Document:

Registration Rights Agreement

  
 Exhibit 4.2 

 
 REGISTRATION RIGHTS AGREEMENT 
  
 THIS REGISTRATION RIGHTS AGREEMENT (this
“Agreement”), dated as of January 2, 2004, is made by and among Jameson Inns, Inc., a Georgia corporation (“Jameson”), and each of the persons listed on Exhibit A hereto (each, a
“Seller” and collectively, the “Sellers”). 
  
 W I T N E S S E T H: 
  
 WHEREAS, Jameson, Kitchin Hospitality, LLC, a Georgia limited liability company (the “LLC”), and the Sellers have entered into a Membership Interest Purchase Agreement dated September 10, 2003 (the
“Membership Interest Purchase Agreement”), pursuant to which Jameson, contemporaneously with the execution and delivery of this Agreement, is purchasing from the Sellers all of the outstanding membership interests in the LLC in
return for shares of Common Stock (defined below) and cash; 
  
 WHEREAS, Jameson has agreed to provide certain registration rights to the Sellers in respect of the shares of Common Stock issued to the Sellers pursuant to the Membership Interest Purchase Agreement; and 
  
 WHEREAS, it is a condition precedent to the closing of the
transactions contemplated by the Membership Interest Purchase Agreement that the parties hereto execute this Agreement; 
  
 NOW, THEREFORE, in consideration of the foregoing and the mutual promises and agreements contained herein, the parties hereto hereby agree as
follows: 
  
 ARTICLE I 
  
 DEFINITIONS 
  
 SECTION 1.1. DEFINITIONS. As used in this Agreement, the following
terms have the following meanings: 
  
 (a)
“Affiliate” has the same meaning as in Rule 12b-2 promulgated under the Exchange Act. 
  
 (b) “Associate” has the same meaning as in Rule 12b-2 promulgated under the Exchange Act. 
  
 (c) “Board of Directors” means the Board of
Directors of Jameson. 
  
 (d) “Common
Stock” means the common stock, par value $0.10 per share, of Jameson. 
  
 (e) “Delay Notice” has the meaning set forth in Section 2.1(e). 
  
 (f) “Director” means a member of the Board
of Directors. 
  

 (g) “Exchange Act” means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder, as amended. 
  
 (h) “Group” shall have the meaning assigned to it in Section 13(d)(3) of the Exchange Act. 
  
 (i) “Holder” shall mean any holder of Registrable Securities. 
  
 (j) “Indemnified Party” has the meaning set
forth in Section 2.8(c). 
  
 (k)
“Indemnifying Party” has the meaning set forth in Section 2.8(c). 
  
 (l) “Independent Director” means a Person who is an independent director within the meaning of Rule 4200 of the National
Association of Securities Dealers, as such rule may be amended from time to time. 
  
 (m) “Initiating Holders” has the meaning set forth in Section 2.1(a). 
  
 (n) “Jameson” has the meaning set forth in
the preamble to this Agreement. 
  
 (o)
“LLC” has the meaning set forth in the recitals to this Agreement. 
  
 (p) “Membership Interest Purchase Agreement” has the meaning set forth in the recitals to this Agreement. 
  
 (q) “Person” means any individual,
corporation, limited liability company, limited or general partnership, joint venture, association, joint-stock company, trust, unincorporated organization, other entity, government or any agency or political subdivision thereof, or any Group
comprised of two or more of the foregoing. 
  
 (r) “Registrable Securities” shall mean (i) any shares of Common Stock held by a Killians Party that were issued to a Killians Party by Jameson pursuant to the Membership Interest Purchase Agreement, and (ii) any shares of
Common Stock issued by way of a stock split or stock dividend in respect of the shares of Common Stock referred to in clause (i). For purposes of this Agreement, any Registrable Securities shall cease to be Registrable Securities when (w) a
Registration Statement covering such Registrable Securities has been declared effective by the SEC, (x) such Registrable Securities shall be eligible for sale pursuant to paragraph (k) of Rule 144 (or any similar provision then in effect) under the
Securities Act, (y) such Registrable Securities are sold in a transaction in which the rights under this Agreement are not assigned, or (z) such Registrable Securities shall cease to be outstanding. 
  
 (s) “Registration Statement” and
“Prospectus” shall mean the registration statement and related prospectus (including any preliminary prospectus and any amendments or supplements thereto in conformity with the requirements of the Securities Act), including any
documents incorporated therein by reference, filed in connection with the registration of any Registrable Securities. 
  

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 (t) “SEC” means the Securities and Exchange Commission. 
  
 (u) “Securities Act” means the Securities
Act of 1933, as amended, and the rules and regulations promulgated thereunder, as amended. 
  
 (v) “Sellers” has the meaning set forth in the preamble to this Agreement. 
  
 (w) “Valid Business Reason” has the meaning
set forth in Section 2.1(e). 
  
 ARTICLE II 
  
 REGISTRATION RIGHTS 
  
 SECTION 2.1. REQUEST FOR REGISTRATION. 
  
 (a) Subject to paragraph 2.1(c) below, at any time, and from
time to time, on or after January 1, 2005, if Jameson is at the time of a request a registrant entitled to register the Registrable Securities for resale on Form S-1, S-2 or S-3 or any successor form thereto, the Holders of at least 25% of the then
Registrable Securities (the “Initiating Holders”) may request in a written notice that Jameson file a Registration Statement on such form under the Securities Act (or a similar document pursuant to any other statute then in effect
corresponding to the Securities Act) covering the registration of all or a part of the Registrable Securities held by such Initiating Holders with an estimated selling price (prior to underwriters’ commissions and expenses) of not less than One
Million Five Hundred Thousand Dollars ($1,500,000.00) for sale pursuant to a firm commitment underwritten public offering. Following receipt of any notice under this Section 2.1, subject to the remaining provisions of this Section 2.1, Jameson shall
(x) within ten days, notify all other Holders of such request in writing and (y) thereupon will, as expeditiously as possible, use its commercially reasonable efforts to cause to be registered under the Securities Act all Registrable Securities that
the Initiating Holders and such other Holders have, within ten days after Jameson has given such notice, requested be registered. Jameson will use its commercially reasonable efforts to cause the Registration Statement to be declared effective by
the SEC as soon as practicable. 
  
 (b) The right
of any Holder to include its Registrable Securities in a registration shall be conditioned upon such Holder’s participation in such underwritten offering and the inclusion of such Holder’s Registrable Securities in the underwritten
offering. All Holders proposing to distribute Registrable Securities through such underwritten offering shall enter into an underwriting agreement in customary form with the underwriter or underwriters. Such underwriter or underwriters shall be
recognized investment banking firm(s) selected by a majority in interest of the Initiating Holders and approved by Jameson. If any Holder of Registrable Securities disapproves of the terms of the underwriting, such Holder may elect to withdraw all
its Registrable Securities by written notice to Jameson, the managing underwriter and the Initiating Holders. The securities so withdrawn also shall be withdrawn from registration. 
  
 (c) Notwithstanding any provision of this Agreement to the contrary, Jameson shall not be required to effect
a registration requested pursuant to this Section 2.1 (i) if 

  

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Jameson has, within the twelve-month period preceding the date of such request, already effected a registration for Holders pursuant to this Section 2.1,
(ii) during the period starting with the date of filing by Jameson of, and ending on a date 180 days following the effective date of, a Registration Statement pertaining to a public offering of securities for the account of Jameson or on behalf of
selling shareholders under any other registration rights agreement or (iii) if within 20 days prior to the receipt by Jameson of the written notice issued by the Initiating Holders requesting registration pursuant to Section 2.1(a), Jameson receives
for or on behalf of any third party or parties exercising rights (whether existing on the date hereof or hereafter granted by Jameson) similar to those provided for in Section 2.1(a) to have securities of Jameson held by such third party or parties
registered under the Securities Act (or other statute then in effect corresponding to the Securities Act). 
  
 (d) Subject to the following sentence, if the managing underwriter for a requested registration advises Jameson in writing that, in
its opinion, the number of securities requested to be included in such registration (including securities of Jameson which are not Registrable Securities) exceeds the number that can be sold in such offering at a price reasonably related to the
then-current market value of such securities, Jameson will include in such registration only the Registrable Securities requested to be included in such registration. In the event that the number of Registrable Securities requested to be included in
such registration exceeds the number which, in the opinion of such managing underwriter, may be sold at a price reasonably related to the then-current market value of such securities, the number of such Registrable Securities to be included in such
registration shall be allocated pro rata among all requesting Holders on the basis of the relative number of shares of Registrable Securities then held by each such Holder (provided that any shares hereby allocated to any such Holder that exceed
such Holder’s request shall be reallocated among the remaining requesting Holders in like manner). In the event that the number of Registrable Securities requested to be included in such registration is less than the number which, in the
opinion of the managing underwriter, may be sold at a price reasonably related to the then-current market value of such securities, Jameson may include in such registration the securities Jameson proposes to sell up to the number of securities that,
in the opinion of the managing underwriter, may be sold at a price reasonably related to the then-current market value of such securities. Jameson will not include in any requested registration pursuant to this Section 2.1 any securities that are
not Registrable Securities (other than securities of Jameson) without the prior written consent of the holders of at least a majority of the Registrable Securities included in such registration. 
  
 (e) If the Board of Directors of Jameson reasonably
determines that any registration of Registrable Securities should not be made or continued due to a valid need not to disclose confidential information or because it would interfere with any financing, acquisition, corporate reorganization or merger
or other transaction involving Jameson (any of such events or circumstances, a “Valid Business Reason”), Jameson may postpone filing a Registration Statement relating to a request for registration under this Section 2.1 until such
Valid Business Reason no longer exists and, in case any such Registration Statement has been filed Jameson may, with respect to a registration effected pursuant to this Section 2.1, cause such Registration Statement to be withdrawn and its 

  

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effectiveness terminated or may, with respect to a registration effected pursuant to this Section 2.1, postpone amending or supplementing such Registration
Statement; and Jameson shall give written notice (a “Delay Notice”) of (i) its determination to postpone or withdraw a Registration Statement, and (ii) of the fact that the Valid Business Reason for such postponement or withdrawal
no longer exists, in each case, promptly after the occurrence thereof. 
  
 (f) Prior to filing a Registration Statement or Prospectus or any amendments or supplements thereto, Jameson shall (i) provide the Holders with an adequate and appropriate opportunity to participate in the preparation
such Registration Statement and each Prospectus included therein (and each amendment or supplement thereto or comparable statement) to be filed with the SEC and (ii) not file any such Registration Statement or Prospectus (or amendment or supplement
thereto or comparable statement) with the SEC to which the Holders’ counsel or any underwriter shall have reasonably objected on the grounds such filing does not comply in all material respects with the requirements of the Act and of the rules
and regulations thereunder. 
  
 SECTION 2.2. INCIDENTAL
REGISTRATION. Subject to Section 2.6, if at any time Jameson determines that it shall file a Registration Statement under the Securities Act (other than (i) a Registration Statement on a Form S-4 or S-8 or any successor or similar forms, or (ii)
a registration in connection with an exchange offer or the offering of securities solely to Jameson’s existing security holders) on any form that also would permit the registration for resale of the Registrable Securities and such filing is to
be on its behalf and/or on behalf of selling holders of its securities for the general registration of its Common Stock to be sold for cash, Jameson shall each such time promptly give each Holder written notice of such determination setting forth
the date on which Jameson proposes to file such Registration Statement, which date shall be no earlier than 30 days from the date of such notice, and advising each Holder of its right to have Registrable Securities included in such registration.
Upon the written request of any Holder received by Jameson no later than 15 days after the date of Jameson’s notice, Jameson shall use its commercially reasonable efforts to cause to be registered under the Securities Act all of the Registrable
Securities that each such Holder has so requested to be registered; provided that if, at any time after giving written notice of its intention to register any securities and prior to the effective date of the Registration Statement filed in
connection with such registration, Jameson shall determine for any reason not to proceed with the proposed registration of the securities to be sold by it, Jameson may, at its election, give written notice of such determination to each Holder of
Registrable Securities and, thereupon, shall be relieved of its obligation to register any Registrable Securities in connection with such registration. If, in the opinion of the managing underwriter (or, in the case of a non-underwritten offering,
in the opinion of Jameson), the total amount of such securities to be so registered, including such Registrable Securities, will exceed the maximum amount of Jameson’s securities that can be marketed at a price reasonably related to the
then-current market value of such securities, then Jameson shall include in such registration (i) first, all the securities Jameson proposes to sell for its own account or is required to register on behalf of any third party exercising rights
(whether in existence on the date of this Agreement or hereafter granted by Jameson) similar to those provided for in Section 2.1(a) and without having the adverse effect referred to above, (ii) second, to the extent that the number of securities
which Jameson proposes to sell for its own account pursuant to this Section 2.2 or is required to register on behalf of any third party exercising rights (whether in existence on the 

  

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date of this Agreement or hereafter granted by Jameson) similar to those provided for in Section 2.1(a) is less than the number of equity securities which
Jameson has been advised can be sold in such offering without having the adverse effect referred to above, all shares of Common Stock requested to be included by third parties exercising the rights similar to those granted in this Section 2.2 and
(iii) third, to the extent that the number of securities referred to in clauses (i) and (ii) is less than the number of equity securities which Jameson has been advised can be sold in such offering without having the adverse effect referred to
above, all Registrable Securities requested to be included in such registration by the Holders pursuant to this Section 2.2; provided, that if the number of Registrable Securities requested to be included in such registration by the Holders pursuant
to this Section 2.2, together with the number of securities to be included in such registration pursuant to clauses (i) and (ii) of this Section 2.2, exceed the number which Jameson has been advised can be sold in such offering without having the
adverse effect referred to above, the number of such Registrable Securities requested to be included in such registration by the Holders pursuant to this Section 2.2 shall be limited to such extent and shall be allocated pro rata among all such
requesting Holders on the basis of the relative number of Registrable Securities each such Holder has requested to be included in such registration. 
  
 SECTION 2.3. OBLIGATIONS OF JAMESON. Whenever required under Section 2.1 to use its commercially reasonable efforts to effect the registration of
any Registrable Securities, Jameson shall, as promptly as reasonably practicable: 
  
 (a) prepare and file with the SEC a Registration Statement with respect to such Registrable Securities and use its commercially reasonable
efforts to cause such Registration Statement to become and remain effective for a period of distribution ending upon the earlier of the sale of all Registrable Securities covered thereby and 90 days from the effective date thereof; 
  
 (b) prepare and file with the SEC such amendments and
supplements to such Registration Statement and the Prospectus used in connection therewith as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities covered by such
Registration Statement, and furnish to the Holders of the Registrable Securities copies of any such amendments and supplements prior to their being used or filed with the SEC; 
  
 (c) furnish to the Holders such number of copies of the Registration Statement and the Prospectus included
therein (including each preliminary Prospectus and any amendments or supplements thereto in conformity with the requirements of the Securities Act) and such other documents and information as they may reasonably request and make available for
inspection by the parties referred to in Section 2.3(d) below such financial and other information and books and records of Jameson, and cause the officers, directors, employees, counsel and independent certified public accountants of Jameson to
respond to such inquiries, as shall be reasonably necessary, in the judgment of the respective counsel referred to in such Section, to conduct a reasonable investigation within the meaning of Section 11 of the Securities Act; 
  
 (d) provide (i) the Holders of the Registrable Securities to
be included in such Registration Statement, (ii) the underwriters (which term, for purposes of this Agreement, 

  

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shall include a person deemed to be an underwriter within the meaning of Section 2(11) of the Securities Act), thereof, (iii) the sales or placement agent
therefor, (iv) counsel for such underwriters or agent, and (v) not more than one counsel for all the Holders of such Registrable Securities the opportunity to participate in the preparation of such Registration Statement, each Prospectus included
therein or filed with the SEC, and each amendment or supplement thereto; 
  
 (e) use its commercially reasonable efforts to register or qualify the Registrable Securities covered by such Registration Statement under such other securities or blue sky laws of such jurisdictions within the United
States as shall be reasonably appropriate for the distribution of the Registrable Securities covered by the Registration Statement; provided, however, that Jameson shall not be required in connection therewith or as a condition thereto to
qualify to do business in or to file a general consent to service of process in any jurisdiction wherein it would not but for the requirements of this paragraph (e) be obligated to do so; and, provided further, that Jameson shall not be required to
qualify such Registrable Securities in any jurisdiction in which the securities regulatory authority requires that any Holder submit its Registrable Securities to the terms, provisions and restrictions of any escrow, lockup or similar agreement(s)
for consent to sell Registrable Securities in such jurisdiction, unless such Holder agrees to do so; 
  
 (f) promptly notify the selling Holders of Registrable Securities, the sales or placement agent therefor and the managing underwriter or
underwriters thereof and confirm such advice in writing, (i) when such Registration Statement or the Prospectus included therein or any Prospectus amendment or supplement or post-effective amendment has been filed, and, with respect to such
Registration Statement or any post-effective amendment, when the same has become effective, (ii) of any comments by the SEC or by any Blue Sky or securities commissioner or regulator of any state with respect thereto or any request by the SEC for
amendments or supplements to such Registration Statement or Prospectus or for additional information, (iii) of the issuance by the SEC of any stop order suspending the effectiveness of such Registration Statement or the initiation or threatening of
any proceedings for that purpose, (iv) if at any time the representations and warranties of Jameson contained in any underwriting agreement or other customary agreement cease to be true and correct in all material respects or (v) of the receipt by
Jameson of any notification with respect to the suspension of the qualification of the Registrable Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; 
  
 (g) use its commercially reasonable efforts to obtain the
withdrawal of any order suspending the effectiveness of such Registration Statement or any post-effective amendment thereto; 
  
 (h) promptly notify each Holder for whom such Registrable Securities are covered by such Registration Statement, at any time when a
Prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event as a result of which the Prospectus included in such Registration Statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required 

  

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to be stated therein or necessary to make, in light of the circumstances under which they were made, the statements therein not misleading, and at the
request of any such Holder promptly prepare and furnish to such Holder a reasonable number of copies of a supplement to or an amendment of such Prospectus as may be necessary so that, as thereafter delivered to the purchasers of such securities,
such Prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make, in light of the circumstances under which they were made, the statements therein not
misleading; 
  
 (i) enter into an underwriting
agreement in customary form, including, without limitation, customary indemnification provisions consistent with Section 2.8 hereof; 
  
 (j) cooperate with the Holders of the Registrable Securities and the managing underwriter(s) to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold, and enable such Registrable Securities to be in such denominations and registered in such names as the managing underwriters may reasonably request at least two business days
prior to any sale of the Registrable Securities; 
  
 (k) otherwise comply with all applicable rules and regulations of the SEC; and 
  
 (l) use its commercially reasonable efforts to list the Registrable Securities covered by such Registration Statement with any securities
exchange or quotation system on which the Common Stock of Jameson is then listed or quoted. 
  
 Each Holder of Registrable Securities agrees that, upon receipt of any notice from Jameson of the happening of any event of the kind described in clause (h) of this Section 2.3, such Holder will forthwith discontinue
disposition of Registrable Securities pursuant to the Registration Statement covering such Registrable Securities until such Holder’s receipt of the copies of the supplemented or amended Prospectus contemplated by clause (h) of this Section
2.3, and, if so directed by Jameson, such Holder will deliver to Jameson (at Jameson’s expense) all copies, other than permanent file copies then in such Holder’s possession, of the Prospectus covering such Registrable Securities current
at the time of receipt of such notice. 
  
 SECTION 2.4. FURNISH
INFORMATION. It shall be a condition precedent to the obligations of Jameson to take any action pursuant to this Agreement that the Holders shall furnish to Jameson such information regarding themselves, the Registrable Securities held by them,
and the intended method of disposition of such securities as Jameson shall reasonably request and as shall be required in connection with the action to be taken by Jameson. 
  
 SECTION 2.5. EXPENSES OF REGISTRATION. All expenses incurred in connection with each registration or attempted
registration pursuant to Section 2.1 or Section 2.2, excluding (i) underwriters’ discounts and commissions, (ii) the fees and disbursements of counsel selected pursuant to Section 2.11 hereof by the Holders of the Registrable Securities being
registered to represent such Holders in connection with each such registration and (iii) the fees and 

  

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disbursements of counsel for the underwriter(s) in connection with each such registration, shall be paid by Jameson. 
  
 SECTION 2.6. UNDERWRITING REQUIREMENTS. In connection with any
underwritten offering in which Holders participate pursuant to Section 2.2, Jameson shall not be required under Section 2.2 to include Registrable Securities in such underwritten offering unless the Holders of such Registrable Securities accept the
terms of the underwriting of such offering that have been agreed upon between Jameson and the underwriters selected by Jameson. 
  
 SECTION 2.7. RULE 144 INFORMATION. With a view to making available the benefits of certain rules and regulations of the SEC which may at any time
permit the sale of the Registrable Securities to the public without registration, at all times, Jameson shall use its commercially reasonable efforts to: 
  
 (i) make and keep public information available, as those terms are understood and defined in Rule 144 under the Securities Act;

  
 (ii) use its commercially reasonable efforts
to file with the SEC in a timely manner all reports and other documents required of Jameson under the Securities Act and the Exchange Act; and 
  
 (iii) furnish to each Holder of Registrable Securities forthwith upon request a written statement by Jameson as to its compliance with the
reporting requirements of such Rule 144 and of the Securities Act and the Exchange Act, a copy of the most recent annual or quarterly report of Jameson, and such other reports and documents so filed by Jameson as such Holder may reasonably request
in availing itself of any rule or regulation of the SEC allowing such Holder to sell any Registrable Securities without registration. 
  
 SECTION 2.8. INDEMNIFICATION. In the event any Registrable Securities are included in a Registration Statement under this Agreement: 
  
 (a) Jameson shall indemnify and hold harmless each Holder,
such Holder’s directors and officers, and each Person, if any, who controls such Holder or participating person within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages and liabilities to which they may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or proceedings in respect thereof) arise out of or are based on any untrue or
alleged untrue statement of a material fact contained in such Registration Statement, preliminary Prospectus, final Prospectus or amendments or supplements thereto or arise out of or are based upon any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that the indemnity agreement contained in this Section 2.8(a) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected without the consent of Jameson; provided further that Jameson shall not be liable to any Holder, such Holder’s directors and officers or controlling person in any such case
for any such loss, 

  

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claim, damage, liability or action to the extent that it arises out of or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in connection with such Registration Statement, preliminary Prospectus, final Prospectus or amendments or supplements thereto, in reliance upon and in conformity with information furnished by any such Holder, such Holder’s
directors and officers or controlling person; provided, further, that as to any preliminary Prospectus or any final Prospectus this indemnity agreement shall not inure to the benefit of any Holder, such Holder’s directors and officers or
controlling persons on account of any losses, claims, damages or liability arising from the sale of Common Stock to any person by such Holder if such Holder or its representatives failed to send or give a copy of the final Prospectus or a Prospectus
supplement, as the case may be (excluding documents incorporated by reference therein), as the same may be amended or supplemented, to that person within the time required by the Securities Act, and the untrue statement or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact in such preliminary Prospectus or final Prospectus was corrected in the final Prospectus or such Prospectus supplement, as the case may be (excluding documents incorporated
by reference therein), unless such failure resulted from non-compliance by Jameson with Section 2.3(c). 
  
 (b) Each Holder requesting or joining in a registration severally and not jointly shall indemnify and hold harmless Jameson, each of its
directors and officers and each person, if any, who controls Jameson within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the foregoing indemnity from Jameson to the Holders but only
with reference to information relating to such Holder furnished to Jameson. 
  
 (c) In case any proceeding (including any governmental investigation) shall be instituted involving any person in respect of which indemnity may be sought pursuant to either of the two preceding paragraphs, such
person (the “Indemnified Party”) shall promptly notify the person against whom such indemnity may be sought (the “Indemnifying Party”) in writing and the indemnifying party, upon request of the indemnified party,
shall retain counsel reasonably satisfactory to the indemnified party to represent the indemnified party and any others the indemnifying party may designate in such proceeding and shall pay the fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that the indemnifying party shall not, in respect of the legal expenses of any indemnified party in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all such indemnified parties and that all such fees and expenses shall be
reimbursed as they are incurred. Such firm shall be designated in writing by the Holders, in the case of parties indemnified pursuant to the second preceding paragraph, and by Jameson, in the case of parties indemnified pursuant to the first
preceding paragraph. 

  

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The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel as contemplated by the second and third sentences of this paragraph, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by such indemnifying party of the aforesaid request and (ii) such indemnifying party shall not
have reimbursed the indemnified party in accordance with such request prior to the date of such settlement. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such proceeding. 
  
 (d) If the indemnification provided for in the first or second paragraph of this Section 2.8 is unavailable to an indemnified party or insufficient in respect of any losses, claims, damages or liabilities referred to
therein, then each indemnifying party under such paragraph, in lieu of indemnifying such indemnified party thereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or
liabilities in such proportion as is appropriate to reflect the relative fault of the indemnifying party and indemnified party in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as
any other relevant equitable considerations. The relative fault of such indemnifying party and indemnified party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue
statement of material fact or omission or alleged omission to state a material fact, has been made by, or relates to information supplied by, such indemnifying party or indemnified party, and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The amount paid or payable by a party as a result of the losses, claims, damages or liabilities referred to above shall be deemed to include any legal or other fees or expenses
reasonably incurred by such party in connection with any investigation or proceeding. The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 2.8(d) were determined by pro rata allocation or by any
other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The remedies provided for in this Section 2.8 are not exclusive and shall not limit any right or remedies that may otherwise be available to
any indemnified party at law or in equity. 
  

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 SECTION 2.9. LOCKUP. 
  
 (a) Each Holder shall, in connection with any registration of Jameson’s securities, upon the request of
Jameson or the underwriter(s) managing any underwritten offering of such securities, agree in writing not to effect any sale, disposition or distribution of any Equity Securities (other than that included in the registration) without the prior
written consent of Jameson or the managing underwriter(s) for such period of time (not to exceed 180 days) from the effective date of such registration as Jameson or the underwriter(s) may specify. 
  
 (b) Jameson shall not effect any public sales or other
distributions of its equity securities, or any securities convertible into or exchangeable for such equity securities, during the period commencing on the 15th day prior to, and ending on the 90th day following, the effective date of the
Registration Statement for any underwritten registration, except in connection with any such underwritten registration and except for (i) any offering (A) pursuant to an employee benefit plan and registered on Form S-8 (or any comparable form
adopted by the SEC) or (B) on Form S-4 (or any comparable form adopted by the SEC) or (iii) any sales of equity securities pursuant to a dividend reinvestment and optional cash purchase plan offered by Jameson. 
  
 SECTION 2.10. CHANGES IN REGISTRABLE SECURITIES. If, and as often as,
there are any changes in the Common Stock by way of share split, share dividend, combination ore reclassification, or through merger, consolidation, reorganization or recapitalization, or by any other means, appropriate adjustment shall be made in
the provisions of this Agreement, as may be required, so that the rights and privileges granted hereby shall continue with respect to the Registrable Securities as so changed. Without limiting the generality of the foregoing, Jameson will require
the successor by merger or consolidation to assume and agree to be bound by the terms of this Agreement, as a condition to any such merger or consolidation. 
  
 SECTION 2.11. TRANSFER OF REGISTRATION RIGHTS. The registration rights of any Holder under this Agreement with respect to the Registrable
Securities may not be transferred to any transferee of such Registrable Securities unless such transferee is a Killians Party or such transferee would, following such transfer, hold at least 10% of the originally outstanding Registrable Securities,
provided that (i) the transferring Holder shall give Jameson written notice at or prior to the time of such transfer stating the name and address of the transferee and identifying the securities with respect to which the rights under this Agreement
are being transferred, (ii) such transferee shall agree in writing, in form and substance reasonably satisfactory to Jameson, to be bound as a Holder by the provisions of this Section and (iii) immediately following such transfer the further
disposition of such securities by such transferee is restricted under the Securities Act. 
  
 SECTION 2.12. SELECTION OF COUNSEL. In connection with any registration of Registrable Securities pursuant to Sections 2.1 or 2.2 hereof, the Holders of a majority of the Registrable Securities covered by any
such registration may select one counsel to represent all Holders of Registrable Securities covered by such registration; provided, however, that in the event that the counsel selected as provided above is also acting as counsel to Jameson in

  

 - 12 - 

 
connection with such registration, the remaining Holders shall be entitled to select one additional counsel to represent all such remaining Holders.

  
 ARTICLE III 
  
 MISCELLANEOUS 
  
 SECTION 3.1. SHAREHOLDER’S ACKNOWLEDGEMENT, CONSENT AND POWER OF
ATTORNEY. Contemporaneously with the execution of this Agreement, each of the Sellers shall execute a Shareholder’s Acknowledgement, Consent and Power of Attorney, appointing Thomas W. Kitchin, and, in the event of death or incapacity of
Thomas W. Kitchin, then Craig R. Kitchin, as such Seller’s lawful attorney and proxy for the purpose of taking any actions required or permitted by the Sellers under this Agreement. 
  
 SECTION 3.2. ENFORCEMENT OF THIS AGREEMENT. The approval of either a majority of the Board of Directors or a majority
of the Independent Directors shall constitute requisite corporate action for Jameson to seek to enforce the terms of this Agreement. 
  
 SECTION 3.3. NOTICES. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given (and shall
be deemed to have been duly received if so given) by hand delivery, by mail (registered or certified mail, postage prepaid, return receipt requested) or by any courier service, such as Federal Express, providing proof of delivery. All communications
hereunder shall be delivered to the respective parties at the following addresses: 
  
 if to any Seller, to: 
  
 Thomas W. Kitchin 
 8 Perimeter Center East 
 Suite 8050 
 Atlanta, Georgia 30346-1604 
  
 if to Jameson, to: 
  
 Jameson Inns, Inc. 
 8 Perimeter Center East 
 Suite 8050 
 Atlanta, Georgia 30346-1604 
 Attention: General Counsel 
  
 If to a Transferee of Registrable Securities: 
  
 At the address set forth in the notice required to be delivered pursuant to Section 2.10 hereof. 
  

 - 13 - 

 SECTION 3.4. AMENDMENTS; NO WAIVERS. 
  
 (a) Any provision of this Agreement may be amended or waived
if, and only if, such amendment or waiver is in writing and signed, in the case of an amendment, by Jameson and each of the Sellers, or in the case of a waiver, by the party against whom the waiver is to be effective; provided that no such amendment
or waiver by Jameson shall be effective without the approval of a majority of the Independent Directors. 
  
 (b) No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies
provided by law. 
  
 SECTION 3.5. SEVERABILITY. If any term
or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law, or public policy, all other conditions and 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 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 a mutually acceptable manner in order that the transactions be consummated as originally contemplated to the fullest
extent possible. 
  
 SECTION 3.6. ENTIRE AGREEMENT;
ASSIGNMENT. This Agreement, together with the documents contemplated hereby, constitutes the entire agreement among the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and undertakings, both
written and oral, among the parties, or any of them, with respect to the subject matter hereof. This Agreement shall not be assigned by operation of law or otherwise, except that the Sellers may assign their respective rights to the extent and as
provided in Section 2.10. 
  
 SECTION 3.7. PARTIES IN
INTEREST. This Agreement shall be binding upon and inure solely to the benefit of each party hereto, and nothing in this Agreement, express or implied, is intended to or shall confer upon any other person any right, benefit or remedy of any
nature whatsoever under or by reason of this Agreement. 
  
 SECTION 3.8. SPECIFIC PERFORMANCE. The parties hereto agree that irreparable damage would occur in the event any provision of this Agreement was not performed in accordance with the terms hereof and that the parties shall be entitled
to specific performance of the terms hereof, in addition to any other remedy at law or equity. 
  
 SECTION 3.9. GOVERNING LAW. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Georgia applicable to contracts executed in and to be performed in the State of
Georgia. All actions and proceedings arising out of or relating to this Agreement shall be heard and determined in any Georgia state or federal court thereof. 
  

 - 14 - 

 SECTION 3.10. HEADINGS. The descriptive headings contained in this Agreement are included for
convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement. 
  
 SECTION 3.11. COUNTERPARTS. This Agreement may be executed and delivered (including by facsimile transmission) in one or more counterparts, and by
the different parties hereto in separate counterparts, each of which when executed and delivered shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. 
  
 SECTION 3.12. TERMINATION. This Agreement shall terminate upon the
earlier of (i) the date on which the number of shares of Common Stock comprising the Registrable Securities falls below 500,000 shares (such number to adjust for stock splits, stock dividends and the like) or (ii) the 20th anniversary of the date
hereof. 
  
 [SIGNATURE PAGE TO FOLLOW] 
  

 - 15 - 

 IN WITNESS WHEREOF, each of the Sellers has executed this Agreement, and Jameson Inns, Inc. has caused
its duly authorized representative or agent to execute this Agreement, as of the day and year first above written. 
  

	JAMESON INNS, INC.
		
	By:	 	  
 /s/ Steven A. Curlee

	 	 	Name:	 	  
 Steven A. Curlee

	 	 	Title:	 	  
 Vice President Legal

	 	 	 	 	 
	SELLERS:
	
	 /s/ Thomas W. Kitchin

	Thomas W. Kitchin, in his individual capacity
	
	 /s/ Thomas W. Kitchin

	Thomas W. Kitchin, as attorney-in-fact to each of the Sellers (other than himself), pursuant to the Shareholder’s Acknowledgement, Consent and Power of Attorney
executed by each of the Sellers

  

 EXHIBIT A 
  

SELLERS 
  
 Thomas W. Kitchin 
  
 Judith K. Kitchin 
  
 Thomas W. Kitchin and Judith
K. Kitchin, Trustees of the Thomas J. Kitchin Family Trust 
  
 Thomas W. Kitchin
and Judith K. Kitchin, Trustees of the Craig R. Kitchin Family Trust 
  
 Thomas W.
Kitchin and Judith K. Kitchin, Trustees of the Matthew T. Kitchin Family Trust 
  
 Thomas W. Kitchin and Judith K. Kitchin, Trustees of the Alexander G. Kitchin Family Trust 
  
 Thomas W. Kitchin and Judith K. Kitchin, Trustees of the John P. Kitchin Family Trust 
  
 Thomas W. Kitchin and Judith K. Kitchin, Trustees of the Karen E. Kitchin Family TrustAgreement of Purchase and Sale

  
 EXHIBIT 10.1

  
 AGREEMENT OF PURCHASE AND SALE 
  
 BY AND BETWEEN 
  
 PAINCARE HOLDINGS, INC., 
  
 AND 
  
 CHRISTOPHER E. CENAC, M.D. 
  
 DATED: December 31, 2003 
  

 AGREEMENT OF PURCHASE AND SALE 
  
 THIS AGREEMENT OF PURCHASE AND SALE (the “Agreement”) is entered into effective this 31st day of December, 2003, by and between Christopher E. Cenac, M.D., an individual residing in the State of Louisiana
(hereinafter referred to as “Seller”) and PainCare Holdings, Inc., a Florida corporation (hereinafter referred to as “Buyer” or sometimes “PainCare”). Buyer, its Subsidiary (defined below) and the Seller are sometimes
referred to herein individually as a “Party” and collectively as the “Parties.” 
  
 W I T N E S S E T H: 
  
 WHEREAS, Seller is a licensed medical provider in the State of Louisiana who owns and operates a medical practice specializing in orthopedic medicine, pain management procedures and other ancillary services, solely
through Seller, his physician employees and other medical personnel (the “Business”) with its principle business location at 210 New Orleans Blvd., Houma, Louisiana 70364 (the “Business Location”); and 
  
 WHEREAS, Seller is desirous of selling all of the assets of the Business; and

  
 WHEREAS, Buyer through a wholly owned subsidiary, PainCare
Acquisition Company VIII, Inc., a Florida corporation d/b/a the Bone & Joint Surgical Clinic (hereinafter called “Subsidiary” and together with the Buyer sometimes hereinafter called the “Acquiring Companies”) is
desirous of buying said assets all on the following terms and conditions. 
  
 NOW THEREFORE, in consideration of the mutual promises and covenants herein contained and the sum of $10.00 and other good and valuable consideration paid by Buyer to Seller, receipt of which is hereby acknowledged by
Seller, it is mutually covenanted and agreed by the parties hereto as follows: 
  
 1. PURCHASE AND SALE OF ASSETS 
  
 1.1 Assets
to be Transferred. Subject to the terms and conditions of this Agreement, on the Closing Date (as hereinafter defined), and except as otherwise stated, Seller shall sell, transfer, convey, assign, and deliver to Subsidiary and Buyer shall
purchase and accept, unless otherwise excluded as provided herein, all of the business rights, claims and assets (of every kind, nature, character and description, whether real, personal or mixed, tangible or intangible, accrued, contingent or
otherwise, and wherever situated) of Seller, used, held for use or acquired or developed for use in the Business, or developed in the course of conducting the Business or by persons employed in the Business (collectively the “Purchased
Assets”). The Purchased Assets shall include all the following assets or rights of the Seller, to the extent so used, held, acquired or developed in the Business: 
  
 (a) Cash and Cash Equivalents and Accounts Receivable. All cash and cash equivalents, and the
Accounts Receivable for the Business described in Disclosure Schedule 1.1.(a). 
  

 (b) Leased Real Property. The lease of real property with respect to Business
Location (the “Real Property Lease”) described in Disclosure Schedule 1.1.(b). 
  
 (c) Personal Property. All other property described in Disclosure Schedule 1.1.(c). 
  
 (d) Inventory. All inventories including, without
limitation, drugs, medication, pharmaceutical supplies, other medical supplies, merchandise and durable medical equipment on the Closing Date, together with related packaging and delivery materials (collectively the “Inventory”).

  
 (e) Personal Property Leases. All
leases of equipment and other personal property leased by Seller for use in the Business (the “Personal Property Leases”) described in Disclosure Schedule 1.1(e). 
  
 (f) Intellectual Property. Seller’s interest in any and all Intellectual Property. As used
herein, the term “Intellectual Property” shall mean and include: (i) all trademark rights, business identifiers, trade dress, logos, service marks, trade names and brand names, all registrations thereof and applications therefore and all
goodwill associated with the foregoing; (ii) all copyrights, copyright registrations and copyright applications, and all other rights associated with the foregoing and the underlying works of authorship; (iii) all patents and patent applications,
and all international proprietary rights associated therewith; (iv) all contracts or agreements granting any right, title, license or privilege under the intellectual property rights of any third party; (v) all inventions, mask works and mask work
registrations, know-how, discoveries, improvements, designs, trade secrets, shop and royalty rights, employee covenants and agreements respecting intellectual property and non-competition and all other types of intellectual property; (vi) all
computer software (including all data and related documentation); (vii) all other proprietary rights; (viii) all copies and tangible embodiments of the foregoing (in whatever form or medium); and (ix) all claims for infringement or breach of any of
the foregoing. Notwithstanding the foregoing, Intellectual Property shall not include Seller’s interest in a book which he is co-authoring with Richard Bunch, Ph.D, P.T. 
  
 (g) Contracts. All Seller’s rights in, to and under all contracts, agreements, license
agreements, purchase orders and sales orders (hereinafter “Contracts”) of Seller as it relates to the Business. To the extent that any Contract for which assignment to Buyer is provided herein is not assignable without the consent of
another party, this Agreement shall not constitute an assignment or an attempted assignment thereof if such assignment or attempted assignment would constitute a breach thereof. Seller and Buyer agree to use their reasonable best efforts (without
any requirement on the part of Buyer to pay any money or agree to any change in the terms of any such Contract) to obtain the consent of such other party to the assignment of any such Contract to Buyer in all cases in which 

  

 
such consent is or may be required for such assignment. If any such consent shall not be obtained, Seller agrees to cooperate with Buyer in any reasonable
arrangement designed to provide for Buyer the benefits intended to be assigned to Buyer under the relevant Contract, including enforcement at the cost and for the account of Buyer of any and all rights of Seller against the other party thereto
arising out of the breach or cancellation thereof by such other party or otherwise. If and to the extent that such arrangement cannot be made, Buyer, upon notice to Seller, shall have no obligation pursuant to Section 2.1 or otherwise with respect
to any such Contract and any such Contract shall not be deemed to be a Purchased Asset hereunder. 
  
 (h) Computer Software. All computer programs and other software, documentation and related property and information of Seller.

  
 (i) Records and Files. All records,
files, invoices, patient files and records, customer lists, specifications, designs, drawings, accounting records, financial records, business records, operating data and other data. 
  
 (j) Licenses; Permits. All licenses, permits and approvals necessary to operate the Business in the
State of Louisiana. 
  
 (k) Business Name.
The trade name “Bone & Joint Surgical Clinic” and all rights to use or allow others to use such name. 
  
 (l) General Intangibles. All prepaid items, all causes of action arising out of occurrences before or after the Effective Date, and
other intangible rights and assets including, without limitation, telephone numbers, directory listings, and prepaid advertisements. 
  
 1.2 Excluded Assets. Section 1.1 notwithstanding, Seller shall not sell, transfer, assign, convey or deliver to Buyer, and Buyer will not purchase
or accept the following assets of Seller: 
  
 (a)
Consideration. The consideration delivered by Buyer to Seller pursuant to this Agreement. 
  
 (b) Tax Credits and Records. Federal, state and local income and franchise tax credits and tax refund claims and associated returns
and records. Buyer shall have reasonable access to such records and may make excerpts therefrom and copies thereof. 
  
 (c) Personal Assets. Those personal assets of Seller. 
  
 2. ASSUMPTION OF LIABILITIES 
  
 2.1 Liabilities to be Assumed. As used in this Agreement, the term “Liability” shall mean and include any direct or indirect
indebtedness, guaranty, endorsement, claim, loss, damage, deficiency, cost, expense, obligation or responsibility, fixed or unfixed, known or 

  

 
unknown, asserted or unasserted, liquidated or unliquidated, secured or unsecured. Subject to the terms and conditions of this Agreement, on the Effective
Date, Buyer shall assume or take subject to, as the case may be, and agrees to perform and discharge the following, and only the following, Liabilities of Seller: 
  
 (a) Certain Liabilities. Those certain accounts payable and accrued Liabilities reflected listed in
Disclosure Schedule 2.1.(a). 
  
 (b)
Contractual Liabilities. Seller’s Liabilities as of and after the Effective Date under and pursuant to the Contracts described in Section 1.1.(b), 1.1.(e) and 1.1.(g). 
  
 (c) Liabilities Under Permits and Licenses. Seller’s Liabilities as of and after the Effective
Date under any permits or licenses listed in Disclosure Schedule 1.1(j) and assigned to Buyer at the Closing. 
  
 (d) Line of Credit. Buyer is acquiring the Accounts Receivable for the Business described in Disclosure Schedule 1.1.(a) subject
to that certain secured interest of South Louisiana Bank, 1362 West Tunnel Blvd., Houma, LA 70361 (the “Bank”) as it pertains to that certain Promissory Note and Business Loan Agreement (No. 30340905) dated March 12, 2002, which will
have as of the Closing Date a balance, including principal and accrued interest, of not more than $605,000 (hereinafter, the “Bank Loan”). Buyer and Seller understand that the Bank intends to convert the Bank Loan to an installment payment
loan requiring twenty three (23) equal monthly payments of $30,000 and a final payment on the 24th month equal to
the unpaid principal balance and all accrued interest (the “Installment Loan”). The Subsidiary agrees to make such payments out of its available cash flow and to secure the payment of the Installment Loan with the accounts receivable
generated by the Subsidiary. Seller agrees to execute, if the Bank requires, such additional guarantee, promissory note and any other documents necessary to effectuate the closing of the Installment Loan. Finally, Seller agrees that in the event the
Subsidiary is unable to make, out of its cash flow from operations, the payments required by the Installment Loan that he will defer until such time as sufficient cash flow is available all necessary cash payments that may otherwise be required to
be made to him pursuant to this Agreement and/or that certain Employment Agreement by and between the Subsidiary and the Seller of even date herewith in order for the Subsidiary to satisfy the Bank Loan. 
  
 The Liabilities described in subsections 2.1.(a), 2.1.(b), 2.1.(c) and 2.1(d)
above are hereinafter collectively described as the “Assumed Liabilities.” 
  
 2.2 Liabilities Not to be Assumed. Except as and to the extent specifically set forth in Section 2.1, Buyer is not assuming nor buying the Purchased Assets subject to any Liabilities of Seller and all
such Liabilities shall be and remain the responsibility of Seller. 
  
 2.3 Taxes Arising from Transaction. Buyer shall not assume or be responsible for any taxes applicable to, imposed upon or arising out of the sale or transfer of the Purchased Assets to 

  

 
Buyer and the other transactions contemplated by this Agreement, including but not limited to any income, transfer, sales, use, gross receipts or documentary
stamp taxes. 
  
 2.4 Income and Franchise Taxes. Buyer
shall not assume or be responsible for any Liability of Seller for Federal income taxes and any state or local income, profit or franchise taxes (and any penalties or interest due on account thereof). 
  
 2.5 Product, Medical Malpractice and Service Liability. Buyer shall
not assume or be responsible for any Liability of Seller arising out of or in any way relating to or resulting from, either directly or indirectly, any medical negligence, malpractice or professional or personal liability or pharmaceutical,
medication or product manufactured, formulated, mixed, compounded, assembled or sold or any service performed by Seller, his contractors or any of his employees prior to the Effective Date (including any Liability of Seller or any of his employees,
contractors or agents for claims made for injury to person, damage to property or other damage, whether made in product liability, tort, negligence, breach of warranty or otherwise). 
  
 2.6 Litigation Matters. Buyer shall not assume or be responsible for any Liability of Seller with respect to any
action, claim, suit, proceeding, arbitration, investigation or inquiry, whether civil, criminal or administrative (“Litigation”). 
  
 2.7 Infringements. Buyer shall not assume or be responsible for any Liability of Seller with respect to a third party for infringement of such
third party’s Intellectual Property. 
  
 2.8 Transaction
Expenses. Buyer shall not assume or be responsible for any Liabilities incurred by Seller in connection with this Agreement and the transactions contemplated herein. 
  
 2.9 Liability For Breach. Buyer shall not assume or be responsible for any Liabilities of Seller for any breach or
failure to perform any of Seller’s covenants and agreements contained in, or made pursuant to, this Agreement, or, prior to the Closing, any other contract or agreement, whether or not assumed hereunder, including breach arising from assignment
of contracts hereunder without consent of third parties. 
  
 2.10
Liabilities to Affiliates. Buyer shall not assume or be responsible for any Liabilities of Seller to its present or former Affiliates. 
  
 2.11 Violation of Laws or Orders. Buyer shall not assume or be responsible for any Liabilities of Seller for any violation of or failure to comply
with any statute, law, ordinance, rule or regulation (collectively, “Laws”) or any order, writ, injunction, judgment, plan or decree (collectively, “Orders”) of any court, arbitrator, department, commission, board, bureau,
agency, authority, instrumentality or other body, whether federal, state, municipal, foreign or other (collectively, “Government Entities”). 
  

 3. PURCHASE PRICE - PAYMENT 
  
 3.1 Initial Transaction Consideration. Subject to the adjustments set forth in Section 3.2 below, the initial
aggregate transaction consideration that Buyer shall pay to the Seller for the Purchased Assets shall equal (i) the amount of the Assumed Liabilities plus (ii) Two Million Five Hundred Thousand and 00/100 Dollars ($2,500,000) comprised of: (x) One
Million Two Hundred Fifty Thousand and 00/100 Dollars ($1,250,000) (the “Cash Due At Closing”) which shall be delivered via wire transfer on the Closing Date to a bank account designated by the Seller; plus (y) Five Hundred Sixty Five
Thousand and Forty Eight (565,048) common shares, $.0001 par value, of Buyer (the “Initial Buyer Shares”) which for purposes of this Agreement shall equal One Million Two Hundred Fifty Thousand and 00/100 Dollars ($1,250,000), or $2.2122
per share. The Cash Due At Closing and the Initial Buyer Shares shall hereinafter collectively be known as the “Initial Transaction Consideration.” 
  
 3.2 Potential Post Closing Adjustments. 
  
 (a) Accounts Receivable Adjustment. If the Subsidiary, within the twelve (12) month calendar period immediately following
the Closing Date, does not collect a total of at least Six Hundred Thousand and 00/100 Dollars ($600,000.00) from the accounts receivable purchased pursuant to this Agreement (the “Acquired Accounts Receivable”), then the Initial
Transaction Consideration shall be reduced dollar for dollar by the A/R Adjustment. The “A/R Adjustment” shall equal the difference between Six Hundred Thousand and 00/100 Dollars ($600,000.00) and the amount of the Acquired Accounts
Receivable actually collected by the Subsidiary during such twelve (12) month period. Buyer shall receive payment for the A/R Adjustment through a lump sum cash payment from the Seller within seven (7) days after the end of the twelve (12) month
period.  
  
 3.3 Earn-out Payment.

  
 (a) General. Subject to the condition
that the Subsidiary achieves Formula Period Profits (as defined in Subsection (f) below) of at least One Million and 00/100 Dollars ($1,000,000) (the “Earnings Threshold”) in each of the three (3) successive twelve (12) month calendar
periods beginning on January 1, 2004 (each such twelve (12) month calendar period shall be referred to herein as a “Formula Period”), then Buyer shall pay to the Seller a total amount of additional consideration of Two Million Five Hundred
Thousand and 00/100 Dollars ($2,500,000), payable in three equal annual installments of Eight Hundred Thirty Three Thousand Three Hundred Thirty Three and 33/100 Dollars ($833,333.33) (the “Intended Installment Payment”) as of the time and
in the form of consideration provided in Section 3.3(d) below and subject to adjustment as provided in Section 3.3(b) and (c) below. 
  
 (b) Installment Payment Discount. Notwithstanding Section 3.3(a) above, if the Subsidiary fails to achieve the Earnings Threshold
in any Formula Period, the amount of the Intended Installment Payment for such Formula Period shall be recalculated to equal the product of the Intended Installment Payment, multiplied by the Installment Payment Discount (as defined below) (the
“Adjusted Installment Payment”). The “Installment Payment Discount” shall equal 

  

 
(i) the Formula Period Profits (as defined in Subsection (f) below) for such Formula Period divided by the Earnings Threshold; multiplied by (ii) ninety
percent (90%). 
  
 (c) Installment Payment
Premium. Notwithstanding Section 3.3(b), if (i) the Seller receives the Adjusted Installment Payment from Buyer in any Formula Period (including the last Formula Period) rather than the Intended Installment Payment as a result of the
Formula Period Profits equaling less than the Earnings Threshold for such Formula Period, and (ii) the Subsidiary’s Formula Period Profits exceed the Earnings Threshold in the Formula Period immediately subsequent to the Formula Period (or,
with respect to the last Formula Period if there is an Adjusted Installment Payment, the twelve (12) month period immediately following the last Formula Period) for which the Installment Payment Discount corresponded, then Buyer shall pay to the
Seller the Installment Payment Premium (as defined below). The “Installment Payment Premium” shall equal the product of (A) the Formula Period Profits for the Formula Period (or, the twelve (12) month period immediately following the last
Formula Period, as the case may be) in which the Installment Payment Premium is calculated minus the Earnings Threshold, multiplied by (B) Seventy-five percent (75%). The Installment Payment Premium shall be paid to the Seller in the same
percentages, form and time as the Installment Payments (as defined in Subsection 3.3(d) below) are due for the Formula Period for which the Installment Payment Premium is calculated. 
  
 (d) Manner of Payment. Within sixty (60) days after the end of each Formula Period, Buyer
shall prepare and deliver to the Seller a financial statement presenting the Formula Period Profits for the Subsidiary for the applicable Formula Period (the “Formula Period Profits Statement”). Ten (10) business days after delivery of the
Formula Period Profits Statement, the Seller shall in a written notice to Buyer either accept or describe in reasonable detail any proposed adjustments to the Formula Period Profits Statement and the reasons therefore, and shall include pertinent
calculations. If the Seller fails to deliver notice of acceptance or objection to the Formula Period Profits Statement within such ten (10) day period, the Seller shall be deemed to have accepted the Formula Period Profits Statement. If the Seller
accepts or fails to object to the Formula Period Profits Statement within the ten (10) day period set forth above, then within ninety (90) days after the end of the Formula Period, Buyer shall pay to the Seller the Intended Installment Payment or
the Adjusted Installment Payment (each an “Installment Payment”, and collectively, the “Installment Payments”) along with any Installment Payment Premium owed in accordance with Subsection 3.3(c) above as follows: (i) fifty
percent (50%) of the Installment Payment shall be made in cash via wire transfer to a bank account designated by the Seller at least five (5) days prior to the end of the Formula Period; and (ii) fifty percent (50%) of the Installment Payment shall
be made in Buyer’s common shares, $.0001 par value (hereinafter the “Earn-out Shares”), priced at Fair Market Value (as defined in Subsection 3.3(f) below) as of the last day of the subject Formula Period. In the event Buyer and the
Seller are not able to agree on the Formula Period Profits Statement within thirty (30) days from and after the receipt by Buyer of any objections raised by the Seller, Buyer and the Seller shall each have the right to require that such disputed
determinations be submitted to an independent certified public accountant or accounting firm that Buyer shall select, for computation or verification in accordance with the provisions of this Agreement, and the Installment Payment shall be paid by
Buyer to the Seller within fifteen (15) days after receipt of the accountant’s computation or 

  

 
verification. The foregoing provisions for certified public accounting firm review shall be final and binding upon the Parties and there shall be no right of
appeal from such decision. 
  
 (e) Earn-out
Cap. Notwithstanding anything to the contrary in this Section 3, in no event whatsoever shall the aggregate amount of the Installment Payments and Installment Payment Premiums payable to the Seller from Buyer in cash, in the Earn-out Shares (as
priced pursuant to this Agreement) or any other form of consideration exceed Two Million Five Hundred Thousand and 00/100 Dollars ($2,500,000). 
  
 (f) Definitions for Purposes of Section 3. For purposes of Section 3 of this Agreement, the following terms shall have the meanings
set forth below: 
  
 (i) “Fair Market
Value” shall mean the value of the Earn-out Shares determined as follows: 
  
 1. if the principal market for Buyer’s common shares, $0.0001 par value (the “Buyer’s Shares”) is a national
securities exchange, then the “Fair Market Value” of the Earn-out Shares shall equal the thirty (30) day trailing average of the closing ask prices of the Buyer’s Shares as reported by such exchange or on a composite tape reflecting
transactions on such exchange; or 
  
 2. if the
principal market for the Buyer Shares is not a national securities exchange, but the price of the Buyer Shares is quoted on the National Association of Securities Dealers Automated Quotation System (“NASDAQ”) Stock Market, and (A) actual
closing price information is available with respect to the Buyer Shares, then the “Fair Market Value of the Earn-out Shares shall equal the thirty (30) day trailing average of the closing ask prices of such stock on the NASDAQ Stock Market; or
(B) actual closing price information is not available with respect to the Buyer Shares, then the “Fair Market Value” of the Earn-out Shares shall equal the thirty (30) day trailing average of the bid prices per share of such stock
on the NASDAQ Stock Market; or 
  
 3. if the
principal market for the Buyer Shares is neither a national securities exchange and such stock is not quoted on NASDAQ, then the “Fair Market Value” of the Earn-out Shares shall equal the thirty (30) day trailing average of the closing ask
prices of the Buyer Shares as reported by the OTC Bulletin Board Service or by National Quotation Bureau, Incorporated, or a comparable service selected by Buyer; or 
  
 4. if subsections (f)(i)(1)-(3) above are inapplicable or if no trades have been made or no quotes are
available for such day with respect to the Buyer Shares, then the “Fair Market Value” of the Earn-out Shares shall be determined by an independent third party appraiser selected by Buyer. Within ten (10) days after the effective date of
the appraiser’s appointment, the appraiser shall deliver an appraisal of the Fair Market Value of the Earn-out Shares, which shall be binding and conclusive on the Parties. The cost of any appraisal hereunder shall be shared equally by the
Parties, and each Party shall be responsible and financially liable for its or his own attorneys’ fees; and 
  

 5. with the understanding that notwithstanding the Fair Market Value ascribed to the
Earn-out Shares pursuant to subsections 3.3(f)(i) (1), (2), (3) or (4) above in no event shall the Fair Market Value of the Earn-out Shares ever be less than One and 50/00 Dollars ($1.50) per share. 
  
 (ii) “Formula Period Profits” shall mean the
Subsidiary’s earnings before deductions for interest, taxes, depreciation and amortization (“EBITDA”) as calculated utilizing GAAP by Buyer’s independent certified public accountants for the applicable Formula Period where
possible, and as calculated by Buyer for quarterly and less than quarterly periods for such Formula Period. Notwithstanding the foregoing, the calculation of the Formula Period Profits shall not include any costs or expenses related to: (i) the
corporate overhead of Buyer or other administrative or similar charges that Buyer might impose upon the Subsidiary, except those charges for services provided directly to and for the benefit of the Subsidiary; (ii) any non-recurring charges, losses,
profits, gains, or non-cash adjustments not related to the ongoing operations of the Subsidiary’s business, including but not limited to discontinued operations, extraordinary items, acquisition costs and goodwill charges incurred in connection
with the transactions contemplated hereby (excluding the write-off of any goodwill with respect to the Subsidiary in accordance with FASA 142), or unusual or infrequent items as such terms are defined pursuant to generally accepted accounting
principles, or (iii) any charge related to grants or exercises of options of employees of the Subsidiary, or (iv) any direct costs and expenses incurred by the Subsidiary during the first six (6) months of employment (the “Capitalized
Period”) as such expenses directly relate to an additional physician for the Subsidiary’s business (the “Capitalized Physician Expenses”) with the understanding that: (x) such new physician must be hired within the first two (2)
Formula Periods, (y) that the Capitalized Physician Expenses shall not exceed $225,000 without PainCare’s approval, and (z) that the Capitalized Physician Expenses will be amortized ratably and charged to the Subsidiary’s earnings (i.e.,
Formula Period Profits) over the remaining Formula Periods beginning on the first day of the first month following the Capitalized Period. The Formula Period Profits shall specifically include without limitation all revenues and expenses associated
with Buyer’s MedX Rehabilitation Program (except with respect to the costs associated with the acquisition of rehabilitation equipment and the initial training of employees, which shall be PainCare’s expense) which may be implemented by
the Subsidiary subsequent to the Closing unless the Parties otherwise mutually agree in writing. In addition, the Formula Period Profits may include, at the election of the Seller, all revenues and expenses associated with any one or more of
Seller’s “Outside Activities” as that term is defined in that certain Employment Agreement entered into by and between the Subsidiary and Seller of even date herewith provided that the Subsidiary receives all the revenues and
profits associated with such Outside Activities which are included in the Formula Period Profits. 
  
 (g) Capital Adjustments Affecting Common Stock. 
  
 1. The existence of the Earn-up Shares shall not affect in any way the right or power of the Buyer or its
shareholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the Buyer’s capital structure or its business, or any merger or consolidation of the Buyer or to issue any securities, bonds,

  

 
debentures, or preferred or prior preference stock ahead of or affecting the common stock of the Buyer or the rights thereof, or to effect the dissolution or
liquidation of the Buyer, or any sale or transfer of all or part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise. 
  
 2. In the event of a stock dividend, recapitalization, merger in which the Buyer is the surviving
corporation, split-up, combination or exchange of shares or the like which results in a change in the number or kind of shares of common stock which is outstanding immediately prior to such event, the aggregate number and kind of shares subject to
the rights of the Seller relative to the Earn-up Shares (hereinafter the “Earn-up Rights”) and the price thereof, shall be appropriately adjusted in the same manner as the number and kind of shares of a shareholder of the Buyer who owned
the same number and kind of shares immediately prior to such event. Such adjustments shall be made by the Board of Directors of the Buyer, whose determination shall be conclusive and binding on all parties. 
  
 3. Except as otherwise expressly provided herein, the
issuance by the Buyer of shares of its capital stock of any class, or securities convertible into shares of capital stock of any class, either in connection with direct sale or upon the exercise of rights or warrants to subscribe therefore, or upon
conversion of shares or obligations of the Buyer convertible into such shares or other securities, shall not affect, and no adjustment by reason thereof shall be made with respect to the number of or price to Buyer of the Earn-up Rights or any
Earn-up Shares. 
  
 4. In case of any
consolidation or merger of the Buyer with or into another corporation or the conveyance of all or substantially all of the assets of the Buyer to another corporation or a share exchange transaction involving not less than 50% of the issued and
outstanding common stock of the Buyer, the Earn-up Shares shall thereafter be convertible into the number of shares of stock or other securities or property to which a holder of the number of shares of common stock deliverable upon entitlement to
the Earn-up Shares would have been entitled upon such consolidation, merger, conveyance or exchange; and, in any such case, appropriate adjustment shall be made in the application of the provisions herein set forth with respect to the rights and
interest thereafter of the holders of the Earn-up Rights, to the end that the provisions set forth herein shall thereafter be applicable, as nearly as reasonably may be, in relation to any shares of stock or other property thereafter deliverable
upon entitlement to the Earn-up Shares. 
  
 3.4 Pledge
Agreement. Contemporaneous with the Closing, Buyer agrees to execute a pledge agreement in the form attached hereto as Exhibit 3.4 (the “Pledge Agreement”) to secure the payment of the Intended Installment Payments. 
  
 3.5. Prorations. The following prorations relating to the Purchased
Assets will be made as of the Effective Date, with Seller liable to the extent such items relate to any time period prior to the Effective Date and Buyer liable to the extent such items relate to periods as of and subsequent to the Effective Date
provided this Agreement is not terminated as provided for herein. Except as otherwise specifically provided herein, the net amount of all such prorations will be settled and paid as the parties agree: 
  
 (a) Personal property taxes, assessments and other taxes, if
any, on or with respect to the Purchased Assets. 
  

 (b) Rents, additional rents, taxes and other items payable by Seller under any lease,
license, permit, contract or other agreement relative to the Assumed Liabilities. 
  
 (c) The amount of rents, taxes and charges for sewer, water, fuel, telephone, electricity and other utilities. 
  
 (d) All other items normally adjusted in connection with
similar transactions. 
  
 3.6 Other Payments and
Adjustments. The amount of wages and other remuneration due in respect of periods prior to the Effective Date to employees of the Business and the amount of bonuses due to such employees for all such periods will be paid by Seller directly to
such employees. 
  
 3.7 Allocation of Purchase Price. The
aggregate Purchase Price (including the assumption by Buyer of the Assumed Liabilities) shall be allocated among the Purchased Assets for tax purposes in accordance with Disclosure Schedule 3.7. Seller and Buyer will follow and use such allocation
in all tax returns, filings or other related reports made by them to any governmental agencies. To the extent that disclosures of this allocation are required to be made by the parties to the Internal Revenue Service (“IRS”) under the
provisions of Section 1060 of the Internal Revenue Code of 1986, as amended (the “Code”) or any regulations thereunder, Buyer and Seller will disclose such reports to the other prior to filing with the IRS. 
  
 4. REPRESENTATIONS AND WARRANTIES OF SELLER 
  
 Seller hereby makes the following representations and warranties to Buyer,
each of which is true and correct on the date this Agreement is executed and shall remain true and correct to and including the Effective Date, shall be unaffected by any investigation heretofore or hereafter made by Buyer, or any knowledge of Buyer
other than as specifically disclosed and accepted by Buyer in the disclosure schedules delivered to Buyer at the time of the execution of this Agreement, and shall survive the Closing of the transactions provided for herein. 
  
 4.1 Authority. The execution and delivery of this Agreement and the
other documents and instruments to be executed and delivered by Seller pursuant hereto and the consummation of the transactions contemplated hereby and thereby have been duly authorized. No other or further act or proceeding on the part of Seller or
any lienholder or other party is necessary to authorize this Agreement or the other documents and instruments to be executed and delivered by Seller pursuant hereto or the consummation of the transactions contemplated hereby and thereby. This
Agreement constitutes, and when executed and delivered, the other documents and instruments to be executed and delivered by Seller pursuant hereto will constitute, valid binding agreements of Seller, enforceable in accordance with their respective
terms, except as such may be limited by bankruptcy, insolvency, reorganization or other laws affecting creditors’ rights generally, and by general equitable principles. 
  

 4.2 No Violation. Neither the execution and delivery of this Agreement or the other documents and
instruments to be executed and delivered by Seller pursuant hereto, nor the consummation by Seller of the transactions contemplated hereby and thereby (a) will violate any applicable Law or Order, (b) will require any authorization, consent,
approval, exemption or other action by or notice to any Government Entity or (c) will conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or
cancel, or require any notice under any agreement, contract, lease, license, instrument or other arrangement to which the Seller is a party or by which the Seller is bound or to which any of the Purchased Assets are subject, or will result in the
termination of, or accelerate the performance required by, or result in the creation of any Lien (as defined in Section 4.8), upon any of the Purchased Assets under, any term or provision of any contract, commitment, understanding, arrangement,
agreement or restriction of any kind or character to which Seller is a party or by which Seller or any of its assets or properties may be bound or affected. 
  
 4.3 Tax Matters. Except as set forth on Disclosure Schedule 4.3: (i) all state, foreign, county, local and other tax returns relating primarily to
the Business or the Purchased Assets, or required to be filed by or on behalf of Seller in any jurisdiction or any political subdivision thereof, have been timely filed and the taxes paid or adequately accrued; (ii) Seller has duly withheld and paid
all taxes which it is required to withhold and pay relating to salaries and other compensation heretofore paid to the employees, contractors and agents of the Business; and (iii) Seller has not received any notice of underpayment of taxes or other
deficiency which has not been paid and there are outstanding agreements or waivers extending the statutory period of limitations applicable to any tax return or report relating primarily to the Business or the Purchased Assets, or required to have
been filed by Seller in any jurisdiction or political subdivision thereof. 
  
 4.4 Absence of Undisclosed Liabilities. Except as and to the extent specifically disclosed in Disclosure Schedule 4.4, Seller does not have any Liabilities, other than commercial liabilities and obligations
incurred in the ordinary course of business and consistent with past practice and none of which has or will have a material adverse effect on Seller or the Business, or the financial condition or results of operations of the Business. Except as and
to the extent described in Disclosure Schedule 4.4, Seller has no knowledge of any basis for the assertion against Seller or the Business or the Purchased Assets of any liability and there are no circumstances, conditions, happenings, events or
arrangements, contractual or otherwise, which may give rise to Liabilities, except commercial liabilities and obligations incurred in the ordinary course of Seller’s Business and consistent with past practice. 
  
 4.5 Compliance With Laws and Orders. 
  
 (a) Compliance. Except as set forth in Disclosure
Schedule 4.5(a), the Business (including each and all of its operations, practices, properties and assets) is in compliance with all applicable laws and orders, including, without limitation, those applicable to discrimination in employment,
Medicare, insurance billings, providing of medical services, sales 

  

 
of medication and durable medical equipment, occupational safety and health, trade practices, competition and pricing, product warranties, zoning, building
and sanitation, employment, retirement and labor relations, and product advertising. Except as set forth in Disclosure Schedule 4.5(a), Seller has not received notice of any violation or alleged violation of, and is subject to no Liability for past
or continuing violation of, any laws or orders with respect to the operations of the Business. All reports and returns required to be filed by Seller with any Government Entity have been filed, and were accurate and complete when filed. Without
limiting the generality of the foregoing: 
  
 (i)
The operation of the Business as it is now conducted does not, nor does any condition existing at the Business Location, in any manner constitute a nuisance or other tortuous interference with the rights of any person or persons in such a manner as
to give rise to or constitute the grounds for a suit, action, claim or demand by any such person or persons seeking compensation or damages or seeking to restrain, enjoin or otherwise prohibit any aspect of the conduct of the Business or the manner
in which it is now conducted. 
  
 (ii) Seller has
made all required payments to its unemployment compensation reserve accounts with the appropriate governmental departments where it is required to maintain such accounts with respect to the operations of the Business, and each of such accounts has a
positive balance. 
  
 (iii) Seller has timely
filed, in a complete and correct manner, all requisite claims and other reports required to be filed in connection with all state and federal Medicare and Medicaid programs due on or before the date hereof. There are no claims, actions, payment
reviews, or appeals pending or threatened before any commission, board or agency, including, without limitation, any intermediary or carrier, the Administrator of the Health Care Financing Administration, the Louisiana Department of Health and
Rehabilitative Services, the Louisiana Board of Medicine or any other state or federal agency with respect to any Medicare or Medicaid claims filed by the Seller on or before the Effective Date or program compliance matters, which would adversely
affect the Business, the Purchased Assets or the consummation of the transactions contemplated hereby. No validation review or program integrity review related to the Seller (other than normal, routine reviews) has been conducted by any commission,
board or agency in connection with the practice of medicine or any Medicare or Medicaid program, and no such reviews are scheduled, pending or, threatened against or affecting the Seller or the consummation of the transactions contemplated hereby.

  
 (ii) Neither Seller nor any person or entity
providing services for Seller have engaged in any activities which are prohibited under 42 U.S.C. d1320a-7a or d1320a-7b, or the regulations promulgated thereunder, pursuant to such statutes or any other related state or local statutes and regulations, including but not limited to the following:
(a) knowingly and willfully making or causing to be made a false statement or representation of a material fact in any application for any benefit or payment; (b) knowingly and willfully making or causing to be made any false statement or
representation of a material fact for use in determining rights to any benefit or payment; (c) failing to disclose knowledge by a claimant of 

  

 
the occurrence of any event affecting the initial or continued right to any benefit or payment on its, his or her own behalf or on behalf of another, with
intent to fraudulently secure such benefit or payment; and (d) knowingly and willfully soliciting or receiving any remuneration kickback, bribe or rebate, directly or indirectly, overtly or covertly, in cash or in kind, or offering to pay or receive
such remuneration in return for (e) referring an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part by Medicare or Medicaid, or (f) purchasing, leasing
or ordering, or arranging for or recommending purchasing, leasing or ordering, any medication, goods, facility, service or item for which payment may be made in whole or in part by Medicare or Medicaid. No physician (or his or her immediate family
members) having a “financial relationship” with Seller, as that term is defined in 42 U.S.C. Section 1395nn, is in a position, directly or indirectly, to refer patients or services to the Seller, or any such referral complies with the
requirements of 42 U.S.C. Section 1395nn and the regulations promulgated pursuant thereto. 
  
 (v) Seller has filed when due any and all material cost reports and other documentation and reports, if any, required to be filed by
third-party payors and governmental agencies in compliance with applicable contractual provisions and/or laws, regulations and rules. 
  
 (b) Licenses and Permits. Seller has all licenses, permits, approvals, authorizations and consents of all Government Entities and
insurance companies including Medicare and all certificates, licenses and permits required for the conduct of the Business. Except as set forth in Disclosure Schedule 4.5(b), the Business (including its operations, properties and assets) is and has
been in compliance with all such permits and licenses, approvals, authorizations and consents. 
  
 4.6 Title to and Condition of Properties. 
  
 (a) Marketable Title. Seller has good and marketable title to all the Purchased Assets, free and clear of all mortgages, liens
(statutory or otherwise), security interests, claims, pledges, licenses, equities, options, conditional sales contracts, assessments, levies, covenants, reservations, restrictions, exceptions, limitations, charges or encumbrances of any nature
whatsoever (collectively, “Liens”) except those described in Disclosure Schedule 4.6(a). None of the Purchased Assets are subject to any restrictions with respect to the transferability thereof. Seller has complete and unrestricted power
and right to sell, assign, convey and deliver the Purchased Assets to Buyer as contemplated hereby. At Closing, Buyer will receive good and marketable title to all the Purchased Assets, free and clear of all Liens of any nature whatsoever except
those described in the appropriate Disclosure Schedule. 
  
 (b) Condition. All tangible assets constituting Purchased Assets hereunder are in good operating condition and repair, free from any defects (except such minor defects as do not interfere with the use thereof
in the conduct of the normal operations of Seller), have been maintained consistent with the standards generally followed in the industry and are sufficient to carry on the business of Seller as conducted during the preceding twelve (12) months and
as contemplated for the next three (3) years. All buildings and other structures owned or otherwise 

  

 
utilized by Seller in operating the Business are in good condition and repair and have no structural defects or defects affecting the plumbing, electrical,
sewerage, or heating, ventilating or air conditioning systems. 
  
 (c) No Condemnation or Expropriation. Neither the whole nor any portion of the Purchased Assets is subject to any order to be sold or is being condemned, expropriated or otherwise taken by any Government Entity
with or without payment of compensation therefore, nor to the best of Seller’s knowledge has any such condemnation, expropriation or taking been proposed. 
  

4.7 Insurance. Set forth in Disclosure Schedule 4.7 is a complete and accurate list and description of all policies of errors and omissions,
fire, liability, product liability, workers compensation, health and other forms of insurance presently in effect with respect to the Business and the Purchased Assets, true and correct copies of which have heretofore been delivered to Buyer.
Disclosure Schedule 4.9 includes, without limitation, the carrier, the description of coverage, the limits of coverage, retention or deductible amounts, amount of annual premiums, date of expiration and the date through which premiums have been paid
with respect to each such policy, and any pending claims in excess of $5,000.00. All such policies are valid, outstanding and enforceable policies and provide insurance coverage for the Business and the Purchased Assets, of the kinds, in the amounts
and against the risks customarily maintained by organizations similarly situated; and no such policy (nor any previous policy) provides for or is subject to any currently enforceable retroactive rate or premium adjustment, loss sharing arrangement
or other actual or contingent liability arising wholly or partially out of events arising prior to the date hereof. Disclosure Schedule 4.9 indicates each policy as to which (a) the coverage limit has been reached or (b) the total incurred losses
from the beginning of the most recent fiscal year to date equal 25% or more of the coverage limit. No notice of cancellation or termination has been received with respect to any such policy, and Seller has no information or knowledge of any act or
omission of Seller which could result in cancellation of any such policy prior to its scheduled expiration date. Seller has not been refused any insurance with respect to any aspect of the operations of the Business nor has its coverage been limited
by any insurance carrier to which it has applied for insurance or with which it has carried insurance during the last three years. Seller has duly and timely made all claims it has been entitled to make under each policy of insurance. There is no
claim by Seller pending under any such policies as to which coverage has been questioned, denied or disputed by the underwriters of such policies, and Seller does not know of any basis for denial of any claim under any such policy. Seller has not
received any written notice from or on behalf of any insurance carrier issuing any such policy that insurance rates therefore will hereafter be substantially increased (except to the extent that insurance rates may be increased for all similarly
situated risks) or that there will hereafter be a cancellation or an increase in a deductible (or an increase in premiums in order to maintain an existing deductible) or non-renewal of any such policy. Such policies are sufficient in all material
respects for compliance by Seller with all requirements of law and with the requirements of all material contracts to which Seller is a party. 
  

 4.8. Contracts and Commitments. 
  
 (a) Real Property Lease. Except as set forth in Disclosure Schedule 1.1.(b), Seller has no leases of
real property used or held for use in connection with the Business or the Purchased Assets. 
  
 (b) Personal Property Leases. Except as set forth in Disclosure Schedule 1.1(e), Seller has no leases of personal property used or
held for use in connection with the Business or the Purchased Assets. 
  
 (c) Purchase Commitments. Seller has no purchase commitments for inventory items or supplies in connection with the Business. 
  
 (d) Sales Commitments. Seller has no sales contracts or commitments to customers or distributors in
connection with or affecting the Business or the Purchased Assets. Seller has no sales contracts or commitments in connection with or affecting the Business or the Purchased Assets except those made in the ordinary course of business, at arm’s
length, and no such contracts or commitments are for a sales price which would result in a loss to the Business. 
  
 (e) Contracts With Affiliates and Certain Others. Seller has no agreement, understanding, contract or commitment (written or oral)
in connection with or affecting the Business or the Purchased Assets with any Affiliate or any other officer, employee, agent, consultant, distributor, dealer or franchisee. 
  
 (f) Powers of Attorney. The Seller has not given a power of attorney, which is currently in effect,
to any person, firm or corporation for any purpose whatsoever in connection with or affecting the Business or the Purchased Assets. 
  
 (g) Loan Agreements. Except as otherwise disclosed in the Disclosure Schedules, Seller is not obligated under any loan agreement,
promissory note, letter of credit, or other evidence of indebtedness as a signatory, guarantor or otherwise, which obligation constitutes or gives rise or could by its terms, through the giving of notice or any other events short of judgment by a
court, give rise to a lien against any Purchased Asset. 
  
 (h) Guarantees. Except as otherwise disclosed in the Disclosure Schedules, Seller has not guaranteed the payment or performance of any person, firm or corporation, agreed to indemnify any person or act as a
surety, or otherwise agreed to be contingently or secondarily liable for the obligations of any person, in connection with the Business or in any other way which affects the Business or the Purchased Assets. 
  
 (i) Government Contracts. Except as otherwise
disclosed in the Disclosure Schedules, Seller is not a party to any contract with any governmental body. 
  
 (j) Burdensome or Restrictive Agreements. Seller is not a party to nor is it bound by any agreement, deed, lease or other
instrument in connection with or affecting the Business or the Purchased Assets which is so burdensome as to materially affect or impair the operation of the Business. Without limiting the generality of the foregoing, Seller is not a party 

  

 
to nor is it bound by any such agreement requiring Seller to assign any interest in any trade secret or proprietary information constituting Purchased Assets
hereunder, or prohibiting or restricting Seller in its operation of the Business from competing in any business or geographical area or soliciting customers or otherwise restricting it from carrying on the Business anywhere in the world. 

 
 (k) No Default. Seller is not in default under any
lease, license, contract or commitment in its operation of the Business, nor has any event or omission occurred which through the passage of time or the giving of notice, or both, would constitute a default thereunder or cause the acceleration of
any of Seller’s obligations or result in the creation of any Lien on any Purchased Asset. No third party is in default under any such lease, contract or commitment to which Seller is a party, nor has any event or omission occurred which,
through the passage of time or the giving of notice, or both, would constitute a default thereunder, or give rise to an automatic termination, or the right of discretionary termination thereof. 
  
 4.9. Employee Benefit Plans. There are no pension, thrift, savings,
profit sharing, retirement, incentive bonus or other bonus, medical, dental, life, accident insurance, benefit, employee welfare, disability, group insurance, stock purchase, stock option, stock appreciation, stock bonus, executive or deferred
compensation, hospitalization and other similar fringe or employee benefit plans, programs and arrangements, and any employment or consulting contracts, “golden parachutes,” collective bargaining agreements, severance agreements or plans,
vacation and sick leave plans, programs, arrangements and policies, including, without limitation, all “employee benefit plans” (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”)), all employee manuals, and all written or binding oral statements of policies, practices or understandings relating to employment, which are provided to, for the benefit of, or relate to, any persons employed by Seller in its
operation of the Business (“Business Employees”). 
  
 4.10 Intellectual Property. Disclosure Schedule 4.10 lists all Intellectual Property of the type described in Section 1.1(f) which are or were used, held for use, or acquired or developed for use in the Business, or developed in the
course of conducting the Business or by persons employed in the Business, specifying whether such Intellectual Property are owned, controlled, used or held (under license or otherwise) by Seller, and also indicating which of such Intellectual
Property are registered. Seller is not infringing and has not infringed any Intellectual Property of another in the operation of the Business, nor is any other person infringing the Intellectual Property of Seller. Seller has not granted any license
or made any assignment of any Trade Right listed on Disclosure Schedule 4.10, and no other person has any right to use any such Trade Right. Seller does not pay any royalties or other consideration for the right to use any Intellectual Property of
others. There is no Litigation pending or threatened to challenge Seller’s right, title and interest with respect to its continued use and right to preclude others from using any Intellectual Property of Seller. All Intellectual Property of
Seller are valid, enforceable and in good standing, and there are no equitable defenses to enforcement based on any act or omission of Seller. 
  

 4.11 Product Warranty and Product Liability. There are no warranties, commitments or obligations
with respect to the return, repair or replacement of Products. There are no defects in design, construction or manufacture of Products which would adversely affect performance or create an unusual risk of injury to persons or property. None of the
Products has been the subject of any replacement, field fix, retrofit, modification or recall campaign and, to Seller’s knowledge, no facts or conditions exist which could reasonably be expected to result in such a recall campaign. As used in
this Section 4.13, the term “Products” means any and all medication and other products currently or at any time previously manufactured, compounded, mixed, formulated, distributed or sold by Seller, or by any predecessor of Seller under
any brand name or mark under which products are or have been manufactured, distributed or sold by Seller, in or through the Business. 
  
 4.12 Assets Necessary to Business. The Purchased Assets include all property and assets (except for the Excluded Assets), tangible and intangible,
and all leases, licenses and other agreements, which are necessary to permit Buyer to carry on, as currently used or held for use in, the Business as presently conducted. 
  
 4.13 No Brokers or Finders. Neither Seller nor any of his employees or agents have retained, employed or used any
broker or finder in connection with the transaction provided for herein or in connection with the negotiation thereof. 
  
 4.14 Financial Statements. Included as Disclosure Schedule 4.14 are true and complete copies of the financial statements of the Seller consisting
of (i) a balance sheet of the Seller as of December 31, 2002 and the related statements of operations for the year then ended (including the notes contained therein or annexed thereto), which financial statements are audited, and (ii) an unaudited
balance sheet of the Seller as of September 30, 2003 (the “Recent Balance Sheet”), and the related unaudited statements of operations for the nine (9) months then ended (the “Recent Statement of Operations”) and for
the corresponding period of the prior year (including the notes and schedules contained therein or annexed thereto). All of such financial statements (including the notes and schedules contained therein or annexed thereto) are true, complete and
accurate, have been prepared in accordance with generally accepted accounting principles applied on a consistent basis, have been prepared in accordance with the books and records of the Seller and fairly present, in accordance with generally
accepted accounting principles, the assets with adequate provision made for doubtful accounts, liabilities and financial position, the results of operations of the Seller as of the dates and for the years and periods indicated. 
  
 4.15. Conduct Since Date of Recent Balance Sheet. Except as set forth
in this Agreement and as disclosed in Disclosure Schedule 4.15 hereto, none of the following has occurred since the date of the Recent Balance Sheet: 
  
 (a) No Adverse Change. Any material adverse change in the financial condition, Purchased Assets, Assumed Liabilities, Business,
prospects or operations of the Seller; 
  

 (b) No Damage. Any material loss, damage or destruction, whether covered by
insurance or not, affecting the Seller’s Business or the Purchased Assets; 
  
 (c) No Increase in Compensation. Any increase in the compensation, salaries or wages payable or to become payable to any employee
or agent of the Seller (including, without limitation, any increase or change pursuant to any bonus, pension, profit sharing, retirement or other plan or commitment), or any bonus or other employee benefit granted, made or accrued, that exceeds in
the aggregate a five percent (5%) increase in the total compensation or benefits payable to any single employee or agent of the Seller; 
  
 (d) No Labor Disputes. Any labor dispute or disturbance, other than routine individual grievances which are not material to the
Business or the Purchased Assets; 
  
 (e) No
Commitments. Any commitment or transaction by the Seller (including, without limitation, any borrowing or capital expenditure) other than in the ordinary course of business consistent with past practice; 
  
 (f) No Disposition of Property. Any sale, lease or
other transfer or disposition of any properties or assets of the Seller, except in the ordinary course of business; 
  
 (g) No Indebtedness. Any indebtedness for borrowed money incurred, assumed or guaranteed by the Seller; 
  
 (h) No Liens. Any mortgage, pledge, lien or
encumbrance made on any of the Purchased Assets; 
  
 (i) No Amendment of Contracts. Any entering into, amendment or termination by the Seller of any Assumed Liability, or any waiver of material rights thereunder, other than in the ordinary course of business; 
  
 (k) Credit. Any grant of credit to any customer or
distributor on terms or in amounts more favorable than those which have been extended to such customer or distributor in the past, any other change in the terms of any credit heretofore extended, or any other change of the Seller’s policies or
practices with respect to the granting of credit; or 
  
 (l) No Unusual Events. Any other event or condition not in the ordinary course of business of the Seller. 
  
 4.16 Companies and Affiliates. Seller has no interests in any entity nor does the Seller own or control, directly or indirectly, any capital stock
of any corporation or interest in any partnership, trust or unincorporated association, or any interest or investment in any other corporation, association or other business entity which operates any part of the Business or otherwise has a contract
with Seller with respect to providing any service or product to the Business. 
  

 4.17 Liabilities. Except as and to the extent specifically disclosed in the Recent Balance Sheet,
or in Disclosure Schedule 4.17, the Seller does not have any material liabilities, commitments or obligations (secured or unsecured, and whether accrued, absolute, contingent, direct, indirect or otherwise) other than commercial liabilities and
obligations incurred since the date of the Recent Balance Sheet in the ordinary course of business and consistent with past practice and none of which has or will have a material adverse effect on the Business or the Purchased Assets. Except as and
to the extent described in the Recent Balance Sheet or in Disclosure Schedule 4.17, the Seller has no any information, knowledge or belief of any basis for the assertion against the Seller, business and/or Purchased Assets of any material liability
and there are no circumstances, conditions, happenings, events or arrangements, contractual or otherwise, which may give rise to such material liabilities, except commercial liabilities and obligations incurred in the ordinary course of the
Seller’s business and consistent with past practice. 
  
 As
of the Closing, other than the current trade accounts payable or otherwise described in the Disclosure Schedules, the Seller, as it pertains to the Business and the Purchased Assets, shall not have any unpaid liabilities, including, but not limited
to, any bank debt, capital leases or any general or professional liability claims, or be obliged in any other way to provide funds in respect of, or to guarantee or assume, any debt, obligation or dividend of any person, except endorsements in the
ordinary course of business in connection with the deposit, in banks or other financial institutions, of items for collection. Except as disclosed in detail in Section 4.17 of the Disclosure Schedule, the Seller does not have any Liabilities or
obligations which might be or become a charge against the Subsidiary. 
  
 4.18 Accounts Receivable. All Accounts Receivable of the Seller represent arm’s length sales actually made in the ordinary course of business; are collectible (net of the reserve shown on the Recent Balance Sheet for doubtful
accounts) in the ordinary course of business without the necessity of commencing legal proceedings; are subject to no counterclaim or setoff; and are not in dispute. Disclosure Schedule 4.18 contains an aged schedule of accounts receivable included
in the Recent Balance Sheet. 
  
 The Seller knows of no reason why
such accounts receivable would not be collectible by the Seller according to approximately the same ratios as accounts receivable have been historically collectible by the Seller. All outstanding accounts and notes receivable included on Disclosure
Schedule 4.18 and generated through the Closing arose in the ordinary course of business. The Seller has not incurred any liabilities to customers for discounts, returns, promotional allowances or otherwise, except as provided in the Disclosure
Schedules. 
  
 4.19 Environmental Matters. The
applicable Laws relating to pollution or protection of the environment, including Laws relating to emissions, discharges, generation, storage, releases or threatened releases of pollutants, contaminants, chemicals or industrial, toxic, hazardous or
petroleum or petroleum-based substances or wastes (“Waste”) into the environment (including, without limitation, ambient air, surface water, ground water, land surface or subsurface strata) or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or handling of Waste including, without limitation, the Clean Water Act, the Clean Air 

  

 
Act, the Resource Conservation and Recovery Act, the Toxic Substances Control Act and the Comprehensive Environmental Response Compensation Liability Act
(“CERCLA”), as amended, and their state and local counterparts are herein collectively referred to as the “Environmental Laws”. Without limiting the generality of the foregoing provisions of this Section, Seller is
in full compliance with all limitations, restrictions, conditions, standards, prohibitions, requirements, obligations, schedules and timetables contained in the Environmental Laws or contained in any regulations, code, plan, order, decree, judgment,
injunction, notice or demand letter issued, entered, promulgated or approved thereunder. Except as set forth in Disclosure Schedule 4.19, there is no Litigation nor any demand, claim, hearing or notice of violation pending or threatened against the
Seller relating in any way to the Environmental Laws or any Order issued, entered, promulgated or approved thereunder. Except as set forth in Disclosure Schedule 4.19, there are no past or present or future events, conditions, circumstances,
activities, practices, incidents, actions, omissions or plans which may interfere with or prevent compliance or continued compliance with the Environmental Laws or with any Order issued, entered, promulgated or approved thereunder, or which may give
rise to any liability, including, without limitation, liability under CERCLA or similar state or local Laws, or otherwise form the basis of any Litigation, hearing, notice of violation, study or investigation, based on or related to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or handling, or the emission, discharge, release or threatened release into the environment, of any Waste. 
  
 4.20 Personnel. Disclosure Schedule 4.20 attached hereto contains accurate and complete information as to names and
rates of compensation (whether in the form of salaries, bonuses, commissions or other supplemental compensation now or hereafter payable) of all personnel of the Seller, together with information as to any contracts with any such personnel. Seller
has no pension, profit-sharing, bonus, incentive, insurance or other employee benefit plans (including without limitation any such plans within the meaning of Section 3 (3) of the Employee Retirement Income Security Act of 1974, as amended) in which
any employees of the Seller participate, except as set forth on the Disclosure Schedule 4.20. 
  
 4.21 Bank Accounts. Disclosure Schedule 4.21 sets forth the names and locations of all banks, trust companies, savings and loan associations and other financial institutions at which Seller, with respect to the
Business, maintains a safe deposit box, lock box or checking, savings, custodial or other account of any nature, the type and number of each such account and the signatories therefore, a description of any compensating balance arrangements, and the
names of all persons authorized to draw thereon, make withdrawals therefrom or have access thereto. 
  
 4.22. Tax Matters. 
  
 (a) Tax Returns. The Seller has filed all Tax Returns it was required to file. All such Tax Returns were correct and complete in
all respects and were filed on a timely basis. All Taxes owed by the Seller (whether or not shown on any Tax Return) have been paid. The Seller currently is not the beneficiary of any extension of time within which to file any Tax Return. No claim
is currently pending by an authority in a jurisdiction where the Business or Seller is domiciled or may be subject to taxation by that jurisdiction. There are no Security 

  

 
Interests on any of the Purchased Assets that arose in connection with any failure (or alleged failure) to pay any Tax. 
  
 (b) Withholding. The Seller has withheld and paid all
Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder, or other third party. 
  
 (c) No Waivers. The Seller has not waived any statute of limitations in respect of Taxes or agreed to
any extension of time with respect to a Tax assessment or deficiency. 
  
 (d) Audits of Tax Returns. No Tax Return of the Seller is currently under audit or examination by any taxing authority, and the Seller has not received a written notice stating the intention of any taxing
authority to conduct such an audit or examination. Each deficiency resulting from any audit or examination relating to Taxes by any taxing authority has been paid, except for deficiencies being contested in good faith. The revenue agents’
reports related to any prior audits and examinations are attached as part of Section 4.22 of the Disclosure Schedule. 
  
 (e) Period of Assessment. There is no agreement or other document extending, or having the effect of extending, the period of
assessment or collection of any Taxes. 
  
 (f)
Tax Agreements. The Seller is not a party to or bound by any tax sharing agreement, tax indemnity obligation or similar agreement with respect to Taxes, including any advance pricing agreement, closing agreement or other agreement relating to
Taxes with any taxing authority. 
  
 4.23 Insurance;
Malpractice. Section 4.7 of the Disclosure Schedule contains a list and brief description of all policies or binders of fire, liability, product liability, workers compensation, health and other forms of insurance policies or binders currently
in force insuring against risks to which the Seller has been a party, a named insured or otherwise the beneficiary of coverage at any time during the five (5) years immediately preceding the Closing Date. Section 4.23 of the Disclosure Schedule
contains a description of all current malpractice liability insurance policies of the Seller and the Seller’s professional employees and all predecessor policies in effect. Except as set forth on Section 4.23 of the Disclosure Schedule: (a)
neither the Seller, nor his professional employees, nor the Seller has, during the five (5) years immediately preceding the Closing Date, filed a written application for any insurance coverage relating to the Seller’s business or property which
has been denied by an insurance agency or carrier; and (b) the Seller, the Seller’s professional employees and the Seller has been continuously insured for professional malpractice claims during the same period. 
  
 4.24 Litigation. Except as noted in Section 4.24 of the Disclosure
Schedule, there is no litigation, arbitration, governmental claim, investigation or proceeding, pending or, to the Seller’s knowledge, threatened, against the Seller at law or in equity, before any court, arbitration tribunal or governmental
agency. The Seller has no knowledge of any facts on which claims may hereafter be made against the Seller that will have a material adverse effect on the Business, 

  

 
Purchased Assets or the Subsidiary. All medical malpractice claims, general liability incidents and incident reports relating to the Business have been
submitted to the Seller’s insurer. All claims made or, to each of the Seller’s knowledge, threatened against the Seller in excess of the deductible are covered under Seller’s current insurance policies. Seller has provided Buyer with
a complete list of all general liability incidents, incident reports and malpractice claims relating to the Business for the five (5) year period prior to the Closing Date. 
  
 4.25 Health Care Compliance. The Seller is participating or otherwise authorized to receive reimbursement from
Medicare and Medicaid and is a party to other third-party payor agreements set forth in Section 4.25 of the Disclosure Schedule. All necessary certifications and contracts required for participation in such programs are in full force and effect and
have not been amended or otherwise modified, rescinded, revoked or assigned, and no condition exists or event has occurred which in itself or with the giving of notice or the lapse of time or both would result in the suspension, revocation,
impairment, forfeiture or non-renewal of any such third-party payor program. The Seller is in compliance in all material respects with the requirements of all such third-party payors applicable thereto. None of Seller’s physician employees, the
Seller, or immediate family members of the Seller, have any financial relationship (whether investment interest, compensation interest, or otherwise) with any entity to which any of the foregoing refer patients, except for such financial
relationships that qualify for exceptions to state and federal laws restricting physician referrals to entities in which they have a financial interest. 
  
 4.26 Fraud and Abuse. The Seller and all persons and entities providing professional services for the Business have not engaged in any activities
which are prohibited under 42 U.S.C. § 1320a-7b, or the regulations promulgated thereunder pursuant to such statutes, or related state or local statutes or regulations, or which are prohibited by rules of professional conduct, including the
following: (a) knowingly and willfully making or causing to be made a false statement or representation of a material fact in any application for any benefit or payment; (b) knowingly and willfully making or causing to be made any false statement or
representation of a material fact for use in determining rights to any benefit or payment; (c) failing to disclose Knowledge by a claimant of the occurrence of any event affecting the initial or continued right to any benefit or payment on its own
behalf or on behalf of another, with intent to fraudulently secure such benefit or payment; and (d) knowingly and willfully soliciting or receiving any remuneration (including any kickback, bribe, or rebate), directly or indirectly, overtly or
covertly, in cash or in kind or offering to pay or receive such remuneration: (A) in return for referring an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or
in part by Medicare or Medicaid; or (B) in return for purchasing, leasing, or ordering or arranging for or recommending purchasing, leasing, or ordering any good, facility, service or item for which payment may be made in whole or in part by
Medicare or Medicaid. The Seller has at all times complied with the requirements of Louisiana Statutes which prohibit physicians who have an ownership, investment or beneficial interest in certain health care facilities from referring patients to
such facilities for the provisions of designated and other health services, and has at all times complied with the Louisiana Statutes. Furthermore, the Seller has filed all reports required to be filed by the State of Louisiana and federal law
regarding compensation arrangements and financial relationships between a physician and an entity to which the physician refers patients. 
  

 4.27 Legal Compliance. The Seller and his Affiliates have complied with all applicable Laws
(including rules, regulations, codes, injunctions, judgments, orders, decrees, and rulings of federal, state, local, and foreign governments (and all agencies thereof)), and no action, suit, proceeding, hearing, complaint, claim, demand, notice or
investigation has been filed or commenced, or to the Knowledge of the Seller, threatened against the Seller or the Business alleging any failure so to comply. The Seller and all physicians and other health care professionals engaged or employed by
the Seller have all permits and licenses required by applicable Law, have made all required regulatory filings and are not in violation of any such permit or license. The Business lawfully operated in accordance with the requirements of all
applicable Laws and has in full force and effect all authorizations and permits necessary to operate a medical practice. There are no outstanding notices of deficiencies relating to the Seller or the Business issued by any governmental authority or
third-party payor requiring conformity or compliance with any applicable law or condition for participation with such governmental authority or third-party condition for participation with such governmental authority or third-party payor. The Seller
has not received notice and the Seller has no Knowledge or reason to believe that, such necessary authorizations may be revoked or not renewed in the ordinary course of business. 
  
 4.28 Rates and Reimbursement Policies. The jurisdiction in which the Business is located does not currently impose
any restrictions or limitations on rates which may be charged to private pay patients receiving services provided by the Seller except for restrictions promulgated by Louisiana law and regulation on charging of excessive fees and limitations on
charges for and profits from the sale of medications, goods and devices and free samples. The Seller does not have any rate appeal currently pending before any governmental authority or any administrator of any third-party payor program. The Seller
has no Knowledge of any applicable Law, which affects rates or reimbursement procedures which has been enacted, promulgated or issued preceding the date of this Agreement or any such legal requirement proposed or currently pending in the State of
Louisiana which could have a material adverse effect on the Seller, the Business, or the Purchased Assets or may result in the imposition of additional Medicaid, Medicare, charity, free care, welfare, or other discounted or government assisted
patients at the Business or require the Subsidiary or Seller to obtain any necessary authorization which the Seller does not currently possess. The Seller has no Knowledge of any impending proposed reduction in reimbursement from third party or
other payors nor Knowledge of any threatened termination of payor contracts. 
  
 4.29 Medical Staff. Except as set forth on Section 4.29 of the Disclosure Schedule, the Seller has no Knowledge of a physician who is providing services on behalf of the Business who plans, or has threatened to
terminate his or her employment or other relationship with the Seller and the Subsidiary. None of the physicians providing services on behalf of the Business currently has plans to retire from the practice of medicine in the next five (5) years.

  

 4.30 Seller and Other Providers. During the five (5) years preceding the Closing Date, each
physician, and other health care provider who is or was employed by, or who renders or has rendered services on behalf of, the Business or the Seller: 
  
 (a) Licenses. Has been duly licensed and registered, and in good standing by the State of Louisiana to engage in the practice of
medicine, and said license and registration have not been suspended, revoked or restricted in any manner; 
  
 (b) Controlled Substances. Has current controlled substances registrations issued by the State of Louisiana and the U.S. Drug
Enforcement Administration, which registrations have not been surrendered, suspended, revoked or restricted in any manner; 
  
 (c) Actions. Except as set forth on Section 4.30 of the Disclosure Schedule, has not been a party or subject to: 
  
 (i) Malpractice Actions. Any malpractice suit, claim
(whether or not filed in court), settlement, settlement allocation, judgment, verdict or decree; 
  
 (ii) Disciplinary Proceedings. Any disciplinary, peer review or professional review investigation, proceeding or action instituted
by any licensure board, hospital, medical school, physical therapy school, health care facility or entity, professional society or association, third party payor, peer review or professional review committee or body, or governmental agency;

  
 (iii) Criminal Proceedings. Any
criminal complaint, indictment or criminal proceedings; 
  
 (iv) Investigation. Any investigation or proceedings, whether administrative, civil or criminal, relating to an allegation of filing false health care claims, violating anti-kickback or fee-splitting laws, or
engaging in other billing improprieties; 
  
 (v)
Mental Illnesses. Any organic or mental illness or condition that impairs or may impair such physician’s ability to practice; 
  
 (vi) Substance Abuse. Any dependency on, habitual use or episodic abuse of alcohol or controlled substances, or any participation
in any alcohol or controlled substance detoxification, treatment, recovery, rehabilitation, counseling, screening or monitoring program; 
  
 (vii) Professional Ethics. Any allegation, or any investigation or proceeding based on any allegation of violating professional
ethics or standards, or engaging in illegal, immoral or other misconduct (of any nature or degree), relating to his or her practice; or 
  
 (viii) Application for Licensure. Any denial or withdrawal of an application in any state for licensure as a physician or physical
therapist, for medical staff privileges at any hospital or other health care entity, for board certification or recertification, for participation in any third party payment program, for state or federal controlled substances registration, or for
malpractice insurance. 
  

 4.31 Third-party Payors. Section 4.31 of the Disclosure Schedule sets forth an accurate, correct
and complete list of the Seller’s third-party payors. The Seller has not received any notice nor has any Knowledge that any third-party payor intends to terminate or materially reduce its business with, or reimbursement to, the Seller. The
Seller has no reason to believe that any third-party payor will cease to do business with the Seller after, or as a result of, the consummation of any transactions contemplated hereby. The Seller does not know of any fact, condition or event which
would adversely affect its relationship with any third-party payor. 
  
 4.32 Disclosure. No representation or warranty by Seller in this Agreement, nor any statement, certificate, schedule or exhibit hereto furnished or to be furnished by or on behalf of Seller pursuant to this Agreement or in connection
with transactions contemplated hereby, contains or shall contain any untrue statement of material fact or omits or shall omit a material fact necessary to make the statements contained therein not misleading. All statements and information contained
in any certificate, instrument, disclosure schedules or document delivered by or on behalf of Seller shall be deemed representations and warranties by Seller. 
  

4.33 Corporate Practice or Fee Splitting. The actions, transactions or relationships arising from, and contemplated by, this Agreement does not
violate any law, rule or regulation relating to the corporate practice of medicine or fee splitting. The Seller accordingly agrees that he will not and will not cause any other Party, in an attempt to void or nullify this Agreement or any document
related to the Transaction or any relationship involving PainCare or Subsidiary to sue, claim, aver, allege or assert that any such document or any such relationship violates any law, rule or regulation relating to the corporate practice of medicine
or fee splitting. 
  
 4.34 Staff Privileges. Disclosure
Schedule 4.34 lists all hospitals at which the Seller has full staff privileges. Such staff privileges have not ever been revoked, surrendered, suspended or terminated, and to the best of the Seller’s Knowledge, there are no, and have not been
any, facts, conditions or incidents that may result in any such revocation, surrender, suspension or termination. 
  
 4.35 Intentions. The Seller intends to continue practicing medicine on a full-time basis for the next five (5) years with the
Subsidiary and does not know of any fact or condition that adversely affects, or in the future may adversely affect, his ability or intention to practice medicine on a full-time basis for the next five (5) years with the Subsidiary. 
  
 4.36 Securities Representation. 
  
 (a) No Registration of the Buyer Shares; Investment
Intent. The Seller acknowledges that the Buyer Shares to be delivered pursuant to this Agreement have not been and will not be registered under the Securities Act and may not be resold without compliance with the Securities Act. The Buyer Shares
to be acquired by the Seller pursuant to this Agreement are being acquired solely for his own account, for investment purposes only and with no present intention of distributing, selling or otherwise disposing of them in connection with a
distribution other than in compliance with the Securities Act. 
  

 (b) Resale Restrictions. The Seller covenants, warrants and represents that none
of the Buyer Shares issued to Seller will be offered, sold, assigned, pledged, hypothecated, transferred or otherwise disposed of except after full compliance with all of the applicable provisions of the Securities Act and the rules of regulations
of the Commission and applicable state securities laws, and the applicable provisions of this Agreement. All certificates evidencing the Buyer Shares shall bear appropriate legends. 
  
 (c) Ability to Bear Economic Risk. The Seller covenants, warrants and represents that he is able to
bear the economic risk of an investment in the Buyer Shares acquired pursuant to this Agreement and can afford to sustain a total loss of such investment and has such Knowledge and experience in financial and business matters that he is capable of
evaluating the merits and risks of the proposed investment and therefore has the capacity to protect his own interests in connection with the acquisition of the Buyer Shares. The Seller, and the Seller’s purchaser representative, if any, have
received copies of PainCare’s most recent 10-KSB, 10-QSB and 8-K filings and have had an adequate opportunity to ask questions and receive answers from the officers of PainCare concerning any and all matters relating to the background and
experience of the officers and directors of PainCare, the plans for the operations of the business of PainCare, and any plans for additional acquisitions and the like. The Seller, and the Seller’s purchaser representative, if any, have asked
any and all questions in the nature described in the preceding sentence and all questions have been answered to such individual’s satisfaction. 
  
 (d) Accredited Investor. The Seller covenants, represents and warrants that he is an: (a) individual with a net worth (either
individually or jointly with his respective spouse) in excess of One Million and No/100 Dollars ($1,000,000.00); or (b) individual who had an income in excess of Two Hundred Thousand and No/100 Dollars ($200,000.00) in each of 2001 and 2002, or had
a joint income with his spouse in excess of Three Hundred Thousand and No/100 Dollars ($300,000.00) in each of 2001 and 2002, and has a reasonable expectation of reaching the same income level in 2003. 
  
 (e) Residency. The Seller covenants, warrants and
represents that he is a resident of the State of Louisiana, and received this Agreement and first learned of the transactions contemplated hereby in the State of Louisiana. He executed and will execute all documents contemplated hereby in the State
of Louisiana, and intends that the laws of the State of Louisiana govern this transaction. 
  
 (f) No Registration. The Seller understands, agrees and acknowledges that the Buyer Shares have not been registered under the
Florida Securities Act, the Louisiana Securities Act or the Securities Act in reliance upon exemption provisions contained therein which PainCare believes are available. 
  
 (g) Disclosure. The representations and warranties contained in this Section 4 do not contain any
untrue statement of a material fact or omit to state any material fact necessary in order to make the statements and information contained in this Section 4 not misleading. 
  

 (h) IT IS ACKNOWLEDGED BY THE SELLER THAT: 
  
 THE SELLER HAS GIVEN AND HIS REPRESENTATIVE(S) HAVE BEEN GIVEN THE
OPPORTUNITY TO ASK QUESTIONS OF, AND RECEIVE ANSWERS FROM, THE BUYER OR PERSON(S) ACTING ON ITS BEHALF CONCERNING THE TERMS AND CONDITIONS OF THIS TRANSACTION, AND TO OBTAIN ANY ADDITIONAL INFORMATION WHICH THE BUYER POSSESSES OR CAN ACQUIRE WITHOUT
UNREASONABLE EFFORT OR EXPENSE THAT IS NECESSARY FOR THE STOCKHOLDER TO MAKE AN INVESTMENT DECISION WITH RESPECT TO THE BUYER. 
  
 THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION HAS NOT PASSED UPON THE MERITS OF OR GIVEN ITS APPROVAL TO THIS TRANSACTION OR THE BUYER’S
SHARES. THE PAINCARE SHARES ARE OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION. 
  
 4.37 HIPAA. Disclosure Schedule 4.37 lists and describes all plans and other efforts of the Seller with respect to the practice locations to comply with the Health Insurance Portability and Accountability Act
of 1996 (“HIPAA”), including the final regulations promulgated thereunder, whether such plans and efforts have been put in place or are in process. Disclosure Schedule 4.37 includes but is not limited in any manner whatsoever to any
privacy compliance plan of the Seller in place or in development, and any plans, analyses or budgets relating to information systems including but not limited to necessary purchases, upgrades or modifications to effect HIPAA compliance. 

 
 4.38 Improper and Other Payments. (a) Neither the Seller, any
employee agent or representative of the Seller nor any person acting on behalf of any of them, has made, paid or received any unlawful bribes, kickbacks or other similar payments to or from any person or authority, (b) no contributions have been
made, directly or indirectly, by the Seller to a domestic or foreign political party or candidate; and (c) the internal accounting controls of the Seller are believed to be adequate to detect any of the foregoing under current circumstances.

  
 4.39 Medical Waste. With respect to the generation,
transportation, treatment, storage, and disposal, or other handling of Medical Waste, the Seller, with respect to the Business, has complied with all Medical Waste Laws (as hereinafter defined). 
  
 “Medical Waste” includes, but is not limited to, (a) pathological waste, (b) blood,
(c) sharps, (d) wastes from surgery or autopsy, (e) dialysis waste, including contaminated disposable equipment and supplies, (f) cultures and stocks of infectious agents and associated biological agents, (g) contaminated animals, (h) isolation
wastes, (i) contaminated equipment, (j) laboratory waste, and (k) various other biological waste and discarded materials contaminated with or exposed to blood, excretion, or secretions from human beings or animals. “Medical Waste” also
includes any substance, pollutant, material, or contaminant listed or regulated under the Medical Waste Tracking Act of 1988, 42 U.S.C. §§6992, et seq. (“MWTA”). 
  

 “Medical Waste Law” means the following, including regulations promulgated and orders issued thereunder, all as
may be amended from time to time: the MWTA; the U.S. Public Vessel Medical Waste Anti-Dumping Act of 1988, 33 USCA §§2501 et seq.; the Marine Protection, Research, and Sanctuaries Act of 1972, 33 USCA §§1401 et seq.; the
Occupational Safety and Health Act, 29 USCA §§651 et seq.; the United States Department of Health and Human Services, National Institute for Occupational Self-Safety and Health Infectious Waste Disposal Guidelines, Publication No. 88-119;
and any other federal, state, regional, county, municipal, or other local laws, regulations, and ordinances insofar as they purport to regulate Medical Waste, or impose requirements relating to Medical Waste. 
  
 4.40 No Untrue or Inaccurate Representation or Warranty. No
representation or warranty by Sellers contains or will contain any untrue statement of fact, or omits or will omit to state a fact necessary to make the statements therein not misleading. 
  
 5. REPRESENTATIONS AND WARRANTIES OF THE ACQUIRING COMPANIES. The Acquiring Companies represent and warrant to the Seller that
the statements contained in this Section 5 are correct and complete as of the Closing Date. 
  
 5.1 Organization of PainCare and Subsidiary. PainCare is a corporation duly organized, validly existing, and in good standing under the laws of the State of Florida. Subsidiary is a corporation duly organized,
validly existing and in good standing under the laws of the State of Florida with authorization to do business in Louisiana. 
  
 5.2 Authorization of Transaction. PainCare and Subsidiary have full power and authority (including full corporate power and authority) to execute
and deliver this Agreement and to perform its obligations hereunder. This Agreement constitutes the valid and legally binding obligation of PainCare, enforceable in accordance with its terms and conditions. 
  
 5.3 Buyer Shares. All of the Initial Shares will be validly issued to
the Seller, fully paid and non-assessable. Buyer will deliver, good and marketable title to the Initial Shares, which shares shall be fully paid and non-assessable and except as otherwise provided in this Agreement shall be free and clear of all
Liens. 
  
 5.4 No Violations. Neither the execution,
delivery nor performance of this Agreement or any other documents, instruments or agreements executed by the Buyer in connection herewith, nor the consummation of the transactions contemplated hereby: (a) constitutes a violation of or default under
(either immediately, upon notice or upon lapse of time) the Articles of Incorporation or Bylaws of Buyer, any provision of any contract to which Buyer or its assets may be bound, any judgment to which Buyer is bound or any law applicable to Buyer;
or (b) result in the creation or imposition of any encumbrance upon, or give any third person any interest in or right to, any or all of the Initial Shares or any other capital stock of Buyer or any of the assets of Buyer; or (c) result in the loss
or adverse modification of, or the imposition of any fine or penalty with respect to, any license, permit or franchise granted or issued to, or otherwise held by or for the use of, Buyer. 
  

 5.5 Consents. The execution, delivery and performance by Buyer of this Agreement and the
consummation by Buyer of the transactions contemplated hereby do not require any consent that has not been received prior to the date hereof. 
  
 5.6 Brokers. Buyer has no liability or obligation to pay any fees or commissions to any broker, finder, or agent with respect to the transactions
contemplated by this Agreement for which the Seller or the Seller could become liable or obligated. 
  
 5.7 Full Disclosure. To the best knowledge of Buyer, no representation or warranty by Buyer in this Agreement, nor any statement, certificate,
schedule, document or exhibit hereto furnished or to be furnished by or on behalf of Buyer pursuant to this Agreement or in connection with transactions contemplated hereby, contains or shall contain any untrue statement of material fact or omits or
shall omit a material fact necessary to make the statements contained therein not materially misleading. 
  
 6. OTHER MATTERS 
  
 6.1
Noncompetition; Confidentiality. Subject to the Closing, and as an inducement to Buyer to execute this Agreement and complete the transactions contemplated hereby, and in order to preserve the goodwill associated with the Business, Seller
hereby covenants and agrees as follows: 
  
 (a)
Covenant Not to Compete. For a period of two (2) years after the Closing Date, Seller will not directly or indirectly, within the Territory (as hereinafter defined): 
  
 (1) be employed by, act as an agent, consultant or contractor of, engage in, continue in or carry on any
business which competes with the Business of the Subsidiary or any business of PainCare or any of its subsidiaries that is substantially similar to the Business of the Subsidiary, including owning or controlling any financial interest in any
corporation, partnership, firm or other form of business organization which is so engaged; 
  
 (2) be employed by, consult with, advise or assist in any way, whether or not for consideration, any corporation, partnership, firm or
other business organization which is now or becomes a competitor of the Subsidiary or PainCare or its subsidiaries in any aspect with respect to the Business of the Subsidiary, including, but not limited to, advertising or otherwise endorsing the
products of any such competitor; soliciting patients and customers or otherwise serving as an intermediary for any such competitor; loaning money or rendering any other form of financial assistance to or engaging in any form of business transaction
on other than on an arm’s length basis with any such competitor; 
  
 (3) offer employment to an employee of the Subsidiary, PainCare or any of its subsidiaries, without the prior written consent of PainCare; or 
  

 (4) engage in any practice the purpose of which is to evade the provisions of this
covenant not to compete or to commit any act which adversely affects the Subsidiary, the PainCare or its subsidiaries or their businesses, excluding Outside Activities provided, however, that the foregoing shall not prohibit the ownership of
securities of corporations which are listed on a national securities exchange or traded in the national over-the-counter market in an amount which shall not exceed 5% of the outstanding shares of any such corporation. The parties agree that the
geographic scope of this covenant not to compete shall include the Parish of Terrebonne, Louisiana (the “Territory”). The parties agree that the Subsidiary or PainCare, as the case may be, may sell, assign or otherwise transfer this
covenant not to compete, in whole or in part, to any person, corporation, firm or entity that purchases all or part of the Subsidiary’s, or PainCare’s, business upon obtaining the prior written consent of Seller which will not be
unreasonably withheld. In the event a court of competent jurisdiction determines that the provisions of this covenant not to compete are excessively broad as to duration, geographical scope or activity, it is expressly agreed that this covenant not
to compete shall be construed so that the remaining provisions shall not be affected, but shall remain in full force and effect, and any such over broad provisions shall be deemed, without further action on the part of any person, to be modified,
amended and/or limited, but only to the extent necessary to render the same valid and enforceable in such jurisdiction. 
  
 6.2 Severability. If any covenant or provision contained in this Section is determined to be void or unenforceable in whole or in part, it shall
not be deemed to affect or impair the validity of any other covenant or provision. If, in any arbitration or judicial proceeding, a tribunal shall refuse to enforce all of the separate covenants deemed included in this Section, then such
unenforceable covenants shall be deemed eliminated from the provisions hereof for the purpose of such proceedings to the extent necessary to permit the remaining separate covenants to be enforced in such proceedings. 
  
 (a) Covenant of Confidentiality. Seller shall not at
any time subsequent to the Closing, except as explicitly requested by Buyer, (i) use for any purpose, (ii) disclose to any person, or (iii) keep or make copies of documents, tapes, discs or programs containing, any confidential information
concerning the Business, the Purchased Assets or the Assumed Liabilities. For purposes hereof, “confidential information” shall mean and include, without limitation, all Intellectual Property which are Purchased Assets, all patient files
and information on the Business, and all other information concerning the processes, apparatus, equipment, services offered, packaging, products, marketing and distribution methods of the Business, not previously disclosed to the public directly by
Seller. 
  
 (b) Equitable Relief for
Violations. Seller agrees that the provisions and restrictions contained in this Section are necessary to protect the legitimate continuing interests of Buyer in acquiring the Business through the purchase of the Purchased Assets and the
assumption of the Assumed Liabilities, and that any violation or breach of these provisions will result in irreparable injury to Buyer for which a remedy at law would be inadequate and that, in addition to any relief at law which may be available to
Buyer for such violation or breach and regardless of any other provision contained in this Agreement, Buyer shall be entitled to 

  

 
injunctive and other equitable relief as a court may grant after considering the intent of this Section. 
  
 6.3 Use of Name. Following the Effective Date, neither Seller nor any
Affiliate shall, without the prior written consent of Buyer, make any use of the name “Bone & Joint Surgical Clinic” or any other name confusingly similar thereto, except as may be necessary for Seller to pay its liabilities, prepare
tax returns and other reports, and to otherwise wind up and conclude its business. 
  
 6.4 After Closing. After the Closing, each party will afford the other party, its counsel, accountants and other representatives, during normal business hours, reasonable access to the books, records and other
data in such party’s possession relating directly or indirectly to the properties, liabilities or operations of the Business, with respect to periods prior to the Closing, and the right to make copies and extracts therefrom, to the extent that
such access may be reasonably required by the requesting party for any proper business purpose. Each party agrees for a period extending three years after the Closing not to destroy or otherwise dispose of any such records without first offering in
writing to surrender such records to the other party, which party shall have ten (10) days after such offer to agree in writing to take possession thereof. 
  
 6.5 Bulk Sales Compliance. Following the execution of this Agreement, Buyer and Seller shall cooperate in complying with all provisions of the bulk
sales or bulk transfer statutes of all states having jurisdiction, in such a way as to provide Buyer the greatest measure of protection against the creditors of Seller allowable under all such statutes. 
  
 7. FURTHER COVENANTS OF SELLER 
  
 Seller covenants and agrees as follows: 
  
 7.1 Access to Information and Records. Seller shall give Buyer, its
counsel, accountants and other representatives(i)access during normal business hours to all of the properties, books, records, contracts and documents of Seller relating to the Business or the Purchased Assets or Assumed Liabilities for the purpose
of such inspection, investigation and testing as Buyer deems appropriate (and Seller shall furnish or cause to be furnished to Buyer and its representatives all information with respect to the Business Buyer may request); (ii) access to employees,
agents and representatives of the Business for the purpose of conducting business, meetings and communications as Buyer reasonably desires; and (iii) access to vendors, customers, manufacturers of its medication and equipment, and others having
business dealings with the Business. 
  
 7.2 Maintain
Organization. Seller will take such action as may be necessary to maintain, preserve, renew and keep in favor and effect the existence, rights and franchises of the Business and will use their best efforts to preserve the Business intact, to
keep available to Buyer the present employees of the Business, and to preserve for Buyer its present relationships with suppliers and customers and others having business relationships with the Business. 
  

 7.3 No Breach. Seller will not do or omit any act, or permit any omission to act, which may cause
a breach of any contract, commitment or obligation material to the Business, or any breach of any representation, warranty, covenant or agreement made by Seller herein, or which would have required disclosure pursuant to this Agreement. 

 
 7.4 No Material Contracts. No contract or commitment will be
entered into, and no purchase of medication, equipment, inventory, or supplies and no sale of goods or services (real, personal, or mixed, tangible or intangible) will be made, by or on behalf of Seller or the Subsidiary in connection with its
operation of the Business. 
  
 7.5 Maintenance of
Insurance. Seller shall take all necessary action to maintain for the benefit of the Subsidiary all of the insurance set forth in Disclosure Schedule 4.7. 
  

7.6 Consents. Seller will use his best efforts prior to Closing to obtain all consents necessary for the consummation of the transactions
contemplated hereby. 
  
 7.7 Other Action. Seller shall use
his best efforts to cause the fulfillment at the earliest practicable date of all of the conditions to the parties’ obligations to consummate the transactions contemplated in this Agreement. 
  
 7.8 Disclosure. Seller shall have a continuing obligation which shall
survive the Closing to promptly notify Buyer in writing with respect to any matter hereafter arising or discovered which, if existing or known at the date of this Agreement, would have been required to be set forth herein or described in the
disclosure schedules, but no such disclosure shall cure any breach of any representation or warranty which is inaccurate. 
  
 8. CONDITIONS PRECEDENT TO BUYER’S OBLIGATIONS 
  
 Notwithstanding the execution and delivery of this Agreement or the performance of any part hereof, Buyer’s obligations to consummate the transaction contemplated by
this Agreement shall be subject to the satisfaction of each of the conditions set forth in this Section 8, except to the extent that such satisfaction is waived by Buyer in writing. 
  
 8.1 Representations and Warranties True on the Effective Date. Each of the representations and warranties made by
Seller in this Agreement, and the statements contained in the disclosure schedules or in any instrument, list, certificate or writing delivered by Seller pursuant to this Agreement, shall be true and correct in all material respects when made and
shall be true and correct in all material respects at and as of the Effective Date as though such representations and warranties were made or given on and as of the Effective Date, except for any changes permitted by the terms of this Agreement or
consented to in writing by Buyer. 
  
 8.2 Compliance With
Agreement. Seller shall have in all material respects performed and complied with all of its agreements and obligations under this Agreement which 

  

 
are to be performed or complied with by Seller prior to or on the Effective Date, including the delivery of the closing documents specified in this
Agreement. 
  
 8.3 Absence of Litigation. No Litigation
shall have been commenced or threatened, and no investigation by any Government Entity shall have been commenced against Buyer, Seller or the Business with respect to the transactions contemplated hereby. 
  
 8.4. Consents and Approvals. All approvals, consents and waivers that
are required to effect the transactions contemplated hereby shall have been received, and executed counterparts thereof shall have been delivered to Buyer prior to the Effective Date including, without limitation, the consent and approval of the
Bank and Merrill Lynch Financial Services, Inc. Notwithstanding the foregoing, receipt of the consent of any third party to the assignment of a Contract which is not (and is not required to be) disclosed in the disclosure schedules shall not be a
condition to Buyer’s obligation to close, provided that the aggregate of all such Contracts does not represent a material portion of the sales or expenditures of the Business. After the Closing, Seller will continue to use its best effects to
obtain any such consents or approvals, and Seller shall not hereby be relieved of any liability hereunder for failure to perform any of its covenants or for the inaccuracy of any representation or warranty. 
  
 8.5. Estoppel Certificates. Buyer shall have obtained Buyer on or
prior to the Effective Date an estoppel certificate or status letter from the landlord under the lease for the Business Location to be assumed pursuant to this Agreement which estoppel certificate or status letter will certify (i) the lease is valid
and in full force and effect; (ii) the amounts payable by Seller under the lease and the date to which the same have been paid; (iii) whether there are, to the knowledge of said landlord, any defaults thereunder, and, if so, specifying the nature
thereof; and (iv) that the transactions contemplated by this Agreement will not constitute default under the lease and that the landlord consents to the assignment of the lease to Buyer. 
  
 8.6 Completion of Due Diligence, Schedules & Exhibits. Completion of Buyer’s due diligence and the
completion and delivery of the Disclosure Schedules and Exhibits required by this Agreement, all to the reasonable satisfaction of Buyer, based upon its knowledge and information, of all matters relative to Seller, the Purchased Assets, Assumed
Liabilities and the Business. If Buyer does not complete its due diligence or the Disclosure Schedules and Exhibits are not completed and delivered to the appropriate Party or if the Buyer is not reasonably satisfied as to all such matters by
January 10, 2004, then this Agreement and all other collateral documents executed in connection with the transactions contemplated by this Agreement may be terminated and rescinded by Buyer and Seller shall immediately return to the Buyer the
Initial Transaction Consideration and any other cost or expense incurred by Buyer with respect to this transaction. 
  
 9. CONDITIONS PRECEDENT TO SELLER’S OBLIGATIONS 
  
 Notwithstanding the execution and delivery of this Agreement or the performance of any part hereof, Seller’s obligations to consummate the
transaction contemplated by this Agreement 

  

 
shall be subject to the satisfaction of each of the conditions set forth in this Section 9, except to the extent that such satisfaction is waived in writing
by Seller. 
  
 9.1 Representations and Warranties True on the
Effective Date. Each of the representations and warranties made by Buyer in this Agreement shall be true and correct in all material respects when made and shall be true and correct in all material respects at and as of the Effective Date as
though such representations and warranties were made or given on and as of the Effective Date. 
  
 9.2 Compliance With Agreement. Buyer shall have in all material respects performed and complied with all of Buyer’s agreements and obligations under this Agreement which are to be performed or complied
with by Buyer prior to or on the Effective Date, including the delivery of the closing documents specified in this Agreement. 
  
 10. CLOSING 
  
 10.1 Closing Date. Consummation of the contemplated transaction (the “Closing”) shall take place on December 31, 2003 or on such
other date or at such other time or place as may be mutually agreed upon in writing by the parties hereto (the “Closing Date”). Notwithstanding the foregoing Closing Date, the parties hereby agree that unless otherwise agreed in
writing that the Closing shall not be effective until the satisfaction or waiver of the conditions precedent set forth in Sections 8 and 9 of this Agreement (the “Effective Date”). The Closing shall take place at the offices of
Buyer in Orlando, Florida, or at such other place as the parties hereto shall agree upon. Such date is referred to in this Agreement as the “Closing Date”. 
  
 10.2 Documents to be Delivered by Seller. At the Closing, Seller shall deliver to Buyer the following documents, in
each case duly executed or otherwise in proper form: 
  
 (a) Bills of Sale. Bills of sale and such other instruments of assignment, transfer, conveyance and endorsement as will be sufficient in the opinion of Buyer and its counsel to transfer, assign, convey and deliver to Buyer the
Purchased Assets as contemplated hereby. 
  
 (b)
Compliance Certificate. A certificate signed by the Seller that each of the representations and warranties made by Seller in this Agreement is true and correct in all material respects on and as of the Effective Date with the same effect as
though such representations and warranties had been made or given on and as of the Effective Date (except for any changes permitted by the terms of this Agreement or consented to in writing by Buyer), and that Seller has performed and complied with
all of Seller’s obligations under this Agreement which are to be performed or complied with on or prior to the Effective Date. 
  
 (c) Other Documents. All other documents, instruments or writings required to be delivered to Buyer at or prior to the Closing
pursuant to this Agreement and such other certificates of authority and documents as Buyer may reasonably request. 
  

 10.3 Documents to be Delivered by Buyer. At the Closing or as soon thereafter as is reasonably
possible, Buyer shall deliver to Seller the following consideration and documents, in each case duly executed or otherwise in proper form: 
  
 (a) Purchase Price. To Seller the Cash Due At Closing and Initial Shares required by Section 3.1 hereof. 
  
 (b) Assumption of Liabilities. Such undertakings and
instruments of assumption as will be reasonably sufficient in the opinion of Seller and its counsel to evidence the assumption of the Assumed Liabilities. 
  
 (c) Compliance Certificate. A certificate signed by the CEO of Buyer that the representations and warranties made by Buyer in this
Agreement are true and correct on and as of the Effective Date with the same effect as though such representations and warranties had been made or given on and as of the Effective Date (except for any changes permitted by the terms of this Agreement
or consented to in writing by Seller), and that Buyer has performed and complied with all of Buyer’s obligations under this Agreement which are to be performed or complied with on or prior to the Effective Date. 
  
 (d) Other Documents. All other documents, instruments
or writings required to be delivered to Seller at or prior to the Closing pursuant to this Agreement and such other certificates of authority and documents as Seller may reasonably request. 
  
 11. POST-CLOSING COVENANTS. The Parties agree as follows with respect to the
period following the Execution Date: 
  
 11.1 General. In
the event that at any time after the Closing any further action is necessary to carry out the purposes of this Agreement, each of the Parties will take such further action (including the execution and delivery of such further instruments and
documents) as any other Party may reasonably request, all at the sole cost and expense of the requesting Party. 
  
 11.2 Tax Returns. The Seller shall be responsible for preparing and filing all income or franchise Tax Returns with respect to the Business
relating to periods of time prior to the Closing Date. The Subsidiary will be responsible for preparing and filing all income and franchise Tax Returns of the Subsidiary relating to periods after the Closing. The Seller will provide the Subsidiary
with an opportunity to review and comment on such Tax Returns (including any amended returns). The Seller will take no positions on his Tax Returns that relate to the tax period prior to the Closing Date that could adversely affect PainCare or the
Subsidiary after the Closing. 
  
 11.3 Transition. Neither
the Seller nor the Buyer will take any action that is designed, intended or likely to have the effect of discouraging any lessor, licensor, customer, supplier or other business associate of the Seller from maintaining the same business relationships
with the Buyer and the Subsidiary after the Closing as he, she or it maintained with the Seller prior to the Closing. 
  

 11.4 Litigation Support. In the event and for so long as any Party actively is contesting or
defending against any action, suit, proceeding, hearing, investigation, charge, complaint, claim or demand in connection with: (a) any transaction contemplated under this Agreement; or (b) any fact, situation, circumstances, status, condition,
activity, practice, occurrence, event, incident, action, failure to act, or transaction on or prior to the Closing Date with respect to the Business, each of the Parties will cooperate with the contesting or defending Party and its or his counsel in
the contest or defense, at the sole cost and expense of the contesting or defending Party except to the extent that the contesting or defending party is entitled to indemnification therefore under this Agreement. 
  
 11.5 Consents. The Seller hereby covenants and agrees that, after the
Execution Date, he will use his best efforts to obtain all authorizations, consents, and approvals set forth in the Disclosure Schedules. If such consent, approval or agreement is not obtained, or if an attempted assignment thereof would affect the
rights of the parties thereunder so that such parties would not in fact receive all such rights, the Parties will cooperate in any arrangement designed to provide for the Parties to receive the benefits under any such contract, including enforcement
for the benefit of PainCare and Subsidiary of any and all rights of the Seller against a third party thereto arising out of the breach or cancellation by such third party or otherwise. 
  
 11.6 Operational Covenants. Without the prior written consent of the Seller, which shall not be unreasonably
withheld, PainCare shall not, prior to the conclusion of the third Formula Period: 
  
 (a) reorganize the Subsidiary, whether by integrating or consolidating the business of the Subsidiary with other operating units of
PainCare or its subsidiaries or Affiliates, except in the case that at the time of such integration or consolidation such transaction could not reasonably be expected to have a material adverse effect on the Formula Period Profits; 
  
 (b) effect any reassignment, reprioritization, reallocation,
restructuring, or reduction of the Subsidiary human or other resources, their research and development initiatives, or their marketing programs, except in a manner that at the time of such event could not reasonably be expected to have a material
adverse effect on the Formula Period Profits or that are reasonably necessary in light of the Subsidiary’s results of operation; 
  
 (c) amend the articles of incorporation or bylaws of the Subsidiary in any manner that at the time of such amendment could reasonably be
expected to have a material adverse effect on the Formula Period Profits; 
  
 (d) cause the Subsidiary to become a party to or terminate any agreement which at the time such agreement is entered into or terminated could reasonably be expected to have a material adverse effect on the Formula
Period Profits or that is reasonably necessary in light of the Surviving Corporation’s results of operation; 
  
 (e) cause the Subsidiary to undertake actions outside the ordinary course of its business which at the time of such undertaking could
reasonably be expected to have a material adverse effect on the Formula Period Profits; 
  

 (f) sell a material portion of the Subsidiary or its assets, merge the Subsidiary with
any other entity, sell a controlling interest in the Subsidiary, or make any fundamental change in the business of the Subsidiary unless such action(s) at the time of such undertaking could not reasonably be expected to have a material adverse
effect on the Formula Period Profits or that is reasonably necessary in light of the Surviving Corporation’s results of operation; 
  
 The parties hereby acknowledge and agree that the foregoing conditions shall become null and void and of no further force or effect if the Formula Profits
of the Subsidiary in each of any two (2) consecutive calendar quarters are less than $200,000, or if the Formula Profits of the Subsidiary in one (1) calendar quarter is less than $100,000. 
  
 In the event that PainCare defaults in its performance of any of its
obligations under this Section and fails to cure such default within thirty (30) days (or such other reasonable period if 30 days is not a sufficient amount of time to cure such default, provided that PainCare shall have commenced in good faith and
is diligently pursuing its efforts to cure such default during such 30-day period) of receiving a written notice of default from the Seller, PainCare shall be deemed to be in breach of this Agreement. 
  
 12. INTENTIONALLY OMITTED 
  
 13. SURVIVAL AND INDEMNIFICATION. 
  
 13.1 Survival of Representations and Warranties. All of the
representations, warranties, covenants, and agreements including but not limited to the restrictive covenants and the indemnification provisions contained in this Agreement are material and have been relied upon by the Parties hereto and shall
survive the Closing. The representations and warranties contained herein shall not be affected by any investigation, verification or examination by any Party or by anyone on behalf of such Party. 
  
 13.2 Indemnification Provisions for the Benefit of PainCare and the
Subsidiary. In the event of: (a) a misrepresentation (or in the event any third party alleges facts that, if true, would mean a misrepresentation) of any of the Seller’s representations and/or warranties contained in this Agreement; (b) a
breach (or in the event any third party alleges facts that, if true, would mean a breach) of any of the Seller’ covenants contained in this Agreement or any other agreement executed in connection herewith; or (c) any Liability or Claim against
the Seller, the Business or the Purchased Assets of any nature whatsoever accrued or existing as of the Closing Date or related to actions of the Seller or arising out of the Business which occurred prior to the Closing Date, which is not reflected
on the Disclosure Schedules and accepted by the Buyer, then the Seller agrees to indemnify PainCare and Subsidiary from and against any Adverse Consequences PainCare and Subsidiary may suffer through and after the date of the claim for
indemnification resulting from, arising out of, relating to, in the nature of, or caused by the misrepresentation or breach (or alleged breach) or non-disclosed or non-accepted Liability. No provision of this Agreement, including but not in any way
limited to, any “Knowledge” qualifiers or materiality 

  

 
standards in the representations and warranties of the Seller, shall have any effect on the Sellers’ indemnity for any Liability arising prior to the
Closing Date. 
  
 13.3 Indemnification Provisions for the
Benefit of the Seller. In the event of a misrepresentation or breach (or in the event any third party alleges facts that, if true, would mean a misrepresentation or breach) of any of PainCare’s or Subsidiary’s representations,
warranties, and covenants contained in this Agreement, then PainCare and Subsidiary agree to indemnify the Seller from and against any Adverse Consequences the Seller may suffer through and after the date of the claim for indemnification resulting
from, arising out of, relating to, in the nature of, or caused by the breach (or the alleged breach). 
  
 13.4 Matters Involving Third Parties. 
  
 13.4.1 Notification. If any third party shall notify any Party (the “Indemnified Party”) with respect to any matter (a
“Third Party Claim”) which may give rise to a claim for indemnification against the other Party (the “Indemnifying Party”) pursuant to this Section, then the Indemnified Party shall promptly notify the Indemnifying Party thereof
in writing; provided, however, that no delay on the part of the Indemnified Party in notifying the Indemnifying Party shall relieve the Indemnifying Party from any obligation hereunder unless the Indemnifying Party thereby is prejudiced and then
only to the extent that the Indemnifying Party is actually prejudiced. 
  
 13.4.2 Defense by Indemnifying Party. The Indemnifying Party shall have the right to defend the Indemnified Party against the Third Party Claim with counsel of its choice satisfactory to the Indemnified Party
so long as: (i) the Indemnifying Party notifies the Indemnified Party in writing within ten (10) business days after the Indemnified Party has given notice of the Third Party Claim that the Indemnifying Party will indemnify the Indemnified Party
from and against any Adverse Consequences the Indemnified Party may suffer resulting from, arising out of, relating to, in the nature of, or caused by the Third Party Claim; (ii) the Indemnifying Party provides the Indemnified Party with evidence
reasonably acceptable to the Indemnified Party that the Indemnifying Party will have the financial resources to defend against the Third Party Claim and fulfill the Indemnifying Party’s indemnification obligations hereunder; (iii) the Third
Party Claim involves only money damages and does not seek an injunction or other equitable relief; (iv) settlement of, or an adverse judgment with respect to, the Third Party Claim is not, in the good faith judgment of the Indemnified Party, likely
to establish a precedential custom or practice adverse to the continuing business interests of the Indemnified Party; and (e) the Indemnifying Party conducts the defense of the Third Party Claim actively and diligently. 
  
 13.4.3 Satisfactory Defense. So long as the
Indemnifying Party is conducting the defense of the Third Party Claim in accordance with Section 10.4(b) above: (i) the Indemnified Party may retain separate co-counsel at its sole cost and expense and participate in the defense of the Third Party
Claim; (ii) the Indemnified Party will not consent to the entry of any judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of the Indemnifying Party (not to be withheld or delayed
unreasonably); and (iii) the 

  

 
Indemnifying Party will not consent to the entry of any judgment or enter into any settlement with respect to the Third Party Claim without the prior written
consent of the Indemnified Party (not to be withheld or delayed unreasonably) and any such settlement must include a complete release of the Indemnified Party. 
  

13.4.4 Conditions. In the event any of the conditions in Section 13.4.2 above is or becomes unsatisfied, however: (i) the
Indemnified Party may defend against, and consent to the entry of any judgment or enter into any settlement with respect to, the Third Party Claim in any manner it reasonably may deem appropriate (and the Indemnified Party need not consult with, or
obtain any consent from, the Indemnifying Party in connection therewith); (ii) the Indemnifying Party will reimburse the Indemnified Party promptly and periodically for the costs of defending against the Third Party Claim (including reasonable
attorneys’ fees and expenses); and (iii) the Indemnifying Party will remain responsible for any Adverse Consequences the Indemnified Party may suffer resulting from, arising out of, relating to, in the nature of, or caused by the Third Party
Claim to the fullest extent provided in this Section 13. 
  
 13.4.5 Right to Set-Off. If any such cost, loss, damage, expense, liability, claim, or obligation occurs or is incurred by PainCare or Subsidiary, PainCare or Subsidiary shall have the right, after written
notice to the Seller, at PainCare’s or Subsidiary’s option and in addition to any other actions permitted by law, to offset the amount of any such cost, loss, damage, expense, liability, obligation or claim against amounts due from
PainCare or Subsidiary to the Seller, including the right to offset any post-closing payment due from PainCare or Subsidiary to the Seller under this Agreement or any other agreement. 
  
 13.4.6 Materiality. Notwithstanding any provision in this Agreement to the contrary, the indemnifying
Party’s obligation to indemnify the Indemnified Party in connection with a breach of any representation, warranty, covenant or other agreement included in this Agreement, and the amount of damages to be indemnified, shall be determined without
regard to any “material”, “materiality” (or correlative meanings”) or “material adverse effect” qualifications, provisions or exceptions set forth in such representation, warranty, covenant or other agreement, each
of which shall be deemed to be given for the purposes of this Section 13 as though there were no such qualifications, provisions or exceptions. 
  
 13.4.7 Limitation. The indemnification provisions set forth in this Section 13 shall be limited to all claims in excess of Twenty
Five Thousand and 00/100 Dollars ($25,000) (the “Threshold”). Once a claim exceeds the Threshold, if a Party is entitled to indemnification under this Section 13, such party shall recover all appropriate funds from the first dollar of
damages. Further, the indemnitors shall not be liable for any liabilities resulting from claims that are covered by any insurance policy or other indemnity or contribution agreement unless, and only to the extent that, the full limit of such
insurance policy, indemnity or contribution agreement has been exceeded. The Party entitled to indemnification shall have a duty to mitigate its damages. 
  

 14. MISCELLANEOUS 
  
 14.1 Disclosure Schedules. Information set forth in the Disclosure Schedules specifically refers to the article and section of this Agreement to
which such information is responsive and such information shall not be deemed to have been disclosed with respect to any other article or section of this Agreement or for any other purpose. The Disclosure Schedules shall not vary, change or alter
the language of the representations and warranties contained in this Agreement and, to the extent the language in the Disclosure Schedules does not conform in every respect to the language of such representations and warranties, such language shall
be disregarded and be of no force or effect. 
  
 14.2 Further
Assurance. From time to time, at Buyer’s request and without further consideration, Seller will execute and deliver to Buyer such documents and take such other action as Buyer may reasonably request in order to consummate more effectively
the transactions contemplated hereby and to vest in Buyer good, valid and marketable title to the business and assets being transferred hereunder. 
  
 14.3. Assignment; Parties in Interest. 
  
 (a) Assignment. Except as expressly provided herein, the rights and obligations of a party hereunder may not be assigned,
transferred or encumbered without the prior written consent of the other party. Notwithstanding the foregoing, Buyer may, without consent of the other party, cause one or more subsidiaries of Buyer to carry out all or part of the transactions
contemplated hereby; provided, however, that Buyer shall, nevertheless, remain liable for all of its obligations, and those of any such subsidiary, to Seller hereunder. 
  
 (b) Parties in Interest. This Agreement shall be binding upon, inure to the benefit of, and be
enforceable by the respective successors and permitted assigns of the parties hereto. Nothing contained herein shall be deemed to confer upon any other person any right or remedy under or by reason of this Agreement. 
  
 14.4 Amendment and Modification. Buyer and Seller may amend, modify
and supplement this Agreement in such manner as may be agreed upon by them in writing. 
  

 14.5 Notice. All notices, requests, demands and other communications hereunder shall be given in
writing and shall be: (a) personally delivered; (b) sent by telecopier, facsimile transmission or other electronic means of transmitting written documents; or (c) sent to the parties at their respective addresses indicated herein by registered or
certified U.S. mail, return receipt requested and postage prepaid, or by private overnight mail courier service. The respective addresses to be used for all such notices, demands or requests are as follows: 
  

	 	(a)	If to Buyer, to: 

  
 PainCare Holdings, Inc. 
 37 North Orange Avenue 
 Suite 500 
 Orlando, Florida 32801 
 Attention: President 
  
 or to such other person
or address as Buyer shall furnish to Seller in writing. 
  

	 	(b)	If to Seller, to: 

  
 210 New Orleans Blvd. 
 Houma, LA 70364 
  
 (with a copy to) 
  
 _______________________ 
 _______________________ 
 _______________________ 
 Facsimile:_______________ 
  
 or to such other
person or address as Seller and Principal Sellers shall furnish to Buyer in writing. 
  
 If personally delivered, such communication shall be deemed delivered upon actual receipt; if electronically transmitted pursuant to this paragraph, such communication shall be deemed delivered the next business day
after transmission (and sender shall bear the burden of proof of delivery); if sent by overnight courier pursuant to this paragraph, such communication shall be deemed delivered upon receipt; and if sent by U.S. mail pursuant to this paragraph, such
communication shall be deemed delivered as of the date of delivery indicated on the receipt issued by the relevant postal service, or, if the addressee fails or refuses to accept delivery, as of the date of such failure or refusal. Any party to this
Agreement may change its address for the purposes of this Agreement by giving notice thereof in accordance with this Section. 
  
 14.6 Intentionally Omitted. 
  

 14.7 Entire Agreement. This instrument embodies the entire agreement between the parties hereto
with respect to the transactions contemplated herein, and there have been and are no agreements, representations or warranties between the parties other than those set forth or provided for herein. 
  
 14.8 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 
  
 14.9 Headings. The headings in this Agreement are inserted for convenience only and shall not constitute a part hereof. 
  
 14.10 Press Releases, and Public Announcements. No Party shall issue
any press release or make any public announcement relating to the subject matter of this Agreement without the prior written approval of the other Parties. 
  
 14.11 Governing Law; Jurisdiction; Attorney’s Fees. This Agreement, and all proceedings hereunder, shall be governed by and construed in
accordance with the domestic laws of the State of Florida without giving effect to any choice or conflict of law provision or rule (either of the State of Florida or any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Florida. In the event of any suit under this Agreement or otherwise between the parties hereto, the prevailing Party shall be entitled to all reasonable attorney’s fees and costs, including allocated costs
of in-house counsel, to be included in any judgment recovered. In addition, the prevailing Party shall be entitled to recover reasonable attorney’s fees and costs, including allocated costs of in-house counsel, incurred in enforcing any
judgment arising from a suit under this Agreement. This post-judgment attorney’s fees and costs provision shall be severable from the other provisions of this Agreement and shall survive any judgment on such suit and is not to be deemed merged
into the judgment. 
  
 14.12 Amendments and Waivers. No
amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by the Parties. No waiver by any Party of any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or
not, shall be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence and all waivers must be in
writing, signed by the waiving Party, to be effective. 
  
 14.13
Severability. Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or
enforceability of the offending term or provision in any other situation or in any other jurisdiction. 
  
 14.14 Expenses. Except as set forth herein, each of the Parties will bear its or his own costs and expenses (including, but not limited to, legal
and accounting fees and expenses) incurred in connection with this Agreement and the transactions contemplated hereby. 
  
 14.15 Further Assurances. Each Party shall, at the reasonable request of any other Party hereto, execute and deliver to such other Party all such
further instruments, assignments, 

  

 
assurances and other documents, and take such actions as such other Party may reasonably request in connection with the carrying out the terms and provisions
of this Agreement. 
  
 14.16 Construction. Any reference to
any federal, state, local, or foreign statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. The word “including” shall mean including without limitation.
Nothing in the Disclosure Schedule shall be deemed adequate to disclose an exception to a representation or warranty made herein, unless the Disclosure Schedule identifies the exception with reasonable particularity. The Parties intend that each
representation, warranty, and covenant contained herein shall have independent significance. If any Party has breached any representation, warranty, or covenant contained herein in any respect, the fact that there exists another representation,
warranty, or covenant relating to the same subject matter (regardless of the relative levels of specificity) which the Party has not breached shall not detract from nor mitigate the fact that the Party is in breach of the first representation,
warranty, or covenant. 
  
 14.17 Survival. All of the
representations, warranties, covenants and agreements made by the Parties in this Agreement or pursuant hereto in any certificate, instrument or document shall survive the consummation of the transactions described herein shall survive for all
applicable statute of limitations, and may be fully and completely relied upon by Sellers and Purchasers, as the case may be, notwithstanding any investigation heretofore or hereafter made by any of them or on behalf of any of them, and shall not be
deemed merged into any instruments or agreements delivered at Closing or thereafter. 
  
 14.18 Incorporation of Exhibits and Schedules. The exhibits and schedules (including the Disclosure Schedule) identified in this Agreement and the recitals first set forth above are incorporated herein by
reference and made a part hereof. 
  
 14.19 Submission to
Jurisdiction. Each party to this Agreement hereby submits to exclusive jurisdiction of any state or federal court within Orange County, Florida for purposes of all legal proceedings arising out of or relating to this Agreement or the
transactions contemplated hereby. Each party to this Agreement hereby irrevocably waives, to the fullest extent permitted by law, any objections which it may now or hereafter have to the laying of the venue of any such proceeding brought in such a
court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum. 
  
 15. DEFINITIONS. All capitalized words that are not capitalized for purposes of grammar and which are not defined in the text of this Agreement are defined
terms with their definitions set forth on Exhibit 1. 
  
 [THE
REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK] 
  

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

	“SELLER”	 	 	 	“BUYER”
			
	 Christopher E. Cenac, M.D.
	 	 	 	 PainCare Holdings, Inc.

					
	By:	 	 /s/ Christopher E. Cenac

	 	 	 	By:	 	 /s/ Randy Lubinsky

					
	 Attest:
	 	  

	 	 	 	 Attest:

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