ASSET PURCHASE AGREEMENT BY AND AMONG HS Infusion Holdings, Inc. a Delaware corporation, the direct and indirect Subsidiariesof the Company, BioScrip, Inc., a Delaware corporation, and HomeChoice Partners, Inc. a Delaware corporation June 11, 2016

EX-2.1 2 v442184_ex2-1.htm EXHIBIT 2.1

Exhibit 2.1

ASSET PURCHASE AGREEMENT

BY AND AMONG

HS Infusion Holdings, Inc.
a Delaware corporation,

the direct and indirect Subsidiaries of the Company,

BioScrip, Inc.,

a Delaware corporation, and

HomeChoice Partners, Inc.

a Delaware corporation

June 11, 2016

Table of Contents

		Page

ARTICLE 1 DEFINITIONS		1

1.1	Certain Definitions	1
1.2	Other Defined Terms	11

ARTICLE 2 PURCHASE AND SALE		12

2.1	Purchase and Sale of the Acquired Assets	12
2.2	Assumed and Excluded Liabilities	14

ARTICLE 3 CLOSING		15

ARTICLE 4 PURCHASE PRICE		15

4.1	Purchase Price	15
4.2	Closing Transactions	16
4.3	Net Working Capital	17
4.4	Payment of Parent Common Stock subject to the Tranche A RSUs	18
4.5	Payment of Parent Common Stock subject to the Tranche B RSUs	18
4.6	Escrow	18
4.7	Allocation of Purchase Price; Bill of Sale, Assignment and Assumption Agreement	19
4.8	Bulk Sales Laws	19
4.9	No Withholding for Taxes	19

ARTICLE 5 REPRESENTATIONS AND WARRANTIES CONCERNING THE COMPANY AND COMPANY SUBSIDIARIES		19

5.1	Organization and Good Standing	19
5.2	Authorization; No Breach; Obligations	20
5.3	Capitalization	20
5.4	Governing Documents	21
5.5	Subsidiaries	21
5.6	Financial Statements	21
5.7	Assets and Property	22
5.8	Bank Accounts; Letters of Credit	22
5.9	Leased Real Property	23
5.10	Owned Real Property	23
5.11	Environmental Laws and Regulations	23
5.12	Compliance with Law	24
5.13	Litigation or Claims	24
5.14	Licenses and Permits	24
5.15	Insurance	25
5.16	Employment	26

5.17	Employee Benefits Matters	27
5.18	Contracts	29
5.19	Tax Matters	30
5.20	Brokers and Investment Advisors	31
5.21	Payment Programs	31
5.22	Inventory	32
5.23	Transactions With Affiliates	32
5.24	Absence of Certain Events	32
5.25	HIPAA	34
5.26	Compliance	34
5.27	Intellectual Property	34
5.28	Confidentiality Agreements	35
5.29	No Other Representations or Warranties	35

ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF THE BUYER PARTIES		36

6.1	Organization and Good Standing	36
6.2	Authority and No Breach	36
6.3	Capitalization of Parent	37
6.4	Brokers and Investment Advisors	37
6.5	Common Stock of Parent	37
6.6	[Intentionally Omitted]	37
6.7	Financing	37
6.8	Solvency	38
6.9	Compliance with Law	38
6.10	Litigation or Claims	38
6.11	No Parent Material Adverse Effect	38
6.12	Organizational Structure	38
6.13	Confidentiality Agreements	38
6.14	Condition of the Business	39

ARTICLE 7 BUYER PARTIES’ CONDITIONS PRECEDENT TO CLOSING		39

7.1	Representations and Warranties to be True and Correct	39
7.2	No Company Material Adverse Effect	39
7.3	Supporting Documents	39
7.4	Third Party Consents	40
7.5	Equity Offering	40
7.6	Shareholder Approval	40
7.7	No Pending Actions or Proceedings	41
7.8	HSR	41

ARTICLE 8 THE COMPANY’S CONDITIONS PRECEDENT TO CLOSING		41

8.1	Representations and Warranties to be True and Correct	41
8.2	Supporting Documents	41
8.3	Closing Deliverables	42
8.4	No Pending Actions or Proceedings	42

8.5	HSR	42

ARTICLE 9 ADDITIONAL COVENANTS AND AGREEMENTS		42

9.1	Preservation of the Businesss; Certain Tax and Post-Closing Organizational Matters	42
9.2	Notification of Certain Matters	43
9.3	Regulatory and Other Authorizations, Consents	43
9.4	Confidentiality	43
9.5	Press Release	44
9.6	Cooperation; Equity Offering	44
9.7	Expenses	45
9.8	Insurance	45
9.9	Filing Returns	46
9.10	Pre-Closing Access	46
9.11	Post-Closing Access to Records	47
9.12	Payroll and Benefit Matters	47
9.13	Employees	48
9.14	Consents to Certain Assignments	48
9.15	Authorized Share Capital	48
9.16	Seller Names and Marks	48
9.17	Antitrust Filings	49
9.18	Receivables Collection	49
9.19	Power of Attorney	50
9.20	Patient Records	50
9.21	Personnel Resources	50
9.22	Registered Stock	51
9.23	Parent Board Representation	52

ARTICLE 10 CERTAIN RESTRICTIVE COVENANTS		53

10.1	Certain Restrictive Covenants	53
10.2	Modification	53
10.3	Exceptions	53

ARTICLE 11 INDEMNIFICATION		54

11.1	Indemnification by the Company and its Subsidiaries	54
11.2	Indemnification by Parent	54
11.3	Limitations	54
11.4	Matters Involving Third Parties	56
11.5	Payment	57
11.6	Insurance Proceeds	57
11.7	Mitigation	58
11.8	Exclusive Remedies	58
11.9	Characterization of Indemnity Payments	58

iii

ARTICLE 12 TERMINATION		58

12.1	Termination	58
12.2	Effect of Termination	59

ARTICLE 13 MISCELLANEOUS		59

13.1	Notices	59
13.2	[Intentionally Omitted]	60
13.3	Waiver	60
13.4	Third Parties	60
13.5	Severability	61
13.6	Amendment	61
13.7	Counterparts	61
13.8	Headings	61
13.9	Entire Agreement	61
13.10	Assignment	61
13.11	Governing Law; Jurisdiction	61
13.12	Interpretation; Construction	62
13.13	RSU Shares	62
13.14	Specific Performance	63
13.15	Disclosure Schedule	63
13.16	Legal Representation	64
13.17	Non-Recourse	64
13.18	Performance Guarantee	64

Schedules and Exhibits

Disclosure Schedule

Disclosure Schedule (Parent)

Other Schedules

Schedule 1.1	Leased Real Property
Schedule 1.2	Net Working Capital
Schedule 4.7	Allocation of Purchase Price Principles
Schedule 7.4	Third Party Consents
Schedule 9.1	Preservation of the Business
Schedule 9.12	Certain Plans

Exhibits
Exhibit 1.1	Form of Bill of Sale, Assignment and Assumption Agreement
Exhibit 1.2	Form of Escrow Agreement
Exhibit 1.3	Form of Non-Solicitation Agreement
Exhibit 7.3.7	Power of Attorney

ASSET PURCHASE AGREEMENT

This ASSET PURCHASE AGREEMENT (this “Agreement”) is entered into as of June 11, 2016, by and among HS Infusion Holdings, Inc., a Delaware corporation (the “Company”), the direct and indirect Subsidiaries of the Company set forth on signature pages hereto under the heading “Company Subsidiaries”, BioScrip, Inc., a Delaware corporation (“Parent”), and HomeChoice Partners, Inc., a Delaware corporation (“Buyer”).

RECITALS

WHEREAS, the Company and its Subsidiaries are engaged in the Business (as defined below);

WHEREAS, the Company desires to sell the Business to Buyer, and Buyer desires to purchase the Business from the Company; and

WHEREAS, in connection with the sale of the Business, the Company desires to sell and assign, and to cause its Subsidiaries to sell and assign, to Buyer, and Buyer desires to purchase from the Company and its Subsidiaries, all of the Acquired Assets (as defined below) in consideration of the payment by Buyer of the Purchase Price and the assumption by Buyer of the Assumed Liabilities (as defined below), all on the terms and subject to the conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the above and the mutual representations, warranties, covenants and agreements set forth herein, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

ARTICLE 1

DEFINITIONS

1.1 Certain Definitions. In this Agreement, the following terms have the meanings specified or referred to in this Section 1.1, which shall be equally applicable to both the singular and plural forms.

“Accounting Principles” means GAAP applied consistently with the Company’s past practices, including past practices with respect to the determination of reserves; provided, that in the event any of the Company’s past practices is not consistent with GAAP, GAAP shall prevail as to such practice.

“Action” means any audit, examination, claim, action, suit, arbitration, formal inquiry or proceeding by or before any mediator, arbitrator or Governmental Entity.

“Affiliate” means a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, a specified Person. For purposes of this definition, “control” means the possession, directly or indirectly, of the power to elect at least 50% of the governing board of such Person or to direct or cause the direction of the management and policies of the Person, whether through ownership of voting securities, partnership or limited liability interests, nonprofit membership, contract or otherwise.

“Assets” means the assets and properties of the Business of every kind, character and description, whether tangible, intangible, real, personal or mixed, and wherever located.

“Bill of Sale, Assignment and Assumption Agreement” means, subject to Section 4.7, the Bill of Sale, Assignment and Assumption Agreement to be entered into in substantially the form attached hereto as Exhibit 1.1.

“Business” means the Company’s and the Company’s Subsidiaries’ operation of an alternate-site infusion and related therapies business and all other business operations of the Company or its Subsidiaries as conducted on the date hereof.

“Business Day” shall mean any day, excluding Saturday, Sunday and any other day on which commercial banks in New York, New York are authorized or required by law to close.

“Buyer Indemnified Parties” means each of the Buyer Parties and its officers, directors, employees, Affiliates, agents, representatives, successors, and assigns.

“Buyer Parties” means Parent and Buyer.

“Change of Control” means (a) any transaction or series of related transactions in which any Person or group of Persons excluding an Affiliate of Parent (it being agreed for purposes of this definition that in no case shall any Person and its Affiliates collectively owning less than ten percent (10%) of the voting power at elections for the Parent Board or any successor entity be deemed an Affiliate of Parent, but that any Person and its Affiliates collectively owning ten percent (10%) or more of the voting power at elections for the Parent Board or any successor entity shall be deemed an Affiliate of Parent) shall (i) directly or indirectly, acquire, whether by purchase, exchange, tender offer, merger, consolidation, recapitalization or otherwise, or (ii) otherwise be the owner of, shares of Parent’s capital stock, such that following such transaction or transactions, such Person or group and their respective Affiliates beneficially own more than fifty percent (50%) of the voting power at elections for the Parent Board or any successor entity, (b) the sale, transfer or other disposition of all or substantially all of the consolidated assets of Parent and its Subsidiaries (based on the net book value of the consolidated assets of Parent and its Subsidiaries in its most recent audited financial statements) in one or a series of related transactions, or (c) any transaction or series of related transactions with any Person in respect of Parent’s equity interests and/or assets resulting in the Parent Common Stock no longer being publicly traded on NASDAQ or another securities exchange or over the counter.

“Closing Date Net Working Capital” means the actual Net Working Capital of the Company and the Company Subsidiaries as of 12:01 a.m. Eastern Time on the Closing Date.

“Closing Payoff Debt” means the amounts due under the Credit Facility (inclusive of any associated banking fees) as of the Closing Date, as described in the Payoff Letter.

“COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended from time to time.

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

“Company Common Stock” means the outstanding common stock of the Company.

“Company Intellectual Property” means Intellectual Property owned, used or held for use by the Company and the Company Subsidiaries in the operation of the Business.

“Company Material Adverse Effect” means any event, circumstance, change or effect that, individually or in the aggregate with all other events, circumstances, changes or effects, is reasonably expected to be materially adverse to the financial condition of the Business or to the properties, assets, liabilities, operations or results of operations of the Company and the Company Subsidiaries, taken as a whole, but shall exclude any event, circumstance, change or effect resulting or arising from: (a) any change or prospective change in any laws or GAAP or interpretation or enforcement thereof; (b) any change that is generally applicable to the industries or markets in which the Business operates; (c) the entry into or announcement of this Agreement or the consummation of the transactions contemplated hereby; (d) any action taken by (or at the request of) a Buyer Party or any of its Affiliates; (e) any omission to act or action taken by the Company or any Company Subsidiary with the consent of a Buyer Party or which is permitted by this Agreement; (f) acts of war (whether or not declared), armed hostilities or terrorism; (g) any acts of God, including any earthquakes, hurricanes, tornados, floods, tsunamis or other natural disasters; (h) any failure, in and of itself, by the Company or any Company Subsidiary to meet any internal or published projections, forecasts or revenue or earnings predictions for any period (it being understood that the facts or occurrences giving rise to such failure may be deemed to constitute, or be taken into account in determining whether there has been or will be, a Company Material Adverse Effect); or (i) conditions in the securities markets, capital markets, credit markets, currency markets or other financial markets in the U.S. or any other country.

“Company Payment Programs” means all Payment Programs in which the Company or any Company Subsidiary has participated in the last three (3) years.

“Company’s knowledge,” “knowledge of Company” and like phrases mean the actual knowledge (i.e., the conscious awareness of facts or other information) of any of Dan Greenleaf, Alex Schott, Michael Jennings, Greg Meadows, Mark Reynolds, Steve Parsons, Melanie Sponholz and Bettyanne Rosa and any knowledge that would have been acquired by any of them upon reasonable inquiry of those individuals who report directly to such persons to the extent of the actual knowledge of any such reporting individuals.

“Confidentiality Agreements” means, collectively, the confidentiality agreement by and between Buyer and the Company, dated as of April 19, 2016, the confidentiality agreement by and between Buyer and the Company, dated as of March 3, 2016, and the confidentiality agreement by and between Buyer and the Company, dated as of November 14, 2015.

“Contracts” means all written arrangements to which the Company or any Company Subsidiary is a party.

“Credit Facility” means that certain Credit Agreement, dated as of November 9, 2012 (as amended, restated, supplemented or otherwise modified from time to time) by and among Home Infusion Solutions, LLC, a Delaware limited liability company, Home Solutions Holdings, LLC, a Delaware limited liability company, the other Company Subsidiaries party thereto, the lenders party thereto and Madison Capital Funding LLC, as agent.

“Designated Confidentiality Agreements” means, collectively, the confidentiality agreement by and between Buyer and the Company, dated as of April 19, 2016 and the confidentiality agreement by and between Buyer and the Company, dated as of March 3, 2016.

“Disclosure Schedules” means the Disclosure Schedule and the Disclosure Schedule (Parent) attached hereto.

“Dispute” means any dispute or controversy arising between or among any parties out of or relating to or with respect to any of the provisions contained in this Agreement.

“Employees” means all of the employees of the Company and the Company Subsidiaries.

“Environmental Requirements” means all laws, orders, permits, agreements and other restrictions and requirements of any Governmental Entity, relating to the regulation of, imposing standards of conduct or liability regarding, or protection of, human health and safety (including, without limitation, employee health and safety and consumer health and safety (including but not limited to regulations and other requirements of the U.S. Food and Drug Administration)), the environment, or the storage, treatment, disposal, transportation, handling, or other management of Materials of Environmental Concern.

“Equipment” means all of the tangible personal property used or held for use in the conduct of the Business, including medical equipment (including infusion pumps and IV hoods), motor vehicles, furniture, furnishings, machinery, computers and equipment, wherever located (including at the Leased Real Property or at patients’ homes).

“Equity Offering” means the equity offering to be consummated in connection with the transactions contemplated hereby, which shall be an equity offering of at least One Hundred Million Dollars ($100,000,000.00) by Parent, and which may take the form of a rights offering, a private placement, a public offering or any other form of equity placement or any combination of the foregoing.

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

“Escrow Account” shall have the meaning set forth in the Escrow Agreement.

“Escrow Agent” means JPMorgan Chase Bank, N.A.

“Escrow Agreement” means the escrow agreement to be entered into in substantially the form set forth on Exhibit 1.2 hereto.

“Escrow Amount” means an amount equal to Ten Million Dollars ($10,000,000.00).

“Escrow Fund” shall have the meaning set forth in the Escrow Agreement.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Fair Market Value” means, with respect to any Parent Common Stock, the average of the daily averages of the high and low sales prices of Parent Common Stock for the ten (10) stock trading days preceding, unless otherwise specified, the date any applicable payment is due.

“GAAP” means generally accepted accounting principles as consistently applied.

“General Representations” means the representations and warranties set forth in this Agreement other than the Specified Representations and the Health Care Representations.

“Government Program” means Medicare, Medicaid, CHAMPUS, TRICARE and VA programs and such other similar federal, state or local reimbursement or governmental programs for which Company or any Company Subsidiary is eligible and in which Company or any Company Subsidiary participates.

“Governmental Entity” means any government or any agency, bureau, board, commission, court, department, official, political subdivision, tribunal or other instrumentality of any government, whether federal, state or local, domestic or foreign.

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

“Independent Auditor” means an independent national or regional accounting firm which is mutually acceptable to the parties hereto in good faith.

“Intellectual Property” means all (a) patents, patent applications, patent disclosures and inventions, (b) trademarks, service marks, trade dress, trade names, logos and corporate names (in each case, whether registered or unregistered) and registrations and applications for registration thereof together, to the extent applicable, with all of the goodwill associated therewith, (c) copyrights (registered or unregistered) and registrations and applications for registration thereof, (d) computer software, computer programs and related data bases and documentation thereof, (e) trade secrets, proprietary research and development, proprietary inventions, proprietary formulas and proprietary technical data, whether or not patentable in each case, (f) World Wide Web addresses and domain name registrations and (g) works of authorship, including computer programs, source code and executable code, whether embodied in software, firmware or otherwise.

“Inventory” means all good, merchantable, and saleable inventory and materials used in the operation of the Business.

“IRS” means the United States Internal Revenue Service.

“KRG” means KRG Capital Partners.

“KRG Management Agreement” means the Management Agreement, dated as of September 24, 2012, by and among the Company, KRG Capital Management, L.P. and the other entities party thereto.

“Leased Equipment” means all Equipment held under the Leases.

“Leased Real Property” means the premises leased by the Company and the Company Subsidiaries, as set forth on Schedule 1.1.

“Leases” means all leases, subleases or other agreements under which the Company or any Company Subsidiary is lessee or sublessor of any real or personal property or has any interest in real property, including any lease deposits or pre-paid rent paid in connection with such leases.

“Liabilities” means any liability, debt, guarantee, claim, demand, expense, commitment or obligation (whether known or unknown, direct or indirect, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, or due or to become due or otherwise) of every kind and description, including all costs and expenses related thereto.

“Licenses and Permits” means all material certificates, certificates of need, certificates of exemption, consents, accreditations, governmental approvals, licenses, permits, franchises, authorizations and approvals by any Governmental Entity necessary for the operation of the Business.

“Liens” means any mortgages, pledges, charges, hypothecations, liens, security interests, encumbrances or restrictions on transfer.

“Losses” means, with respect to any Person, all losses, out-of-pocket expenses (including attorneys’ fees), satisfaction of third party claims, damages, fines, penalties, compliance costs and investigation and remediation costs, including any of the above incurred in enforcing a right to indemnification hereunder. Notwithstanding the foregoing, in no event shall any Indemnified Party be entitled to recover or make a claim for any amounts in respect of, and in no event shall “Losses” be deemed to include any punitive, special or exemplary losses (other than those paid or payable to third parties), or, in the case of a Buyer Indemnified Party, any loss, liability, damage or expense to the extent such item was included in the calculation of the Cash Consideration or any component thereof.

“Managed Medicaid” means a health benefit program for the delivery of Medicaid health benefits and additional services through contracted arrangements between state Medicaid agencies and managed care organizations.

“Material Contract” means any Contract which (a)(i) has expected annual payments or receipts of more than Two Hundred Fifty Thousand Dollars ($250,000.00) and (ii) is not terminable on thirty one (31) days’ notice or less, or (b) involves direct or indirect payments to or from physicians or other potential sources of referrals (or Persons owned or controlled, in whole or in part, by physicians or potential sources of referrals, including those in a position to influence referrals).

“Materials of Environmental Concern” means (a) any “hazardous substance” as defined in § 101(14) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended from time to time (42 U.S.C. §§ 9601 et seq.) or any regulations promulgated thereunder, (b) asbestos or asbestos-containing material, (c) any chemical, material or substance defined as, or included in the definition of, “hazardous substances,” “hazardous wastes,” “hazardous materials,” “extremely hazardous wastes,” “restricted hazardous waste” or “toxic substances” or words of similar import under any applicable federal, state or local law or under the regulations adopted or publications promulgated pursuant thereto, including under any Environmental Requirements, or (d) any other chemical, material or substance, exposure to which is prohibited, limited or regulated by any Governmental Entity.

“Medicare Advantage” means the health benefit program offered by the federal government and established under Part C of Title XVIII of the Social Security Act that provides health care benefit options to Medicare beneficiaries through private organizations that have been approved by, and have entered into an agreement with, the Centers for Medicare and Medicaid Services (“CMS”), including Special Needs Plans.

“Medicare Prescription Drug Plan (Part D)” means a Medicare prescription drug coverage benefit plan established under Part D of Title XVII of the Social Security Act that is offered under a policy, contract or plan with a private organization that has been approved by CMS.

“NASDAQ” means the NASDAQ Stock Market or any successor thereto.

“Net Working Capital” means (a) the current assets of the Company and the Company Subsidiaries (consisting solely of those asset account line items specified on Schedule 1.2, subject to any footnotes thereto), excluding all Tax assets and the other Excluded Assets, minus (b) the current liabilities of the Company and the Company Subsidiaries (consisting solely of those liability account line items specified on Schedule 1.2, subject to any footnotes thereto), excluding any Tax liabilities, any amounts payable in respect of Transaction-Related Costs, the Closing Payoff Debt and the other Excluded Liabilities, in each case, determined in accordance with the Accounting Principles and on a consolidated basis. The parties hereto acknowledge and agree that the purpose of preparing and calculating Net Working Capital hereunder is to measure changes in Net Working Capital without the introduction of new or different accounting methods, policies, practices, procedures, classifications, judgments or estimation methodologies from the Accounting Principles.

“Net Working Capital Adjustment Amount” means the amount (if any), which may be positive or negative, equal to (a) the Closing Date Net Working Capital, less (b) the Net Working Capital Target; provided, that the Net Working Capital Adjustment Amount shall be zero if the absolute value of the result of such calculation is less than Two Million Dollars ($2,000,000.00), and if the absolute value of the result of such calculation is greater than Two Million Dollars ($2,000,000.00), the Net Working Capital Adjustment Amount shall be equal to the absolute value of the result of such calculation, less Two Million Dollars ($2,000,000.00), reflected as a positive number if the difference between the Closing Date Net Working Capital, less the Net Working Capital Target is positive and as a negative number if the difference between the Closing Date Net Working Capital, less the Net Working Capital Target is negative.

“Net Working Capital Target” means Eight Million Thirty Five Thousand Dollars ($8,035,000).

“Non-Solicitation Agreement” means the non-solicitation agreement to be entered into in substantially the form set forth on Exhibit 1.3 hereto.

“Objections Statement” means a statement setting forth any objections to the Closing Statement.

“Parent Common Stock” means the common stock of Parent, par value $0.0001 per share.

“Parent Material Adverse Effect” means any event, circumstance, change or effect that, individually or in the aggregate with all other events, circumstances, changes or effects, is reasonably expected to be materially adverse to the financial condition of the business of Parent and its Subsidiaries, taken as a whole, or to the properties, assets, liabilities, operations or results of operations of Parent and its Subsidiaries, taken as a whole, but shall exclude any event, circumstance, change or effect resulting or arising from: (a) any change or prospective change in any laws or GAAP or interpretation or enforcement thereof; (b) any change that is generally applicable to the industries or markets in which the business of Parent and its Subsidiaries operates; (c) the entry into or announcement of this Agreement or the consummation of the transactions contemplated hereby; (d) any action taken by (or at the request of) the Company or any of its Affiliates; (e) any omission to act or action taken by Parent or any of its Subsidiaries with the consent of the Company or which is permitted by this Agreement; (f) acts of war (whether or not declared), armed hostilities or terrorism; (g) any acts of God, including any earthquakes, hurricanes, tornados, floods, tsunamis or other natural disasters; (h) any failure, in and of itself, by Parent or any of its Subsidiaries to meet any internal or published projections, forecasts or revenue or earnings predictions for any period (it being understood that the facts or occurrences giving rise to such failure may be deemed to constitute, or be taken into account in determining whether there has been or will be, a Parent Material Adverse Effect); or (i) conditions in the securities markets, capital markets, credit markets, currency markets or other financial markets in the U.S. or any other country.

“Patient Records” shall mean all electronic or hard copy files, charts, lists, medical history and other similar data maintained by the Company and its Subsidiaries and pertaining to any person treated by the Company and its Subsidiaries for alternate-site infusion or related therapies.

“Payment Programs” means Medicare, TRICARE, Medicaid, Worker’s Compensation, Blue Cross/Blue Shield programs, and all other governmental or commercial managed care plans, health maintenance organizations, preferred provider organizations, health benefit plans (insured and self-insured), commercial payors and other third party reimbursement and payment programs, including without limitation Company Payment Programs.

“Permitted Lien” means (a) statutory Liens for current Taxes or other governmental charges that are not yet due and payable, (b) mechanics’, carriers’, workers’, repairers’ and similar statutory Liens arising or incurred in the ordinary course of business and relating to amounts that are not yet due and payable, (c) zoning, entitlement, building and other land use regulations imposed by any Governmental Entity having jurisdiction over Leased Real Property which are not violated by the current use and operation of the Leased Real Property and which do not, individually or in the aggregate, interfere in any material respect with the occupancy or use of the Leased Real Property for the purposes for which it is currently used or proposed to be used in connection with the Business, (d) covenants, conditions, restrictions, easements and other similar matters of record affecting title to the Leased Real Property which do not, individually or in the aggregate, materially impair the occupancy or use of the Leased Real Property for the purposes for which it is currently used or proposed to be used in connection with the Business, (e) Liens on goods in transit incurred pursuant to documentary letters of credit, (f) purchase money Liens on fixed assets so long as (i) the Lien granted is limited to the specific assets acquired and the proceeds thereof and (ii) the aggregate principal amount of the debt secured by the Lien is not more than the acquisition cost of the specific fixed assets on which the Lien is granted, as reduced by payments of principal thereof, (g) other Liens which do not materially impair the use or value of the underlying asset, (h) Liens on Excluded Assets, and (i) Liens in favor of any Governmental Entity to secure obligations under Government Program requirements.

“Person” means an association, a corporation, an individual, a partnership, a limited liability company, a trust or any other entity or organization, including a Governmental Entity.

“Pro Rata Share” means, with respect to each Shareholder, such Shareholder’s percentage of any dividends made by the Company as determined in accordance with the certificate of incorporation of the Company.

“Referral Sources” means any and all Persons (including physicians, discharge planners, case managers and managed care entities) who or which, at any time during the duration of the covenants set forth in Section 10.1 or the six (6) month period preceding the Closing Date, referred, directed, encouraged or arranged for any patient to receive goods or services from or through Company or any Company Subsidiary.

“Restricted Area” means the United States.

“Securities Act” means the Securities Act of 1933, as amended.

“Seller Indemnified Parties” means the Company, the Company Subsidiaries, the Shareholders and their respective officers, directors, employees, Affiliates, agents, representatives, successors, and assigns.

“Seller Names and Seller Marks” means the names and marks of the Company and its Subsidiaries.

“Shareholders” means the holders of Company Common Stock.

“Special Needs Plans (“SNPs”)” means all plans that cover Medicare, Medicaid or dual-eligible beneficiaries with specific diseases or characteristics and tailor their benefits, provider choices and drug formularies to best meet the specific needs of the groups they serve, including D-SNPS, I-SNPs or C-SNPs.

“Subsidiary” means, of a specified Person, any corporation, partnership, limited liability company, limited liability partnership, joint venture, or other legal entity of which the specified Person (either alone or through or together with any other Subsidiary): (a) owns, directly or indirectly, more than fifty percent (50%) of the voting stock or other equity or partnership interests the holders of which are generally entitled to vote for the election of the board of directors or other governing body, of such legal entity or (b) controls the management.

“Tax Returns” means any return, report, statement, information return or other document (including any related or supporting information) filed or required to be filed with any Governmental Entity in connection with the determination, assessment, collection or administration of any Taxes or the administration of any laws, regulations, or administrative requirements relating to any Taxes, including any schedule or attachment thereto, and including any amendment thereof.

“Taxes” means any federal, state, local or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental (including taxes under Code § 59A), customs duties, capital stock, franchise, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated, or other taxes or similar charges in the nature of a tax, including any interest, penalty, or addition thereto, whether disputed or not.

“Transaction-Related Costs” means all of the fees, costs and out-of-pocket expenses (including any fees and expenses of legal counsel, investment bankers, brokers or other representatives and consultants and all transaction bonuses accrued or payable to any employee, consultant or agent of Company or any Company Subsidiary as a result of the transactions contemplated by this Agreement) incurred on or before the Closing Date by any and all of the Company, any Company Subsidiary or the Shareholders (on behalf of the Company or any Company Subsidiary) in connection with or related to the transactions contemplated hereby, in each case, to the extent not paid at or prior to the Closing by the Company, the Company Subsidiaries or the Shareholders, as applicable.

“Transfer Taxes” means any sales, use, stock transfer, value added, real property transfer, transfer, stamp, registration, documentary, recording or similar duties or taxes together with any interest thereon, penalties, fines, costs, fees, additions to tax or additional amounts with respect thereto incurred in connection with the transactions contemplated in this Agreement, but does not include any income Taxes.

“TRICARE” means the health care insurance system for U.S. military service members and their dependents that covers care not available through the usual U.S. military medical service or public health service facilities, formerly known as CHAMPUS, as set forth in 10 U.S.C. Section 1071 et seq.

“U.S. Family Health Plan (“USFHP”)” means a plan provider selected by the U.S. Department of Defense to be a provider of TRICARE Prime, a managed care plan option available to TRICARE beneficiaries.

“VA” means the U.S. Department of Veterans Affairs.

1.2 Other Defined Terms. The following terms have the meanings defined for such terms in the locations set forth below:

Term		Location
Acquired Policies		Section 9.8.1
Affiliated Person		Section 13.17
Agreement		Introductory Paragraph
Antitrust Laws		Section 9.17
Apportioned Obligations		Section 9.9.2
Basket		Section 11.3.3(i)
Buyer		Introductory Paragraph
Buyer Parties		Introductory Paragraph
Cash Consideration		Section 4.1.1
Class A Common Stock		Section 5.3
Class L Common Stock		Section 5.3
Closing		Article 3
Closing Certificate		Section 4.2
Closing Date		Article 3
Closing Equity Consideration		Section 4.1.2
Closing Statement		Section 4.3
CMS		Definition of “Medicare Advantage”
Company		Introductory Paragraph
Company Subsidiary		Section 5.5
Eligible Subsidiary		Section 6.12
Equity Consideration		Section 4.1.2
Financial Statements		Section 5.6.1
Government Receivables		Section 2.1.3(i)
Government Receivables Statement		Section 9.19.3
Health Care Representations		Section 11.3.1(iii)
HIPAA		Section 5.25
HITECH		Section 5.25
HS Directors		Section 9.23.1(i)
Indemnification Shares		Section 11.3.4(ii)
Indemnified Party		Section 11.4.1
Indemnifying Party		Section 11.4.1
Intermediate Subsidiary		Section 6.12
Mid-Year Interim Financial Statements		Section 5.6.1
Mini-Basket		Section 11.3.3(i)
Non-Parties		Section 13.17
Offering Documents		Section 9.6.2
Outside Closing Date		Section 12.1.2
Parent Board		Section 9.23.1(i)
Payoff Letter		Section 4.2
Pension Plan		Section 5.17.6
Plan		Section 5.17.1
Pre-Closing Period		Section 9.1

Term		Location
Purchase Price		Section 4.1
Receivables Collector		Section 9.19.2
Recourse Theory		Section 13.17
Registrable Securities		Section 9.22
Related Persons		Section 5.29
Retained Policies		Section 9.8.1
RSUs		Section 4.1.2
Seller Group		Section 13.15
Specified Representations		Section 11.3.1(ii)
Third Party Claim		Section 11.4.1
Ultimate Cap		Section 11.3.3(iii)
Waiving Parties		Section 13.16

ARTICLE 2
PURCHASE AND SALE

2.1 Purchase and Sale of the Acquired Assets.

2.1.1 Acquired Assets. On the terms and subject to the conditions set forth in this Agreement, and subject to Section 2.1.2, at the Closing, the Company shall sell, convey, assign, transfer and deliver to Buyer, and shall cause each of its Subsidiaries to sell, convey, assign, transfer and deliver to Buyer, and Buyer shall purchase, acquire and accept from each such Person, free and clear of any Liens other than Permitted Liens, all of such Person’s right, title and interest in and to the Assets at the Closing (collectively, but specifically excluding any Excluded Assets (as defined below), the “Acquired Assets”), including the following:

(i) all tangible and intangible property related to the Business, including equipment, client lists, patient lists, referral lists, records, goodwill and other intangible assets;

(ii) all non-governmental or quasi-governmental payor Contracts and provider agreements (including, Medicare Advantage Contracts, U.S. Family Health Plan (“USFHP”) Contracts, Medicare Prescription Drug Plan (Part D) Contracts, Special Needs Plans Contracts, Managed Medicaid Contracts and any Contracts with Accountable Care Organizations);

(iii) all purchasing Contracts from suppliers or other vendors;

(iv) subject to Section 9.16, the Company Intellectual Property;

(v) all accounts receivable associated with non-governmental or quasi-governmental payor Contracts and provider agreements (including, Medicare Advantage Contracts, U.S. Family Health Plan (“USFHP”) Contracts, Medicare Prescription Drug Plan (Part D) Contracts, Special Needs Plans Contracts, Managed Medicaid Contracts and any Contracts with Accountable Care Organizations);

(vi) all Inventory;

(vii) subject to Section 2.1.2(viii), all books and records related to the Acquired Assets, including any books of account, ledgers and general financial and accounting records, client lists, price lists, vendor lists, client and inquiry files, research and development files, records, data and correspondences (including all correspondence with any Governmental Entity);

(viii) any asset related to any employee benefit plan, program or arrangement that is an Assumed Liability, to the extent permitted by applicable law;

(ix) the Acquired Policies and all rights of any nature with respect thereto; and

(x) any other assets of any nature whatsoever that are related to or used in connection with the Business, and the goodwill associated therewith.

2.1.2 Excluded Assets. Notwithstanding anything to the contrary herein, the following assets of the Company and its Subsidiaries shall be retained by the Company and its Subsidiaries, and shall be excluded from the Acquired Assets (collectively, the “Excluded Assets”):

(i) any accounts receivable (and related rights) associated with governmental payors, including Government Programs (the “Government Receivables”);

(ii) all rights and interests in and to each Subsidiary’s bank and deposit accounts, including lock boxes, to which the Company’s and its Subsidiaries’ account debtors remit payment in respect of Governmental Receivables, and all rights to receive funds swept there from all governmental payor Contracts;

(iii) all Government Program provider numbers issued to the Company and its Subsidiaries;

(iv) all enrollment and participation agreements with Government Programs;

(v) all cash and cash equivalents, whether on hand or held by any bank or other third party, and any bank accounts;

(vi) any shares of, or other equity interests in, the Company or any of its Subsidiaries;

(vii) any causes of actions related to any of the Excluded Assets or the Excluded Liabilities;

(viii) all corporate minute books (and other similar corporate records) and stock records and any books and records related solely to the Excluded Assets or the Excluded Liabilities;

(ix) any privileged materials, documents or records of the Company or any of its Subsidiaries solely to the extent related to the Excluded Assets or the Excluded Liabilities;

(x) (A) the Retained Policies and all rights of any nature with respect thereto and (B) refunded premiums, if any, arising from Buyer’s election to terminate any Acquired Policies;

(xi) all confidentiality agreements with prospective purchasers of the Business or any portion thereof and all bids and expressions of interests received from third parties with respect to the Business;

(xii) all Tax losses and credits, Tax loss and credit carry forwards and other Tax attributes, all deposits or advance payments with respect to Taxes, and any claims, rights and interests in and to any refund, credit or reduction of Taxes of any of the Company or its Subsidiaries;

(xiii) any personnel and employment records, to the extent the transfer thereof is precluded by applicable law; and

(xiv) any intercompany receivables.

2.2 Assumed and Excluded Liabilities.

2.2.1 Assumed Liabilities. On the terms and subject to the conditions set forth in this Agreement, and subject to Section 2.2.2, Buyer shall, at the Closing, assume and thereafter timely pay, discharge and perform, in accordance with their respective terms, all Liabilities of the Company and its Subsidiaries, except the Excluded Liabilities, as the same shall exist through the Closing and irrespective of whether the same shall arise prior to, on or following the Closing Date (collectively, the “Assumed Liabilities”).

2.2.2 Excluded Liabilities. Notwithstanding Section 2.2.1, Buyer shall not assume, pay or discharge any of the following Liabilities of the Company or its Subsidiaries (collectively, the “Excluded Liabilities”):

(i) Liabilities for amounts due or that may become due to Medicare, Medicaid or any other government health care reimbursement or Government Program contractor or other Governmental Entity with authority to enforce laws and regulations applicable to Government Programs, e.g., the U.S. Department of Justice, on account of overpayments or payment adjustments, or any other form of Medicare or other government health care reimbursement recapture, adjustment or investigation whatsoever, including fines, penalties and Losses, exclusively in respect of services performed and products sold by the Company and its Subsidiaries and any legal predecessor thereto before the Closing and billed to a Government Program; provided, that, for the avoidance of doubt, Liabilities associated with Medicare Advantage, Managed Medicaid and Medicare Part D shall be treated as Assumed Liabilities and not as Excluded Liabilities;

(ii) Transaction-Related Costs;

(iii) any Liabilities related to option or other share-based compensation vesting;

(iv) any fees payable under the KRG Management Agreement and any obligations under notes payable owed by the Company or any of its Subsidiaries to KRG or any of its Affiliates;

(v) accounts payable that have been outstanding for ninety (90) days or more (other than accounts payable reflected in the calculation of Net Working Capital);

(vi) the Closing Payoff Debt;

(vii) any intercompany payables; and

(viii) any liability or obligation of the Company or any of its Subsidiaries, or any member of any consolidated, affiliated, combined or unitary group of which the Company or any of its Subsidiaries is or has been a member, for Taxes; provided, that Transfer Taxes incurred in connection with the transactions contemplated hereby and Apportioned Obligations shall be paid in the manner set forth in Sections 9.9.1 and 9.9.2 hereof.

ARTICLE 3
CLOSING

Unless the parties hereto otherwise agree in writing, the actions contemplated to consummate the transactions under this Agreement (the “Closing”) shall take place on the third (3rd) Business Day following the day on which all of the conditions to closing set forth in Article 7 and Article 8 are met or waived (the “Closing Date”). On such Closing Date, the Closing shall occur at a time and place mutually determined by the parties; provided, that the Closing shall be deemed to be effective as of 12:01 a.m. Eastern Time on the Closing Date.

ARTICLE 4
PURCHASE PRICE

4.1 Purchase Price. The aggregate consideration to be paid by Buyer to the designee(s) of the Company for the sale of the Acquired Assets shall be equal to the Cash Consideration (as defined below), plus the Equity Consideration (as defined below) (such aggregate consideration, together with the assumption of the Assumed Liabilities, the “Purchase Price”).

4.1.1 Cash Consideration. The cash portion of the Purchase Price (the “Cash Consideration”) shall be an amount equal to Eighty Million Dollars ($80,000,000.00), less the amount of the Government Receivables, plus the Net Working Capital Adjustment Amount.

4.1.2 Equity Consideration. The equity portion of the Purchase Price shall consist of (a) the number of shares of Parent Common Stock equal to the quotient of Five Million Dollars ($5,000,000.00), divided by the price per share of Parent Common Stock issued pursuant to the Equity Offering (the “Closing Equity Consideration”) and (b) the right to receive restricted Parent Common Stock contributed from Parent to Buyer and paid over by Buyer to the Company or the appropriate Company Subsidiary or Company Subsidiaries as set forth on Schedule 4.7 in two tranches (Tranche A and Tranche B) (the “RSUs” and, together with the Closing Equity Consideration, the “Equity Consideration”). The aggregate number of RSUs in each tranche shall be as follows:

(i) The number of shares of Parent Common Stock in Tranche A will be equal to the quotient of Twelve Million Three Hundred Seventy Five Thousand Dollars ($12,375,000.00), divided by Four Dollars ($4.00).

(ii) The number of shares of Parent Common Stock in Tranche B will be equal to the quotient of Twelve Million Three Hundred Seventy Five Thousand Dollars ($12,375,000.00), divided by Five Dollars ($5.00).

The shares of Parent Common Stock subject to RSUs shall be subject to the payment conditions described in Sections 4.4 and 4.5 below.

4.2 Closing Transactions. At least three (3) Business Days prior to the Closing Date, the Company shall deliver to Buyer a certificate (the “Closing Certificate”) signed by a duly authorized officer of the Company setting forth its estimate of (i) the amount of the Government Receivables (calculated as of 12:01 a.m. Eastern Time on the Closing Date in accordance with the Accounting Principles), (ii) the Net Working Capital Adjustment Amount and (iii) the amount of the Cash Consideration. Subject to the terms and conditions set forth in this Agreement, the parties shall consummate the following transactions on the Closing Date, which shall be deemed by the parties to have occurred simultaneously at the Closing:

4.2.1 Buyer shall pay, or cause to be paid, as directed by the Company, in accordance with the instructions set forth in the Payoff Letter, the amount necessary to discharge and fully repay the Closing Payoff Debt;

4.2.2 Buyer shall pay, or cause to be paid, on behalf of the Company, the Transaction-Related Costs that are due and payable at the Closing;

4.2.3 Buyer shall pay, or cause to be paid, on behalf of the Company, any outstanding Excluded Liabilities described in Section 2.2.2(v);

4.2.4 Buyer shall deposit, or cause to be deposited, into the Escrow Account, the Escrow Amount;

4.2.5 Buyer shall pay, or cause to be paid to the Company or the appropriate Company Subsidiary or Company Subsidiaries as set forth on Schedule 4.7, the remainder of the estimated Cash Consideration after giving effect to Sections 4.2.1 through 4.2.4;

4.2.6 Parent shall contribute to Buyer and Buyer shall pay over to the Company or the appropriate Company Subsidiary or Company Subsidiaries as set forth on Schedule 4.7, shares of Parent Common Stock representing the Closing Equity Consideration; and

4.2.7 Buyer and the Company shall make or cause to be made such other deliveries as are required by Article 7 and Article 8 hereof.

Payments in cash made or caused to be made by Buyer pursuant to this Section 4.2 shall be made by wire transfer of immediately available U.S. funds to such account(s), and pursuant to such wire instructions as are designated in writing by the Company at least three (3) Business Days prior to the Closing Date on behalf of the applicable payee(s). At least two (2) Business Days prior to the Closing Date, the Company shall deliver to Buyer a customary payoff letter (the “Payoff Letter”), in customary form and substance, from the lenders(s) under the Credit Facility specifying the amount necessary to discharge and fully repay the Closing Payoff Debt attributable to the Credit Facility and providing for release of all Liens under and securing the Credit Facility upon payment made in compliance therewith.

4.3 Net Working Capital. As promptly as possible, but in any event within sixty (60) days after the Closing Date, Buyer will deliver to the Company, with reasonable supporting detail, its calculation of the Net Working Capital Adjustment Amount (the “Closing Statement”), which shall be prepared in accordance with the Accounting Principles. After delivery of the Closing Statement, the Company and its representatives shall be permitted reasonable access to review any materials used by Buyer, its Affiliates or representatives in the preparation of the Closing Statement. Buyer shall, and shall cause its Affiliates and representatives to, use reasonable best efforts to cooperate with and respond to the Company’s inquiries in connection with such review. If the Company has any objections to the Closing Statement, it shall deliver to Buyer an Objections Statement within thirty (30) days after its receipt of the Closing Statement. An Objections Statement shall set forth in reasonable detail the basis for the items being disputed in good faith. If an Objections Statement is not delivered to Buyer within thirty (30) days after receipt of the Closing Statement, the Closing Statement shall be final, binding and non-appealable by the parties hereto. The Company hereby waives the right to assert any objection, other than allegations of fraud, with respect to the Closing Statement that is not asserted in an Objections Statement delivered to Buyer within thirty (30) days after its receipt of the Closing Statement. If the Company timely delivers an Objection Statement, the Company and Buyer shall negotiate in good faith to resolve any identified objections. If they do not reach a final resolution within fifteen (15) days after the delivery of the Objections Statement, the Company or Buyer may, with written notice to the other party, submit such Dispute to the Independent Auditor. The Company and Buyer shall use their commercially reasonable efforts to cause the Independent Auditor to resolve all disagreements as soon as practicable. The resolution of any Dispute by the Independent Auditor shall be final, binding and non-appealable on the parties hereto. The costs and expenses of the Independent Auditor shall be paid fifty percent (50%) by Buyer and fifty percent (50%) by the Company. If the amount of the Net Working Capital Adjustment Amount based on the final, binding and non-appealable determination of the Net Working Capital Adjustment Amount in accordance with this Section 4.3 is greater than the estimated Net Working Capital Adjustment Amount set forth in the Closing Certificate, Buyer shall promptly pay or cause to be paid to the Company or the appropriate Company Subsidiary as set forth on Schedule 4.7 the amount of such excess in cash. If the amount of the Net Working Capital Adjustment Amount based on the final, binding and non-appealable determination of the Net Working Capital Adjustment Amount in accordance with this Section 4.3 is less than the estimated Net Working Capital Adjustment Amount set forth in the Closing Certificate, Buyer and the Company shall deliver joint written instructions to the Escrow Agent instructing the Escrow Agent to deliver promptly to Buyer or its designee an amount equal to the amount of such shortfall in cash; provided, that in no circumstances shall Buyer be entitled to recover any amount in excess of the amount of the Escrow Fund.

4.4 Payment of Parent Common Stock subject to the Tranche A RSUs. Promptly, and in any event within five (5) Business Days, following the earlier of (a) the closing price of Parent Common Stock, as reported by NASDAQ, averaging Four Dollars ($4.00) per share or above over twenty (20) consecutive trading days during the period beginning on the Closing Date and ending December 31, 2019 or (b) a Change of Control that occurs on or prior to December 31, 2017 or a Change of Control thereafter but on or prior to December 31, 2019 pursuant to which the consideration payable per share equals or exceeds $4.00 per share, the shares of Parent Common Stock to be paid over pursuant to the RSUs in Tranche A will be contributed by Parent to Buyer, and Buyer shall pay over such shares to the Company or the appropriate Company Subsidiary or Company Subsidiaries as set forth on Schedule 4.7. Notwithstanding the foregoing delivery requirement, for the avoidance of doubt, in connection with any Change of Control of the type described in clause (b), the shares of Parent Common Stock to be paid over pursuant to the RSUs in Tranche A will participate in such Change of Control to the same extent as the other shares of Parent Common Stock issued and outstanding as of such time.

4.5 Payment of Parent Common Stock subject to the Tranche B RSUs. Promptly, and in any event within five (5) Business Days, following the earlier of (a) the closing price of Parent Common Stock, as reported by NASDAQ, averaging Five Dollars ($5.00) per share or above over twenty (20) consecutive trading days during the period beginning on the Closing Date and ending December 31, 2019 or (b) a Change of Control that occurs on or prior to December 31, 2017 or a Change of Control thereafter but on or prior to December 31, 2019 pursuant to which the consideration payable per share equals or exceeds $5.00 per share, the shares of Parent Common Stock to be paid over pursuant to the RSUs in Tranche B will be contributed by Parent to Buyer, and Buyer shall pay over such shares to the Company or the appropriate Company Subsidiary or Company Subsidiaries as set forth on Schedule 4.7. Notwithstanding the foregoing delivery requirement, for the avoidance of doubt, in connection with any Change of Control of the type described in clause (b), the shares of Parent Common Stock to be paid over pursuant to the RSUs in Tranche B will participate in such Change of Control to the same extent as the other shares of Parent Common Stock issued and outstanding as of such time.

4.6 Escrow. The Escrow Amount shall be held in the Escrow Account in accordance with the terms and conditions of the Escrow Agreement until such time as any amounts remaining in the Escrow Account shall be released to the Company or the appropriate Company Subsidiary or Company Subsidiaries as set forth on Schedule 4.7 in accordance with the terms and conditions of the Escrow Agreement.

4.7 Allocation of Purchase Price; Bill of Sale, Assignment and Assumption Agreement. The Company and Buyer shall cooperate in good faith to agree upon, promptly following the date hereof, an allocation of the purchase price (as determined for Tax purposes) as among the Acquired Assets and among the Company and its Subsidiaries in accordance with Section 1060 of the Code. If the Company and Buyer do not reach agreement within thirty (30) days, the dispute resolution provisions of Section 4.3 shall apply, mutatis mutandis; provided, that the Company and Buyer shall cause the Independent Auditor to make its determination (which shall be in accordance with Section 1060 of the Code) no later than five (5) Business Days prior to the Closing Date. The allocation determined pursuant to either of the previous two (2) sentences shall be final and binding, and shall be attached to this Agreement as Schedule 4.7. The parties shall not take any position for Tax purposes inconsistent with such allocation. Any subsequent adjustments to the purchase price shall be allocated in a manner consistent with such allocation, except otherwise required by applicable Law.

4.8 Bulk Sales Laws. The parties hereto shall use commercially reasonable efforts to comply with the provisions of any tax clearance procedures, bulk sales, bulk transfer or similar laws of any jurisdiction that may otherwise be applicable with respect to the sale of any or all of the Acquired Assets to Buyer pursuant to this Agreement, and acknowledge and agree that any Liabilities arising in connection with the foregoing shall be borne by the party charged with such Liability under applicable law.

4.9 No Withholding for Taxes. No Buyer Parties (or its Affiliates) shall be entitled to deduct and withhold any amount from the consideration otherwise payable pursuant to or contemplated by this Agreement, except such amounts as a Buyer Party (or any of its Affiliates) is required to deduct and withhold with respect to the making of such payment under the Code, or any provision of state, local or foreign Tax law. Any withheld amounts shall be paid over to the appropriate Taxing authority and treated for all purposes of this Agreement as having been paid to the Person in respect of which such deduction and withholding was made.

ARTICLE 5
REPRESENTATIONS AND WARRANTIES CONCERNING
THE COMPANY AND COMPANY SUBSIDIARIES

Except as set forth in the Disclosure Schedule pursuant to Section 13.15, the Company hereby represents and warrants to the Buyer Parties that, as of the date hereof, or, if specified as of a particular date, as of such date:

5.1 Organization and Good Standing. The Company is a corporation and is duly organized, validly existing and in good standing under the laws of the State of Delaware. The Company has not had any other legal names or operated using any other name during the last five (5) years. The Company has the full corporate power and authority and all licenses, permits and authorizations necessary to carry on its business as now presently conducted and to own, lease and operate the properties and assets it now owns or leases, except where the failure to have such licenses, permits and authorizations, as applicable, has not had, and would not reasonably be expected to have, a Company Material Adverse Effect. Schedule 5.1 of the Disclosure Schedule lists all of the states in which the Company is qualified to do business. The Company is qualified to conduct business in all states where the nature of the business transacted or properties owned by it makes such qualification necessary, except where the failure to be so qualified has not had, and would not reasonably be expected to have, a Company Material Adverse Effect.

5.2 Authorization; No Breach; Obligations.

5.2.1 The Company has the full corporate power and authority necessary to execute and deliver this Agreement and the other documents and instruments required to be signed by the Company hereunder and to perform its obligations hereunder and thereunder, and the Company has duly authorized, executed and delivered this Agreement. All corporate actions and other authorizations prerequisite to the Company’s execution of this Agreement and the consummation of the transactions contemplated by this Agreement have been taken or obtained by the Company. Assuming due authorization, execution and delivery by the other parties hereto and thereto, this Agreement and all other documents and instruments required to be signed by the Company hereunder constitute or, when signed by the Company, will constitute, the legal, valid and binding obligations of the Company, enforceable against it in accordance with their respective terms, except insofar as enforcement hereof may be limited by bankruptcy, insolvency or other similar laws. Except as set forth on Schedule 5.2.1 of the Disclosure Schedule, the execution, delivery and consummation of this Agreement and the transactions contemplated herein will not violate or give any third party the right to modify, suspend, terminate, or accelerate any obligation under any Material Contract, and will not create any Lien upon the capital stock or assets of the Company or any Company Subsidiary.

5.2.2 The Company’s execution and delivery of this Agreement and the consummation of the transactions contemplated hereby will not result in (a) any material conflict, breach or violation of or default under (i) its articles of incorporation or bylaws, or (ii) any statute, judgment, order, decree, license, law or regulation; or (b) any material conflict, breach or violation of or default under any judgment, order, decree, license, law or regulation applicable to the Company or any Company Subsidiary.

5.3 Capitalization. There are Eleven Million (11,000,000) shares of capital stock of the Company authorized for issuance, consisting of One Million (1,000,000) shares of Class L Common Stock, par value $0.001 per share (the “Class L Common Stock”) and Ten Million (10,000,000) shares of Class A Common Stock, par value $0.001 per share (the “Class A Common Stock”). As of the date hereof, there are 10,789.103 shares of Class L Common Stock issued and outstanding and 100,673.261 shares of Class A Common Stock issued and outstanding. All of the outstanding shares of the Company’s capital stock are duly authorized, validly issued, fully paid and nonassessable. None of the outstanding equity securities or other securities of the Company was issued in violation of the Securities Act or any other legal requirement concerning the issuance of securities. The Company is not subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any of its capital stock. Except as set forth on Schedule 5.3 of the Disclosure Schedule, there are no (i) options, warrants, preemptive or other similar rights outstanding to purchase any equity security of the Company, or (ii) contracts for the purchase and sale of any outstanding shares of capital stock or any outstanding rights relating to the issuance, sale, or transfer of any equity securities or other securities of the Company. The Company does not have outstanding any bonds, debentures, notes or other obligations, the holders of which have the right to vote with the Shareholders on any matter.

5.4 Governing Documents. True and correct copies of the certificate of incorporation (or equivalent) and all amendments thereto and bylaws (or equivalent) and all amendments thereto, in each case, in effect as of the date hereof, of the Company and each Company Subsidiary have been provided to the Buyer Parties. The books and records of the Company and each Company Subsidiary have been made available to the Buyer Parties.

5.5 Subsidiaries. Schedule 5.5 of the Disclosure Schedule sets forth a complete and accurate list of the name and jurisdiction of organization of each Subsidiary of the Company (each a “Company Subsidiary” and collectively, the “Company Subsidiaries”), the authorized, issued and outstanding capital stock of each Company Subsidiary, the states in which each Company Subsidiary is qualified to do business and any names under which each Company Subsidiary engages in business. Each of the outstanding shares of the capital stock of the Company Subsidiaries is duly authorized, validly issued, fully paid and non-assessable and is directly owned of record as set forth on Schedule 5.5 of the Disclosure Schedule, free and clear of any Liens other than Permitted Liens. Except as set forth on Schedule 5.5 of the Disclosure Schedule, neither the Company nor any Company Subsidiary owns, directly or indirectly, any capital stock of, or equity ownership or voting interest in, any Person. Each Company Subsidiary (a) is a corporation or other legal entity duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, (b) has all requisite power to own and operate its properties and to carry on its businesses as now conducted, and (c) is, where applicable, duly qualified to do business and is, where applicable, in good standing in every jurisdiction in which its ownership of property of the conduct of its business as now conducted requires it to qualify, except in the case of the preceding clauses (b) and (c) where the failure to have such power or to be so qualified, as applicable, has not had, and would not reasonably be expected to have, a Company Material Adverse Effect. Except as set forth on Schedule 5.5 of the Disclosure Schedule, no Company Subsidiary has had any other legal names or operated using any other name during the last five (5) years.

5.6 Financial Statements.

5.6.1 Attached hereto as Schedule 5.6.1 of the Disclosure Schedule are the audited consolidated financial statements of the Company for the fiscal years ended 2014 and 2015, and the unaudited consolidated financial statements of the Company for the interim period ended March 31, 2016 (“Mid-Year Interim Financial Statements”). All of the foregoing financial statements are herein called the “Financial Statements”. The Financial Statements have been prepared in accordance with GAAP, except as noted therein (subject, in the case of the Mid-Year Interim Financial Statements, to the absence of footnotes and to normal year-end adjustments) and, to the Company’s knowledge, present fairly, in all material respects, the financial position of the Company and the Company Subsidiaries, and present fairly, in all material respects, the results of the operations and cash flows of the Company and the Company Subsidiaries for their respective periods and on their respective dates, as applicable.

5.6.2 Except as set forth in the Financial Statements or as disclosed in this Agreement (including the Disclosure Schedule), the Company and the Company Subsidiaries have no liabilities or obligations that are required by GAAP to be reflected on a balance sheet or in the notes thereto, except for liabilities incurred since the date of the Mid-Year Interim Financial Statements in the ordinary course of business which would not reasonably be expected to have a Company Material Adverse Effect or in connection with the transactions contemplated hereby.

5.6.3 Since the date of the Mid-Year Interim Financial Statements, there has not been any change or effect that constitutes a Company Material Adverse Effect.

5.7 Assets and Property.

5.7.1 Except as set forth on Schedule 5.7 of the Disclosure Schedule, the Company and the Company Subsidiaries have, and will convey and assign to Buyer or its applicable Subsidiary as of the Closing, good and marketable title to, or a valid leasehold interest in, all of the Acquired Assets, free and clear of all Liens other than Permitted Liens and Liens securing the Credit Facility. The Acquired Assets constitute all of the assets, properties, rights and interests, other than the Excluded Assets, used to conduct the Business.

5.7.2 Except for pumps located at patient homes and except as set forth on Schedule 5.7 of the Disclosure Schedule, none of the Assets is in the possession of unaffiliated third parties and the Company does not hold any material quantity of the Assets on consignment. None of the Acquired Assets includes any outstanding capital stock of, or other equity interest in, any Person or any right to acquire, directly or indirectly, any such outstanding capital or equity interest.

5.7.3 All of the Leases relating to material Leased Equipment are in full force and effect and constitute legal, valid and binding obligations of the Company or a Company Subsidiary, subject to applicable limitations under bankruptcy, insolvency or other similar laws, and with no existing or claimed default or event of default, or event which with notice or lapse of time or both would constitute a default or event of default, by the Company or a Company Subsidiary, or, to the Company’s knowledge, by any other party thereto. Except as set forth on Schedule 5.7, of the Disclosure Schedule, none of the Equipment is leased pursuant to a capital lease.

5.8 Bank Accounts; Letters of Credit.

5.8.1 Schedule 5.8.1 of the Disclosure Schedule lists all deposit accounts, lockbox accounts, securities accounts and commodity accounts maintained by the Company and any Company Subsidiary, including the name of each institution where each such account is held, the name of each such account, the owners of each such account, the account number for each such account and indication of the type of account.

5.8.2 Schedule 5.8.2 of the Disclosure Schedule sets forth all letters of credit issued in favor of the Company or any Company Subsidiary, as beneficiary thereunder, including the amount of each letter of credit.

5.9 Leased Real Property. The Leased Real Property constitutes all of the real property leased by the Company. Schedule 5.9 of the Disclosure Schedule sets forth a list of all of the Leases for the Leased Real Property and such Leases have not been amended, modified, supplemented, extended, renewed or assigned except as set forth on Schedule 5.9 of the Disclosure Schedule. With respect to each Lease for the Leased Real Property, neither the Company nor any Company Subsidiary, or to the Company’s knowledge, any of the other counterparties thereto is in material default under any such Lease. Each of the Company and the Company Subsidiaries, as applicable, has a valid leasehold interest in its Leased Real Property free and clear of any Liens other than Permitted Liens and Liens securing the Credit Facility. Each of the Leases for the Leased Real Property is in full force and effect, except insofar as the effectiveness of such Lease may be limited by bankruptcy, insolvency or similar laws. Neither the Company nor any Company Subsidiary has received any written notice within the past twenty-four (24) months of any pending or, to the Company’s knowledge, threatened condemnations, planned public improvements, annexations or zoning, subdivision changes, or the bankruptcy or insolvency of any landlord under any Lease that would reasonably be expected to have a material and adverse effect on the Leased Real Property. All material licenses and permits required for the occupancy and operation on the Leased Real Property as presently being used have been obtained and are in full force and effect, and, in the last three (3) years, neither the Company nor any Company Subsidiary has received any written notice of violations in connection with the same. The present use of the Leased Real Property is in material compliance with all applicable zoning ordinances, occupancy codes, building codes, fire codes, and other local governmental regulations, and any applicable recorded covenants. Neither the Company nor any Company Subsidiary has subleased, licensed or otherwise granted anyone the right to use or occupy the Leased Real Property or any portion thereof. Neither the Company nor any Company Subsidiary has collaterally assigned or granted any other security interest in any Lease that will not be released at Closing. The Company or a Company Subsidiary is in full and complete possession of the Leased Real Property and has commenced full occupancy and use of the Leased Real Property. Except as set forth on Schedule 5.9 of the Disclosure Schedule, none of the Leases requires the consent of any third party prior to the consummation by the parties of the transactions contemplated by this Agreement.

5.10 Owned Real Property. The Company does not own any real property.

5.11 Environmental Laws and Regulations. (a) To the Company’s knowledge, the Company and each Company Subsidiary is, and, during the last three (3) years, has been, in material compliance with all applicable Environmental Requirements relating to the Business and the Leased Real Property, and any other property in which the Company or any Company Subsidiary has had an ownership interest, including any Environmental Requirements relating to the use, storage, treatment, disposal or transportation of any Materials of Environmental Concern, (b) to the Company’s knowledge, during the occupancy and operation of the Leased Real Property by the Company or any Company Subsidiary and any other property in which the Company or any Company Subsidiary has had an ownership interest, no release, leak, discharge, spill, disposal, or emission of any Materials of Environmental Concern has occurred in, on, or under the Leased Real Property in a quantity or manner that violates or may give rise to material liability under Environmental Requirements; (c) the Company and the Company Subsidiaries do not use, treat, store, dispose or transport any Materials of Environmental Concern in a quantity that could give rise to material liability under Environmental Requirements; (d) there is no pending or, to the knowledge of the Company, threatened litigation or administrative proceeding or investigation (whether civil, criminal or administrative) involving any Materials of Environmental Concern or Environmental Requirements concerning the Business or the Leased Real Property and (e) the Company has delivered to the Buyer Parties true and complete copies of any material reports or audits possessed or initiated by the Company or any Company Subsidiary pertaining to Materials of Environmental Concern or Environmental Requirements related to the Business, Leased Real Property, or any other property in which Company or any Company Subsidiary has had an ownership interest or at which Materials of Environmental Concern may have been generated, handled, treated, stored or disposed of by the Business.

5.12 Compliance with Law. The operations of the Company and each Company Subsidiary are, and during the last three (3) years have been, conducted in substantial and material compliance with all laws, regulations, orders and other applicable legal requirements of all courts and other Governmental Entities having jurisdiction over the Company, any Company Subsidiary or any of their employees, assets, properties and operations. No material violation or default of any law, regulation, order or other legal requirement exists and neither the Company nor any Company Subsidiary is in material default with respect to any order, writ, judgment, award, injunction or decree of any Governmental Entity or arbitrator, domestic or foreign, applicable to the Company, any Company Subsidiary or any of their assets, properties or operations with respect thereto. The Company has furnished to the Buyer Parties true and correct copies of all audit response letters pertaining to the Company or any Company Subsidiary received in the twenty-four (24) months preceding the date hereof from legal counsel devoting substantive attention to matters which may result in any material liability or obligation of the Company or any Company Subsidiary. This Section does not relate to healthcare matters, Tax or environmental matters.

5.13 Litigation or Claims. Except as disclosed on Schedule 5.13 of the Disclosure Schedule, there are no material claims, actions, suits, proceedings or investigations pending or, to the knowledge of Company, threatened before any Governmental Entity, or before any arbitrator or mediator of any nature, brought by or against the Company, any Company Subsidiary or any of their officers, directors, employees, or agents involving, affecting or relating to the business of the Company, any Company Subsidiary or their assets or the transactions contemplated by this Agreement. Neither the Company nor any Company Subsidiary is subject to any order, writ, judgment, award, injunction or decree of any Governmental Entity or arbitrator, domestic or foreign, that materially affects the business or assets of the Company or any Company Subsidiary, or that could reasonably be expected to materially interfere with the transactions contemplated by this Agreement.

5.14 Licenses and Permits. Schedule 5.14 of the Disclosure Schedule sets forth a true and complete list of all healthcare Licenses and Permits and all pending applications therefor. Each healthcare License and Permit has been duly obtained, is valid and in full force and effect, and is not subject to any pending or, to the Company’s knowledge, threatened administrative or judicial proceeding to revoke, cancel, suspend or declare such License and Permit invalid in any respect. Except as provided in Schedule 5.14 of the Disclosure Schedule, and assuming compliance with the HSR Act, no material pre-Closing consent of any federal, state or local authority or accrediting body is required in connection with the execution, delivery and performance of this Agreement by the Company. The licenses and permits set forth on Schedule 5.14 of the Disclosure Schedule constitute all of the healthcare Licenses and Permits necessary for Company and the Company Subsidiaries to lawfully conduct and operate its business in the manner in which it is currently conducted and to operate its business and to permit the Company and the Company Subsidiaries to own and use their assets in the manner in which they currently own and use such assets. Except as set forth on Schedule 5.14 of the Disclosure Schedule, during the last three (3) years, the Company and Company Subsidiaries have held and maintained all material Licenses and Permits necessary to lawfully conduct and operate their business. Each employee has all Licenses and Permits necessary for his or her performance of duties for Company and all such Licenses and Permits are valid and in full force and effect.

5.15 Insurance.

5.15.1 Schedule 5.15.1 of the Disclosure Schedule lists all policies of insurance to which the Company or any Company Subsidiary is a party or under which the Company, any Company Subsidiary or any director of Company or any Company Subsidiary, is or has been covered at any time within the two (2) years preceding the date of this Agreement. The Company and the Company Subsidiaries have maintained, at all times during the last three (3) years, insurance coverage for professional liability, general liability and workers’ compensation.

5.15.2 All policies of insurance coverage for professional liability, general liability and workers’ compensation to which the Company or any Company Subsidiary is a party or that provide coverage to the Company, any Company Subsidiary or any director or officer of the Company or any Company Subsidiary:

(i) are valid, outstanding, and enforceable;

(ii) are issued by an insurer that is financially sound and reputable; and

(iii) are sufficient for compliance with all material legal requirements and Material Contracts to which the Company and each Company Subsidiary is a party or by which any of them are bound.

5.15.3 Other than in connection with insurance policy renewals in the ordinary course of business, during the last three (3) years, neither the Company nor any Company Subsidiary has received from any professional liability, general liability or workers’ compensation insurer (A) any refusal of coverage, or (B) any notice of cancellation or any other indication that any insurance policy is no longer in full force or effect or will not be renewed or that the issuer of any such policy is not willing or able to perform its obligations thereunder.

5.15.4 The Company and the Company Subsidiaries have paid all premiums due, and have otherwise performed in all material respects all of their obligations, under each insurance policy to which the Company or any Company Subsidiary is a party.

5.16 Employment.

5.16.1 The Company and each Company Subsidiary is, and has been since December 31, 2013, in material compliance with all applicable laws relating to employment and employment practices, including payroll obligations, conditions of employment, employee and independent contractor classification, wages and hours, occupational safety and health, workers compensation, unemployment benefits, laws concerning leave requirements, laws prohibiting discrimination and retaliation and laws concerning unfair labor practices within the meaning of Section 8 of the National Labor Relations Act, as amended, and the employment of non-residents under the Immigration Reform and Control Act of 1986, as amended. To the Company’s knowledge, no Employee of Company or any Company Subsidiary is in violation or breach of any non-compete, nondisclosure, confidentiality, employment, consulting or similar restrictive covenant agreement, or in conflict with the Company’s or any Company Subsidiary’s present business activities, and neither the Company nor any Company Subsidiary has received any notice alleging that any violation of any such restrictive covenants has occurred.

5.16.2 The Company has provided to the Buyer Parties a true and correct copy (as of the date provided) of a census containing the names, job titles or positions, annual or hourly rate of compensation (as applicable), annual bonus target, if any, and potential severance entitlements of all Employees of the Company and each Company Subsidiary. Except as indicated on Schedule 5.16.2 of the Disclosure Schedule, no Employee has a written employment agreement with the Company or any Company Subsidiary. Neither the Company nor any Company Subsidiary is a party to a collective bargaining agreement or similar agreement with any labor organization or employee association. Neither the Company nor any Company Subsidiary has received notice from the National Labor Relations Board that a petition for recognition for a collective bargaining unit has been filed by or on behalf of its Employees, nor, to the Company’s knowledge, has there been any attempts by any union to obtain recognition as a bargaining agent in respect thereof.

5.16.3 To the Company’s knowledge, there are no material charges, governmental audits, investigations, administrative proceedings or complaints concerning employment practices of Company or any Company Subsidiary pending or threatened before any federal, state or local agency or court, and, to the Company’s knowledge, no basis for any such matter exists.

5.16.4 To the Company’s knowledge, there are no material inquiries, investigations or monitoring of activities of any licensed, registered, or certified health care professional personnel employed by the Company or any Company Subsidiary pending or threatened by any state professional board or agency charged with regulating the professional activities of such health care practitioners.

5.16.5 Since December 31, 2013, neither the Company nor any Company Subsidiary has experienced any organized slowdown, work interruption, strike, or work stoppage by the employees.

5.16.6 Since December 31, 2013, neither the Company nor any Company Subsidiary has implemented any plant closings, layoffs, relocations or other employment losses sufficient to trigger obligations under the federal Worker Adjustment and Retraining Notification Act, or any other similar applicable state law.

5.16.7 Notwithstanding anything in this Agreement to the contrary, the representations and warranties made by the Company set forth in this Section 5.16 are the sole and exclusive representations and warranties made regarding employment and labor matters.

5.17 Employee Benefits Matters.

5.17.1 Plans. Except as set forth on Schedule 5.17.1 of the Disclosure Schedule, neither the Company nor any Company Subsidiary is a party to, and no Employee or former employee of the Company or any Company Subsidiary benefits by virtue of its employment or former employment with the Company or any Company Subsidiary under, any agreement, arrangement, plan, or policy, qualified or non-qualified, that involves any (a) pension, retirement, profit sharing, deferred compensation, bonus, stock option, stock purchase, phantom stock or incentive plan; (b) welfare or material “fringe” benefits, including, without limitation vacation, severance, disability, medical, hospitalization, dental, life and other insurance, tuition, company car, club dues, sick leave, maternity, paternity or family leave, health care reimbursement, dependent care assistance or cafeteria plan or other similar benefits; or (c) employment or consulting, retainer or golden parachute agreement or arrangement, including without limitation any “employee benefit plan” (as defined in ERISA Section 3(3)), (together “Plans” and each item thereunder a “Plan”). Neither the Company nor any Company Subsidiary has liability or obligation to provide life, medical or other welfare benefits to former or retired employees, other than under COBRA.

5.17.2 Disclosure. To the extent applicable with respect to each Plan, true, correct and complete copies of the following documents have been made available to the Buyer Parties: (i) IRS determination or opinion letter; (ii) the three (3) most recently filed Forms 5500, including without limitation all schedules thereto, all financial statements with attached opinions of independent accountants; (iii) all plan documents and amendments thereto and any written policies, forms and/or procedures used in the administration of such Plans; and (iv) summary plan descriptions and any summaries of material modifications.

5.17.3 Compliance with Applicable Law. Each Plan and related funding instrument complies with and has been administered, operated, and maintained in material compliance with its terms and applicable law, including, where applicable, Code Section 401(a). With respect to each Plan, neither the Company nor any Company Subsidiary has direct or indirect material liability under the requirements provided by any and all statutes, orders or governmental rules or regulations applicable to or governing each Plan. With respect to each Plan, no prohibited transaction (as defined in ERISA Section 406 or Code Section 4975) or violation of ERISA Section 407 for which an applicable statutory or administrative exemption does not exist has occurred that would reasonably be expected to result in material liability.

5.17.4 Claims/Liability. Except as listed on Schedule 5.17.4 of the Disclosure Schedule, and to the Company’s knowledge, there is no pending or threatened legal action, proceeding or investigation, suit, grievance, arbitration or other manner of litigation, or claim against or involving any Plan and, to the Company’s knowledge, no facts exist that would give rise to any legal action, proceeding or investigation, suit, grievance, arbitration or other manner of litigation, or claim, other than routine claim for benefits. Neither the Company nor any Company Subsidiary or of their directors, officers, employees or any plan fiduciary has any material liability for failure to comply with ERISA, HIPAA, COBRA or the Code for any action or failure to act in connection with the administration or investment of any Plan. Neither the Company nor any Company Subsidiary has liability by virtue of its being a member of a controlled group with a person who has liability under the Code or ERISA. In the past three (3) years, neither the Company nor any Company Subsidiary has made any voluntary correction program submission to either the Internal Revenue Service or the Department of Labor with respect to any compliance failure or operational failure as relates to any Plan and no such voluntary correction program submissions remain outstanding with the Internal Revenue Service or the Department of Labor which are related to any Plan.

5.17.5 Contributions/Premiums. All contributions that are required to be made with respect to the Plans for all periods ending prior to the Closing Date will be made prior to the Closing Date by the Company and all members of the controlled group in accordance with past practice. All contributions that were required to be made to the Plans have been made on a timely basis in accordance with ERISA and the Code. All insurance premiums that were required to be paid have been paid in full, subject only to normal retrospective adjustments in the ordinary course, with regard to the Plan for policy years or other applicable policy periods ending on or before the Closing Date.

5.17.6 Qualified Pension Plans. Except as set forth on Schedule 5.17.6 of the Disclosure Schedule, neither the Company nor any Company Subsidiary is a party to any plan described in Section 3(2) of ERISA (“Pension Plan”) that is intended to qualify under Code Section 401(a) and Code Section 501(a) and each such Pension Plan and its related trust, if any, are qualified under Code Section 401(a) and Code Section 501(a) and have been determined by the IRS to qualify thereunder for all applicable requirements and, to the Company’s knowledge, nothing has occurred to cause the loss of the Pension Plans’ qualification.

5.17.7 Title IV Pension Plans, Multi-Employer Plans and Terminated Plans. Neither the Company nor any Company Subsidiary has ever made or been required to make any contributions to any Plan which is subject to the provisions of Title IV of ERISA or to any multi-employer plan (as defined in ERISA Section 3(37) of 4001(a)(3)), and neither the Company nor any Company Subsidiary has ever been a member of a controlled group which contributed to any such Plans. Neither the Company nor any Company Subsidiary has terminated or taken action within the last six (6) taxable years to terminate (in part or in whole) any employee pension benefit plan as defined in Section 3(2) of ERISA.

5.17.8 No Triggering of Obligations. Other than as set forth in Schedule 5.17.8 of the Disclosure Schedule, the consummation of the transaction contemplated by this Agreement, other than by reason of actions taken by a Buyer Party following the Closing, will not (i) entitle any current or former employee of Company or any Company Subsidiary to severance pay, unemployment compensation or any other payment, (ii) accelerate the time of payment or vesting, or increase the amount of any compensation due to any current or former employee of Company or any Company Subsidiary, or (iii) give rise to the payment of any amount that would not be deductible pursuant to Code Section 280G.

5.17.9 COBRA. To the extent applicable, the Company and each Company Subsidiary has complied with the provisions of ERISA Section 601 et seq. and Code Section 4980B. Further, the Company and Company Subsidiaries shall also remain responsible for and continue to provide any applicable health care continuation coverage under Code Section 4980B to employees or their dependents if the “qualifying event” (as defined in Code Section 4980B(f)(3)) occurred prior to Closing.

5.17.10 Health and Welfare Plans and VEBAs. Neither the Company nor any Company Subsidiary has established, maintained, or contributed to, or had any obligation to establish, maintain or contribute to:

(i) a multiple employer welfare arrangement within the meaning of ERISA Section 3(40)(A); or

(ii) a voluntary employees’ beneficiary association under Code Section 501(c)(9).

5.17.11 Section 409A. Each of the Plans that is subject to Code Section 409A in whole or in part has been administered to comply in all material respects with the requirements of Code Section 409A.

5.17.12 Notwithstanding anything in this Agreement to the contrary, the representations and warranties made by the Company set forth in this Section 5.17 are the sole and exclusive representations and warranties made regarding the Plans and employee benefits matters.

5.18 Contracts. All Material Contracts in effect as of the date hereof are listed on Schedule 5.18 of the Disclosure Schedule. Except as disclosed on Schedule 5.18 of the Disclosure Schedule, none of the Material Contracts requires the consent of any third party prior to the consummation by the parties of the transactions contemplated by this Agreement. The Company has delivered to the Buyer Parties true and complete copies of all Material Contracts. None of the Material Contracts contains any covenant or commitment that in any material respect purports to restrict the business activity of the Company or any Company Subsidiary or limit the freedom of the Company or any Company Subsidiary to engage in any line of business or to compete with any person, other than as relates to ordinary course confidentiality obligations. The Material Contracts are valid and effective in accordance with their terms, except insofar as enforcement thereof may be limited by bankruptcy, insolvency or similar laws, and there is not under any Material Contract (i) any existing or claimed material default by the Company or any Company Subsidiary or event which, with notice or lapse of time or both, would constitute a material default by Company or any Company Subsidiary or (ii) to the Company’s knowledge, any existing or claimed material default by any other party or event which, with notice or lapse of time or both, would constitute a material default by any such party. Except as set forth on Schedule 5.18 of the Disclosure Schedule, the continuation, validity and effectiveness of the Material Contracts will not be materially affected by the transactions contemplated hereunder, and such transactions will not result in a material breach of or default under any of such Material Contracts. There is no pending or, to the knowledge of Company, threatened termination or cancellation of any Material Contract. To the knowledge of Company, there is no pending or threatened bankruptcy, insolvency or similar proceeding with respect to any other party to any of the Material Contracts. Neither the Company nor any Company Subsidiary is a party to any interest rate, commodity or other similar swap, cap, collar, futures contract or other hedging arrangement.

5.19 Tax Matters.

5.19.1 The Company has filed or caused to be filed (on a timely basis) and subject to all permitted extensions, all income and other material Tax Returns relating to or required by law to be filed by the Company or any Company Subsidiary or with respect to Company or any Company Subsidiary, either separately or as a member of a group of corporations, in connection with any Taxes, with the appropriate Governmental Entities in all jurisdictions in which such Tax Returns are required to be filed, and all Tax Returns are true, correct and complete in all material respects insofar as they reflect the current liability for Taxes shown as due thereon. All Taxes that are shown as due on such Tax Returns have been timely paid, or delinquencies cured with payment of any applicable penalties and interest, as of the Closing Date. Neither the Company nor any Company Subsidiary has requested any extension of time within which to file any Tax Return (other than extensions entered into in the ordinary course of business in connection with the filing of Tax Returns), which Tax Return has not since been filed. There are no Liens for Taxes, other than Liens described in clause (a) of the definition of Permitted Liens. No adjustment or deficiency of any Tax or claim for additional Taxes has been proposed, asserted or assessed, or threatened against Company or any Company Subsidiary in writing. There are no audits or other examinations being conducted or threatened in writing, and there is no deficiency or refund litigation or controversy in progress or, threatened in writing with respect to any Taxes previously paid by Company or any Company Subsidiary or with respect to any Tax Returns previously filed by the Company or any Company Subsidiary or on behalf of Company or any Company Subsidiary. Neither the Company nor any Company Subsidiary has made any extension or waiver of any statute of limitations relating to the assessment or collection of Taxes (other than extensions entered into in the ordinary course of business in connection with the filing of Tax Returns).

Notwithstanding anything to the contrary in this Agreement, nothing in this Agreement (including this Section 5.19) shall be construed as providing a representation or warranty with respect to the existence, amount, expiration date or limitations on (or availability of) any Tax attribute of the Company or any Company Subsidiary (including methods of accounting of the Company or any Company Subsidiary).

5.20 Brokers and Investment Advisors. Except as set forth on Schedule 5.20 of the Disclosure Schedule, neither the Company nor any Company Subsidiary has employed, contracted for the services of or authorized any broker, finder or investment advisor with respect to the negotiations leading up to the execution of this Agreement or the consummation of the transactions contemplated hereby.

5.21 Payment Programs. All Company Payment Programs, including provider numbers, are listed on Schedule 5.21 of the Disclosure Schedule. Company or a Company Subsidiary, as applicable, is a participating provider, in good standing, in each Company Payment Program. There is no pending, concluded or, to the knowledge of Company, threatened investigation, or civil, administrative or criminal proceeding relating to participation by Company or any Company Subsidiary in any Payment Program, except as disclosed on Schedule 5.21 of the Disclosure Schedule. Except as set forth on Schedule 5.21 of the Disclosure Schedule, neither Company nor any Company Subsidiary is subject to, nor have any of them been subjected to, any pre-payment utilization review or other utilization review by any Payment Program. No Payment Program has requested or threatened in writing any recoupment or set-off from Company or any Company Subsidiary. Company or a Company Subsidiary has paid or repaid all known and undisputed refunds, overpayments, discounts or adjustments. Except as set forth on Schedule 5.21 of the Disclosure Schedule, there are no pending appeals, audits, litigation or notices from any Payment Program of intent to audit with respect to any prior reports or billings. Except as disclosed on Schedule 5.21 of the Disclosure Schedule, since December 31, 2013, neither Company nor any Company Subsidiary has been audited by any Payment Program. Since December 31, 2013, no Payment Program has imposed a fine, penalty or other sanction on Company or any Company Subsidiary. None of Company, any Company Subsidiary, shareholder, employee or independent contractor has been excluded from participation in any Payment Program. Since December 31, 2013, all billing practices of the Company or any of the Company’s Subsidiaries have been conducted in compliance in all material respects with all applicable laws and the billing guidelines of the Payment Programs. All Medicare, Medicaid and third party reports and claims filed or required to be filed by or on behalf of Company or any Company Subsidiary have been timely filed and are complete and accurate in all material respects.

Neither Company nor, to the knowledge of the Company, any of Company’s Affiliates, directors, officers, employees or agents has, directly or indirectly, (i) offered to pay to or solicited any remuneration from, in cash, property or in kind, or made any financial arrangements with, any past or present patient or customer, or physician, other health care provider, supplier, contractor, third party, or Payment Program in order to induce or directly or indirectly obtain business or payments from such person, including without limitation any item or service for which payment may be made in whole or in part under any federal, state or private health care program, or for purchasing, leasing, ordering or arranging for or recommending, purchasing leasing, or ordering any good, facility, service or item for which payment may be made in whole or in part under any federal, state or private health care program, in violation of any applicable laws or regulations; or (ii) made or agreed to make any agreement to make, any contribution, payment or gift of funds or property to, or for the private use of, any governmental official, employee or agent where either the contribution, payment or gift or the purpose of such contribution, payment or gift is or was illegal under the laws of the United States or under the laws of any state thereof or any other jurisdiction in which such payment, contribution or gift was made. Neither Company nor any Company Subsidiary has billed for or received any payment or reimbursement in excess of amounts permitted by law or the rules and regulations of Payment Programs or contracts therewith.

5.22 Inventory. The amount and quality of the Inventory is consistent with normal operating levels maintained by the Company and the Company Subsidiaries in keeping with past practice. The Inventory conforms in all material respects to generally acceptable quality standards in the Company’s industry. None of the Inventory is beyond its outdate.

5.23 Transactions With Affiliates. Except as set forth on Schedule 5.23 of the Disclosure Schedule, and other than for compensation received by officers and employees in the ordinary course of business, no shareholder, director, officer or employee of the Company or any Company Subsidiary or, to the Company’s knowledge, any member of the immediate family of any such person, or any corporation, partnership, trust or other entity in which any such person, or, to the Company’s knowledge, any member of the immediate family of any such person, has a substantial interest in, or is an officer, director, trustee or partner of, any Person that is a party to any material transaction with the Company or any Company Subsidiary, including any contract, agreement or other arrangement providing for the furnishing of goods or services by, rental of real or personal property from or to, or otherwise requiring payments or involving other obligations to any such Person.

5.24 Absence of Certain Events. Since January 1, 2016, the Company and the Company Subsidiaries have conducted their business in all material respects in the ordinary course (aside from steps taken in contemplation of the transactions contemplated hereby). As amplification and not in limitation of the foregoing, since January 1, 2016, except as disclosed on Schedule 5.24 of the Disclosure Schedule, there has not been:

5.24.1 Any change in the authorized or issued capital stock of the Company or any Company Subsidiary; grant of any stock option or right to purchase shares of capital stock of the Company or any Company Subsidiary or any securities or obligations convertible into or exchangeable therefor; issuance of any security convertible into such capital stock; grant of any registration rights; purchase, redemption, retirement, or other acquisition by the Company or any Company Subsidiary of any shares of any of its authorized or issued capital stock; or declaration, setting aside or payment of any dividend or other distribution or payment in respect of the equity interests of the Company or any Company Subsidiary;

5.24.2 Any amendment to the organizational documents of the Company or any Company Subsidiary;

5.24.3 Any material decrease in the net book value of the assets of Company or any Company Subsidiary other than ordinary depreciation consistent with past practice;

5.24.4 Any voluntary or involuntary sale, assignment, license or other disposition, of any material business or assets by the Company or any Company Subsidiary, except (i) as contemplated by this Agreement, (ii) pursuant to existing Contracts or commitments and (iii) for the utilization of supplies, inventories and drugs in the ordinary course of business;

5.24.5 Any Lien imposed or created on the assets of the Company or any Company Subsidiary, except for Permitted Liens and Liens securing the Credit Facility;

5.24.6 Any extraordinary compensation, bonuses or distribution to any Shareholder or any employee of the Company or any Company Subsidiary;

5.24.7 Any termination, modification or amendment of any Material Contract, except for terminations, modifications and amendments of Material Contracts made in the ordinary course of business;

5.24.8 Any increase by the Company or any Company Subsidiary, except in the ordinary course of business or as required by applicable law or Contract, of any bonuses, salaries, severance or benefits or other compensation to any director, officer, or Employee or entry into any employment, severance, or similar contract, or any loans to, any director, officer, or Employee;

5.24.9 Any material change in any of the financial accounting principles adopted by the Company or any Company Subsidiary, or any material change in the policies, procedures, or methods of the Company or any Company Subsidiary with respect to applying such principles;

5.24.10 Any new borrowing or guarantee of the indebtedness or liabilities of another Person by the Company or any Company Subsidiary of more than Two Hundred Thousand Dollars ($200,000.00);

5.24.11 Any other distribution other than in the ordinary course of business of the Company or any Company Subsidiary (whether in cash or property or any combination thereof and whether in redemption or liquidation of an interest or otherwise) to any person;

5.24.12 Except in the ordinary course of business or in accordance with the Company’s capital expenditure budget delivered previously to the Buyer Parties, any new investment of a capital nature, whether by purchase of stock or securities, contributions to capital, property transfers or otherwise, in any partnership, limited liability company, corporation or other entity, or purchase of any property or assets;

5.24.13 Any cancellation, waiver or compromise, in whole or in part, of any material debt or claim of the Company or any Company Subsidiary other than in the ordinary course of business;

5.24.14 Any waiver or release of any material rights by the Company or any Company Subsidiary, including without limitation, any material intangible rights, other than in the ordinary course of business;

5.24.15 Any loss or damage (whether or not such loss or damage shall have been covered by insurance) which materially affected the ability of Company or any Company Subsidiary to conduct its business;

5.24.16 Any written notice or communication from any third party payor which represents annual revenue of Two Hundred Fifty Thousand Dollars ($250,000.00) or more for the Company and the Company Subsidiaries in any of the past three (3) fiscal years of intent to discontinue or materially reduce prior levels of business;

5.24.17 Any payment of any fee under the KRG Management Agreement; or

5.24.18 Any agreement by the Company or any Company Subsidiary to do any of the foregoing.

5.25 HIPAA. The Company and each Company Subsidiary (i) is in material compliance with the requirements for health information privacy and security established by the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) and the Health Information Technology for Economic and Clinical Health Act (“HITECH”) provisions of the American Reinvestment and Recovery Act of 2009, including the HIPAA and HITECH privacy and security regulations, and (ii) has developed and implemented appropriate policies and procedures and training programs for compliance with the HIPAA and HITECH privacy and security laws, regulations, and guidance promulgated by the U.S. Department of Health and Human Services.

5.26 Compliance. The Company and Company Subsidiaries have established and implemented a corporate compliance program, including compliance standards and procedures, to promote compliance and detect non-compliance with respect to the operations of the Company and the Company Subsidiaries and their employees in accordance with all applicable laws, regulations, orders and other applicable legal requirements.

5.27 Intellectual Property.

5.27.1 Schedule 5.27 of the Disclosure Schedule contains a complete and accurate list of all Company Intellectual Property included in clauses (a), (b) and (f) of the definition of Intellectual Property, all material Company Intellectual Property included in clauses (c) and (g) of the definition of Intellectual Property, and all proprietary Company Intellectual Property included in clause (d) of the definition of Intellectual Property. Schedule 5.27 of the Disclosure Schedule contains a complete and accurate list of all licenses and other rights granted by the Company or any Company Subsidiary to any Person with respect to any Company Intellectual Property and all licenses and other rights granted by any Person to the Company or any Company Subsidiary with respect to any Company Intellectual Property (excluding “off-the-shelf” programs or products or other “shrink wrap” software licensed in the ordinary course of business) identifying the subject Company Intellectual Property. Neither the Company nor any Company Subsidiary has assigned to any Person the exclusive use of any material Company Intellectual Property.

5.27.2 To the knowledge of the Company, the Company or a Company Subsidiary owns or possesses sufficient legal rights to all material Company Intellectual Property without any infringement of the rights of others. To the knowledge of the Company, neither the Company nor any Company Subsidiary is infringing upon any Intellectual Property of any other Person, and the Company has no knowledge of any material violation by any Person of any Company Intellectual Property. Neither the Company nor any Company Subsidiary has received any written notice from any Person claiming infringement of a Person’s Intellectual Property rights. Except as set forth herein, to the knowledge of the Company, no other Person owns any interest in any of the Company Intellectual Property. Company or a Company Subsidiary owns all right, title and interest in all material work product commissioned from third parties by Company or a Company Subsidiary.

5.27.3 Each item of Company Intellectual Property owned by the Company or a Company Subsidiary is, to the knowledge of the Company, valid and subsisting. To the extent any Company Intellectual Property is registered or subject to a pending application with any relevant authority in the United States or any foreign jurisdiction, all necessary application, registration, maintenance and/or renewal fees for such Company Intellectual Property have been timely paid.

5.27.4 To the knowledge of the Company, no trade secret that is material to the Business as presently conducted has been actually disclosed by Company or any Company Subsidiary to any Person other than pursuant to a non-disclosure agreement restricting the disclosure and use of such trade secret.

5.28 Confidentiality Agreements. The Company is, and at all times has been, in compliance with the terms and conditions of the Confidentiality Agreements.

5.29 No Other Representations or Warranties. Except for the representations and warranties of the Company contained in this Article 5, neither the Company nor any other Person makes or has made any other representation or warranty, expressed or implied, at law or in equity, with respect to the Company or the Company Subsidiaries, or any of the Company’s or the Company Subsidiaries’ respective businesses, assets, liabilities, operations, prospects, or condition (financial or otherwise), and the Company disclaims any other representations or warranties, whether made by the Company or any of its or the Company Subsidiaries’ Affiliates, shareholders, officers, directors, employees, agents or representatives (collectively, “Related Persons”), and no Related Person has any authority, express or implied, to make any representations, warranties or agreements not specifically set forth in this Agreement and subject to the limited remedies herein provided. Except for the representations and warranties of the Company contained in this Article 5, neither the Company nor any Related Person has made or makes any representation or warranty to any Buyer Party or its Affiliates regarding: (a) merchantability or fitness of any assets for any particular purpose, (b) the nature or extent of any liabilities, (c) the prospects of the business of the Company and the Company Subsidiaries or (d) the probable success or profitability of the Company or the Company Subsidiaries or (e) the accuracy or completeness of any documents, projections, material, statement, data or other information (financial or otherwise) provided to any Buyer Party, its Affiliates or its or their representatives.

ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF THE BUYER PARTIES

Except (a) as set forth in the Disclosure Schedule (Parent) pursuant to Schedule 13.15 and (b) as disclosed or reflected prior to the date hereof in the reports filed with or furnished to the Securities and Exchange Commission by Parent (but excluding any risk factor disclosures contained under the heading “Risk Factors,” any disclosure of risks included in any “forward-looking statements” disclaimer or any other statements that are similarly predictive or forward-looking in nature, in each case, other than any specific factual information contained therein), the Buyer Parties hereby jointly and severally represent and warrant to the Company that, as of the date hereof, or, if specified as of a particular date, as of such date:

6.1 Organization and Good Standing.

Each of the Buyer Parties is a Delaware business corporation and is duly organized, validly existing and in good standing under the laws of the State of Delaware. Each of the Buyer Parties has the full corporate power and authority to carry on its business as presently conducted and to own and lease the properties and assets that it now owns and leases. Each of the Buyer Parties is qualified to conduct business and is in good standing in all states or other jurisdictions where the nature of the business transacted or properties owned by it makes such qualification necessary and as necessary for its full performance of its obligations under this Agreement.

6.2 Authority and No Breach.

6.2.1 Each of the Buyer Parties has the full corporate power and authority to execute, deliver and, subject to the approval set forth in Section 7.6, perform its obligations under the terms of this Agreement and all documents and agreements reasonably necessary to give effect to the provisions of this Agreement. Each of the Buyer Parties has duly authorized, executed and delivered this Agreement. Assuming due authorization, execution and delivery by the other parties hereto and thereto, this Agreement and all other documents and instruments required to be signed by each of the Buyer Parties hereunder constitute or, when signed by such Person, will constitute, the legal, valid and binding obligations of such Person, enforceable against it in accordance with their respective terms, except insofar as enforcement hereof may be limited by bankruptcy, insolvency or other similar laws. No approval by the shareholders of any Buyer Party is required under applicable law or exchange requirements to authorize the execution of this Agreement.

6.2.2 Subject to the approval set forth in Section 7.6, the transactions contemplated hereby will not result in (a) any material conflict, breach or violation of or default under (i) any Buyer Party’s articles of incorporation or bylaws, or (ii) any statute, judgment, order, decree, license, law or regulation; nor will the execution, delivery and consummation of this Agreement and the transactions contemplated hereby result in any material breach or default under any mortgage, agreement, deed of trust, indenture or other instrument to which a Buyer Party is a party or by which it is bound. Subject to the approval set forth in Section 7.6, all corporate action and other authorizations prerequisite to the execution of this Agreement and the consummation of the transactions contemplated by this Agreement have been taken or obtained by the Buyer Parties. Neither the execution of this Agreement nor the consummation of any transactions contemplated herein, violates any material contract, agreement, or other document to which a Buyer Party is a party or to which a Buyer Party is otherwise subject.

6.3 Capitalization of Parent. Schedule 6.3 of the Disclosure Schedule (Parent) sets forth a complete and accurate list of the number and type of authorized, issued and outstanding shares of capital stock of Parent as of the date hereof. There are no other shares of capital stock or other equity securities of Parent authorized, issued, reserved for issuance or outstanding and except as set forth on Schedule 6.3 of the Disclosure Schedule (Parent), there are no outstanding or authorized options, warrants, convertible or exchangeable securities, subscriptions, rights (including preemptive rights), calls or commitments of any character whatsoever, relating to the capital stock of, or other equity or voting interest in, Parent, to which Parent is a party or is bound requiring the issuance, delivery or sale of shares of capital stock of Parent. Except as set forth on Schedule 6.3 of the Disclosure Schedule (Parent), there are no outstanding or authorized stock appreciation, phantom stock, profit participation or similar rights with respect to the capital stock of, or other equity or voting interest in, Parent to which Parent is a party or is bound. Except as set forth on Schedule 6.3 of the Disclosure Schedule (Parent), Parent has no authorized or outstanding bonds, debentures, notes or other indebtedness the holders of which have the right to vote (or convertible into, exchangeable for, or evidencing the right to subscribe for or acquire securities having the right to vote). Except as set forth on Schedule 6.3 of the Disclosure Schedule (Parent), there are no contracts to which Parent is a party or by which it is bound to (i) repurchase, redeem or otherwise acquire any shares of capital stock of, or other equity or voting interest in, Parent or (ii) vote or dispose of any shares of capital stock of, or other equity or voting interest in, Parent. Except as set forth on Schedule 6.3 of the Disclosure Schedule (Parent), there are no registration rights, irrevocable proxies or voting agreements with respect to any shares of capital stock of, or other equity or voting interest in, Parent.

6.4 Brokers and Investment Advisors. Except as set forth on Schedule 6.4 of the Disclosure Schedule (Parent), none of the Buyer Parties or any of its Affiliates has employed, contracted for the services of or authorized any broker, finder or investment advisor with respect to the negotiations leading up to the execution of this Agreement or the consummation of the transactions contemplated hereby.

6.5 Common Stock of Parent. All of the issued and outstanding shares of Parent’s common stock are, and all of such shares, when issued in accordance with the terms of this Agreement are or will be, duly and validly authorized and issued and outstanding, fully paid and nonassessable, free of preemptive rights and in proper certificated form. None of the common stock of Parent was issued in violation of the Securities Act or any other legal requirement and all rules and regulations of the Securities and Exchange Commission.

6.6 [Intentionally Omitted]

6.7 Financing. Upon closing of the Equity Offering, the Buyer Parties will have immediately available funds sufficient to consummate the transactions contemplated by this Agreement, including the payment of all fees and expenses payable by the Buyer Parties in connection with the transactions contemplated hereby.

6.8 Solvency. No transfer of property is being made and no obligation is being incurred in connection with the transactions contemplated by this Agreement with the intent to hinder, delay or defraud either present or future creditors of the Company or the Company Subsidiaries.

6.9 Compliance with Law. The operations of Parent and each Subsidiary of Parent are, and during the last three (3) years have been, conducted in substantial and material compliance with all laws, regulations, orders and other applicable legal requirements of all courts and other Governmental Entities having jurisdiction over Parent, any Subsidiary of Parent or any of their employees, assets, properties and operations, except as would not be required to be disclosed in any periodic report filed by Parent under the Exchange Act. No material violation or default of any law, regulation, order or other legal requirement exists, and neither Parent nor any Subsidiary of Parent is in material default with respect to any, order, writ, judgment, award, injunction or decree of any Governmental Entity or arbitrator, domestic or foreign, applicable to Parent, any Subsidiary of Parent or any of their assets, properties or operations with respect thereto, except as would not be required to be disclosed in any periodic report filed by Parent under the Exchange Act. Parent has furnished to the Company true and correct copies of all audit response letters pertaining to Parent or any Subsidiary of Parent received in the twenty-four (24) months preceding the date hereof from legal counsel devoting substantive attention to matters which may result in any material liability or obligation of Parent or any Subsidiary of Parent.

6.10 Litigation or Claims. Except as disclosed on Schedule 6.10 of the Disclosure Schedule (Parent), there are no material claims, actions, suits, proceedings, labor disputes or investigations pending or threatened in writing before any Governmental Entity, or before any arbitrator or mediator of any nature, brought by or against Parent, any Subsidiary of Parent or any of their officers, directors, employees, or agents involving, affecting or relating to the business of Parent, any Subsidiary of Parent or their assets or the transactions contemplated by this Agreement that would be required to be disclosed in any periodic report filed by Parent under the Exchange Act. Neither Parent nor any Subsidiary of Parent is subject to any order, writ, judgment, award, injunction or decree of any Governmental Entity or arbitrator, domestic or foreign, that materially affects the business or assets of Parent or any Subsidiary of Parent, or that could reasonably be expected to materially interfere with the transactions contemplated by this Agreement.

6.11 No Parent Material Adverse Effect. Since March 31, 2016, there has not been any change or effect that constitutes a Parent Material Adverse Effect.

6.12 Organizational Structure. Any Subsidiary of Parent to which Buyer assigns any of its rights or obligations under this Agreement will be (a) treated as a corporation for income Tax purposes or (b) owned, directly or indirectly, by a Subsidiary of Parent (each, an “Intermediate Subsidiary”) that is treated as a corporation for income Tax purposes (a Subsidiary satisfying either of the preceding clauses (a) or (b), an “Eligible Subsidiary”). Neither Parent nor its Affiliates has any plan or intention to (following the Closing) merge, eliminate, liquidate, transfer the stock of, or convert from corporate form, any Intermediate Subsidiary or any Eligible Subsidiary.

6.13 Confidentiality Agreements. Parent is, and at all times has been, in compliance with the terms and conditions of the Confidentiality Agreements, and shall, by the Closing, have complied with the return or destruction request distributed by the Company on June 8, 2016.

6.14 Condition of the Business. Notwithstanding anything contained in this Agreement to the contrary, each of the Buyer Parties agrees that neither the Company nor any other Person is making any representations or warranties whatsoever, express or implied, at law or in equity, with respect to the Company or the Company Subsidiaries, beyond those expressly given by the Company in Article 5. Each of the Buyer Parties acknowledges and agrees that, except for the representations and warranties contained in Article 5, the Acquired Assets and the Business are being transferred on an “as is, where is” basis. Each of the Buyer Parties further acknowledges that none of the Company or any of its Affiliates (including the Company Subsidiaries) nor any other Person has made or is making any representation or warranty, express or implied, as to the accuracy or completeness of any information, data, or statement regarding the Company or any of the Company Subsidiaries not expressly set forth in Article 5. Each of the Buyer Parties acknowledges and agrees that in making its determination to proceed with the transactions contemplated hereby, it has relied solely on its own independent investigation and the representations and warranties contained in Article 5.

ARTICLE 7
BUYER PARTIES’ CONDITIONS PRECEDENT TO CLOSING

The obligations of the Buyer Parties to consummate the transactions described in this Agreement are subject to the satisfaction of the following conditions precedent, any of which may be waived in writing by the Buyer Parties.

7.1 Representations and Warranties to be True and Correct. The representations and warranties of the Company set forth in this Agreement, other than the Company’s Specified Representations and the representations and warranties set forth in Section 5.6.3, shall be true and correct as of the Closing (except for those representations and warranties which address matters only as of a particular date, which shall remain true and correct as of such date) without giving effect to any “Company Material Adverse Effect” or materiality qualifications therein, except where the failure of such representations and warranties to be true and correct has not had, and would not reasonably be expected to have, a Company Material Adverse Effect. The Company’s Specified Representations shall be true and correct as of the Closing (except for those representations and warranties which address matters only as of a particular date, which shall remain true and correct as of such date) in all material respects without giving effect to any “Company Material Adverse Effect” or materiality qualifications therein. The representations and warranties set forth in Section 5.6.3 shall be true and correct as of the Closing in all respects. The pre-Closing agreements, covenants and conditions required by this Agreement to be performed and complied with by the Company shall have been performed and complied with in all material respects.

7.2 No Company Material Adverse Effect. There shall have been no changes that have had or are reasonably likely to have a Company Material Adverse Effect since the date of this Agreement.

7.3 Supporting Documents. Buyer shall have received the documents set forth below:

7.3.1 A certificate signed by an authorized officer of Company dated the Closing Date and stating that the conditions set forth in Section 7.1 have been satisfied;

7.3.2 A certificate of good standing for the Company and each Company Subsidiary from applicable Secretary of State dated not more than ten (10) days prior to the Closing Date;

7.3.3 A certificate of the Secretary or an Assistant Secretary of the Company dated the Closing Date and certifying: (1) that attached thereto is a true and complete copy of the Articles of Incorporation and Bylaws of the Company as in effect on the date of such certification; (2) that attached thereto is a true and complete copy of all resolutions adopted by the Board of Directors of the Company (or an executive committee thereof) authorizing the execution, delivery and performance of this Agreement and the ancillary agreements and all transactions contemplated by this Agreement and that all such resolutions are in full force and effect as of the Closing Date; and (3) that the Articles of Incorporation and Bylaws of the Company have not been amended since the date of the last amendment referred to in the Articles of Incorporation and Bylaws attached pursuant to subsection (1) of this Section 7.3.2;

7.3.4 Releases or similar documentation in customary form and substance in relation to all Liens on the assets of the Company and each Company Subsidiary relating to the Closing Payoff Debt;

7.3.5 [Intentionally Omitted]

7.3.6 The Escrow Agreement, executed by the Company;

7.3.7 A power of attorney, substantially in the form of Exhibit 7.3.7 hereto (the “Power of Attorney”), necessary to permit the operation of the Business after the Closing Date;

7.3.8 Subject to Section 4.7, the Bill of Sale, Assignment and Assumption Agreement, executed by the parties thereto; and

7.3.9 The Non-Solicitation Agreement, executed by KRG.

7.4 Third Party Consents. Copies of the third party consents to the consummation of the transactions contemplated hereby set forth on Schedule 7.4 shall have been received.

7.5 Equity Offering. Parent shall have closed on the Equity Offering with proceeds of not less than One Hundred Million Dollars ($100,000,000.00) raised.

7.6 Shareholder Approval. Parent shall have received the approval of its shareholders for any modification of its certificate of incorporation and/or designation necessary to increase the authorized capital in connection with the transactions contemplated by this Agreement and to pay the Equity Consideration.

7.7 No Pending Actions or Proceedings. Except for any action or proceeding directly or indirectly instigated by a Buyer Party, no action or proceeding before any Governmental Entity shall be pending wherein an unfavorable judgment, decree or order would prevent the performance of this Agreement or the consummation of any of the transactions contemplated hereby, declare unlawful the transactions contemplated by this Agreement or cause such transactions to be rescinded.

7.8 HSR. All required approvals of any Governmental Entity with respect to any applicable Antitrust Laws shall have been obtained and all notice periods under the Antitrust Laws shall have expired or been terminated.

ARTICLE 8
THE COMPANY’S CONDITIONS PRECEDENT TO CLOSING

The obligation of the Company to consummate the transactions described in this Agreement is subject to the satisfaction of the following conditions precedent, any of which may be waived in writing by the Company:

8.1 Representations and Warranties to be True and Correct. The representations and warranties of the Buyer Parties set forth in this Agreement shall be true and correct in all material respects as of the Closing (except for those representations and warranties which address matters only as of a particular date, which shall remain true and correct as of such date) without giving effect to any materiality qualifications therein. The representations and warranties set forth in Section 6.11 shall be true and correct as of the Closing in all respects. The pre-Closing agreements, covenants and conditions required by this Agreement to be performed and complied with by the Buyer Parties shall have been performed and complied with in all material respects.

8.2 Supporting Documents. The Company shall have received the documents set forth below:

8.2.1 A certificate of good standing for each of the Buyer Parties from the Secretary of State of the State of Delaware dated not more than ten (10) days prior to the Closing Date;

8.2.2 A certificate signed by an authorized officer of Parent dated the Closing Date and stating that the conditions set forth in Section 8.1 have been satisfied;

8.2.3 A certificate of the Secretary or an Assistant Secretary of each of the Buyer Parties dated the Closing Date and certifying: (1) that attached thereto is a true and complete copy of the Articles of Incorporation and Bylaws of such Person as in effect on the date of such certification; (2) that attached thereto is a true and complete copy of all resolutions adopted by the Board of Directors of such Person (or an executive committee thereof) authorizing the execution, delivery and performance of this Agreement and the ancillary agreements and all transactions contemplated by this Agreement and that all such resolutions are in full force and effect as of the Closing Date; and (3) that the Articles of Incorporation of such Person have not been amended since the date of the last amendment referred to in the Articles of Incorporation attached pursuant to subsection (1) of this Section 8.2.3;

8.2.4 [Intentionally Omitted]

8.2.5 The Escrow Agreement, executed by Buyer; and

8.2.6 Subject to Section 4.7, the Bill of Sale, Assignment and Assumption Agreement, executed by the parties thereto.

8.3 Closing Deliverables. Buyer shall make the closing deliverables contemplated by Buyer pursuant to Section 4.2.

8.4 No Pending Actions or Proceedings. Except for any action or proceeding directly or indirectly instigated by the Company, no action or proceeding before any Governmental Entity shall be pending wherein an unfavorable judgment, decree or order would prevent the performance of this Agreement or the consummation of any of the transactions contemplated hereby, declare unlawful the transactions contemplated by this Agreement or cause such transactions to be rescinded.

8.5 HSR. All required approvals of any Governmental Entity with respect to any applicable Antitrust Laws shall have been obtained and all notice periods under the Antitrust Laws shall have expired or been terminated.

ARTICLE 9
ADDITIONAL COVENANTS AND AGREEMENTS

9.1 Preservation of the Businesss; Certain Tax and Post-Closing Organizational Matters. During the period beginning on the date hereof and ending on the earlier of (a) the Closing Date and (b) the termination of this Agreement pursuant to Article 12 (the “Pre-Closing Period”), except as otherwise contemplated by this Agreement, as set forth on Schedule 9.1, or agreed to in writing by a Buyer Party, the Company shall, and shall cause each Company Subsidiary to continue to manage and operate its business in the ordinary course, not to enter into any new Material Contract, and to use commercially reasonable efforts to take those steps it has taken in the past to preserve the business of the Company and each Company Subsidiary, keep available the services of the key employees and preserve the current relationships of the Company and each Company Subsidiary with the material customers, payors and suppliers of, and other Persons which have significant business relationships with, the Company and any Company Subsidiary. Neither Parent nor any of its Affiliates will, during the thirteen (13)-month period following the Closing Date, merge, eliminate, liquidate, transfer the stock of, or convert from corporate form, any Intermediate Subsidiary or any Eligible Subsidiary. The parties agree that the transactions contemplated hereunder shall be treated for all Tax reporting purposes as a taxable sale of assets to Buyer or to an Eligible Subsidiary, as applicable, and not a reorganization within the meaning of Section 368 of the Code or a transaction governed by Section 351 of the Code.

9.2 Notification of Certain Matters. During the Pre-Closing Period, the Company shall give prompt notice to Buyer and Buyer shall give prompt notice to the Company of (a) the occurrence, or failure to occur, during the Pre-Closing Period of any event which occurrence or failure would be likely to cause any of its representations or warranties contained in this Agreement to be untrue or inaccurate in any material respect and (b) any failure of it to comply with or satisfy any of its covenants, conditions or agreements to be complied with or satisfied by it prior to the Closing under this Agreement; provided, however, that such disclosure shall not be deemed to cure any breach of a representation, warranty, covenant or agreement, or to satisfy any condition. The party receiving such notification shall not be barred from seeking indemnity with respect to the subject matter of such notification pursuant to Article 11, subject to the terms and conditions thereof.

9.3 Regulatory and Other Authorizations, Consents. Each party hereto shall, subject to Section 9.17, use its commercially reasonable efforts to obtain all authorizations, consents, orders and approvals of, and to give all notices to and make all filings with, all Governmental Entities and other third parties that are required pursuant to obligations imposed on such party pursuant to any license, law or Contract as may be or become necessary for its execution and delivery of, the performance of its obligations pursuant to, and the consummation of the transactions contemplated under this Agreement, and each party will cooperate reasonably with the other parties in promptly seeking to obtain all such authorizations, consents, orders and approvals, giving such notices, and making such filings. Notwithstanding the foregoing, provided that the Company promptly provides all information requested by Buyer that is required to complete the regulatory filings, within fifteen (15) days after the date hereof, Buyer shall file all necessary regulatory filings set forth on Schedule 7.4; provided, further, that Buyer shall, to the extent possible and at its is sole cost and expense, utilize any expedited transfer protocols or processes available to obtain the licenses set forth on Schedule 7.4. The parties hereto agree not to take any action that will have the effect of unreasonably delaying, impairing or impeding the receipt of any required authorizations, consents, orders or approvals.

9.4 Confidentiality.

9.4.1 Parent and the Company shall comply with, and shall cause their respective counsel, accountants and other representatives and Affiliates to comply with, all of their respective obligations under the Confidentiality Agreements, which shall survive the Pre-Closing Period in accordance with the terms and conditions set forth therein.

9.4.2 Notwithstanding the foregoing, following the Closing, the limitations on Parent’s use of the confidential information of the Company and the Company Subsidiaries set forth in the Designated Confidentiality Agreements (other than confidential information related solely to the Excluded Assets or the Excluded Liabilities) shall be of no force or effect; provided, that the Parent shall continue to maintain the confidentiality of any information it has received pertaining to the Shareholders.

9.5 Press Release. The parties agree to consult with each other prior to any press release, public announcement or publicly disseminated communication concerning this transaction, to discuss the content of any such announcement and to refrain from making any such press releases or public announcements without first receiving the other’s prior consent, which shall not be unreasonably withheld; provided, however, that in no event shall Parent be prohibited or delayed from timely complying with federal and state securities laws or rules of a stock exchange on which Parent lists securities; provided, further, that the parties acknowledge that, within four (4) Business Days following the date hereof, Parent shall file a Current Report on Form 8-K pursuant to the Exchange Act announcing the transactions contemplated by this Agreement, and the Company shall have a reasonable opportunity to review and comment on such filing before it is made. A party shall be deemed to have given such consent if such party has not provided written notice of objection to the other party within two (2) Business Days following the delivery of notice to the non-disclosing party of such proposed communication.

9.6 Cooperation; Equity Offering.

9.6.1 During the Pre-Closing Period, each of the Buyer Parties, on the one hand, and the Company, on the other, shall reasonably cooperate with the other, without additional consideration, to carry out the purposes and intent of this Agreement. The parties further agree not to act or omit to act in such a manner and to not commit intentional acts in bad faith that would cause the acting party or the other party to terminate or violate the terms of this Agreement. The Company agrees to cooperate with Parent as reasonably requested by Parent to timely satisfy any post-Closing reporting obligations under the Exchange Act pursuant to Form 8-K related to the transactions contemplated hereby.

9.6.2 Subject to Section 9.4, prior to the Closing, the Company shall use its commercially reasonable efforts to cause its senior management, representatives and advisors (including legal and accounting advisors) to provide to Parent such cooperation as may be reasonably requested by Parent in connection with the Equity Offering, including: (i) to the extent as would be customary, participation at reasonable times in a reasonable number of meetings, drafting sessions, presentations, road shows (if applicable), and due diligence sessions; (ii) furnishing Parent the information contemplated by Section 9.10 and such financial and other information as Parent shall reasonably request in connection with the execution and consummation of the Equity Offering (all of the foregoing under clauses, collectively, the “Offering Documents”) and delivering customary authorization letters and representation letters in connection with the Offering Documents; (iii) reasonably cooperating with the marketing efforts, if any, of Parent for any portion of the Equity Offering, including direct contact between senior management, on the one hand, and the actual or potential investors, on the other hand; and (iv) using reasonable best efforts to cause Company’s independent accountants to deliver customary comfort letters, including as to customary negative assurances, and consents to use audit reports. Notwithstanding the foregoing, nothing in this Section 9.6.2 will require any cooperation by the Company, its senior management, representatives or advisors to the extent it would unreasonably interfere with the normal business or operations of the Company or any of the Company Subsidiaries. Parent shall promptly reimburse the Company and the Company Subsidiaries for any reasonable out-of-pocket expenses incurred in connection with this Section 9.6.2.

9.6.3 Notwithstanding anything to the contrary in this Agreement and without limiting the generality of Section 9.6.1, Parent shall use its commercially reasonable efforts to cause the condition to closing set forth in Section 7.5 to be satisfied as promptly as practicable. Parent shall keep the Company reasonably informed on a reasonably current basis as to the status of the Equity Offering.

9.7 Expenses. Except as otherwise provided in this Agreement, each of the parties hereto shall pay its own expenses and costs (including, without limitation, the fees, disbursements and expenses of its attorneys, accountants, auditors, consultants, and agents), incurred by it in negotiating, preparing, closing and carrying out this Agreement and the transactions contemplated hereby.

9.8 Insurance.

9.8.1 At least ten (10) Business Days prior to the Closing Date, the Company shall notify Buyer of the insurances policies set forth on Schedule 5.15.1 of the Disclosure Schedule that it can assign or cause to be assigned to Buyer (such policies to be included within the Acquired Assets and referred to as, the “Acquired Policies”) and the insurance policies set forth on Schedule 5.15.1 of the Disclosure Schedule that it cannot assign or cause to be assigned to Buyer (the “Retained Policies”). Notwithstanding the foregoing, the Company’s policy(ies) of director and officer liability insurance (including the executive liability tail policy referenced on Schedule 5.15.1 of the Disclosure Schedule) shall be Retained Policies.

9.8.2 To the extent that any Retained Policy covers any Losses related to an Acquired Asset or an Assumed Liability, the Company shall reasonably cooperate and cause its Affiliates to reasonably cooperate with Buyer in submitting claims with respect to such Losses on behalf of Buyer, and shall promptly remit the proceeds received therefrom to Buyer or its designee(s), less the Company’s reasonable cost of collection.

9.8.3 To the extent that any Acquired Policy covers any Losses related to an Excluded Asset or an Excluded Liability, Buyer shall reasonably cooperate and cause its Affiliates to reasonably cooperate with the Company in submitting claims with respect to such Losses on behalf of the Company, and shall promptly remit the proceeds received therefrom to the Company or its designee(s), less Buyer’s reasonable cost of collection.

9.8.4 With respect to any insurance policies set forth on Schedule 5.15.1 of the Disclosure Schedule maintained on a claims made basis (excluding, for the avoidance of doubt, the executive liability tail policy referenced on Schedule 5.15.1 of the Disclosure Schedule), the Company shall purchase (it being understood and agreed that 50% of all amounts paid by the Company or its Subsidiaries in connection with this Section 9.8.4 on or prior to the Closing shall increase the Purchase Price) on or before the Closing Date six year extended reporting endorsements (“tails”) with limits consistent with amounts in effect as of the date hereof and will use its reasonable best efforts to add Buyer as an additional insured to said policies. The Company will provide a certificate of insurance evidencing any such tail policy to Buyer at the Closing.

9.9 Filing Returns.

9.9.1 Transfer Taxes. Parent shall be responsible for the first Two Hundred Thousand Dollars ($200,000.00) of any Transfer Taxes payable in connection with the transactions contemplated in this Agreement. Each of Buyer, on the one hand, and the Company, on the other hand, shall be responsible for fifty percent (50%) of any Transfer Taxes payable in excess of such amount. Each of the parties hereto shall fully cooperate with the other party with respect to the preparation and filing of any Tax Returns and other filings relating to any such Transfer Taxes as may be required.

9.9.2 Allocation of Taxes. All real property, personal property and similar ad valorem obligations levied with respect to the Acquired Assets for a taxable period which includes (but does not end on) the Closing Date (collectively, the “Apportioned Obligations”) shall be apportioned between the Company and its Subsidiaries and Buyer based on the number of days of such taxable period before and after the Closing Date. The Company and its Subsidiaries shall be liable for the proportionate amount of such Apportioned Obligations that is attributable to the number of days of such taxable period ending on the Closing Date, and Buyer shall be liable for the proportionate amount of such Apportioned Obligations that is attributable to the number of days of such taxable period beginning after the Closing Date. Notwithstanding anything to the contrary in this Agreement, any Tax attributable to any action taken by Buyer on the Closing Date after the Closing that is not in the ordinary course of business shall be deemed to be allocated to Buyer’s Apportioned Obligations.

9.9.3 Cooperation and Tax Record Retention. Buyer shall promptly furnish to the Company such information as the Company may reasonably request with respect to Tax matters relating to the Business, the Acquired Assets or the Assumed Liabilities, including by providing access to relevant books and records and making employees of the Buyer Parties available to provide additional information and explanation of any materials provided hereunder.

9.10 Pre-Closing Access. During the Pre-Closing Period, subject to Section 9.4.1, the Company shall, and shall cause the Company Subsidiaries to, provide each of the Buyer Parties and its counsel, accountants and other representatives with reasonable access during normal business hours to the premises of Company and the Company Subsidiaries and all property, both real and personal, contracts, leases, agreements and litigation documents relating to Company and the Company Subsidiaries, as well as the books of account and other records of the Company and Company Subsidiaries. The Buyer Parties shall make reasonable efforts to coordinate with the Company for time(s) and place(s) that such materials may be accessed. Notwithstanding anything to the contrary in this Agreement, during the Pre-Closing Period, none of the Company, the Company Subsidiaries or any of their respective representatives or Affiliates shall be required to provide access to, or disclose information to, any of the Buyer Parties or any of their respective representatives if such access or disclosure would violate any contract or law to which any of the Company or the Company Subsidiaries is a party or is subject, or which it reasonably determines upon the advice of counsel would result in the loss of the ability to successfully assert attorney-client or work product privileges.

9.11 Post-Closing Access to Records. Following the Closing, the Company and its representatives shall be permitted to access from the Buyer Parties and their Affiliates such books and records relating to the Company and the Company Subsidiaries and treated as Acquired Assets as are reasonably necessary to complete the transactions contemplated by this Agreement or prosecute or defend any third-party litigation or investigation or other third-party inquiry, including audits, compliance with governmental requirements, regulations and requests to which the Company or any of its Subsidiaries is a party or is subject, except to the extent necessary to (a) ensure compliance with any applicable law or (ii) preserve any applicable privilege. The Company shall be entitled to make copies of the books and records to which it is entitled access pursuant to this Section 9.11. Subject to Section 9.9, Parent agrees to hold all books and records relating to the Company and the Company Subsidiaries and treated as Acquired Assets in accordance with Parent’s document retention policy or such longer time as may be required by law. Following the Closing, Buyer and its representatives shall be permitted to access from the Company and its Affiliates such books and records relating to the Business as are reasonably necessary to complete the transactions contemplated by this Agreement or prosecute or defend any third-party litigation or investigation or other third-party inquiry, including audits, compliance with governmental requirements, regulations and requests to which Parent or any of its Subsidiaries is a party or is subject, except to the extent necessary to (a) ensure compliance with any applicable law or (ii) preserve any applicable privilege. The Buyer shall be entitled to make copies of the books and records to which it is entitled access pursuant to this Section 9.11. The Company agrees to hold all books and records relating to the Business in accordance with the Company’s document retention policy or such longer time as may be required by law.

9.12 Payroll and Benefit Matters. The Company and each Company Subsidiary will, for those Employees who accept employment with Buyer or its Affiliates, pay or accrue all payroll obligations within ordinary course time frames and will pay or accrue for all accrued paid-time-off liabilities prior to the Closing Date in accordance with the Accounting Principles. The Company and each Company Subsidiary will, for those Employees who do not accept employment with Buyer or its Affiliates, pay or accrue all payroll obligations within ordinary course time frames and will pay or accrue for all accrued paid-time-off liabilities prior to the Closing Date in accordance with the Accounting Principles. In addition, Company will take all steps reasonably necessary to terminate, and will terminate, Plans listed on Schedule 9.12 effective as of or immediately prior to the Closing Date. Parent shall cause its 401(k) or other tax-qualified defined contribution plan to accept rollovers of distributions (or direct rollovers) from the Company’s 401(k) or other tax-qualified defined contribution plan (including plan loans).

9.13 Employees. Parent shall offer employment to all of the Employees, which offers shall include (i) base salary or wages or rate of pay not less than Employee’s base salary or wages or rate of pay as of the Closing Date and (ii) benefits substantially similar in the aggregate to the benefits provided to similarly-situated employees of Parent; provided, however, that any offer of employment shall be contingent upon the Closing actually occurring. Nothing herein shall obligate Buyer to employ any Employees for any specific time period. Notwithstanding anything within this Agreement or any Plan to the contrary, in no event will the Company be liable for, or required to pay any severance or similar amounts or satisfy any severance or similar entitlements with respect to any Employee. If any Employee fails to meet Buyer’s standard background screening requirements, (a) Buyer will nevertheless offer employment to such individuals for such minimum period as is necessary to permit eligibility for COBRA benefits under Buyer’s health benefit plans; (b) such Employees will not be granted access to any Buyer systems; and (c) such Employees will not be eligible for any severance from Buyer or the Company. Nothing herein shall be construed to grant any Employee any rights as a third party beneficiary.

9.14 Consents to Certain Assignments.

9.14.1 Notwithstanding anything in this Agreement or the Bill of Sale, Assignment and Assumption Agreement to the contrary, this Agreement shall not constitute an agreement to transfer or assign any Acquired Asset or any benefit arising thereunder or resulting therefrom if an attempted assignment thereof, without the consent of a third party, would constitute a breach or other contravention under any agreement or law to which any the Company is a party or by which it is bound.

9.14.2 The Company (with the reasonable cooperation of the Buyer) shall use its commercially reasonable efforts to obtain any consent or waiver required to assign to the Buyer any Acquired Asset prior to the Closing. If any such consent or waiver is not obtained prior to Closing and as a result thereof Buyer shall be prevented by such third party from receiving the rights and benefits with respect to such Acquired Asset intended to be transferred hereunder, or if any attempted assignment would adversely affect the rights of the Company or a Company Subsidiary thereunder so that Buyer would not in fact receive all such rights, the Company and Buyer shall use their commercially reasonable efforts to obtain such consent or waiver after the Closing Date, and to take such actions such that Buyer would obtain the economic claims, rights and benefits under such asset and assume the economic burdens and obligations under the same terms and for the same duration with respect thereto in accordance with this Agreement, including by subcontracting, sublicensing or subleasing to Buyer. The Company shall use commercially reasonable efforts to take all actions reasonably necessary to provide the Buyer the benefits of and enforce the Buyer’s rights with respect to such Acquired Asset under the same terms and for the same duration, and the Company shall promptly pay to the Buyer when received all monies received by the Company in respect of or related to such Acquired Asset. Buyer shall pay the Company’s out-of-pocket expenses incurred after the Closing in connection with the compliance of the Company with its obligations under this Section 9.14.2. The obligations set forth in this Section 9.14.2 shall terminate ninety (90) days following the Closing.

9.15 Authorized Share Capital. At all times following the Closing, Parent shall maintain adequate share capital to issue the maximum number of shares issued or issuable pursuant to Sections 4.1.2 and 11.3.4(ii).

9.16 Seller Names and Marks. The Company shall, for a period of twelve (12) months after the Closing Date, have a limited, worldwide, non-exclusive, non-transferable, non-sublicensable, fully paid-up, royalty free license to use the Seller Names and Seller Marks. No later than one (1) month after the Closing Date, the Company shall cause each Company Subsidiary that has the words “Home Solutions” or “Home Infusion Solutions” in its name to remove such words from its name.

9.17 Antitrust Filings. Each of Buyer and the Company shall, as soon as practicable, and in any event no later than ten (10) Business Days from the date of this Agreement, make any initial filings required under the HSR Act, and supply as promptly as reasonably practicable any additional information and documentary material that may be requested by a Governmental Entity pursuant to the HSR Act. Buyer shall pay all filing fees under the HSR Act, and neither the Company nor any Company Subsidiary shall be required to pay any fee, penalty or other payment to any Governmental Entity in connection with any filings under the HSR Act or such other filings as may be required under applicable law. The parties hereto shall consult and cooperate with one another, and consider in good faith the views of one another, in connection with any analyses, appearances, presentations, memoranda, briefs, arguments, opinions and proposals made or submitted by or on behalf of any party hereto in connection with proceedings under or relating to the HSR Act. Each of Buyer and the Company shall use reasonable best efforts to resolve such objections, if any, as may be asserted by any Governmental Entity with respect to the transactions contemplated by this Agreement under the HSR Act or any other law, rule or regulation having the purpose or effect of monopolization or restraint of trade (collectively, “Antitrust Laws”). Each of Buyer and the Company shall use reasonable best efforts to take such action as may be required to cause the termination or expiration of the notice periods under the Antitrust Laws with respect to the transactions contemplated hereby as promptly as possible after the execution of this Agreement. Without limiting the foregoing, each of Buyer and the Company shall take any and all of the following actions to the extent necessary or appropriate to obtain the approval of any Governmental Entity with jurisdiction over the enforcement of any applicable Antitrust Laws or other laws regarding the transactions contemplated hereby: (i) entering into negotiations; (ii) providing information required by Antitrust Law or governmental regulation adopted thereunder; (iii) providing information informally requested by a Governmental Entity reviewing the transactions contemplated hereby under the HSR Act; and (iv) undertaking reasonable best efforts to substantially comply with any Request for Additional Information and Documentary Material issued pursuant to the HSR Act. The preceding obligations shall expire if this Agreement is terminated pursuant to Article 12.

9.18 Receivables Collection.

9.18.1 After the Closing, (i) the Company and its Subsidiaries shall promptly remit to Buyer (or its designee(s)) the proceeds of any accounts receivable or other amounts (other than the Government Receivables) received by the Company and its Subsidiaries in respect of the Business and (ii) Buyer shall promptly remit to the Company (or its designee(s)) the proceeds of any Government Receivables received by Buyer or its Affiliates.

9.18.2 Buyer shall use its commercially reasonable efforts to facilitate, as promptly as practicable following the date hereof, an agreement, in a form reasonably acceptable to the Company, between the Company and its Subsidiaries and a third party Person experienced in the collection of healthcare receivables (the “Receivables Collector”), to be effective as of the Closing, pursuant to which the Receivables Collector will, following the Closing, facilitate the collection of the Government Receivables on behalf of the Company and its Subsidiaries.

9.18.3 As promptly as possible, but in any event within sixty (60) days after the first anniversary of the Closing Date, the Company will deliver to Buyer, with reasonable supporting detail, an accounting of the amount of the Government Receivables as set forth in the Closing Certificate that have actually been collected by the Company or on its behalf (including pursuant to the agreement contemplated by Section 9.18.2) as of such date (the “Government Receivables Statement”). If the amount of the Government Receivables set forth in the Government Receivables Statement (determined without taking into account any setoffs, reductions or recoupments imposed by any payor) is less than the amount of the estimated Government Receivables set forth in the Closing Certificate, Buyer shall promptly pay or cause to be paid to the Company or its designee(s) the amount of such shortfall in cash.

9.18.4 For the avoidance of doubt, no party hereto may offset or withhold any amounts that are required to be paid to another party hereto pursuant to this Section 9.18, it being acknowledged that the obligation to pay over such amounts is absolute and unconditional.

9.19 Power of Attorney. Contingent upon and effective as of the Closing, subject to the execution and delivery of the Power of Attorney as described in Section 7.3.7, and to the conditions and limitations contained therein, the Company authorizes the Buyer Parties to operate the Business until new licenses and registrations are obtained. Buyer shall diligently, and in good faith, prepare, file and make applications for and pursue issuance of DEA registrations as necessary to lawfully operate the Business in accordance with Section 9.3, including making such state notifications in advance of the Closing as mutually deemed appropriate by the parties with the advice of legal counsel. The Buyer Parties shall comply with all laws applicable to such DEA registration.

9.20 Patient Records. With respect to any Patient Records transferred to Buyer pursuant to this Agreement, Buyer shall comply with all state and federal laws and regulations applicable to the maintenance, use, and disclosure of medical record and individually identifiable health information, including HIPAA and regulations promulgated pursuant to HIPAA. After the Closing, Buyer shall keep and preserve all such medical records and other records of the Business received by Buyer as of the Closing and that are required to be kept and preserved (a) by an applicable federal or state law or (b) in connection with any claim or controversy still pending involving any of the Business.

9.21 Personnel Resources. From and after the Closing, Parent shall make available to the Company, during normal business hours, and without charge for internal costs, de minimis Employee personnel resources as the Company reasonably requests for purposes of assisting in the Company’s collection of Government Receivables, providing general administrative support and preparing Tax filings. Any out-of-pocket costs and expenses incurred by Parent in connection with such assistance shall be paid by the Company.

9.22 Registered Stock. Promptly, and in any event within thirty (30) days following the Closing, Parent shall file with the SEC a registration statement on Form S-3 (or any successor form) under the Securities Act to register the resale of the Registrable Securities (as defined below). In the event that Parent ceases for any reason to be eligible to file with the SEC a registration statement on Form S-3 (or any successor form) under the Securities Act, such that the registration statement on Form S-3 (or any successor form) under the Securities Act previously filed to register the resale of the Registrable Securities may no longer be used to effect the resale of the securities registered thereunder, if so requested by the Company, Parent shall promptly file with the SEC a registration statement on Form S-1 (or any successor form) under the Securities Act to register the resale of the Registrable Securities. Parent shall use its reasonable best efforts to cause any registration statement filed pursuant to either of the preceding two sentences to be declared effective by the SEC as soon as practicable following the filing thereof and to maintain the effectiveness of such registration statement during such time as such securities remain Registrable Securities. Parent shall prepare and file with the SEC such amendments and supplements to any such registration statement and the prospectus included therein as may be necessary to keep any such registration statement continuously effective (and available for use) throughout such period and to ensure that any such registration statement and prospectus does not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. Parent shall take such other reasonable actions (including, causing such securities to be listed or quoted on a national securities exchange) as may be necessary to facilitate the resale of such securities pursuant to any such registration statement. Parent shall bear all expenses incident to Parent’s performance of or compliance with this Section 9.22, including all registration and filing fees, fees and expenses of compliance with securities or “blue sky” laws, listing application fees, printing expenses, transfer agent’s and registrar’s fees, costs of distributing prospectuses in preliminary and final form as well as any supplements thereto, and fees and disbursements of counsel for Parent and all independent certified public accountants and other persons retained by Parent. For the avoidance of doubt, the Company shall bear all underwriting discounts or commissions, brokerage fees and transfer taxes attributable to the sale or disposition by the Company of the securities registered under the registration statement and any fees or expenses of the Company or any counsel to the Company. “Registrable Securities” means the maximum number of shares of Parent Common Stock issuable by Parent in respect of the Equity Consideration, assuming satisfaction of the RSU criteria described in Article 4. Any particular Registrable Securities shall cease to be Registrable Securities (A) when a registration statement with respect to the sale of such securities shall have been declared effective under the Securities Act and such securities shall have been disposed of in accordance with such registration statement, (B) upon and from and after such time as such securities shall be eligible to be resold to the public pursuant to Rule 144 under the Securities Act (or any successor rule thereunder) without any volume or manner of sale restrictions thereunder or (C) when such securities, after having been issued pursuant to Article 4, shall cease to be outstanding. The parties agree to work in good faith to accomplish the registration for resale of any Indemnification Shares, consistent with the provisions set forth in this Section 9.22, to the extent applicable.

9.23 Parent Board Representation.

9.23.1 Scope of Rights. As soon as practicable following the Closing, Parent shall:

(i) cause any slate of directors (subject to satisfaction of all legal and governance requirements regarding services as a director of Parent) presented to Parent’s stockholders for election to the board of directors of Parent (the “Parent Board”) to consist of such nominees that, if elected, would result in the Parent Board containing two (2) directors designated by the Company (“HS Directors”); provided, however, that so long as Daniel Greenleaf is serving as the chief executive officer of Parent, one such nominee shall be Daniel Greenleaf, and, in the event that Daniel Greenleaf is no longer serving as chief executive officer of Parent, the Company shall be entitled pursuant to this Section 9.23.1 to designate one (1) nominee for presentation to Parent’s stockholders for election to the Parent Board; and

(ii) ensure that the Parent Board will have a number of vacancies at least equal to the number of HS Directors.

9.23.2 Procedural Matters.

(i) Parent shall recommend that its stockholders vote in favor of the HS Directors nominated in accordance with the terms of this Section 9.23, and shall use its commercially reasonable efforts to solicit from the stockholders of Parent eligible to vote for the election of directors proxies in favor of the election of the HS Directors.

(ii) If, for any reason, a nominated HS Director is not elected to the Parent Board by the stockholders of Parent, then a new HS Director designated by the Company shall be recommended by Parent for election to the Parent Board pursuant to the procedures set forth in this Section 9.23.

(iii) If at any time a HS Director resigns or is removed in accordance with applicable law or Parent’s bylaws, or becomes incapacited, a new HS Director designated by the Company shall be recommended by Parent for election to the Parent Board pursuant to the procedures set forth in this Section 9.23.

(iv) Parent agrees that the HS Directors shall be entitled to the same rights, privileges and compensation as the other members of the Parent Board in their capacity as such, including with respect to insurance coverage and reimbursement for Parent Board participation and related expenses. Parent shall maintain, at its own expense, directors’ and officers’ liability insurance with coverage no less favorable to the HS Directors than the policies that are in effect with respect to all other directors.

9.23.3 Termination of Nomination Rights. The rights of the Company pursuant to this Section 9.23 shall terminate automatically upon the earlier of (a) the date (if any) upon which the Company and its Affiliates cease, collectively, to hold at least fifty percent (50%) of the Parent Common Stock they hold following issuance of the Closing Equity Consideration (and issuance of any Parent Common Stock pursuant to the RSUs), and (b) the date that is three (3) years from the Closing Date.

ARTICLE 10
CERTAIN RESTRICTIVE COVENANTS

10.1 Certain Restrictive Covenants. The Company agrees that it shall not, directly or indirectly, alone or in association with others (other than Buyer or its Affiliates) in any capacity, for a period of three (3) years following the Closing Date:

(i) Participate within the Restricted Area, other than as a duly authorized agent of Buyer or its Affiliates or as an owner of five percent (5%) or less of any publicly traded company, in the ownership, management, sales, marketing, product development, business development, strategic planning, operation or control of any enterprise which provides or offers to provide or otherwise engages in the provision of any goods or any services related to (a) home or alternate site infusion, or (b) the provision of any other product or service provided by the Company or any Company Subsidiary within the twelve (12) months prior to the Closing;

(ii) Influence or attempt to influence any of the patients of Buyer or its Affiliates to transfer their patronage from Buyer or its Affiliates to any other business or enterprise;

(iii) Influence or attempt to influence any of the Referral Sources to refer patients to any business or enterprise providing the same or substantially the same goods and services as Buyer or its Affiliates; or

(iv) Solicit for employment (other than through general advertisements or executive searches not specifically directed at Buyer or its Affiliates), hire, offer employment to or employ, any employee of Buyer or its Affiliates, unless such person has (a) ceased to be an employee of Buyer or its Affiliates for at least six (6) months prior to such time or (b) been terminated by Buyer or its Affiliates.

10.2 Modification. If a court of competent jurisdiction should declare a covenant contained in this Article 10 unenforceable because of any unreasonable restriction of activities, duration or geographical area, then the parties hereby acknowledge and agree that such court shall have the express authority to reform such covenant to provide for reasonable restrictions.

10.3 Exceptions. Notwithstanding the foregoing, nothing in this Article 10 shall preclude the Company, its Subsidiaries or their representatives from collecting, or causing the collection of, the Government Receivables.

ARTICLE 11
INDEMNIFICATION

11.1 Indemnification by the Company and its Subsidiaries. Subject to this Article 11, following the Closing, the Company and its Subsidiaries shall, jointly and severally, indemnify, defend, and hold harmless the Buyer Indemnified Parties from, against and with respect to, any and all Losses incurred by the Buyer Indemnified Parties, arising from, resulting from, or attributable to, any of the following:

11.1.1 Any breach of any representation or warranty of the Company contained herein;

11.1.2 Any breach or default by the Company of any covenant, obligation or undertaking on its part contained herein; or

11.1.3 Any Excluded Liabilities.

11.2 Indemnification by Parent. Subject to this Article 11, following the Closing, the Buyer Parties shall, jointly and severally, indemnify, defend and hold harmless the Seller Indemnified Parties from, against and with respect to, any and all Losses incurred by the Seller Indemnified Parties arising from, resulting from, or attributable to, any of the following:

11.2.1 Any breach of any representation or warranty of the Buyer Parties contained herein;

11.2.2 Any breach or default by a Buyer Party of any covenant, obligation or undertaking on its part contained herein; or

11.2.3 Any Assumed Liabilities.

11.3 Limitations.

11.3.1 The following survival periods shall apply to claims for indemnification pursuant to this Article 11.

(i) Any claim for indemnification pursuant to Sections 11.1.1 or 11.2.1 in respect of the General Representations must be made in writing within eighteen (18) months following the Closing Date.

(ii) Any claim for indemnification pursuant to Sections 11.1.1 or 11.2.1 in respect of the representations and warranties contained in Sections 5.1 (Organizational and Good Standing), 5.2.1 (Authorization), 5.2.2(a)(i) (No Breach of Organizational Documents), 5.7.1 (Assets), 5.20 (No Brokers), 6.1 (Organization and Good Standing), 6.2.1 (Authorization), 6.2.2(a)(i) (No Breach of Organizational Documents), 6.3 (Capitalization of Parent), 6.4 (Brokers and Investment Advisors) (together, the “Specified Representations”) must be made in writing within six (6) years following the Closing Date.

(iii) Any claim for indemnification pursuant to Section 11.1.1 in respect of the representations and warranties contained in Section 5.21 (Payment Programs) or 5.25 (HIPAA) (together, the “Health Care Representations”) must be made in writing within three (3) years following the Closing Date.

(iv) Any claim for indemnification pursuant to Sections 11.1.2 or 11.2.2 in respect of a covenant, obligation or undertaking must be made in writing during the period contemplated by the terms of such covenant, obligation or undertaking, or, with respect to pre-Closing covenants, within eighteen (18) months of the Closing Date.

(v) Any claim for indemnification pursuant to Sections 11.1.3 or 11.2.3 must be made in writing by the earlier of (i) sixty (60) days following the expiration of the applicable statute of limitations and (ii) six (6) years following the Closing Date.

11.3.2 Claims will survive through the period during which a claim may be asserted in accordance with Section 11.3.1 and, if a claim is so asserted, until final disposition of such claim. Any claim for indemnification timely asserted in accordance with Section 11.3.1 must specify in writing the particular event or item for which indemnification is sought and shall survive until resolved.

11.3.3 Notwithstanding anything contained in this Agreement to the contrary, the following monetary limitations shall apply to claims for indemnification pursuant to Section 11.1, subject to Section 11.5.

(i) The Company and its Subsidiaries will not have any liability (A) under Sections 11.1.1 or 11.1.2, until the total of all Losses in respect of which the Buyer Indemnified Parties would otherwise be entitled to indemnification under Sections 11.1.1 or 11.1.2 exceeds Five Hundred Thousand Dollars ($500,000.00) (“Basket”), and then only to the extent that such Losses exceed the Basket, or (B) with respect to any individual claim made pursuant to Section 11.1, unless the aggregate Losses arising from such individual claim exceed Fifty Thousand Dollars ($50,000.00) (the “Mini-Basket”); provided, that such limitations shall not apply in respect of claims based on intentional fraud with respect to the representations and warranties set forth in this Agreement.

(ii) The sole recourse of the Buyer Indemnified Parties for indemnification pursuant to Sections 11.1.1 (other than in respect of the Specified Representations) or 11.1.2 will be to the Escrow Fund; provided, that, from the Escrow Fund, the Company and its Subsidiaries will not have any liability under Section 11.1.1 in respect of the General Representations in excess of Seven Million Five Hundred Thousand Dollars ($7,500,000.00).

(iii) The cumulative indemnification obligations of the Company and its Subsidiaries (and, if Section 11.5 applies, the Shareholders) pursuant to Section 11.1 (the “Ultimate Cap”) shall not exceed Thirty Million Dollars ($30,000,000.00); provided, that the Ultimate Cap will be revised downward over time as follows: (A) one (1) year following the Closing Date, to an amount equal to Twenty Two Million Five Hundred Thousand Dollars ($22,500,000.00), (B) two (2) years following the Closing Date, to an amount equal to Fifteen Million Dollars ($15,000,000.00) and (C) three (3) years following the Closing Date, to an amount equal to Ten Million Dollars ($10,000,000.00).

11.3.4 Notwithstanding anything contained in this Agreement to the contrary, the following monetary limitations shall apply to claims for indemnification pursuant to Section 11.2.

(i) The Buyer will not have any liability (A) under Sections 11.2.1, until the total of all Losses in respect of which the Company Indemnified Parties would otherwise be entitled to indemnification under Sections 11.2.1 exceeds the Basket, and then only to the extent that such Losses exceed the Basket, or (B) with respect to any individual claim made pursuant to Section 11.2, unless the aggregate Losses arising from such individual claim exceed the Mini-Basket; provided, that such limitations shall not apply in respect of claims based on intentional fraud with respect to the representations and warranties set forth in this Agreement.

(ii) The Buyer and its Affiliates will not have any liability under Section 11.2 in excess of Twenty Million Dollars ($20,000,000.00); provided, that, the first Ten Million Dollars ($10,000,000.00) of such amount shall be payable in cash and the remaining Ten Million Dollars ($10,000,000.00) of such amount shall be payable in shares of Parent Common Stock (the “Indemnification Shares”).

11.4 Matters Involving Third Parties.

11.4.1 If any third party shall notify any party (the “Indemnified Party”) with respect to any matter (a “Third Party Claim”) which may give rise to a claim for indemnification against any other party (the “Indemnifying Party”) under this Article 11, then the Indemnified Party shall notify each Indemnifying Party thereof in writing within ten (10) days; provided, however, that no delay on the part of the Indemnified Party in notifying any Indemnifying Party shall relieve that Indemnifying Party from any obligation hereunder unless (and then solely to the extent) the Indemnifying Party thereby is prejudiced.

11.4.2 Any Indemnifying Party will have the right to defend the Indemnified Party against the Third Party Claim with counsel of its choice reasonably satisfactory to the Indemnified Party so long as (a) the Indemnifying Party notifies the Indemnified Party in writing within thirty (30) days after the Indemnified Party has given notice of the Third Party Claim that the Indemnifying Party elects to assume the defense thereof, (b) the Third Party Claim involves only money damages and does not seek an injunction or other equitable relief, (c) settlement of, or an adverse judgment with respect to, the Third Party Claim is not, in the good faith judgment of the Indemnified Party, likely to establish a precedential custom or practice materially adverse to the continuing business interests of the Indemnified Party, and (d) the Indemnifying Party conducts the defense of the Third Party Claim actively and diligently.

11.4.3 So long as the Indemnifying Party is conducting the defense of the Third Party Claim in accordance with Section 11.4.2: (a) the Indemnified Party may retain separate co-counsel at its sole cost and expense and participate in the defense of the Third Party Claim, (b) the Indemnified Party will not consent to the entry of any judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of the Indemnifying Party (not to be withheld unreasonably), and (c) the Indemnifying Party will not consent to the entry of any judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of the Indemnified Party (not to be withheld unreasonably) unless such settlement (i) is only for money damages, and (ii) does not admit fault on the party of the Indemnified Party.

11.4.4 In the event any of the conditions in Section 11.4.2 is or becomes unsatisfied, (a) the Indemnified Party may defend against, and, with the prior written consent of the Indemnifying Party (such consent, not to be unreasonably withheld, conditioned or delayed), consent to the entry of any judgment or enter into any settlement with respect to, the Third Party Claim, and (b) the Indemnifying Party will remain responsible for any Losses the Indemnified Party may suffer resulting from, arising out of, relating to, in the nature of, or caused by the Third Party Claim to the fullest extent provided in this Article 11.

11.4.5 The Indemnified Party and the Indemnifying Party shall cooperate with each other in all reasonable respects in connection with the defense of any Third Party Claim, including making available records relating to such Third Party Claim and furnishing to the defending party such management employees of the non-defending party as may be reasonably necessary for the preparation of the defense of such Third Party Claim.

11.4.6 No Indemnifying Party shall admit or permit to be admitted any fault, responsibility or liability on behalf of an Indemnified Party without such Indemnified Party’s consent, which consent may be granted or withheld at Indemnified Party’s sole discretion.

11.5 Payment. The Losses for which a Buyer Indemnified Party may make a claim for indemnification, up to the Ultimate Cap, pursuant to (a) Section 11.1.1 in respect of the Specified Representations, (b) Section 11.1.3 or (c) a claim based on intentional fraud with respect to the representations and warranties set forth in this Agreement, shall, subject to the following sentence, be settled solely from the amount of the Escrow Fund and thereafter from the forfeiture of shares of Parent Common Stock that are earned and paid over to the designee(s) of the Company pursuant to the RSUs (for the avoidance of doubt, even if such sources are less than the Ultimate Cap). To the extent the amount of such Losses exceeds the amount of the Escrow Fund and the Fair Market Value of the shares of Parent Common Stock that are earned and paid over to the designee(s) of the Company pursuant to the RSUs, each Shareholder shall, on a several basis, in accordance with such Shareholder’s Pro Rata Share, indemnify, defend and hold harmless the applicable Buyer Indemnified Party from and against the amount of any such excess indemnifiable Losses; provided, that the sole recourse of the applicable Buyer Indemnified Party against any such Shareholder shall be the forfeiture of shares of Parent Common Stock earned and paid over pursuant to the RSUs that have become held by such Shareholder (for the avoidance of doubt, even if the Fair Market Value thereof is less than the Ultimate Cap).

11.6 Insurance Proceeds. If the Indemnified Party receives insurance proceeds on a claim for which it has already received indemnity from the Indemnifying Party, the Indemnified Party shall as soon as reasonably practicable thereafter pay the amount of such insurance proceeds or other recoveries, as applicable, to the Indemnifying Party to the extent necessary to refund the indemnity provided by the Indemnifying Party.

11.7 Mitigation. Each Person entitled to indemnification pursuant to this Article 11 shall take reasonable steps to mitigate all Losses after becoming aware of any event which could reasonably be expected to give rise to any Losses that are indemnifiable or recoverable hereunder or in connection herewith.

11.8 Exclusive Remedies. Following the Closing, a claim pursuant to this Article 11 shall be an Indemnified Party’s sole and exclusive remedy with respect to (a) any violation or breach of any covenant, representation or warranty contained in this Agreement or (b) any other matters in respect of this Agreement or the transactions contemplated hereby, in each case, regardless of whether such claim arises in contract, tort, breach of warranty or any other legal or equitable theory; provided, however, that Section 4.3 shall govern disputes related to the final determination of the Net Working Capital Adjustment Amount, Section 4.7 shall govern disputes related to the final determination of the allocation of the purchase price (as determined for Tax purposes), the Company and its Subsidiaries shall be entitled to the rights and remedies set forth in the Power of Attorney, and the rights of specific performance shall be available to the extent provided in Section 13.14. In furtherance of the foregoing, each of the parties hereby waives, from and after the Closing, to the fullest extent permitted under applicable law, any and all other rights, claims and causes of action such party or any of its Affiliates may have against any other party or its Affiliates relating to this Agreement or the transactions contemplated hereby, whether arising in contract, tort, breach of warranty or any other legal or equitable theory. Notwithstanding anything to the contrary in this Agreement, subject to Section 11.5, each of the parties hereto retains all of its rights and remedies with respect to claims based on intentional fraud with respect to the representations and warranties set forth in this Agreement.

11.9 Characterization of Indemnity Payments. Any indemnification payments made pursuant to this Agreement shall be considered, to the extent permissible under applicable law, as adjustments to the purchase price for all Tax purposes.

ARTICLE 12
TERMINATION

12.1 Termination. This Agreement may be terminated at any time prior to the Closing:

12.1.1 by the mutual written agreement of the Company and Buyer;

12.1.2 by Buyer, if (i) there has been a violation or breach by the Company of any covenant, representation or warranty contained in this Agreement, which has prevented or would prevent the satisfaction of any of the Buyer Parties’ conditions precedent to Closing and (A) such violation or breach has not been waived by Buyer, (B) Buyer has provided written notice to the Company of such violation or breach, and (C) the Company has not cured such violation or breach within ten (10) Business Days after receiving written notice thereof from Buyer, or (ii) the transactions contemplated hereby have not been consummated by the date that is ninety (90) days following the date hereof (the “Outside Closing Date”); provided, however, Buyer shall not be entitled to terminate this Agreement pursuant to this Section 12.1.2(ii) if a Buyer Party’s breach of this Agreement has substantially contributed to the failure of the consummation of the transactions contemplated hereby to occur by the Outside Closing Date;

12.1.3 by the Company, if (i) there has been a violation or breach by a Buyer Party of any covenant, representation or warranty contained in this Agreement, which has prevented or would prevent the satisfaction of any of the Company’s conditions precedent to Closing and (A) such violation or breach has not been waived by the Company, (B) the Company has provided written notice to Buyer of such violation or breach, and (C) such Buyer Party has not cured such violation or breach within ten (10) Business Days after receiving written notice thereof from the Company, or (ii) the transactions contemplated hereby have not been consummated by the Outside Closing Date; provided, however, the Company shall not be entitled to terminate this Agreement pursuant to this Section 12.1.3(ii) if the Company’s breach of this Agreement has substantially contributed to the failure of the consummation of the transactions contemplated hereby to occur by the Outside Closing Date;

12.1.4 by the Company, if the condition to the Closing set forth in Section 7.5 shall not have been satisfied within seventeen (17) days following the date hereof; or

12.1.5 by Buyer or the Company, if any permanent injunction or other order of a Governmental Entity preventing the consummation of the transactions contemplated hereby shall have become final and nonappealable.

12.2 Effect of Termination. In the event of a valid termination pursuant to Section 12.1, all rights and obligations of the parties hereto shall terminate without any liability on the part of any of the parties hereto or their respective owners, directors, officers or employees, except that Sections 9.4 and 9.5, this Section 12.2 and Article 13 shall survive termination of this Agreement. Notwithstanding the foregoing, no such termination of this Agreement shall preclude any claim by a Buyer Party against the Company or by the Company against a Buyer Party based on or arising from any breach or default by the other party with respect to its representations, warranties, covenants or agreements contained in this Agreement; provided, that such breach or default, as applicable, has been the basis for such termination.

ARTICLE 13
MISCELLANEOUS

13.1 Notices. All notices, requests, demands and other communications required or permitted to be given or made under this Agreement shall be in writing and shall be deemed delivered (a) on the date of personal delivery or transmission by confirmed telegram or confirmed facsimile transmission, (b) on the third (3^rd) Business Day following the date of deposit in the United States mail, postage prepaid, by registered or certified mail, return receipt requested, (c) on the first (1^st) Business Day following the date of delivery to a nationally-recognized overnight courier service, or (d) by e-mail, upon acknowledgment of receipt, in each case addressed as follows, or to such other address, person or entity as either party shall designate by notice to the other in accordance herewith:

If to the Company,	c/o KRG Capital Partners, LLC
addressed to:	1800 Larimer Street #2200
	Denver, CO 80202
	Attention: Steven Neumann and Charles Gwirtsman
	Facsimile: (303) 390-5015
	E-mail: *@*;
	*@*

With a copy to:	Ropes & Gray LLP
	191 North Wacker Drive
	32nd Floor
	Chicago, IL 60606
	Attention: Gregory R. Metz
	Facsimile: (312) 845-5500
	E-mail: *@*

If to the Buyer Parties,	BioScrip, Inc.
addressed to:	1600 Broadway, Suite 950
	Denver, CO 80202
	Attention: General Counsel
	Facsimile: (312) 416- 4722
	E-mail: *@*

With a copy to:	Polsinelli PC
	100 South Fourth Street, Suite 1000
	St. Louis, MO 63102
	Attention: Jane Arnold
	Facsimile: (314) 754-9481
	E-mail: *@*

13.2 [Intentionally Omitted]

13.3 Waiver. The failure of any party to insist, in any one or more instances, on performance of any of the terms and conditions of this Agreement shall not be construed as a waiver or relinquishment of any rights granted hereunder or of the future performance of any such term, covenant or condition, but the obligations of the parties with respect thereto shall continue in full force and effect.

13.4 Third Parties. Except for the provisions of Article 11 (in respect of which the Indemnified Parties shall be express third party beneficiaries) and Section 13.17 (in respect of which the Non-Parties shall be express third party beneficiaries), none of the provisions of this Agreement shall confer rights or benefits as third party beneficiaries or otherwise upon any party that is not expressly a party to this Agreement, and the provisions of this Agreement shall not be enforceable by any such third party.

13.5 Severability. If any part of this Agreement should be determined to be invalid, unenforceable, or contrary to law, that part shall be amended, if possible, to conform to law, and if amendment is not possible, that part shall be deleted and other parts of this Agreement shall remain fully effective, but only if, and to the extent, such modification or deletion would not materially and adversely frustrate the parties’ essential objectives as expressed in this Agreement.

13.6 Amendment. This Agreement may be amended, supplemented, altered or modified at any time only by a written instrument duly executed by the Company and the Buyer Parties.

13.7 Counterparts. This Agreement may be executed simultaneously in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. The parties to this Agreement may deliver their executed counterparts by facsimile or other electronic means.

13.8 Headings. The headings contained in this Agreement have been inserted for the convenience of reference only and shall in no way restrict or modify any of the terms or provisions hereof.

13.9 Entire Agreement. This Agreement (including the schedules and exhibits hereto, and all other agreements and documents executed in connection herewith, including the Power of Attorney) constitutes the entire agreement among the parties hereto with respect to the subject hereof.

13.10 Assignment. All terms and provisions of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective successors and permitted assigns of the parties hereto, whether so expressed or not. No party hereto may assign (whether by operation of law or otherwise) this Agreement or any rights, interests or obligations provided by this Agreement without the prior written consent of the other parties hereto; provided, however, that Buyer may assign any or all of its rights and obligations under this Agreement to an Eligible Subsidiary; provided, further, that no such assignment shall release Buyer from any liability under this Agreement.

13.11 Governing Law; Jurisdiction. The parties specifically agree that this Agreement and any dispute hereunder, whether in law or in equity, whether in contract or in tort, by statute or otherwise, shall in all respects be interpreted, read construed and governed by the internal laws of the State of Delaware, exclusive of its conflicts of law rules. The parties hereby irrevocably consent to the exclusive jurisdiction of the Chancery Court of the State of Delaware (or, if the Chancery Court of the State of Delaware declines to accept jurisdiction over a particular matter, any state or federal court sitting in Delaware) and each party hereto expressly agrees to waive any challenge to either jurisdiction or venue in any of the aforementioned courts; provided, that each party hereto agrees that a final, non-appealable judgment in any action or proceeding so brought may be enforced in any court of competent jurisdiction by suit on the judgment or in any other manner provided by law. Each party hereto hereby consents to service of process in any such proceeding in any manner permitted by Delaware law, and agrees that service of process by registered or certified mail, return receipt requested, at its address specified pursuant to Section 13.1 is reasonably calculated to give actual notice. EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF SUCH PROCEEDING. EACH PARTY HERETO CERTIFIES AND ACKNOWLEDGES THAT: (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF SUCH PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) IT MAKES THIS WAIVER VOLUNTARILY AND (D) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 13.11.

13.12 Interpretation; Construction. Unless the context otherwise requires, words importing the singular shall include the plural, and vice versa. The use in this Agreement of the term “including” (whether or not followed by the words “without limitation” or “but not limited to”) means “including, without limitation”. The words “shall” and “will” shall be used interchangeably in this Agreement. The word “or” is not exclusive and shall mean “and/or” unless the context requires otherwise. The words “herein”, “hereof”, “hereunder”, “hereby”, “hereto”, and other words of similar import refer to this Agreement as a whole, including the Disclosure Schedule and exhibits, as the same may from time to time be amended, modified, supplemented or restated, and not to any particular article, section, subsection, paragraph, subparagraph or clause contained in this Agreement. All references to articles, sections, subsections, clauses, paragraphs, schedules and exhibits mean such provisions of this Agreement and the Disclosure Schedule, and exhibits attached to this Agreement, except where otherwise stated. For purposes of this Agreement, if the Company or a Person acting on its behalf has posted a document (a) to the online data room hosted on behalf of the Company and located at https://services.intralinks.com, (b) to the online data room hosted on behalf of the Company by Egnyte, or (c) to the Company’s online contract management site utilizing Meditract software at www.meditract.com, in each case, prior to 6:00 p.m. (New York City time) on the date prior to the date hereof, such document shall be deemed to have been “delivered”, “furnished”, “made available” or “provided” (or any similar formulation) to the Buyer Parties by the Company. The language used in this Agreement shall be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction shall be applied against any party hereto.

13.13 RSU Shares. For purposes of determining the number of earned and paid over shares of Parent Common Stock to be issued or forfeited pursuant to Article 11 in respect of any indemnifiable Losses, the amount of such Losses shall be divided by the Fair Market Value of the Parent Common Stock to be issued or forfeited, rounded to the nearest whole number. Notwithstanding anything to the contrary in this Agreement, the number of shares of Parent Common Stock to be paid over upon the satisfaction of any RSU criteria described in this Agreement shall be adjusted as may be equitably required to reflect any stock split, reverse stock split, recapitalization, reclassification, reorganization, exchange, subdivision or combination. Parent shall take such actions, including the re-cutting and cancellation of stock certificates, as are reasonably requested by the Company in order to effect the transfer of shares of Parent Common Stock paid over pursuant to the RSUs.

13.14 Specific Performance. The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement are not performed in accordance with their specific terms or are otherwise breached, and that money damages or legal remedies would not be an adequate remedy for any such damages. Therefore, it is accordingly agreed that each party hereto shall be entitled to an injunction or injunctions to prevent or restrain any breach or threatened breach of this Agreement by any other party hereto and to enforce specifically the terms and provisions of this Agreement to prevent breaches or threatened breaches of, or to enforce compliance with, the covenants and obligations of any other party hereto, and appropriate injunctive relief shall be granted in connection therewith. Any party hereto seeking an injunction, a decree or order of specific performance or other equitable remedy shall not be required to provide any bond or other security in connection therewith and any such remedy shall be in addition to and not in substitution for any other remedy to which such party is entitled at law or in equity. Each of the parties hereby waives any defenses in any action for specific performance, including the defense that a remedy at law would be adequate. Notwithstanding the foregoing, the remedies of injunctive relief and specific performance (or any other equitable remedy) will not be available to the Buyer Indemnified Parties after the Closing for the enforcement of any monetary obligation, it being the intent of the parties that the Buyer Indemnified Parties’ sole post-Closing remedies for the enforcement of monetary obligations will be those remedies set forth in Article 11.

13.15 Disclosure Schedules. Each Disclosure Schedule is hereby incorporated in and made a part of this Agreement as if set forth in full herein. Any matter or item disclosed on one Schedule of a Disclosure Schedule shall be deemed to have been disclosed on each other Schedule of such Disclosure Schedule in which it is reasonably apparent on the face of such disclosure that the information is required to be included. Disclosure of any item on any Schedule of a Disclosure Schedule shall not constitute an admission or indication that such item or matter is material or establish any standard of materiality. No disclosure on a Schedule of a Disclosure Schedule relating to a possible breach or violation of any Contract, law or order shall be construed as an admission or indication that a breach or violation exists or has actually occurred. The specification of any dollar amount or the inclusion of any item in a Disclosure Schedule is not intended to imply that the amounts, or higher or lower amounts, or the items so included, or other items, are or are not required to be disclosed (including whether such amounts or items are required to be disclosed as material or threatened) or are within or outside of the ordinary course of business, and no party will use the fact of the setting of the amounts or the fact of the inclusion of any item in such Disclosure Schedule in any dispute or controversy between the parties as to whether any obligation, item or matter not described or included in such Disclosure Schedule is or is not required to be disclosed (including whether the amount or items are required to be disclosed as material or threatened) or is within or outside of the ordinary course of business for purposes of this Agreement. Any capitalized terms used in any Schedule of a Disclosure Schedule or Exhibit but not otherwise defined therein shall be defined as set forth in this Agreement.

13.16 Legal Representation. Each of the Buyer Parties hereby agrees, on its own behalf and on behalf of its directors, members, partners, officers, employees and Affiliates, and each of their respective successors and assigns, including, following the Closing, the Company and the Company Subsidiaries (all such parties, the “Waiving Parties”), that Ropes & Gray LLP may represent the Company and the Company Subsidiaries or any or all of the Shareholders in connection with any dispute, Action, claim, or obligation arising out of or relating to this Agreement, and each of the Buyer Parties on behalf of itself and the Waiving Parties hereby consents thereto and irrevocably waives (and will not assert) any conflict of interest or any objection arising therefrom or relating thereto. Each of the Buyer Parties, for itself and the Waiving Parties, hereby irrevocably acknowledges and agrees that all communications between the Company, the Company Subsidiaries, the Shareholders and any of their respective Affiliates (the “Seller Group”) and their counsel, including Ropes & Gray LLP, made in connection with the negotiation, preparation, execution or delivery of this Agreement, any agreements contemplated by this Agreement or the transactions contemplated hereby, or any matter relating to any of the foregoing, are privileged communications, and none of the Buyer Parties or any of the Waiving Parties, nor any Person purporting to act on behalf of or through the Buyer Parties or any of the Waiving Parties, will seek to obtain the same by any process. From and after the Closing, each of the Buyer Parties, on behalf of itself and the Waiving Parties, waives and will not assert any attorney-client privilege with respect to any communication between Ropes & Gray LLP and the Company or the Company Subsidiaries or any other Person in the Seller Group made in connection with the negotiation, preparation, execution or delivery of this Agreement, any agreements contemplated by this Agreement or the transaction contemplated hereby, or any matter relating to any of the foregoing.

13.17 Non-Recourse. This Agreement may only be enforced against, and any Action that may be based upon, in respect of, arise under, out of or by reason of, be connected with, or relate in any manner to this Agreement, or the negotiation, execution, performance or breach (whether willful, intentional, unintentional or otherwise), of this Agreement, including any representation or warranty made or alleged to have been made in connection with, or as an inducement to, this Agreement (each of such above-described legal, equitable or other theories or sources of liability, a “Recourse Theory”) may only be made or asserted against (and are expressly limited to) the Persons that are expressly identified as the parties hereto in the preamble to and signature pages of this Agreement and solely in their capacities as such. No Person who is not a party hereto (including (a) any former, current or future direct or indirect equity holder, controlling Person, management company, incorporator, member, general or limited partner, manager, director, officer, employee, agent, Affiliate, attorney or representative of, and any financial advisor or lender to (all above-described Persons in this subclause (a), collectively, “Affiliated Persons”) a party hereto or any Affiliate of such party, and (b) any Affiliated Persons of such Affiliated Persons but specifically excluding the parties hereto (the Persons in subclauses (a) and (b), together with their respective successors, assigns, heirs, executors or administrators, collectively, but specifically excluding the parties hereto, “Non-Parties”)) shall have any liability whatsoever in respect of, based upon or arising out of any Recourse Theory. Without limiting the rights of any party hereto against the other parties hereto as set forth herein, in no event shall any party hereto, any of its Affiliates or any Person claiming by, through or on behalf of any of them institute any Action under any Recourse Theory against any Non-Party. Notwithstanding the foregoing, nothing in this Section 13.17 shall limit the rights of any Buyer Indemnified Party pursuant to Article 11, including its right to receive payment pursuant to Section 11.5.

13.18 Performance Guarantee. Subject to the prior satisfaction of any conditions set forth herein, Parent unconditionally and irrevocably agrees to take any and all actions necessary to cause Buyer and its permitted assignees to perform all of its covenants, agreements and obligations under this Agreement, including with respect to the consummation of the transactions contemplated hereby and the payment of the Purchase Price, indemnification and other obligations relating to or arising under Article 2, Article 3, Article 4, Article 9, Article 11, Article 12 and this Article 13, and Parent shall be liable for any breach by Buyer or its permitted assignees of any such covenant, agreement or obligation.

[Remainder of page reserved intentionally]

* * * * *

IN WITNESS WHEREOF, the parties have entered into this Agreement as of the date first written above.

PARENT:
BioScrip, Inc., a Delaware corporation

By:		/s/ Richard M. Smith
Printed Name:		Richard M. Smith
Its:		President and Chief Executive Officer

BUYER:
HomeChoice Partners, Inc., a Delaware corporation

By:		/s/ Richard M. Smith
Printed Name:		Richard M. Smith
Its:		President

Signature Page to the Asset Purchase Agreement

COMPANY:
HS Infusion Holdings, Inc., a Delaware corporation

By:		/s/ Daniel Greenleaf
Printed Name:		Daniel Greenleaf
Its:		Chairman and CEO

Signature Page to the Asset Purchase Agreement

COMPANY SUBSIDIARIES:
HS Infusion Intermediate Holdings, Inc., a Delaware corporation

By:		/s/ Daniel Greenleaf
Printed Name:		Daniel Greenleaf
Its:		Chairman and CEO

Home Solutions Holdings, LLC, a Delaware limited liability company

By:		/s/ Daniel Greenleaf
Printed Name:		Daniel Greenleaf
Its:		Chairman and CEO


Home Infusion Solutions, LLC, a Delaware limited liability company

By:		/s/ Daniel Greenleaf
Printed Name:		Daniel Greenleaf
Its:		Chairman and CEO

Home Infusion Solutions (NY), LLC, a New York limited liability company

By: Home Infusion Solutions, LLC, its sole member

By:		/s/ Daniel Greenleaf
Printed Name:		Daniel Greenleaf
Its:		Chairman and CEO

Best Healthcare Services, Inc., a New Jersey corporation

By:		/s/ Daniel Greenleaf
Printed Name:		Daniel Greenleaf
Its:		Chairman and CEO

Signature Page to the Asset Purchase Agreement