Document:

Exhibit 10.1

 

Execution Version

 

LIMITED FORBEARANCE AGREEMENT

 

This LIMITED FORBEARANCE AGREEMENT is made as of November 21, 2018 (this “Agreement”), among Synergy Pharmaceuticals Inc., a Delaware corporation (“Borrower”), the Subsidiary Guarantors (as defined in the Loan Agreement referred to below) party hereto, the Lenders (as defined in the Loan Agreement referred to below), and CRG Servicing LLC, a Delaware limited liability company (“CRG Servicing”), as administrative agent and collateral agent for the Lenders (in such capacities, together with its successors and assigns, “Agent” and, collectively with Lenders, “CRG Parties”).

 

RECITALS

 

A.                                    Borrower, the Subsidiary Guarantors and the CRG Parties are party to the Term Loan Agreement, dated as of September 1, 2017 (as amended as of February 26, 2017, August 28, 2018, October 29, 2018, November 13, 2018 and November 16, 2018 and as further amended, restated, modified or supplemented from time to time, the “Loan Agreement”), among Borrower, the Subsidiary Guarantors party thereto, the lenders party thereto (each a “Lender” and, collectively, the “Lenders”), and Agent.  Capitalized terms used herein without definition have the meanings assigned thereto in the Loan Agreement.

 

B.                                    As of the date hereof, the Events of Default identified on Exhibit A hereto have occurred and are continuing (collectively, the “Designated Defaults”).

 

C.                                    Notwithstanding the existence of the Designated Defaults, Borrower and Subsidiary Guarantors requested that CRG Parties, during the Forbearance Period (defined below), temporarily forbear from exercising their rights and remedies under the Loan Agreement, the other Loan Documents and applicable law with respect to such Designated Defaults (and only with respect thereto).

 

D.                                    Subject to the terms and conditions set forth herein, CRG Parties have agreed to forbear from exercising certain of their default-related rights and remedies against Obligors with respect to the Designated Defaults (and only with respect thereto).

 

E.                                     These Recitals shall be construed as part of this Agreement.

 

NOW, THEREFORE, for valuable consideration, the receipt and adequacy of which is hereby acknowledged, and in consideration of the premises and the mutual covenants contained herein, subject to the satisfaction of the conditions described in Section 5, the parties hereto hereby agree as follows:

 

SECTION 1.                                   Definitions.

 

(a)                                 Certain Defined Terms.  As used herein, the following terms have the following respective meanings:

 

“Agreement” has the meaning set forth in the introduction hereto.

 

“Designated Defaults” has the meaning set forth in the Recitals hereof.

 

 

“Forbearance Period” means the period commencing on November 20, 2018 and ending on the earlier to occur of (i) December 5, 2018 (11:59 p.m. Central time) and (ii) the occurrence of any default or Event of Default other than a Liquidity Covenant Default under the Loan Agreement or the other Loan Documents, other than the Designated Defaults.

 

“Liquidity Covenant Default” means a default during the Forbearance Period resulting from a breach of Section 10.02 of the Loan Agreement that would give rise to an Event of Default under Section 11.01(d) but for the forbearance set forth herein.

 

“Loan Agreement” has the meaning set forth in the Recitals hereof.

 

SECTION 2.                                   Acknowledgment.

 

(a)                                 Acknowledgment of Obligations.  Each Obligor hereby acknowledges, confirms and agrees that, as of November 20, 2018, the Obligors are unconditionally indebted to the Lenders in respect of the Loans in an aggregate amount no less than the amounts set forth in Exhibit B without offset, recoupment, defense or counterclaim of any kind, nature or description whatsoever, all of which (if any exist, and which the Obligors hereby acknowledge do not exist) are hereby waived by the Obligors.

 

(b)                                 Acknowledgment of Security Interest.  Each Obligor hereby acknowledges, confirms and agrees that Secured Parties have, as of the date hereof, and shall continue to have, a valid, enforceable and perfected first-priority (subject only to Permitted Priority Liens) liens upon and security interests in the Collateral, to the extent contemplated by the Security Documents.

 

(c)                                  Acknowledgment of Default.  Each Obligor hereby acknowledges and agrees that the Designated Defaults have occurred and are continuing as of the date hereof, each of which constitutes an Event of Default, and, as a result of the Designated Defaults, as well as any other Defaults or Events of Default that may exist, CRG Parties are entitled to exercise any and all default-related rights and remedies under the Loan Agreement, the other Loan Documents, and/or applicable law, including without limitation, to accelerate the Obligations  or to exercise rights against Collateral and that no Obligor has any valid defense to the enforcement of such default-related rights and remedies.  Each Obligor hereby acknowledges and agrees that the first to occur of the Designated Defaults occurred no later than October 30, 2018 and has continued to date, however, CRG Parties hereby acknowledge, confirm and agree that they have waived such Designated Defaults through and including November 20, 2018.

 

(d)                                 Acknowledgment of Exercise of Remedies.  Each Obligor hereby acknowledges, confirms, and agrees that (i) on November 20, 2018, CRG Parties duly provided notice to the Borrower that various defaults and Events of Default (including, without limitation, the Designated Defaults) have occurred and are continuing; and (ii) such action by CRG Parties was a proper exercise of their rights and remedies, and was made in accordance with the provisions of the Loan Agreement, the other Loan Documents, and applicable law.

 

SECTION 3.                                   Forbearance.  Subject to Section 5, during the Forbearance Period, CRG Parties will not take action, on account of the Designated Defaults or the Liquidity Covenant Default only, to accelerate the Obligations of the Obligors under the Loan Documents or

 

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otherwise exercise their default rights and remedies.  Automatically and without any notice or action by CRG Parties, upon termination or expiration of the Forbearance Period, CRG Parties shall be entitled (but not required) to exercise any of the rights and remedies with respect to the Designated Defaults (or otherwise) available to them under the Loan Documents or applicable law.  For the avoidance of doubt, during the Forbearance Period, the rights and remedies of CRG Parties shall not be limited, adversely affected, or otherwise subject to forbearance or restraint on account of any Default, Event of Default, or other reason, other than a Designated Default or a Liquidity Covenant Default.  For the avoidance of doubt, interest on the Loans and other due and payable Obligations shall continue to accrue at the Default Rate during the Forbearance Period, without being affected by this forbearance.

 

SECTION 4.                                   Conditions to Effectiveness.

 

The effectiveness of Section 3 is expressly conditioned upon the satisfaction and delivery of each of the applicable conditions set forth below:

 

(a)                                 Agent shall have received the following documents, each of which shall be in form and substance acceptable to Lenders:

 

(i)                                     this Agreement duly executed and delivered by Obligors and CRG Parties.

 

(b)                                 Obligors shall have paid or reimbursed Lenders for Lenders’ reasonable out of pocket costs and expenses incurred in connection with this Agreement that have been invoiced at least one Business Day prior to the date hereof, including Lenders’ reasonable out of pocket legal fees and costs, pursuant to Section 13.03(a)(i)(z) of the Loan Agreement.

 

(c)                                  The representations and warranties in Section 7 shall be true and correct on the date hereof.

 

(d)                                 As a condition to the continued effectiveness of Section 3 hereof, the Obligors covenant to:

 

(i)                                     negotiate in good faith with CRG Parties regarding all offers and expressions of interest related to or involving (in whole or in part) a refinancing or restructuring of the Obligations or the sale of Obligors’ assets that are CRG Parties’ collateral, the chapter 11 process, any use of cash collateral or incremental financing, or any bidding procedures or other section 363-related activities that the Obligors may consider during the Forbearance Period;

 

(ii)                                  continue to provide the CRG Parties and their professionals with access to the electronic data room created by or on behalf of Obligors for the purpose of disseminating certain confidential information to CRP Parties and their professionals;

 

(iii)                               continue to permit the CRG Parties to exercise their board of directors supervisor rights as provided in Section 8.15 of the Loan Agreement (as amended by Amendment and Waiver No. 3, dated as of October 30, 2018), provided such right shall remain and be exercised in a manner to permit Obligors to protect applicable privileges; and

 

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(iv)                              maintain all accounts with respect to which a control agreement has been executed in favor of the CRG Parties and is in effect or over which the Secured Parties have “control” (as defined in the Uniform Commercial Code) and cause all cash or cash equivalents of the Obligors to be deposited in such accounts at all times and not to open any new accounts unless and until enforceable control agreements have become effective; provided, however, that the Obligors shall be permitted, in the ordinary course of business, to maintain and utilize (including by depositing cash or cash equivalents therein) the account denominated “Synergy Pharmaceuticals Inc. BENE Pharmametrics Inc. FBO Account” at Wells Fargo Bank, N.A. without the requirement to execute a control agreement with respect thereto.

 

SECTION 5.                                   Reservation of Rights.

 

(a)                                 Each CRG Party has not waived, is not by this Agreement waiving, and has no intention of waiving under this Agreement or any Loan Document, any Defaults, Events of Default, or other noncompliance which may be continuing on the date hereof or any Defaults, Events of Default, or other noncompliance that may occur after the date hereof (whether the same or similar to the Designated Defaults or otherwise), and no CRG Party has agreed to forbear with respect to any of its rights or remedies concerning any Defaults, Events of Default, or other noncompliance (other than, during the Forbearance Period, the Designated Defaults or Liquidity Covenant Default to the extent expressly set forth herein), which may have occurred or are continuing as of the date hereof or which may occur after the date hereof.

 

(b)                                 Neither any “day-by-day” discretionary extensions of credit or releases or permitted uses of cash constituting Collateral or proceeds thereof by the Any CRG Party, nor anything in this Agreement or in any ongoing discussions or negotiations between any CRG Party, on the one hand, and any Obligor or Affiliate of an Obligor, on the other hand, nor any delay on the part of CRG Parties in exercising any of their respective rights and remedies under the Loan Agreement, the other Loan Documents and/or applicable law, shall directly or indirectly: (i) create any obligation to forbear or otherwise refrain from taking any enforcement action, exercising any right or remedy or asserting any defense, or to make any further extensions of credit or releases or permitted uses of cash constituting Collateral or proceeds thereof (other than during the Forbearance Period, with respect to the Designated Defaults and the Liquidity Covenant Default to the extent expressly set forth herein), (ii) constitute a consent to or waiver of any past, present or future Default or Event of Default or other violation of any provisions of the Loan Agreement or any other Loan Document, (iii) amend, modify or operate as a waiver of any provision of the Loan Agreement or any other Loan Document or any right, defense, power, privilege or remedy of any CRG Party thereunder or under applicable law or constitute an agreement to forbear or otherwise refrain (other than during the Forbearance Period, with respect to the Designated Defaults and the Liquidity Covenant Default to the extent expressly set forth herein) or to restructure or modify any of the Obligations in any respect or otherwise modify the capital structure or Collateral of any or all of the Obligors, or (iv) constitute a course of dealing or other basis for altering any rights, defenses, remedies or obligations of any CRG Party under the Loan Documents or any Obligations.  Nothing contained in this Agreement shall confer on any Obligor or Person any right to notice or cure periods with respect to any Event of Default or other defaults or matters which rights remain as set forth in the Loan Documents.

 

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(c)                                  CRG Parties have not waived the Designated Defaults and (subject to the express provisions of Section 3) each CRG Party expressly reserves all of its rights, defenses, powers, privileges and remedies under the Loan Agreement, other Loan Documents and/or applicable law, including, without limitation, subject to Section 3 solely with respect to the Designated Defaults, its right at any time, as applicable, (i) to determine not to make further Loans under the Loan Agreement or releases or permitted uses of cash constituting Collateral or proceeds thereof as a result of the Designated Defaults or the Liquidity Covenant Default, (ii) to charge the Default Rate of interest in respect of the Obligations (as of any date from and after November 20, 2018; for the avoidance of doubt, the Default Rate of interest shall not accrue at any time prior to November 20, 2018), (iii) to commence any legal or other action to collect or enforce any or all of the Obligations from any or all of the Borrower, the other Obligors, and any other Person liable therefor and/or any Collateral, (iv) to foreclose or otherwise realize, collect, or recover on any or all of the Collateral and/or as appropriate, set-off, recoup or apply to the payment of any or all of the Obligations, any or all of the Collateral, (v) to take any other enforcement action or otherwise exercise any or all rights and remedies provided for by any or all of the Loan Agreement, other Loan Documents or applicable law, and (vi) to reject any forbearance, financial restructuring or other proposal made by or on behalf of any Obligor or any creditor or equity holder.  Subject to Section 3 solely with respect to the Designated Defaults and the Liquidity Covenant Defaults, each CRG Party may exercise its rights, defenses, powers, privileges and remedies, including those set forth in (i) through (vi) above at any time in its sole and absolute discretion without further notice.  No oral representations or course of dealing on the part of any CRG Party or any of its officers, employees or agents, and no failure or delay by any CRG Party with respect to the exercise of any right, defense, power, privilege or remedy under any of the Loan Agreement, other Loan Documents or applicable law shall operate as a waiver thereof, and the single or partial exercise of any such right, defense, power, privilege or remedy shall not preclude any later exercise of any other right, defense, power, privilege or remedy.

 

SECTION 6.                                   Release; Covenant Not to Sue; Acknowledgement.

 

(a)                                 Each Obligor and its Affiliates hereby absolutely and unconditionally release and forever discharge each CRG Party and any and all participants, parent corporations, subsidiary corporations, affiliated corporations, insurers, indemnitors, successors and assigns thereof, together with all of the present and former directors, officers, agents, attorneys, consultants, representatives and employees of any of the foregoing (each a “Released Party”), from any and all claims, demands, defenses or causes of action of any kind, nature or description relating to or arising out of or in connection with or as a result of any of the Obligations, the Loan Agreement, any other Loan Documents or any agreement related to any of the foregoing, whether arising in law or equity or upon contract or tort or under any state or federal law or otherwise, which any Obligor has had, now has or has made claim to have against any such person for or by reason of any act, omission, matter, cause or thing whatsoever arising from the beginning of time to and including the date of this Agreement, whether such claims, demands, defenses, and causes of action are matured or unmatured, known or unknown, contingent, liquidated, or otherwise.  It is the intention of each Obligor and each of its Affiliates in providing this release that the same shall be effective as a bar to each and every claim, demand and cause of action specified.  Each Obligor and its Affiliates acknowledge that it may hereafter discover facts different from or in addition to those now known or believed to be true with respect to such claims, demands,

 

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defenses, or causes of action and agree that this instrument shall be and remain effective in all respects notwithstanding any such differences or additional facts.  Each Obligor and its Affiliates understand, acknowledge and agree that the release set forth above may be pleaded as a full and complete defense and may be used as a basis for an injunction against any action, suit or other proceeding which may be instituted, prosecuted or attempted in breach of the provisions of such release.

 

(b)                                 Each Obligor and its Affiliates, on behalf of itself and its successors, assigns, and other legal representatives, hereby absolutely, unconditionally and irrevocably, covenant and agree with and in favor of each Released Party above that it will not sue (at law, in equity, in any regulatory proceeding or otherwise) any Released Party on the basis of any claim released, remised and discharged by any Obligor pursuant to the above release.  If any Obligor, any of its Affiliates or any of their successors, assigns or other legal representations violates the foregoing covenant, each Obligor and its Affiliates, for itself and its successors, assigns and legal representatives, agrees to pay, in addition to such other damages as any Released Party may sustain as a result of such violation, all reasonable attorneys’ fees and costs incurred by such Released Party as a result of such violation.

 

(c)                                  Each Obligor hereby acknowledges its status as a Obligor and affirms its obligations under the Loan Agreement and the other Loan Documents and represents and warrants that, to its knowledge, there are no liabilities, claims, suits, debts, liens, losses, causes of action, demands, rights, damages or costs, or expenses of any kind, character or nature whatsoever, known or unknown, fixed or contingent, which any Obligor may have or claim to have against any Released Party arising with respect to the Obligations, the Loan Agreement or any other Loan Documents.

 

(d)                                 In connection with the releases granted herein, to the extent applicable, the Obligors expressly waive any and all rights conferred upon them by the provisions of Section 1542 of the Civil Code of California and/or any other federal or state statute or common law principle of similar effect. Section 1542 of the Civil Code of California reads as follows:

 

A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.

 

The Obligors understand and acknowledge the significance and consequence of their waiver of Section 1542 of the California Civil Code, as well as any other federal or state statute or common law principle of similar effect.

 

SECTION 7.                                   Representations and Warranties of Obligors.

 

In order to induce CRG Parties to enter into this Agreement, each Obligor hereby jointly and severally represents, warrants and covenants to CRG Parties, as of the date hereof and any other date on which representations and warranties are otherwise remade or deemed remade under the Loan Agreement that:

 

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(a)                                 Representations, Warranties.  (i) After giving effect to this Agreement, no representation or warranty of any Obligor contained in the Loan Agreement or any of the Loan Documents, including this Agreement, shall be untrue or incorrect in any material respect as of the date hereof, except to the extent that such representation or warranty expressly relates to an earlier date, and except for the representations and warranties contained in Section 7.04(b) and Section 7.11 of the Loan Agreement and (ii) no Default or Event of Default (other than the Designated Defaults) has occurred or is continuing, or would result after giving effect hereto.

 

(b)                                 Authorization, Etc.  Each Obligor has the power and authority to execute, deliver and perform this Agreement.  Each Obligor has taken all necessary action (including, without limitation, obtaining approval of its stockholders, if necessary) to authorize its execution, delivery and performance of this Agreement.  No consent, approval or authorization of, or declaration or filing with, any Governmental Authority, and no consent of any other Person, is required in connection with any Obligor’s execution, delivery and performance of this Agreement, except for those already duly obtained.  This Agreement has been duly executed and delivered by each Obligor and constitutes the legal, valid and binding obligation of each Obligor, enforceable against it in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, or similar laws affecting the enforcement of creditor rights generally or by equitable principles relating to enforceability.  No Obligor’s execution, delivery or performance of this Agreement (i) contravenes the terms of any of such Obligor’s organization documents; (ii) conflicts with or constitutes a violation or breach of, or constitutes a default under, or results in the creation or imposition of any Lien (other than pursuant to the Security Documents) upon the property of any Obligor by reason of the terms of any material obligation under any Contract to which such Obligor is a party (including without limitation obligations arising from agreements relating to any such Contract to which any Obligor is a party or which is binding upon it); or (iii) violates any Requirement of Law in any material respect.

 

(c)                                  Security.  The Secured Parties’ security interests in the Collateral continue to be perfected, valid, binding and enforceable first-priority (subject only to Permitted Priority Liens) security interests which secure the Obligations and no tax or judgment liens are currently of record against any Obligor. Neither the Borrower nor any Subsidiary Guarantor holds or controls, or will hold or control during the Forbearance Period, cash or cash equivalents that is unencumbered (other than in accordance with the Loan Documents).

 

SECTION 8.                                   Reference to and Effect on Loan Documents.

 

(a)                                 Ratification.  Except as specifically provided in this Agreement, the Loan Agreement and the other Loan Documents shall remain in full force and effect and each Obligor hereby ratifies and reaffirms each term and condition set forth in the Loan Agreement and in the other Loan Documents, effective as of the date hereof.

 

(b)                                 No Waiver.  This Agreement is only applicable and shall only be effective in the specific instances and for the specific purposes for which made or given.  Except as specifically provided in this Agreement, the execution, delivery and effectiveness of this Agreement shall not operate as a waiver or forbearance of any right, power or remedy of any CRG Party under the Loan Agreement or any of the Loan Documents, or constitute a consent, waiver or modification with respect to any provision of the Loan Agreement or any of the Loan Documents which shall

 

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remain in full force and effect.  Upon the effectiveness of this Agreement each reference in (i) the Loan Agreement to “this Agreement,” “hereunder,” “hereof,” or words of similar import and (ii) any Loan Document to “the Agreement” shall, in each case and except as otherwise specifically stated therein, mean and be a reference to the Loan Agreement as modified hereby.

 

SECTION 9.                                   Affirmation of Subsidiary Guarantors.

 

(a)                                 Each Subsidiary Guarantor hereby acknowledges that it has reviewed the terms and provisions of this Agreement and consents to any modification of the Loan Documents effected pursuant to this Agreement.  Each Subsidiary Guarantor hereby confirms to the Agent and the other Secured Parties that, after giving effect to this Agreement, the Guarantee of such Subsidiary Guarantor and each other Loan Document to which such Subsidiary Guarantor is a party continues in full force and effect and is the legal, valid and binding obligation of such Subsidiary Guarantor, enforceable against such Subsidiary Guarantor in accordance with its terms except as enforceability may be limited by applicable bankruptcy, insolvency, or similar laws affecting the enforcement of creditors’ rights generally or by equitable principles relating to enforceability.  Each Subsidiary Guarantor further acknowledges, confirms and agrees that Control Agent and the other Lenders have and shall continue to have a valid, enforceable and perfected first-priority (subject only to Permitted Priority Liens) lien upon and security interest in the Collateral granted to Secured Parties pursuant to the Loan Documents or otherwise granted to or held by Secured Parties.

 

(b)                                 Each Subsidiary Guarantor acknowledges and agrees that (i) notwithstanding the conditions to effectiveness set forth in this Agreement, such Subsidiary Guarantor is not required by the terms of the Loan Agreement or any other Loan Document to consent to the waivers or modifications to the Loan Agreement effected pursuant to this Agreement and (ii) nothing in the Loan Agreement, this Agreement or any other Loan Document shall be deemed to require the consent of such Subsidiary Guarantor to any future waivers or modifications to the Loan Agreement.

 

SECTION 10.                            Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.

 

(a)                                 Governing Law.  This Agreement and the rights and obligations of the parties hereunder shall be governed by, and construed in accordance with, the law of the State of New York, without regard to principles of conflicts of laws that would result in the application of the laws of any other jurisdiction; provided that Section 5-1401 of the New York General Obligations Law shall apply.

 

(b)                                 Submission to Jurisdiction.  Each Obligor agrees that any suit, action or proceeding with respect to this Agreement or any other Loan Document to which it is a party or any judgment entered by any court in respect thereof may be brought initially in the federal or state courts in Houston, Texas or in the courts of its own corporate domicile and irrevocably submits to the non-exclusive jurisdiction of each such court for the purpose of any such suit, action, proceeding or judgment.  This Section 5 is for the benefit of the Lenders only and, as a result, no Lender shall be prevented from taking proceedings in any other courts with jurisdiction.  To the extent allowed by applicable Laws, the Lenders may take concurrent proceedings in any number of jurisdictions.

 

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(c)                                  Waiver of Jury Trial.  Each Obligor and each Lender hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any suit, action or proceeding arising out of or relating to this Agreement, the other Loan Documents or the transactions contemplated hereby or thereby.

 

SECTION 11.                            Miscellaneous.

 

(a)                                 Severability.  In case any provision of or obligation under this Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.

 

(b)                                 Headings.  Headings and captions used in this Agreement (including the Exhibits, Schedules and Annexes hereto, if any) are included for convenience of reference only and shall not be given any substantive effect.

 

(c)                                  Integration.  This Agreement constitutes a Loan Document and, together with the other Loan Documents, incorporates all negotiations of the parties hereto with respect to the subject matter hereof and is the final expression and agreement of the parties hereto with respect to the subject matter hereof.

 

(d)                                 Counterparts.  This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument and any of the parties hereto may execute this Agreement by signing any such counterpart.

 

(e)                                  Controlling Provisions.  In the event of any inconsistencies between the provisions of this Agreement and the provisions of any other Loan Document, the provisions of this Agreement shall govern and prevail.

 

(f)                                   Loan Document.  This Agreement is a Loan Document.

 

(g)                                  Entire Agreement.  This Agreement, including all schedules and other documents attached hereto or incorporated by reference herein or delivered in connection herewith, constitutes the entire agreement of the signing parties with respect to the subject matter hereof and supersedes all other understandings, oral or written, with respect to the subject matter hereof.

 

(h)                                 Time of the Essence.  With regard to all dates and time periods set forth or referred to in this Agreement, time is of the essence.

 

(i)                                     Reviewed by Attorneys.  Each Obligor represents and warrants to CRG Parties that it (i) understands fully the terms of this Agreement and the consequences of the execution and delivery of this Agreement, (ii) has been afforded an opportunity to have this Agreement reviewed by, and to discuss this Agreement and the documents executed in connection herewith, with such attorneys and other persons and advisors as such Obligor may wish, and (iii) has entered into this Agreement and executed and delivered all documents in connection herewith of its own free will and accord and without threat, duress or other coercion of any kind by any Person.  The parties hereto acknowledge and agree that neither this Agreement nor any of the

 

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other documents executed pursuant hereto shall be construed more favorably in favor of one party over the other based upon which party drafted the same, it being acknowledged that all parties hereto contributed substantially to the negotiation and preparation of this Agreement and the other documents executed pursuant hereto or in connection herewith.

 

(j)                                    Further Assurances.  Each Obligor agrees to, and to cause any other Obligor to, take all further actions and execute all further documents as Agent may from time to time reasonably request to carry out the transactions contemplated by this Agreement and all other agreements executed and delivered in connection herewith.

 

[signature pages follow]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the day and year first above written.

 

	
 
    	
BORROWER:
    
	
 
    	
 
    
	
 
    	
SYNERGY   PHARMACEUTICALS INC.
    
	
 
    	
 
    
	
 
    	
By
    	
/s/ Gary Gemignani
    
	
 
    	
 
    	
Name:
    	
Gary Gemignani
    
	
 
    	
 
    	
Title:
    	
EVP, Chief   Financial Officer
    
	
 
    	
 
    
	
 
    	
SUBSIDIARY   GUARANTORS:
    
	
 
    	
 
    
	
 
    	
SYNERGY ADVANCED   PHARMACEUTICALS, INC.
    
	
 
    	
 
    
	
 
    	
By
    	
/s/ Gary Gemignani
    
	
 
    	
 
    	
Name:
    	
Gary Gemignani
    
	
 
    	
 
    	
Title:
    	
EVP, Chief   Financial Officer
    

 

[Signature Page to Forbearance Agreement]

 

 

	
ADMINISTRATIVE   AGENT:
    	
 
    
	
 
    	
 
    
	
CRG SERVICING LLC
    	
 
    
	
 
    	
 
    
	
By
    	
/s/ Nathan Hukill
    	
 
    
	
 
    	
Nathan Hukill
    	
 
    
	
 
    	
President
    	
 
    
	
 
    	
 
    
	
LENDERS:
    	
 
    
	
 
    	
 
    
	
CRG PARTNERS   III–PARALLEL FUND “A” L.P.
    	
 
    
	
 
    	
By
    	
CRG PARTNERS III–PARALLEL FUND “A” GP L.P.,   its General Partner
    	
 
    
	
 
    	
By
    	
CRG PARTNERS III   GP LLC, its General Partner
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By
    	
/s/ Nathan Hukill
    	
 
    
	
 
    	
 
    	
Nathan Hukill
    	
 
    
	
 
    	
 
    	
Authorized   Signatory
    	
 
    
	
 
    	
 
    
	
CRG PARTNERS III   (CAYMAN) UNLEV AIV I L.P.
    	
 
    
	
 
    	
By
    	
CRG PARTNERS III (CAYMAN) GP L.P., its   General Partner
    	
 
    
	
 
    	
By
    	
CRG PARTNERS III   GP LLC, its General Partner
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By
    	
/s/ Nathan Hukill
    	
 
    
	
 
    	
 
    	
Nathan Hukill
    	
 
    
	
 
    	
 
    	
Authorized   Signatory
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Witness:
    	
/s/ Nicole Nesson
    	
 
    
	
 
    	
Name: Nicole   Nesson
    	
 
    
	
 
    	
 
    
	
CRG ISSUER 2017-1
    	
 
    
	
 
    	
By
    	
CRG SERVICING LLC,   acting by power of attorney
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By
    	
/s/ Nathan Hukill
    	
 
    
	
 
    	
 
    	
Nathan Hukill
    	
 
    
	
 
    	
 
    	
Authorized   Signatory
    	
 
    
						

 

[Signature Page to Forbearance Agreement]

 

 

EXHIBIT A
 to Forbearance Agreement

 

EVENTS OF DEFAULT

 

1.                                      An Event of Default under Section 11.01(d) of the Loan Agreement of the Loan Agreement resulting from a breach of Section 10.01 of the Loan Agreement.

 

Beginning on October 30, 2018, Borrower has not maintained at all times an Average Market Capitalization, calculated on a trailing five (5) trading day basis, in an amount equal to at least 200% of the aggregate outstanding principal amount of Loans (excluding PIK Loans).

 

 

EXHIBIT B
 to Forbearance Agreement

 

REPAYMENT AMOUNT

 

[Please see attached]ASSET
PURCHASE AGREEMENT

 

BY
AND AMONG

 

JELLICO
community hospital, INC.

 

AND

 

CAREPLUS
RURAL HEALTH CLINIC, LLC

 

AND

 

JELLICO
MEDICAL CENTER, INC.

 

AND

 

COMMUNITY
HOSPITAL CORPORATION

 

AND

 

RENNOVA
HEALTH INC.

 

November
20, 2018

 

 

 

    	 	 	 

    	 

    

 

TABLE
OF CONTENTS

 

	 	 	 	Page
	 	 	 	 
	1.	PURCHASE OF ASSETS	1
	 	1.1	Assets	1
	 	1.2	Excluded
    Assets	3
	 	1.3	Assumed
    Liabilities	4
	 	1.4	Excluded
    Liabilities	4
	 	1.5	Purchase
    Price	6
	 	1.6	Net
    Working Capital, Estimates and Audits	6
	 	1.7	Transition
    Patients	7
	 	1.8	Meaningful
    Use Funds	8
	 	1.9	Prorations	9
	 	1.10	Physical
    Inventory	10
	 	1.11	Owned
    Personal Property FMV	10
	2.	CLOSING	11
	 	2.1	Closing	11
	 	2.2	Actions
    of Sellers at Closing	11
	 	2.3	Actions
    of Buyer at Closing	12
	3.	REPRESENTATIONS AND WARRANTIES OF SELLERS	13
	 	3.1	Existence
    and Capacity; Subsidiaries	13
	 	3.2	Powers;
    Consents; Absence of Conflicts With Other Agreements, Etc.	13
	 	3.3	Binding
    Agreement	14
	 	3.4	Financial
    Statements	14
	 	3.5	Certain
    Post-Balance Sheet Results	14
	 	3.6	Licenses	15
	 	3.7	Medicare
    Participation/Accreditation/Compliance	16
	 	3.8	Regulatory
    Compliance	16
	 	3.9	Equipment	16
	 	3.10	Real
    Property	17
	 	3.11	Title	18
	 	3.12	Employee
    Benefit Plans	18
	 	3.13	Litigation
    or Proceedings	18

 

    	 	- i-	 

     

    

 

	 	3.14	Environmental
    Laws	19
	 	3.15	Taxes	19
	 	3.16	Employee
    Relations	20
	 	3.17	The
    Contracts	20
	 	3.18	Supplies	21
	 	3.19	Insurance	21
	 	3.20	Third
    Party Payor Cost Reports	21
	 	3.21	Medical
    Staff Matters	21
	 	3.22	Condition
    of Assets	22
	 	3.23	Certificates
    of Need	22
	 	3.24	Regulatory
    Compliance	22
	 	3.25	Information
    Privacy and Security Compliance	23
	 	3.26	Intellectual
    Property	23
	4.	REPRESENTATIONS AND WARRANTIES OF BUYER	24
	 	4.1	Existence
    and Capacity	24
	 	4.2	Powers;
    Consents; Absence of Conflicts with Other Agreements, Etc.	24
	 	4.3	Binding
    Agreement	24
	 	4.4	Availability
    of Funds	24
	 	4.5	Buyer
    Acknowledgement	25
	5.	COVENANTS OF SELLERS PRIOR TO CLOSING	25
	 	5.1	Access
    and Information	25
	 	5.2	Operations	25
	 	5.3	Negative
    Covenants	26
	 	5.4	Governmental
    Approvals	26
	 	5.5	FTC
    Notification	27
	 	5.6	Additional
    Financial Information	27
	 	5.7	No-Shop
    Clause	27
	 	5.8	Efforts
    to Close	27
	 	5.9	Quality
    Reporting	28
	 	5.10	Closure
    of Maternity Department	28
	6.	COVENANTS OF BUYER PRIOR TO CLOSING	28
	 	6.1	Governmental
    Approvals	28
	 	6.2	FTC
    Notification	28

 

    	 	- ii-	 

     

    

 

	 	6.3	Title
    Commitment and Survey	28
	 	6.4	Efforts
    to Close	30
	7.	CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER	30
	 	7.1	Representations/Warranties;
    Covenants	30
	 	7.2	Governmental
    Approvals	30
	 	7.3	Title
    Policy	31
	 	7.4	Actions/Proceedings	31
	 	7.5	Insolvency	31
	 	7.6	Vesting/Recordation	31
	 	7.7	Closing
    Deliveries	31
	 	7.8	No
    Material Adverse Effect	31
	 	7.9	Material
    Consents	31
	 	7.10	Environmental
    Surveys	31
	 	7.11	Leased
    Real Property Consent and Estoppel	32
	8.	CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLERS	32
	 	8.1	Representations/Warranties;
    Covenants	32
	 	8.2	Governmental
    Approvals	32
	 	8.3	Actions/Proceedings	32
	 	8.4	Insolvency	32
	 	8.5	Closing
    Deliveries	32
	9.	SELLER’S COVENANT NOT TO COMPETE	33
	 	9.1	Non-Compete	33
	 	9.2	Enforcement	33
	10.	ADDITIONAL AGREEMENTS	33
	 	10.1	Allocation
    of Purchase Price	33
	 	10.2	Termination
    Prior to Closing	34
	 	10.3	Post-Closing
    Access to Information	34
	 	10.4	Preservation
    and Access to Records After the Closing	35
	 	10.5	Tax
    and Medicare Effect	35
	 	10.6	Reproduction
    of Documents	35
	 	10.7	Cooperation
    on Tax Matters	36
	 	10.8	Cost
    Report Matters	36
	 	10.9	Misdirected
    Payments, Etc.	36

 

    	 	- iii -	 

     

    

 

	 	10.10	Employee
    Matters	37
	 	10.11	WARN
    Act Compliance	37
	 	10.12	Indigent
    Care Policies	38
	 	10.13	Medical
    Staff Privileges	38
	 	10.14	Use
    of Controlled Substance Permits	38
	 	10.15	Transition
    Services Agreement	38
	 	10.16	Use
    of Excluded Marks	38
	 	10.17	Access
    to Records Including as to Recovery and Audit Information	39
	 	10.18	Continuation
    of Insurance.	39
	 	10.19	Tax
    Abatement.	39
	11.	INDEMNIFICATION	39
	 	11.1	Indemnification
    by Buyer	39
	 	11.2	Indemnification
    by Sellers	39
	 	11.3	Limitations	40
	 	11.4	Notice
    and Control of Litigation	40
	 	11.5	Notice
    of Claim	41
	 	11.6	Mitigation	41
	 	11.7	Exclusive
    Remedy	41
	12.	MISCELLANEOUS	42
	 	12.1	Schedules
    and Other Instruments	42
	 	12.2	Additional
    Assurances	42
	 	12.3	Third
    Party Consents	42
	 	12.4	Consents,
    Approvals and Discretion	42
	 	12.5	Legal
    Fees and Costs	42
	 	12.6	Choice
    of Law	43
	 	12.7	Benefit/Assignment	43
	 	12.8	No
    Brokerage	43
	 	12.9	Cost
    of Transaction	43
	 	12.10	Confidentiality	43
	 	12.11	Public
    Announcements	44
	 	12.12	Waiver
    of Breach	44
	 	12.13	Notice	44
	 	12.14	Severability	45

 

    	 	- iv
                                                                                                                                                                                                                                                                 -	 

     

    

 

	 	12.15	Gender
    and Number	45
	 	12.16	Divisions
    and Headings	45
	 	12.17	Survival	45
	 	12.18	Affiliates	45
	 	12.19	Waiver
    of Jury Trial	45
	 	12.20	Effective
    Time	46
	 	12.21	No
    Inferences	46
	 	12.22	No
    Third Party Beneficiaries	46
	 	12.23	Enforcement
    of Agreement	46
	 	12.24	Entire
    Agreement/Amendment	46
	 	12.25	Seller
    Guarantor Guaranty	46
	 	12.26	Buyer
    Guarantor Guaranty	47
	 	12.27	Risk
    of Loss	47
	 	12.28	Sellers’
    Knowledge	47
	 	12.29	Material
    Adverse Effect	47

 

    	 	- v -	 

     

    

 

EXHIBITS

 

	Description	Exhibit
	Limited
    Power of Attorney	A

 

SCHEDULES

 

	Description	Schedules
	 	 
	Owned
    Real Property	1.1(a)(i)
	Leased
    Real Property	1.1(a)(ii)
	Excluded
    Assets	1.2
	Excluded
    Contracts	1.2(j)
	Assumed
    Liabilities	1.3(b)
	Remaining
    Liabilities	1.3(d)
	Excluded
    Liabilities	1.4
	Net
    Working Capital	1.6
	Conflicts
    with Other Agreements	3.2(c)
	Financial
    Statements	3.4
	Certain
    Post Balance Sheet Results	3.5
	Licenses	3.6
	Medicare
    Participation/Accreditation/Compliance	3.7
	Regulatory
    Compliance	3.8
	Equipment	3.9
	Employee
    Benefit Plans	3.12
	Litigation
    or Proceedings	3.13
	Environmental
    Laws	3.14
	Taxes	3.15
	Employee
    Relations	3.16
	Assumed
    Contracts	3.17
	Insurance	3.19
	Third
    Party Payor Cost Reports	3.20
	Medical
    Staff Matters	3.21
	Certificates
    of Need	3.23
	Intellectual
    Property	3.26
	Material
    Consents	7.9
	Non-Compete	9.1
	Brokers
    	12.8
	Sellers’
    Knowledge	12.28

 

    	 	- vi -	 

     

    

 

GLOSSARY
OF DEFINED TERMS

 

	Defined
    Term	Section
	 	 
	Affiliate	12.18
	AG
    Approval	5.4
	Agreement	Introduction
	Allocation	10.1
	Applications	3.23
	Assets	1.1
	Assignment
    and Assumption Agreement	2.2(d)
	Assignments
    of Leases	2.2(a)
	Assumed
    Contracts	3.17
	Assumed
    Liabilities	1.3
	Balance
    Sheet Date	3.4(a)
	Basket
    Amount	11.3
	Benefit
    Plans	3.12
	Buyer	Introduction
	Buyer
    Entities	12.7
	Buyer
    Guarantor	Introduction
	Buyer
    Indemnified Parties	11.2
	CERCLA	3.14
	Certificate
    of Need	3.23
	CHC	1.2(f)
	CIHQ	3.7
	Clinic
    Seller	Introduction
	Closing	2.1
	Closing
    Date	2.1
	CMS	1.4(l)
	COBRA	1.3(d)
	Code	3.12
	Contracts	3.17
	Control	12.18
	DRG
    Transition Patients	1.7(a)
	Effective
    Time	2.1
	Endorsements	7.3
	Environmental
    Conditions	6.3(e)
	Environmental
    Inspection Period	6.3(e)
	Environmental
    Laws	3.14
	ERISA	3.12
	Excluded
    Assets	1.2
	Excluded
    Intellectual Property	3.26(d)
	Excluded
    Liabilities	1.4
	Excluded
    Marks	1.2(f)
	Exemption
    Certificate	3.23
	Financial
    Statements	3.4
	FTC	5.5
	GAAP	3.4

 

    	 	- vii -	 

     

    

 

GLOSSARY
OF DEFINED TERMS

 

	Defined
    Term 	Section
	 	 
	Government
    Entity	3.8
	Hazardous
    Substances	3.14
	Hospital	Recital
    A
	Hospital
    Landlord	1.1(a)
	Hospital
    Lease	1.1(a)
	Hospital
    Seller	Introduction
	HQI
    Program	5.9
	HSR
    Act	5.5
	Indemnified
    Party	11.4
	Indemnifying
    Party	11.4
	Information
    Privacy or Security Laws	3.25(c)
	Intellectual
    Property	3.26(c)
	Interim
    Statements	5.6
	Justice
    Department	5.5
	Leased
    Real Property	1.1(a)
	Licenses	3.6
	Material
    Adverse Effect	12.29
	Medical
    Staff	3.21
	MU
    Payments	1.8(a)
	Net
    Working Capital	1.6(a)
	Objections	6.3(c)
	Owned
    Personal Property	1.1(b)
	Owned
    Real Property	1.1(a)
	Permitted
    Encumbrances	3.10(a)
	Personal
    Information	3.25(c)
	PIP	1.7(c)
	Post-Effective
    Time Periods	1.8(b)
	Pre-Effective
    Time Periods	1.8(a)
	Prohibited
    Business	9.1
	Purchase
    Price	1.5
	PYA	1.6(c)
	RCRA	3.14
	Real
    Property	1.1(a)
	Records	10.4
	Restricted
    Area	9.1
	Seller
    or Seller	Introduction
	Seller
    Cost Reports	10.8
	Seller
    Entities	12.7
	Seller
    Guarantor	Introduction
	Seller
    Indemnified Parties	11.1
	Seller’
    knowledge	12.28
	Straddle
    Period	1.8(c)
	Survey	6.3(b)
	Survival
    Period	12.17

 

    	 	- viii -	 

     

    

 

GLOSSARY
OF DEFINED TERMS

 

	Defined
    Term 	Section
	 	 
	Tax
    or Taxes	3.15
	Tail
    Policies	10.18
	TDH	3.6
	Title
    Commitment	6.3(a)
	Title
    Company	6.3(a)
	Title
    Evidence	6.3(c)
	Title
    Policy	6.3(a)
	Transition
    Patients	1.7
	Transition
    Services	1.7
	Value
    of Inventory	1.10
	WARN
    Act	10.11

 

    	 	- ix
                                                                                                                                                                                                                                                                 -	 

     

    

 

ASSET
PURCHASE AGREEMENT

 

THIS
ASSET PURCHASE AGREEMENT (the “Agreement”) is made and entered into as of November 20, 2018, by and among
(i) JELLICO COMMUNITY HOSPITAL, INC., a Tennessee corporation (“Hospital Seller”), and CAREPLUS RURAL HEALTH
CLINIC, LLC, a Kentucky limited liability company (“Clinic Seller”) (Hospital Seller and Clinic Seller are each
sometimes referred to as a “Seller” and collectively as the “Sellers”), (ii) JELLICO MEDICAL CENTER,
INC., a Tennessee corporation (“Buyer”), (iii) COMMUNITY HOSPITAL CORPORATION, a Texas non-profit corporation
(“Seller Guarantor”), and (iv) RENNOVA HEALTH, INC., a Florida corporation (“Buyer Guarantor”).

 

RECITALS:

 

A.
Sellers operate an acute care hospital known as Jellico Community Hospital, located at 188 Hospital Lane, Jellico, TN 37762,
and businesses related thereto, including a rural health clinic located at 993 Highway 25, Williamsburg, Kentucky, and other outpatient
care facilities and ancillary services (collectively referred to as the “Hospital”).

 

B.
Sellers desire to sell to Buyer, and Buyer desires to purchase from Sellers, substantially all of the assets of Sellers which
are directly or indirectly related to, necessary for, or used in connection with, the operation of the Hospital, on the terms
and conditions set forth in this Agreement.

 

C.
Seller Guarantor is a party to this Agreement for purposes of guaranteeing certain obligations of Sellers as set forth herein.

 

D.
Buyer Guarantor is a party to this Agreement for purposes of guaranteeing certain obligations of Sellers as set forth herein.

 

AGREEMENT:

 

NOW,
THEREFORE,
for and in consideration of the premises and the agreements, covenants, representations, and warranties hereinafter set forth
and other good and valuable consideration, the receipt and adequacy of which are forever acknowledged and confessed, the parties
hereto agree as follows:

 

1.
PURCHASE OF ASSETS.

 

1.1
Assets. Subject to the terms and conditions of this Agreement, as of the Closing (as defined in Section 2.1 hereof),
Sellers agree to sell, convey, transfer and deliver to Buyer, and Buyer agrees to purchase, all right, title and interest of Sellers
in and to all of the assets of every kind and nature, whether real, personal or mixed, tangible or intangible, owned or used by
Sellers in connection with, or otherwise associated with, the operation of the Hospital, other than the Excluded Assets (hereinafter
defined), free and clear of all liabilities, claims, liens, security interests and restrictions other than the Assumed Liabilities
and the Permitted Encumbrances, which assets shall include, without limitation, the following (the “Assets”):

 

    	 	 	 

    	 

    

 

(a)
fee simple to the real property described on Schedule 1.1(a)(i) hereto, together with all improvements, any construction
in progress, and any other buildings and fixtures thereon, and all rights, privileges and easements appurtenant thereto, including
appurtenant rights in and to any public streets or rights of way (collectively, the “Owned Real Property”), and leasehold
title to the real property that is leased to Sellers pursuant to the leases described on Schedule 1.1(a)(ii) hereto (collectively,
the “Leased Real Property”; the Owned Real Property and the Leased Real Property being referred to herein as the “Real
Property”), including, without limitation, the Facility Lease Agreement dated May 1, 2015, between the City of Jellico (“Hospital
Landlord”) and Hospital Seller (the “Hospital Lease”);

 

(b)
all tangible personal property that is owned by Sellers, including, without limitation, all major, minor or other equipment,
vehicles, furniture and furnishings (the “Owned Personal Property”);

 

(c)
all supplies and inventory located at the Hospital;

 

(d)
assumable deposits, prepaid expenses and claims for refunds;

 

(e)
all claims, causes of action, and judgments in favor of Sellers relating to the condition of the Assets and, to the extent
assignable by Sellers, all warranties (express or implied) and rights and claims assertable by (but not against) Sellers related
to the Assets;

 

(f)
all financial, patient, medical staff and personnel records relating to the Hospital (including, without limitation, all
equipment records, medical administrative libraries, medical records, documents, catalogs, books, records, files, operating manuals
and current personnel records);

 

(g)
all rights and interests of Sellers in the “Assumed Contracts”, as defined in Section 3.17 below;

 

(h)
Sellers’ Medicare and Medicaid provider numbers and all rights under the corresponding Medicare and Medicaid provider
agreements, to the extent transferable;

 

(i)
all licenses, permits, certificates, certificates of need, registrations and accreditations, to the extent assignable,
held by Sellers relating to the ownership, development, and operation of the Hospital (including, without limitation, any pending
or approved governmental approvals);

 

(j)
except for the Excluded Marks, all names, trade names, trademarks and service marks (or variations thereof) associated
with the Hospital, all goodwill associated therewith, and all applications and registrations associated therewith;

 

(k)
all goodwill associated with the Hospital and the Assets;

 

(l)
the assets owned by Affiliates (as defined in Section 12.18 below) of Seller which are primarily used in connection
with the operations of the Hospital; and

 

    	 	- 2 -	 

     

    

 

(m)
the interest of Sellers in all property of the foregoing types, arising or acquired in the ordinary course of the business
of Sellers in respect of the Hospital between the date hereof and the Closing.

 

1.2
Excluded Assets. Those assets of Sellers described below, together with any assets described on Schedule 1.2 hereto,
shall be retained by Sellers (collectively, the “Excluded Assets”) and shall not be conveyed to Buyer:

 

(a)
cash and cash equivalents;

 

(b)
all amounts payable to Sellers in respect of third party payors pursuant to retrospective settlements (including, without
limitation, pursuant to Medicare, Medicaid and TriCare/CHAMPUS cost reports filed or to be filed by Sellers for periods prior
to the Effective Time (hereinafter defined) and retrospective payment of claims that are the subject of CMS Recovery Audit Contractor
appeals) and all appeals and appeal rights of Sellers relating to such settlements, including cost report settlements, for periods
prior to the Effective Time;

 

(c)
all records relating to the Excluded Assets and the Excluded Liabilities (as defined below) to the extent that Buyer does
not need the same in connection with the ongoing activities of the Hospital, the Assets, or the Assumed Liabilities (as defined
below), as well as all records which by law Seller or their Affiliates are required to maintain in their possession; provided,
however, that in the latter case, copies of such records may be made available upon the reasonable request of Buyer;

 

(d)
any reserves or prepaid expenses related to Excluded Assets and Excluded Liabilities (such as prepaid legal expenses or
insurance premiums);

 

(e)
all accounts receivable arising from the rendering of services to patients at the Hospital, billed and unbilled, recorded
or unrecorded, with collection agencies or otherwise, accrued and existing in respect of services rendered prior to the Effective
Time;

 

(f)
any and all names, symbols, trademarks, logos or other symbols used in connection with the Hospital and the Assets which
include the names “Community Hospital Corporation,” “CHC” or any variants thereof or any other names which
are proprietary to Community Hospital Corporation (“CHC”) or its Affiliates (other than Sellers) (the “Excluded
Marks”);

 

(g)
receivables from or obligations with Sellers or their Affiliates;

 

(h)
all insurance proceeds arising in connection with the operation of the Hospital or the Assets prior to the Effective Time
and all insurance proceeds arising in connection with the Excluded Assets and the Excluded Liabilities;

 

(i)
any computer software and programs which are proprietary to CHC or CHC’s Affiliates;

 

(j)
all of CHC’s proprietary manuals, marketing materials, policy and procedure manuals, standard operating procedures
and marketing brochures, data and studies or analyses, any contracts, commitments or agreements that are available only to Sellers
by reason of its being an Affiliate of CHC, and any other such contracts, commitments or agreements that are not Contracts, including,
without limitation, those set forth on Schedule 1.2(j);

 

    	 	- 3 -	 

     

    

 

(k)
all rights in connection with and the assets of Sellers’ employee benefit plans;

 

(l)
all documents, records, operating manuals and film (in format) pertaining to the Hospital which are proprietary to CHC
or CHC’s Affiliates or which by law Sellers or their Affiliates are required to retain; provided, however, that in the latter
case, copies of such records may be made available upon the reasonable request of Buyer;

 

(m)
all obligations between Sellers and/or between Sellers and Seller Guarantor;

 

(n)
all equity interests in Clinic Seller and Jellico Healthcare Associates, LLC; and

 

(o)
all rights of Sellers under this Agreement and its related documents.

 

1.3
Assumed Liabilities. In connection with the conveyance of the Assets to Buyer, Buyer agrees to assume, as of the Effective
Time, the future payment and performance of the following liabilities (the “Assumed Liabilities”) of Sellers:

 

(a)
all obligations accruing after the Effective Time with respect to the Assumed Contracts;

 

(b)
the capital lease obligations set forth on Schedule 1.3(b) hereto;

 

(c)
obligations and liabilities as of the Effective Time in respect of accrued vacation, holiday, and sick pay of Sellers’
employees at the Hospital who are hired by Buyer as of the Effective Time, and related taxes; and

 

(d)
all remaining liabilities and obligations to former employees or qualified beneficiaries of any Seller under the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), after such Seller ceases to provide any group health
plan to its employees, as set forth on Schedule 1.3(d).

 

1.4
Excluded Liabilities. Except for the Assumed Liabilities, Buyer shall not assume and under no circumstances shall Buyer
be obligated to pay or assume, and neither the Assets nor any other assets of Buyer shall be or become liable for or subject to
any liability, indebtedness, commitment, or obligation of Sellers, whether known or unknown, fixed or contingent, recorded or
unrecorded, currently existing or hereafter arising or otherwise (collectively, the “Excluded Liabilities”), including,
without limitation, the following Excluded Liabilities:

 

(a)
any debt, obligation, expense or liability of Sellers that is not an Assumed Liability;

 

    	 	- 4 -	 

     

    

 

(b)
claims or potential claims for medical malpractice or general liability arising from events that occurred prior to the
Effective Time;

 

(c)
those claims and obligations (if any) specified in Schedule 1.4 hereto;

 

(d)
any liabilities associated with or arising out of any of the Excluded Assets;

 

(e)
liabilities or obligations of Sellers in respect of periods prior to the Effective Time arising under the terms of the
Medicare, Medicaid, TriCare/CHAMPUS, Blue Cross, or other third party payor programs, and any liability arising pursuant to the
Medicare, Medicaid, TriCare/CHAMPUS, Blue Cross, or any other third party payor programs as a result of the consummation of any
of the transactions contemplated under this Agreement;

 

(f)
any liability or obligation of Sellers for Taxes, including, without limitation, (i) any Taxes arising as a result of
Sellers’ operation of the Hospital or ownership of the Assets prior to the Effective Time, (ii) any property Taxes which
are the obligation of Sellers pursuant to Section 1.9, and (iii) any liability of Sellers for the unpaid Taxes of any individual,
entity or other party under Treasury Regulations Section 1.1502-6 (or any similar provision of state, local, or foreign law),
as a transferee or successor, by contract, or otherwise;

 

(g)
liability for any and all claims by or on behalf of Sellers’ employees relating to periods prior to the Effective
Time including, without limitation, liability for any severance payments, pension, profit sharing, deferred compensation, or any
other employee health and welfare benefit plans, liability for any EEOC claim, ADA claim, FMLA claim, wage and hour claim, unemployment
compensation claim, or workers’ compensation claim (provided, however, that this clause (g) shall not apply to any and all
employee benefits constituting Assumed Liabilities);

 

(h)
any obligation or liability accruing, arising out of, or relating to any federal, state or local investigations of, or
claims or actions against, Sellers or any of their Affiliates or any of their employees, medical staff, agents, vendors or representatives
with respect to acts or omissions prior to the Effective Time;

 

(i)
any civil or criminal obligation or liability accruing, arising out of, or relating to any acts or omissions of Seller,
their Affiliates or their directors, officers, employees and agents claimed to violate any constitutional provision, statute,
ordinance or other law, rule, regulation, interpretation or order of any Governmental Entity (as defined in Section 3.8);

 

(j)
liabilities or obligations arising as a result of any breach by Sellers at any time of any contract or commitment that
is not assumed by Buyer;

 

(k)
liabilities or obligations arising out of any breach by Sellers prior to the Effective Time of any Contract;

 

(l)
any recoupment with respect to periods prior to Closing in connection with audits performed by Zone Program Integrity
Contractors, Medicare Recovery Audit Contractors, or other contractors or auditors pursuant to authority delegated by The Centers
for Medicare and Medicaid Services (“CMS”), the OIG, or state agencies;

 

    	 	- 5 -	 

     

    

 

(m)
any liabilities or obligations relating to information requests, proceedings, subpoenas or production requests brought
or made by third parties with respect to the compliance prior to Closing of any of the Assets (to the extent such Assets are not
modified, altered or reconstructed after the Closing) with the requirements of the Americans with Disabilities Act, as amended,
and Section 504 of the Rehabilitation Act of 1973;

 

(n)
any liabilities or obligations relating to or arising from any Environmental Condition relating to any of the Assets occurring
or in existence prior to the Closing or any noncompliance by Sellers, or any Affiliate of Sellers, with respect to any Environmental
Law; and

 

(o)
any debt, obligation, expense, or liability of Sellers arising out of or incurred solely as a result of any transaction
of Sellers occurring after the Effective Time or for any violation by Sellers of any law, regulation, or ordinance at any time.

 

Sellers
hereby acknowledge and agree that they are retaining, and are liable for, the Excluded Liabilities, and shall pay, discharge and
perform all such Excluded Liabilities promptly when due.

 

1.5
Purchase Price. The purchase price (the “Purchase Price”) for the Assets shall be (i) the current fair market
value of the Owned Personal Property, as calculated pursuant to Section 1.11 below; plus (ii) the amount of the
Net Working Capital (as defined in Section 1.6(a)) as of the Effective Time; and minus (iii) the outstanding amount
of the capital lease obligations set forth on Schedule 1.3(b) hereto and assumed by Buyer. The Purchase Price shall be
calculated as of the Closing based upon the estimated Net Working Capital (as determined in accordance with Section 1.6(b)).
Buyer shall pay the Purchase Price to Sellers at Closing by wire transfer of immediately available funds to an account designated
by Sellers. The Purchase Price shall be adjusted after the Closing in accordance with Section 1.6 to reflect the actual
Net Working Capital as of the Effective Time (as determined in accordance with Section 1.6(b)).

 

1.6
Net Working Capital, Estimates and Audits.

 

(a)
Net Working Capital. As used herein, the term “Net Working Capital” shall mean the value of prepaid expenses
and supplies and inventory, minus accrued liabilities for vacation and holiday benefits for employees of Sellers who are
hired by Buyer.

 

(b)
Estimates and Adjustments. Attached hereto as Schedule 1.6 is a schedule of the Net Working Capital as of September
30, 2018. At least ten (10) business days prior to Closing, Sellers shall deliver to Buyer a reasonable estimate of Net Working
Capital as of the end of the most recently ended calendar month prior to the Closing Date for which financial statements are available
and containing reasonable detail and supporting documents showing the derivation of such estimate. The Net Working Capital shall
be estimated following the same methodologies used to determine the Net Working Capital as of September 30, 2018, and shall be
used for purposes of calculating the Purchase Price as of the Closing; provided, however, that the value of the inventory shall
be determined in accordance with Section 1.10 below. Within thirty (30) days after the Closing, Sellers shall deliver to
Buyer their determination of the actual Net Working Capital as of the Effective Time (following the same methodologies used to
determine the estimated Net Working Capital as set forth on Schedule 1.6 and the estimated Net Working Capital as of the
Closing, but using the method set forth in Section 1.10 to determine the value of the inventory). Each party shall have
full access to the financial books and records pertaining to the Hospital to confirm or audit Net Working Capital computations.
Should Buyer disagree with Sellers’ determination of actual Net Working Capital as of the Effective Time, Buyer shall notify
Sellers within thirty (30) days after Sellers’ delivery of Sellers’ determination of Net Working Capital. If Sellers
and Buyer fail to agree within thirty (30) days after Buyer’s delivery of notice of disagreement on the amount of Net Working
Capital, such disagreement shall be resolved in accordance with the procedure set forth in Section 1.6(c), which shall
be the sole and exclusive remedy for resolving accounting disputes relative to the determination of Net Working Capital. The Purchase
Price shall be increased or decreased based on actual Net Working Capital as of the Effective Time, and within five (5) business
days after determination thereof any increase shall be paid in cash by Buyer to Sellers, and any decrease shall be paid in cash
to Buyer by Sellers.

 

    	 	- 6 -	 

     

    

 

(c)
Dispute of Adjustments. In the event that Sellers and Buyer are not able to agree on the actual Net Working Capital within
thirty (30) days after Buyer’s delivery of notice of disagreement, Sellers and Buyer shall each have the right to require
that such disputed determination be submitted to Pershing, Yoakley & Associates, PC (“PYA”) for computation or
verification in accordance with the provisions of this Agreement. PYA shall review the matters in dispute and, acting as arbitrators,
shall promptly decide the proper amounts of such disputed entries (which decision shall also include a final calculation of Net
Working Capital). The submission of the disputed matter to PYA shall be the exclusive remedy for resolving accounting disputes
relative to the determination of Net Working Capital. PYA’s determination shall be binding upon Sellers and Buyer, absent
fraud or manifest error. PYA’s fees and expenses shall be borne equally by Sellers and Buyer.

 

(d)
Tax Treatment. For income Tax purposes, unless otherwise required by applicable law, Buyer and Sellers agree to treat
all payments made under this Section 1.6 (other than the fees and expenses of PYA) as adjustments to the Purchase Price.

 

1.7
Transition Patients. To compensate Sellers for services rendered and medicine, drugs and supplies provided prior to the
Effective Time (the “Transition Services”) with respect to patients who are admitted to the Hospital prior to the
Effective Time but who are not discharged until on or after the Effective Time (such patients being referred to herein as the
“Transition Patients”), the parties shall take the following actions:

 

(a)
Medicare, Medicaid, CHAMPUS/TRICARE and Other DRG Transition Patients. As soon as practicable after the Closing Date,
Sellers shall deliver to Buyer a statement itemizing the Transition Services provided by Sellers to patients whose medical care
is paid for, in whole or in part, by Medicare, Medicaid, CHAMPUS/TRICARE, Blue Cross or any other third party payer who pays on
a DRG, case rate or other similar basis (the “DRG Transition Patients”). Buyer shall pay to Sellers an amount equal
to (i) the total reimbursement (including DRG, outlier payments, disproportionate share payments, capital and any deposits, deductibles
or co-payments received by Buyer) per the remittance advice received by Buyer on behalf of a DRG Transition Patient, multiplied
by a fraction, the numerator of which shall be the total charges for the Transition Services provided to such DRG Transition Patient
by Sellers prior to the Effective Time, and the denominator of which shall be the sum of the total charges for all services provided
to such DRG Transition Patient both prior to and after the Effective Time, minus (ii) any deposits, deductibles or co-payments
made by such DRG Transition Patients to Seller prior to the Effective Time. Sellers shall provide Buyer with all information required
to properly bill the DRG Transition Patients for the Transition Services, including the information described in (ii) above.

 

    	 	- 7 -	 

     

    

 

(b)
Other Patients. As of the Effective Time, Sellers shall prepare and send cut-off billings for all patients not covered
by Section 1.7(a).

 

(c)
Remittances (Including PIP or Pass-Through Payments). If Buyer or any of its Affiliates receives or collects any funds
(whether from patients, third-party payors, governmental entities, group purchasing organizations, suppliers, or any other individual
or entity) relating to any of the Excluded Assets, any accounts receivable related to services rendered by Seller prior to the
Effective Time, or any other funds attributable to the operation of the Hospital prior to the Effective Time (including, without
limitation, amounts from the Medicare program for periodic interim payments (“PIP”) or costs paid for on a pass-through
basis, such as capital costs, associated with the operation of the Hospital prior to the Effective Time), then in any such event,
Buyer shall tender the amount applicable to the Excluded Assets or the period prior to the Effective Time to Sellers within ten
(10) business days of receipt. If Sellers or any of their Affiliates receives or collects any funds (whether from patients, third-party
payors, governmental entities, group purchasing organizations, suppliers, or any other individual or entity) relating to any of
the Assets, any accounts receivable related to services rendered by Buyer subsequent to the Effective Time, or any other funds
attributable to the operation of the Hospital subsequent to the Effective Time (including, without limitation, amounts from the
Medicare program for PIP or pass-through costs, such as capital costs, associated with the operation of the Hospital subsequent
to the Effective Time), then in any such event, Sellers shall tender the amount applicable to the Assets or the period subsequent
to the Effective Time to Buyer within ten (10) business days of receipt. It is the intent of the parties that each of Buyer and
Sellers shall receive such funds (including, without limitation, PIP payments and pass-through costs payments, including capital
costs) as are applicable to the period of time the Hospital was or is operated by such party.

 

(d)
Timing; Dispute Resolution. All payments required by this Section 1.7 shall be made within ten (10) business days
of the applicable party’s receipt of payment with respect to a Transition Patient, accompanied by copies of remittances
and other supporting documentation as reasonably required by Sellers. In the event that Buyer and Sellers are unable to agree
on any amount to be paid under this Section 1.7, then such amount shall be determined by PYA at the parties’ joint
expense.

 

1.8
Meaningful Use Funds.

 

(a)
Matters Relating to Pre-Effective Time Meaningful Use Funds. Sellers or CHC (or an Affiliate of CHC) shall be responsible
for preparing, certifying and attesting for meaningful use payments (“MU Payments”) under the Health Information Technology
for Economic and Clinical Health Act in respect of the Hospital relating to periods ending on or prior to the Effective Time (“Pre-Effective
Time Periods”), and Sellers shall be entitled to any such MU Payments relating to Pre-Effective Time Periods. Buyer shall
pay to Sellers any amount received by Buyer or any of its Affiliates in respect of such MU Payments relating to Pre-Effective
Time Periods within ten (10) days of receipt thereof by Buyer or any of its Affiliates.

 

    	 	- 8 -	 

     

    

 

(b)
Matters Relating to Post-Effective Time Meaningful Use Funds. Buyer shall be responsible for preparing, certifying and
attesting for MU Payments in respect of the Hospital relating to periods ending after the Effective Time (“Post-Effective
Time Periods”), and Buyer shall be entitled to any such MU Payments relating to Post-Effective Time Periods. Sellers shall
pay to Buyer any amount received by Sellers or any of their Affiliates in respect of such MU Payments relating to Post-Effective
Time Periods within ten (10) days of receipt thereof by Sellers or any of their Affiliates.

 

(c)
Straddle Periods. For purposes of paragraphs (a) and (b) above, if the measurement period for a MU Payment that includes
the Closing Date does not terminate prior to the Effective Time (a “Straddle Period”), then the MU Payment for the
Straddle Period shall be allocated between Seller and Buyer in the following manner: (i) Sellers shall be entitled to receive
the portion of the MU Payment attributable to the period prior to the Effective Time, which shall equal the MU Payment for the
entire Straddle Period multiplied by a fraction, the numerator of which is the total number of days in the Straddle Period prior
to the Effective Time and the denominator of which is the total number of days in the Straddle Period; and (ii) Buyer shall be
entitled to receive the portion of the MU Payment attributable to the period following the Effective Time, which shall equal the
MU Payment for the entire Straddle Period multiplied by a fraction, the numerator of which is the total number of days in the
Straddle Period from the Effective Time to the end of the Straddle Period and the denominator of which is the total number of
days in the Straddle Period.

 

(d)
MU Payment Reconciliation. The parties agree that, in the event of a determination by any governmental payor that MU Payments
previously received by the parties are adjusted or otherwise revised, the repayment (in case of a reduction of MU Payments previously
made) or receipt (in case of an increase of MU Payments previously made) of funds relating to prior MU Payments shall, notwithstanding
the prior settlement of the MU Payments in accordance with this Section 1.8, be reconciled and remitted, with reasonable
promptness, to the appropriate party based on the application of this Section 1.8 to such adjustment to the MU Payments.

 

(e)
Late Payments. In the event that any payment required to be made hereunder is not made within the time period required
by this Section 1.8, the party obligated to make such payment shall also be obligated to pay interest on such payment from
the date such payment should have been made to the date of payment at the rate of interest equal to 200 basis points over the
prime rate as quoted in the Money Rates section of The Wall Street Journal from time to time.

 

1.9
Prorations. Except as otherwise provided herein (for example, in the determination of Net Working Capital) or as settled
at the Closing, within thirty (30) days after the Closing Date (hereinafter defined), Seller and Buyer shall prorate as of the
Effective Time any amounts which become due and payable on or after the Closing Date with respect to (i) the Contracts, (ii) real
or personal property Taxes imposed on or with respect to the Assets for any taxable period that begins before and ends after the
Closing Date, and (iii) all utilities servicing any of the Assets, including water, sewer, telephone, electricity and gas service.
Any such amounts which are not available within thirty (30) days after the Closing Date shall be similarly prorated as soon as
practicable thereafter. For the avoidance of doubt, all Taxes (including real property and personal property Taxes) imposed on
or with respect to the Assets for taxable periods ending prior to the Closing Date shall be solely the responsibility of Seller.

 

    	 	- 9 -	 

     

    

 

1.10
Physical Inventory. Within the ten (10) day period preceding the Closing Date, Sellers will perform a physical inventory
in a manner consistent with past practice to verify the levels and amounts of the Hospital’s inventory. Sellers will give
Buyer not less than ten (10) days’ notice of such physical inventory. Representatives of Buyer will be permitted to observe
such physical inventory and will be permitted to make test counts of inventory and receive copies of the records of the physical
inventory conducted pursuant to this Section 1.10. Prior to Closing, Sellers may, at their option, remove supplies that,
based upon such physical inventory, have been determined by the parties to be unusable or obsolete. Based on such physical inventory,
the value of inventory shall be determined by applying the cost of each item of inventory and Sellers shall prepare a schedule
thereof (the “Value of Inventory”). The Value of Inventory shall be used for purposes of calculating the Net Working
Capital pursuant to Section 1.6 and the Purchase Price pursuant to Section 1.5. The amount of the Value of Inventory
shall be increased or decreased, as appropriate, to reflect the value of any additions to, or the value of any deletions from,
the inventory between the date of the physical inventory and the Closing Date.

 

1.11
Owned Personal Property FMV. Within three (3) days of the date of this Agreement, Buyer and Sellers shall engage PYA to
determine the current fair market value of the Owned Personal Property. The costs of such appraisal shall be shared equally by
Buyer and Sellers. Buyer and Sellers agree that the value of any personal property leased to Sellers under the Hospital Lease
or any operating lease shall not be included in the fair market value of the Owned Personal Property. Notwithstanding anything
herein to the contrary, if the PYA appraisal determines that the current fair market value of the Owned Personal Property is (i)
less than $1,540,000, then for purposes of calculating the Purchase Price pursuant to Section 1.5, the current fair market
value of the Owned Personal Property shall be deemed to be $1,540,000, and (ii) greater than $1,940,000, then for purposes of
calculating the Purchase Price pursuant to Section 1.5, the current fair market value of the Owned Personal Property shall
be deemed to be $1,940,000. If the PYA appraisal referenced above determines that the current fair market value of the Owned Personal
Property is less than $1,540,000, then Buyer may terminate this Agreement by written notice to Sellers delivered within ten (10)
business days following Buyer’s receipt of the PYA appraisal.

 

    	 	- 10 -	 

     

    

 

2.
CLOSING.

 

2.1
Closing. Subject to the satisfaction or waiver by the appropriate party of all of the conditions precedent to Closing
specified in Sections 7 and 8 hereof, the consummation of the transactions contemplated by and described in this
Agreement (the “Closing”) shall take place on February 1, 2019, provided that if such conditions precedent are not
satisfied by February 1, 2019, Closing shall occur on the earlier of (i) ten (10) days after all such conditions have been satisfied,
or (ii) the first day of the first month after such conditions are met, or on such other date or at such other location as the
parties may mutually designate in writing (the date of consummation is referred to herein as the “Closing Date”).
The Closing shall be effective as of 12:00:01 a.m., local time, on the Closing Date, or such other time as the parties may mutually
designate in writing (such time, the “Effective Time”).

 

2.2
Actions of Sellers at Closing. At the Closing and unless otherwise waived in writing by Buyer, Sellers shall deliver to
Buyer the following:

 

(a)
A deed containing special warranty of title, fully executed by the appropriate Seller in recordable form and otherwise
in a form reasonably acceptable to Buyer and the Title Company, conveying to Buyer fee simple title to the Owned Real Property,
and Assignments of Leases, fully executed by the appropriate Seller, assigning to Buyer leasehold title to the Leased Real Property
(the “Assignments of Leases”), subject only to the Permitted Encumbrances (hereinafter defined);

 

(b)
An amendment to the Hospital Lease adding two (2) additional renewal terms of ten (10) years each, in form and substance
acceptable to Buyer, and executed by Hospital Landlord, along with a consent from Hospital Landlord for the transactions contemplated
hereby;

 

(c)
A General Assignment, Conveyance and Bill of Sale, fully executed by the appropriate Seller, conveying to Buyer title
to all tangible and intangible personal property that is owned by such Seller and a part of the Assets, free and clear of all
liabilities, claims, liens, security interests and restrictions other than the Assumed Liabilities;

 

(d)
An Assignment and Assumption Agreement (the “Assignment and Assumption Agreement”), fully executed by the
appropriate Seller, conveying to Buyer such Seller’s interest in the Assumed Contracts;

 

(e)
A standard form owner’s affidavit (modified as necessary to make such affidavit factually accurate) as required
by the Title Company (as defined in Section 6.2 hereof) to issue the Title Policy (as defined in Section 6.2 hereof)
as described in and provided by Section 7.3 hereof and such other documents as may be reasonably required by the Title
Company to issue the Title Policy;

 

(f)
Copies of resolutions duly adopted by the Board of Directors or appropriate governing body of each of the Sellers and
Seller Guarantor, authorizing and approving the performance of the transactions contemplated hereby and the execution and delivery
of this Agreement and the documents described herein, certified as true and of full force as of the Closing, by the appropriate
officers of each Seller and Seller Guarantor, respectively;

 

(g)
Certificates of the President or a Vice President of each Seller and Seller Guarantor, certifying that each covenant and
agreement of such Seller and Seller Guarantor to be performed prior to or as of the Closing pursuant to this Agreement has been
performed and each representation and warranty of such Seller is true and correct on the Closing Date, as if made on and as of
the Closing;

 

    	 	- 11 -	 

     

    

 

(h)
Certificates of incumbency for the respective officers of each Seller and Seller Guarantor executing this Agreement or
making certifications for the Closing dated as of the Closing Date;

 

(i)
Certificates of existence and good standing of each Seller and Seller Guarantor from the state in which it is formed or
incorporated, dated the most recent practical date prior to the Closing;

 

(j)
Evidence of filing of UCC termination statements and other releases with respect to all liens that must be released at
or prior to Closing or pay-off letter(s) in form acceptable to Buyer;

 

(k)
All forms required for the termination or assignment of any trade names used by Seller in the operation of the Hospital
and registered in any state in which such Seller does business, fully executed by such Seller;

 

(l)
A non-foreign affidavit with respect to such Seller, dated as of the Closing Date, in form and substance required under
the Treasury Regulations issued pursuant to Section 1445 of the Code and reasonably satisfactory to Buyer;

 

(m)
The Transition Services Agreement, fully executed by Sellers (or their applicable Affiliates), as contemplated by Section
10.15; and

 

(n)
Such other instruments and documents as Buyer reasonably deems necessary to effect the transactions contemplated hereby.

 

2.3
Actions of Buyer at Closing. At the Closing and unless otherwise waived in writing by Sellers, Buyer shall deliver to
Sellers the following:

 

(a)
An amount equal to the Purchase Price in immediately available funds to an account designated by Sellers prior to Closing;

 

(b)
The Assignment of Leases, fully executed by Buyer;

 

(c)
The Assignment and Assumption Agreement, fully executed by Buyer, pursuant to which Buyer shall assume the future performance
of the Contracts as herein provided;

 

(d)
Copies of resolutions duly adopted by the Board of Directors of Buyer and the Board of Directors of Buyer Guarantor authorizing
and approving their performance of the transactions contemplated hereby and the execution and delivery of this Agreement and the
documents described herein, certified as true and in full force as of the Closing, by the appropriate officer of Buyer and Buyer
Guarantor, respectively;

 

(e)
Certificates of the President or a Vice President of Buyer, certifying that each covenant and agreement of Buyer to be
performed prior to or as of the Closing pursuant to this Agreement has been performed and each representation and warranty of
Buyer is true and correct on the Closing Date, as if made on and as of the Closing;

 

    	 	- 12 -	 

     

    

 

(f)
Certificates of incumbency for the respective officers of Buyer and Buyer Guarantor executing this Agreement or making
certifications for the Closing dated as of the Closing Date;

 

(g)
Certificates of existence and good standing of Buyer and Buyer Guarantor from the state in which each is incorporated,
dated the most recent practical date prior to Closing; and

 

(h)
Such other instruments and documents as Sellers reasonably deem necessary to effect the transactions contemplated hereby.

 

3.
REPRESENTATIONS AND WARRANTIES OF SELLERS. As
of the date hereof, and, when read in light of any schedules which have been updated in accordance with the provisions of Section
12.1 hereof, as of the Closing Date, Sellers represent and warrant to Buyer the following:

 

3.1
Existence and Capacity; Subsidiaries.

 

(a)
Each Seller is duly organized and validly existing in good standing under the laws of the state of its formation. Each
Seller has the requisite power and authority to enter into this Agreement, to perform its obligations hereunder and to conduct
its business as now being conducted. Seller Guarantor is a corporation duly organized and validly existing in good standing under
the laws of the State of Texas. Seller Guarantor has the requisite power and authority to enter into this Agreement, to perform
its obligations hereunder and to conduct its business as now being conducted.

 

(b)
Neither Seller directly or indirectly owns any equity, membership or similar interest in, or any interest convertible
into or exchangeable or exercisable for any equity, membership or similar interest in, any corporation, partnership, limited liability
company, joint venture or other business association or entity, except for Hospital Seller’s ownership in Clinic Seller
and Jellico Healthcare Associates, LLC.

 

3.2
Powers; Consents; Absence of Conflicts With Other Agreements, Etc. The execution, delivery, and performance of this Agreement
by each Seller and Seller Guarantor and all other agreements referenced herein, or ancillary hereto, to which such Seller or Seller
Guarantor is a party, and the consummation of the transactions contemplated herein by each Seller and Seller Guarantor:

 

(a)
are within its corporate powers, are not in contravention of corporate law or of the terms of its organizational documents,
and have been duly authorized by all appropriate corporate action;

 

(b)
except as provided in Section 5.4 below, do not require any approval or consent of, or filing with, any governmental
agency or authority bearing on the validity of this Agreement which is required by law or the regulations of any such agency or
authority;

 

(c)
except as set forth on Schedule 3.2(c), will neither conflict with, nor result in any breach or contravention of,
or the creation of any lien, charge, or encumbrance under, nor result in acceleration of the timing of payment or performance
of such Seller’s obligations under, any indenture, agreement, lease, instrument or understanding to which it is a party
or by which it is bound;

 

    	 	- 13 -	 

     

    

 

(d)
will not violate any statute, law, rule, or regulation of any Government Entity (as defined in Section 3.8) to
which it or the Assets may be subject; and

 

(e)
will not violate any judgment, decree, writ or injunction of any court or Government Entity to which it or the Assets
may be subject.

 

3.3
Binding Agreement. This Agreement and all agreements to which Sellers or Seller Guarantor will become a party pursuant
hereto are and will constitute the valid and legally binding obligations of each Seller or Seller Guarantor, respectively, and
are and will be enforceable against each Seller or Seller Guarantor, respectively, in accordance with the respective terms hereof
or thereof.

 

3.4
Financial Statements. Sellers have delivered to Buyer copies of the following financial statements of or pertaining to
the Hospital and its operations (“Financial Statements”), which Financial Statements are maintained on an accrual
basis:

 

(a)
Unaudited Balance Sheet dated as of September 30, 2018 (the “Balance Sheet Date”);

 

(b)
Unaudited Income Statement for the three—month period ended on the Balance Sheet Date; and

 

(c)
Unaudited Balance Sheets and Income Statements for the fiscal years ended December 31, 2017 and 2016.

 

Such
Financial Statements conform to generally accepted accounting principles (“GAAP”) consistently applied, except as
set forth in Schedule 3.4. Such Balance Sheets present fairly, in all material respects, the financial condition of the
Hospital as of the dates indicated thereon, and such Income Statements present fairly, in all material respects, the results of
operations of the Hospital for the periods indicated thereon.

 

3.5
Certain Post-Balance Sheet Results. Except as set forth in Schedule 3.5 hereto, since the Balance Sheet Date there
has not been any:

 

(a)
material damage, destruction, or loss (whether or not covered by insurance) affecting the Hospital or the Assets;

 

(b)
threatened employee strike, work stoppage, or labor dispute pertaining to the Hospital;

 

(c)
sale, assignment, transfer, or disposition of any item of property, plant or equipment included in the Assets having a
value in excess of Ten Thousand Dollars ($10,000) (other than supplies), except in the ordinary course of business consistent
with past practices;

 

    	 	- 14 -	 

     

    

 

(d)
changes in the accounting methods or practices employed by Sellers or changes in depreciation or amortization policies;

 

(e)
grant or incurrence of any obligation for any increase in the compensation of any employee who is employed at the Hospital
(including any increase pursuant to any bonus, pension, profit-sharing, retirement, or other plan or commitment) except in the
ordinary course of business or in accordance with existing, written personnel policies;

 

(f)
making or changing of any Tax election, settling of any audit, investigation or other administrative or judicial proceeding
related to Taxes, entering into any closing agreement with respect to Taxes, or filing of any amended Tax Return, in each case
by or with respect to any Seller; or

 

(g)
transaction or other occurrence pertaining to the Hospital by Sellers outside the ordinary course of business.

 

3.6
Licenses. Jellico Community Hospital is duly registered with the Tennessee Department of Health (“TDH”) as
a 54-bed general acute care hospital in accordance with the applicable laws of the State of Tennessee. Sellers have all other
licenses, registrations, certificates, permits, and approvals which are needed or required by law to operate the business related
to or affecting the Hospital or any ancillary services related thereto (the TDH license, together with all such other licenses,
registrations, certificates, permits, and approvals are collectively, the “Licenses”). Sellers have delivered to Buyer
an accurate list and summary description (Schedule 3.6) of all such Licenses owned or held by Sellers relating to the ownership,
development, or operation of the Hospital or the Assets, all of which are now, and as of the Closing shall be, in good standing.
Sellers and the Hospital, as applicable, are, and at all times since May 1, 2015 have been, in compliance in all material respects
with the terms of such Licenses and there are no provisions in, or agreements relating to, any License that preclude or limit
Sellers from operating the Hospital and carrying on their operations as currently conducted. There is no pending or, to Sellers’
knowledge, threatened proceeding by or before any Government Entity to revoke, cancel, rescind, suspend, restrict, modify, or
refuse to renew any License owned or held by any Seller, and all such Licenses are now, and as of the Closing shall be without
limitation, in good standing, in full force and effect and not subject to meritorious challenge. To Sellers’ knowledge,
no event has occurred and no facts exist with respect to any material License owned or held by Sellers that allows, or after notice
or the lapse of time or both, would allow the suspension, revocation, or termination of any such material License, or would result
in any other material impairment in the rights of any holder thereof. Since May 1, 2015, neither Sellers nor the Hospital has
received any written notice or communication from any Government Entity regarding any material violation of any License owned
or held by Seller (other than any surveys or deficiency reports for which Sellers have submitted a plan of correction that has
been accepted or approved by the applicable Government Entity). Sellers have delivered to Buyer accurate and complete copies of
all survey reports, deficiency notices, plans of correction, and related correspondence received by Sellers or the Hospital since
May 1, 2015 in connection with the Licenses owned or held by Sellers.

 

    	 	- 15 -	 

     

    

 

3.7
Medicare Participation/Accreditation/Compliance. The Hospital is qualified for participation in the Medicare, Medicaid
and CHAMPUS/TRICARE programs, has a current and valid provider contract with such programs, is in compliance in all material respects
with the conditions of participation in such programs, and has received all approvals or qualifications necessary for capital
reimbursement for the Hospital. Sellers have delivered accurate and complete copies of all such program agreements to Buyer, each
of which is in full force and effect. To Sellers’ knowledge, all billing practices of Sellers to all third party payors,
including, without limitation, the government programs and private insurance companies, have been conducted in material compliance
with all applicable law and the billing guidelines of such third party payors. Except as set forth on Schedule 3.7, there
is no proceeding, survey, or other action pending or, to Sellers’ knowledge, threatened, involving any of the government
programs or any other third party payor programs, including the Hospital’s participation in and the reimbursement received
by Seller and the Hospital from the government programs or any such program. Except as set forth on Schedule 3.7, the Hospital
is duly accredited, with no contingencies, by the Center for Improvement in Healthcare Quality (“CIHQ”). A copy of
the most recent accreditation letter from CIHQ pertaining to the Hospital has been made available to Buyer. Schedule 3.7
also contains a list of all National Provider Identifiers and all provider numbers under the government programs issued to and
held by Seller and the Hospital, all of which are in full force and effect. No Seller has been excluded from participation in
the Medicare, Medicaid or CHAMPUS/TRICARE programs, nor, to the best knowledge of Seller, is any such exclusion threatened. Except
as set forth on Schedule 3.7, Sellers have not received any notice from any of the Medicare, Medicaid or CHAMPUS/TRICARE
programs, or any other third party payor programs, of any pending or threatened investigations or surveys.

 

3.8
Regulatory Compliance. Except as set forth in a writing delivered by Sellers to Buyer which specifically makes reference
to this Section 3.8 or as set forth on Schedule 3.8, Sellers are in compliance in all material respects with all
material statutes, rules, regulations, and requirements of the Government Entities having jurisdiction over the Hospital and the
operations of the Hospital or its related ancillary services. As used herein, “Government Entity” means any government
or any agency, bureau, board, directorate, commission, court, department, official, political subdivision, tribunal or other instrumentality
of any government, whether federal, state or local. Sellers have timely filed all material reports, data, and other information
required to be filed with the Government Entities.

 

3.9
Equipment. Sellers have delivered to Buyer a depreciation schedule as of the Balance Sheet Date (Schedule 3.9)
which takes into consideration all the equipment associated with, or constituting any part of, the Hospital and the Assets.

 

    	 	- 16 -	 

     

    

 

3.10
Real Property.

 

(a)
Sellers have not created or permitted any mortgages, liens, restrictions, agreements, claims or other encumbrances which
will, individually or in the aggregate, materially interfere with Buyer’s use of the Real Property in a manner consistent
with the current use by Sellers or adversely and materially affect the title of the Real Property. Sellers own and will convey
fee simple and/or leasehold title to the Real Property to Buyer subject to (i) any lien for Taxes not yet due and payable, which
shall be prorated at Closing, (ii) liens securing any indebtedness assumed by Buyer, (iii) any lease obligations assumed by Buyer,
(iv) easements, restrictions and other matters of record, and which do not, individually or in the aggregate, materially interfere
with the use or operation of the Real Property in a manner consistent with the current use thereof by Seller or adversely and
materially affect the title of the Real Property, (v) zoning regulations and other governmental laws, rules, regulations, codes,
orders and directives affecting the Real Property, (vi) unrecorded easements, discrepancies, boundary line disputes, overlaps,
encroachments and other matters that would be revealed by an accurate survey or inspection of the Real Property, and which do
not, materially or in the aggregate, materially interfere with the use or operation of the Real Property in a manner consistent
with the current use thereof by Sellers or adversely and materially affect the title of the Real Property, (vii) any other encumbrances
or defects which do not, individually or in the aggregate, materially interfere with the use or operation of the Real Property
in a manner consistent with the current use thereof by Sellers or adversely and materially affect the title of the Real Property,
and (viii) with respect to the Leased Real Property, any encumbrances which encumber the fee interest in such property (collectively,
the “Permitted Encumbrances”).

 

(b)
To Sellers’ knowledge, the Real Property is in compliance in all material respects with all applicable zoning ordinances
and regulations permitting the operation of the property in a manner consistent with the current use thereof by Sellers and any
restrictive covenant or deed restriction (recorded or otherwise) affecting any portion of the Real Property. Sellers have not
received, during the past three (3) years, written notice from any Government Entity of a violation of any applicable ordinance
or other law, order or regulation with respect to the Real Property, or written notice of any lien, assessment or the like relating
to any part of the Real Property or the operation thereof. Sellers have not received, during the past three (3) years, written
notice from any Government Entity of any existing, proposed or contemplated plans to modify or realign any street or highway,
or any existing, proposed or contemplated eminent domain proceeding that would result in the taking of any part of the Real Property.

 

(c)
The Real Property comprises all of the real property owned or leased by Sellers or any of their Affiliates and associated
with or employed in the operation of the Hospital.

 

(d)
There are no outstanding options to purchase, rights of first offer, rights of first refusal or any similar rights to
purchase the Owned Real Property or any portion thereof. No Affiliate of Sellers or any other person has any ownership or leasehold
interest in the Real Property, except for the leasehold interest of third party tenants with respect to the Owned Real Property
and the ownership interest of the owners of the Leased Real Property.

 

(e)
To Sellers’ knowledge, permanent certificates of occupancy, and all licenses, permits, authorizations and approvals
required by all Government Entities having jurisdiction for the operation of the Real Property have been issued and are in full
force and effect.

 

(f)
To Sellers’ knowledge, all approvals, licenses and permits required for the existing water, sewer, gas and electricity
lines, storm sewer and other utility systems on the Real Property have been obtained and are in force and effect, all of said
utilities are installed and operating, and are adequate to serve the utility needs of the Real Property for its use and operation
as currently conducted by Sellers.

 

    	 	- 17 -	 

     

    

 

(g)
Sellers are not, nor will become, a person or entity with whom U.S. persons are restricted from doing business under regulations
of the OFAC of the United States Department of Treasury (including those named on OFAC’s Specially Designated and Blocked
Persons list) or under any statute, executive Order (including Executive Order 13224 on Terrorism Financing, effective September
24, 2001), or the United and Strengthening America by Providing Tools Required to Intercept and Obstruct Terrorism Act of 2001,
H.R. 3162, Public Law 107-56, or any other governmental action. At the Closing, Sellers shall execute and deliver to Buyer or
the Title Company an affidavit certifying that it is not a “blocked person” under Executive Order 13224, which form
shall be acceptable to Buyer.

 

3.11
Title. Sellers presently own and will hold on the Closing Date good and valid title to the Owned Real Property and valid
title to all intangible assets that are owned by (and not leased to) Sellers and are included in the Assets, free and clear of
all mortgages, liens, restrictions, claims or other encumbrances, except the Permitted Encumbrances and the Assumed Liabilities.

 

3.12
Employee Benefit Plans. All employee pension benefit plans and employee health or welfare benefit plans relating to employees
of the Hospital (collectively “Benefit Plans”) have been administered in compliance in all material respects with
all applicable laws including, without limitation, the applicable provisions of the Internal Revenue Code of 1986, as amended
(the “Code”), and the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). There are
no “accumulated funding deficiencies” within the meaning of the Code. No reportable events (within the meaning of
ERISA) or prohibited transactions (within the meaning of the Code) have occurred. Except as set forth on Schedule 3.12
hereto, all returns, reports, disclosure statements, and premium payments required to be made under the Code or ERISA with respect
to the Benefit Plans have been timely filed or delivered.

 

3.13
Litigation or Proceedings. Sellers have delivered to Buyer an accurate list and summary description (Schedule 3.13)
of all current litigation or proceedings with respect to the Hospital and the Assets, as well as settlements, orders and similar
agreements under which Sellers or any of their Affiliates have current or future obligations with respect to the Hospital or the
Assets. Sellers are not in default under any order of any court or federal, state, municipal, or other governmental department,
commission, board, bureau, agency or instrumentality wherever located. Except as set forth in a writing delivered by Sellers to
Buyer which specifically makes reference to this Section 3.13 or as set forth on Schedule 3.13, there are no claims,
actions, suits, proceedings, or investigations pending, or to the best knowledge of Seller, threatened against or related to Sellers,
the Hospital or the Assets, at law or in equity, or before or by any federal, state, municipal, or other governmental department,
commission, board, bureau, agency, or instrumentality wherever located.

 

    	 	- 18 -	 

     

    

 

3.14
Environmental Laws. Except as set forth on Schedule 3.14 hereto, to the knowledge of Sellers (i) the Real Property
is not subject to any material environmental hazards, risks, or liabilities, (ii) the Real Property is not in violation of any
federal, state or local statutes, regulations, laws or orders pertaining to the protection of human health and safety or the environment
(collectively, “Environmental Laws”), including, without limitation, the Comprehensive Environmental Response Compensation
and Liability Act, as amended (“CERCLA”), and the Resource Conservation and Recovery Act, as amended (“RCRA”)
and (iii) Sellers have not received any notice alleging or asserting either a violation of any Environmental Law or an obligation
to investigate, assess, remove, or remediate any property, including but not limited to the Real Property, under or pursuant to
any Environmental Law. No “Hazardous Substances” (which shall mean and include polychlorinated biphenyls, asbestos,
petroleum products, and any substances, materials, contaminants, wastes, or other elements which are included under or regulated
by any Environmental Law, including, without limitation, CERCLA and RCRA) have been disposed of on or released or discharged from
or onto, or threatened to be released from or onto, the Real Property (including groundwater) by Sellers, or to Sellers’
knowledge, any third party, in violation of any applicable Environmental Law. Neither Sellers, nor to Sellers’ knowledge,
any prior owners, operators or occupants of the Real Property, have allowed any Hazardous Substances to be discharged, possessed,
managed, processed, released, or otherwise handled on the Real Property in a manner which is in violation of any Environmental
Law, and Sellers have complied with all Environmental Laws applicable to any part of the Real Property. To the knowledge of Sellers,
no portion of the Real Property has been used as a dump or landfill.

 

3.15
Taxes. Except as set forth on Schedule 3.15, Sellers have filed all federal, state and local tax returns required
to be filed by Sellers (all of which are true and correct in all material respects) and have duly paid or made provision for the
payment of all Taxes (including any interest or penalties and amounts due state unemployment authorities) which are due and payable
to the appropriate tax authorities. Except as set forth on Schedule 3.15, no deficiencies for any of such Taxes have been
asserted or, to the knowledge of Sellers, threatened, and no audit on any such returns is currently under way or, to the knowledge
of Sellers, threatened. Except as set forth on Schedule 3.15, there are no outstanding agreements by Sellers for the extension
of time for the assessment of any such Taxes. There are no tax liens on any of the Assets and, to the knowledge of Sellers, no
basis exists for the imposition of any such liens. As used in this Agreement, “Tax”
or “Taxes” means (i) any federal, state, local or foreign income, gross receipts, capital, bulk, production, license,
payroll, employment, excise, severance, stamp, recording, occupation, premium, windfall profits, environmental, customs duties,
franchise, single business, profits, margin, withholding, social security, unemployment, disability, real property, real estate
excise, mortgage, inventory, personal property, intangible property, escheatment, unclaimed property, sales, use, ad valorem,
transfer, registration, value added, alternative or add-on minimum, estimated or other tax, fee or assessment of any kind whatsoever,
including any interest, penalties, fines, additions to tax or additional amounts imposed by any Government Entity with respect
thereto, whether disputed or not, and (ii) any liability for payment of amounts described in clause (i) whether as a result of
transferee liability, of being a member of an affiliated, consolidated, combined or unitary group for any taxable period
(including, without limitation, any liability pursuant to Treasury Regulations Section 1.1502-6 or any similar provision of state,
local or foreign law), by contract, or otherwise.

 

    	 	- 19 -	 

     

    

 

3.16
Employee Relations. Except as set forth on Schedule 3.16, all employees of the Hospital are employees of one of
the Sellers. To Sellers’ knowledge, there is no threatened employee strike, work stoppage, or labor dispute pertaining to
the Hospital. Except as set forth on Schedule 3.16, no union representation question exists respecting any employees of
any Seller. Except as set forth on Schedule 3.16, no collective bargaining agreement exists or is currently being negotiated
by any Seller, no demand has been made for recognition by a labor organization by or with respect to any employees of any Seller,
no union organizing activities by or with respect to any employees of any Seller are, to the best knowledge of Sellers, taking
place, and none of the employees of any Seller is represented by any labor union or organization. There is no unfair practice
claim against any Seller before the National Labor Relations Board, nor any strike, dispute, slowdown, or stoppage pending or
threatened against or involving the Hospital, and none has occurred since May 1, 2015. Sellers are in compliance in all material
respects with all federal and state laws respecting employment and employment practices, terms and conditions of employment, and
wages and hours. Sellers are not engaged in any unfair labor practices. Sellers have complied in all material respects with all
requirements of the Immigration and Reform and Control Act of 1986. Except as set forth on Schedule 3.16, there are no
pending or, to the best knowledge of Sellers, threatened EEOC claims, OSHA complaints, union grievances, wage and hour claims,
unemployment compensation claims, workers’ compensation claims or the like.

 

3.17
The Contracts. Sellers have made available to Buyer true and correct copies of all contracts, commitments, leases and
agreements to which either Seller is bound or which otherwise pertain to the Assets or the operations of the Hospital (the “Contracts”),
in each case as amended or otherwise modified and in effect, together with any extension notices and other material correspondence
or documentation (including any fair market value analyses with respect to third party leases pursuant to which the Sellers lease,
sublease, license or otherwise grant a right to use or occupy all or some portion of the Real Property to physicians or other
referral sources) related thereto, in the possession or control of the Sellers, and have given, and will give, the agents, employees
and representatives of Buyer access to the originals of the Contracts to the extent originals are available. Schedule 3.17
lists all of the Contracts that Buyer wishes to assume and include in the Assets (such Contracts hereinafter being referred
to as the “Assumed Contracts”), and designates which of them require the consent of the other party prior to any assignment
thereof. Sellers represent and warrant with respect to the Assumed Contracts that:

 

(a)
The Assumed Contracts are, and will be, without penalty, upon the consummation of the transactions contemplated hereby,
in full force and effect, constitute valid and legally binding obligations of the appropriate Seller and, to Sellers’ knowledge,
the other parties with respect thereto, and are enforceable against Sellers and, to Sellers’ knowledge, the other parties
with respect thereto, in accordance with their terms;

 

(b)
Each Assumed Contract constitutes the entire agreement by and between the respective parties thereto with respect to the
subject matter thereof;

 

(c)
Except as expressly set forth on Schedule 3.17, in all material respects, all obligations required to be performed
by the appropriate Seller under the terms of the Assumed Contracts have been performed to the extent such obligations to perform
have accrued, no Seller is in breach of or default under any Assumed Contract or in receipt of any claim of breach of or default
under any Assumed Contract, and no act or omission by the appropriate Seller has occurred or failed to occur which, with the giving
of notice, the lapse of time or both would constitute a default under the Assumed Contracts;

 

(d)
Except as expressly set forth on Schedule 3.17, Sellers have no knowledge of any breach or anticipated breach by
the other parties to any Assumed Contract; and

 

    	 	- 20 -	 

     

    

 

(e)
Except as expressly set forth on Schedule 3.17, the Assumed Contracts do not require consent to the assignment
and assumption of such Assumed Contracts by Buyer.

 

3.18
Supplies. All the inventory and supplies constituting any part of the Assets are substantially of a quality and quantity
usable and salable in the ordinary course of business of the Hospital. The inventory levels are based on past practices of Sellers
at the Hospital.

 

3.19
Insurance. Sellers have delivered to Buyer an accurate schedule (Schedule 3.19) disclosing the insurance policies
covering the ownership and operations of the Hospital and the Assets, which Schedule reflects the policies’ numbers, terms,
identity of insurers, amounts, and coverage. All of such policies are in full force and effect with no premium arrearage. Sellers
have given in a timely manner to its insurers all notices required to be given under such insurance policies with respect to all
of the claims and actions covered by insurance, and no insurer has denied coverage of any such claims or actions. Sellers have
not (a) received any notice or other communication from any such insurance company canceling or materially amending any of such
insurance policies, and no such cancellation or amendment is threatened or (b) failed to give any required notice or present any
claim which is still outstanding under any of such policies with respect to the Hospital or any of the Assets.

 

3.20
Third Party Payor Cost Reports. Sellers have duly filed all required cost reports for all the fiscal years set forth on
Schedule 3.20, and copies of all such cost reports filed by or on behalf of Sellers since 2015 have been provided to Buyer.
All of such cost reports accurately reflect in all material respects the information required to be included thereon and such
cost reports do not claim, and neither the Hospital nor Sellers have received, reimbursement in any amount in excess of, the amounts
provided by law or any applicable agreement. To Sellers’ knowledge, there are no facts or circumstances that would give
rise to any disallowance under such cost reports. Schedule 3.20 indicates which of such cost reports have not been audited
and finally settled and a brief description of any and all notices of program reimbursement, proposed or pending audit adjustments,
disallowances, appeals of disallowances, and any and all other unresolved claims or disputes in respect of such cost reports.
Sellers have established adequate reserves to cover any potential reimbursement obligations that Sellers may have in respect of
any such third party cost reports, and such reserves are set forth in the Financial Statements.

 

3.21
Medical Staff Matters. Sellers have provided to Buyer true, correct, and complete copies of the bylaws and rules and regulations
of the medical staff of the Hospital (the “Medical Staff”), as well as a list of all current members of the Medical
Staff. Except as set forth on Schedule 3.21 hereto, there are no adverse actions with respect to any Medical Staff members
of the Hospital or any applicant thereto for which a Medical Staff member or applicant has requested a judicial review hearing
which has not been scheduled or has been scheduled but has not been completed, and there are no pending or, to the knowledge of
Sellers, threatened disputes with applicants, Medical Staff members, or health professional affiliates, and Sellers know of no
basis therefore, and all appeal periods in respect of any Medical Staff member or applicant against whom an adverse action has
been taken have expired. Except as set forth on Schedule 3.21, no Medical Staff members have resigned or had their privileges
revoked or suspended since July 31, 2018.

 

    	 	- 21 -	 

     

    

 

3.22
Condition of Assets. Other than with respect to the representations and warranties herein provided, Sellers shall transfer
the Assets to Buyer and Buyer shall accept the Assets AS IS, WHERE IS, WITH ALL FAULTS, AND WITH NO WARRANTY OF HABITABILITY OR
FITNESS FOR HABITATION, WITH RESPECT TO THE LAND, BUILDINGS AND IMPROVEMENTS, AND WITH NO WARRANTIES, INCLUDING WITHOUT LIMITATION,
THE WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO THE EQUIPMENT, INVENTORY, AND SUPPLIES,
AND ANY AND ALL OF WHICH WARRANTIES SELLER HEREBY DISCLAIMS. All of the Assets shall be further subject to normal wear and tear
on the land, buildings, improvements and equipment and normal and customary use and disposal of inventory and supplies in the
ordinary course of business up to the Effective Time.

 

3.23
Certificates of Need. Except as set forth on Schedule 3.23 hereto, no application for any Certificate of Need,
Exemption Certificate (each as defined below) or declaratory ruling has been made by any Seller with TDH or other applicable agency
which is currently pending or open before such agency, and no such application (collectively, the “Applications”)
filed by any Seller within the past three (3) years has been ultimately denied by any commission, board or agency or withdrawn
by such Seller. Except as set forth on Schedule 3.23, Sellers have not prepared, filed, supported or presented opposition
to any Applications filed by another hospital or health agency within the past three (3) years. Except as set forth on Schedule
3.23 hereto, Sellers have neither any Applications pending nor any approved Applications which relate to projects not yet
completed. As used herein, “Certificate of Need” means a written statement issued by TDH evidencing community need
for a new, converted, expanded or otherwise significantly modified health care facility, health service or hospice, and “Exemption
Certificate” means a written statement from TDH stating that a health care project is not subject to the Certificate of
Need requirements under applicable state law.

 

3.24
Regulatory Compliance.

 

(a)
Neither Sellers nor the Hospital, nor any of their respective officers, directors or employees, have been convicted of,
charged with or, to Sellers’ knowledge, investigated for, or have engaged in conduct that would constitute, a Medicare or
other Federal Health Care Program (as defined in 42 U.S.C. § 1320a-7(b)(f)) related offense or convicted of, charged with
or, to Sellers’ knowledge, investigated for, or engaged in conduct that would constitute a violation of any Law related
to fraud, theft, embezzlement, breach of fiduciary duty, kickbacks, bribes, other financial misconduct, obstruction of an investigation
or controlled substances. None of Sellers, the Hospital nor any officer, director, employee or independent contractor of Sellers
or the Hospital (whether an individual or entity), has been excluded from participating in any government program, subject to
sanction pursuant to 42 U.S.C. § 1320a-7a or § 1320a-8 or been convicted of a crime described at 42 U.S.C. § 1320a-7b,
nor, to Seller’s knowledge, are any such exclusions, sanctions or charges threatened or pending.

 

(b)
Neither Sellers nor the Hospital have received at any time since May 1, 2015, any communication from a Government Entity,
commercial payor or patient that alleges the Hospital or the Assets are not in compliance with any law, other than statements
of deficiencies from a Government Entity received in the ordinary course of business. Sellers have timely filed all material reports,
data, and other information required to be filed with such commissions, boards, bureaus, and agencies regarding the Hospital and
the Assets.

 

    	 	- 22 -	 

     

    

 

3.25
Information Privacy and Security Compliance.

 

(a)
Sellers and the Hospital (i) to the extent their operations are subject to the administrative simplification provisions
of HIPAA, and the implementing regulations contained in 45 C.F.R. Parts 160, 162 and 164, are in compliance in all material respects
with those administrative simplification provisions and implementing regulations, including, without limitation, in conducting
any of the standard transactions set forth in 45 C.F.R. Part 162; and (ii) are in compliance in all material respects with all
other applicable Information Privacy or Security Laws.

 

(b)
Sellers have provided to Buyer accurate and complete copies of any written complaints delivered to Seller or the Hospital
during the past three (3) years alleging a violation of any Information Privacy or Security Laws.

 

(c)
“Information Privacy or Security Laws” means HIPAA and the implementing regulations and any other law concerning
the privacy or security of Personal Information, including state data breach notification laws, state health information privacy
laws, the FTC Act, the FTC Red Flag Rules and state consumer protection laws. “Personal Information” means any information
with respect to which there is a reasonable basis to believe that the information can be used to identify an individual, including
“individually identifiable health information” as defined in 45 C.F.R. 160.103, demographic information, and Social
Security numbers.

 

3.26
Intellectual Property.

 

(a)
Sellers own, or will own, or are licensed or will be licensed or otherwise possesses or will possess all necessary rights
to use, all of the Intellectual Property and the Excluded Intellectual Property.

 

(b)
To Sellers’ knowledge, there is no unauthorized use, disclosure, infringement or misappropriation of any Intellectual
Property rights of Seller, or any trade secret material to Sellers, by any third party, including any employee or former employee
of Sellers or any of their Affiliates, relating in any way to any of the Assets.

 

(c)
“Intellectual Property” means, to the extent used or held for use in or ancillary to the Hospital and the
Assets, all intellectual property or rights thereto, including patents, trademarks, trade names, service marks, symbols, copyrights
and any applications therefor, mask works, net lists, schematics, technology, know-how, trade secrets, ideas, algorithms, processes,
internet domain names, computer software programs and applications (in both source code and object code form), and tangible or
intangible proprietary information or material, except for the Excluded Intellectual Property.

 

(d)
“Excluded Intellectual Property” means the Intellectual Property listed as excluded on Schedule 3.26.

 

    	 	- 23 -	 

     

    

 

4.
REPRESENTATIONS AND WARRANTIES OF BUYER. As
of the date hereof, and, when read in light of any Schedules which have been updated in accordance with the provisions of Section
12.1 hereof, as of the Closing Date, Buyer represents and warrants to Sellers the following:

 

4.1
Existence and Capacity. Buyer is a corporation, duly organized and validly existing in good standing under the laws of
the State of Tennessee. Buyer has the requisite power and authority to enter into this Agreement, to perform its obligations hereunder,
and to conduct its business as now being conducted. Buyer Guarantor is a corporation, duly organized and validly existing in good
standing under the laws of the State of Florida. Buyer Guarantor has the requisite power and authority to enter into this Agreement,
to perform its obligations hereunder, and to conduct its business as now being conducted.

 

4.2
Powers; Consents; Absence of Conflicts with Other Agreements, Etc. The execution, delivery, and performance of this Agreement
by Buyer and Buyer Guarantor and all other agreements referenced herein, or ancillary hereto, to which Buyer or Buyer Guarantor
is a party, and the consummation by Buyer and each Buyer Entity of the transactions contemplated herein:

 

(a)
are within its corporate powers, are not in contravention of law or of the terms of its organizational documents, and
have been duly authorized by all appropriate corporate action;

 

(b)
except as provided in Section 6.1 below, do not require any approval or consent of, or filing with, any governmental
agency or authority bearing on the validity of this Agreement which is required by law or the regulations of any such agency or
authority;

 

(c)
will neither conflict with, nor result in any breach or contravention of, or the creation of any lien, charge or encumbrance
under, any indenture, agreement, lease, instrument or understanding to which it is a party or by which it is bound;

 

(d)
will not violate any statute, law, rule, or regulation of any Government Entity to which it may be subject; and

 

(e)
will not violate any judgment, decree, writ, or injunction of any court or Government Entity to which it may be subject.

 

4.3
Binding Agreement. This Agreement and all agreements to which Buyer or Buyer Guarantor will become a party pursuant hereto
are and will constitute the valid and legally binding obligations of Buyer or Buyer Guarantor, respectively, and are and will
be enforceable against Buyer or Buyer Guarantor, respectively, in accordance with the respective terms hereof and thereof.

 

4.4
Availability of Funds. Buyer has the ability to obtain funds in cash in amounts equal to the Purchase Price by means of
credit facilities or otherwise and will at the Closing have immediately available funds in cash which are sufficient to pay the
Purchase Price and to pay any other amounts payable pursuant to this Agreement and to consummate the transactions contemplated
by this Agreement.

 

    	 	- 24 -	 

     

    

 

4.5
Buyer Acknowledgement. Buyer hereby acknowledges that Buyer has been provided with all financial information that Buyer
has requested from Seller, and further acknowledges that the Hospital has experienced significant operating losses during recent
quarterly and annual periods. Buyer acknowledges that Buyer has knowledge and expertise in financial and business matters and
in the operation of facilities similar to the Hospital that enable Buyer to evaluate the merits and risks of the transactions
described in this Agreement.

 

5.
COVENANTS OF SELLERS PRIOR TO CLOSING. Between
the date of this Agreement and the Closing:

 

5.1
Access and Information. Sellers shall afford to the officers and authorized representatives and agents (which shall include
accountants, attorneys, bankers, and other consultants) of Buyer reasonable access to and the right to inspect the plants, properties,
books, and records of the Hospital, and will furnish Buyer with such additional financial and operating data and other information
as to the business and properties of Sellers pertaining to the Hospital as Buyer may from time to time reasonably request without
regard to where such information may be located. Buyer’s right of access and inspection shall be exercised in such a manner
as not to interfere unreasonably with the operations of the Hospital. Buyer agrees that no inspections shall take place and no
employees or other personnel of the Hospital shall be contacted by Buyer without Buyer first providing reasonable notice to Sellers
and coordinating such inspection or contact with Sellers.

 

5.2
Operations. Sellers will:

 

(a)
carry on their business pertaining to the Hospital in substantially the same manner as presently conducted and not make
any material change in personnel, operations, finance, accounting policies, or real or personal property pertaining to the Hospital;

 

(b)
use commercially reasonable efforts to maintain the Hospital and all parts thereof in good operating condition, ordinary
wear and tear excepted;

 

(c)
use commercially reasonable efforts to perform all of their obligations under agreements relating to or affecting the
Hospital or the Assets, subject to Sellers’ financial capacity to do so;

 

(d)
use commercially reasonable efforts to keep in full force and effect present insurance policies or other comparable insurance
pertaining to the Hospital;

 

(e)
use commercially reasonable efforts to maintain and preserve their business organizations intact, retain their present
employees at the Hospital and maintain their relationships with physicians, suppliers, customers, and others having business relations
with the Hospital;

 

(f)
promptly notify Buyer in writing of the threat or commencement of any litigation by, against or affecting Sellers, the
Hospital or the Assets, or that challenges or may affect the validity of, or seeks damages or other relief in connection with,
this Agreement, or the ability of Sellers to consummate the transactions contemplated hereby;

 

    	 	- 25 -	 

     

    

 

(g)
promptly notify Buyer in writing if any governmental or other third party payor cancels or materially modifies or terminates
any rights to reimbursement or gives Sellers or the Hospital written notice of its intention to do so, and promptly provide Buyer
with true and correct copies of any written communications or notices related thereto;

 

(h)
promptly notify Buyer in writing of any governmental survey conducted or to be conducted relating to the Hospital; and

 

(i)
maintain in effect and good standing all licenses and permits relating to the Hospital.

 

5.3
Negative Covenants. Sellers will not, without the prior written consent of Buyer:

 

(a)
amend or terminate any of the Contracts, enter into any contract or commitment, or incur or agree to incur any liability,
except as provided herein or in the ordinary course of business;

 

(b)
increase compensation payable or to become payable or make any bonus payment to, or otherwise enter into one or more bonus
agreements with, any employee at the Hospital, except in the ordinary course of business in accordance with existing personnel
policies;

 

(c)
acquire (whether by purchase or lease) or sell, assign, lease, or otherwise transfer or dispose of any property, plant,
or equipment with a value in excess of Fifty Thousand Dollars ($50,000), except in the ordinary course of business;

 

(d)
take any action of the type described in Section 3.5(f);

 

(e)
purchase capital assets or incur costs in respect of construction-in-progress in excess of Fifty Thousand Dollars ($50,000);
or

 

(f)
take any action outside the ordinary course of business of the Hospital or its related ancillary services.

 

5.4
Governmental Approvals. Sellers shall (i) use commercially reasonable efforts to obtain all governmental approvals (or
exemptions therefrom) necessary or required to allow Sellers to perform their obligations under this Agreement; and (ii) assist
and cooperate with Buyer and its representatives and counsel in obtaining all governmental consents, approvals, and licenses which
Buyer deems necessary or appropriate and in the preparation of any document or other material which may be required by any governmental
agency as a predicate to or as a result of the transactions contemplated herein. Without limiting the foregoing, Sellers shall
promptly (and in no event later than December 7, 2018) notify the Office of the Attorney General of the State of Tennessee of
the transactions contemplated hereby, and thereafter use commercially reasonable efforts to obtain all required consents, approvals
or authorizations from the said Attorney General, including any that may be required under the Tennessee Public Benefit Hospital
Sales and Conveyance Act of 2006 (the “AG Approval”).

 

    	 	- 26 -	 

     

    

 

5.5
FTC Notification. Sellers shall, if and to the extent required by law, file all reports or other documents required or
requested by the Federal Trade Commission (“FTC”) or the United States Department of Justice (“Justice Department”)
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (“HSR Act”), and all regulations promulgated thereunder,
concerning the transactions contemplated hereby, and comply promptly with any requests by the FTC or Justice Department for additional
information concerning such transactions, so that the waiting period specified in the HSR Act will expire as soon as reasonably
possible after the execution and delivery of this Agreement. Sellers agree to furnish to Buyer such information concerning Sellers
as Buyer needs to perform its obligations under Section 6.2 of this Agreement. The parties agree that a filing under the
HSR Act is not required in connection with the transactions contemplated by this Agreement.

 

5.6
Additional Financial Information. Within thirty (30) days following the end of each calendar month prior to Closing, Sellers
shall deliver to Buyer true and complete copies of the unaudited balance sheets and the related unaudited statements of income
(collectively, the “Interim Statements”) of, or relating to, the Hospital for each month then ended, together with
a year-to-date compilation and the notes, if any, related thereto, which shall have been prepared from and in accordance with
the books and records of Sellers, and shall fairly present in all material respects the financial position and results of operations
of the Hospital as of the date and for the period indicated.

 

5.7
No-Shop Clause. Sellers shall not, and shall direct and use their collective best efforts to cause their respective officers,
directors, employees, agents and representatives (including any investment banker, attorney or accountant retained by Sellers)
not to: (i) offer for sale or lease all or any portion of the Assets, other than in the ordinary course of business, or any ownership
interest in any entity owning any of the Assets, (ii) solicit offers to buy all or any portion of the Assets, other than in the
ordinary course of business, or any ownership interest in any entity owning any of the Assets, (iii) initiate, encourage or provide
any documents or information to any third party in connection with, discuss or negotiate with any person regarding any inquires,
proposals or offers relating to any disposition of all or any portion of the Assets, other than in the ordinary course of business,
or a merger or consolidation of any entity owning any of the Assets, or (iv) enter into any agreement or discussions with any
party (other than Buyer) with respect to the sale, assignment, or other disposition of all or any portion of the Assets, other
than in the ordinary course of business, or any ownership interest in any entity owning any of the Assets or with respect to a
merger or consolidation of any entity owning any of the Assets.

 

5.8
Efforts to Close. Sellers shall use commercially reasonable efforts to satisfy all of the conditions precedent set forth
in Section 7 to the extent that Sellers’ action or inaction can control or influence the satisfaction of such conditions,
so that the Closing will occur on or before February 1, 2019.

 

    	 	- 27 -	 

     

    

 

5.9
Quality Reporting. Sellers shall submit all quality data required by CMS under its Hospital Quality Initiative Program
(the “HQI Program”) to CMS or its agent for any calendar quarter with reporting deadlines between the date of this
Agreement and the Closing Date. If a calendar quarter ends prior to the Closing Date, but the reporting deadline for such quarter
ends after the Closing Date, Sellers shall prepare and submit the quality data for the Hospital required under the HQI Program
in accordance with applicable filing deadlines and in the form and manner required by CMS or, at the sole option of Buyer, Sellers
shall transmit such quality data to Buyer in a form mutually agreeable to Buyer and Sellers, to enable the Buyer to submit quality
data for the Hospital required under the HQI Program for such quarter in the form and manner required by CMS. If the Closing Date
falls between the first and last day of a calendar quarter, Sellers shall, to the extent reasonably required, cooperate with Buyer
to ensure that all quality data required to be submitted for the Hospital under the HQI Program for the portion of the quarter
during which Sellers owned the Hospital can be aggregated with the quality data for the portion of the quarter during which Buyer
owned the Hospital, to enable the Buyer and/or the Sellers to submit quality data for the Hospital required under the HQI Program
in accordance with applicable filing deadlines and in the form and manner required by CMS.

 

5.10
Closure of Maternity Department. Sellers shall promptly begin closure of the Hospital’s maternity department, and
shall use their best efforts to complete such closure prior to the Closing Date.

 

6.
COVENANTS OF BUYER PRIOR TO CLOSING. Between
the date of this Agreement and the Closing:

 

6.1
Governmental Approvals. Buyer shall (i) use commercially reasonable efforts to obtain all governmental approvals (or exemptions
therefrom) necessary or required to allow Buyer to perform its obligations under this Agreement; and (ii) assist and cooperate
with Sellers and their representatives and counsel in obtaining all governmental consents, approvals, and licenses which Sellers
deem necessary or appropriate and in the preparation of any document or other material which may be required by any governmental
agency as a predicate to or as a result of the transactions contemplated herein. Without limiting the forgoing, Buyer shall submit
the required application for the Hospital’s facility license to the Tennessee Department of Health, Office of Health Care
Facilities, prior to November 30, 2018, and diligently pursue such license application, and shall provide Sellers with any information
regarding Buyer that is required in connection with Sellers’ application for the AG Approval by December 5, 2018.

 

6.2
FTC Notification. Buyer shall, if and to the extent required by law, file all reports or other documents required or requested
by the FTC or the Justice Department under the HSR Act, and all regulations promulgated thereunder, concerning the transactions
contemplated hereby, and comply promptly with any requests by the FTC or Justice Department for additional information concerning
such transactions, so that the waiting period specified in the HSR Act will expire as soon as reasonably possible after the execution
and delivery of this Agreement. Buyer agrees to furnish to Sellers such information concerning Buyer as Sellers needs to perform
its obligations under Section 5.5 of this Agreement. The parties agree that a filing under the HSR Act is not required
in connection with the transactions contemplated by this Agreement.

 

6.3
Title Commitment and Survey.

 

(a)
Title Commitment. Buyer has ordered a current title commitment with respect to the Real Property (the “Title Commitment”),
issued by a title insurance company selected by Buyer (the “Title Company”), together with legible copies of all exceptions
to title referenced therein, sufficient for the issuance to Buyer of a leasehold title policy for the Leased Real Property and
an owner’s policy of title insurance for the Owned Real Property (collectively, the “Title Policy”).

 

    	 	- 28 -	 

     

    

 

(b)
Survey. Buyer, at its expense, shall obtain an ALTA/ACSM Land Title Survey of the Real Property, or such portion thereof
as Buyer may elect (the “Survey”). Buyer shall promptly upon its receipt furnish a copy of the Survey to Sellers.

 

(c)
Title Defects and Cure. The Title Commitment and the Survey are collectively referred to herein as the “Title Evidence.”
If the Title Evidence discloses any liens, claims, encroachments, exceptions, defects or other matters which do not constitute
Permitted Encumbrances, Buyer may object to the same by giving written notice of such objections to Seller within ten (10) days
after Buyer’s receipt of the last of the Title Evidence (any such objections being referred to herein as the “Objections”).
Sellers may elect to either cure the Objections on or before the Closing or not cure the Objections, which election shall be made
by written notice to Buyer within ten (10) days after Seller’ receipt of Buyer’s written notice of the Objections.
If Sellers fail to timely give such written notice, Sellers shall be deemed to have elected not to cure the Objections. If Sellers
elect not to cure the Objections, Buyer may elect to either waive such Objections and close or terminate this Agreement, which
election shall be made by written notice to Sellers within twenty (20) days after Sellers’ receipt of Buyer’s written
notice of the Objections. If Buyer fails to timely give such written notice, Buyer shall be deemed to have elected to waive such
Objections and close. Upon termination of this Agreement under the terms of this Section 6.3(c), no party to this Agreement
shall have any further claims under this Agreement against any other party. Any matters shown by the Title Evidence to which Buyer
does not object timely, in accordance with the terms of this Section 6.3(c), or which are waived (or deemed waived) by
Buyer as herein provided, shall be deemed to be Permitted Encumbrances. Notwithstanding anything contained in this Section
6.3(c) to the contrary, at the Closing, Seller shall cause all mortgages, deeds of trust, financing statements and other similar
liens encumbering Sellers’ fee interest in the Owned Real Property and arising by, through or under Sellers or any of their
Affiliates to be released (other than liens for Taxes not yet due and payable and any mechanic’s or materialmen’s
liens relating to Assumed Liabilities) and the same shall not in any event be deemed to be Permitted Exceptions.

 

(d)
Costs. Section 12.9 shall govern which party or parties hereto shall bear the costs and expenses of the Title Commitment,
the Title Policy, the Survey and the Environmental Inspection Report.

 

(e)
Environmental Inspections. For a period of thirty (30) days following the execution of this Agreement (the “Environmental
Inspection Period”), Sellers shall use commercially reasonable efforts to obtain for Buyer and Buyer’s agents, representatives
and contractors the right to enter upon the Real Property for the purpose of conducting such tests, assessments, evaluations and
investigations as are reasonably necessary for Buyer to evaluate and determine the current environmental condition of the Real
Property, including without limitation Phase I or Phase II environmental assessments of any Real Property under AAI standards
for CERCLA. Within five (5) days after the expiration of the Environmental Inspection Period, Buyer shall give written notice
to Sellers of any condition which would reasonably be expected to materially and adversely affect the use or operation of the
Hospital (“Environmental Conditions”). Buyer shall provide Sellers with a copy of Buyer’s Environmental Inspections
reflecting such Environmental Conditions. If Buyer gives notice of any Environmental Conditions to Sellers, Sellers shall use
commercially reasonable efforts to cure any defect identified in such notice. Should Sellers, notwithstanding the use of commercially
reasonable efforts, not have cured by Closing any such Environmental Conditions referenced in the Buyer’s Environmental
Inspections, and the failure to cure such Environmental Condition(s) shall reasonably be expected to have a Material Adverse Effect,
then Sellers may elect to either terminate this Agreement, in which event neither Sellers nor Buyer shall have any further obligation
to the other hereunder except those obligations which by the express terms of this Agreement shall survive any such termination,
or waive such right to terminate this Agreement.

 

    	 	- 29 -	 

     

    

 

6.4
Efforts to Close. Buyer shall use commercially reasonable efforts to satisfy all of the conditions precedent set forth
in Section 8 to the extent that Buyer’s action or inaction can control or influence the satisfaction of such conditions,
so that the Closing will occur on or before February 1, 2019. Without limiting the forgoing, Buyer shall cooperate with Sellers’
efforts to obtain the material consents identified on Schedule 7.9 and provide any financial information as may be reasonably
requested by the applicable vendors in connection with the seeking of such consents.

 

7.
CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER. Notwithstanding
anything herein to the contrary, the obligations of Buyer to consummate the transactions described herein are subject to the fulfillment,
on or prior to the Closing Date, of the following conditions precedent unless (but only to the extent) waived in writing by Buyer
at the Closing:

 

7.1
Representations/Warranties; Covenants. The representations and warranties of Sellers contained in this Agreement shall
be true in all material respects when made and, when read in light of any Schedules which have been updated in accordance with
the provisions of Section 12.1 hereof, as of the Closing Date as though such representations and warranties had been made
on and as of such Closing Date. Each and all of the terms, covenants, and conditions of this Agreement to be complied with or
performed by Seller on or before the Closing Date pursuant to the terms hereof shall have been duly complied with and performed
in all material respects.

 

7.2
Governmental Approvals. All material consents, authorizations, orders and approvals of (or filings or registrations with)
any Government Entity or other party required in connection with the execution, delivery and performance of this Agreement shall
have been obtained or made by Buyer when so required, except as for any documents required to be filed, or consents, authorizations,
orders or approvals required to be issued, after the Closing Date. Without limiting the foregoing, Sellers shall have received
all consents, approvals and authorizations required from the Office of the Attorney General of the State of Tennessee, including
any such approval as may be required under the Tennessee Public Benefit Hospital Sales and Conveyance Act of 2006.

 

    	 	- 30 -	 

     

    

 

7.3
Title Policy. At the Closing, the Title Company shall be ready, willing and able to issue a pro forma of the Title Policy
(or marked Title Commitment containing no additional exceptions to title to the Real Property) to Buyer. The Title Policy shall
be issued, at Buyer’s expense, on an ALTA Form 2006 Leasehold or Owner’s Title Policy in an amount equal to the portion
of the Purchase Price being allocated to the Real Property and shall inure to Buyer good and marketable title to the Owned Real
Property and good and valid leasehold title to the Leased Real Property subject only to the Permitted Encumbrances and with such
endorsements as Buyer reasonably requests and are available for issuance in the State of Tennessee (the “Endorsements”).
Sellers agree to deliver any information as may reasonably be required by the Title Company under the requirements section of
the Title Commitment or otherwise in connection with the issuance of the Title Policy and any Endorsements. Sellers also agree
to provide customary affidavits of title and/or such other information as the Title Company may reasonably require in order for
the Title Company to insure over the “gap” (i.e., the period of time between the effective date of the title insurance
company’s last checkdown of title to the Real Property and the Closing Date) and to cause the Title Company to delete all
standard printed exceptions from the Title Policy at Closing and to issue the Endorsements.

 

7.4
Actions/Proceedings. No action or proceeding before a court or any other governmental agency or body shall have been instituted
or threatened to restrain or prohibit the transactions herein contemplated, and no governmental agency or body shall have taken
any other action or made any request of any party hereto as a result of which Buyer reasonably and in good faith deems it inadvisable
to proceed with the transactions hereunder.

 

7.5
Insolvency. Seller shall not (i) be in receivership or dissolution, (ii) have made any assignment for the benefit of creditors,
(iii) have admitted in writing its inability to pay its debts as they mature, (iv) have been adjudicated a bankrupt, or (v) have
filed a petition in voluntary bankruptcy, a petition or answer seeking reorganization, or an arrangement with creditors under
the federal bankruptcy law or any other similar law or statute of the United States or any state, nor shall any such petition
have been filed against Seller.

 

7.6
Vesting/Recordation. Sellers shall have furnished to Buyer, in form and substance reasonably satisfactory to Buyer, assignments
or other instruments of transfer necessary or appropriate to transfer to and effectively vest in Buyer all right, title, and interest
in and to the Assets, in proper statutory form for recording if such recording is necessary or appropriate.

 

7.7
Closing Deliveries. Sellers shall have delivered to Buyer, in accordance with the terms of this Agreement, all contracts,
agreements, instruments, and documents required to be delivered by Sellers to Buyer pursuant to Section 2.2.

 

7.8
No Material Adverse Effect. There shall have been no Material Adverse Effect since the date of this Agreement, and no
event or circumstance shall have occurred since the date of this Agreement which might reasonably be expected to result in a Material
Adverse Effect.

 

7.9
Material Consents. Buyer shall have received consents to the assignment of certain Assumed Contracts as listed on Schedule
7.9 hereto, each of which shall be in form and substance reasonably acceptable to Buyer.

 

7.10
Environmental Surveys. Buyer shall have received the environmental inspections contemplated by Section 6.3(e),
and any Environmental Conditions that are reasonably expected to have a Material Adverse Effect and with respect to which Sellers
have been notified by Buyer have been cured by Sellers or waived by Buyer, all as contemplated by Section 6.3(e).

 

    	 	- 31 -	 

     

    

 

7.11
Leased Real Property Consent and Estoppel. Buyer shall have received an executed consent to assignment and estoppel certificate
reasonably satisfactory to Buyer from the lessor under any and all leases for the Leased Real Property being assigned to Buyer.

 

8.
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLERS. Notwithstanding
anything herein to the contrary, the obligations of Sellers to consummate the transactions described herein are subject to the
fulfillment, on or prior to the Closing Date, of the following conditions precedent unless (but only to the extent) waived in
writing by Sellers at the Closing:

 

8.1
Representations/Warranties; Covenants. The representations and warranties of Buyer contained in this Agreement shall be
true in all material respects when made and, when read in light of any Schedules which have been updated in accordance with the
provisions of Section 12.1 hereof, as of the Closing Date as though such representations and warranties had been made on
and as of such Closing Date. Each and all of the terms, covenants, and conditions of this Agreement to be complied with or performed
by Buyer on or before the Closing Date pursuant to the terms hereof shall have been duly complied with and performed in all material
respects.

 

8.2
Governmental Approvals. All material consents, authorizations, orders and approvals of (or filings or registrations with)
any Government Entity or other party required in connection with the execution, delivery and performance of this Agreement shall
have been obtained or made by Seller when so required, except for any documents required to be filed, or consents, authorizations,
orders or approvals required to be issued, after the Closing Date.

 

8.3
Actions/Proceedings. No action or proceeding before a court or any other governmental agency or body shall have been instituted
or threatened to restrain or prohibit the transactions herein contemplated, and no governmental agency or body shall have taken
any other action or made any request of any party hereto as a result of which Sellers reasonably and in good faith deems it inadvisable
to proceed with the transactions hereunder.

 

8.4
Insolvency. Buyer shall not (i) be in receivership or dissolution, (ii) have made any assignment for the benefit of creditors,
(iii) have admitted in writing its inability to pay its debts as they mature, (iv) have been adjudicated a bankrupt, or (v) have
filed a petition in voluntary bankruptcy, a petition or answer seeking reorganization, or an arrangement with creditors under
the federal bankruptcy law or any other similar law or statute of the United States or any state, nor shall any such petition
have been filed against Buyer.

 

8.5
Closing Deliveries. Buyer shall have delivered to Seller, in accordance with the terms of this Agreement, all contracts,
agreements, instruments and documents required to be delivered by Buyer to Seller pursuant to Section 2.3.

 

    	 	- 32 -	 

     

    

 

9.
SELLER’S COVENANT NOT TO COMPETE. 

 

9.1
Non-Compete. Sellers hereby covenants that at all times from the Closing Date until the second (2nd) anniversary of the
Closing Date, neither Sellers nor their Affiliates shall, directly or indirectly, except as a consultant or contractor to or of
Buyer (or any Affiliate of Buyer), own, lease, manage, operate, control, or participate in any manner with the ownership, leasing,
management, operation or control of any Prohibited Business within a twenty (20) mile radius of the Hospital (the “Restricted
Area”), without Buyer’s prior written consent (which Buyer may withhold in its sole and absolute discretion). “Prohibited
Business” shall mean any health care facility, business or service that competes with the Hospital, either as of the Closing
Date or at any time thereafter, including the following: acute care hospitals; long term acute care hospitals; specialty hospitals;
cancer treatment centers (including outpatient radiation oncology centers, gamma-knife centers and cyber-knife centers); physician
practices; ambulatory surgery centers; urgent care clinics; free-standing emergency departments; psychiatric services; diagnostic
imaging services; and cath laboratories; provided, however, that Prohibited Business shall exclude the current operations
of Sellers, CHC and their Affiliates within the Restricted Area that are listed on Schedule 9.1 so long as they are not
materially expanded or altered after the Closing.

 

9.2
Enforcement. In the event of a breach of this Section 9, Sellers recognize that monetary damages shall be inadequate
to compensate Buyer and Buyer shall be entitled, without the posting of a bond or similar security, to an injunction restraining
such breach, with the reasonable costs (including reasonable attorneys’ fees) of securing such injunction to be borne by
the breaching Seller or Affiliate. Nothing contained herein shall be construed as prohibiting Buyer from pursuing any other remedy
available to it for such breach or threatened breach. All parties hereto hereby acknowledge the necessity of protection against
the competition of Sellers and their Affiliates and that the nature and scope of such protection has been carefully considered
by the parties. Sellers further acknowledge and agree that the covenants and provisions of this Section 9 form part of
the consideration under this Agreement and are among the inducements for Buyer entering into and consummating the transactions
contemplated herein. The period provided and the area covered are expressly represented and agreed to be fair, reasonable and
necessary. The consideration provided for herein is deemed to be sufficient and adequate to compensate for agreeing to the restrictions
contained in this Section 9. If, however, any court determines that the foregoing restrictions are not reasonable, such
restrictions shall be modified, rewritten or interpreted to include as much of their nature and scope as will render them enforceable.

 

10.
ADDITIONAL AGREEMENTS. 

 

10.1
Allocation of Purchase Price. The Purchase Price (plus liabilities of Seller, to
the extent such liabilities should be included in the Purchase Price for federal income Tax purposes) shall be allocated
among the Assets in accordance with and as provided by Section 1060 of the Code. Within ninety (90) days of the Closing, Buyer
shall provide Seller with an allocation of the Purchase Price (as calculated for federal income Tax purposes) among the Assets
(the “Allocation”). Buyer and Sellers agree that any Tax Returns or other Tax information or documents they may file
or cause to be filed with any Government Entity shall be prepared and filed consistently with the Allocation, including, without
limitation, IRS Form 8594.

 

    	 	- 33 -	 

     

    

 

10.2
Termination Prior to Closing. Notwithstanding anything herein to the contrary, this Agreement may be terminated: (i) prior
to the Closing by mutual consent of Seller and Buyer; (ii) by Buyer on or after March 1, 2019, if any of the conditions specified
in Section 7 of this Agreement have not been satisfied (unless the failure results primarily from Buyer breaching any representation,
warranty, or covenant herein) and shall not have been waived by Buyer; (iii) by Sellers on or after March 1, 2019, if any of the
conditions specified in Section 8 of this Agreement have not been satisfied (unless the failure results primarily from
a Seller breaching any representation, warranty, or covenant herein) and shall not have been waived by Sellers; (iv) by Buyer
on or prior to December 14, 2018 if Buyer’s review of the Schedules and diligence materials provided in connection with
this Agreement discloses a matter which might reasonably be expected to constitute or result in a Material Adverse Effect; (v)
by either Sellers or Buyer pursuant to Section 12.1 hereof; or (vi) as otherwise specifically set forth herein.

 

10.3
Post-Closing Access to Information. Sellers and Buyer acknowledge that subsequent to Closing each party may need access
to information or documents in the control or possession of the other party(ies) for the purposes of, without limitation, concluding
the transactions herein contemplated, audits, compliance with governmental requirements and regulations, and the prosecution or
defense of third party claims. Accordingly, Sellers and Buyer agree that for a period of six (6) years after Closing each will
make reasonably available to the other’s agents, independent auditors, counsel, and/or governmental agencies upon written
request and at the expense of the requesting party such documents and information as may be available relating to the Assets for
periods prior and subsequent to Closing to the extent necessary to facilitate, without limitation, concluding the transactions
herein contemplated, audits, compliance with governmental requirements and regulations, and the prosecution or defense of claims.
All documents and items pertaining to current litigation against the Hospital and related entities (including Seller and their
Affiliates) shall be preserved at the Hospital. Buyer agrees to fully cooperate with all pending and future litigation involving
as parties, Sellers, Affiliates of Sellers, or the Hospital. Sellers shall remain the client of defense litigation counsel of
record, which representation shall continue uninterrupted. To the extent included in the Assets, Buyer shall remain the custodian
of the records, documents and all information, items, things and matters relevant to the litigation, and shall continue to maintain
them secure in compliance with applicable law and court orders, including those for preservation of documents, computers, equipment,
CDs, and information. Full cooperation and access shall be provided to defense litigation counsel of record, Buyer understanding
that the necessities of litigation and court requirements may include expedited response and Buyer shall provide timely response
and access to meet those needs. Following the Closing Date, Buyer shall designate a representative of the Hospital who will be
responsible for communicating and working with litigation counsel, and provide notice of the identity of that person to litigation
counsel.

 

    	 	- 34 -	 

     

    

 

10.4
Preservation and Access to Records After the Closing. After the Closing, Buyer shall, in the ordinary course of business
and as required by law, keep and preserve in their original form all medical and other records of the Hospital existing as of
the Closing, and which constitute a part of the Assets delivered to Buyer at the Closing. For purposes of this Agreement, the
term “records” includes all documents, electronic data and other compilations of information in any form. Buyer acknowledges
that as a result of entering into this Agreement and operating the Hospital it will gain access to patient and other information
which is subject to rules and regulations regarding confidentiality. Buyer agrees to abide by any such rules and regulations relating
to the confidential information Buyer acquires. Buyer agrees to maintain the patient records delivered to Buyer at the Closing
at the Hospital after Closing in accordance with applicable law (including, if applicable, Section 1861(v)(1)(I) of the Social
Security Act (42 U.S.C. §1395(v)(1)(I)), and requirements of relevant insurance carriers, all in a manner consistent with
the maintenance of patient records generated at the Hospital after Closing. Upon reasonable notice, during normal business hours,
at the sole cost and expense of Seller and upon Buyer’s receipt of appropriate consents and authorizations, Buyer will afford
to the representatives of Sellers, including their counsel and accountants, full and complete access to, and copies of, the records
transferred to Buyer at the Closing (including, without limitation, access to patient records in respect of patients treated by
Sellers at the Hospital). Upon reasonable notice, during normal business hours and at the sole cost and expense of Sellers, Buyer
shall also make its officers and employees available to Sellers at reasonable times and places after the Closing. In addition,
Sellers shall be entitled, at Sellers’ sole risk, to remove from the Hospital copies of any such patient records, but only
for purposes of pending litigation involving a patient to whom such records refer, as certified in writing prior to removal by
counsel retained by Sellers in connection with such litigation and only upon Buyer’s receipt of appropriate consents and
authorizations. Any patient record so removed from the Hospital shall be promptly returned to Buyer following its use by Sellers.
Any access to the Hospital, its records or Buyer’s personnel granted to Sellers in this Agreement shall be upon the condition
that any such access not materially interfere with the business operations of Buyer or the Hospital.

 

10.5
Tax and Medicare Effect. None of the parties (nor such parties’ counsel or accountants) has made or is making any
representations to any other party (nor such party’s counsel or accountants) concerning any of the tax or Medicare effects
of the transactions provided for in this Agreement as each party hereto represents that each has obtained, or may obtain, independent
tax and Medicare advice with respect thereto and upon which it, if so obtained, has solely relied.

 

10.6
Reproduction of Documents. This Agreement and all documents relating hereto, including, without limitation, (i) consents,
waivers and modifications which may hereafter be executed, (ii) the documents delivered at the Closing, and (iii) financial statements,
certificates and other information previously or hereafter furnished to Sellers or to Buyer, may, subject to the provisions of
Section 12.10 hereof, be reproduced by Sellers and by Buyer by any photographic, photostatic, microfilm, micro-card, miniature
photographic or other similar process and Seller and Buyer may destroy any original documents so reproduced. Sellers and Buyer
agree and stipulate that any such reproduction shall be admissible in evidence as the original itself in any judicial, arbitral
or administrative proceeding (whether or not the original is in existence and whether or not such reproduction was made by the
Sellers or Buyer in the regular course of business) and that any enlargement, facsimile or further reproduction of such reproduction
shall likewise be admissible in evidence.

 

    	 	- 35 -	 

     

    

 

10.7
Cooperation on Tax Matters. After the Closing, the parties shall cooperate with
each other by furnishing any additional information and executing and delivering any additional documents as may be reasonably
requested by such parties (i) in their preparation of any Tax Returns required to be filed by or with respect to Sellers, the
Hospital or the Assets, and (ii) in connection with any proceedings in respect of Taxes of or with respect to Sellers, the Hospital
or the Assets. Such cooperation shall include access during normal business hours afforded to the parties and their respective
agents and representatives to, and reasonable retention by such parties of, Tax records related to Sellers, the Hospital and the
Assets, and making employees and agents (including auditors) of the parties available on a reasonably convenient basis to provide
additional information and explanation of any material provided hereunder.

 

10.8
Cost Report Matters. Sellers, at their expense, shall prepare and timely file all terminating and other cost reports required
or permitted by law to be filed under the Medicare and Medicaid or other third party payor programs and the State Health Agency
for periods ending on or prior to the Effective Time, or as a result of the consummation of the transactions described herein
(“Seller Cost Reports”). For cost reporting periods ending after the Effective Time, Buyer agrees to include a separate
and distinct listing of allowable Medicare bad debts with dates of service on or prior to the Effective Time provided by Sellers
within ninety (90) days of the cost report year end which have been deemed uncollectible after the Effective Time, and on which
Buyer agrees to request a distinct sample and audit for processing of the NPR. Sellers agree to provide any and all supporting
documentation to Buyer during any audits by the Medicare Administrative Contactor (MAC), and Sellers will also provide a determination
to Buyer of the final audited allowed Medicare bad debts by the MAC before finalization of the NPR. Buyer agrees to remit the
net allowed and settled Medicare bad debts of Sellers within five (5) business days of the NPR date of each impact annual cost
report. Buyer shall forward to Sellers any and all correspondence relating to the Seller Cost Reports within five (5) business
days after receipt by Buyer. Buyer shall remit any receipts of funds relating to the Seller Cost Reports within five (5) business
days after receipt by Buyer and shall forward to Sellers any demand for payments within three (3) business days after receipt
by Buyer. Sellers shall retain all rights to the Seller Cost Reports including any amounts receivable or payable in respect of
such reports or reserves relating to such reports. Such rights shall include the right to appeal any Medicare or Medicaid determinations
relating to the Seller Cost Reports. Sellers shall retain the originals of the Seller Cost Reports, correspondence, work papers
and other documents relating to the Seller Cost Reports. Sellers will furnish copies of such cost reports to Buyer at least five
(5) business days prior to filing.

 

10.9
Misdirected Payments, Etc. Sellers and Buyer covenant and agree to remit to the other, with reasonable promptness (within
five (5) business days after receipt) to the other any payments received, which payments are on or in respect of accounts or notes
receivable owned by (or are otherwise payable to) the other. In addition, and without limitation, in the event of a determination
by any governmental or third-party payor that payments to the Sellers or the Hospital resulted in an overpayment or other determination
that funds previously paid by any program or plan to the Sellers or the Hospital must be repaid, Sellers shall be responsible
for repayment of said monies (or defense of such actions) if such overpayment or other repayment determination was for services
rendered prior to the Effective Time and Buyer shall be responsible for repayment of said monies (or defense of such actions)
if such overpayment or other repayment determination was for services rendered after the Effective Time. In the event that, following
Closing, Buyer suffer any offsets against reimbursement under any third-party payor or reimbursement programs due to Buyer, relating
to amounts owing under any such programs by Sellers or any of their Affiliates, Sellers shall promptly upon demand from Buyer
pay to Buyer the amounts so billed or offset.

 

    	 	- 36 -	 

     

    

 

10.10
Employee Matters. As of the Closing Date, Sellers shall terminate all of
the employees of the Hospital, and Buyer, subject to Buyer’s standard hiring practices and policies, shall offer employment
to all active employees in good standing, commencing as of the Closing Date in positions and at compensation levels consistent
with those being provided by Sellers immediately prior to the Closing Date. Nothing herein shall be deemed (i) to affect or limit
in any way normal management prerogatives of Buyer with respect to employees, (ii) to create or grant to any such employees third
party beneficiary rights or claims of any kind or nature, (iii) to be construed as an amendment, waiver or creation of any Benefit
Plan, Buyer benefit Plans or other employee benefit plan, (iv) limit in any way the right of the Hospital, Sellers, CHC, Buyer,
or their respective Affiliates to amend or terminate any Benefit Plan or Buyer benefit plan at any time, or (v) create any right
to employment, continued employment, or any term or condition of employment with the Hospital, Sellers, CHC, Buyer, or their respective
Affiliates. In respect of the employees employed by Buyer, Buyer shall provide such employees with employee benefits consistent
in the aggregate with the benefits generally offered to employees of Buyer and its Affiliates and, to the extent Sellers have
qualified retirement programs for such employees, Buyer shall recognize the years of service of such employees and shall provide
credit under such plans for purposes of determining eligibility and vesting (but not benefit accrual); provided, however, that
no such credit need be given in respect of any new plan commenced or participated in by Buyer in which no prior service credit
is given or recognized to or for other plan beneficiaries. In extending such benefits, Buyer shall use commercially reasonable
efforts, subject to the consent of the applicable insurer, to waive pre-existing conditions limitations in Buyer’s welfare
benefit plans which might otherwise apply to such employees except to the extent employees have not satisfied such limitations
under the current welfare benefit plans of Sellers. Buyer shall give credit to all hired employees for their actual accumulated
and unused vacation and holiday pay to the extent included in the Net Working Capital.

 

10.11
WARN Act Compliance. Within the period of ninety (90) days before the Closing,
Sellers shall not, and within the ninety (90) days following the Closing, Buyer shall not: (i) permanently or temporarily shut
down a single site of employment, or one or more facilities or operating units within a single site of employment, if the shutdown
results in an employment loss during any thirty (30) day period at the single site of employment for fifty (50) or more employees,
excluding any part-time employees; or (ii) have a mass layoff at a single site of employment of at least thirty-three percent
(33%) of the active employees and at least fifty (50) employees, excluding part-time employees. The terms “single site of
employment,” “operating unit,” “employment loss” and “mass layoff” shall be defined
as in the Workers Adjustment Retraining and Notification Act (the “WARN Act”). At Closing, Sellers shall provide Buyer
a list of all employees who have been terminated during the ninety (90) days prior to the Closing. With respect to terminations
of employees following the Closing, Buyer shall be responsible for any notification required under the WARN Act.

 

    	 	- 37 -	 

     

    

 

10.12
Indigent Care Policies. Buyer shall adopt and maintain a reasonable policy for the treatment of indigent patients of the
Hospital. Buyer shall cause the Hospital to treat any patient presented to the emergency room who has a medical emergency or who,
in the judgment of a staff physician, has an immediate emergency need, in compliance with applicable laws. Buyer shall cause the
Hospital to continue to provide services to patients covered by the Medicare and Medicaid programs and those unable to pay for
emergent and medically necessary care. This covenant shall be subject in all respects to changes in governmental policy.

 

10.13
Medical Staff Privileges. As a result of the acquisition of the Assets by Buyer, without the consent of the Medical Staff,
there will be no change or modification to the current staff privileges for physicians on the Medical Staff; provided, however,
that the consummation of the transactions contemplated hereby will not limit the ability of the board of directors or medical
executive committee of the Hospital to grant, withhold or suspend Medical Staff appointments or clinical privileges in accordance
with the terms and provisions of the Medical Staff bylaws. 

 

10.14
Use of Controlled Substance Permits. To the extent permitted by applicable law, Buyer shall have the right, for a period
not to exceed one hundred eighty (180) days following the Closing Date, to operate under the licenses and registrations of Sellers
relating to controlled substances and the operations of pharmacies, until Buyer is able to obtain such licenses and registrations
for themselves. In furtherance thereof, each Seller holding such licenses or registrations shall execute and deliver to Buyer
at or prior to the Closing one or more limited powers of attorney substantially in the form attached hereto as Exhibit A.

 

10.15
Transition Services Agreement. If required by Buyer, at the Closing, Sellers (or one or more of their Affiliates) and
Buyer shall enter into a Transition Services Agreement for the provision of mutually agreed upon billing and transition services,
in form mutually acceptable.

 

10.16
Use of Excluded Marks. As of the Closing Date, Buyer shall take all action necessary to change the names of the Hospital
and the Assets so as not to include the Excluded Marks; provided, however, Sellers or their assigns, from and after the Closing,
shall grant a nonexclusive license to Buyer and its successors and assigns to use (a) durable personal property items, within
the Hospital, containing the Excluded Marks (such as bed sheets, laundry and cafeteria trays) through the useful life of such
durable personal property, (b) any signage or advertisements containing the Excluded Marks on the exterior of the Hospital or
in other locations for a period of ninety (90) days after the Closing, (c) any existing advertisements and listings in telephone
directories for a period not to exceed the date the next such directory is published, and (d) any proprietary manuals, policy
and procedures manuals, and standard operating procedures for a period not to exceed one hundred eighty (180) days. Buyer shall
not use the Excluded Marks in connection with any personal property acquired by Buyer after the Closing.

 

    	 	- 38 -	 

     

    

 

10.17
Access to Records Including as to Recovery and Audit Information. If any entity, governmental agency or person makes a
claim, inquiry or request to Buyer or Sellers relating to Sellers’ operation of the Hospital prior to the Effective Time
(including but not limited to a notice to Buyer or Sellers from a person responsible for retroactive payment denials, including
recovery audit contractors) of their intent to review Sellers’ claims or any other aspect of Sellers’ operation of
the Hospital prior to the Effective Time, or otherwise seeks information pertaining to Sellers, Buyer shall: (i) comply with all
requests from such entity or person in a timely manner; (ii) comply with all other applicable laws and regulations; (iii) forward
to Sellers all communications and/or documents sent to such person or entity or received from such person or entity within five
(5) business days of Buyer’s delivery or receipt of such communications and/or documents; and (iv) provide Sellers and their
agents and attorneys upon reasonable request with reasonable access to records, information and personnel necessary for any response,
appeal or challenge by Sellers regarding any such matter (with the understanding that Sellers shall be solely responsible for
handling any such response, appeal or challenge).

 

10.18
Continuation of Insurance. Sellers, at their sole cost and expense, will obtain supplemental insurance policies (the “Tail
Policies”) providing for extended reporting periods for claims made in respect of events occurring prior to or as of the
Closing, in form and substance reasonably acceptable to Buyer, to insure against professional and general liabilities of Sellers
relating to all periods of Sellers’ ownership of the Hospital, to have a reporting period of not less than three (3) years
and provide coverage consistent with current limits. Sellers shall deliver to Buyer evidence of Sellers’ purchase of the
Tail Policies at the Closing.

 

10.19
Tax Abatement. Sellers shall use commercially reasonable efforts to assist Buyer in obtaining confirmation from the Hospital
Landlord with respect to the abatement of real estate taxes for the Leased Real Property subject to the Hospital Lease.

 

11.
INDEMNIFICATION.

 

11.1
Indemnification by Buyer. Subject to the limitations set forth in Section 11.3 hereof, Buyer shall defend, indemnify
and hold harmless Sellers and their Affiliates, and its respective officers, employees, agents or independent contractors (collectively,
“Seller Indemnified Parties”), from and against any and all losses, liabilities, damages, costs (including, without
limitation, court costs and costs of appeal) and expenses (including, without limitation, reasonable attorneys’ fees and
fees of expert consultants and witnesses) that such Seller Indemnified Party incurs as a result of, or with respect to (i) any
misrepresentation or breach of warranty by Buyer under this Agreement, (ii) any breach by Buyer of, or any failure by Buyer to
perform, any covenant or agreement of, or required to be performed by, Buyer under this Agreement, (iii) any of the Assumed Liabilities,
or (iv) any claim made by a third party with respect to the operation of the Hospital by Buyer following the Effective Time.

 

11.2
Indemnification by Sellers. Subject to the limitations set forth in Section 11.3 hereof, Sellers shall defend,
indemnify and hold harmless Buyer and its Affiliates, and their respective officers, employees, agents, or independent contractors
(collectively, “Buyer Indemnified Parties”), from and against any and all losses, liabilities, damages, costs (including,
without limitation, court costs and costs of appeal) and expenses (including, without limitation, reasonable attorneys’
fees and fees of expert consultants and witnesses) that such Buyer Indemnified Party incurs as a result of, or with respect to
(i) any misrepresentation or breach of warranty by Sellers under this Agreement, (ii) any breach by Sellers of, or any failure
by Sellers to perform, any covenant or agreement of, or required to be performed by, Sellers under this Agreement, (iii) any of
the Excluded Liabilities, or (iv) any claim made by a third party with respect to the operation of the Hospital by Seller prior
to the Effective Time.

 

    	 	- 39 -	 

     

    

 

11.3
Limitations. Buyer and Sellers shall be liable under Section 11.1(i) or Section 11.2(i) (i.e., for misrepresentations
and breaches of warranties), as applicable, only when total indemnification claims exceed One Hundred Thousand Dollars ($100,000)
(the “Basket Amount”), after which Buyer or Sellers, as applicable, shall be liable only for the amount in excess
of the Basket Amount. No party shall be liable for any indemnification pursuant to Section 11.1(i) or Section 11.2(i),
as applicable, for any claims for misrepresentations and breaches of warranty which are the basis upon which any other party shall
have failed to consummate the transactions described herein pursuant to Section 7.1 or Section 8.1, as applicable,
or which are based upon misrepresentations and breaches of warranty which have been waived pursuant to the initial paragraph of
Section 7 or Section 8, as applicable. The liability of Buyer and Sellers for indemnification under Section 11.1(i)
or Section 11.2(i), respectively, shall be limited to an amount equal to fifty percent (50%) of the Purchase Price.
Any indemnification payments required to be made hereunder with respect to any matter shall be reduced by the amount of any insurance
proceeds or tax benefits that can be proved to have been received by the Indemnified Party (as hereinafter defined) as a result
of such matter.

 

11.4
Notice and Control of Litigation. If any claim or liability is asserted in writing by a third party against a party entitled
to indemnification under this Section 11 (the “Indemnified Party”) which would give rise to a claim under this
Section 11, the Indemnified Party shall notify the person giving the indemnity (the “Indemnifying Party”) in
writing of the same within fifteen (15) days of receipt of such written assertion of a claim or liability. The Indemnifying Party
shall have the right to defend a claim and control the defense, settlement, and prosecution of any litigation. If the Indemnifying
Party, within ten (10) days after notice of such claim, fails to defend such claim, the Indemnified Party shall (upon further
notice to the Indemnifying Party) have the right to undertake the defense, compromise, or settlement of such claim on behalf of
and for the account and at the risk of the Indemnifying Party, subject to the right of the Indemnifying Party to assume the defense
of such claim at any time prior to settlement, compromise, or final determination thereof. Anything in this Section 11.4
notwithstanding, (i) if there is a reasonable probability that a claim may materially and adversely affect the Indemnified Party
other than as a result of money damages or other money payments, the Indemnified Party shall have the right, at its own cost and
expense, to defend, compromise, and settle such claim, and (ii) the Indemnifying Party shall not, without the written consent
of the Indemnified Party, settle or compromise any claim or consent to the entry of any judgment which does not include as an
unconditional term thereof the giving by the claimant to the Indemnified Party of a release from all liability in respect of such
claim. The foregoing rights and agreements shall be limited to the extent of any requirement of any third-party insurer or indemnitor.
All parties agree to cooperate fully as necessary in the defense of such matters. Should the Indemnified Party fail to notify
the Indemnifying Party in the time required above, the indemnity with respect to the subject matter of the required notice shall
be limited to the damages that would have resulted absent the Indemnified Party’s failure to notify the Indemnifying Party
in the time required above after taking into account such actions as could have been taken by the Indemnifying Party had it received
timely notice from the Indemnified Party.

 

    	 	- 40 -	 

     

    

 

11.5
Notice of Claim. If an Indemnified Party becomes aware of any breach of the representations or warranties of the Indemnifying
Party hereunder or any other basis for indemnification under this Section 11, the Indemnified Party shall notify the Indemnifying
Party in writing of the same within thirty (30) days after becoming aware of such breach or claim, specifying in detail the circumstances
and facts which give rise to a claim under this Section 11. Should the Indemnified Party fail to notify the Indemnifying
Party within the time frame required above, the indemnity with respect to the subject matter of the required notice shall be limited
to the damages that would have nonetheless resulted absent the Indemnified Party’s failure to notify the Indemnifying Party
in the time required above after taking into account such actions as could have been taken by the Indemnifying Party had it received
timely notice from the Indemnified Party.

 

11.6
Mitigation. The Indemnified Party shall take all reasonable steps to mitigate all liabilities and claims, including availing
itself as reasonably directed by the Indemnifying Party of any defenses, limitations, rights of contribution, claims against third
parties and other rights at law, and shall provide such evidence and documentation of the nature and extent of any liability as
may be reasonably requested by the Indemnifying Party. The amount of any indemnification hereunder shall be reduced or reimbursed,
as the case may be, by any amount received by the Indemnified Party under any insurance coverage or from any other party alleged
to be responsible therefor. The Indemnified Party shall use reasonable efforts to collect any amounts available under such insurance
coverage and from such other party alleged to have responsibility. If the Indemnified Party receives an amount under any such
insurance coverage or from such other party subsequent to an indemnification provided by the Indemnifying Party pursuant to this
Section 11, the Indemnified Party shall promptly reimburse the Indemnifying Party for any payment made or expense incurred
by the Indemnifying Party in connection with providing such indemnification up to such amount received by the Indemnified Party.
Each party shall act in a commercially reasonable manner in addressing any liabilities that may provide the basis for an indemnifiable
claim (that is, each party shall respond to such liability in the same manner that it would respond to such liability in the absence
of the indemnification provided for in this Agreement). Any request for indemnification of specific costs shall include invoices
and supporting documents containing reasonably detailed information about the costs or damages for which indemnification is being
sought.

 

11.7
Exclusive Remedy. The representations and warranties contained in or made pursuant to this Agreement shall be terminated
and extinguished upon the earlier of the end of the Survival Period (hereinafter defined) or any termination of this Agreement.
Thereafter, none of Sellers, Buyer or any shareholder, partner, officer, director, principal or Affiliate of any of the preceding
shall be subject to any liability of any nature whatsoever with respect to any such representation or warranty. Moreover, the
sole and exclusive remedy for any breach or inaccuracy, or alleged breach or inaccuracy, of any representation and warranty made
by Sellers or Buyer shall be the remedies provided by this Section 11.

 

    	 	- 41 -	 

     

    

 

12.
MISCELLANEOUS.

 

12.1
Schedules and Other Instruments. Each Schedule and Exhibit to this Agreement shall be considered a part hereof as if set
forth herein in full. From the date hereof until the Closing, Sellers or Buyer may update their Schedules, subject to the other
party’s approval rights described below. Any other provision herein to the contrary notwithstanding, all Schedules, Exhibits,
or other instruments provided for herein and not delivered at the time of execution of this Agreement or which are incomplete
at the time of execution of this Agreement shall be delivered or completed within ten (10) business days after the date hereof
or prior to the Closing, whichever is sooner. It shall be deemed a condition precedent to the obligations of the parties hereto
that each of the Schedules, Exhibits and related documents shall meet with the reasonable approval of such parties. Each of the
parties hereto shall have ten (10) business days following the date of receipt of each Schedule, Exhibit or related document within
which to approve or disapprove such item. If within the ten (10) business day period either party gives written notice to the
other of disapproval of any such item, the other party shall have five (5) business days within which to correct the item disapproved.
If the party to whom notice of disapproval is delivered is either unwilling or unable to correct the disapproved item, then the
disapproving party shall have five (5) business days within which to terminate this Agreement by giving written notice of such
termination to the other party.

 

12.2
Additional Assurances. The provisions of this Agreement shall be self-operative and shall not require further agreement
by the parties except as may be herein specifically provided to the contrary; provided, however, at the request of a party, the
other party or parties shall execute such additional instruments and take such additional actions as the requesting party may
deem necessary to effectuate this agreement. In addition and from time to time after Closing, Sellers shall execute and deliver
such other instruments of conveyance and transfer, and take such other actions as Buyer reasonably may request, more effectively
to convey and transfer full right, title, and interest to, vest in, and place Buyer in legal and actual possession of, any and
all of the Hospital and the Assets. Sellers shall also furnish Buyer with such information and documents in their possession or
under its control, or which Seller can execute or cause to be executed, as will enable Buyer to prosecute any and all petitions,
applications, claims, and demands relating to or constituting a part of the Hospital or the Assets. Additionally, Sellers shall
cooperate and use their best efforts to have its present directors, officers, and employees cooperate with Buyer on and after
Closing in furnishing information, evidence, testimony, and other assistance in connection with any action, proceeding, arrangement,
or dispute of any nature with respect to matters pertaining to all periods prior to Closing in respect of the items subject to
this Agreement.

 

12.3
Third Party Consents. Anything contained herein to the contrary notwithstanding, this Agreement shall not constitute an
agreement to assign any claim, right, contract, license, lease, commitment, sales order, or purchase order if an attempted assignment
thereof without the consent of the other party thereto would constitute a breach thereof or in any material way affect the rights
of Sellers thereunder, unless such consent is obtained.

 

12.4
Consents, Approvals and Discretion. Except as herein expressly provided to the contrary, whenever this Agreement requires
any consent or approval to be given by a party, or whenever a party must or may exercise discretion, the parties agree that such
consent or approval shall not be unreasonably withheld or delayed and such discretion shall be reasonably exercised.

 

12.5
Legal Fees and Costs. In the event a party elects to incur legal expenses to enforce or interpret any provision of this
Agreement by judicial proceedings, the prevailing party will be entitled to recover such legal expenses, including, without limitation,
reasonable attorneys’ fees, costs, and necessary disbursements at all court levels, in addition to any other relief to which
such party shall be entitled.

 

    	 	- 42 -	 

     

    

 

12.6
Choice of Law. The parties agree that this Agreement shall be governed by and construed in accordance with the laws of
the State of Tennessee, without regard to conflict of laws principles.

 

12.7
Benefit/Assignment. Subject to provisions herein to the contrary, this Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective legal representatives, successors, and assigns. No party may assign this
Agreement without the prior written consent of the other parties, which consent shall not be unreasonably withheld; provided,
however, that any party may, without the prior written consent of the other parties, assign its rights and delegate its duties
hereunder to one or more Affiliates (as defined in Section 12.18). At the Closing and upon the request of Buyer, Sellers
shall, and shall cause its Affiliates owning any portion of the Assets (the “Seller Entities”) to, transfer the Assets
and the Assumed Liabilities to Buyer and its Affiliates, including, without limitation, Rennova Health Services TN, Inc. (the
“Buyer Entities”). Notwithstanding the provisions of Section 12.22 hereof, the Seller Entities and the Buyer
Entities shall be third-party beneficiaries of this Agreement.

 

12.8
No Brokerage. Except as set forth on Schedule 12.8, Buyer and Sellers each represent and warrant to the other that
it has not engaged a broker in connection with the transactions described herein. Each party agrees to be solely liable for and
obligated to satisfy and discharge all loss, cost, damage, or expense arising out of claims for fees or commissions of brokers
employed or alleged to have been employed by such party.

 

12.9
Cost of Transaction. Whether or not the transactions contemplated hereby shall be consummated, the parties agree as follows:
(i) Sellers shall pay the fees, expenses, and disbursements of Sellers and their agents, representatives, accountants, and legal
counsel incurred in connection with the subject matter hereof and any amendments hereto; and (ii) Buyer shall pay the fees, expenses,
and disbursements of Buyer and its agents, representatives, accountants and legal counsel incurred in connection with the subject
matter hereof and any amendments hereto. Buyer shall pay the cost of the Title Commitment, the Title Policy, the Survey and the
Environmental Inspection Report, licensure application fees, recording fees, any state and local deed, stamp, or transfer taxes
associated with or assessed in connection with the sale and purchase of the Assets, and mechanical, structural, electrical and
roofing engineering costs related to or arising out of the transactions contemplated by this Agreement.

 

12.10
Confidentiality. It is understood by the parties hereto that the information, documents, and instruments delivered to
Buyer by Sellers and their agents and the information, documents, and instruments delivered to Sellers by Buyer and its
agents are of a confidential and proprietary nature. Each of the parties hereto agrees that both prior and subsequent to the
Closing it will maintain the confidentiality of all such confidential information, documents, or instruments delivered to it
by each of the other parties hereto or their agents in connection with the negotiation of this Agreement or in compliance
with the terms, conditions, and covenants hereof and will only disclose such information, documents, and instruments to its
duly authorized officers, members, directors, representatives, and agents (including consultants, attorneys, and accountants
of each party) and applicable Government Entities in connection with any required notification or application for approval or
exemption therefrom. Each of the parties hereto further agrees that if the transactions contemplated hereby are not
consummated, it will return all such documents and instruments and all copies thereof in its possession to the other parties
to this Agreement. Each of the parties hereto recognizes that any breach of this Section 12.10 would result in
irreparable harm to the other party to this Agreement and its Affiliates (as defined in Section 12.18 below) and that
therefore either Sellers or Buyer shall be entitled to an injunction to prohibit any such breach or anticipated breach,
without the necessity of posting a bond, cash, or otherwise, in addition to all of its other legal and equitable remedies.
Nothing in this Section 12.10, however, shall prohibit the use of such confidential information, documents,
or information for such governmental filings as in the opinion of Sellers’ counsel or Buyer’s counsel are
required by law or governmental regulations or are otherwise required to be disclosed pursuant to applicable state
law.

 

    	 	- 43 -	 

     

    

 

12.11
Public Announcements. Sellers and Buyer mutually agree that no party hereto shall release, publish, or otherwise make
available to the public in any manner whatsoever any information or announcement regarding the transactions herein contemplated
without the prior written consent of Sellers and Buyer, except for information and filings reasonably necessary to be directed
to governmental agencies to fully and lawfully effect the transactions herein contemplated or required in connection with securities
and other laws.

 

12.12
Waiver of Breach. Except as herein expressly provided to the contrary, no waiver of any provision of this Agreement is
valid unless the same is in writing and signed by the party against whom such waiver is sought to be enforced. The waiver by any
party of a breach or violation of any provision of this Agreement shall not operate as, or be construed to constitute, a waiver
of any subsequent breach of the same or any other provision hereof.

 

12.13
Notice. Any notice, demand, or communication required, permitted, or desired to be given hereunder shall be deemed effectively
given when personally delivered, when received by receipted overnight delivery, or five (5) days after being deposited in the
United States mail, with postage prepaid thereon, certified or registered mail, return receipt requested, addressed as follows:

 

	Sellers:	Jellico
    Community Hospital, Inc.
	 	7800
    N. Dallas Parkway, Ste. 200
	 	Plano,
    TX 75024
	 	Attn:
    President
	 	 
	With
    a simultaneous copy to:	Community
    Hospital Corporation
	 	7800
    N. Dallas Parkway, Ste. 200
	 	Plano,
    TX 75024
	 	Attn:
    General Counsel
	 	 
	Buyer:	c/o
    Rennova Health
	 	400
    South Australian Ave.
	 	8th
    Floor
	 	West
    Palm Beach, FL 33401
	 	Attention:
    CEO
	 	 
	With
    a simultaneous copy to:	Rennova
    Health
	 	400
    South Australian Ave.
	 	8th
    Floor
	 	West
    Palm Beach, FL 33401
	 	Attention:
    General Counsel 
	 	 
	With
    a simultaneous copy to:	Bass,
    Berry & Sims PLC
	 	150
    Third Avenue South, Suite 2800
	 	Nashville,
    TN 37201
	 	Attention:
    Michael R. Hill

 

or
to such other address, and to the attention of such other person or officer as any party may designate, with copies thereof to
the respective counsel thereof as notified by such party.

 

    	 	- 44 -	 

     

    

 

12.14
Severability. In the event any provision of this Agreement is held to be invalid, illegal or unenforceable for any reason
and in any respect, such invalidity, illegality, or unenforceability shall in no event affect, prejudice, or disturb the validity
of the remainder of this Agreement, which shall be and remain in full force and effect, enforceable in accordance with its terms.

 

12.15
Gender and Number. Whenever the context of this Agreement requires, the gender of all words herein shall include the masculine,
feminine, and neuter, and the number of all words herein shall include the singular and plural.

 

12.16
Divisions and Headings. The divisions of this Agreement into sections and subsections and the use of captions and headings
in connection therewith are solely for convenience and shall have no legal effect in construing the provisions of this Agreement.

 

12.17
Survival. All of the representations, warranties, covenants, and agreements made by the parties in this Agreement or pursuant
hereto in any certificate, instrument, or document shall survive the consummation of the transactions described herein, and may
be fully and completely relied upon by Sellers and Buyer, as the case may be, notwithstanding any investigation heretofore or
hereafter made by any of them or on behalf of any of them, and shall not be deemed merged into any instruments or agreements delivered
at the Closing or thereafter. The representations and warranties contained in or made pursuant to this Agreement shall survive
the Closing for a period of one (1) year following the Closing Date (the “Survival Period”).

 

12.18
Affiliates. As used in this Agreement, the term “Affiliate” means, as to the entity in question, any person
or entity that directly or indirectly controls, is controlled by or is under common control with, the entity in question and the
term “control” means possession, directly or indirectly, of the power to direct or cause the direction of the management
and policies of an entity whether through ownership of voting securities, by contract or otherwise.

 

12.19
Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHTS IT MAY HAVE TO DEMAND THAT ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT OR THE RELATIONSHIPS OF THE PARTIES HERETO BE
TRIED BY JURY. THIS WAIVER EXTENDS TO ANY AND ALL RIGHTS TO DEMAND A TRIAL BY JURY ARISING FROM ANY SOURCE INCLUDING, BUT NOT
LIMITED TO, THE CONSTITUTION OF THE UNITED STATES OR ANY STATE THEREIN, COMMON LAW OR ANY APPLICABLE STATUTE OR REGULATIONS. EACH
PARTY HERETO ACKNOWLEDGES THAT IT IS KNOWINGLY AND VOLUNTARILY WAIVING ITS RIGHT TO DEMAND TRIAL BY JURY.

 

    	 	- 45 -	 

     

    

 

12.20
Effective Time. The transactions contemplated hereby shall be effective for accounting and all other purposes as of the
Effective Time.

 

12.21
No Inferences. Inasmuch as this Agreement is the result of negotiations between sophisticated parties of equal bargaining
power represented by counsel, no inference in favor of, or against, either party shall be drawn from the fact that any portion
of this Agreement has been drafted by or on behalf of such party.

 

12.22
No Third Party Beneficiaries. The terms and provisions of this Agreement are intended solely for the benefit of Buyer
and Sellers and their respective permitted successors or assigns, and it is not the intention of the parties to confer, and this
Agreement shall not confer, third-party beneficiary rights upon any other person.

 

12.23
Enforcement of Agreement. The parties hereto agree that irreparable damage would occur in the event that any of the provisions
of this Agreement was not performed in accordance with its specific terms or was otherwise breached. It is accordingly agreed
that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof in any court of competent jurisdiction, this being in addition to any other remedy to which they
are entitled at law or in equity.

 

12.24
Entire Agreement/Amendment. This Agreement supersedes all previous contracts or understandings, including any offers,
letters of intent, proposals or letters of understanding, and constitutes the entire agreement of whatsoever kind or nature existing
between or among the parties respecting the within subject matter, and no party shall be entitled to benefits other than those
specified herein. As between or among the parties, no oral statements or prior written material not specifically incorporated
herein shall be of any force and effect. The parties specifically acknowledge that in entering into and executing this Agreement,
the parties rely solely upon the representations and agreements contained in this Agreement and no others. All prior representations
or agreements, whether written or verbal, not expressly incorporated herein are superseded, and no changes in or additions to
this Agreement shall be recognized unless and until made in writing and signed by all parties hereto. This Agreement may be executed
in two or more counterparts, each and all of which shall be deemed an original and all of which together shall constitute but
one and the same instrument.

 

12.25
Seller Guarantor Guaranty. Seller Guarantor hereby unconditionally and absolutely guarantees the prompt performance and
observance by Sellers of any obligations of Sellers arising under (i) Section 11.2(i), but only with respect to breaches
of the representations and warranties in Sections 3.7, 3.20 or 3.24 arising from events occurring on or after
May 1, 2015; (ii) Section 11.2(ii), both only with respect to a breach of Section 10.9; or (iii) Section 11.2(iii),
but only with respect to any Excluded Liabilities described in Sections 1.4(e) or (l) arising from events occurring
on or after May 1, 2015. The obligation of Seller Guarantor under this Section 12.25 is a continuing guaranty and shall
remain in effect, and the obligations of Seller Guarantor shall not be affected, modified or impaired upon the happening from
time to time of an of the following events, whether or not with notice or consent of Seller Guarantor:

 

    	 	- 46 -	 

     

    

 

(a)
The compromise, settlement, release, change, modification, amendment (except to the extent of such compromise, settlement
release, change, modification or amendment) of any or all of the obligations, duties, covenants, or agreements or any party under
this Agreement or any ancillary documents hereto; or

 

(b)
The extension of the time for performance of payment of money pursuant to this Agreement, or of the time for performance
of any other obligations, covenants or agreements under or arising out of this Agreement or any ancillary documents hereto or
the extension or the renewal thereof.

 

12.26
Buyer Guarantor Guaranty. Buyer Guarantor hereby unconditionally and absolutely guarantees the prompt performance and
observance by Buyer of any obligations of Sellers arising Section 1.3. The obligation of Seller Guarantor under this Section
12.26 is a continuing guaranty and shall remain in effect, and the obligations of Buyer Guarantor shall not be affected, modified
or impaired upon the happening from time to time of an of the following events, whether or not with notice or consent of Buyer
Guarantor:

 

(a)
The compromise, settlement, release, change, modification, amendment (except to the extent of such compromise, settlement
release, change, modification or amendment) of any or all of the obligations, duties, covenants, or agreements or any party under
this Agreement or any ancillary documents hereto; or

 

(b)
The extension of the time for performance of payment of money pursuant to this Agreement, or of the time for performance
of any other obligations, covenants or agreements under or arising out of this Agreement or any ancillary documents hereto or
the extension or the renewal thereof.

 

12.27
Risk of Loss. Notwithstanding any other provision hereof to the contrary, the risk of loss in respect of casualty to the
Assets shall be borne by Sellers prior to the Effective Time and by Buyer thereafter.

 

12.28
Sellers’ Knowledge. “Sellers’ knowledge” (and any similar expression) means, as to a particular
matter, the actual knowledge of any person specified with respect to Sellers on Schedule 12.28.

 

12.29
Material Adverse Effect. “Material Adverse Effect” means any change, fact, circumstance, occurrence, event,
effect or condition that results in, or could reasonably be expected to result in, the diminution of the value of the Assets by
an amount equal to or greater than $350,000, except to the extent resulting from (i) changes in general local, domestic, foreign
or international economic conditions, (ii) changes generally affecting the healthcare industry, (iii) acts of war, sabotage or
terrorism, military actions or the escalation thereof, or (iv) any changes in applicable laws or accounting rules or principles,
including changes in GAAP.

 

SIGNATURE
PAGE FOLLOWS

 

    	 	- 47 -	 

     

    

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in multiple originals by their authorized officers,
all as of the date first above written.

 

	 	“Hospital Seller”
	 	 	 
	 	JELLICO
    COMMUNITY HOSPITAL, INC.
	 	 	 
	 	By:	/s/
    Joe Thomason
	 	Title:	 President
	 	 	 
	 	“Clinic
    Seller”
	 	 	 
	 	CAREPLUS
    RURAL HEALTH CLINIC, LLC
	 	 	 
	 	By:	/s/
    Joe Thomason
	 	Title:	President
	 	 	 
	 	“Buyer”
	 	 	 
	 	JELLICO
    MEDICAL CENTER, INC.
	 	 	 
	 	By:	/s/
    Seamus Lagan
	 	Title:	CEO
	 	 	 
	 	“Seller
    Guarantor”
	 	 	 
	 	COMMUNITY
    HOSPITAL CORPORATION
	 	 	 
	 	By:	/s/ Jim Kendrick 
	 	Title:	President
	 	 	 
	 	“Buyer
Guarantor”
	 	 	 
	 	RENNOVA
    HEALTH, INC.
	 	 	 
	 	By:	/s/
    Seamus Lagan 
	 	Title:	CEO

 

    	 	- 48 -

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