Document:

Asset Purchase Agreement

 Exhibit 10.7 
  
 ASSET PURCHASE AGREEMENT 
  
 THIS ASSET PURCHASE AGREEMENT dated as of April 2, 2004 (the “Agreement”) is entered into by and between HEALTHESSENTIALS SOLUTIONS,
INC., a Delaware corporation (“Purchaser”), and CAREBRIDGE, INC. (“Seller”), a Georgia corporation. Purchaser and Seller are sometimes individually referred to in this Agreement as a “Party” and
collectively as the “Parties.” 
  
 RECITALS:

  
 WHEREAS, Seller’s business consists of
employing nurse practitioners to provide health care services to patients in long-term care facilities, skilled nursing facilities and assisted living facilities (the “Business”); 
  
 WHEREAS, Seller desires to sell, transfer, convey, assign and deliver
the Purchased Assets (as defined below) and to assign the Assumed Liabilities (as defined below), and Purchaser desires to purchase, take delivery of, and assume such Purchased Assets and Assumed Liabilities, upon the terms and subject to the
conditions set forth herein; 
  
 WHEREAS, Seller has filed
and commenced a Chapter 11 bankruptcy case (the “Bankruptcy Case”) that is pending in the United States Bankruptcy Court for the Northern District of Georgia, Atlanta Division (the “Bankruptcy Court”); and

  
 WHEREAS, the transactions contemplated by this
Agreement (the “Transactions”) will be consummated pursuant to an Approval Order (as defined below) entered in the Bankruptcy Case under Sections 105, 363, 365 and other applicable provisions of the Bankruptcy Code (as defined
below), and the Transactions and this Agreement are subject to the approval of the Bankruptcy Court. 
  
 NOW, THEREFORE, in consideration of the foregoing and the mutual agreements, covenants, representations, warranties, and promises set forth
herein, and in order to prescribe the terms and conditions of such purchase and sale, intending to be legally bound, the Parties agree as follows: 
  
 1. Definitions. 
  
 1.1. Definitions. The following terms, as used herein, have the following meanings: 
  
 (a) “Affiliate” means, with respect to any
Person, any other Person directly or indirectly controlling, controlled by, or under common control with, such other Person. 
  
 (b) “Bankruptcy Code” means Title 11 of the United States Code (11 U.S.C. § 101 et seq.), as amended. 
  

 (c) “Business Day” means a day other than Saturday, Sunday or other day
on which commercial banks in Atlanta, Georgia are authorized or required by law to close. 
  
 (d) “Claim” means a “claim” as defined in Section 101 of the Bankruptcy Code. 
  
 (e) “Closing Date” means the date of the
Closing. 
  
 (f) “Code” means
the Internal Revenue Code of 1986, as amended. 
  
 (g) “Confidentiality Agreement” means the Confidentiality Agreement dated July 9, 2003, between Centennial HealthCare Corporation and Purchaser. 
  
 (h) “Cure Costs” means all amounts that must be paid and all obligations that otherwise
must be satisfied, including pursuant to Sections 365(b)(1) (A) and (B) of the Bankruptcy Code, in connection with the assumption and/or assignment of the Assumed Contracts and Chapter 11 Licenses to Purchaser as provided herein; provided
however, that all amounts that must be paid and all obligations that otherwise must be satisfied pursuant to any Assumed Contract between Seller and a debtor-Affiliate shall not be considered a Cure Cost. 
  
 (i) “Intellectual Property Right” means any
trademark, service mark, trade name, mask work, invention, patent, trade secret, copyright, know-how (including any registrations or applications for registration of any of the foregoing) or any other similar type of proprietary intellectual
property right. 
  
 (j) “Knowledge of
Seller,” “Seller’s knowledge” or any other similar knowledge qualification in this Agreement means all facts actually known by the following individuals: David R. Wilson, Brian Grazzini, Mark Hunt, Caroline Folger and
Michael Skaggs. 
  
 (k) “Lien”
means, with respect to any property or asset, any mortgage, lien, pledge, charge, security interest or other encumbrance in respect of such property or asset. 
  

(l) “Material Adverse Effect” means a material adverse effect on the Business and the Purchased Assets, taken as a
whole, excluding any such effect to the extent resulting from or arising in connection with (i) the Transactions or the public announcement or disclosure thereof, (ii) changes or conditions affecting the industries generally in which Seller
operates, (iii) changes in economic, regulatory or political conditions generally, (iv) changes resulting from the commencement or continuation of the Bankruptcy Case, or (v) actions taken by Seller pursuant to (or as contemplated by) orders entered
by the Bankruptcy Court in the Bankruptcy Case. 
  

 (m) “Petition Date” means December 20, 2002. 
  
 (n) “Person” means an individual,
corporation, partnership, limited liability company, association, trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof. 
  
 (o) “Pre-Closing Tax Period” means (i) any
Tax period ending on or before the Closing Date and (ii) with respect to a Tax period that commences before but ends after the Closing Date, the portion of such period up to and including the Closing Date. 
  
 (p) “Property Taxes” means all real
property Taxes, personal property Taxes and similar ad valorem obligations levied with respect to the Purchased Assets for any Taxable period. 
  
 (q) “Tax” means (i) any tax, governmental fee or other like assessment or charge of any kind whatsoever (including
withholding on amounts paid to or by any Person), together with any interest, penalty, addition to tax or additional amount imposed by any governmental authority (a “Taxing Authority”) responsible for the imposition of any such tax
(domestic or foreign), or (ii) liability for the payment of any amounts of the type described in (i) as a result of being party to any agreement or any express or implied obligation to indemnify any other Person. 
  
 1.2. Cross References. Each of the following terms is
defined in the Section set forth opposite such term: 
  

			
	 Term

	  	Section

	 Agreement
	  	Preamble
	 Apportioned Obligations
	  	8.3
	 Approval Order
	  	7.5(b)
	 Articles of Incorporation
	  	3.4
	 Assumed Contracts
	  	2.1(c)
	 Assumed Liabilities
	  	2.3
	 Bankruptcy Case
	  	Recitals
	 Bankruptcy Court
	  	Recitals
	 Bylaws
	  	3.4
	 Business
	  	Recitals
	 Chapter 11 Contracts
	  	2.1(c)
	 Chapter 11 Licenses
	  	2.1(d)
	 Closing
	  	2.8
	 End Date
	  	12.1(b)
	 Excluded Assets
	  	2.2
	 Excluded Liabilities
	  	2.4
	 Good Faith Deposit
	  	2.7 (a)
	 Leased Real Property
	  	3.9(a)

  

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	 Term

	  	Section

	 Permitted Liens
	  	3.10 (c) (i)
	 Post-Closing Tax Period
	  	8.3
	 Post-Petition Contracts
	  	2.1(b)
	 Purchased Assets
	  	2.1
	 Purchase Price
	  	2.6(a)
	 Seller
	  	Preamble
	 Transactions
	  	Recitals
	 Transfer Taxes
	  	8.2
	 Transferred Employees
	  	9.4
	 Transferred Employees’ Employment Date
	  	9.4
	 WARN Act
	  	7.4(a)

  
 2. Purchase and
Sale. 
  
 2.1. Purchase and Sale.
Subject to the terms and conditions set forth in this Agreement, at the Closing, Seller agrees to sell, transfer and deliver to Purchaser, and Purchaser agrees to purchase, acquire and accept from Seller, on an “as is, where is” basis and
without any representation or warranty on the part of Seller as to fitness, merchantability or otherwise, all right, title and interest of Seller in and to the following assets, properties and rights (the “Purchased Assets”), to the
extent owned, held or primarily used in the conduct of the Business, free and clear of all Liens and Claims (other than Permitted Liens and the Assumed Liabilities) to the maximum extent permitted by Section 363 of the Bankruptcy Code: 

 
 (a) all inventory and supplies; 
  
 (b) all contracts, agreements, leases, licenses,
commitments, and orders of Seller, in each case executed or entered into after the Petition Date (collectively, the “Post-Petition Contracts”); 
  
 (c) certain executory contracts and unexpired leases of Seller that were executed or entered into on or
prior to the Petition Date (the “Chapter 11 Contracts;” the Post-Petition Contracts and the Chapter 11 Contracts are referred to collectively as the “Assumed Contracts” and are set forth on Schedule 2.1(c));

  
 (d) all transferable licenses, permits or
other governmental authorizations of Seller (“Chapter 11 Licenses”); 
  
 (e) all transferable Medicare and Medicaid provider agreements and related provider numbers, including the items set forth on Schedule
2.1(e); 
  
 (f) all transferable Intellectual
Property Rights, including the items listed on Schedule 2.1(f); 
  

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 (g) all books and records of Seller (provided that Seller shall be entitled to retain
copies of such books, records, files and papers); and 
  
 (h) all equipment and other items of personal property, including the items listed on Schedule 2.1(h). 
  
 2.2. Excluded Assets. Notwithstanding any other provision of this Agreement to the contrary, the Purchased Assets shall not include
any assets, properties or rights not specifically identified in Section 2.1, including the following (the “Excluded Assets”): 
  
 (a) all of Seller’s cash and cash equivalents on hand (including all undeposited checks) and in banks or other financial
institutions; 
  
 (b) all avoidance claims and
other causes of action, whether arising under the Bankruptcy Code or otherwise and the proceeds thereof, including actions available to Seller under Section 510 or under any of Sections 542 through 553 of the Bankruptcy Code, of whatever kind or
nature, and whether asserted or unasserted; 
  
 (c) the corporate minute books of Seller; 
  
 (d) any unexpired lease or executory contract not identified in this Agreement as an Assumed Contract; 
  
 (e) all insurance policies relating to the Business and all claims arising under such policies prior to the Closing, and all credits,
premium refunds, proceeds, causes of action or rights thereunder; 
  
 (f) all rights of Seller arising under this Agreement or in connection with the Transactions; 
  
 (g) any Purchased Asset sold or otherwise disposed of pursuant to Section 5.1(b) prior to the Closing Date; 
  
 (h) any Tax refund or reimbursement due to Seller or its
Affiliates and relating to the Business; 
  
 (i)
Seller’s accounts receivable; and 
  
 (j)
all accounts, notes and other receivables and amounts owed to the Seller by any of Seller’s Affiliates. 
  
 2.3. Assumed Liabilities. Upon the terms and subject to the conditions of this Agreement, Purchaser agrees, effective at the time
of the Closing, to assume, pay, perform and discharge, promptly when payment or performance is due or required, the following liabilities and obligations of Seller or the Business (the “Assumed Liabilities”): 
  

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 (a) all liabilities and obligations of Seller related to or arising under Assumed
Contracts and Chapter 11 Licenses from and after the Closing; 
  
 (b) all Cure Costs; 
  
 (c) any and all costs and expenses necessary in connection with providing “adequate assurance of future performance” with respect to the Assumed Contracts (as contemplated by Section 365 of the Bankruptcy Code); and 
  
 (d) all post-Closing liabilities relating to or arising from
the Business or the Purchased Assets. 
  
 2.4.
Excluded Liabilities. Notwithstanding any other provision of this Agreement to the contrary, Purchaser is assuming only the Assumed Liabilities and is not assuming any other liability or obligation of Seller of whatever nature, whether
presently in existence or arising hereafter. All such other liabilities and obligations shall be retained by and remain obligations and liabilities of Seller (all such liabilities and obligations not being assumed being herein referred to as the
“Excluded Liabilities”). 
  
 2.5. Assignment of Contracts and Rights. To the maximum extent permitted by the Bankruptcy Code, the Chapter 11 Contracts shall be assumed by Seller and assigned to Purchaser at the Closing pursuant to Section 365 of the Bankruptcy
Code. Notwithstanding any other provision of this Agreement to the contrary, this Agreement shall not constitute an agreement to assign any Purchased Asset or any right thereunder if an attempted assignment, without the consent of a third party,
would constitute a breach or in any way adversely affect the rights of Purchaser or Seller thereunder. If such consent is not obtained or such assignment is not attainable pursuant to Sections 105, 363 and/or 365 of the Bankruptcy Code, Seller and
Purchaser will cooperate in a mutually agreeable arrangement under which Purchaser would obtain the benefits and assume the obligations thereunder in accordance with this Agreement. 
  
 2.6. Purchase Price; Allocation of Purchase Price. 
  
 (a) In addition to the assumption of the Assumed
Liabilities, in consideration for the sale, transfer and delivery of the Purchased Assets, at the Closing, Purchaser shall deliver to Seller Two Hundred Forty-Five Thousand Dollars ($245,000.00) (the “Purchase Price”) which shall be
paid in the following amounts and at the following times: (i) Twenty-Five Thousand Dollars ($25,000.00) in cash at the execution of this Agreement (being the Good Faith Deposit described in paragraph 2.7), (ii) Twenty-Five Thousand Dollars
($25,000.00) in cash at the Closing, and (iii) the balance of One Hundred Ninety-Five Thousand Dollars ($195,000.00) by delivery to Seller of a promissory note, in the form attached hereto as Exhibit A (the “Note”), providing
for (x) a payment of Thirty Thousand Dollars ($30,000.00) in cash within sixty days of the Closing and (y) twenty-four (24) monthly payments of Seven Thousand Two Hundred Thirty-Eight Dollars and Seventy-Eight Cents ($7,238.78), plus accrued
interest beginning ninety days after the Closing. 
  

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 (b) Purchaser and Seller agree that the Purchase Price, applicable Assumed Liabilities
and other relevant items shall be allocated in accordance with Section 1060 of the Code and the regulations thereunder and Schedule 2.6 hereof (such schedule to be determined jointly by Purchaser and Seller prior to Closing). Purchaser and
Seller each agrees to provide the other promptly with any other information required to complete Schedule 2.6. Such allocation shall be binding on Purchaser and Seller for all purposes including the reporting of gain or loss and determination of
basis for income tax purposes, and each of the parties hereto agrees that it or they will file a statement (on IRS Form 8594 or other applicable form) setting forth such allocation with its or their federal and applicable state income tax returns
and will also file such further information or take such further actions as may be necessary to comply with the Treasury Regulations that have been promulgated pursuant to Section 1060 of the Code and similar applicable state laws and regulations.

  
 2.7. Good Faith Deposit. 

 
 (a) Upon execution of this Agreement, Purchaser shall
deposit with Seller’s counsel cash in immediately available federal funds by wire transfer to an account designated by Seller’s counsel, an amount equal to Twenty-Five Thousand Dollars ($25,000.00) (the “Good Faith
Deposit”), to be applied as provided in Section 2.7(b). 
  
 (b) The Good Faith Deposit may be retained by Seller (i) at the Closing as a credit against the Purchase Price, (ii) if this Agreement is terminated pursuant to Section 12.1(e), or (iii) if this Agreement is
terminated pursuant to Section 12.1(b) and any of the conditions of Section 10.3 have not been satisfied. Except as described in the previous sentence, the Good Faith Deposit shall be returned to Purchaser five Business Days after the entry of an
Order of the Bankruptcy Court approving the sale of the Purchased Assets to a third party (other than Purchaser), subject to any right of setoff for any claim of breach or payment due for breach by Purchaser of this Agreement. 
  
 2.8. Closing. The closing (the
“Closing”) of the purchase and sale of the Purchased Assets and the assumption of the Assumed Liabilities shall take place at the offices of King & Spalding LLP, 191 Peachtree Street, Atlanta, Georgia, at the earliest
practicable date, provided that the Parties shall use commercially reasonable efforts to consummate the Transactions no later than one (1) Business Day after satisfaction of the conditions set forth in Section 10 (other than those requiring a
delivery, or the taking of other action, at the Closing), or at such other time or place as Purchaser and Seller may agree. 
  

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 2.9. Deliveries by Seller. At the Closing, Seller will deliver or cause to be
delivered to Purchaser (unless delivered previously) the following: 
  
 (a) a Bill of Sale, Assignment and Assumption Agreement substantially in the form attached hereto as Exhibit B (the “Assignment and Assumption Agreement”), duly executed by Seller; and

  
 (b) all other documents, instruments and
writings reasonably required by Purchaser to be delivered by Seller at or prior to the Closing pursuant to this Agreement. 
  
 2.10. Deliveries by Purchaser. At the Closing, Purchaser will deliver or cause to be delivered to Seller (unless previously
delivered) the following: 
  
 (a) Twenty-Five
Thousand Dollars ($25,000.00) in cash; 
  
 (b)
the Note, duly executed by Purchaser; 
  
 (c) the
Assignment and Assumption Agreement, duly executed by Purchaser; and 
  
 (d) all other documents, instruments and writings reasonably required by Seller to be delivered by Purchaser at or prior to the Closing pursuant to this Agreement. 
  
 3. Representations and Warranties of Seller. Subject to the terms,
conditions and limitations set forth in this Agreement, Seller hereby represents and warrants to Purchaser as of the date hereof as follows: 
  
 3.1. Organization. Seller is a corporation validly existing under the laws of the State of Georgia, and has the corporate power and
authority to own, lease and operate the Purchased Assets, and to carry on in all material respects the Business as now being conducted. 
  
 3.2. Corporate Authorization. The execution, delivery and performance by Seller of this Agreement and the consummation of the
Transactions are within Seller’s corporate powers and have been duly authorized by all necessary action on the part of Seller. Subject to entry by the Bankruptcy Court of the Approval Order in the Bankruptcy Case, this Agreement constitutes a
valid and binding agreement of Seller that is enforceable in accordance with its terms. 
  
 3.3. Governmental Authorization. Except as disclosed in Schedule 3.3, the execution, delivery and performance by Seller of
this Agreement and the consummation of the transactions contemplated hereby by Seller require no action by or in respect of, or filing with, any governmental body, agency or official other than (i) consents, approvals or authorizations of, or
declarations or filings with, the Bankruptcy Court and (ii) any such action or filing as to which the failure to make or obtain would not have a Material Adverse Effect. 
  

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 3.4. Noncontravention. The execution, delivery and performance by Seller of this
Agreement and the consummation of the transactions contemplated hereby do not and will not (i) violate Seller’s articles or certificate of incorporation, as amended (the “Articles of Incorporation”), or bylaws (the
“Bylaws”), (ii) assuming compliance with the matters referred to in Section 3.3, materially violate any applicable law, rule, regulation, judgment, injunction, order or decree, (iii) except as to matters which would not reasonably
be expected to have a Material Adverse Effect, constitute a default under or give rise to any right of termination, cancellation or acceleration of any right or obligation or to a loss of any benefit relating to any Purchased Asset to which Seller
is entitled under any provision of any agreement or other instrument binding upon Seller except for breaches and defaults referred to in Section 365(b)(2) of the Bankruptcy Code, or (iv) result in the creation or imposition of any Lien on any
Purchased Asset, except for Liens of the type referenced in Section 3.10(c)(ii) of this Agreement. 
  
 3.5. Required Consents. Except for consents, approvals or authorizations of, or declarations or filings with, the Bankruptcy Court,
and except as otherwise set forth on Schedule 3.5, there is no agreement or other instrument binding upon Seller requiring a consent or other action by any Person as a result of the execution, delivery and performance of this Agreement,
except such consents or actions as would not, individually or in the aggregate, have a Material Adverse Effect if not received or taken by the Closing Date. 
  
 3.6. Contracts. Except as a result of the filing and pendency of the Bankruptcy Case or as set forth on Schedule 3.6 hereto,
there are currently no material events of default by Seller and, to Seller’s Knowledge, no material default by any other party under any Assumed Contract. Subject to the delivery to Purchaser at Closing of the consents set forth on Schedule
3.5 hereto, upon entry of the Approval Order, Seller shall have the right to assign, transfer and convey to Purchaser the Assumed Contracts. 
  
 3.7. Litigation. Except as disclosed in Schedule 3.7, as of the date hereof, there is no action, suit, investigation or
proceeding pending against, or to the Knowledge of Seller, threatened against or affecting, the Purchased Assets before any court or arbitrator or any governmental body, agency or official which is reasonably likely to have a Material Adverse Effect
or which in any manner challenges or seeks to prevent, enjoin, alter or materially delay the Transactions. 
  
 3.8. Compliance with Laws and Court Orders. To the Knowledge of Seller, Seller is not in violation of any law, rule, regulation,
judgment, injunction, order or decree applicable to the Purchased Assets or the conduct of the Business, except for violations which would not reasonably be expected to have a Material Adverse Effect. 
  
 3.9. Properties. 
  
 (a) Schedule 3.9 includes a description of all
material real property used or held for use primarily in the Business which Seller leases or subleases (the “Leased Real Property”). 
  

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 (b) To Seller’s knowledge, except as set forth on Schedule 3.9, Seller has
valid leasehold interests in the Leased Real Property, except for properties where the failure to have such valid leasehold interests would not have a Material Adverse Effect. 
  
 3.10. Sufficiency of and Title to the Purchased Assets. 
  
 (a) The Purchased Assets constitute all of the material
property and assets owned, held or primarily used in the conduct of the Business (other than the Excluded Assets). 
  
 (b) Upon consummation of the Transactions, Purchaser will have acquired good and marketable title in and to, or a valid leasehold interest
in, each of the Purchased Assets, free and clear of all Liens and Claims to the maximum extent permitted by the Bankruptcy Code, other than Assumed Liabilities and Permitted Liens. 
  
 (c) No Purchased Asset is subject to any Lien, except: 
  
 (i) Liens for Taxes, assessments and similar charges that
are not yet due or are being contested in good faith (the “Permitted Liens”); and 
  
 (ii) Liens which will attach to the proceeds of sale under this Agreement pursuant to Section 363 of the Bankruptcy Code or will not
survive the Closing. 
  
 3.11. Certain
Fees. Except for the fees and expenses of Conway, Del Genio, Gries & Co., LLC, Seller has not incurred any liability for any investment banking fees, financial advisory fees, brokerage fees, finders’ fees, or other similar fees in
connection with this Agreement or the Transactions. 
  
 3.12. Exclusivity of Representations and Warranties. NOTWITHSTANDING ANY OTHERWISE EXPRESS REPRESENTATIONS AND WARRANTIES MADE BY SELLER IN THIS AGREEMENT, SELLER MAKES NO REPRESENTATION OR WARRANTY TO PURCHASER WITH RESPECT TO: (A)
ANY PROJECTIONS, ESTIMATES OR BUDGETS HERETOFORE DELIVERED TO OR MADE AVAILABLE TO PURCHASER OR FUTURE REVENUES, EXPENSES OR EXPENDITURES OR FUTURE RESULTS OF OPERATIONS; OR (B) EXCEPT AS EXPRESSLY COVERED BY A REPRESENTATION AND WARRANTY CONTAINED
IN THIS ARTICLE III, ANY OTHER INFORMATION OR DOCUMENTS (FINANCIAL OR OTHERWISE) MADE AVAILABLE TO PURCHASER OR ITS COUNSEL, ACCOUNTANTS OR ADVISERS WITH RESPECT TO SELLER, THE BUSINESS, THE PURCHASED ASSETS OR THE ASSUMED LIABILITIES. EXCEPT FOR
THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS ARTICLE III, NEITHER SELLER NOR THEIR AFFILIATES MAKE ANY REPRESENTATIONS OR WARRANTIES IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. NOTWITHSTANDING ANYTHING TO THE CONTRARY
HEREIN, NO REPRESENTATION OR WARRANTY 

  

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CONTAINED IN THIS ARTICLE III IS INTENDED TO, OR DOES, COVER OR OTHERWISE PERTAIN TO ANY ASSETS THAT ARE NOT INCLUDED IN THE PURCHASED ASSETS OR ANY
LIABILITIES THAT ARE NOT INCLUDED IN THE ASSUMED LIABILITIES. 
  
 4. Representations and Warranties of Purchaser. Purchaser represents and warrants to Seller as follows: 
  
 4.1. Organization. Purchaser is a corporation duly incorporated, validly existing and in good standing under the laws of Delaware
and has all corporate powers and all material governmental licenses, authorizations, permits, consents and approvals required to carry on its business as now conducted. 
  
 4.2. Corporate Authorization. The execution, delivery and performance by Purchaser of this Agreement
and the consummation of the transactions contemplated hereby are within the corporate powers of Purchaser and have been duly authorized by all necessary corporate action on the part of Purchaser. This Agreement constitutes a valid and binding
agreement of Purchaser that is enforceable in accordance with its terms. 
  
 4.3. Governmental Authorization. The execution, delivery and performance by Purchaser of this Agreement and the consummation of the Transactions by Purchaser require no action by or in respect of, or filing
with, any governmental body, agency or official other than (i) consents, approvals or authorizations of, or declarations or filings with, the Bankruptcy Court and (ii) any such action or filing as to which the failure to make or obtain would not
have a material adverse effect on the Purchaser or its ability to close the Transactions. 
  
 4.4. Noncontravention. Neither the execution and delivery of this Agreement nor the consummation of the Transactions will (a)
conflict with or result in any breach of any provision of the articles or certificate of incorporation or bylaws of Purchaser; (b) require any filing with, or the obtaining of any permit, authorization, consent or approval of, any governmental
entity; (c) violate, conflict with or result in a default (or any event which, with notice or lapse of time or both, would constitute a default) under, or give rise to any right of termination, cancellation or acceleration under, any of the terms,
conditions or provisions of any note, mortgage, other evidence of indebtedness, guarantee, license, agreement, lease or other contract, instrument or obligation to which Purchaser is a party or by which Purchaser or any of its assets may be bound;
or (d) violate any law, order, injunction or decree applicable to Purchaser, excluding from the foregoing clauses (b), (c) and (d) such requirements, violations, conflicts, defaults or rights (i) which would not adversely affect the ability of
Purchaser to consummate the Transactions, or (ii) which become applicable as a result of any acts or omissions by, or the status of or any facts pertaining to, Seller. 
  
 4.5. Financing. Purchaser has sufficient cash, available lines of credit or other sources of
immediately available funds to enable it to make payment of the Purchase Price and any other amounts to be paid by it hereunder. 
  

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 4.6. Litigation. There is no action, suit, investigation or proceeding pending
against or, to the knowledge of Purchaser, threatened against or affecting Purchaser before any court or arbitrator or any governmental body, agency or official which in any manner challenges or seeks to prevent, enjoin, alter or materially delay
the Transactions. 
  
 4.7. Certain Fees.
Purchaser has not employed any broker, finder, investment banker, or other intermediary or incurred any liability for any investment banking fees, financial advisory fees, brokerage fees, finders’ fees, or other similar fees in connection with
this Agreement or the Transactions. 
  
 4.8.
Inspections; No Other Representations. Purchaser is an informed and sophisticated purchaser, and has engaged expert advisers, experienced in the evaluation and purchase of properties and assets such as the Purchased Assets and assumption of
liabilities such as the Assumed Liabilities as contemplated hereunder. Purchaser has undertaken such investigation and has been provided with and has evaluated such documents and information as it has deemed necessary to enable it to make an
informed and intelligent decision with respect to the execution, delivery and performance of this Agreement. Purchaser acknowledges that Seller has given Purchaser complete and open access to the key employees, documents and facilities of the
Business. Purchaser acknowledges and agrees that the Purchased Assets are being sold on an “as is, where is” basis and Purchaser agrees to accept the Purchased Assets and the Assumed Liabilities in the condition they are in on the Closing
Date based on its own inspection, examination and determination with respect to all matters and without reliance upon any express or implied representations or warranties of any nature made by or on behalf of or imputed to Seller, except as
expressly set forth in this Agreement. Without limiting the generality of the foregoing, Purchaser acknowledges that Seller makes no representation or warranty with respect to (i) any projections, estimates or budgets delivered to or made available
to Purchaser of future revenues, future results of operations (or any component thereof), future cash flows or future financial condition (or any component thereof) of the Business or the future prospects or operations of the Business or (ii) any
other information or documents made available to Purchaser or its counsel, accountants or advisors with respect to the Business, except as expressly set forth in this Agreement. 
  
 5. Covenants of Seller. Seller agrees that: 
  
 5.1. Conduct of the Business. Except as may be required by the Bankruptcy Court, except for the
consequences resulting from the commencement and continuation of the Bankruptcy Case, and except as may be required or contemplated by this Agreement, from the date hereof until the Closing Date, Seller shall use its reasonable efforts to conduct
the Business in the ordinary course consistent with past practice and to preserve intact the business organizations and relationships with third parties and to keep available the services of the present employees of the Seller. Without limiting the
generality of the foregoing, from the date hereof until the Closing Date, except (i) as disclosed on Schedule 5.1, (ii) as may be required by the Bankruptcy Court, (iii) for the consequences resulting from the commencement and continuation

  

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of the Bankruptcy Case, or (iv) as may be required or contemplated by this Agreement, Seller will not: 
  
 (a) with respect to the Business acquire a material amount
of assets from any other Person; 
  
 (b) sell,
lease, license or otherwise dispose of any Purchased Assets or any other material assets of Seller except (i) pursuant to existing contracts or commitments, (ii) in the ordinary course consistent with past practice or (iii) pursuant to Section 363
of the Bankruptcy Code; 
  
 (c) agree or commit
to do any of the foregoing; or 
  
 (d) take any
action that would reasonably be expected to cause the failure of the conditions contained in Section 10.2(b) (other than actions taken by Seller in connection with the discharge of its fiduciary duties during the Bankruptcy Case). 
  
 5.2. Access to Information. From the date hereof
until the Closing Date, Seller shall reasonably afford, and shall cause its officers, employees, attorneys and other agents to reasonably afford, to Purchaser and its counsel, accountants and other representatives, access (at reasonable times during
normal business hours) to officers and other employees of the Business for the purposes of evaluating the Business and all properties, books, accounts, records and documents of, or relating to, the Business, subject to the terms of the
Confidentiality Agreement. 
  
 5.3. Notices of
Certain Events. Seller shall promptly notify Purchaser of: 
  
 (a) any notice or other communication from any Person alleging that the consent of such Person is or may be required in connection with the consummation of the Transactions; 
  
 (b) any material communication from any governmental or
regulatory agency or authority in connection with or relating to the Transactions; and 
  
 (c) the commencement of any actions, suits, investigations or proceedings relating to Seller or the Business that, if pending on the date
of this Agreement, would have been required to have been disclosed pursuant to Section 3.7. 
  
 6. Covenants of Purchaser. Purchaser agrees that: 
  
 6.1. Confidentiality. Prior to the Closing Date and after any termination of this Agreement, the Confidentiality Agreement shall
remain in full force and effect. After the Closing has occurred, the Confidentiality Agreement shall be terminated to the extent relating to the Purchased Assets, Assumed Liabilities and the employees of Seller, and shall, with respect to any of the
Excluded Assets and Excluded Liabilities, remain in full force and effect. 
  

 - 12 - 

 6.2. Access. On and after the Closing Date, upon reasonable written notice,
Purchaser will afford promptly to Seller and its agents reasonable access during normal business hours to its properties, books, records, employees, auditors and counsel to the extent necessary for financial reporting and accounting matters,
employee benefits matters, the preparation and filing of any Tax returns, reports or forms, the defense of any Tax audit, claim or assessment or the reconciliation of Claims in the Bankruptcy Case or to permit Seller to determine any matter relating
to its rights and obligations hereunder or any other reasonable business purpose related to the Excluded Assets or Excluded Liabilities; provided that any such access by Seller shall not unreasonably interfere with the conduct of the business
of Purchaser. Seller will hold, and will use its best efforts to cause its officers, directors, employees, accountants, counsel, consultants, advisors and agents to hold, in confidence, unless compelled to disclose by judicial or administrative
process or by other requirements of law, all confidential documents and information concerning Purchaser or the Business provided to them pursuant to this Section 6.2. 
  
 6.3. Insurance. To the extent that any insurance policies of Seller or any of its Affiliates cover
any loss, liability, claim, damage or expense relating to any Purchased Assets and such insurance policies continue after the Closing to permit claims to be made thereunder with respect to events occurring prior to the Closing, Purchaser shall
cooperate with Seller in submitting and pursuing such claims. 
  
 7. Covenants of Purchaser and Seller. Purchaser and Seller agree that: 
  
 7.1. Efforts; Further Assurances. Subject to the terms and conditions of this Agreement, Purchaser and Seller will use their
respective commercially reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary or desirable under applicable laws and regulations to consummate the transactions contemplated by this
Agreement; provided, however, Seller shall be entitled to take such actions as are required in connection with the discharge of its fiduciary duties during the Bankruptcy Case (including, without limitation, soliciting higher or better
offers for the Purchased Assets). Seller and Purchaser agree to execute and deliver such other documents, certificates, agreements and other writings and to take such other actions as may be necessary or desirable in order to vest in Purchaser good
title to the Purchased Assets or to evidence the assumption by Purchaser of the Assumed Liabilities. 
  
 7.2. Certain Filings. Seller and Purchaser shall cooperate with one another (i) in determining whether any action by or in respect
of, or filing with, any governmental body, agency, official or authority is required, or any actions, consents, approvals or waivers are required to be obtained from parties to any Assumed Contracts, in connection with the consummation of the
Transactions and (ii) in taking such actions or making any such filings, furnishing information required in connection therewith and seeking timely to obtain any such actions, consents, approvals or waivers. 
  
 7.3. Public Announcements. Purchaser shall not make
any public announcements or statements concerning the Transactions without the prior written consent of 

  

 - 13 - 

 
Seller. Purchaser acknowledges and agrees that Seller may provide copies of this Agreement to parties in interest in the Bankruptcy Case, and those parties
to whom Seller determines it is necessary to provide copies in connection with soliciting higher or better bids for the Purchased Assets or as otherwise necessary in connection with the Bankruptcy Case. Seller also shall be entitled to file copies
with the Bankruptcy Court or as otherwise required by law. 
  
 7.4. WARN Act. 
  
 (a) Purchaser shall assume all obligations and liabilities for the provision of notice or payment in lieu of notice or any applicable penalties under the Worker Adjustment and Retraining Notification Act (the “WARN Act”) or
any similar state or local law arising as a result of the Transactions. Purchaser hereby agrees to indemnify Seller and its Affiliates against and agrees to hold each of them harmless from any and all expenses, losses, Claims and damages incurred or
suffered by Seller or its Affiliates with respect to WARN Act or any similar state or local law arising as a result of the Transactions. 
  
 (b) Purchaser shall not, at any time prior to ninety (90) days after the Closing Date, effectuate a “plant closing” or
“mass layoff’ as those terms are defined in the WARN Act affecting the employees of Seller without complying fully with WARN Act. 
  
 7.5. Medical Records and Other Protected Health Information. The parties acknowledge that the Purchased Assets include medical
records and other protected health information (“PHI”) (as that term is defined at 45 C.F.R. § 164.501), including medical records and PHI contained in equipment transferred to Purchaser (including but not limited to computers).
Purchaser hereby acknowledges that, as of the Effective Date, Purchaser assumes all responsibility for maintaining the confidentiality and security of such medical records, PHI and equipment. Such responsibility shall be exercised in accordance with
the terms of this Agreement as well as applicable federal, state and local laws and regulations regarding the confidentiality of health information, including but not limited to the Health Insurance Portability and Accountability Act of 1996 and its
implementing regulations. Purchaser agrees to indemnify and hold harmless Seller from and against all claims, actions, judgments, damages, costs, and liability (including without limitation reasonable attorneys’ fees), arising from or caused by
any negligent or intentional acts or omissions or breach of any agreements, covenants, warranties as well as any breach of federal, state or local law or regulations regarding the confidentiality of health information by Purchaser, its employees,
officers, trustees, directors, successors and assigns, and agents. 
  
 7.6. Bankruptcy. 
  
 (a) Promptly following the execution of this Agreement by the Parties, Seller shall file with the Bankruptcy Court a motion seeking approval of this Agreement, with this Agreement appended as an Exhibit thereto.

  

 - 14 - 

 (b) Seller and Purchaser shall each use their commercially reasonable efforts, and shall
cooperate, assist and consult with each other, to secure the entry of an order (the “Approval Order”) (i) approving this Agreement, (ii) authorizing the sale of the Purchased Assets pursuant to Section 363 of the Bankruptcy Code,
(iii) authorizing the assumption and/or assignment of the Assumed Contracts pursuant to Section 365 of the Bankruptcy Code and (iv) authorizing the Transactions; provided, however, Seller shall be entitled to take such actions as may
be required in connection with the discharge of its fiduciary duties in the Bankruptcy Case (including, without limitation, soliciting higher or better offers for the Purchased Assets). In connection with the assumption and/or assignment of the
Assumed Contracts pursuant to Section 365 of the Bankruptcy Code, Purchaser shall take all actions required to provide “adequate assurance of future performance” by Purchaser under the Assumed Contracts after the Closing. Seller and
Purchaser shall consult with one another regarding pleadings that either of them intends to file, or positions either of them intend to take, with the Bankruptcy Court in connection with or that might reasonably affect, the Bankruptcy Court’s
entry of the Approval Order. 
  
 (c) If the
Approval Order or any other orders of the Bankruptcy Court relating to this Agreement or the Transactions shall be appealed by any Person (or if any petition for certiorari or motion for reconsideration, amendment, clarification, modification,
vacation, stay, rehearing or reargument shall be filed with respect to the Approval Order or other such order), Seller and Purchaser will cooperate in taking such steps diligently to defend such appeal, petition or motion; and Seller and Purchaser
shall use their commercially reasonable efforts to obtain an expedited, favorable resolution of any such appeal, petition or motion. 
  
 7.7. Notices. If at any time (i) Purchaser becomes aware of any material breach by Seller of any representation, warranty, covenant
or agreement contained herein and such breach is capable of being cured by Seller, or (ii) Seller becomes aware of any breach by Purchaser of any representation, warranty, covenant or agreement contained herein and such breach is capable of being
cured by Purchaser, the Party becoming aware of such breach shall promptly notify the other Party, in accordance with Section 13.1, in writing of such breach. Upon such notice of breach, the breaching Party shall have 5 days to cure such breach
prior to the exercise of any remedies in connection therewith. 
  
 8. Tax Matters 
  
 8.1. Tax
Cooperation. Purchaser and Seller agree to furnish or cause to be furnished to each other, upon request, as promptly as practicable, such information and assistance relating to the Business and the Purchased Assets (including access to books and
records) as is reasonably necessary for the preparation and filing of all Tax returns, the making of any election relating to Taxes, the preparation for any audit by any Taxing Authority, and the prosecution or defense of any claim, suit or
proceeding relating to any Tax. Seller and Purchaser shall cooperate with each other in the conduct of any audit or other proceeding relating to Taxes involving the Purchased Assets or the Business. 
  

 - 15 - 

 8.2. Allocation of Taxes. To the extent not exempt under Section 1146(c) of the
Bankruptcy Code in connection with the Bankruptcy Case, all excise, sales, use, value added, registration, stamp, recording, documentary, conveyancing, franchise, property, transfer, gains and similar Taxes, levies, charges and fees (collectively,
“Transfer Taxes”) incurred in connection with the Transactions shall be borne by Purchaser. Purchaser and Seller shall cooperate in providing each other with any appropriate resale exemption certifications and other similar
documentation. 
  
 8.3. Property Taxes.
All Property Taxes for a Tax period which includes (but does not end on) the Closing Date (collectively, the “Apportioned Obligations”) shall be apportioned between Seller, on the one hand, and Purchaser, on the other hand, based on
the number of days of such Tax period included in the Pre-Closing Tax Period and the number of days of such Tax period after the Closing Date (with respect to any such Tax period, the “Post-Closing Tax Period”). Seller shall be
liable for the proportionate amount of such Property Taxes that is attributable to the Pre-Closing Tax Period, and Purchaser shall be liable for the proportionate amount of such Property Taxes that is attributable to the Post-Closing Tax Period.

  
 8.4. Apportionment. Apportioned
Obligations or Transfer Taxes shall be timely paid, and all applicable filings, reports and returns shall be filed, as provided by applicable law. The paying Party shall be entitled to reimbursement from the non-paying Party in accordance with
Section 8.2 or 8.3, as the case may be. Upon payment of any such Apportioned Obligation or Transfer Tax, the paying Party shall present a statement to the non-paying Party setting forth the amount of reimbursement to which the paying Party is
entitled under Section 8.2 or 8.3, as the case may be, together with such supporting evidence as is reasonably necessary to calculate the amount to be reimbursed. The non-paying Party shall make such reimbursement promptly but in no event later than
10 days after the presentation of such statement. Any payment not made within such time shall bear interest at the rate per annum equal to the rate of interest announced by JP Morgan Chase N.A. from time to time as its base rate in New York City.

  
 9. Employee Matters. 
  
 9.1. Offers of Employment. At or prior to the Closing
Date, Purchaser shall offer employment (commencing as of the Closing Date) to all nurse practitioners employed by Seller at each employee’s current salary or wage and on such other terms and conditions as Purchaser employs similar
professionals. 
  
 9.2. Employee Plans.

  
 (a) The Parties recognize that the continued
employment of the nurse practitioners employed by Seller is significant to the business interests of both Purchaser and Seller. As such, the orderly transfer of employment relationships is important to the Parties and Purchaser will use its best
efforts to accomplish the transition with as little disruption to the Business as possible. 
  

 - 16 - 

 (b) If Purchaser fails to offer employment as required under Section 9.1, it shall be
liable for, and shall reimburse Seller for (and indemnify Seller from and against), any severance paid by Seller to such nurse practitioners and all other costs, liabilities, claims, damages and expenses incurred by Seller as a result of such
failure. If any nurse practitioner of Seller who accepts an offer of employment from Purchaser (pursuant to Section 9.1) is subsequently terminated by Purchaser within the sixty day (60) period after the Closing Date, then Purchaser shall make
severance payments to such nurse practitioner in an amount that is not less than the amount of severance that such nurse practitioner would have been entitled to receive from Seller (if such nurse practitioner had been terminated by Seller as of the
Closing Date). 
  
 (c) Purchaser shall maintain
employee records transferred to Purchaser hereunder for a period of not less than four (4) years and during that period will afford Seller reasonable access to such records during Purchaser’s normal business hours. Purchaser shall maintain the
confidentiality of such records and limit access thereto in a manner consistent with Purchaser’s treatment of its employee records. 
  
 (d) Purchaser agrees with respect to nurse practitioners presently employed by Seller and hired by Purchaser at or after the Closing: (i)
to the extent permissible under Purchaser’s benefit plans give such nurse practitioners credit under Purchaser’s benefit plans, programs, and arrangements, including credit for accrued vacation, for such nurse practitioners’ period of
service with Seller, provided that such credit shall only be taken into account under any tax-qualified plan maintained by Purchaser for purposes of determining such nurse practitioners’ eligibility for participation and eligibility to satisfy
any hours of service requirement in order to receive an allocation of an employer contribution; (ii) to the extent permissible under Purchaser’s plan provide coverage to such nurse practitioners who are eligible for health, medical, life
insurance and other welfare plans (A) without the need to undergo a physical examination or otherwise provide evidence of insurability; (B) by taking into account the period of coverage under Seller’s (or its Affiliates’) plans for
purposes of applying any pre-existing condition or similar limitations or exclusions; and (C) by applying and giving credit for amounts paid for the plan year in which the Closing Date occurs as deductibles, out of pocket expenses and similar
amounts paid by individuals and their beneficiaries. 
  
 9.3. Successor Employer. Purchaser shall use its best efforts to apply the successor employer provisions of Treasury Regulation Section 31.3121(a)(1)-1(b) with respect to each nurse practitioner hired by Purchaser for the year of the
Closing. 
  
 9.4. Workers’
Compensation. Seller shall be liable for all workers’ compensation claims arising out of injuries with an identifiable date of occurrence sustained by Seller’s employees prior to the Closing Date. Purchaser shall be liable for all
workers’ compensation claims arising out of injuries with an identifiable date of occurrence, sustained by Seller’s former employees (hereinafter “Transferred Employees”) on and after the dates 

  

 - 17 - 

 
Purchaser hires them (hereinafter, “Transferred Employees’ Employment Date”), including injuries sustained by a Transferred Employee on
or after the Transferred Employees’ Employment Date that are aggravations, exacerbations or re-injuries of medical conditions or diagnoses resulting from injuries that were sustained before the Transferred Employees’ Employment Date.
Seller shall be liable for all workers’ compensation claims arising out of injuries or occupational diseases without an identifiable date of occurrence or exposure, originating from within the Seller’s facilities and sustained or
contracted prior to the Closing Date, provided such claims are filed with the appropriate Workers’ Compensation authority within 45 days after the Transferred Employees’ Employment Date. Purchaser shall be liable for all
workers’ compensation claims arising out of injuries or occupational diseases without an identifiable date of occurrence or exposure, which are alleged to have been sustained or contracted either before or after the Transferred Employees’
Employment Date, provided such claims are filed with the appropriate workers’ compensation authority more than 45 days after the Transferred Employees’ Employment Date. 
  
 10. Closing Conditions. 
  
 10.1. Conditions to Obligations of Purchaser and Seller. The obligations of Purchaser and Seller to consummate the Closing are
subject to the satisfaction of the following conditions: 
  
 (a) The Bankruptcy Court shall have entered the Approval Order in the Bankruptcy Case, authorizing the Transactions and approving this Agreement and the ancillary agreements contemplated hereby under Sections 105(a),
363 and 365 of the Bankruptcy Code, in form and substance reasonably acceptable to Seller and Purchaser (including a finding that Purchaser is a “good faith” Purchaser within the meaning of Section 363(m) of the Bankruptcy Code and waiving
any stay that would otherwise be applicable pursuant to Bankruptcy Rules 6004(g) or 6006(d)), and as of the Closing Date the Approval Order shall be in full force and effect and shall not have been stayed, vacated or reversed. 
  
 (b) The Parties shall have executed and delivered this
Agreement and any ancillary agreements contemplated herein, in forms mutually acceptable to the Parties. 
  
 10.2. Conditions to Obligations of Purchaser. The obligation of Purchaser to consummate the Closing is subject to the satisfaction
(or waiver by Purchaser) of the following further conditions: 
  
 (a) Seller shall have performed in all material respects all of its obligations hereunder required to be performed by Seller on or prior to the Closing Date; and 
  
 (b) the representations and warranties of Seller contained
in this Agreement shall be true and correct at and as of the Closing Date, as if made at and as of 

  

 - 18 - 

 
such date (or to the extent such representations and warranties speak as of an earlier date, they shall be true and correct as of such earlier date), with
only such exceptions as would not in the aggregate reasonably be expected to have a Material Adverse Effect. 
  
 10.3. Conditions to Obligations of Seller. The obligation of Seller to consummate the Closing is subject to the satisfaction (or
waiver by Seller) of the following further conditions: 
  
 (a) (i) Purchaser shall have performed in all material respects all of its obligations hereunder required to be performed by it at or prior to the Closing Date, and (ii) the representations and warranties of Purchaser contained in this
Agreement shall be true and correct in all material respects at and as of the Closing Date, as if made at and as of such date (or to the extent such representations and warranties speak as of an earlier date, they shall be true and correct in all
material respects as of such earlier date). 
  
 (b) Seller shall have received all documents it may reasonably request relating to the existence of Purchaser and the authority of Purchaser for this Agreement, all in form and substance reasonably satisfactory to Seller. 
  
 11. Survival; Indemnification. 
  
 11.1. Survival. The (a) representations and
warranties of Seller, and (b) covenants and agreements of Seller that by their terms are to be performed before Closing, contained in this Agreement or in any certificate or other writing delivered in connection herewith, shall not survive the
Closing. The covenants and agreements of Seller contained herein that by their terms are to be performed after Closing shall survive the Closing for such terms. 
  
 11.2. Indemnification. Each of Purchaser and Seller agrees to indemnify the other with respect to any
investment banking fees, financial advisory fees, brokerage fees, finders’ fees, or other similar fees which are alleged to be due and payable with respect to the Transactions and which are asserted as a result of the actions of the
indemnifying party. There shall be no post-Closing indemnification of Purchaser by Seller with respect to any matter not set forth in this Section 11.2. 
  
 12. Termination. 
  
 12.1. Grounds for Termination. This Agreement may be terminated at any time prior to the Closing: 
  
 (a) by mutual written agreement of Seller and Purchaser;

  
 (b) by Seller or Purchaser, if the Closing
shall not have been consummated on or before the later of (i) May 1, 2004, or (ii) 5 days after any notice 

  

 - 19 - 

 
delivered pursuant to Section 7.7 (the later of clauses (i) and (ii), the “End Date”), unless the Party seeking termination is in breach of
its obligations hereunder; 
  
 (c) by Seller or
Purchaser, if any condition set forth in Section 10.1 is not satisfied, and such condition is incapable of being satisfied by the End Date; 
  
 (d) by Purchaser, if failure to perform any covenant or agreement on the part of Seller set forth in this Agreement shall have occurred
that would cause the conditions set forth in Section 10.2 not to be satisfied, and such condition is incapable of being satisfied by the End Date or shall not have been cured during the 5-day period referred to in Section 7.6; or 
  
 (e) by Seller, if failure to perform any covenant or
agreement on the part of the Purchaser set forth in this Agreement shall have occurred that would cause the conditions set forth in Section 10.3 not to be satisfied, and such condition is incapable of being satisfied by the End Date or shall not
have been cured during the 5-day period referred to in Section 7.6; or 
  
 (f) by Seller, if Seller executes a definitive agreement with a third party (other than Purchaser) for the acquisition of all or substantially all of the Purchased Assets. 
  
 The Party desiring to terminate this Agreement pursuant to this Section 12.1
(other than pursuant to Section 12.1(a)) shall give notice of such termination to the other Parties in accordance with Section 13.1. 
  
 12.2. Effect of Termination. If this Agreement is terminated as permitted by Section 12.1, such termination shall be without
liability of any Party (or any stockholder, director, officer, employee, agent, consultant or representative of such Party) to the other Parties to this Agreement except as provided in Sections 2.7; provided that if such termination shall
result from the willful (i) failure of any Party to fulfill a condition to the performance of the obligations of the other Party, (ii) failure of any Party to perform a covenant of this Agreement, or (iii) breach of representation or warranty by any
Party, such Party shall be fully liable for any and all losses, costs, damages and expenses incurred or suffered by the other Party as a result of such failure or breach. The provisions of Sections 2.7, 6.1, 11.2, 12.2, 12.3, 13.1, 13.4, 13.5, 13.6,
13.9 and 13.10 shall survive any termination hereof pursuant to Section 12.1. 
  
 12.3. Expenses. All costs and expenses incurred in connection with this Agreement shall be paid by the Party incurring such cost or expense. 
  
 12.4. Exclusive Remedies. Except as specifically set forth in this Agreement, effective as of
Closing, Purchaser waives irrevocably any rights and Claims Purchaser may have against Seller or its Affiliates, whether in law or in equity, relating to (i) any breach of representation, warranty, covenant or agreement contained herein and
occurring on or prior to the Closing, or (ii) the Purchased Assets, Assumed Liabilities or the Business. Purchaser and 

  

 - 20 - 

 
Seller acknowledge and agree that if this Agreement is terminated pursuant to Section 12.1, the provisions of Sections 12.2 shall be the sole and exclusive
remedies of the Purchaser for any termination pursuant to Section 12.1. 
  
 13. Miscellaneous. 
  
 13.1. Notices. All notices, requests and other communications to any party hereunder shall be in writing (including facsimile transmission) and shall be given, 
  
 if to Purchaser, to: 
  
 HealthEssentials Solutions, Inc. 
 9510 Ormsby
Station Road, Suite 101 
 Louisville, KY 40223 
 Attention: General Counsel 
 Fax: 502-429-4557 
  
 if to Seller, to: 
  
 Carebridge, Inc. 
 400 Perimeter Center
Terrace, Suite 650 
 Atlanta, Georgia 30346 
 Attention: President and CEO 
 Fax: 770-730-1420 
  
 with a copy to (which shall not constitute notice): 
  
 King & Spalding LLP 
 191 Peachtree Street 
 Atlanta, Georgia 30303

 Attention: Paul K. Ferdinands, Esq. 
 Fax: 404-572-5100 
  
 All such notices,
requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m. in the place of receipt and such day is a Business Day in the place of receipt. Otherwise, any such notice,
request or communication shall be deemed not to have been received until the next succeeding Business Day in the place of receipt. 
  
 13.2. Waivers. No failure or delay by any Party in exercising any right, power or privilege hereunder shall operate as a 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. 
  

 - 21 - 

 13.3. Successors and Assigns. The provisions of this Agreement shall be binding
upon and inure to the benefit of the Parties and their respective successors and assigns; provided that no Party may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the consent of each
other Party. 
  
 13.4. Governing Law. This
Agreement shall be governed by and construed in accordance with the internal laws of the State of Georgia and any applicable provisions of the Bankruptcy Code, without regard to the principles of conflicts of law that would provide for application
of another law. 
  
 13.5. Jurisdiction.

  
 (a) Prior to the closing of the Bankruptcy
Case, except as otherwise expressly provided in this Agreement, the Parties agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the
Transactions shall be brought exclusively in the Bankruptcy Court, and each of the Parties hereby irrevocably consents to the jurisdiction of the Bankruptcy Court (and of the appropriate appellate courts therefrom) in any such suit, action or
proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in the Bankruptcy Court or that any such suit, action or
proceeding which is brought in the Bankruptcy Court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any Party anywhere in the world, whether within or without the jurisdiction of the
Bankruptcy Court. Without limiting the foregoing, each Party agrees that service of process on such Party as provided in Section 13.1 shall be deemed effective service of process on such Party. 
  
 (b) Upon the closing of the Bankruptcy Case, except as
otherwise expressly provided in this Agreement, the Parties hereto agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the Transactions may be
brought in any court having subject matter jurisdiction over such suit, action or proceeding, and that any cause of action arising out of this Agreement shall be deemed to have arisen from a transaction of business in the State of Georgia, and each
of the Parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection
that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum. Process
in any such suit, action or proceeding may be served on any Party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each Party agrees that service of process on such Party as
provided in Section 13.1 shall be deemed effective service of process on such Party. 
  

 - 22 - 

 13.6. Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS. 
  
 13.7. Counterparts; Third Party Beneficiaries. This Agreement may be signed in any number of counterparts, each of which shall be
an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each Party hereto shall have received a counterpart hereof signed by the other party hereto. Except
for Section 9.2(b), no provision of this Agreement is intended to confer upon any Person other than the parties hereto any rights or remedies hereunder. 
  
 13.8. Entire Agreement; Amendments; Counterparts. This Agreement and the Confidentiality Agreement set forth the entire agreement
among the Parties with respect to the subject matter hereof and may be amended only by a writing executed by Purchaser and Seller. This Agreement may be executed in counterparts, each of which when taken together shall constitute an original.

  
 13.9. Captions, Headings,
Interpretation. The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof. The headings contained in this Agreement are for convenience of reference only and shall not
affect the meaning or interpretation of this Agreement. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without
limitation.” In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring any Party by
virtue of authorship of any provisions of this Agreement. 
  
 13.10. Disclosure Schedules. The Parties acknowledge and agree that (i) the Schedules to this Agreement may include certain items and information solely for informational purposes for the convenience of
Purchaser and (ii) the disclosure by Seller of any matter in the Schedules shall not be deemed to constitute an acknowledgment by Seller that the matter is required to be disclosed by the terms of this Agreement or that the matter is material. If
any Schedule discloses an item or information, the matter shall be deemed to have been disclosed in all other Schedules, notwithstanding the omission of an appropriate cross-reference to such other Schedules. 
  
 (The remainder of this page has been intentionally left blank.)

  

 - 23 - 

 IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly executed by their respective
authorized officers as of the day and year first above written. 
  

			
	 HEALTESSENTIALS SOLUTIONS, INC.

		
	 By:
	 	 /s/ John E. Clontz

		
	 Name:
	 	 John E. Clontz

		
	 Title:
	 	 General Counsel

	
	 CAREBRIDGE, INC.

		
	 By:
	 	 
		
	 Name:
	 	 
		
	 Title:
	 	 

  

 - 24 -Stock Purchase Agreement

 Exhibit 10.8 
  
 STOCK PURCHASE AGREEMENT 
  
 THIS STOCK PURCHASE AGREEMENT (this “Agreement”), dated as of July 1, 2004, is by and among Romeo Villarreal, RN (the
“Shareholder” and “Villarreal”) and HealthEssentials Solutions, Inc., a Delaware corporation (the “Purchaser” and/or “HE”). Capitalized terms used herein and not otherwise
defined herein have the meanings given to such terms in Article VIII below. 
  
 WHEREAS, Shareholder owns all of the shares (the “Shares”) of the common stock of IHG Healthcare, Inc. d/b/a Grace Hospice of Texas (“Agency”), being 1000 shares and having one dollar ($1.00) par value,
which Shares comprise all of the issued and outstanding shares of Agency’s capital stock; 
  
 WHEREAS, Villarreal desires to sell 499 Shares, being forty-nine (49%) percent of his ownership interest in Agency and HE desires to purchase 499 Shares, being forty-nine (49%) percent ownership interest in Agency,
subject to the terms, conditions and covenants contained herein; 
  
 WHEREAS, HE
desires to employ Villarreal and Villarreal desires to be employed by HE; and 
  
 NOW, THEREFORE, in consideration of the mutual covenants, agreements and understandings herein contained, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows: 
  
 ARTICLE I 
 The Stock Purchase; Closing 
  
 1.1. Purchase and Sale of the Shares. At the Closing, subject to the terms and conditions set forth herein, Villarreal shall sell, convey, assign, transfer, and deliver to the Purchaser and Purchaser shall purchase from Villarreal
499 Shares, being forty-nine (49%) percent of Villarreal’s Shares, free and clear of any liens, agreements, voting trusts, proxies or restrictions of any kind (“Encumbrances”). 
  
 1.2. Purchase Price of Shares. Subject to the terms and conditions of this Agreement,
at the Closing, Purchaser shall pay Seller One Hundred Forty Thousand ($140,000.00) Dollars for the Shares (the “Shares Purchase Price”), of which Twenty Thousand ($20,000.00) dollars has been paid, receipt of which Seller
acknowledges, and the balance of One Hundred Twenty Thousand ($120,000.00) Dollars (“HE Debt”) is payable in twelve equal monthly installments of Ten Thousand ($10,000.00) Dollars, commencing May 21, 2004 and continuing until paid
in full. 
  
 1.3. The Closing. The closing shall be contingent upon
satisfaction of the conditions to the Closing Conditions set forth in Article II below or waiver by the party entitled to the benefit thereof, upon execution and delivery of all ancillary documents, including but not limited to, all Agreements,
Exhibits and supporting documents related to Exhibits and Schedules (the “Ancillary Documents”) and upon satisfactory receipt by the parties of all required deliverables. 

 1.4. At the Closing, subject to the satisfaction or waiver of each of the applicable conditions specified in Article II
below: 
  
 (i) Villarreal shall cause the Agency to issue new stock certificates
to Villarreal representing fifty-one (51%) percent of the authorized and issued Shares, free and clear of all Encumbrances and to HE representing forty-nine (49%) percent of the authorized and issued Shares, duly endorsed in blank for transfer or
accompanied by stock powers duly executed in blank. 
  
 (ii) The closing
certificates, opinion of counsel and other documents and agreements required to be delivered pursuant to this Agreement with respect to the Closing shall be exchanged. 
  
 (iii) Villarreal shall deliver to Purchaser a duly executed Stock Transfer Agreement in the form attached as Exhibit D. 
  
 1.5. Villarreal’s Employment. HE will employ Villarreal to provide
administrative, management and business development services to the Agency’s patients. The agreement for services will have similar terms and conditions as are in HE’s agreements for Directors and Villarreal’s compensation will be
Seventy-Two Thousand ($72,000.00) Dollars, payable every two (2) weeks. 
  
 1.6.
Termination of Employment and Cancellation of HE Debt. In the event Villarreal terminates his employment, without cause, or the Agency terminates his employment, with cause, during the initial twelve (12) months of his employment, HE’s
obligation to pay the balance of the Purchase Price will immediately terminate, no additional amounts will be owed to Villarreal for the Shares and all outstanding amounts will immediately be discharged and uncollectible. HE will have the right to
terminate Villarreal’s employment “with cause” upon: (i) Villarreal’s breach of his Employment Agreement; (ii) an unappealable finding by the Nursing Board of Texas that Villarreal is guilty of unprofessional or unethical
conduct; (iii) Villarreal’s conviction in a court of competent jurisdiction of any felony offense or any misdemeanor offense involving moral turpitude; (iv) Villarreal’s death or a permanent disability caused by Villarreal’s
intentional conduct or gross negligence and prevents Villarreal’s continued provision of services as contemplated by this Agreement; or (v) Villarreal engaging in conduct amounting to fraud, dishonesty, disloyalty, gross negligence or gross
misconduct as determined by an independent party mutually selected by Villarreal and HE or, failing such selection, a party selected by a court having jurisdiction over the parties, with the unsuccessful party paying all costs incurred to obtain a
determination whether termination for cause is appropriate under this subsection. 
  
  

Purchaser and for twenty-four (24) months after his employment terminates, provided HE has not breached the terms of this Agreement or the interdepent Administrative
Service Agreement, Stockholders Agreement or Employment Agreement and HE has not breached the terms of, or terminated without cause, Villarreal’s employment agreement, he will not directly or indirectly, through, or in conjunction with any
other person or entity, provide medical, administrative, management, or marketing services that are competitive with or adverse to the Agency’s business or business affairs of HE, which shall be defined as the provision of hospice medical

 services to patients, medical services to patients in long-term care facilities, extended care facilities, assisted
living facilities or similar entities or in medical services in patients’ homes; contract with such health care facilities for the provision of such medical services; have any interest in an entity which provides such medical services; or
utilize HE’s health care delivery models in the city of Houston, Texas. 
  
 1.7. Expansion of Services and Right of First Refusal. In the event a stockholder (“Initiating Stockholder”) desires to provide hospice services in the San Antonio, Texas market or Fort Worth, Texas market
(“New Market”), the Initiating Stockholder will give the Agency thirty (30) days advance notice of its intention to provide hospice services in a New Market. The Agency shall have the right of first refusal to exclusively provide
hospice services in the New Market. The Agency will have twenty (20) days to notify the Initiating Stockkholder of its decision. If the Agency fails to timely respond or declines to provide services the Initiating Stockholder may provide hospice
services in a New Market. 
  
 The parties further agree that unanimous consent is
required before the Agency’s capital can be used to pay the development and start-up costs incurred in opening a New Market and that each will be responsible for making a capital contribution for its pro rata share of the development and
start-up costs for a New Market. 
  
 ARTICLE II 

Closing Conditions 
  
 2.1. Mutual Conditions. The obligations of Purchaser and Seller to consummate the transactions contemplated hereby are subject to the satisfaction as of the
Closing of the following conditions: 
  
 (a) Litigation. No suit, action or
other proceeding, or injunction, order, decree or judgment relating thereto, shall be threatened or pending in which it is sought to restrain or prohibit or to obtain damages or other relief in connection with the transactions contemplated hereby
and no injunction, judgment, order, decree or ruling with respect thereto shall be in effect. 
  
 (b) Employment Agreement. HE and Villarreal will have executed and delivered an employment agreement (“Employment Agreement”) in substantially the form attached hereto as Exhibit A.

  
 (c) Stock Transfer Agreement. HE and Villarreal will have executed and
delivered a Stock Transfer Agreement (“Transfer Agreement”) in substantially the form attached hereto as Exhibit D. 
  
 2.2. Conditions to Purchaser’s Obligations. The obligation of the Purchaser to consummate the transactions contemplated hereby is subject to the satisfaction
as of the Closing of the following conditions: 
  

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 (a) Representations and Warranties; Covenants. The representations and warranties contained in Articles III hereof
shall be true, complete and correct in all material respects at and as of the Closing as though then made and Seller shall have performed all of the covenants required to be performed by Seller hereunder. 
  
 (b) Opinions of the Seller’s Counsel. The Purchaser shall have received from
counsel for Seller an opinion with respect to the matters set forth in Exhibit B attached hereto, which shall be addressed to the Purchaser and dated as of the Closing Date. 
  
 (c) Resignation of Officers. Purchaser shall have received the resignation of each officer and effective as of the Closing Date or
such later date requested by Purchaser. 
  
 (d) Amendment of Articles of
Incorporation and Articles of Organization. The Agency’s Articles of Incorporation, to the extent applicable, shall have been amended and restated in a form reasonably satisfactory to Purchaser and shall be in full force and effect under
the laws of the State of Texas as of the Closing and shall not have been further amended or modified. 
  
 (e) Amendment of Bylaws. The Agency’s Bylaws, to the extent applicable, shall have been amended and restated in a form reasonably satisfactory to Purchaser and shall be in full force and effect as of the
Closing as so amended and restated and shall not have been further amended or modified. 
  
 (f) Consents and Approvals. The Agency shall have made all filings and shall have obtained all permits, authorizations, consents and approvals required to be obtained by the Agency to consummate the transactions contemplated by this
Agreement (the “Consents”) as set forth on Schedule 3.20. 
  
 (g) Material Adverse Effect. Since the date hereof, there shall have been no fact, event or circumstance which could have a Material Adverse Effect. 
  
 (h) Financials. The Purchaser shall have received Agency’s balance sheet as of April, 2004 and Agency’s statements of
income and cash flow for 2004 (all such financial statements, the “Financials”). 
  
 (i) Closing Documents. At the Closing, the Seller shall have delivered to the Purchaser copies of all of the following documents: 
  
 (i) all existing minute books, stock transfer records, corporate seals and other materials relating to the Agency’ respective corporate
administration which are in Seller’s possession; 
  
 (ii) a good standing
certificate for the Agency from the State of Texas dated within thirty (30) days prior to the Closing Date; 
  
 (iii) all applicable Consents; and 
  

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 (iv) other documents relating to the transactions contemplated by this Agreement as the Purchaser may reasonably request.

  
 2.3. Conditions to Seller’s Obligations. The obligation of the
Seller to consummate the transactions contemplated hereby is subject to the satisfaction as of the Closing of the following conditions: 
  
 (a) Employment Agreements. At the Closing, the Purchaser shall have delivered to the Seller executed Employment Agreements pursuant to Section 2.1(b). 

 
 (b) Representations and Warranties, Covenants. The representations and warranties
contained in Article IV hereof shall be true, complete and correct in all material respects at and as of the Closing and the Purchaser shall have performed all of the covenants required to be performed by Purchaser prior to the Closing. 

 
 (c) Opinions of the Purchaser’s Counsel. Seller shall have received from
Purchaser’s Counsel an opinion with respect to the matters set forth in Exhibit C attached hereto, which shall be addressed to Seller and dated as of the Closing Date. 
  
 ARTICLE III 
 Representations and Warranties of Seller 
  
 As a material
inducement to the Purchaser to enter into this Agreement and to consummate the transactions contemplated hereby, Seller hereby represents and warrants to the Purchaser as follows: 
  

	3.1.	Power and Authority. Seller possesses all requisite power and authority necessary to carry out the transactions contemplated by this Agreement. 

  

	3.2.	Authorization; No Breach. This Agreement and all other agreements or instruments contemplated hereby to which the Seller is a party or by which the Seller is bound, when
executed and delivered by the Seller in accordance with the terms hereof, shall each constitute a valid and binding obligation of such Seller, enforceable in accordance with its terms. The execution, delivery and performance by Seller of this
Agreement and all other agreements contemplated hereby to which such Seller is a party, and the fulfillment of and compliance with the respective terms hereof and thereof by the Seller, do not and shall not (i) conflict with or result in a breach of
the terms, conditions or provisions of, (ii) constitute a default under (whether with or without the passage of time, the giving of notice or both), (iii) result in the creation of any Encumbrance upon the Shares pursuant to, (iv) give any third
party the right to modify, terminate or accelerate any obligation under, (v) result in a violation of, or (vi) require any authorization, consent, approval, exemption or other action by or notice or declaration to, or filing with, any third party or
Government Entity pursuant to, (A) any Law to which the Seller are subject or (B) any material agreement, instrument, order, judgment or decree to which the Sellers are subject. 

  

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 3.3. Title to Shares. As of immediately prior to the Closing, all of the Shares will be owned of record and
beneficially by the Seller, and Seller will have good and marketable title to the Shares, free and clear of all Liens. 
  
 3.4. Litigation, etc. Except as set forth on Schedule 3.4, there are no actions, suits, proceedings (including any arbitration proceedings), orders,
investigations or claims pending or to Seller’s Knowledge threatened against the Agency, or pending or threatened by the Agency against any third party, at law or in equity, or before or by any Government Entity (including any actions, suits,
proceedings or investigations with respect to the transactions contemplated by this Agreement); the Agency is not subject to any arbitration proceedings under collective bargaining agreements or otherwise or any governmental investigations or
inquiries, and there is no basis for any of the foregoing. The Agency is insured with respect to each of the matters set forth on Schedule 3.4. The Agency is not subject to any judgment, order or decree of any Government Entity. 

 
 3.5. Organization and Corporate Power. To the best of Seller’s Knowledge the
Agency is a corporation duly organized, validly existing and in good standing under the laws of the State of Texas and is qualified to do business in its present locations. Agency possesses all requisite corporate power and authority necessary to
own its properties and to carry on its business as now conducted and presently proposed to be conducted to carry out the transactions contemplated by this Agreement. The copies of Agency’s Articles of Incorporation and bylaws furnished to
Purchaser reflect all amendments made thereto at any time prior to the date of this Agreement and are true, complete and correct. The minute books (containing the records of meetings of the sole stockholder, the sole member of the board of directors
and any committees of the board of directors), the stock certificate books and the stock record books Agency are true, complete and correct. 
  
 3.6. Capitalization. As of the date hereof and as of immediately prior to the Closing, the authorized, issued and outstanding capital stock of the Agency is set
forth on Schedule 3.6. All of such outstanding capital stock is held beneficially and of record by the Seller free and clear of any Liens. Immediately after the Closing, the Shares will be duly authorized, validly issued and non-assessable
and free and clear of any Liens and will have been issued free and clear of any preemptive or similar rights. The Agency does not have outstanding (i) any stock or securities convertible or exchangeable for any shares or units of their capital stock
or containing any profit participation features, nor any rights or options to subscribe for or to purchase its capital stock or (ii) any stock appreciation rights or phantom stock or similar plans or rights. Except as set forth on Schedule
3.6 attached hereto, there are no (i) outstanding obligations of the Agency (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital stock or any warrants, options or other rights to acquire its capital
stock or (ii) voting trusts, proxies or other agreements among the Agency’s stockholders with respect to the voting or transfer of the Agency’s capital stock. As of the Closing and immediately thereafter, all of the outstanding shares and
units of the Agency’s capital stock shall be duly authorized and validly issued, fully paid and nonassessable. 
  

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 3.7. Subsidiaries; Investments. The Agency does not have, or hold the right (pursuant to a specific agreement) to
make, an Investment in any other Person. 
  
 3.8. Financial Statements.
Attached hereto as part of Schedule 3.8 are management prepared balance sheets of the Agency as of April 2004 and the related profit and loss statements for the Agency. All of the foregoing financial statements are hereinafter collectively
referred to as the “Financial Statements.” Except as set forth on Schedule 3.9, each of the Financial Statements (including in all cases the notes thereto, if any) has been prepared from, and is in accordance with, the books and records of
the Agency, are true, complete and correct to the best of Seller’s knowledge, fairly presents the financial condition of the Agency, accurately reflects the operating results and cash flows of the Agency. Seller acknowledges the Financial
Statements have not been prepared in accordance with GAAP and acknowledges and agrees to Purchaser relying on the statements and representations of Seller’s accountant concerning the accuracy of the Financial Statements attached hereto.

  
 3.9. Absence of Undisclosed Liabilities. Except as set forth on
Schedule 3.9 hereto, to the best of Seller’s Knowledge, the Agency has no obligation or liability (whether known or unknown, accrued, absolute, contingent, unliquidated or otherwise, whether due or to become due and regardless of when
asserted), other than (i) liabilities set forth on the liabilities side of the most recent Balance Sheet (rather than any notes thereto), (ii) liabilities and obligations which have arisen after the date of the most recent Balance Sheet in the
ordinary course of business (none of which is a liability resulting from breach of contract, breach of warranty, tort, infringement, claim, lawsuit, violation of law or environmental liability or clean-up obligation), or (iii) obligations of the
Agency pursuant to agreements set forth on Schedule 3.14. 
  
 3.10.
Product Warranty. To the best of Seller’s Knowledge, all services rendered by the Agency have been in conformity with all applicable federal and state statutes and regulations, contractual commitments and all express and implied
warranties, and the Agency does not have any liability (and there is no reasonable basis for any present or future action, suit, proceeding, hearing, investigation, charge, complaint, claim or demand against such Company giving rise to any such
liability) for damages in connection therewith in excess of past custom and Agency and experience. No services rendered by the Agency are subject to any guarantee, warranty or other indemnity beyond the applicable standard terms and conditions of
such service. 
  
 3.11. Absence of Certain Developments. Since April, 2004,
there has occurred no fact, event or circumstance which has had or could have a Material Adverse Effect, except as expressly contemplated by this Agreement or as set forth on Schedule 3.11, on the transaction described in this Agreement.
Since April 2004, Seller has caused the Agency to conduct its business only in the ordinary course of business consistent with past custom and Agency, and to the Seller’s Knowledge the Agency has not: 
  
 (a) issued any notes, bonds or other debt securities or any capital stock or units of
membership interest or other equity securities or any securities or rights convertible, exchangeable or exercisable into any capital stock or other equity securities; 
  

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 (b) incurred any Indebtedness, other than the capitalized leases listed in Schedule 3.9; 
  
 (c) discharged or satisfied any Lien or paid any obligation or liability, other than current
liabilities paid in the ordinary course of business consistent with past custom and Agency; 
  
 (d) declared, set aside or made any payment or distribution of cash or other property with respect to its capital stock or other equity securities or purchased, redeemed or otherwise acquired any shares of its capital
stock or other equity securities (including any warrants, options or other rights to acquire its capital stock or other equity securities); 
  
 (e) mortgaged or pledged any of its properties or assets or subjected them to any Lien, except Permitted Liens; 
  
 (f) sold, assigned, transferred, leased, licensed or abandoned any of its assets, tangible or
intangible, except in the ordinary course of business consistent with past custom and Agency; 
  
 (g) made or granted any bonus or any wage or salary increase to any employee or group of employees made or granted any increase in any employee benefit plan or arrangement, or amended or terminated any existing
employee benefit plan or arrangement or adopted any new employee benefit plan or arrangement, or entered into, modified or terminated any collective bargaining agreement or relationship; 
  
 (h) delayed, postponed or canceled the payment of any accounts payable or any other liability or obligation or agreed or negotiated with any
party to extend the payment date of any accounts payable or accelerated the collection of any accounts or notes receivable; 
  
 (i) delayed or postponed the purchase of any inventory, the making of any capital expenditure or the repair or maintenance of any assets; 
  
 (j) made any loans or advances to, guarantees for the benefit of, or any Investments in, any
Persons (other than advances to employees in the ordinary course of business consistent with past custom and Agency) or formed any Subsidiary; 
  
 (k) suffered any damage, destruction or casualty loss exceeding $5,000 in the aggregate, whether or not covered by insurance, or experienced any material changes in the
amount and scope of insurance coverage; 
  
 (l) made any change in its cash
management Agencys or in any method of accounting or accounting policies, or made any write-down in the value of its inventory that is material or out of the ordinary course of business consistent with past custom and Agency; 
  
 (m) directly or indirectly engaged in any transaction or entered into any arrangement with
any officer, director, shareholder, member or other Affiliate of the Agency; 
  
 (n) amended its charter, bylaws, operating agreement or other organizational documents; 
  

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 (o) taken any action or omit to take any action which act or omission could reasonably be expected to have a Material
Adverse Effect; or 
  
 (p) waived any material benefits of; or agreed to modify in
any material respect, any confidentiality, standstill, non-solicitation or similar agreement to which the Sellers are a party; 
  
 (q) been involved in any labor dispute, other than routine non-material grievances, or any activity or proceeding by a labor union or representative thereof to organize
any employees of the Agency, or any lockouts, strikes, slowdowns, work stoppages or threats thereof by or with respect to such employees; 
  
 (r) entered into any new line of business, or incurrence or commitment to incur any capital expenditures, obligations or liabilities in connection therewith; 

 
 (s) entered into any acquisition or agreement to acquire by merger, consolidation or
otherwise, or agreement to acquire a substantial portion of the assets of, or in any other manner, any business of any other Person; 
  
 (t) cancelled or waived (i) any right material to the operation of the business of the Agency; 
  
 (u) agreed, whether orally or in writing, to do any of the foregoing. 
  
 3.12. Assets. Except as set forth on Schedule 3.12 attached hereto, the Agency has good and valid title to, or a valid
leasehold interest in, the properties and assets, tangible or intangible and used by it or located on its premises or shown on the most recent Balance Sheet or acquired thereafter prior to Closing, free and clear of all Liens, except for (a)
properties and assets disposed of in the ordinary course of business since the date of the most recent Balance Sheet and (b) Permitted Liens. The Agency owns, has a valid leasehold interest in, or has a valid license to use, all the assets,
properties and rights, whether tangible or intangible, necessary for the conduct of its business as presently conducted and as presently proposed to be conducted. 
  
 3.13. Tax Matters. 
  
 (a) Except as set forth on Schedule 3.13, to Seller’s Knowledge: 
  
 (i) As of April 2004 Agency has filed all Tax Returns which it is required to file under applicable laws and regulations, and all such Tax Returns are true, complete and
correct and have been prepared in compliance with all applicable laws and regulations in all material respects; 
  
 (ii) Agency has paid all Taxes due and owing by it (whether or not such Taxes are shown or required to be shown on a Tax Return) and have withheld and paid over to the
appropriate taxing authority all Taxes which it is required to withhold from amounts paid or owing to any employee, shareholder, member, creditor or other third party; 
  

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 (iii) Agency has not waived any statute of limitations with respect to any Taxes or agreed to any extension of time for
filing any Tax Return which has not been filed; and has not consented to extend to a date later than the date hereof the period in which any Tax may be assessed or collected by any Tax authority; 
  
 (iv) no foreign, federal, state or local tax audits or administrative or judicial proceedings
are pending or being conducted with respect to the Agency; 
  
 (v) there are no
material unresolved questions or claims concerning the Agency’s Tax liability, except as provided on Schedule 1.8(f), there are no Liens on any asset of the Agency that arose in connection with any failure (or alleged failure) to pay any Tax;

  
 (vi) Agency has never been a member of an Affiliated Group or filed or been
included in a combined, consolidated or unitary income Tax Return; and 
  
 (vii)
Agency is not a party to or bound by any Tax allocation or Tax sharing agreement; is not liable for the Taxes of another Person (A) under Treasury Regulation § 1.1502-6 (or comparable provisions of state, local or foreign law), (B) as a
transferee or successor, or (C) by contract or indemnity or otherwise; and has not made any payments, are obligated to make any payments, or are a party to any agreement that under certain circumstances could obligate it to make any payments that
will not be deductible under Code §280G. 
  
 3.14. Contracts and
Commitments. To the best of Seller’s Knowledge: 
  
 (a) except as
expressly contemplated by this Agreement or as set forth on Schedule 3.14, the Agency is not a party to or bound by any written or oral: 
  
 (i) pension, profit sharing, stock option, employee stock purchase or other plan or arrangement providing for deferred or other compensation to employees or any other
employee benefit plan, arrangement or Agency, whether formal or informal; 
  
 (ii)
management agreement or contract for the employment of any officer, individual employee or other Person on a full-time, part-time, consulting or other basis (1) providing for the payment of any cash or other compensation or benefits upon the
consummation of the transactions contemplated hereby or (2) otherwise restricting its ability to terminate the employment of any employee at any time for any lawful reason or for no reason without penalty or liability; 
  
 (iii) contract or agreement involving any Government Entity; 
  
 (iv) agreement or indenture relating to borrowed money or other Indebtedness or the
mortgaging, pledging or otherwise placing a Lien on any material asset or material group of assets of the Agency or any letter of credit arrangements, or any guarantee therefor; 
  

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 (v) other contract or group of related contracts with the same party or group of affiliated parties continuing over a
period of more than six months from the date or dates thereof, not terminable by either of the Agency upon 30 days’ or less notice without penalty or involving more than $10,000; 
  
 (vi) agreements relating to the ownership of, Investments in or loans and advances to any Person, including Investments in joint ventures
and minority equity investments; 
  
 (vii) license, royalty, indemnification or
other agreement with respect to any intangible property (including any Intellectual Property Rights); 
  
 (viii) agent, sales representative, sales or distribution agreement; 
  
 (ix) power of attorney or other similar agreement or grant of agency; 
  
 (x) contract or agreement prohibiting it from freely engaging in any business or competing anywhere in the world, including, without limitation, any nondisclosure or confidentiality agreements; or 
  
 (xi) other agreement which is material to its operations and business prospects or involves a
consideration in excess of $10,000 annually, whether or not in the ordinary course of business. 
  
 (b) To the best of Sellers’ Knowledge, all of the contracts, agreements and instruments set forth or required to be set forth on Schedule 3.12 (the “Material Contracts”) are valid, binding
and enforceable in accordance with their respective terms. Each of the Material Contracts shall be in full force and effect without penalty in accordance with their terms upon consummation of the transactions contemplated hereby. 
  
 (c) The Purchaser has been supplied with a true, complete and correct copy of each written
Material Contract, together with all amendments, waivers or other changes thereto (all of which amendments, waivers or other changes thereto are described on Schedule 3.12). 
  
 3.15. Intellectual Property Rights. Schedule 3.15 contains a true, complete and correct list of all computer software owned or
used by the Agency (“Computer Software”) and all licenses or similar agreements or arrangements for Computer Software. Except as set forth on Schedule 3.15, the Agency owns all right, title and interest to, or have the right
to use pursuant to a valid, enforceable and effective written license, free and clear of all Liens, the Computer Software. No loss or expiration of any of the Computer Software is threatened, pending or reasonably foreseeable. The Agency have taken
all commercially reasonable action to maintain and protect the Computer Software. 
  
 3.16. Brokerage. Except as set forth on Schedule 3.16, there are and shall be no claims for brokerage commissions, finders’ fees or similar compensation in connection with the transactions contemplated by this Agreement
based on any arrangement or agreement to which any of the Seller is a party or to which any of the Seller is subject. 
  

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 3.17. Insurance. Schedule 3.17 contains a description of each insurance policy maintained by the Agency
with respect to its properties, assets and business, and each such policy shall be in full force and effect as of the Closing or a substituted policy shall have been obtained therefor. The Agency is not in default with respect to its obligations
under any insurance policy maintained by it, and the Agency has never been denied insurance coverage. The Agency does not have a self-insurance or co-insurance programs. 
  
 3.18. Labor Matters. The Agency has (a) no material labor relations problems (including any additional union organization activities,
threatened or actual strikes or work stoppages or material grievances), (b) not engaged in any unfair labor Agencys, (c) during the past five years, not suffered any labor strike, lockout, work stoppage or other material labor dispute or, (d) no
union organization campaign in progress with respect to any of their employees, nor any question concerning representation exists respecting such employees. 
  
 3.19. Employee Benefit Plans. 
  
 (a) The Agency does not have, nor at any time since its organization has it had any Employee Benefit Plan to which it contributes or is obligated to contribute, or with
respect to which the Agency has any liability. 
  
 (b) The Agency does not
maintain (and have never maintained) and does not contribute (nor has ever contributed or been required to contribute) to any Employee Welfare Benefit Plan providing medical, health, or life insurance or other welfare-type benefits for current or
future retired or terminated employees, their spouses, or their dependents (other than in accordance with COBRA). 
  
 3.20. Compliance with Laws, Permits. Except as set forth on Schedule 3.20, to Seller’s knowledge: 
  
 (a) The Agency has complied with all applicable Laws relating to the operation of its
business in all material respects. No notices have been received by and no claims have been filed against Agency alleging a violation of any such Laws. 
  
 (b) The Agency holds all material permits, licenses, certificates, accreditations and other authorizations of all Government Entities required for the conduct of its
business and the ownership of its properties. No notices have been received by the Agency alleging the failure to hold any permit, license, certificate, accreditation or other authorization of any Government Entity. The Agency is in compliance in
all material respects with all terms and conditions of all material permits, licenses, accreditations and authorizations which it holds. All of such permits, licenses, accreditations, authorizations and change of ownership with any applicable state
agencies will be available for use by Agency immediately after the Closing. 
  
 3.21. Environmental and Safety Matters. Except as set forth on Schedule 3.21: 
  

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 (a) The Agency has complied with and are currently in compliance with all applicable Environmental and Safety
Requirements. The Agency has not received any oral or written notice, report or information regarding any violations of or any liabilities (whether accrued, absolute, contingent, unliquidated or otherwise) or corrective, investigatory or remedial
obligations arising under Environmental and Safety Requirements which relate to the Agency. 
  
 (b) Without limiting the generality of the foregoing, the Agency has obtained and complied with, and are currently in compliance with, all permits, licenses and other authorizations that may be required pursuant to
any Environmental and Safety Requirements for the occupancy of its facilities or the operation of its business. 
  
 (c) To the best of Sellers’ Knowledge, none of the following exists at any property or facility occupied by the Agency: 
  
 (i) underground storage tanks; 
  
 (ii) asbestos-containing materials in any form or condition; 
  
 (iii) materials or equipment containing polychlorinated biphenyls; or 
  
 (iv) landfills, surface impoundments or other disposal areas. 
  
 (d) The Agency has not treated, stored, disposed of, arranged for or permitted the disposal of, transported, handled or Released any
substance (including any hazardous substance) or owned, occupied or operated any facility or property (and no such property or facility is contaminated by any such substance) in a manner that has given or reasonably expected to give rise to any
liabilities (including any liability for response costs, corrective action costs, personal injury, natural resource damages, property damage or attorneys fees or any investigative, corrective or remedial obligations) pursuant to CERCLA or any other
Environmental and Safety Requirements. 
  
 (e) To the best of Sellers’
Knowledge, the Agency has not, either expressly or by operation of law, assumed or undertaken any liability or corrective, investigatory or remedial obligation of any other Person relating to any Environmental and Safety Requirements. 
  
 (f) To the best of Seller’s Knowledge, without limitation upon the foregoing, there are
no facts, events or conditions relating to facilities, properties or operations of the Agency, that will give rise to any regulatory notice requirement. 
  
 (g) The Seller has furnished to Purchaser all environmental audits, reports and other material environmental documents relating to the Agency which are in his possession
or under its reasonable control. 
  

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 3.22. Real Property. 
  
 The Agency does not own any real property (the “Owned Property”). 
  
 3.23. Personal Property. 
  
 (a) The Agency has good title to all personal property of any kind or nature which the Agency purports to own, free and clear of all Liens, except for (i) Liens disclosed
on Schedule 3.9, (ii) Liens for non-delinquent taxes and non-delinquent statutory Liens arising other than by reason of default, (iii) statutory Liens of landlords, Liens of carriers, warehousemen, mechanics and materialmen incurred in the
past customary Agency for sums not yet due; (iv) Liens incurred or deposits made in the past customary Agency in connection with worker’s compensation, unemployment insurance and other types of social security, (v) purchase money liens, and
(vi) Liens which do not materially detract from the value or use of said personal property. The Agency, as a lessee, has the right under valid and subsisting leases to use, possess and control all personal property leased by the Agency as now used,
possessed and controlled by the Agency. 
  
 (b) All machinery, equipment and other
tangible assets currently being used by the Agency, which are owned or leased by the Agency are in good operating condition, maintenance and repair, ordinary wear and tear excepted, are usable in the ordinary course of business and are reasonably
adequate and suitable for the uses to which they are being put. 
  
 3.24.
Specific Compliance with Medicare Regulations. Without limiting in any way the generality of Section 3.14, or the other provisions of this Agreement, except as identified on Schedule 3.20, the Agency has not violated any Medicare law
or regulation, and is not currently under investigation, audit, or been threatened or noticed with any pending audit, investigation or claim relating to potential violations of any Medicare law or regulation. 
  
 3.25. Prohibited Payments. Seller has not, directly or indirectly, (a) made or agreed
to make any contribution, payment or gift to any government official, employee or agent where either the contribution, payment or gift or the purpose thereof was illegal under the laws of any federal, state, local or foreign jurisdiction, (b)
established or maintained any unrecorded fund or asset for any purpose or made any false entries on the books and records of the Agency for any reason, (c) made or agreed to make any contribution, or reimbursed any political gift or contribution
made by any other person, to any candidate for federal, state, local or foreign public office or (d) paid or delivered any fee, commission or any other sum of money or item of property, however characterized, to any finder, agent, government
official or other party, in the United States or any other country, which in any manner relates to the assets, business or operations of the Agency, which the Seller knew or had reason to believe to have been illegal under any federal, state or
local laws (or any rules or regulations thereunder) of the United States or any other country having jurisdiction. 
  
 3.26. Closing Date. The representations and warranties of Seller contained in this Article III and elsewhere in this Agreement and all information contained in any
Exhibit, Schedule or attachment hereto or in any certificate or other writing delivered by, or on behalf of, the Seller to 
  

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 the Purchaser shall be true, complete and correct on the Closing Date, except as otherwise disclosed to the Purchaser in
writing prior to the Closing. 
  

	3.27.	Disclosure. The representations and warranties contained in this Article III do not contain any untrue statement of a fact. 

  
 ARTICLE IV 
 Representations and Warranties of the Purchaser 
  
 As a material inducement to the Seller to enter into this Agreement and consummate the transactions contemplated hereby, the Purchaser hereby represents and warrants to the Seller as follows: 
  

	4.1.	Organization, Power and Authority. The Purchaser is a Delaware corporation duly organized, validly existing and in good standing to transact business under the Laws of Texas.
The Purchaser possesses all requisite corporate power and authority necessary to carry out the transactions contemplated by this Agreement. 

  

	4.2.	Authorization; No Breach. The execution, delivery and performance of this Agreement and all other agreements or instruments contemplated hereby to which the Purchaser is a
party or by which the Purchaser is bound have been duly authorized by the Purchaser. This Agreement and all other agreements contemplated hereby to which the Purchaser is a party, when executed and delivered by the Purchaser in accordance with the
terms hereof, shall each constitute a valid and binding obligation of the Purchaser, enforceable in accordance with its terms. The execution, delivery and performance by the Purchaser of this Agreement and all other agreements contemplated hereby to
which the Purchaser is a party, and the fulfillment of and compliance with the respective terms hereof and thereof by the Purchaser, do not and shall not (i) conflict with or result in a breach of the terms, conditions or provisions of, (ii)
constitute a default under (whether with or without the passage of time, the giving of notice or both), (iii) give any third party the right to modify, terminate or accelerate any obligation under, (iv) result in a violation of, or (v) require any
authorization, consent, approval, exemption or other action by or notice or declaration to, or filing with, any Government Entity pursuant to, (A) the organizational documents of the Purchaser, (B) any Law to which the Purchaser is subject, or (C)
any material agreement, instrument, order, judgment or decree to which the Purchaser is subject. 

  

	4.3.	Closing Date. The representations and warranties of the Purchaser contained in this Article IV and elsewhere in this Agreement shall be true, complete and correct on the
Closing Date as though then made and as though such Closing Date was substituted for the date of this Agreement throughout such representations and warranties. 

  

	4.4.	Disclosures. The representations and warranties contained in this Article IV do not contain any untrue statement of a fact. 

  

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 ARTICLE V 
 Indemnification 
  
 5.1. Survival of
Representations and Warranties. The representations and warranties in this Agreement shall survive the Closing for a period of two (2) years following the Closing Date except that (i) the representation and warranty set forth in Section 3.13
shall survive until 90 days after the end of the applicable statute of limitations, (ii) the representation and warranty set forth in Section 3.21 shall survive for a period of five (5) years after the Closing Date, and (iii) the representations and
warranties set forth in Sections 3.3, 3.6 and 3.16, shall survive forever; provided, that any representation or warranty in respect of which indemnity may be sought under Section 5.2, and the indemnity with respect thereto, shall survive the time at
which it would otherwise terminate pursuant to this Section 5.1 if notice of the inaccuracy or breach or potential inaccuracy or breach thereof giving rise to such right or potential right of indemnity shall have been given to the party against whom
such indemnity may be sought prior to such time. The representations and warranties in this Agreement shall survive for the periods set forth in this Section 5.1 and shall in no event be affected by any investigation, inquiry or examination made for
or on behalf of any party, or the knowledge of any party’s officers, directors, shareholders, members, employees or agents or the acceptance by any party of any certificate or opinion hereunder. 
  
 5.2. General Indemnification. 
  
 (a) Indemnification Obligations of the Seller. Seller shall indemnify the Purchaser
and its Affiliates, shareholders, partners, officers, directors, employees, agents, representatives, successors and permitted assigns (collectively, the “Purchaser Indemnified Parties”) and save and hold each of them harmless for
any loss, liability, action, cause of action, cost, damage or expense, whether or not arising out of third party claims (including interest, penalties, reasonable attorneys’ fees and expenses and all amounts paid in, defense or settlement of
any of the foregoing) (collectively, “Losses”, and each a “Loss”), which any such Purchaser Indemnified Party may suffer, sustain or become subject to, as a result of, in connection with, relating or incidental to
or by virtue of: 
  
 (i) any facts or circumstances which constitute a breach of
any representation or warranty of the Seller under this Agreement, or in any of the certificates or other instruments or documents furnished by the Seller pursuant to this Agreement; or 
  
 (ii) any nonfulfillment or breach of any covenant, agreement or other provision by Seller under this Agreement. 
  
 (b) Indemnification Obligations of the Purchaser. The Purchaser shall indemnify Seller
and his Affiliates, shareholders, partners, officers, directors, employees, agents, representatives, successors and permitted assigns (other than the Agency and their Subsidiaries, if any) (collectively, the “Seller Indemnified
Parties”) and save and hold each of them harmless against any Losses which any such Seller Indemnified Party may suffer, sustain or become subject to, as a result of, in connection with, relating or incidental to or by virtue of:

  

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 (i) any facts or circumstances which constitute a breach of any representation or warranty of the Purchaser under this
Agreement or in any of the certificates or other instruments or documents furnished by the Purchaser pursuant to this Agreement; 
  
 (ii) any nonfulfillment or breach of any covenant, agreement or other provision by the Purchaser under this Agreement; or 
  
 (iii) any failure to pay or satisfy any liability as shown on the Financial Statements of
Agency or any liabilities arising in the ordinary course of business since the date of the Financial Statements. 
  
 (c) Manner of Payment. Any indemnification of the Purchaser Indemnified Parties or the Seller Indemnified Parties pursuant to this Section 5.2 shall be effected by
wire transfer of immediately available funds to an account designated in writing by any Purchaser Indemnified Party or Seller Indemnified Party, as the case may be, or by reduction to the Seller Notes, within 15 days after the determination thereof,
provided, that the Purchaser, at its option, may setoff any such indemnification owing from the Sellers against any payment obligation (other than salary) owing from the Purchaser or the Agency to the Sellers. Any indemnification payments shall be
made together with interest accruing thereon from the date written notice of the indemnification claim is made to the date of payment at the Applicable Rate. 
  
 (d) Third Party Claims. Any Person making a claim for indemnification under this Section 5.2 (an “Indenmitee”) shall notify the indemnifying party
(an “Indemnitor”) of the claim in writing promptly after receiving written notice of any action, lawsuit, proceeding, investigation or other claim (a “Proceeding”) against it (if by a third party), describing the
claim, the amount thereof (if known and quantifiable) and the basis thereof, provided, that the failure to so notify an Indemnitor shall not relieve the Indemnitor of its obligations hereunder unless and to the extent the Indemnitor shall be
actually prejudiced by such failure to so notify. Any Indemnitor shall be entitled to participate in the defense of such Proceeding giving rise to an Indemnitee’s claim for indemnification at such Indemnitor’s expense, and at its option
(subject to the limitations set forth below) shall be entitled to assume the defense thereof by appointing a reputable counsel reasonably acceptable to the Indemnitee to be the lead counsel in connection with such defense; provided, that prior to
the Indemnitor assuming control of such defense, it shall (x) first demonstrate to the Indemnitee in writing such Indemnitor’s financial ability to provide full indemnification to the Indemnitee with respect to such Proceeding, and (y) agree in
writing to be fully responsible for all Losses relating to such Proceeding; and provided further, that: 
  
 (i) the Indemnitee shall be entitled to participate in the defense of such claim and to employ counsel of its choice for such purpose; provided, that the fees and expenses of such separate counsel shall be borne by
the Indemnitee; 
  
 (ii) the Indemnitor shall not be entitled to assume control of
such defense and shall pay the fees and expenses of counsel retained by the Indemnitee if (A) the claim for indemnification relates to or arises in connection with any criminal proceeding, action, indictment, allegation or investigation (provided
that in such event (x) the Indemnitee shall not enter into any settlement 
  

 - 16 - 

 of a claim without the prior written consent of the Indemnitor (which shall not be unreasonably withheld), (y) the
Indemnitor shall be entitled to participate in the defense of such claim and to employ counsel of its choice for such purpose (provided that the fees and expenses of such separate counsel shall be borne by the Indemnitor), and (z) the Indemnitor
shall be entitled to review the files and record relating to such defense upon request of the Indemnitor); (B) the Indemnitee reasonably believes an adverse determination with respect to the Proceeding giving rise to such claim for indemnification
would be detrimental to or injure the Indemnitee’s reputation or future business prospects; (C) the claim seeks an injunction or equitable relief against the Indemnitee; (D) a conflict of interest exists between the Indemnitor and the
Indemnitee; or (E) the Indemnitor failed or is failing to vigorously prosecute or defend such claim; and 
  
 (iii) if the Indemnitor shall control the defense of any such claim, the Indemnitor shall obtain the prior written consent of the Indemnitee before entering into any settlement of a Proceeding or ceasing to defend
such Proceeding if, pursuant to or as a result of such settlement or cessation, injunctive or other equitable relief will be imposed against the Indemnitee or if such settlement does not expressly and unconditionally release the Indemnitee from all
liabilities and obligations with respect to such claim, without prejudice. 
  
 (e)
Anticipated Claims. With regard to any potential claims anticipated with respect to the representations and warranties of either party to this Agreement, such party shall notify the other parties within a reasonable period of time of any such
potential claims. 
  
 (f) Waiver. Seller hereby agrees that he shall not
make any claim for indemnification hereunder against the Agency by reason of the fact that he was a shareholder (whether such claim is for judgments, damages, penalties, fines, costs, amounts paid in settlement, losses, expenses or otherwise) with
respect to any Proceeding brought by any of the Purchaser Indemnified Parties against the Seller or any claim against the Seller in connection with the transactions contemplated by this Agreement and the Seller hereby acknowledge and agree that he
shall have no claims or right to contribution or indemnity from the Agency with respect to any amounts paid by them pursuant to this Section 5.2 or otherwise in connection with the transactions contemplated by this Agreement. 
  
 ARTICLE VI 
 Definitions 
  
 For
the purposes hereof, the following terms have the meanings set forth below: 
  
 “Affiliate” of any particular Person means any other Person controlling, controlled by or under common control with such particular Person, where “control” means the possession, directly or indirectly, of
the power to direct the management and policies of a Person whether through the ownership of voting securities, contract or otherwise. 
  

 - 17 - 

 “Affiliated Group” means any affiliated group as defined in Code § 1504 that has filed a
consolidated return for federal income tax purposes (or any similar group under state, local or foreign law) for a period during which either of the Agency was a member. 
  
 “Agency” has the meaning set forth in the preamble to this Agreement. 
  
 “Agreement” has the meaning set forth in the preamble to this Agreement.

  
 “Applicable Rate” has the meaning set forth in Section
1.4(c). 
  
 “CERCLA” means the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended. 
  
 “COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1986. 
  
 “Code” means the Internal Revenue Code of 1986, as amended. 
  
 “Company Intellectual Property Rights” means all of the Intellectual Property Rights owned or used by the Agency (along with all income, royalties, damages and payments due or payable at the Closing
or thereafter (including without limitation, damages and payments for past or future infringements or misappropriations thereof)), the right to sue and recover for past infringements or misappropriations thereof, any and all corresponding rights
that, now or hereafter, may be secured throughout the world and all copies and tangible embodiments of any such Intellectual Property Rights. 
  
 “Controlled Group of Corporations” has the meaning set forth in Code § 1563. 
  
 “Employee Benefit Plan” means any (a) nonqualified deferred compensation or retirement plan or arrangement, (b) qualified
defined contribution retirement plan or arrangement which is an Employee Pension Benefit Plan, (c) qualified defined benefit retirement plan or arrangement which is an Employee Pension Benefit Plan (including any Multiemployer Plan), or (d) Employee
Welfare Benefit Plan or material fringe benefit plan or program. 
  
 “Employee Pension Benefit Plan” has the meaning set forth in ERISA §3(2). 
  
 “Employee Welfare Benefit Plan” has the meaning set forth in ERISA §30). 
  
 “Environmental and Safety Requirements” shall mean all federal, state, local and foreign statutes, regulations, ordinances and other provisions having
the force or effect of law, all judicial and administrative orders and determinations, all contractual obligations and all common law, in each case concerning public health and safety, worker health and safety and pollution or protection of the
environment (including all those relating to the presence, use, production, generation, handling, transport, treatment, storage, disposal, distribution, labeling, testing, processing, discharge, Release, threatened Release, control or cleanup of any
hazardous or otherwise regulated materials, substances or wastes, chemical substances or mixtures, pesticides, 
  

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 pollutants, contaminants, toxic chemicals, petroleum products or byproducts, asbestos, polychlorinated biphenyls, noise
or radiation). 
  
 “ERISA” means the Employee Retirement Income
Security Act of 1974, as amended. 
  
 “Fiduciary” has the meaning
set forth in ERISA §3(21). 
  
 “GAAP” means United States
generally accepted accounting principles consistently applied, as in effect from time to time. 
  
 “Government Entity” means individually, and “Government Entities” means collectively, the United States of America or any other nation, any state or other political subdivision
thereof, or any entity exercising executive, legislative, judicial, regulatory or administrative functions of government, including any court, in each case having jurisdiction over either Company. 
  
 “Intellectual Property Rights” means all (i) patents, patent applications
and patent disclosures as well as any reissues, continuations, continuations-in-part, divisions, extensions or reexaminations thereof, (ii) trademarks, service marks, trade dress, trade names, slogans, logos, internet domain names, and corporate
names and registrations and applications for registration thereof, together with all of the goodwill associated therewith, (iii) copyrights and copyrightable works and registrations and applications for registration thereof, (iv) mask works and
registrations and applications for registration thereof, (v) computer software, data, data bases and documentation thereof, and (vi) trade secrets and other confidential information (including, ideas, formulas, compositions, inventions (whether
patentable or unpatentable and whether or not reduced to Agency), know-how, manufacturing and production processes and techniques, research and development information, drawings, specifications, designs, plans, proposals, technical data, financial
and marketing plans and customer and supplier lists and information). 
  
 “Investment” as applied to any Person means (i) any direct or indirect purchase or other acquisition by such Person of any notes, obligations, instruments, stock, securities or ownership interest (including partnership
interests and joint venture interests) of any other Person and (ii) any capital contribution by such Person to any other Person. 
  
 “Knowledge” means no investigation required. 
  
 “Laws” means all statutes, laws, codes, ordinances, regulations, rules, orders, judgments, writs, injunctions, acts or decrees of any Government Entity.

  
 “Lien” or “Liens” means any mortgage,
pledge, security interest, right of first refusal, option, encumbrance, lien or charge of any kind (including any conditional sale or other title retention agreement or lease in the nature thereof), any sale of receivables with recourse against
either of the Agency, any filing or agreement to file a financing statement as debtor under the Uniform Commercial Code or any similar statute (other than to reflect ownership by a third party of property leased to either of the Agency under a lease
which is not in the nature of a conditional sale or title retention agreement), or any subordination arrangement in favor of another Person. 
  

 - 19 - 

 “Material Adverse Effect” means a material and adverse effect upon (i) the business, operations,
prospects, assets, liabilities, condition (financial or otherwise), operating results or employee, customer or supplier relations or prospects of the Agency or (ii) the ability of either of the Agency or the Seller to consummate the transactions
contemplated hereby or perform their respective obligations hereunder. 
  
 “Multiemployer Plan” has the meaning set forth in ERISA §3(37). 
  
 “PBGC” means the Pension Benefit Guaranty Corporation. 
  
 “Permitted Liens” means (i) Liens for Taxes or assessments and similar charges, which either are (a) not delinquent or (b) being contested in good faith and by appropriate proceedings, and adequate
reserves (as determined in accordance with GAAP, consistently applied) have been established on the Agency’s books with respect thereto, and (ii) with respect to Leased Real Property only, (A) mechanics’, materialmen’s or
contractors’ Liens or encumbrances or any similar statutory Lien or restriction for amounts not yet due and payable, (B) zoning, entitlement, building and other land use regulations imposed by governmental agencies having jurisdiction over the
Leased Property which are not violated by the current use and operation of the Leased Property and (C) covenants, conditions, restrictions, easements and other similar matters of record affecting title to the Leased Property which do not materially
impair the occupancy or use of the Leased Property for the purposes for which it is currently used in connection with the Agency businesses. 
  
 “Person” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture,
an unincorporated organization and a governmental entity or any department, agency or political subdivision thereof. 
  
 “Possession Date” means the date on which Seller resigns and transfers control of Agency to Purchaser. 
  
 “Prohibited Transactions” has the meaning set forth in ERISA §406 and
Code §4975. 
  
 “Purchaser” has the meaning set forth in the
preamble to this Agreement. 
  
 “Release” has the meaning set
forth in CERCLA. 
  
 “Reportable Event” has the meaning set forth
in ERISA §4043. 
  
 “Sellers” has the meaning set forth in
the preamble to this Agreement. 
  
 “Subsidiary” means, with
respect to any Person, any corporation, limited liability company, partnership, association or other business entity of which (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other 
  

 - 20 - 

 Subsidiaries of that Person or a combination thereof, or (ii) if a limited liability company, partnership, association or
other business entity, a majority of the partnership or other similar ownership interest thereof is at the time owned or controlled, directly or indirectly, by any Person or one or more Subsidiaries of that Person or a combination thereof.

  
 “Tax” or “Taxes” means federal, state,
county, local, foreign or other income, gross receipts, ad valorem, franchise, profits, sales or use, transfer, registration, excise, utility, environmental, communications, real or personal property, capital stock, license, payroll, wage or other
withholding, employment, social security, severance, stamp, occupation, alternative or add-on minimum, estimated and other taxes of any kind whatsoever (including deficiencies, penalties, additions to tax, and interest attributable thereto) whether
disputed or not. 
  
 “Tax Return” means any return, information
report or filing with respect to Taxes, including any schedules (including Schedule K-1) attached thereto and including any amendment thereof. 
  
 “Treasury Regulation” means the United States Treasury Regulations promulgated under the Code, and any reference to any particular Treasury Regulation
section shall be interpreted to include any final or temporary revision of or successor to that section regardless of how numbered or classified. 
  
  
 ARTICLE VII 
 Termination 
  
 7.1.
Conditions of Termination. This Agreement may be terminated at any time prior to the Closing (or as otherwise specified): 
  
 (a) by the mutual written consent of the Purchaser and the Seller; 
  
 (b) by the Purchaser if the Purchaser shall have received notice of a breach of Seller’s representations and warranties or a breach of a covenant hereunder which
renders the condition in Section 2.2 incapable of being satisfied; or 
  
 (c) by
the Seller if Seller shall have received notice of a breach of the Purchaser’s representations and warranties or a breach of a covenant hereunder which renders the condition in Section 2.3 incapable of being satisfied; 
  
 7.2. Effect of Termination. In the event of termination of this Agreement as provided
above, this Agreement shall forthwith become void and of no further force and effect, except that the covenants and agreements set forth in Sections 8.1, and 8.4 shall survive such termination indefinitely, and nothing in this Section 7.2 shall be
deemed to release any party from any liability for any breach by such party of the terms and provisions of this Agreement or to impair the right of any party to compel specific performance by another party of its obligations under this Agreement.

  

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 ARTICLE VIII 
 Miscellaneous 
  
 8.1. Fees and
Expenses. The Purchaser will be responsible for all costs and expenses incurred by the Purchaser in connection with the negotiation, preparation and entry into this Agreement and the consummation of the transactions contemplated hereby. The
Seller will be responsible for all costs and expenses incurred by the Seller in connection with the negotiation, preparation and entry into this Agreement and the consummation of the transactions contemplated hereby. Any transfer Tax liability which
is by statute imposed on the Seller, shall be paid by the Seller. 
  
 8.2.
Certain Tax Matters. 
  
 Agency shall prepare, or cause to be prepared, and
file, or cause to be filed, any Tax Returns for Tax periods which end on or before the Closing Date and which have not been filed as of the Closing Date. The Purchaser shall prepare, or cause to be prepared, and file, or cause to be filed, any Tax
Returns due after the Closing Date and before the Closing Date. Purchaser shall permit the Seller to review and comment on each such Tax Return prior to filing. In the event the parties hereto shall disagree as to any such Tax Return, the parties
shall negotiate in good faith to resolve any such disagreement. Seller shall pay all taxes owed for business activities prior to the Possession date and Purchaser shall pay all taxes owed for business activities after the Possession date.

  
 8.3. Sellers’ Guarantees. Purchaser agrees to pay those
liabilities listed on Schedule 3.12 and those liabilities listed on the most recent Balance Sheet and to take any and all action necessary to have Sellers released from any personal guarantees made by the Seller for such liabilities. 
  
 8.4. Press Release and Announcements. None of the parties hereto nor any of their
respective representatives shall make any public announcement with respect to this Agreement or the transactions contemplated hereby without the prior written consent of the Seller and Purchaser. Notwithstanding the foregoing, any such public
announcement may be made if required by applicable law or a securities exchange rule; provided, that the party required to make such public announcement shall confer with the other parties concerning the timing and content of such public
announcement before the same is made. 
  
 8.5. Remedies. Except as
expressly provided in this Agreement, any Person having any rights under any provision of this Agreement shall be entitled to enforce such rights specifically (without posting a bond or other security), to recover damages by reason of any breach of
any provision of this Agreement and to exercise all other rights granted by Laws. All such rights and remedies shall be cumulative and non-exclusive, and may be exercised singularly or concurrently. 
  
 8.6. Consent to Amendments; Waivers. This Agreement may be amended, or any provision
of this Agreement may be waived upon the approval, in a writing, executed by the Purchaser and the Sellers. No course of dealing between or among the parties hereto shall be deemed effective 
  

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 to modify, amend or discharge any part of this Agreement or any rights or obligations of any such party or such holder
under or by reason of this Agreement. 
  
 8.7. Successors and Assigns. This
Agreement and all covenants and agreements contained herein and rights, interests or obligations hereunder, by or on behalf of any of the parties hereto, shall bind and inure to the benefit of the respective successors and permitted assigns of the
parties hereto whether so expressed or not, except that neither this Agreement nor any of the covenants and agreements herein or rights, interests or obligations hereunder may be assigned or delegated by Seller prior to the Closing, without the
prior written consent of the Purchaser, and neither this Agreement nor any of the covenants and agreements herein or rights, interests or obligations hereunder may be assigned or delegated by the Purchaser without the prior written consent of the
Sellers; provided, that the Purchaser may assign this Agreement and its rights and obligations hereunder without such prior written consent to any of its Affiliates, any Person which provides financing, the Purchaser or any of their respective
Affiliates, and any subsequent purchaser of the Purchaser. 
  
 8.8.
Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement or the application of any such provision to any
Person or circumstance shall be held to be prohibited by, illegal or unenforceable under applicable law or rule in any respect by a court of competent jurisdiction, such provision shall be ineffective only to the extent of such prohibition,
illegality or unenforceability, without invalidating the remainder of such provision or the remaining provisions of this Agreement. 
  
 8.9. Counterparts. This Agreement may be executed in counterparts (including by means of telecopied signature pages), any one of which need not contain the
signatures of more than one party, but all such counterparts taken together shall constitute one and the same agreement. 
  
 8.10. Descriptive Headings, Interpretation. The headings and captions used in this Agreement and the table of contents to this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this Agreement. Any capitalized terms used in any Schedule or Exhibit attached hereto and not otherwise defined therein shall have the meanings set forth in this Agreement. The
use of the word “including” herein shall mean “including without limitation.” 
  
 8.11. Entire Agreement. This Agreement, the agreements and documents referred to herein contain the entire agreement and understanding among the parties hereto with respect to the subject matter hereof and
supersede all prior agreements and understandings, whether written or oral, relating to such subject matter in any way, including, without limitation, the letter of intent dated September 17, 2003 between the Sellers and Purchaser. 
  
 8.12. No Third-Party Beneficiaries. This Agreement is for the sole benefit of the
parties hereto and their permitted successors and assigns and nothing herein expressed or implied shall give or be construed to give any Person, other than the parties hereto and such permitted successors and assigns, any legal or equitable rights
hereunder. 
  

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 8.13. Schedules and Exhibits. All Schedules and Exhibits attached hereto or referred to herein are hereby
incorporated in and made a part of this Agreement as if set forth in full herein. 
  
 8.14. Governing Law. All issues and questions concerning the construction, validity, enforcement and interpretation of this Agreement and the Schedules and Exhibits hereto shall be governed by, and construed in accordance with, the
laws of the State of Texas 
  
 8.15. Notices. All notices, demands or other
communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been given when delivered personally to the recipient or when sent by facsimile followed by delivery by
reputable overnight courier service, or one day after being sent to the recipient by reputable overnight courier service (charges prepaid). Such notices, demands and other communications shall be sent to the Purchaser and Seller at the addresses
indicated below or to such other address or to the attention of such other Person as the recipient party has specified by prior written notice to the sending party. All notices, demands and other communications hereunder may be given by any other
means (including telecopy or electronic mail), but shall not be deemed to have been duly given unless and until it is actually received by the intended recipient. 
  
 Seller: 
  
 Romeo Villarreal, RN 
 2807 Kings Crossing
Dr. #342 
 Kingwood, TX 77345 
  
 The Purchaser: 
  
 HealthEssentials Solutions, Inc. 
 9510 Ormsby Station Road, Suite 101 
 Louisville, Kentucky 40223 
 Attention:
General Counsel 
 Facsimile No.: (502) 429-4557 
  
 8.16. Waiver of Jury Trial. Each of the parties hereto waives any right it may have to trial by jury in respect of any litigation based on, arising out of, under
or in connection with this Agreement or any course of conduct, course of dealing, verbal or written statement or action of any party hereto. 
  
 8.17. Jurisdiction. Each of parties hereto submits to the jurisdiction of any state or federal court sitting in San Diego County, California, in any action or
proceeding arising out or relating to this Agreement and agrees that all claims in respect of the action or proceeding may be heard and determined in any such court. 
  
 8.18. No Strict Construction. The parties hereto have participated jointly in the negotiation and drafting of this Agreement. In the
event an ambiguity or question of intent or interpretation 
  

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 arises, this Agreement shall be construed as if drafted jointly by the parties hereto, and no presumption or burden of
proof shall arise favoring or disfavoring any party hereto by virtue of the authorship of any of the provisions of this Agreement. 
  
 IN WITNESS WHEREOF, the parties hereto have executed this Stock Purchase Agreement on the date first written above. 
  

					
	 	  	 	  	HealthEssentials Solutions, Inc.
			
	                                       
                                        
                                        
  
 Romeo Villarreal, RN
	  	 	  	  
  
  

                                      
                                        
                                     
 Title:  
                                        
                                        
                     

  

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