shall have the meaning set forth in Section 2.1 of this
Agreement.

 

“Purchased Assets” shall have the meaning set forth in Section 1.1 of this
Agreement.

 

“Purchased Personal Property” shall have the meaning set forth in Section 1.1(b)
of this Agreement.

 

“Purchased Real Property” shall have the meaning set forth in Section 1.1(a) of
this Agreement.

 

“Purchaser” shall have the meaning set forth in the Preamble of this Agreement.

 

“Purchaser Documents” shall have the meaning set forth in Section 5.2 of this
Agreement.

 

“Real Estate” shall have the meaning set forth in the Recitals of this
Agreement.

 

“Real Estate Seller” shall have the meaning set forth in the Preamble of this
Agreement.

 

“Real Property Leases” means all real property and interests in real property
leased, licensed or otherwise possessed by a Seller and used in any material
degree in the Business, as lessee, lessor, licensee, licensor or otherwise.

 

“Release” means any release, spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, or leaching of Hazardous Material into
the indoor or outdoor environment, or into or out of any property.

 

“Remedial Action” means any and all actions as required by a Governmental Body
to (i) investigate, monitor, clean up, remove, remediate, treat or in any other
way address any Hazardous Material; (ii) prevent any Release so it does not
endanger or threaten to endanger public health or welfare or the indoor or
outdoor environment or any natural resources; (iii) perform pre-remedial studies
and investigations or post-remedial monitoring and care concerning Hazardous
Material; or (iv) to correct a condition of noncompliance with, or in violation
of, Environmental Law.

 

“Rennova” shall have the meaning set forth in the Preamble of this Agreement.

 

“Representatives” means with respect to any Person, any of its Affiliates,
directors, trustees, officers, members, employees, consultants, agents, advisors
and other representatives.

 

“Restricted Area” shall have the meaning set forth in Section 7.17(a) of this
Agreement.

 

“Revised Statements” shall have the meaning set forth in Section 9.3 of this
Agreement.

 

“Sale Motion” means the motion, supporting papers, notices and form of Sale
Order, all in form and substance reasonably acceptable to Purchaser in its
reasonable discretion, seeking approval and entry of the Sale Order.

 

“Sale Order” means a Final Order of the Bankruptcy Court substantially in the
form of Exhibit F hereto inter alia approving the sale of the Purchased Assets,
assumption of the Assumed Liabilities, and assignment of all Assigned Contracts
free and clear of any Liens (except for Permitted Exceptions and any Assumed
Liabilities under this Agreement) and finding that Purchaser is a “good faith
purchaser” for purposes of Section 363(m) of the Bankruptcy Code, with the final
form and substance of such Order to be acceptable to Purchaser in its sole
discretion.

 

 

 

 -7- 

 

 

“Seller” and “Sellers” shall have the meanings set forth in the Preamble of this
Agreement.

 

“Seller Confidential Information” shall mean any information that is
confidential or proprietary in nature that is related to the Purchased Assets,
the Assumed Liabilities, the Business, the Excluded Assets, or the Excluded
Liabilities, including methods of operation, patient information, prices, fees,
costs, Technology, Software, know-how, marketing methods, plans, personnel,
suppliers, competitors, markets or other specialized information or proprietary
matters; provided, however, that Seller Confidential Information does not
include, and there shall be no obligation hereunder with respect to, information
that (i) becomes generally available to the public other than as a result of a
disclosure by Purchaser or any of its Representatives in violation of this
Agreement; (ii) becomes available to Purchaser on a non- confidential basis from
a source other than a Seller or its Representatives, provided that such source
is not known by Purchaser to be bound by a confidentiality agreement with, or
other obligation of secrecy to, Sellers; (iii) is lawfully received by Purchaser
from a third party reasonably believed by Purchaser to have the right to
disseminate Seller Confidential Information without restriction on disclosure;
or (iv) can be shown by Purchaser through written documents or evidence
maintained by Purchaser to have been independently developed by either of them.

 

“Software” means, except to the extent generally available for purchase from a
third Person, any and all (i) computer programs, including any and all software
implementations of algorithms, models and methodologies, whether in source code
or object code, (ii) databases and compilations, including any and all data and
collections of data, whether machine readable or otherwise, (iii) descriptions,
flow charts and other work product used to design, plan, organize and develop
any of the foregoing, screens, user interfaces, report formats, firmware,
development tools, templates; menus, buttons and icons, and (iv) all
documentation including user manuals and other training documentation related to
any of the foregoing, in each case, that are used in, incorporated in, embodied
in, displayed by or relate to, or are used or useful in the Business.

 

“Tax Authority” means any federal, state or local government, or agency,
instrumentality or employee thereof, charged with the administration of any law
or regulation relating to Taxes.

 

“Tax Return” means all returns, declarations, reports, estimates, information
returns and statements required to be filed in respect of any Taxes.

 

“Taxes” means (i) all federal, state, local or foreign taxes, charges or other
assessments, including all net income, gross receipts, capital, sales, use, ad
valorem, value added, transfer, franchise, profits, inventory, capital stock,
license, withholding, payroll, employment, social security, unemployment,
excise, severance, stamp, occupation, property, excise taxes under Section 4358
of the Code, unrelated business income taxes, and estimated taxes, whether
disputed or not, and (ii) all interest, penalties, tines, additions to tax or
additional amounts imposed by any taxing authority in connection with any item
described in clause (i).

 

“Technology” means, collectively, all designs, formulae, algorithms, procedures,
methods, techniques, ideas, know-how, research and development, technical data,
programs, subroutines, tools, materials, specifications, processes, inventions
(whether patentable or unpatentable and whether or not reduced to practice),
apparatus, creations, improvements, works of authorship and other similar
materials, and all recordings, graphs, drawings, reports, analyses, and other
writings, and other tangible embodiments of the foregoing, in any form whether
or not specifically listed herein, and all related technology, that are used in,
incorporated in, embodied in, displayed by or relate to, or are used or useful
in the Business, other than any in the form of Software.

 

 

 

 

 -8- 

 

 

“Title Company” means Fidelity National Title Group, Inc. or other nationally
recognized title insurance company reasonably acceptable to Purchaser.

 

“Transfer Taxes” shall have the meaning set forth in Section 9.1 of this
Agreement.

 

“Transferred Property” shall have the meaning set forth in Section 1.2(l) of
this Agreement.

 

“Waller Professional Fees Escrow” shall have the meaning set forth in Section
6.6 of this Agreement.

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 -9- 

 

 

 

AMENDMENT NO. 1 TO ASSET PURCHASE AGREEMENT

 

This Amendment No. 1 to Asset Purchase Agreement (this "Amendment"), dated as of
December 31, 2016, is by and among Pioneer Health Services of Oneida LLC, a
Mississippi limited liability company ("Hospital Seller"), Pioneer Health
Services of Oneida Real Estate LLC, a Mississippi limited liability company
("Real Estate Seller", each individually a "Seller" and, collectively with
Hospital Seller, the "Sellers"), and Rennova Health, Inc., a Delaware
corporation ("Rennova" or "Purchaser").

 

RECITALS

 

A. On October 26, 2016, Sellers and Purchaser entered into that certain Asset
Purchase Agreement ("Purchase Agreement"), pursuant to which Purchaser agreed to
purchase the Purchased Assets from, and assume the Assumed Liabilities of,
Sellers.

 

B. Pursuant to Section 10.5 of the Purchase Agreement, any term of the Purchase
Agreement may be amended by an agreement in writing signed by each party
thereto.

 

C. The parties to the Purchase Agreement desire to amend the Purchase Agreement
as set forth below.

 

NOW, THEREFORE, in consideration of the foregoing recitals and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the paities hereby agree as follows:

 

1.       Definitions; Construction. Capitalized terms not otherwise defined
herein shall have the meanings set forth in the Purchase Agreement. References
in the Purchase Agreement to "this Agreement" (and indirect references such as
"hereunder," "hereby," "herein" and "hereof') shall be deemed to be references
to the Purchase Agreement as amended hereby.

 

2.       Amendment to Section 3.4(a)(ix). Section 3.4(a)(ix) of the Purchase
Agreement is hereby amended and restated in its entirety as follows:

 

"(ix) upon written notice to Sellers if the Closing shall not have occurred by
the close of business on January 6, 2017 (the "Outside Date")."

 

3.       Miscellaneous. Except as expressly modified by this Amendment, all of
the terms and conditions of the Purchase Agreement shall remain in full force
and effect. In the event of any conflict or inconsistency between the terms and
conditions of the Purchase Agreement and this Amendment, the terms and
conditions of this Amendment shall control and govern. This Amendment may be
executed in multiple counterparts which, when taken together, shall constitute
one and the same document. The exchange of copies of this Amendment and of
signature pages by facsimile, or by .pdf or similar imaging transmission, will
constitute effective execution and delivery of this Amendment as to the parties
and may be used in lieu of the original agreement for all purposes. Signatures
of the parties transmitted by facsimile, or by .pdf or similar imaging
transmission, will be deemed to be their original signatures for any purpose
whatsoever.

 

[Remainder of page intentionally left blank]

 

 

 1 

 

 

IN WITNESS WHEREOF, the parties have executed this Amendment effective as of the
date first above written.

 

 

SELLERS:   PIONEER HEALTH SERVICES OF ONEIDA LLC           By: /s/ Scott
Phillips                                                    Name: Scott Phillips
    Title: CRO                 PIONEER HEALTH SERVICES OF ONEIDA REAL ESTATE LLC
          By: /s/ Joseph S. McNulty III                                Name:
Joseph S. McNulty III     Title: President             PURCHASER:   RENNOVA
HEALTH, INC.           By: /s/ Victoria E.
Nemerson                                   Name: Victoria E. Nemerson     Title:
General Counsel

 

 

 

 

 

 

 

 

 

[Signature Page to First Amendment to Asset Purchase Agreement]

 

 

 

 

 2 

 

 

 

AMENDMENT NO. 2 TO ASSET PURCHASE AGREEMENT

 

This Amendment No. 2 to Asset Purchase Agreement (this “Amendment”), dated as of
January 6, 2017, is by and among Pioneer Health Services of Oneida LLC, a
Mississippi limited liability company (“Hospital Seller”), Pioneer Health
Services of Oneida Real Estate LLC, a Mississippi limited liability company
(“Real Estate Seller”, each individually a “Seller” and, collectively with
Hospital Seller, the “Sellers”), and Rennova Health, Inc., a Delaware
corporation (“Rennova” or “Purchaser”).

RECITALS

 

A.       On October 26, 2016, Sellers and Purchaser entered into that certain
Asset Purchase Agreement, as amended by that Amendment No. 1 to Asset Purchase
Agreement, dated December 8, 2016 (as amended, the “Purchase Agreement”),
pursuant to which Purchaser agreed to purchase the Purchased Assets from, and
assume the Assumed Liabilities of, Sellers.

 

B.       Pursuant to Section 10.5 of the Purchase Agreement, any term of the
Purchase Agreement may be amended by an agreement in writing signed by each
party thereto.

 

C.       The parties to the Purchase Agreement desire to further amend the
Purchase Agreement as set forth below.

 

NOW, THEREFORE, in consideration of the foregoing recitals and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:

 

1.       Definitions; Construction. Capitalized terms not otherwise defined
herein shall have the meanings set forth in the Purchase Agreement. References
in the Purchase Agreement to “this Agreement” (and indirect references such as
“hereunder,” “hereby,” “herein” and “hereof”) shall be deemed to be references
to the Purchase Agreement as amended hereby.

 

2.       Amendment to Section 3.4(a)(ix). Section 3.4(a)(ix) of the Purchase
Agreement is hereby amended and restated in its entirety as follows:

“(ix) upon written notice to Sellers if the Closing shall not have occurred by
the close of business on January 13, 2017 (the “Outside Date”).”

 

3.       Miscellaneous. Except as expressly modified by this Amendment, all of
the terms and conditions of the Purchase Agreement shall remain in full force
and effect. In the event of any conflict or inconsistency between the terms and
conditions of the Purchase Agreement and this Amendment, the terms and
conditions of this Amendment shall control and govern. This Amendment may be
executed in multiple counterparts which, when taken together, shall constitute
one and the same document. The exchange of copies of this Amendment and of
signature pages by facsimile, or by .pdf or similar imaging transmission, will
constitute effective execution and delivery of this Amendment as to the parties
and may be used in lieu of the original agreement for all purposes. Signatures
of the parties transmitted by facsimile, or by .pdf or similar imaging
transmission, will be deemed to be their original signatures for any purpose
whatsoever.

 

[Remainder of page intentionally left blank]

 

 

 1 

 

 

IN WITNESS WHEREOF, the parties have executed this Amendment effective as of the
date first above written.

 

 

SELLERS:   PIONEER HEALTH SERVICES OF ONEIDA LLC           By: /s/ Scott
Phillips                                                    Name: Scott Phillips
    Title: CRO                 PIONEER HEALTH SERVICES OF ONEIDA REAL ESTATE LLC
          By: /s/ Scott Phillips                                Name: Scott
Phillips     Title: President             PURCHASER:   RENNOVA HEALTH, INC.    
      By: /s/ Michael Goldberg                                   Name: Michael
Goldberg     Title: Director

 

 

 

 

 

 

 

 

 

[Signature Page to Second Amendment to Asset Purchase Agreement]

 

 

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