for the middle district of tennessee in re: ) mbh …

4827-8319-2506.4

IN THE UNITED STATES BANKRUPTCY COURT FOR THE MIDDLE DISTRICT OF TENNESSEE

IN RE: ) ) MBH HIGHLAND, LLC,1 )

) Case No. 3:20-bk-01940 Chapter 11

) Judge Charles M. Walker Debtor.

)

DECLARATION OF SCOTT SCHWIEGER

IN SUPPORT OF DEBTORS’ SALE MOTION

I, Scott Schwieger, do hereby declare as follows:

1. I am General Counsel and Chief Compliance Officer of Summit Behavioral

Healthcare, LLC (“Summit BHC”), a Delaware limited liability company, which owns and

operates nineteen (19) behavioral healthcare facilities across fourteen (14) states. Summit BHC

West Virginia, LLC, a West Virginia limited liability company, is a wholly owned subsidiary of

Summit BHC (“Summit WVa,” and together with Summit BHC, collectively, “Summit”).

2. As General Counsel and Chief Compliance Officer of Summit, I am authorized to

execute this Declaration on behalf of Summit. I submit this declaration in support of (a) Debtors’

Motion for Entry of Orders (A)(I) Establishing Bidding Procedures Relating to the Sale of Certain

of the Debtors’ Assets, Including Approving the Bid Protections; (II) Establishing Procedures

Relating to the Assumption and Assignment of Certain Executory Contracts and Unexpired Leases,

Including Notice of Proposed Cure Amounts; (III) Approving the Form and Manner of Notice

Relating Thereto; (IV) Scheduling a Hearing to Consider the Proposed Sale; and (V) Granting

Related Relief, and (B)(I) Approving the Sale of Certain of the Debtors’ Assets Free and Clear of

1 The Debtors’ “Affiliate Debtors” that are jointly administered within this case, are: MBH West Virginia, LLC, Case No. 3:20-bk-01939, and MBH Health Center, LLC, Case No. 3:20-bk-0194.

Case 3:20-bk-01940 Doc 92 Filed 04/27/20 Entered 04/27/20 18:58:00 Desc Main Document of 10

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All Liens, Claims, Encumbrances and Interests; (II) Authorizing the Assumption and Assignment

of Certain Executory Contracts and Unexpired Leases; and (III) Granting Related Relief [Dk. 25]

(the “Sale Motion”), and (b) Debtors’ Motion for Entry of an Order Authorizing the Debtors’

Assumption of the Management Agreement [Dk. 24] (the “Management Agreement Motion,” and

together with the Sale Motion, the “Motions”) .2

3. Debtors own and operate Highland Hospital, a 115-bed psychiatric hospital (the

“Facility”), and Highland Health Center, which is a 16-bed residential substance abuse treatment

facility (the “Health Center,” and together with the Facility, the “Business”), all of which is located

at 300 56th Street SE, Charleston, WV 25304 (the “Premises”).

4. Summit WVa and DSKT LLC, a Florida limited liability company, are collectively

the Stalking Horse Bidder for the Assets of Debtors, as set forth in the Sale Motion and the

Purchase Agreement (defined below) attached thereto as Exhibit 4, which include all or

substantially all the Debtors’ property used in the Business.

5. Summit WVa is also currently acting as the manager of the Business, pursuant to

the A&R Management Agreement (defined below) that is the subject of the Management

Agreement Motion.

6. I am familiar with and have personal knowledge of the contents of the Sale Motion,

Purchase Agreement, Management Agreement Motion, A&R Management Agreement, and the

Secured Repayment Agreement (defined below).

7. Without limiting the forgoing, all statements set forth in this Declaration are based

upon my personal knowledge, information learned from my review of relevant documents, from

information provided to me from other employees of Summit which I have reviewed in the

2 Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms as set forth in the Motions.


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ordinary course of my duties as General Counsel and Chief Compliance Officer, or my experience

and knowledge of Debtors’ and Summit’s respective operations and financial condition, unless

otherwise expressly stated. Where indicated, certain statements herein are based upon information

supplied to me by Debtors and other parties-in-interest in these Chapter 11 Cases.

8. Summit was contacted in January 2019 to be a potential new operator of the

Business after the Business had been experiencing declining financial performance and flagging

operations in the months prior.

9. After months of negotiation, Summit agreed to enter into an Asset Purchase

Agreement, dated May 1, 2019 (the “Original Purchase Agreement”), for the purchase of the

Business, which was conditioned on, among other things, completion of due diligence by Summit.

10. At that same time, Debtors and CHCT West Virginia, LLC (“CHCT WVa”), as

their landlord, asked Summit to manage the Facility while it was conducting its due diligence.

Summit agreed to do so and entered into that certain Management Agreement, dated May 1, 2019

(the “Original Management Agreement”), with Debtor MBH Highland, LLC (“Highland”),

pursuant to which Summit agreed to provide corporate management and oversight of the Facility

in areas such as facility leadership, accounting, financial reporting and planning, internal audit,

real estate development, ethics and compliance, and payroll and employee benefits, among others.

11. Because the Original Purchase Agreement did not contemplate a sale of the

Business as one authorized under section 363 of the Bankruptcy Code, Debtors and Summit WVa

terminated the Original Purchase Agreement and entered into a new Asset Purchase Agreement

dated March 26, 2020 (the “Purchase Agreement”). A true and correct copy of the Purchase

Agreement is attached hereto as Exhibit A and is the same Purchase Agreement attached as

Exhibit 4 to the Sale Motion.


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12. For the same reasons why the parties entered into the Purchase Agreement, Debtors

and Summit WVa also entered into an Amended and Restated Management Agreement, dated

March 26, 2020 (the “A&R Management Agreement,” and together with the Original Management

Agreement, the “Management Agreement”). A true and correct copy of the A&R Management

Agreement is attached hereto as Exhibit B and is the same A&R Management Agreement attached

as Exhibit 1 to the Management Agreement Motion.

13. Since Summit WVa has taken over management of the Business and as of March

30, 2020, the financial and operational performance have improved in the following categories:

a. The average daily census has increased by 15.10%;

b. The average monthly net revenues have increased by approximately $53,000, or 2.21% percent, despite a state Medicaid rate reduction and two state hospitals’ rate reduction by $192 per patient day in August 2019;

c. The operating expenses have been reduced per patient day by $152.90, or 16.46%;

d. The Business’s profit margin has improved by 7.49%, from -0.26% to 7.22%;

e. The average EDITDAM has increased by approximately $182,000 per month; and

f. Commencing in June 2019 and continuing to the date of the Sale Motion, Debtor Highland has been able to make lease payments to CHCT WVa in accordance with the Lease in the amount of $220,000 per month.

14. Since Summit WVa took over management of the Business, the value of the

Business has increased and the Business has become more marketable. Summit believes that since

Summit WVa has taken over management of the Business, the value of the Business has increased

by significantly more than the aggregate amount of the Bid Protections (defined below) and the

Liquidated Damages (defined below).


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15. Managing the Business was never a prerequisite or condition for Summit to execute

the Original Purchase Agreement or Purchase Agreement that is the subject of the Sale Motion.

Summit is not in the business of managing hospitals for third parties – the Business is the only

management contract that Summit has – and Summit was reluctant to take on that role, but Summit

agreed to manage the Business at the request of Debtors and CHCT WVa. Had Summit WVa not

been provided the opportunity to manage the Business, Summit WVa would still have conducted

its due diligence and determined whether it wished to enter into the Purchase Agreement. It is, of

course, possible, that if Summit had not managed the Business that Summit would not have agreed

to pay as much for the Assets as contemplated under the Purchase Agreement.

16. Summit specifically negotiated for the inclusion of the Break-Up Fee and the

Expense Reimbursement (collectively, the “Bid Protections”) in the Purchase Agreement as part

of the consideration to act as the Stalking Horse Bidder for the Assets. These Bid Protections are

among the critical terms and conditions under the Purchase Agreement from Summit WVa’s

perspective and are an integral part of its willingness to (i) enter into the Purchase Agreement, (ii)

serve as the Stalking Horse Bidder, (iii) manage the Business pursuant to the A&R Management

Agreement during the pendency of these Chapter 11 Cases, and (iv) continue managing the

Business pursuant to the A&R Management Agreement even if Summit WVa is not the Successful

Bidder to permit a smooth operational transition of the Business to the Successful Bidder. Both

the Break-Up Fee and the Expense Reimbursement were also specifically bargained for to

compensate Summit for its efforts in improving the value of the Assets, making them more

marketable to potential buyers, and exposing them to the market. Without these Bid Protections,

Summit WV’s agreement to serve as the Stalking Horse Bidder and to manage the Business for a

period of time even if it is not the Successful Bidder would deny Summit material benefits for


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which it bargained and would cause Summit to reconsider the efficacy of proceeding with the

contemplated transactions.

17. In addition to the foregoing and as additional consideration for the results of

Summit WVa’s management efforts under the Original Management Agreement and its agreement

to continue managing the Business during the pendency of these Chapter 11 Cases and for a period

of time after the Sale Hearing if the Assets are sold to another party, the A&R Management

Agreement provides Summit WVa with liquidated damages in the amount of Two Hundred and

Fifty Thousand Dollars ($250,000) (the “Liquidated Damages”).

18. The Liquidated Damages are intended to compensate Summit WVa if the A&R

Management Agreement is terminated because the Assets are sold to a Successful Bidder other

than to the Stalking Horse Bidder.

19. Under those circumstances, Summit WVa will continue to allocate its resources to

the Business by continuing to manage it while operations are transitioned to the Successful Bidder

in an orderly fashion. While Summit WVa will receive its Management Fee (as defined in the

A&R Management Agreement) for that additional period, the Management Fee will not fully

compensate Summit WVa for continuing to allocate manpower and other resources to a hospital

that Summit does not and will not own. Again, Summit is not in the business of managing hospitals

for third parties; it is in the business of owning and operating them. Therefore, if Summit WVa

were not the Successful Bidder, it would prefer to immediately reallocate all of its employees and

other resources to existing hospitals it owns and/or to other opportunities to acquire new facilities.

Summit WVa is, nevertheless, willing to accommodate Debtors’ request to continue managing the

Business for a limited period of time, which Summit is informed and believes will help Debtors

market the Business to potential competing bidders.


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20. In addition, as is set forth in the Sale Motion, if Summit WVa is the Successful

Bidder, it will assume the Lease between Debtor Highland and CHCT WVa, which will

simultaneously be amended and restated, and that certain Secured Repayment Agreement, dated

March 26, 2020 (the “Secured Repayment Agreement”) between Summit WVa and CHCT

Lending, LLC (“CHCT Lending,” and together with CHCT WVa, “CHCT”), which is an affiliate

of CHCT WVa, will become effective. A true and correct copy of the Secured Repayment

Agreement is attached hereto as Exhibit C. As set forth in the Sale Motion, CHCT Lending is

providing the financing for the Purchase Price under the Purchase Agreement. Pursuant to the

Secured Repayment Agreement, Summit WVa will repay some or all of that funding (which is

defined as the Repayment Amount in the Secured Repayment Agreement) from the revenues

generated from the Business, but will continue to receive a monthly Management Payment (as

defined in the Secured Repayment Agreement) from the net revenues equal to the greater of (a)

$75,000 or (b) three percent (3%) of the monthly net revenues. Summit WVa will be entitled to

receive the Management Payment until the Repayment Amount is paid in full or for eighteen (18)

months following the Closing Date of the Sale, whichever occurs first. If Summit WVa was to

receive the Management Payment for the full 18-month period, the aggregate total would be

$1,350,000.

21. If the Assets are sold to a Successful Bidder other than Summit WVa, then Summit

WVa will lose the opportunity to earn the Management Payment.

22. The Liquidated Damages are a reasonable estimate of the actual damages that

Summit WVa will suffer arising out of a sale of the Assets to a competing bidder, which in turn

would result in the termination of the A&R Management Agreement and the Secured Repayment

Agreement.


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23. Summit has no relation to CHCT other than the contractual relationship arising out

of the transactions contemplated and disclosed in the Sale Motion, the Purchase Agreement, and

the Secured Repayment Agreement. Summit does not have any common owners, directors,

officers, or employees with CHCT.

[Remainder of Page Intentionally Left Blank]


4827-8319-2506.4

CERTIFICATE OF SERVICE

The undersigned hereby certifies that the foregoing was filed and served via the Court’s

CM/ECF filing and noticing system this 27th day of April, 2020, to all parties registered to receive

electronic notices in this case.

/s/ David E. Lemke David E. Lemke


4827-8319-2506.4

EXHIBIT A

Purchase Agreement

See attached.

Case 3:20-bk-01940 Doc 92-1 Filed 04/27/20 Entered 04/27/20 18:58:00 Desc Exhibit A - Purchase Agreement Page 1 of 49

EXHIBIT 4

Purchase Agreement

See attached.

Case 3:20-bk-01940 Doc 25-4 Filed 03/31/20 Entered 03/31/20 20:11:00 Desc Exhibit 4 - Asset Purchase Agreement Page 1 of 48


4823‐4361‐3615

Execution Version

ASSET PURCHASE AGREEMENT

BY

AND

AMONG

MBH HIGHLAND, LLC

AND

MBH HEALTH CENTER, LLC,

AS SELLERS

AND

SUMMIT BHC WEST VIRGINIA, LLC

AND

DSKT LLC,

AS BUYER

Dated as of March 26, 2020



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List of Exhibits 1.1‐A Form of Bidding Procedures Order 1.1‐B Form of Sale Order 4.2(a) Form of Summit WVa Bill of Sale 4.2(b) Form of DSKT Bill of Sale 4.2(c) Form of Assignment and Assumption Agreement 8.17 Form of DACA 8.18 Form of DAISA 8.19 Form of Agency Agreement



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ii

List of Schedules 2.1(e) Assumed Contracts 3.2 Assumed Liabilities 5.2 Powers; Consents; Absence of Conflicts with Other Agreements, Etc. 5.4 Organizational Structure 5.5(b) Leased Real Property 5.5(c) Third Party Leases 5.6 Title to Personal Property 5.7 Pending Litigation or Proceedings 5.8 Regulatory Compliance 5.9 Federal Healthcare Program Participation 5.11 Tax Liabilities 5.12 Benefit Plans 8.5 Governmental Authorizations and Consents 8.7 Pre‐Closing Liabilities



4823‐4361‐3615

ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of March 26, 2020, by and among MBH Highland, LLC, a Delaware limited liability company (“MBH Highland”) and MBH Health Center, LLC a Delaware limited liability company (“MBH Center,” and together with MBH Highland, each, a “Seller” and collectively, “Sellers”), and Summit BHC West Virginia, LLC, a West Virginia limited liability company (“Summit WVa”) and DSKT LLC, a Florida limited liability company (“DSKT,” and together with Summit WVa, individually and collectively, “Buyer”).

W I T N E S S E T H:

WHEREAS, Sellers own and operate a psychiatric residential treatment facility located at 300 56th St SE, Charleston, WV 25304 known as Highland Hospital and a residential treatment and detoxification program known as Highland Health Center (each of the hospitals and treatment centers listed above is individually a “Facility” and collectively, the “Facilities”);

WHEREAS, Buyer desires to acquire certain assets of Sellers, and Sellers desire to sell such assets to Buyer, all as more fully set forth below, and Buyer and Sellers believe the consideration for such assets to be acquired by Buyer hereunder represents the fair value for such assets;

WHEREAS, substantially contemporaneously with the execution of this Agreement, Sellers intend to commence bankruptcy cases (the “Bankruptcy Cases”) under Chapter 11 of Title 11 of the United States Code (the “Bankruptcy Code”) by filing voluntary petitions for relief in the United States Bankruptcy Court for the Middle District of Tennessee (the “Bankruptcy Court”);

WHEREAS, contemporaneously with the commencement of the Bankruptcy Cases, Sellers will file the Sale Motion (as defined herein) whereby Sellers will seek approval of this Agreement from the Bankruptcy Court pursuant to all applicable provisions of the Bankruptcy Code, including, without limitation, Sections 363(b) and (f), and Section 365;

WHEREAS, Sellers and Summit WVa previously entered into that certain Asset Purchase Agreement, dated May 1, 2019 (the “Prior Agreement”); and

WHEREAS, the parties have terminated the Prior Agreement and intend for this Agreement to supersede the Prior Agreement in all respects.

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



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1. DEFINITIONS

1.1 Definitions. Capitalized terms used in this Agreement have the following meanings:

“Accounts Receivable” has the meaning set forth in Section 2.1(a).

“Affiliate” means as to the Person in question, any Person that directly or indirectly controls, is controlled by, or is under common control with the Person in question and any successors or assigns of such Persons; and the term “control” means possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person whether through ownership of voting securities, by contract or otherwise.

“Agency Agreement” has the meaning set forth in Section 8.19.

“Agency Settlements” has the meaning set forth in Section 2.1(j).

“Agreement” has the meaning set forth in the preamble to this Agreement.

“Assets” has the meaning set forth in Section 2.1.

“Assignment and Assumption Agreement” has the meaning set forth in Section 4.2(c).

“Assumed Contracts” has the meaning set forth in Section 2.1(e).

“Assumed Liabilities” has the meaning set forth in Section 3.2.

“Auction” means the competitive sale of the Assets conducted pursuant to the terms and conditions of the Bidding Procedures Order.

“Bank Accounts” has the meaning set forth in Section 5.13.

“Bankruptcy Cases” has the meaning set forth in the preamble to this Agreement.

“Bankruptcy Code” has the meaning set forth in the preamble to this Agreement.

“Bankruptcy Court” has the meaning set forth in the preamble to this Agreement.

“Benefit Plan” means “employee benefit plan,” as defined in Section 3(3) of ERISA, any benefit plan as defined in Section 6039D of the Code and the rules and regulations promulgated thereunder, and any other stock purchase, stock option, equity‐based, retention bonus, bonus, incentive compensation, deferred compensation, profit sharing, severance, change of control, supplemental unemployment, layoff, salary continuation, retirement, pension, health, life insurance, disability, group insurance, vacation, holiday, sick leave, fringe benefit, welfare and other employee benefit plan or employment (including severance and change in control) agreement, program, policy or other arrangement (whether formal or informal, oral or written,



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qualified or non‐qualified, and whether or not subject to ERISA), including any funding mechanism therefor or otherwise, under which any employee or former employee of Sellers, or any ERISA Affiliate has any present or future right to benefits or under which Sellers or any ERISA Affiliate has or may have any present or future liability.

“Bid Protections” means, collectively, the Break‐Up Fee and the Expense Reimbursement, which are payable to Summit WVa pursuant to Section 7.5 in the event a Person other than Buyer is deemed the Successful Bidder for the Assets.

“Bidding Procedures” means those certain procedures set forth on Exhibit 1 to the Bidding Procedures Order.

“Bidding Procedures Order” means an order of the Bankruptcy Court substantially in the form attached hereto as Exhibit 1.1‐A, which, among other things, (i) approves Summit WVa’s entitlement to the Bid Protections, (ii) authorizes and approves procedures of the Auction acceptable to Summit WVa, (iii) establishes a date by which Qualified Bids (as defined in the Bidding Procedures Order) meeting the requirements approved in the Bidding Procedures Order must be submitted, (iv) approves the form and manner of the notice of the Auction and sale of the Assets, (v) provides for the Auction to take place, if at all, no later than eighty (80) calendar days following the Petition Date, (vi) requires Sellers to provide copies of any Qualified Bid to Summit WVa promptly after receipt by Sellers or its representatives but in no event later than twenty‐four (24) hours after Sellers’ receipt of such Qualified Bid, and (vii) grants other related relief in form and substance acceptable to Summit WVa.

“Bills of Sale” has the meaning set forth in Section 4.2(b).

“Borrower Account” has the meaning set forth in the DIP Credit Agreement.

“Break‐Up Fee” means a fee equal to four and one‐half percent (4.5%) of the Purchase Price, which is payable to Summit WVa pursuant to Section 7.5 in the event a Person other than Buyer is deemed the Successful Bidder for the Assets.

“Budget” has the meaning set forth in the DIP Credit Agreement.

“Business” means collectively, the ownership and operation of the Facilities by (i) the Sellers prior to Closing, and (ii) Summit WVa after Closing.

“Buyer” has the meaning set forth in the preamble to this Agreement.

“Certificate of Need” means a written statement issued by the appropriate state agency evidencing community need for a new, converted, expanded or otherwise significantly modified health care facility or health service.

“CHCT” means collectively CHCT Services, Landlord, and CHCT Lending.



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“CHCT Lending” means CHCT Lending, LLC, a Delaware limited liability company.

“CHCT Mezz Collateral” means the Sellers’ assets that secure the CHCT Mezz Debt, including the Sellers’ permits, licenses, and contracts relating to the ownership, occupancy, use, operation, maintenance and administration of the Facilities, pursuant to that certain Assignment of Licenses, Permits, and Contracts, dated as of September 27, 2017.

“CHCT Mezz Debt” means the indebtedness owed from Sellers to CHCT Lending in the outstanding principal balance of $5,876,000, plus interest, fees and expenses, which is evidenced by that certain Mezzanine Loan Agreement, dated as of September 27, 2017, and that certain $5,000,000 Promissory Note, dated as of September 27, 2017, and which indebtedness is secured by the CHCT Mezz Collateral.

“CHCT Services” means Community Healthcare Trust Services, Inc., a Tennessee corporation.

“Closing” has the meaning set forth in Section 4.1.

“Closing Date” has the meaning set forth in Section 4.1.

“Closing Statement” has the meaning set forth in Section 3.1(a).

“COBRA” means Title I, Part 6, of ERISA.

“Code” means the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder.

“Company Collateral” means all of the Sellers’ assets, except the CHCT Mezz Collateral, including, without limitation, all of Sellers’ Accounts Receivable and the proceeds thereof, which secures Sellers’ obligations under the Company Note.

“Company Guaranty” means that Guaranty, dated as of December 5, 2016, which was executed by Sellers, together with other affiliated entities, pursuant to which they guaranteed MBHS’ obligations under the ServisFirst Loan Documents.

“Company Guaranty Debt” means the Sellers’ indebtedness under the Company Guaranty.

“Company Note” means that Promissory Note, dated as of March 19, 2020, in the original principal amount of $2,500,000, which the Sellers executed in favor of and delivered to ServisFirst in substitution and replacement of the Company Guaranty, and in return for which ServisFirst released Sellers from further liability under the Company Guaranty and Company Guaranty Debt, and which remains secured by the Company Security Agreement and Company Collateral.



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“Company Security Agreement” means that certain Security Agreement, dated as of December 5, 2017, pursuant to which Sellers granted ServisFirst a security interest in the Company Collateral to secure the Company Guaranty Debt and the Company Note.

“Confidential Information” has the meaning set forth in Section 12.2.

“Cost Report” means (i) the report that Medicaid‐certified institutional providers are required to submit to a governmental entity to achieve settlement of costs relating to health care services rendered to Medicaid beneficiaries and that contains provider information such as facility characteristics, utilization data, cost and charges by cost center (in total and for Medicaid), Medicaid settlement data, and financial statement data, and (ii) any similar report required to be submitted with respect to any other Federal Healthcare Program.

“Credit Bid” has the meaning set forth in Section 3.1(b).

“Credit Bid Agreement” means that certain Credit Bid Agreement dated as of the date hereof, by and between CHCT Lending and CHCT Services and Buyer, pursuant to which CHCT Lending and CHCT Services will authorize Buyer to make the Credit Bid, pursuant to Section 363(k) of the Bankruptcy Code, as consideration for some or all of the Purchase Price for the Assets as set forth herein.

“Cure Costs” means any and all amounts, or other payments for actual pecuniary loss or otherwise that are due to a non‐Seller party under an Assumed Contract (except with respect to the Lease Cure Amount due under the Lease Agreement), as determined by the Bankruptcy Court or otherwise agreed to by the parties, that must be paid in order to effectuate the assumption and assignment of any Assumed Contract to Buyer pursuant to Section 365 of the Bankruptcy Code.

“DACA” means a Deposit Account Control Agreement in the form attached hereto as Exhibit 8.17, to be entered into by Sellers, Buyer, and the applicable Depository Bank with respect to the applicable Bank Account, and which shall be executed on or before the Closing Date and in full force and effective as of the Effective Time.

“DAISA” means a Deposit Account Instructions and Service Agreement in the form attached hereto as Exhibit 8.18, to be entered into by Sellers, Buyer, and the applicable Depository Bank with respect to the applicable Bank Account, and which shall be executed on or before the Closing Date and in full force and effective as of the Effective Time.

“Depository Bank” has the meaning set forth in Section 5.13.

“DIP Credit Agreement” means that certain Debtor in Possession Revolving Credit and Security Agreement entered into between Sellers and CHCT Lending contemporaneously herewith, which memorializes the terms of the DIP Financing.



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“DIP Financing” means the debtor‐in‐possession financing that Sellers will seek approval to obtain from CHCT Lending in the principal amount of $3,650,000, pursuant to Section 364(d)(1) of the Bankruptcy Code, to fund payment of the Pre‐Closing Liabilities, including, without limitation, the IRS Debt and the Lease Cure Amount, to provide working capital to pay post‐petition operating expenses and administrative expenses arising out of the Bankruptcy Cases, and to pay Cure Costs.

“DSKT” has the meaning set forth in the preamble to this Agreement.

“Effective Time” has the meaning set forth in Section 4.1.

“Encumbrances” means security interests, mortgage liens, deeds of trust liens, trust liens, mechanics and materialmen’s liens, artisans’ liens, judicial liens, and any other type of lien as defined in the Bankruptcy Code, any charge or burden, or any other interest that can be asserted against real or personal property, whether tangible or intangible.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder.

“ERISA Affiliate” means (a) any related company, trade or business that is required to be aggregated with Sellers under Code Sections 414(b), (c), (m) or (o); (b) any other company, entity, trade or business that has adopted or has ever participated in any Benefit Plan related to Sellers; and (c) any predecessor or successor company, trade or business of Sellers.

“Excluded Assets” has the meaning set forth in Section 2.2.

“Excluded Contracts” has the meaning set forth in Section 2.2(i).

“Excluded Liabilities” has the meaning set forth in Section 3.3.

“Expense Reimbursement” means Summit WVa’s documented, out‐of‐pocket charges, costs, fees, payments and expenses (including, without limitation, all fees, expenses and disbursements of Summit WVa’s legal counsel and other advisors) paid or incurred by or on behalf of Summit WVa relating to or in connection with (i) the purchase of the Assets, including the transactions contemplated herein, and any documents or agreements related thereto, (ii) the negotiation, preparation, execution or performance of agreements relating to the purchase of the Assets, including this Agreement, and certain other documents or agreements related thereto, (iii) business, financial, legal, accounting, tax and other due diligence relating to the Assets, and (iv) the due diligence, analysis, negotiation, preparation or execution of any contracts or arrangements with any current or prospective brokers, customers, licensees, licensors, lessors, lessees, vendors, suppliers, agents or payees of Summit WVa.

“Facility” has the meaning set forth in the recitals of this Agreement.



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“Factoring Litigation Funds” means the funds that are the subject of the litigation pending in the United States District Court for the Southern District of West Virginia (Charleston), styled as: Branch Banking and Trust Company v. ServisFirst Bank, et al., Case No. 2:19‐cv‐00366.

“Federal Healthcare Programs” means the Medicare, Medicaid and TRICARE programs.

“Final Order” means an action taken or order issued by the applicable Governmental Authority as to which: (i) no request for stay of the action or order is pending, no such stay is in effect, and, if any deadline for filing any such request is designated by statute or regulation, it has passed, including any extensions thereof; (ii) no petition for rehearing or reconsideration of the action or order, or protest of any kind, is pending before the Governmental Authority and the time for filing any such petition or protest has passed; (iii) the Governmental Authority does not have the action or order under reconsideration or review on its own motion and the deadline for such reconsideration or review has passed, including any extension thereof; and (iv) the action or order is not then under judicial review, there is no notice of appeal or other application for judicial review pending, and the deadline for filing such notice of appeal has passed.

“Government Patient Receivables” means accounts receivable existing at the Effective Time arising from the rendering of services and the provision of medicines, drugs and supplies to patients and customers of the Business relating to Medicare, Medicaid, TRICARE and other third‐party patient claims of Sellers due from beneficiaries or governmental third‐party payors.

“Governmental Authority” means any nation or government, any state or other political subdivision thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including the Bankruptcy Court and any other governmental authority, bureau, agency, department, board, commission or instrumentality of the United States, any State of the United States or any political subdivision thereof, any contractor of such governmental or quasi‐governmental entity, and any tribunal or arbitrator(s) of competent jurisdiction, and any self‐regulatory organization.

“Governmental Authorization” means any approval, certificate of authority, Certificate of Need, accreditation, license, registration, permit, franchise, right, or other authorization issued, granted, given or otherwise made available by or under the authority of any Governmental Authority or pursuant to any law.

“Intellectual Property Assets” means all intellectual property rights (common law, statutory or otherwise), including patents (including all reissues, divisions, continuations and extensions), trademarks, service marks, trade names, copyrights, registrations and applications for any and all of the foregoing, internet domain names, formulae, algorithms, designs, inventions, methodologies, specifications, know‐how, trade secrets, computer software programs and code (both object and source), development tools and proprietary information,



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technologies and processes, and all documentation and media describing or relating to the above, in any format, whether hard copy or machine‐readable only.

“IRS Debt” means the indebtedness owed by MBH Highland to the Internal Revenue Service in the approximate amount of $1,350,000 for past due payroll taxes and related withholdings, and which indebtedness is the subject of tax liens filed by the Internal Revenue Service against MBH Highland’s assets.

“Knowledge” when referring to the Sellers’ ‘knowledge’ or any similar phrase or qualification based on knowledge, means the actual knowledge of any member of the Sellers’ senior management.

“Landlord” means CHCT West Virginia, LLC, a Delaware limited liability company, as landlord under the Lease Agreement.

“Law” means any federal, state, local, municipal, foreign, international, multinational or other constitution, law, ordinance, principal of common law, code, statute, rule, regulation or treaty.

“Lease Agreement” means that certain Lease Agreement dated as of September 27, 2017, between Landlord, as lessor, and MBH Highland, as lessee, pursuant to which Landlord leases the Leased Real Property to MBH Highland.

“Lease Cure Amount” means the unpaid and past due amounts owed by MBH Highland to Landlord under the Lease Agreement in the approximate amount of $1,450,000 and which must paid pursuant to Section 365(b)(1)(A) of the Bankruptcy Code if MBH Highland assumes the Lease Agreement pursuant to Section 365(a) of the Bankruptcy Code.

“Leased Real Property” has the meaning set forth in Section 5.5(b), including, without limitation, the property leased to Sellers pursuant to the Lease Agreement.

“Management Agreement” means that certain Management Agreement dated as of May 1, 2019, as amended and restated by that certain Amended and Restated Management Agreement dated as of March 26, 2020, pursuant to which Manager has agreed to provide certain corporate management and oversight services to Sellers.

“Manager” means Summit BHC West Virginia, LLC, in its capacity as Manager under the Management Agreement.

“Material Adverse Effect” means any event, occurrence, fact, condition, change or effect that (i) is, or is reasonably likely in the future to be, individually or in the aggregate, materially adverse to the business, operations, results of operations, condition (financial or otherwise), properties (including intangible properties), rights, obligations or assets of Sellers, or (ii) materially impairs or delays, or is reasonably likely to materially impair or delay, the ability of Sellers to consummate the transactions contemplated by this Agreement or to perform their



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obligations under this Agreement; provided, however, that any adverse change, development, effect, event or occurrence arising from or related to the following shall not be taken into account in determining whether a Material Adverse Effect has occurred (collectively, the “MAE Exceptions”): (i) any changes or conditions affecting economic or capital markets in the United States or internationally, or any change in interest rates or general economic conditions in the industries or markets in which Sellers operate; (ii) any national or international political or social conditions, including the engagement by the United States in hostilities, whether or not pursuant to the declaration of a national emergency or war, or the occurrence of any military or terrorist attack upon the United States, or any of its territories, possessions, or diplomatic or consular offices or upon any military installation, equipment or personnel of the United States; (iii) any changes in financial, banking or securities markets (including any disruption thereof and any decline in the price of any security or any market index); (iv) any changes in GAAP; (v) any change in any Law; or (vi) a breach by Manager of any provision of the Management Agreement, except to the extent that such change, development, effect, event or occurrence described in clauses (i) through (v), (A) disproportionately impacts the Business or the Assets as compared to the impact on others that engage in a business similar to the Business, (B) renders a material part of the Business illegal, or (C) renders Buyer unable to reasonably perform a material part of the Business; provided, further, that the MAE Exceptions shall not be taken into account in any respect in determining whether a Material Adverse Effect has occurred as a result of or in connection with the COVID‐19 pandemic.

“MBHS” means Meridian Behavioral Health Systems, LLC, which is the parent company of Sellers.

“Person” means any individual, corporation, company, body corporate, association, partnership, limited liability company, firm, joint venture, trust or Governmental Authority.

“Petition Date” means the date on which Sellers commence the Bankruptcy Cases by filing their voluntary petitions for relief under the Bankruptcy Code.

“Phase II Lease” means that certain Amended and Restated Lease Agreement to be executed by and between Landlord and Summit WVa at Closing relating to the Leased Real Property, and which will amend and restate the Lease Agreement in its entirety.

“Pre‐Closing Liabilities” has the meaning set forth in Section 8.7.

“Provider Agreements” has the meaning set forth in Section 5.9.

“Purchase Price” has the meaning set forth in Section 3.1.

“Real Estate Laws” means all applicable zoning and other land use and similar laws, codes, ordinances, rules, regulations and orders, including the Americans With Disabilities Act.



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“Repayment Agreement” means that certain Secured Repayment Agreement dated as of the date hereof, by and among CHCT Lending, CHCT Services and Buyer relating to repayment of the Repayment Amount (as defined therein).

“Sale Milestones” has the meaning set forth in Section 7.2.

“Sale Motion” means Sellers’ motion, together with appropriate supporting papers and notices, seeking entry of the Bidding Procedures Order and the Sale Order by the Bankruptcy Court, in form and substance acceptable to Summit WVa.

“Sale Order” means an order of the Bankruptcy Court substantially in the form attached hereto as Exhibit 1.1‐B (i) authorizing and approving the sale of the Assets to Buyer free and clear of all Encumbrances pursuant to Sections 363(b) and (f) of the Bankruptcy Code, on the terms and conditions contained in this Agreement, (ii) authorizing and approving the consummation of the transactions contemplated herein, (iii) approving the assumption and assignment of the Assumed Contracts pursuant to Section 365 of the Bankruptcy Code and on the terms and conditions contained in this Agreement, (iv) containing findings of fact and conclusions of law that (a) Buyer and any assignee thereof is a good faith purchaser entitled to the protections of Section 363(m) of the Bankruptcy Code, (b) the consideration to be paid by Buyer or any assignee thereof for the Assets is fair, reasonable and adequate, and (c) adequate assurance of future performance has been provided pursuant to Section 365 of the Bankruptcy Code with respect to Assumed Contracts, (v) finding that notice of the Auction and the hearing on the Sale Motion was good and sufficient, and (vi) granting other related relief in form and substance acceptable to Summit WVa.

“Seller(s)” has the meaning set forth in the preamble to this Agreement.

“ServisFirst” means ServisFirst Bank, an Alabama state bank. “ServisFirst Loan Documents” means that certain Loan Agreement, dated as of December 5, 2016, as amended by that certain First Amendment to Revolving Credit Note and Loan Agreement, dated as of July 20, 2017, as amended by that certain Second Amendment to Revolving Credit Note and Loan Agreement, dated as of December 5, 2017; that certain $2,300,000 Term Note, dated as of December 5, 2016; that certain $350,000 Revolving Credit Note, dated as of December 5, 2016, as amended by the certain First Amendment to Revolving Credit Note and Loan Agreement, dated as of July 20, 2017, which increased the principal indebtedness to $750,000, as amended by that certain Second Amendment to Revolving Credit Note and Loan Agreement, dated as of December 5, 2017, which increased the principal indebtedness to $1,750,000, as amended by that certain Extension Letter, dated as of November 21, 2018, pursuant to which MBHS is indebted to ServisFirst.

“Successful Bidder” has the meaning set forth in the Bidding Procedures Order.

“Summit WVa” has the meaning set forth in the preamble to this Agreement.



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“Tax Allocation” has the meaning set forth in Section 3.5.

“Tax Return” means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

“Taxes” means (i) any and all federal, state, local, foreign and other net income, gross income, gross receipts, sales, use, ad valorem, unclaimed property, transfer, franchise, profits, license, lease, rent, service, service use, withholding, payroll, employment, excise, severance, privilege, stamp, occupation, premium, property, windfall profits, alternative minimum, estimated, customs, duties or other taxes, fees, assessments or charges of any kind whatsoever, together with any interest and penalties, additions to tax or additional amounts with respect thereto, (ii) any liability for payment of amounts described in clause (i) as a result of successor or transferee liability or otherwise through operation of law, and (iii) any liability for the payment of amounts described in clauses (i) or (ii) as a result of any tax sharing, tax indemnity or tax allocation agreement or any other express or implied agreement to indemnify any other Person.

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

2. SALE OF ASSETS AND CERTAIN RELATED MATTERS

2.1 Sale and Transfer of the Assets. Subject to the terms and conditions of this Agreement, Sellers agree to sell, transfer, assign, convey and deliver to Buyer and Buyer agrees to purchase and acquire at Closing all assets, tangible and intangible, real, personal or mixed, other than the Excluded Assets (as defined below), owned or leased by Sellers or any Affiliate of Sellers and used in the Business, including the following items (collectively, the “Assets”):

(a) all accounts receivable (including, without limitation, patient accounts receivable and the Government Patient Receivables), notes receivable, allowance for bad debt, other prepaid expenses and prepaid insurance (collectively, the “Accounts Receivable”);

(b) all equipment, whether movable or attached, used in the Business, including vehicles, furniture, and furnishings, including those items identified on Schedule 2.1(b);

(c) all supplies and inventory;

(d) subject to applicable law, all current and historical financial, patient, medical staff and personnel records;

(e) all of Sellers’ right, title and interest in, to or under all commitments, contracts, leases, purchase orders and agreements identified on Schedule 2.1(e) (collectively, the “Assumed Contracts”); provided, however that at any time prior to three (3) business days



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before the scheduled date of the Auction, Buyer may, in its sole and absolute discretion, by written notice to Sellers, designate any of the Assumed Contracts as additional Excluded Contracts (as defined below) and except as otherwise provided herein, the liabilities of Sellers under or related to any such Assumed Contract which is subsequently excluded under this Section 2.1(e) will constitute Excluded Liabilities (as defined below). The exclusion of any Assumed Contract by Buyer pursuant to the foregoing shall not have any impact on the Purchase Price.

(f) to the extent assignable, and unless Buyer declines (in Buyer’s sole and absolute discretion) to assume such at Closing, all Governmental Authorizations and Medicaid and Medicare provider numbers held by Sellers relating to the ownership, development and operations of the Business;

(g) all claims, causes of action and judgments in favor of Sellers relating to the Business or the Assets, except for those claims, causes of action and judgments identified in Section 2.2(h);

(h) Sellers’ goodwill in respect of the Business;

(i) all “prepaid but not yet earned” revenue of Sellers;

(j) provided Summit WVa does not decline to assume Sellers’ provider numbers or Provider Agreements, all rights to settlements and retroactive adjustments, if any, for periods starting on or after the Effective Time arising under the terms of the Medicare program, the TRICARE program or the Medicaid program of any state, and against any third party payor programs which settle upon a basis other than an individual claims basis (“Agency Settlements”);

(k) Sellers’ right to use the names “Highland Hospital,” “Highland Behavioral Health Services,” and all variations thereof, all websites owned or controlled by the Business, all Sellers’ Intellectual Property Assets, and all of Sellers’ rights to use the Intellectual Property Assets of other Persons heretofore or currently used in the Business; and

(l) all deposits, prepaid expenses, prefunding liabilities or other assets of like nature at the time of Closing.

2.2 Excluded Assets. Notwithstanding anything herein to the contrary, the following assets that are associated with Sellers’ operations of the Business are not intended by the parties to be a part of the Assets and shall be excluded from such purchase and the definition of the Assets (collectively, the “Excluded Assets”):

(a) rights to Agency Settlements, if any, for periods ending on or prior to the Effective Time;



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(b) except for an amount equal to the “prepaid but not yet earned” revenue of Sellers, any and all cash and cash equivalents owned or held by Sellers (including certificates of deposit and checking and money market accounts);

(c) Sellers’ records books, minute books, tax records, and any records that by law Sellers are required to retain in their possession (copies of which shall be given to Summit WVa);

(d) all assets, rights and funds in connection with any Benefit Plan;

(e) all of Sellers’ rights to insurance proceeds relating to the operations of the Business prior to the Effective Time;

(f) [reserved];

(g) other assets of Sellers not specifically used in connection with, or the operation of, the Business;

(h) any claims, causes of action or judgments asserted or entered, or that may be asserted or entered, in that litigation currently pending in the United States District Court for the Southern District of West Virginia, styled: Branch Banking and Trust Company v. ServisFirst Bank, et. al, Case No. 2:19‐cv‐00366;

(i) the Factoring Litigation Funds; and

(j) all of Sellers’ right, title and interest in, to or under all commitments, contracts, leases, purchase orders and agreements outstanding in respect of the Business or that otherwise relate to the Assets other than the Assumed Contracts (collectively, the “Excluded Contracts”).

2.3 Interpretation. In this Agreement, unless the context otherwise requires:

(a) References to this Agreement are references to this Asset Purchase Agreement and to the Schedules and Exhibits hereto;

(b) References to Articles and Sections are references to the articles and sections of this Agreement;

(c) References to any party to this Agreement shall include references to its successors and permitted assigns;

(d) References to a judgment shall include references to any order, writ, injunction, decree, determination or award of any court or tribunal;



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(e) The terms “hereof,” “herein,” “hereby,” and any derivative or similar words will refer to this entire Agreement;

(f) References to any document (including this Agreement) are references to that document as amended, consolidated, supplemented, novated or replaced by the parties from time to time;

(g) References to any law are references to that law and all rules and regulations promulgated thereunder as of the date hereof and the Closing Date;

(h) The word “including” shall mean including, without limitation; and

(i) References to time are references to Central Standard or Daylight Time (as in effect on the applicable day) unless otherwise specified herein.

3. FINANCIAL ARRANGEMENTS 3.1 Purchase Price. (a) Subject to the terms and conditions hereof, in reliance upon the

representations, warranties, covenants and agreements of Sellers herein set forth and as consideration for the sale and purchase of the Assets as herein contemplated, Buyer shall pay a purchase price (the “Purchase Price”) of not less than Ten Million Dollars ($10,000,000.00) payable as set forth below and subject to such adjustments as provided herein or as otherwise described on the “Closing Statement” signed by Buyer and Sellers at Closing. The Closing Statement, if there shall be one, shall not modify, limit or expand the scope or content of any representation, warranty or covenant herein, but shall provide only for the expedient delivery of amounts to the Sellers and/or other Persons, as the parties may agree.

(b) The Purchase Price shall be payable as follows: (i) a credit bid, pursuant

to Section 363(k) of the Bankruptcy Code and the Credit Bid Agreement (the “Credit Bid”), of the CHCT Mezz Debt, the Company Note, and the DIP Financing (the “CHCT Secured Debt”), plus (ii) direct payment of the IRS Debt and the Lease Cure Amount to the extent the outstanding balance of the DIP Financing does not already include payment of such amounts prior to Closing, plus (iii) any Credit Bid Advance (as defined in the Credit Bid Agreement) that is made pursuant to the Credit Bid Agreement; provided, however, the parties hereto agree that, to the extent the Purchase Price is less than the aggregate balance of the CHCT Secured Debt, the remaining balance of the CHCT Secured Debt (the “CHCT Balance”) will remain secured by and payable solely from the Factoring Litigation Funds that are recovered by Sellers’ bankruptcy estates, without other recourse against Sellers or Sellers’ bankruptcy estates.

3.2 Assumed Liabilities. As of the Closing Date, Buyer shall assume and agree to pay, perform and discharge in accordance with the respective terms of each of (a) the obligations arising during and relating to the period after the Effective Time under the Assumed



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Contracts; and (b) those accounts payable of Sellers identified in (and in the amounts set forth on) Schedule 3.2. Notwithstanding anything set forth above to the contrary, Buyer shall not be liable for (i) any claims arising from Sellers’ assignment and Buyer’s assumption of the Assumed Liabilities, (ii) uncured defaults in performance of the Assumed Liabilities for periods prior to Closing; (iii) unpaid amounts in respect of the Assumed Liabilities that are past due as of Closing in accordance with the terms of the obligation and not accrued on the books of Sellers; or (iv) any Cure Costs to be paid with respect to Assumed Contracts.

3.3 Excluded Liabilities. Except as expressly provided to the contrary in Section 3.2 above, under no circumstance shall Buyer be obligated to pay or assume, and none of the Assets shall be or become liable for or subject to, any liability of Sellers or their Affiliates, including the following, whether fixed or contingent, recorded or unrecorded, known or unknown, and whether or not set forth on the Schedules hereto (collectively, the “Excluded Liabilities”):

(a) any obligation or liability accruing, arising out of, or relating to acts or omissions of any Seller in connection with the Assets or the operation of the Business prior to Closing;

(b) any obligation or liability accruing, arising out of, or relating to any act or

omission (or suspected or alleged act or omission) by Sellers, any of their Affiliates, or any of their respective medical staff, employees, agents, vendors or representatives before or after Closing;

(c) any obligation or liability accruing, arising out of, or relating to any breach of any Assumed Contract by Sellers or any of their Affiliates prior to Closing;

(d) any obligation or liability accruing, arising out of, or relating to any Excluded Contract;

(e) any long‐term indebtedness of Sellers, including capital lease obligations (including the current portion thereof);

(f) any indebtedness of Sellers for borrowed money, including indebtedness owed to a bank or other similar financial institution;

(g) any intercompany or related‐party indebtedness of Sellers;

(h) any liability or obligation for severance with respect to employees of Sellers or their Affiliates on or before the Closing;

(i) any obligation or liability accruing, arising out of, or relating to any federal, state or local investigations, claims or actions with respect to acts or omissions (or suspected or alleged acts or omissions) of Sellers, any of their Affiliates or any of their respective employees, medical staff, agents, or vendors prior to Closing;



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(j) any civil or criminal obligation or liability relating to the violation of Laws and which is accruing arising out of or relating to any acts or omissions of Sellers, any of their Affiliates or any of their respective directors, officers, employees and agents;

(k) any liability or claim resulting from the failure to obtain the consent of any third party to the assignment of any of the Assumed Contracts or otherwise resulting from the assignment or alleged assignment of any Assumed Contract at Closing, except to the extent that Summit WVa waives any closing condition with respect to any such consent;

(l) any liabilities or obligations of Sellers or any of their Affiliates of every kind and nature, known and unknown, arising under the terms of the Federal Healthcare Programs or any other third‐party payor programs or health insurers, in respect of, arising out of or as a result of (i) periods prior to and up to the Effective Time; (ii) the consummation of the transactions contemplated hereby; (iii) claims for overpayments or other excessive reimbursement or non‐covered services or any penalties or sanctions relating thereto; and (iv) any liability of Sellers under, arising prior to or relating to any period prior to the Effective Time from any risk pools and other risk sharing agreements established in connection with any managed care contract assumed by Buyer hereunder;

(m) any Taxes (i) of Sellers, (ii) arising or resulting from or in connection with Sellers’ ownership and/or operation of the Business and the Assets for taxable periods (or portions thereof) ending on or prior to the Closing Date, (iii) resulting from or payable in connection with the sale of the Assets pursuant to this Agreement and (iv) of Sellers that become a liability of Buyer or its Affiliates under any common law doctrine of de facto merger or mere continuation, or any transferee or successor liability or otherwise by operation of contract or Law;

(n) (i) any liability with respect to Sellers’ employees relating to periods prior to the Effective Time, including liability for (A) any compensation, paid time off, liability for any EEOC claim, wage and hour claim, unemployment compensation claim or workers’ compensation claim or personnel policy, including those relating to any termination of employment, and all employee wages and benefits, or (B) any payroll taxes; or (ii) any liability arising under the WARN Act, if applicable;

(o) liabilities for expenses incurred by Sellers incidental to the preparation of this Agreement, the preparation or delivery of materials or information requested by Buyer, or the consummation of the transactions contemplated hereby, including all broker, counsel and accounting fees or any account payable that is attributable to legal and accounting fees and similar costs incurred by Sellers that are directly related to the sale of any of the Assets;

(p) liabilities arising from or in connection with (i) any order of any Governmental Authority, (ii) the violation of any law or (iii) the violation of any integrity or compliance agreement of any Federal Healthcare Program, each of the foregoing involving



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Sellers and relating to or arising in connection with the Business or the use, operation, ownership or possession of the Assets prior to Closing;

(q) liabilities attributable to any of the Excluded Assets;

(r) except for the Assumed Contracts and any other Assumed Liabilities, all liabilities listed in the Schedules hereto;

(s) any Cure Costs to be paid with respect to Assumed Contracts;

(t) any liability for any Benefit Plan (including but not limited to the Pension Plan for Employees of Highland Hospital) or any other retirement, health, and/or welfare plans; and

(u) any other liability, fixed or contingent, known or unknown, relating to or arising out of the ownership, operation or use of the Business or the Assets prior to Closing.

3.4 Reserved. 3.5 Allocation of Purchase Price. The parties agree that Summit WVa shall prepare

an allocation of the Purchase Price (and all other capitalized costs) among the Assets in accordance with Section 1060 of the Code (and any similar provisions of state, local or foreign law, as appropriate) (“Tax Allocation”), which Tax Allocation shall be binding upon Sellers. Summit WVa shall deliver such Tax Allocation to Sellers within one hundred and eighty (180) days after the Closing Date. Each of Buyer and Sellers shall report, act and file all Tax Returns (including, but not limited to IRS Form 8594) in all respects and for all purposes consistent with such Tax Allocation prepared by Summit WVa. Sellers shall timely and properly prepare, execute, file and deliver all such documents, forms and other information as Summit WVa may reasonably request to prepare such Tax Allocation. Neither Buyer nor Sellers shall take any position (whether in audits, Tax Returns, or otherwise) that is inconsistent with such Tax Allocation, unless required to do so by applicable law.

3.6 Prorations and Utilities. To the extent not otherwise prorated pursuant to this Agreement, Buyer and Sellers shall prorate as of the Closing Date, any and all current real estate and personal property lease payments, charges against the Leased Real Property, power and utility charges and all other income and expenses that are normally prorated upon the sale of a going concern.

3.7 Tax Proration. Buyer and Sellers shall prorate as of the Closing Date any amounts with respect to property (i) ad valorem Taxes on the Assets and (ii) property Taxes on the Assets, including Taxes on the Leased Real Property. Payments for ad valorem property Taxes shall initially be determined based on the previous year’s Taxes and shall later be adjusted to reflect the current year’s Taxes when the Tax bills are finally rendered.



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4. CLOSING

4.1 Closing. The consummation of the sale and purchase of the Assets and the other transactions contemplated by and described in this Agreement (“Closing”) shall take place at the offices of Waller Lansden Dortch & Davis, LLP, 511 Union Street, Suite 2700, Nashville, Tennessee, or such other place as shall be mutually agreed upon in writing by the parties hereto, at 10:00 a.m. Central Time on the first business day of the month following the satisfaction or waiver by the appropriate party of all the conditions precedent to Closing specified in Articles 8 and 9 hereof, or on such later date as the parties hereto may mutually designate (the “Closing Date”). Closing shall be effective as of 12:00:01 a.m. on the Closing Date (the “Effective Time”).

4.2 Deliveries of Sellers at Closing. At Closing and unless otherwise waived in writing by Summit WVa, Sellers shall deliver to Buyer the following:

(a) a Quitclaim Bill of Sale (the “Summit WVa Bill of Sale”), fully executed by Sellers, transferring to Summit WVa good title to all tangible and intangible assets comprising the Assets, except for the Accounts Receivable, the form of which is attached hereto as Exhibit 4.2(a);

(b) a Quitclaim Bill of Sale (the “DSKT Bill of Sale,” and together with the Summit WVa Bill of Sale, the “Bills of Sale”), fully executed by Sellers, transferring to DSKT good title to the Accounts Receivable, the form of which is attached hereto as Exhibit 4.2(b);

(c) an Assignment and Assumption Agreement (the “Assignment and Assumption Agreement”), fully executed by Sellers, assigning to Summit WVa all of Sellers’ right, title and interest in, to and under the Assumed Contracts, the form of which is attached hereto as Exhibit 4.2(c);

(d) a copy of resolutions duly adopted by the board of directors or other authorized governing body of Sellers authorizing and approving the transactions contemplated hereby, Sellers’ performance of the transactions contemplated hereby and the execution, delivery and performance of this Agreement and the documents described herein to which Sellers are a party, certified as true and of full force as of Closing by an appropriate officer of Sellers;

(e) the signature and incumbency of the officers of Sellers authorized to execute and deliver this Agreement and the other agreements and documents that Sellers are required to deliver on or before the Closing Date pursuant to this Agreement, certified as true and accurate as of Closing by an appropriate officer of Sellers;

(f) a certificate of an officer of Sellers certifying that each covenant and agreement of Sellers to be performed prior to or as of Closing pursuant to this Agreement has



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been performed in all material respects and that each of the representations and warranties of Sellers set forth herein is true and correct as of the Closing Date;

(g) [reserved];

(h) [reserved];

(i) a limited power of attorney fully executed by Sellers giving Summit WVa the right, for a period not to exceed one hundred and twenty (120) days following Closing, to operate under the licenses and registrations of Sellers and the Facility relating to controlled substances and the operation of laboratories until Summit WVa is able to obtain its own such licenses and registrations;

(j) a certificate of insurance evidencing that all physicians and physician assistants who are, as of Closing, (i) providing services at the Facilities and (ii) covered by MBH Highland’s professional liability policy, are covered by an adequate tail insurance policy; provided, however, to the extent the cost of such tail insurace policy exceeds the amount set forth in the Budget for payment of the same and there is insufficient availability under the DIP Financing to pay such higher cost, Sellers shall not be required to deliver such certificate of insurance unless such additional costs are paid from some source other than Sellers; and

(k) such other instruments and documents as Summit WVa reasonably deems necessary to effect the transactions contemplated hereby.

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

(a) the Purchase Price (as set forth in Section 3.1), including an acknowledgement from CHCT evidencing a reduction in the balance of the CHCT Secured Debt (less any CHCT Balance which shall remain secured by and payable solely from the Factoring Litigation Funds), as applicable, to memorialize the final amount of the Credit Bid made by Buyer for the Assets;

(b) the Bills of Sale, fully executed by Summit WVa and DSKT, as appropriate;

(c) the Assignment and Assumption Agreement, fully executed by Summit WVa;

(d) copy of resolutions duly adopted by the board of directors or other authorized governing body of each of Summit WVa and DSKT, respectively, authorizing and approving the transactions contemplated hereby, their respective performance of the transactions contemplated hereby and the execution, delivery and performance of this Agreement and the documents described herein to which they are a party, certified as true and of full force as of Closing by an appropriate officer of each of Summit WVa and DSKT, respectively;



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(e) the signature and incumbency of the officers of each of Summit WVa and DSKT, respectively, authorized to execute and deliver this Agreement and the other agreements and documents that each of Summit WVa and DSKT are required to deliver on or before the Closing Date pursuant to this Agreement, certified as true and accurate as of Closing by an appropriate officer of each of Summit WVa and DSKT, as the case may be;

(f) a certificate of an authorized officer of each of Summit WVa and DSKT, respectively, certifying that each covenant and agreement of Summit WVa and DSKT, as the case may be, to be performed prior to or as of Closing pursuant to this Agreement has been performed in all material respects and that each of the representations and warranties of Summit WVa and DSKT set forth herein is true and correct as of the Closing Date;

(g) a certificate of existence and good standing of Summit WVa and DSKT from the Secretary of State of the State of West Virginia and Secretary of State of Florida, respectively, dated the most recent practical date prior to Closing; and

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

4.4 Reserved.

4.5 Additional Acts. From time to time after Closing, Sellers shall execute and deliver such other instruments of conveyance and transfer, and take such other actions as the other party may reasonably request, to convey and transfer more effective full right, title and interest to, to vest in, and to place Buyer in legal and actual possession of any and all of the Assets as contemplated by and in accordance with the terms of this Agreement.

5. REPRESENTATIONS AND WARRANTIES OF SELLERS

As of the date hereof, except as disclosed in the Schedules, Sellers, jointly and severally, represent and warrant to Buyer the following:

5.1 Capacity of Sellers. Each Seller is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware. Each Seller is duly qualified or licensed to transact business and is in good standing in all jurisdictions in which it conducts business. Each Seller has the requisite power and authority to enter into this Agreement, perform its obligations hereunder and to conduct its businesses as now being conducted. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary limited liability company action on the part of each Seller.

5.2 Powers; Consents; Absence of Conflicts with Other Agreements, Etc. The execution, delivery and performance of this Agreement and all other agreements referenced in or ancillary hereto by Sellers, and the consummation of the transactions contemplated herein by Sellers:



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(a) are within each Seller’s powers and are not in contravention of the terms of any of its governing documents or any amendments thereto;

(b) except for entry of the Bidding Procedures Order and Sale Order by the Bankruptcy Court and as set forth on Schedule 5.2, do not require any Seller to obtain any approval or consent of, or give notice to or make any filing with any Governmental Authority bearing on the validity of this Agreement that is required by law or the regulations of any such Governmental Authority;

(c) cause Buyer to become subject to, or become liable for the payment of, any Tax with respect to periods ending on or before the Closing Date or, to Sellers’ Knowledge, cause any of the Assets to be reassessed or revalued by any taxing authority or other Governmental Authority;

(d) will not violate any statute, law, rule or regulation of any Governmental Authority to which Sellers or the Assets may be subject; and

(e) will not violate any judgment of any court or Governmental Authority to which Sellers or the Assets may be subject.

5.3 Binding Agreement. Subject to entry of the Bidding Procedures Order, the Sale Order and satisfaction of the conditions set forth in this Agreement, including, without limitation, Article 9, this Agreement and all agreements contemplated by this Agreement to which Sellers are or shall become a party are and will constitute the valid and legally binding obligation of Sellers and will be enforceable against Sellers in accordance with the respective terms hereof or thereof.

5.4 Organizational Structure. All of the owners and managers of each Seller are identified on Schedule 5.4 hereto with their respective ownership percentages. Except as set forth on Schedule 5.4, there are no outstanding securities, options, warrants, calls, rights or agreements to which any Seller is a party obligating it to issue, deliver, sell or cause to be issued, delivered or sold capital stock or other voting securities. Except as set forth on Schedule 5.4, there are no outstanding contractual obligations of any Seller to repurchase, redeem or otherwise acquire any capital stock of any Seller. Sellers do not have any subsidiaries or any investment in any other entity.

5.5 Real Property.

(a) Sellers own no real property.

(b) A list and general description of the use of all real property leased by Sellers as lessee from any third parties under any oral or written lease or license (each, a “Lease”), together with the relevant address, term, rental rate, area leased and whether such leased property is subject to any Seller’s option to renew is contained on Schedule 5.5(b) hereto (the “Leased Real Property”). Sellers have a good and valid leasehold interest in all of



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the Leased Real Property, subject to the forbearance of Landlord of which Buyer is aware. There are no agreements or amendments, oral or written, pertaining to the Leased Real Property other than as set forth in the Leases referenced on Schedule 5.5(b). The Leased Real Property constitutes all of the real property used by Sellers in the operation of the Facility.

(c) A list and general description of the term of any third party leases by Sellers as landlord including the relevant address, term, rental rate and area leased is contained on Schedule 5.5(c).

(d) The Leased Real Property is in material compliance with all applicable Real Estate Laws, and Sellers have not received any written notice of violation from any Governmental Authority of any Real Estate Law on the use, occupancy, operation of the Leased Real Property. To Sellers’ Knowledge, Sellers have all easements, servitudes, and rights‐of‐way necessary for access to the Leased Real Property. To Sellers’ Knowledge, no portion of the Leased Real Property is located within a flood plain or constitutes an area classified as a protected wetland.

5.6 Title to Personal Property. At Closing, Sellers will convey to Buyer good and valid marketable title in personal property, tangible and intangible, constituting the Assets (including but not limited to the Intellectual Property Assets), free and clear of any liens, claims, Encumbrances, or other interests to the fullest extent permitted under the Bankruptcy Code, except as set forth on Schedule 5.6. Except for the Excluded Assets, the Assets conveyed at Closing by Sellers to Buyer constitute in all material respects all tangible and intangible assets necessary for the operation of the Business in accordance with past practice.

5.7 Litigation or Proceedings. Except as set forth on Schedule 5.7, (i) there are no claims, actions, suits, proceedings or investigations pending or, to Sellers’ Knowledge, threatened against or affecting Sellers with respect to the Business, at law or in equity, before or by any Governmental Authority wherever located and, to the Knowledge of Sellers, no basis for any such action exists, and (ii) no Seller knows of any facts on which claims may hereafter be made against Sellers or by Sellers against any Person.

5.8 Regulatory Compliance. Except as set forth on Schedule 5.8, Sellers have not received any written notice from any Governmental Authority that the Facilities or the Business is not in compliance in all material respects with all applicable laws and regulations. Except as set forth on Schedule 5.8, since September 27, 2017, Sellers have timely filed all reports, data and other information required to be filed under applicable laws and regulations. Except as set forth on Schedule 5.8, since September 27, 2017, Sellers and the Business have been and are in compliance in all material respects with all laws and regulations required to carry on the Business as currently conducted.

5.9 Federal Healthcare Program Participation. The Business is certified for participation in the Federal Healthcare Programs and Sellers have a provider agreement with each such Federal Healthcare Program (the “Provider Agreements”). Except as set forth on



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Schedule 5.9, the Business is in material compliance with the conditions of participation of the Federal Healthcare Programs and with the terms, conditions and provisions of the Provider Agreements. The Provider Agreements are each in full force and effect, and Sellers have no Knowledge of any fact or circumstance that would cause any such Provider Agreement will not to remain in force or be renewed on and after Closing. There is no proceeding, investigation or survey pending or, to Sellers’ Knowledge, threatened involving any of the Federal Healthcare Programs or any other third‐party payor programs with respect to the Business, and Sellers have no reason to believe that any such investigations or surveys are pending, threatened, or imminent.

5.10 Third‐Party Payor Cost Reports. Sellers have duly filed all required Cost Reports for the fiscal years ended December 31, 2017 and December 31, 2018, respectively.

5.11 Tax Liabilities. Except as expressly set forth on Schedule 5.11 hereto, Sellers have duly filed or caused to be filed, or shall duly file or cause to be filed, in a timely manner (taking into account all extensions of due dates) with the appropriate Governmental Authorities all Tax Returns (including information returns) that are required to be filed on or before the Closing Date by or on behalf of Sellers. All such Tax Returns are correct and complete in all material respects. Other than the Pre‐Closing Liabilities and except as expressly set forth on Schedule 5.11 hereto, all Taxes due and payable prior to the date hereof (or, as of the Closing Date, due and payable prior to the Closing Date), whether or not shown on any Tax Return filed or due prior to the Closing Date, have been paid in full, and all Taxes, whether or not shown on Sellers’ Tax Returns filed after the Closing Date will be paid in full within the time permitted under the Code or applicable laws. Except as expressly set forth on Schedule 5.11 hereto, there are no liens on any of the Assets with respect to Taxes. Other than the Pre‐Closing Liabilities, no deficiencies for Taxes have been claimed, proposed or assessed by any Governmental Authority with respect to the Assets or the Facilities, and there are no matters under discussion by Sellers with any Governmental Authorities with respect to Taxes relating to the Assets or the Facilities. Other than the Pre‐Closing Liabilities, there are no pending or threatened audits, investigations or claims for or relating to any liability in respect of Taxes with respect to the Assets and the Facilities. Other than with respect to the Pre‐Closing Liabilities, Sellers have withheld and timely paid all Taxes required to have been withheld and paid in connection with amounts paid to any employee, independent contractor, creditor, or other third party, and all IRS Forms W‐2 and 1099 required with respect thereto have been properly completed and timely filed. All Persons who have provided services to any Seller as independent contractors for Tax purposes were properly classified. All the representations and warranties contain in this Section 5.11 are subject to the matters disclosed on Schedule 5.11.

5.12 Benefit Plans. Except as set forth on Schedule 5.12, none of the Sellers, nor any ERISA Affiliate has maintained, contributed to, or otherwise had any liability with respect to a plan subject to Title IV of ERISA or Code Section 412, including any “multiemployer plan” as defined in Sections 3(37) and 4001(a)(3) of ERISA (each, a “Pension Plan”). There are no liens



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on any Assets with respect to ERISA, the Pension Plan and/or any other Benefit Plan. The Sellers make no further representations regarding the Pension Plan.

Except for a January 17, 2020 inquiry by the Pension Benefit Guaranty Corporation with respect to the Pension Plan, there is no action, audit, claim, investigation or government enforcement action pending or, to the Sellers’ Knowledge, threatened against the Sellers or any Affiliate thereof, the Benefit Plans or any of them, other than routine claims for benefits. Except for a January 17, 2020 inquiry by the Pension Benefit Guaranty Corporation with respect to the Pension Plan, there is no outstanding issue with reference to a Benefit Plan pending before any Governmental Authority. No Benefit Plan provides for, and no written or oral agreement has been entered into promising or guaranteeing, the continuation of medical, dental, vision, life or disability insurance coverage for any current or former employees of the Sellers or their beneficiaries for any period of time beyond termination of employment (except to the extent of coverage required under the Consolidated Omnibus Budget Reconciliation Act of 1985 or a similar state Law). No event has occurred, and no condition or circumstance exists, that could reasonably be expected to subject the Sellers or any Benefit Plans of Sellers to material penalties or excise taxes under (i) Sections 4980D, 4980H, or 4980I of the Code, or (ii) the Patient Protection and Affordable Care Act, Pub. L. No. 11‐148 (“PPACA”), the Healthcare and Education Reconciliation Act of 2010, Pub. L. No. 111‐152 (“HCERA”), and any regulations and guidance issued thereunder. With respect to each Benefit Plan, other than the Pension Plan, all contributions or payments (including all employer contributions, employee salary reduction contributions, and premium payments) that are due have been made within the time periods prescribed by the terms of each Benefit Plan, ERISA and the Code.

5.13. Bank Accounts. Set forth on Schedule 5.13 hereto is a list of all bank accounts maintained by Sellers and used in connection with the collection of the Accounts Receivable (collectively, the “Bank Accounts”), together with (i) the names of corresponding banks at which such Bank Accounts are held (each, a “Depository Bank”), (ii) the last four digits of the bank account numbers of the corresponding Bank Accounts, (iii) the names of the authorized signatories on each such Bank Account, and (iv) the names of the persons at Summit WVa who have authorized access to each such Bank Account. For the avoidance of doubt, the Borrower Account is not considered a Bank Account for purposes of this Section 5.13 and Section 10.8 of this Agreement.

5.14 Termination at Closing. The representations and warranties of Sellers contained in this Article 5 shall terminate at Closing and be of no further force and effect from and after the Effective Time.

6. REPRESENTATIONS AND WARRANTIES OF BUYER

As of the date hereof, except as disclosed in the Schedules, Buyer represents and warrants to Sellers as follows:



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6.1 Authority of Buyer. Summit WVa is a limited liability company duly organized, validly existing and in good standing under the laws of the State of West Virginia. DSKT is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Florida. Each Buyer has the requisite limited liability company power and authority to enter into this Agreement, perform its obligations hereunder and to conduct its businesses as now being conducted. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary limited liability action on the part of each respective Buyer.

6.2 Binding Agreement. Subject to entry of the Bidding Procedures Order, the Sale Order and satisfaction of the conditions set forth in this Agreement, including, without limitation, Sections 7.1(a) and 7.2, and Article 8, this Agreement and the other agreements contemplated by this Agreement to which Buyer is a party (i) have been or will be duly executed by Buyer, (ii) are and will constitute the valid and legally binding obligation of Buyer, and (iii) are and will be enforceable against Buyer in accordance with the respective terms hereof or thereof upon entry of the Sale Order as a Final Order.

6.3 Litigation. There is no claim, action, suit, proceeding or investigation pending or, to the knowledge of Buyer, threatened against or affecting Buyer that has or would reasonably be expected to have a material adverse effect on Buyer’s ability to perform this Agreement or any aspect of the transactions contemplated hereby.

6.4 Termination at Closing. The representations and warranties of Buyer contained in this Article 6 shall terminate at Closing and be of no further force and effect from and after the Effective Time.

7. BANKRUPTCY MATTERS

7.1 Bankruptcy Court Approval.

(a) Sellers’ and Buyer’s obligations under this Agreement are subject to the Bankruptcy Court having entered the Bidding Procedures Order and the Sale Order, with both such orders becoming Final Orders; provided, however, if the Bidding Procedures Order or the Sale Order is appealed, Sellers shall use their best efforts to defend such appeal; provided further, that Summit WVa may, in its sole and absolute discretion, elect to proceed with the transactions contemplated herein, including closing the sale, to the extent the effectiveness of the Bidding Procedures Order and the Sale Order are not stayed pursuant to Bankruptcy Rule 6004 or otherwise, which election shall also be binding on Sellers and DSKT.

(b) In the event an appeal is taken or a stay pending appeal is granted from either the Bidding Procedures Order or the Sale Order, Sellers shall immediately notify Buyer of such appeal or stay order and shall promptly provide Buyer a copy of the related notice of appeal or order of stay, and any motion or application filed in connection with any appeal from either such order.



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7.2 Sale Milestones. The following events shall occur by the dates set forth below (collectively, the “Sale Milestones”), unless waived by Summit WVa in each instance in its sole and absolute discretion:

(a) Sellers shall file the Sale Motion within five (5) business days of the Petition Date;

(b) The Bidding Procedures Order shall be entered by the Bankruptcy Court within thirty‐five (35) days of the Petition Date, and such order shall become a Final Order within fifty (50) days of the Petition Date;

(c) Sellers shall file a motion with the Bankruptcy Court within one (1) business day of the Petition Date seeking authority to retain Summit WVa as the management company for the Business pursuant to the terms and conditions contained in the Management Agreement;

(d) The Bankruptcy Court shall have entered an order in the Bankruptcy Cases approving the motion referenced in subsection 7.2(c), and such order shall become a Final Order within thirty‐five (35) days of the Petition Date;

(e) Sellers shall file a motion with the Bankruptcy Court within one (1) business day of the Petition Date seeking (i) authority to use cash collateral in accordance with the Budget, and (ii) to obtain the DIP Financing on terms and conditions acceptable to CHCT and Summit WVa and that are consistent with, and will permit Buyer to consummate, the transactions contemplated in this Agreement;

(f) The Bankruptcy Court shall have entered an order in the Bankruptcy Cases approving the motion referenced in subsection 7.2(e) on an interim basis within five (5) days of the Petition Date, and such order shall have been entered by the Bankruptcy Court on a final basis within thirty‐five (35) days of the Petition Date and shall become a Final Order within fifty (50) days of the Petition Date;

(g) Sellers shall file a motion with the Bankruptcy Court within sixty (60) days of the Petition Date to assign the Lease Agreement to Buyer, with the Lease Cure Amount to be paid at Closing and the Lease Agreement to be amended and restated by the Phase II Lease;

(h) Sellers shall have conducted the Auction within seventy‐four (74) days of the Petition Date;

(i) The Sale Order shall be entered by the Bankruptcy Court within seventy‐five (75) days of the Petition Date, and such Sale Order shall become a Final Order within eighty‐nine (89) days of the Petition Date; and

(j) The Closing shall have occurred within ninety (90) days of the Petition Date.

7.3 Assumption and Assignment of Assumed Contracts. Sellers shall take such action as is reasonably necessary or appropriate to effectuate the assignment of the Assumed



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Contracts to Buyer as contemplated herein, including, without limitation, satisfying any and all Cure Costs (with the exception of the Lease Cure Amount, which shall be paid as part of the Purchase Price in accordance with Section 3.1(b) of this Agreement), executing lease assignment agreements and other assignments or other documents; and providing required or appropriate notices, in each case in form and substance acceptable to Summit WVa;

7.4 Purchased Assets Subject to Further Bidding. Buyer understands and agrees that Sellers will be debtors in possession in the Bankruptcy Cases and will conduct the sale process and Auction as directed by the Bankruptcy Court and in accordance with the procedures set forth in the Bidding Procedures Order, and that the Purchase Price set forth in this Agreement shall be used as the initial bid for the Assets (such initial bid, the “Stalking Horse Bid”). Buyer shall be entitled, but not required, to participate in the Auction and bid beyond the Stalking Horse Bid pursuant to this Agreement, the Bidding Procedures Order, and the Credit Bid Agreement.

7.5 Bid Protections. Notwithstanding anything in this Agreement to the contrary, subject to entry of the Bidding Procedures Order, if Buyer is not the Successful Bidder for the Assets, Sellers agree to pay Summit WVa the Bid Protections as set forth in the Bidding Procedures, which are attached as Exhibit 1 to the Bidding Procedures Order.

7.6 Other Bankruptcy Covenants. From and after the date hereof, Sellers agree, represent, and warrant as follows:

(a) If Buyer is the Successful Bidder for the Assets, Sellers shall not take any action that is intended to or does result in, or fail to take any action the intent of which failure to act would or does result in, the reversal, voiding, modification or staying of the Bidding Procedures Order or the Sale Order.

(b) In the case of licenses, permits, approvals, authorizations, Leases, contracts, agreements and other commitments included in the Assets (i) that cannot be transferred or assigned effectively without the consent of third parties, which consent has not been obtained prior to the Closing (after giving effect to the Sale Order and the Bankruptcy Code), Sellers shall, subject to any approval of the Bankruptcy Court that may be required, reasonably cooperate with Buyer in endeavoring to obtain such consent and, if any such consent is not obtained, Sellers shall, following the Closing, and subject to any approval of the Bankruptcy Court that may be required, cooperate with Buyer in all reasonable respects, at reasonable cost to Sellers, to provide Buyer the benefits thereof in some other manner, including sub‐licensing to Buyer or any other way allowing Buyer to use the relevant licenses, certificates, approvals, authorizations, Leases, contracts, agreements and other commitments for the period necessary to conduct the Business pertaining to the Assets in the ordinary course of business, or (ii) that are otherwise not transferable or assignable (after giving effect to the Sale Order and the Bankruptcy Code), Sellers shall, following the Closing, and subject to any approval of the Bankruptcy Court that may be required, reasonably cooperate with Buyer to provide Buyer the benefits thereof in some other manner, including the exercise of the



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rights of the Seller thereunder or sub‐licensing to Buyer or any other way allowing Buyer to use the relevant licenses, certificates, approvals, authorizations, Leases, contracts, agreements and other commitments for the period necessary to conduct the Business pertaining to the Assets in the ordinary course of business.

8. CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER

The obligations of Buyer hereunder are subject to the satisfaction, fulfillment or performance on or prior to the Closing Date of the following conditions unless waived in writing by Buyer:

8.1 Sellers’ Deliverables. Sellers shall have delivered to Buyer the agreements, documents and other items described in Section 4.2.

8.2 Compliance with Agreement. Each of the terms, covenants, agreements and conditions of this Agreement to be complied with or performed by Sellers on or before the Closing Date pursuant to the terms hereof shall have been duly complied with and performed in all material respects.

8.3 Representations and Warranties. Each of the representations and warranties by Sellers set forth in Article 5 hereof shall be true and correct in all material respects on the Closing Date.

8.4 Action/Proceeding. No action or proceeding before a court or any other Governmental Authority shall have been instituted or threatened to restrain or prohibit the transactions contemplated herein.

8.5 Consents and Approvals. Buyer shall have received all material Governmental Authorizations and consents from all third parties with respect to the material Assumed Contracts as set forth on Schedule 8.5 hereto.

8.6 Healthcare Approval.

(a) Summit WVa shall have received, in form and substance reasonably satisfactory to Summit WVa, an agreement from the West Virginia Health Care Authority and any relevant State of West Virginia licensing bodies and payors (“WVHCA”) that WVHCA (i) will accept Summit WVa into the West Virginia Medicaid Program regardless of Summit WVa’s enrollment status with the Medicare program and (ii) will not seek to recover, offset, or recoup from Summit WVa, the Assets or any Government Patient Receivables or any liabilities or claims WVHCA has as of the Closing Date or in the future against Sellers, including, without limitation, any liabilities arising out of, or related to, Sellers’ participation in the Federal Healthcare Programs.

(b) The Sale Order shall contain a provision, in form and substance satisfactory to Summit WVa in its sole discretion, that the Sellers’ Medicare Provider Agreement and related



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Provider number can and will be transferred and assigned to Summit WVa at Closing, free and clear of any and all liens, claims, liabilities, encumbrances and rights of setoff or recoupment which the Centers for Medicare and Medicaid Services has as of the Closing Date or in the future against Sellers arising out of, or related to, Sellers’ participation in the Federal Healthcare Programs; provided, however, Buyer shall not be permitted to terminate this Agreement for failure to satisfy this condition and Buyer’s sole remedy will be for Summit WVa to elect not to assume Sellers’ Medicare Provider Agreement and related Provider number.

8.7 Satisfaction of Certain Liabilities. The liabilities identified on Schedule 8.7 hereto (collectively, the “Pre‐Closing Liabilities”) shall have been satisfied in full at Closing from (i) operating revenues or (ii) funds loaned by CHCT Lending (A) as part of the DIP Financing, or (B) to Buyer, as contemplated in Section 3.1(b) of this Agreement, to satisfy such Pre‐Closing Liabilities so that all of the Assets will be transferred to Buyer at Closing free and clear of all liens and Encumbrances and without any assumption of such Pre‐Closing Liabilities by Buyer other than as expressly agreed by Summit WVa under the terms of this Agreement.

8.8 Absence of Certain Changes. During the period from the date of this Agreement, through the Closing, there shall not have been a Material Adverse Effect.

8.9 Releases. All Encumbrances currently encumbering the Assets shall have been duly released by the secured parties and other lien holders, and UCC‐3 amendments or termination statements and other lien discharging documents shall have been properly recorded or the recording thereof shall have been duly arranged pursuant to the relevant secured party’s written authorization allowing Buyer and/or Sellers to file such lien‐discharging documents without the secured party’s signature.

8.10 Closing Documents. Sellers shall have executed and delivered to Buyer all other documents, agreements and certificates required to be executed or delivered by each of them pursuant to any term or provision of this Agreement.

8.11 Certificate of Need Exemption. Sellers shall have (a) filed with the WVHCA a notification of exemption of the transactions contemplated herein from Certificate of Need pursuant to any applicable exemptions under W.Va Code § 16‐2D‐11 (“CON Exemption”) and (b) received notification of approval from WVHCA of the CON Exemption.

8.12 Governmental Authorizations. Buyer shall have obtained all Governmental Authorizations that are necessary or required for completion of the transactions contemplated herein, including reasonable assurances that any Governmental Authorization not actually issued as of the Closing will be issued following Closing (which may include oral assurances from appropriate governmental agencies or bodies).

8.13 Assignment of Lease Agreement. The Lease Agreement shall have been assumed and assigned by Sellers to Summit WVa, as amended and restated by the Phase II Lease, which shall have been fully executed by all parties thereto on or before the Closing Date.



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8.14 Management Agreement Remains in Effect. The Management Agreement shall not have been breached by Sellers or terminated prior to the Closing Date.

8.15 Credit Bid Agreement. On or before the Petition Date, the Credit Bid Agreement shall have been fully executed by all parties thereto and shall remain in full force and effect as of the Closing.

8.16 Repayment Agreement. On or before the Petition Date, the Repayment Agreement shall be fully executed and delivered by all parties thereto, which shall be in form and substance acceptable to Summit WVa and in full force and effect as of the date hereof.

8.17 DACA. On or before the Closing Date, Sellers shall have executed and delivered to DSKT a DACA substantially in the form attached hereto as Exhibit 8.17, which shall be in full force and effect as of the date hereof.

8.18 DAISA. On or before the Closing Date, Sellers shall have executed and delivered to DSKT a DAISA substantially in the form attached hereto as Exhibit 8.18, which shall be in full force and effect as of the date hereof.

8.19 Agency Agreement. On or before the Closing Date, Sellers shall have executed and delivered to Buyer, substantially in the form attached hereto as Exhibit 8.19, that certain Agency Agreement, by and among Sellers and Buyer (the “Agency Agreement”), whereby Sellers have granted to DSKT the sole and exclusive authority to (i) collect the Accounts Receivable for the benefit of Sellers, with all proceeds being deposited into the Bank Accounts associated with the collection of the Accounts Receivable, (ii) access and withdraw all funds in the Bank Accounts associated with the collection of the Accounts Receivable, and (iii) authorize Summit WVa to collect the Accounts Receivable for the benefit of DSKT and Landlord, and which shall be in full force and effect as of the date hereof.

8.20 Assumption and Assignment. In addition to the Lease Agreement, the Bankruptcy Court shall have approved and authorized the assumption and assignment of each Assumed Contract, free and clear of all Encumbrances, Pre‐Closing Liabilities or obligations of any kind.

8.21 Sale Milestones. The satisfaction or occurrence of the Sale Milestones shall have occurred in accordance with the dates set forth in the definition of Sale Milestones set forth in Section 7.2.

8.22 Bankruptcy Court Approval. The Bidding Procedures Order and the Sale Order shall have been entered by the Bankruptcy Court, and both such orders shall have become Final Orders.

The conditions set forth in this Article 8 are for the sole benefit of Buyer, and may be waived in whole or in part by Buyer by notice to Sellers in writing without prejudice to Buyer’s



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rights under this Agreement or at law, if any, in the event of the non‐fulfillment of any other condition or conditions.

9. CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLERS

The obligations of Sellers hereunder are, at the option of Sellers, subject to the satisfaction, on or prior to the Closing Date, of the following conditions unless waived in writing by Sellers:

9.1 Buyer’s Deliverables. Buyer shall have delivered to Sellers the agreements, documents and other items described in Section 4.3.

9.2 Compliance with Agreement. Each and all of the terms, covenants, agreements and conditions of this Agreement to be complied with or performed by Buyer on or before the Closing Date pursuant to the terms hereof shall have been duly complied with and performed in all material respects.

9.3 Representations and Warranties. Each of the representations and warranties by Buyer set forth in Article 6 hereof shall be true and correct in all material respects on the Closing Date.

9.4 Action/Proceeding. No action or proceeding before a court or any other Governmental Authority shall have been instituted or threatened to restrain or prohibit the transactions contemplated herein.

9.5 Closing Documents. Buyer shall have executed and delivered to Sellers all other documents, agreements and certificates required to be executed or delivered by Buyer pursuant to any term or provision of this Agreement.

9.6 Reserved.

9.7 Reserved.

9.8 Satisfaction of Certain Liabilities. The Pre‐Closing Liabilities that consist of the Company Note, IRS Debt and the Lease Cure Amount shall have been satisfied, it being the parties’ understanding that such liabilities will be satisfied with proceeds of the DIP Financing or by funds advanced by CHCT Services or CHCT Lending to pay such liabilities prior to or at Closing as contemplated in Section 3.1(b).

9.9 Reserved.

9.10 Bankruptcy Court Approval. The Bidding Procedures Order and the Sale Order shall have been entered by the Bankruptcy Court, and both such orders shall have become Final Orders; provided, however, Sellers acknowledge and agree that this condition may be waived in whole or in part by Buyer, by notice to Sellers in writing, without prejudice to Buyer’s rights



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under this Agreement or at law, if any, in the event of the non‐fulfillment of any other condition or conditions required pursuant to this Agreement.

9.11 Advance for Cure Costs Related to Assumed Contracts. Buyer shall have sufficient cash available at Closing to pay any and all Cure Costs related to any Assumed Contract.

9.12 Sufficient Funds Available to Pay Post Sale Expenses. Sellers shall have sufficient funds in the Borrower Account to pay all Post Sale Expenses (as defined in the DIP Credit Agreement).

Except as provided in Section 9.10 and Section 9.12, the conditions set forth in this Article 9 are for the sole benefit of Sellers, and may be waived in whole or in part by Sellers by notice to Buyer in writing without prejudice to Sellers’ rights under this Agreement or at law, if any, in the event of non‐fulfillment of any other condition or conditions.

10. ADDITIONAL AGREEMENTS AND COVENANTS

10.1 Post‐Closing Access to Information. For a period of five (5) years after Closing, the parties will make available to one another upon written request such documents and information as may be available relating to the Assets, the Assumed Contracts and the Assumed Liabilities for periods prior and subsequent to Closing to the extent reasonably necessary to facilitate concluding the transactions contemplated herein, audits, compliance with governmental requirements and regulations and the prosecution or defense of claims.

10.2 Employee Matters.

(a) At Closing, Summit WVa shall offer to employ substantially all of the active employees of Sellers at equivalent compensation as currently received by such employees, provided, that such employees meet the pre‐employment screening requirements of Summit WVa. No obligations of Sellers to or with respect to any of its employees, including, but not limited to, obligations under employment contracts, Benefit Plans, collective bargaining agreements, and applicable laws (including liability for payroll Taxes and other proper deductions and withholdings) are being assumed by Buyer, and except as may be specifically required by applicable law, Buyer shall not be obligated to continue any employment relationship with any employee for any specific period of time.

(b) Without limiting the generality of the foregoing, Summit WVa represents and agrees that it will not effectuate a “plant closing” or “mass layoff,” as those terms are defined under the WARN Act, at the Facilities within sixty (60) days following the Closing Date, and, if it does, that it will be responsible for providing any required WARN Act notices to effected employees.

(c) Sellers acknowledge and agree that Buyer does not assume or agree to



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discharge any liability under COBRA with respect to any current or former employees of Sellers. Sellers agree that they will not take any voluntary action, including the termination of its Benefit Plans, the effect of which would be, or might reasonably be expected to be, the imposition upon Buyer of COBRA liability for current or former employees of Sellers not hired by Buyer. Additionally, Sellers shall retain any and all liabilities under Section 4980B of the Code and Sections 601 through 608 of ERISA with respect to all current and former employees of Sellers.

10.3 Pre‐Closing Access. Sellers will provide Buyer and its accountants, attorneys, agents or affiliates with reasonable access to all of the Sellers’ books, records, and management personnel and to the Facility.

10.4 Notices and Consents. Sellers shall use commercially reasonable efforts to assist Buyer in obtaining the consents, approvals, authorizations or waivers set forth in Schedule 8.5.

10.5 Notice of Developments and Consents. Until the Closing Date, Sellers shall promptly advise Buyer in writing of (i) any change or event that would cause any condition to Closing in Articles 8 or 9 to be unable to be satisfied, (ii) any notice or other communication from any Person alleging that the consent of such Person is or may be required in connection with the transactions contemplated by this Agreement, and (iii) the existence of any matter arising or discovered which would have been required to be set forth or described in the Exhibits or Schedules to this Agreement. Each party hereto shall promptly notify the other of any action, suit or proceeding that shall be instituted or threatened against such party to restrain, prohibit or otherwise challenge the legality of any transaction contemplated by this Agreement. No disclosure by any party under this Section 10.5 shall be deemed to amend or to supplement the Schedules to this Agreement or to prevent or cure any misrepresentation, breach of warranty, breach of covenant, or any failure to satisfy any condition pursuant to Articles 8 or 9 of this Agreement. Each party hereto shall use reasonable commercial efforts to promptly advise the other parties of the status and progress of such party in obtaining any consents or approvals of third parties or Governmental Authorities that are conditions to the consummation of the transactions contemplated by this Agreement.

10.6 Affirmative Covenants of Sellers. The parties hereto acknowledge that Sellers and Summit WVa are parties to the Management Agreement, and from the date hereof through the Closing Date, except as expressly permitted or required by this Agreement or as otherwise consented to by Summit WVa in writing, Sellers agree to (i) cooperate and not interfere with Manager’s provision of such services under the Management Agreement, and use commercially reasonable efforts to carry on the Business in the ordinary course of business consistent with past practice, and (ii) use commercially reasonable efforts to (A) preserve the Business, (B) maintain its properties in all material respects in the same operating condition and repair as they exist as of the date of this Agreement ordinary wear and tear excepted, and (C) maintain their relationship with customers, suppliers and others having business dealings with them, such that there shall be no Material Adverse Effect after the date of this Agreement.



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10.7 Negative Covenants of Sellers. From the date hereof through the Closing Date, except as expressly permitted or required by this Agreement or as otherwise consented to by Summit WVa in writing, or as directed or undertaken by Manager on Sellers’ behalf under the Management Agreement, Sellers will not:

(a) except as may relate to trade payables of Sellers or the Business incurred in the ordinary course of business and the renewal of any malpractice insurance coverage of Sellers, enter into, renew, amend, breach or terminate any material contract or agreement to which they are a party other than in the ordinary course of business and consistent with past practices;

(b) impose or suffer the imposition on any Asset of any Encumbrance or permit any such Encumbrance to exist;

(c) sell or dispose of any Assets, whether real or personal, tangible or intangible, except in the ordinary course of business and consistent with past practices;

(d) engage in any transaction other than in the ordinary course of business and consistent with past practices;

(e) grant (or commit to grant) any increase in the compensation (including incentive or bonus compensation) of any employee or service provider of Sellers or institute, adopt or amend (or commit to institute, adopt or amend) any compensation or Benefit Plan, policy, program or arrangement or collective bargaining agreement applicable to any such employee or service provider; or

(f) take any action or omit to take any action, which action or omission would result in a breach of any of the representations and warranties set forth in Article 5 of this Agreement.

10.8 Sellers Bank Accounts. In order to minimize any disruption to the collection of

the Accounts Receivable after the Closing, Sellers shall: (i) maintain (and not terminate) any of the Bank Accounts; (ii) execute and deliver to DSKT a DACA and a DAISA for each Depository Bank at which the Bank Accounts are maintained; and (iii) take any and all other actions necessary or reasonably requested by DSKT, Summit WVa or the Depository Bank at which the Bank Accounts are maintained to allow an authorized representative of DSKT or Summit WVa, which DSKT and Summit WVa shall designate at Closing, the joint sole and exclusive right to access and withdraw all funds in the Bank Accounts, without the further or joint consent of Sellers or any of their representatives or agents. Sellers shall provide to Buyer all information concerning any funds deposited into or directed to the Bank Accounts after the Closing as Buyer may request from time to time. Unless expressly directed by DSKT, Summit WVa or an authorized representative of DSKT or Summit WVa and as long as the respective DACA and DAISA are in full force and effect, no Seller or any representative or agent of any Seller shall withdraw or transfer any funds out of any of the Bank Accounts.



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10.9 Cooperation in Preparation of Cost Reports. Sellers shall cooperate with Buyer in preparing and filing all termination and other Cost Reports required or permitted by law to be filed under the Medicare, Medicaid or other third party payor programs for all periods ending on or prior to the Effective Time, or as a result of the consummation of the transactions described herein.

10.10 Misdirected Payments. Each of Sellers, DSKT and Summit WVa covenant and agree to remit, with reasonable promptness, to the other any payments received, which payments are on or in respect of accounts or notes receivable owned by, or otherwise payable to, the other. In addition, and without limitation, in the event of a determination by any Governmental Authority or third party payor that payments to Sellers or the Facilities resulted in an overpayment or other determination that funds previously paid by any program or plan to Sellers or the Facilities must be repaid, (i) Buyer shall not be responsible for repayment of said monies (or defense of such actions) if such overpayment or other repayment determination was for items or services rendered prior to the Effective Time, and neither DSKT nor Summit WVa assumes such liability; and (ii) Summit WVa shall be responsible for such repayment of said monies (or defense of such actions) if such overpayment or other repayment determination was for services rendered after the Effective Time. Such obligations related to any misdirect payment as set forth in this Section 10.10 shall be in addition to any other remedies available herein.

10.11 Use of Controlled Substance Permit. To the extent permitted by applicable law, Summit WVa shall have the right, for a period not to exceed one hundred and twenty (120) days following Closing, to operate under the licenses and registrations of Sellers and the Facilities relating to controlled substances and the operation of laboratories until Summit WVa is able to obtain its own such licenses and registrations. In furtherance thereof, Sellers shall execute and deliver to Summit WVa at or prior to Closing limited powers of attorney to facilitate such use.

11. TERMINATION

11.1 Termination Events. This Agreement may be terminated at any time prior to Closing upon prior written notice given by (or on behalf of) the party electing to terminate this Agreement to the other party:

(a) by mutual agreement of Summit WVa and Sellers (expressed in writing);

(b) by Summit WVa:

(i) if a Governmental Authority whose approval is necessary to consummate the transactions contemplated hereby shall have refused to approve the transactions contemplated hereby, and such decision is non‐appealable, including, without limitation, if Sellers or Buyer receive notice from WVHCA that the CON Exemption is not approved;



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(ii) if any permanent injunction, court order or other order, decree or ruling of any court of competent jurisdiction or other Governmental Authority or new law or change to existing law permanently restraining, enjoining or otherwise preventing the consummation of the transactions contemplated hereby shall have been issued and become final and non‐appealable;

(iii) if WVHCA refuses to agree that WVHCA will not seek to recover, offset, or recoup from Summit WVa, the Assets, or any Government Patient Receivables any liabilities or claims WVHCA has as of the Closing Date or in the future against Sellers, including, without limitation, any liabilities arising out of, or related to, Sellers’ participation in the Federal Healthcare Programs;

(iv) if any Sale Milestone has not been fully and timely satisfied and Summit WVa has not waived such non‐compliance in writing;

(v) if Closing shall not have occurred by September 30, 2020 (“Outside Closing Date”) by reason of the failure of any condition precedent under Article 8 hereof (unless the failure results primarily from Buyer breaching any representation, warranty or covenant contained in this Agreement);

(vi) if a Material Adverse Effect shall have occurred since the effective date of this Agreement;

(vii) upon a material breach of this Agreement by Sellers, and such breach has not been waived in writing by Summit WVa;

(viii) upon a material breach of the Management Agreement by Seller, and such breach has not been waived in writing by Summit WVa;

(ix) upon a material breach of the Credit Bid Agreement by CHCT Lending or CHCT Services, and such breach has not been waived in writing by Summit WVa;

(x) if Landlord fails to execute and deliver the Repayment Agreement, in form and substance acceptable to Buyer, on or before the Closing Date;

(xi) if CHCT fails to fund the Purchase Price as contemplated in Section

3.1(b) on or before any deadline established by the Bankruptcy Court.

(xii) if any of the covenants, warranties or conditions set forth in this Agreement have not been fully and timely satisfied (except to the extent they are covenants, warranties or conditions to be performed solely by Buyer) and such failure has not been waived in writing by Summit WVa;

(xiii) if Buyer is not the Successful Bidder of the Assets;



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(xiv) if the Bidding Procedures Order or the Sale Order are stayed, vacated, modified or supplemented (unless Summit WVa has provided prior express written consent to same);

(xv) if any of the Bankruptcy Cases are dismissed or converted to cases under Chapter 7 of the Bankruptcy Code, and neither such dismissal nor conversion expressly contemplates that the transactions provided for herein be completed within five (5) calendar days from the dismissal or the conversion, or a trustee is appointed in the Bankruptcy Cases;

(xvi) if Sellers accept an offer for a transaction or series of transactions in which any material portion of the Assets are to be sold, transferred or otherwise disposed of to any party other than Buyer; or

(xvii) if Sellers withdraw, seek authority to withdraw, or seek to modify, in any material respect adversely affecting Buyer, any request for relief sought in the Sale Motion, or any relief granted in the Bidding Procedures Order or the Sale Order.

(c) by Sellers:

(i) if a Governmental Authority whose approval is necessary to consummate the transactions contemplated hereby shall have refused to approve the transactions contemplated hereby, and such decision is non‐appealable.

(ii) if any permanent injunction, court order or other order, decree or ruling of any court of competent jurisdiction or other Governmental Authority or new law or change to existing law permanently restraining, enjoining or otherwise preventing the consummation of the transactions contemplated hereby shall have been issued and become final and non‐appealable;

(iii) if Closing shall not have occurred by the Outside Closing Date (unless Buyer agrees to extend the Outside Closing Date); or

(iv) upon a material breach of this Agreement by Summit WVa, and such breach has not been waived in writing by Sellers;

(v) upon a material breach of the Management Agreement by Summit WVa, and such breach has not been waived in writing by Sellers;

(vi) if Buyer is not the Successful Bidder of the Assets;

(vii) if the Bidding Procedures Order or the Sale Order are stayed or vacated; or



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(viii) if any of the Bankruptcy Cases are dismissed or converted to cases under Chapter 7 of the Bankruptcy Code, and neither such dismissal nor conversion expressly contemplates that the transactions provided for herein be completed within five (5) calendar days from the dismissal or the conversion.

11.2 Effect of Termination.

(a) In the event of termination of this Agreement pursuant to Section 11.1, all obligations of the parties hereto shall terminate except the obligations or covenants set forth in Sections 12.2, 12.3, 12.5, 12.6, 12.7, 12.8, 12.9, 12.10, 12.11, 12.12 and 12.13.

(b) In the event the Sellers close on a sale of the Assets to any party other than Buyer or close a sale or sales of a material portion of the Assets which otherwise resulted from the process contemplated by the Bidding Procedures Order, then Sellers shall pay Summit WVa the Bid Protections from the proceeds of the closed transaction(s) on the closing date of such closed transaction(s). In all cases, the payment of the Bid Protections shall be made free and clear of the interests of any Encumbrances of any person or entity which might have or assert an interest in the proceeds of the sale. Sellers shall cause any acquirer or transferee contemplated above to pay the Bid Protections in cash at closing of any such transaction(s) and such payment shall be a condition to entering into any such transaction(s) and shall not enter into any such transaction(s) without such acquirer’s or transferee’s written agreement to do so.

12. GENERAL

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

Sellers: MBH Highland, LLC

2216 Abbott Martin Road, Suite 220 Nashville, TN 37215 Attn: Steve Moore [email protected]

With a copy to: Bass Berry & Sims PLC 150 Third Avenue South, Suite 2800 Nashville, TN 37201 Attn: Paul Jennings [email protected]

Buyer: Summit BHC West Virginia, LLC

389 Nichol Mill Lane, Suite 100



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Franklin, TN 37067 Attn: Scott Schwieger, General Counsel [email protected]

DSKT LLC 13928 River Road, Unit 503 Pensacola, FL 32507

Attn: Danny Carpenter [email protected]

With a copy to: Waller Lansden Dortch & Davis, LLP 511 Union Street, Suite 2700 Nashville, TN 37219 Attn: David E. Lemke [email protected]

or to such other address, and to the attention of such other Person as any party may designate in writing. Notice given by a party’s counsel shall be considered notice given by that party.

12.2 Confidentiality; Public Announcement. It is understood by the parties hereto that the information, documents and instruments delivered to Sellers by Buyer or any affiliate of Buyer or their agents and the information, documents and instruments delivered to Buyer or any affiliate of Buyer by Sellers or their agents including this Agreement and all documents delivered hereunder, are of a confidential and proprietary nature (“Confidential Information”). Each of the parties hereto agrees that prior to and subsequent to Closing it will maintain the confidentiality of all such Confidential Information delivered to it by each of the other parties hereto or their agents in connection with the negotiation of this Agreement or in compliance with the terms, conditions and covenants hereof and only disclose such Confidential Information to its duly authorized officers, directors, representatives and agents unless (i) compelled to disclose by judicial or administrative process (including in connection with obtaining the necessary approvals of this Agreement and the transactions contemplated hereby) or by other requirements of law or (ii) disclosed in an action or proceeding brought by a party hereto in pursuit of its rights or in the exercise of its remedies hereunder; provided, however, that the parties hereto shall not disclose any Confidential Information not required to be disclosed as part of such permitted disclosure. Each of the parties hereto recognizes that any breach of this Section 12.2 would result in irreparable harm to the other parties to this Agreement and their Affiliates and that therefore either Buyer or Sellers shall be entitled to an injunction to prohibit any such breach or anticipated breach, without the necessity of posting a bond, cash or otherwise, in addition to all of their other legal and equitable remedies.

12.3 Cost of Transaction. Except as otherwise provided herein, (i) Sellers shall pay the fees, expenses and disbursements of Sellers and their agents, representatives, accountants and counsel incurred in connection with the subject matter hereof and any amendments hereto and (ii) Buyer shall pay the fees, expenses and disbursements of Buyer and its agents,



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representatives, accountants and counsel incurred in connection with the subject matter hereof and any amendments hereto (except in each case in respect of costs and fee incurred in connection with enforcement of this Agreement, which shall be paid by the non‐prevailing party). Sellers shall be responsible for paying all transfer, documentary, sales, use, stamp, registration and other such Taxes, and all conveyance fees, recording charges and other fees and charges (including any penalties and interest) incurred in connection with the sale of the Assets and the consummation of the transactions contemplated by this Agreement.

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

12.5 Choice of Law; Waiver of Jury Trial. The parties agree that this Agreement shall be governed by and interpreted, construed and enforced in accordance with the laws of the State of Tennessee, excluding any conflict‐of‐laws rule or principle that might refer the governance or the interpretation, construction or enforcement of this Agreement to the laws of another jurisdiction. BUYER AND SELLERS HEREBY WAIVE THE RIGHT TO A TRIAL BY JURY, FROM WHATEVER SOURCE ARISING, IN CONNECTION WITH ANY PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

12.6 Benefit/Assignment. Subject to provisions herein to the contrary, this Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective legal representatives, successors and assigns and no others; provided, however, that no party hereto may assign this Agreement without the prior written consent of the other party hereto, which consent shall not be unreasonably withheld. The foregoing notwithstanding, Buyer may, without the prior written consent of Sellers, assign its rights and delegate its duties hereunder to any Affiliate of Summit WVa or DSKT, respectively.

12.7 Waiver of Breach. The waiver by any party hereto of a breach or violation of any provision of this Agreement shall not operate as, or be construed to constitute, a waiver of any subsequent breach of the same or another provision hereof.

12.8 Severability. If any provision of this Agreement is held to be illegal, invalid or unenforceable under any present or future law, and if the rights or obligations of Buyer or Sellers under this Agreement will not be materially and adversely affected thereby, (a) such provision will be fully severable; (b) this Agreement will be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part hereof; (c) the remaining provisions of this Agreement will remain in full force and effect and will not be affected by the illegal, invalid or unenforceable provision or by its severance herefrom; and (d) in lieu of such illegal, invalid or unenforceable provision, there will be added automatically as a part of this agreement a legal, valid and enforceable provision as similar in terms (including duration, area or amount) to such illegal, invalid or unenforceable provision as may be possible.



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12.9 Entire Agreement; Amendments; Counterparts. This Agreement supersedes all previous agreements, contracts and understandings and constitutes, together with the other documents, agreements, and instruments called for to be delivered pursuant to the Agreement, the entire agreement of whatsoever kind or nature existing between or among the parties hereto in respect of the within subject matter and no party hereto shall be entitled to benefits other than those specified herein. As among the parties hereto, no oral statements or prior written material not specifically incorporated herein shall be of any force and effect. Each party hereto acknowledges that in entering into and executing this Agreement, such party relied solely upon the representations, warranties and agreements contained in this Agreement and no others. All prior representations, warranties or agreements, whether written or oral, not expressly incorporated herein are hereby superseded and no amendments, modifications or changes in or to this Agreement shall be effective unless and until made in writing and signed by all parties hereto. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute but one and the same instrument. A facsimile copy of any Person’s signature or any such counterpart shall be fully effective as if an original signature.

12.10 No Third Party Beneficiaries. The terms and provisions of this Agreement are intended solely for the benefit of the parties hereto and their respective successors or permitted assigns, and this Agreement does not, and shall not be construed to, confer third‐party beneficiary rights upon any other Person.

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

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

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

[Signature pages follow]



4827-8319-2506.4

EXHIBIT B

A&R Management Agreement

See attached.

Case 3:20-bk-01940 Doc 92-2 Filed 04/27/20 Entered 04/27/20 18:58:00 Desc Exhibit B - A&R Management Agreement Page 1 of 19

Execution Version

4816‐4720‐7856

AMENDED AND RESTATED MANAGEMENT AGREEMENT

This Amended and Restated Management Agreement (this “Agreement”) is made and entered into as of this 26th day of March, 2020 (the “Effective Date”), by and between Summit BHC West Virginia, LLC, a West Virginia limited liability company (“Manager”), and MBH Highland, LLC, a Delaware limited liability company (“MBH Highland”) and MBH Health Center, LLC, a Delaware limited liability company (“MBH Center,” and together with MBH Highland, the “Company”):

RECITALS

WHEREAS, the Company leases from CHCT West Virginia, LLC, a Delaware limited liability company (“Landlord”), premises totaling 119,489 square feet located at 300 56th St. SE, Charleston, West Virginia, 25304, from which it operates a psychiatric hospital, psychiatric residential treatment facility, and substance abuse treatment facility (collectively, the “Business”);

WHEREAS, the Company and Manager are parties to that certain Asset Purchase Agreement, dated as of March 26, 2020 (the “Purchase Agreement;” capitalized terms used but not defined herein shall have the meaning given to such terms as set forth in the Purchase Agreement), pursuant to which the Company has agreed to sell certain Assets to Manager subject to the terms of the Purchase Agreement and approval of the Bankruptcy Court (as defined below);

WHEREAS, Manager currently manages the Business (defined herein) pursuant that certain Management Agreement, dated as of May 1, 2019 (the “Existing Management Agreement”), by and between MBH Highland and Manager;

WHEREAS, subsequent to the execution of this Agreement, the Company intends to file voluntary petitions for relief (the “Bankruptcy Cases”) under chapter 11 of title 11 of the United States Code, 11 U.S.C. §§ 101‐1532, as amended (the “Bankruptcy Code”), in the United States Bankruptcy Court for the Middle District of Tennessee (the “Bankruptcy Court”);

WHEREAS, CHCT Lending, LLC (“CHCT Lending”) has agreed to provide debtor‐in‐possession financing (“DIP Financing”) pursuant to that certain Debtor‐In‐Possession Credit and Security Agreement (the “DIP Credit Agreement”), a corresponding Promissory Note (the “Note”), and related loan and security documents (together with the DIP Credit Agreement and the Note, the “DIP Loan Documents”), which financing shall be subject to approval by the Bankruptcy Court and shall include certain financing covenants and requirements as set forth therein;

WHEREAS, Steve Moore, a principal of Tortola Advisors, LLC, is the Company’s Chief Restructuring Officer (“CRO”);

WHEREAS, the Company desires that Manager continue to manage the Business both before the filing of any Bankruptcy Cases and while such Bankruptcy Cases are pending pursuant

Case 3:20-bk-01940 Doc 24 Filed 03/31/20 Entered 03/31/20 20:06:07 Desc Main Document Page 23 of 40


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to the terms of this Agreement, which is an amendment to and restatement of the Existing Management Agreement;

WHEREAS, Manager has the background, experience, and expertise necessary to provide corporate‐office management services to Business;

WHEREAS, Manager is willing to continue managing the Business pursuant to the terms and conditions in this Agreement; and

NOW, THEREFORE, the Company and Manager agree as follows:

1. Management Services.

1.1. The Company hereby engages Manager, and Manager hereby accepts such engagement, to provide corporate management and oversight to the Company’s day‐to‐day operation of the Business. Manager will provide corporate office oversight in the following areas, including, without limitation, facility leadership, accounting, financial reporting, financial planning, development, internal audit, capital management, real estate development, maintenance, ethics and compliance, education and training, human resources, payroll and employee benefits, consulting and management services, treasury, internal legal, quality management, insurance/risk management consulting, reimbursement, and communications/public relations (collectively, the “Management Services”):

In carrying out its duties under this Agreement, Manager shall, in consultation with the Company (through its CRO), and subject to the requirements set forth in the DIP Loan Documents, have authority to (i) direct the Company’s employees with respect to charges, cash flow, budgeting, planning, accounts receivable and third‐party payor reimbursements; (ii) oversee all of the departments of the Business, establish charge schedules, promulgate personnel policies (including, but not limited to, working hours and qualifications and criteria for hiring and discharge), and (iii) hire and discharge Business personnel; provided, however, any such hiring or discharging of the Medical Director, the CEO (as defined below), or the Chief Financial Officer (the “Senior Management”) requires the CRO’s consent; provided, further, that if the CRO does not consent to the hiring or firing of a member of the Senior Management, as requested by Manager, including, without limitation, the timing of same, Manager may terminate this Agreement as set forth in Section 3(v) below. Except as expressly set forth herein, Summit has no duty or obligation to perform any of the Company’s duties or obligations under the DIP Loan Documents.

Manager may carry out any or all of its duties hereunder through subcontracts or similar arrangements with vendors for the provision of goods or services (including, but not limited to, professional and general liability insurance, information technology services, revenue cycle management (including billing and collections), supply chain management, group purchasing, workforce solutions, health information management and credentialing). Charges under such third‐party contracts shall be billed to the Company separately from the Management Fee.



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1.2. Manager shall use commercially reasonable efforts to cause the Company to do all acts, procedures, authorizations and any and all other matters necessary, appropriate or related to maintaining all necessary licenses, permits and approvals from all regulatory authorities having jurisdiction over the Business and/or its operations.

1.3. Manager shall have authority to make withdrawals from the Company’s bank accounts, and subject to the requirements set forth in the DIP Loan Documents, in order to pay all Business related expenses as set forth in the Budget (as defined below), including any Budget approved by the Bankruptcy Court in an applicable cash collateral and/or debtor‐in‐possession financing order, including, without limitation, payment of the Management Fee (as defined herein). The handling of receipts and disbursements with respect to such bank accounts shall be in accordance with the DIP Loan Documents and/or any applicable Bankruptcy Court order and customary business and bankruptcy practices.

1.4. Manager may review and from time to time, in consultation with the Company (through its CRO), revise and amend management, financial and informational systems in order to conduct the operations of the Business. Manager, in consultation with the Company (through its CRO), may assist in preparation and submission of reports required to be submitted pursuant to the requirements of third‐party payors or any authority having jurisdiction over the Business. Subject to the Company’s approval, Manager shall have authority to negotiate and consummate agreements and contracts for and on behalf of the Business in the usual course of business, including contracts of insurance naming both the Company and Manager as insureds pursuant to the master insurance policies and programs maintained by Manager or any of its affiliates for its affiliated hospitals and other healthcare facilities.

1.5. Manager shall undertake all of its obligations and duties hereunder for the account of the Company and not for the account of Manager, and Manager shall have no responsibility or liability for performing any duties that involve making payments or incurring expenses unless the Company makes adequate funds available therefor.

1.6. In carrying out its duties hereunder, Manager shall be an independent contractor and shall not be subject to any right of control, or any control in fact, of the Company over the methods by which it carries out its duties. Neither this Agreement nor the exercise of any of the duties of the Company or Manager shall create any partnership, joint venture, association, or other relationship between the parties hereto other than that of independent contractors each as to the other.

1.7. Manager shall have the right to act as the agent of the Company and/or the Business in the procuring of licenses, permits, accreditations and other approvals, the payment and collection of accounts and in all other activities necessary, appropriate or useful to Manager in the carrying out of its duties as specified in the preceding paragraphs of this Section 1.

1.8. The full authority and responsibility for the day‐to‐day operation of the Business shall, during the term of this Agreement, be and remain in the Company, with oversight from Manager, provided, however, that (i) the Company shall retain all authority required under Medicare and Medicaid laws, Joint Commission Accreditation Standards, and other licenses, permits and certifications required to operate the Business and (ii) all medical and professional



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matters shall be the responsibility of the Company and the medical director and medical staff of the Business.

2. Bankruptcy Court Approval; Budget.

2.1. The parties acknowledge and agree that within one (1) business day following the commencement of the Bankruptcy Cases, the Company will file a motion with the Bankruptcy Court seeking, among other things, authority to assume this Agreement and continue to engage Manager to provide the Management Services pursuant to the terms of this Agreement.

2.2. The parties acknowledge and agree that within one (1) business day following the commencement of the Bankruptcy Cases, the Company will file a motion with the Bankruptcy Court seeking, among other things, authority to obtain the DIP Financing from CHCT Lending, which will permit Manager to manage the Business pursuant to this Agreement, subject to the requirements set forth in the DIP Loan Documents, including, without limitation, approval of a budget, with acceptable variances, that is acceptable to the Company, CHCT Lending and Manager, and approved by the Bankruptcy Court (the “Budget”).

3. Term. The term of this Agreement shall commence on the Effective Date and shall continue until the earlier of any of the following events (each, an “Event of Termination”):

(i) July 15, 2020;

(ii) the Closing Date;

(iii) thirty (30) days following any termination of the Purchase Agreement by Manager; provided, however, if the Purchase Agreement is terminated by Manager due solely to a Material Adverse Effect (as defined in the Purchase Agreement) resulting from the COVID‐19 pandemic, then this Agreement will terminate sixty (60) days after such termination of the Purchase Agreement;

(iv) thirty (30) days following an Event of Default (as defined below) under Section 12(a)(i);

(v) immediately and automatically, without notice or opportunity to cure, if

(A) the Company fails to file timely with the Bankruptcy Court the Motions contemplated in Section 2 above,

(B) the Bankruptcy Court, after considering the Motion filed pursuant to Section 2.1, does not authorize the Company to engage Manager pursuant to the terms of this Agreement,

(C) the Bankruptcy Court, after considering the Motion filed pursuant to Section 2.2, does not authorize the Company to use cash collateral,



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obtain the DIP Financing, or approve the Budget (or any amendments to the Budget approved by the Company, CHCT Lending and Manager),

(D) that certain Lease Agreement, dated as of September 27, 2017 (as amended, restated, supplemented or otherwise modified from time to time) between Landlord and the Company is terminated by any Party at any time prior to the Closing,

(E) if CHCT fails to fund or ceases funding the DIP Financing, or

(F) the Company terminates the Purchase Agreement for any reason other than a sale of the Business (or any material part thereof) to a party other than Manager; provided, however, that in the event the Company terminates the Purchase Agreement because of a sale to a party other than Manager, the provisions of Section 12(b) shall govern the continued management by Manager and payment of the related Liquidated Damages.

(vi) termination of this Agreement by Manager, which can be done on seven (7) days’ notice, with an opportunity to cure during that seven (7) day period, if the CRO does not consent to the hiring or firing of a member of the Senior Management, as requested by Manager, including, without limitation, the timing of same;

(vii) termination of this Agreement by Manager, which can be done immediately and without advance notice or opportunity to cure, if any party hereto:

(A) exercises any remedies against the Company or their assets that would, in Manager’s opinion, adversely impair Manager’s ability to manage the Business pursuant to this Agreement or to effectuate the Closing, or

(B) fails to execute or breaches

(1) that certain Credit Bid Agreement, dated as of March 26, 2020 (the “Credit Bid Agreement”), by and between the parties thereto, pursuant to which Manager will be authorized to credit bid certain secured debt owed by the Company as payment of the Purchase Price, or

(2) that certain Secured Repayment Agreement, dated as of March 26, 2020 (the “Repayment Agreement”), by and between the parties thereto, pursuant to which certain advances made to the Company and/or to Manager in connection with the Bankruptcy Cases and the Purchase Agreement shall get repaid;



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(viii) termination of this Agreement by Manager, which can be done immediately and without notice or opportunity to cure, after the occurrence of an Event of Default (as defined below) under Section 12(a)(ii) or (iii); or (ix) thirty (30 ) days after the date on which Manager provides written notice of termination of this Agreement to the Company.

4. Management Fee.

4.1. As Manager’s fee for the Management Services, the Company shall pay Manager on a monthly basis an amount equal to the greater of (i) One Hundred Thousand Dollars ($100,000.00) or (ii) three percent (3%) of the monthly net revenues of the Business during the management period, each such amount prorated for periods less than a full calendar month (the “Management Fee”). For this purpose, “net revenues” shall be determined in accordance with Manager’s customary accounting policies and procedures. The Management Fee for each month shall be paid on or before the fifteenth (15th) day of the following month. All rent due under the Lease Agreement shall be subordinate to the Management Fee. In addition, Manager shall continue to hold the retainer of Two Hundred Thousand Dollars ($200,000) (the “Retainer”) that it received upon execution of the Existing Management Agreement as security for the Management Fee and expenses payable pursuant to Section 4.2 below. Upon termination of this Agreement, Manager will return the balance of the Retainer, if any, to the Company (or as otherwise ordered by the Bankruptcy Court), after paying first the outstanding balance, if any, of its Management Fee and expenses payable pursuant to Section 4.2.

4.2. In addition to the above Management Fee, Manager shall be reimbursed by the Company for the direct cost of all out‐of‐pocket expenses incurred in the management of the Business and/or the performance of the Management Services. Such authorized reimbursement shall include, but is not limited to, professional liability insurance premiums allocable to the Business; information systems costs, such as third‐party software license costs, third‐party application service provider fees and fees for extraordinary or nonrecurring information system services provided by Manager or its affiliates; all costs of providing the employees for the Business, including, without limitation, recruiting costs and all compensation and employee benefit costs. The Company agrees to reimburse Manager for such expenses no less frequently than monthly and within ten (10) business days after a proper request for reimbursement is submitted by Manager.

4.3. Except as otherwise provided in this Agreement, all of the costs and expenses of maintaining and operating the Business and its facilities shall be expenses of the Company, for the account of the Business and the Company, and shall not be expenses of Manager.

5. Books and Records; Reports.

5.1. Manager shall supervise the maintenance of the books of account covering the operations of the Company. Such books of account shall be maintained on an accrual basis



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in accordance with generally accepted accounting principles in the United States consistently applied by Manager and its affiliates.

5.2. Manager shall prepare, or cause to be prepared, and furnish to the Company promptly after the close of each fiscal month its unaudited financial statements reflecting the operations of the Business and the Company for such month.

5.3. Authorized agents of the Company, CHCT Lending and Landlord shall have the right at all reasonable times during usual business hours to audit, examine and make copies of or extracts from the books of account of the Company maintained by Manager. Such right may be exercised through any agent, independent public accountant or employee designated by the Company, CHCT Lending or Landlord. Each such party shall bear all expenses incurred in any examination it makes pursuant hereto.

6. Representations and Warranties of Manager.

6.1. Manager represents and warrants to the Company that it has been duly organized and is validly existing and in good standing as a limited liability company under the laws of the State of West Virginia, with full power to conduct its business under the laws of said state.

6.2. Manager has the full power and authority to enter into this Agreement and to perform its obligations hereunder; this Agreement constitutes the valid and binding obligation of Manager, enforceable in accordance with its terms, subject to applicable liquidation, conservatorship, insolvency, bankruptcy, reorganization, moratorium, rearrangement, and other similar laws from time to time applicable to creditor’s rights generally and subject further to the power of courts to deny enforcement of specific remedies.

6.3. As of the date hereof, there is no legal, administrative, and/or arbitration proceeding pending or, to the knowledge of Manager or any of its affiliates, threatened against Manager or its properties, assets, or business, or against any of Manager’s affiliates, which seeks to terminate, modify, or affect this Agreement or the consummation of the transactions contemplated herein.

6.4. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby by Manager will not (of itself or with the giving of notice or lapse of time or both): (a) result in the breach of any of the terms or conditions of, or constitute a default under, its articles of organization or the limited liability company agreement of Manager or any indenture or mortgage to which Manager is a party; or (b) violate any law to which Manager is subject.



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7. Representations and Warranties of the Company. The Company represents and warrants:

7.1. That it has been duly organized and is validly existing and in good standing as a limited liability company under the laws of the State of Delaware, with full power to own its properties and to conduct its business under the laws of said state.

7.2. That it is duly qualified or domesticated as a foreign limited liability company and in good standing under the limited liability company laws of each jurisdiction in which the failure to be so qualified or domesticated would have a material adverse effect on the transactions contemplated hereby or on its business, operations, or financial condition, taken as a whole.

7.3. That it has the full power and authority to enter into this Agreement and to perform its obligations hereunder.

7.4. That this Agreement constitutes the valid and binding obligation, enforceable in accordance with its terms, subject to applicable liquidation, conservatorship, insolvency, bankruptcy, reorganization, moratorium, rearrangement, and other similar laws from time to time applicable to creditor’s rights generally and subject further to the power of courts to deny enforcement of specific remedies.

7.5. That the execution, delivery, and the performance of the obligations under this Agreement, has been duly authorized by all necessary limited liability company action.

7.6. As of the date hereof, there is no legal, administrative, and/or arbitration proceeding pending or threatened against which seeks to terminate, modify, or affect this Agreement or the consummation of the transactions contemplated herein.

7.7. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby will not (of itself or with the giving of notice or lapse of time or both): (a) result in the breach of any of the terms or conditions of, or constitute a default under, its certificate of formation or its limited liability company agreement or any indenture or mortgage to which it is a party; or (b) violate any law to which it is subject.

8. [Reserved.]

9. Use of Name, Logos, etc. During the term of this Agreement, Manager shall have the right to utilize the name, trademarks, logos and symbols identifying the Business, including the right to represent to the public and the health care industry that the facilities and operations of the Business are managed by Manager. The Company shall not, however, make any use of the name of Manager or any of its affiliates, or any of their respective trademarks, logos or symbols, without the prior written consent of Manager.

10. Manager’s Intellectual Property. All computer software, programs and similar systems, licenses, manuals, books and records and other information or intellectual property provided by Manager or its affiliates in its provision of the Management Services or relating to the operation of the Business (collectively, the “Manager’s Intellectual Property”), are the sole



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property of Manager or its applicable affiliates, and nothing contained in this Agreement shall constitute a transfer of or license to any portion of the Manager’s Intellectual Property, whether during or after the term of this Agreement. Upon the termination of this Agreement, Manager and its applicable affiliates shall retain all of the Manager’s Intellectual Property.

11. Indemnification.

11.1. Manager does not hereby assume any of the obligations, liabilities or debts of the Company, and shall not, by virtue of its performance hereunder, assume or become liable for any of such obligations, debts or liabilities of the Company or to the Company, except as expressly provided in Section 11.2 below. The Company hereby agrees to indemnify and hold Manager, its affiliates and members, and their respective officers, governors, directors, employees, agents, equity holders and affiliates (each, a “Manager Indemnified Party”) harmless from and against any and all claims, actions, liabilities, losses, costs and expenses of any nature whatsoever, including reasonable attorneys’ fees and other costs of investigating and defending any such claim or action (each, a “Loss”), which may be asserted against any of the Manager Indemnified Parties in connection with the Manager’s provision of services to the Company, including, without limitation:

(i) Manager’s performance of its duties hereunder, including the Management Services, during the term of this Agreement;

(ii) the continued employment of the Chief Executive Officer of the Business (the “CEO”) and all Employees who directly or indirectly report to the CEO (collectively with the CEO, the “Covered Employees”) during the term of this Agreement;

(iii) the engagement of independent contractors (“Independent Contractors” and, collectively with the Covered Employees, the “Covered Persons”) on behalf of the Company;

(iv) acts or omissions of any Covered Persons during the term of this Agreement;

(v) malpractice or other tort claims asserted against the Business, the Company, or the Manager relating to the Business; and

(vi) acts or omissions of the Company, but excluding any Loss arising as a result of the gross negligence or willful misconduct of Manager or any Manager Indemnified Party.

11.2. Manager hereby agrees to indemnify and hold harmless the Company and its members, managers, employees and agents (each, a “Company Indemnified Party”) from and against any and all Losses which may be asserted against a Company Indemnified Party as a result of the gross negligence or willful misconduct of Manager, its affiliates and members, and their respective officers, directors, employees, agents, equity holders and affiliates, in connection with the performance by or on behalf of Manager of its duties hereunder (but excluding any Loss arising as a result of the negligence or willful misconduct of the Covered Persons, which negligence or willful misconduct of the Covered Persons does not result from an action or actions



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directed by the Manager in breach of the Manager’s duties under this Agreement). The indemnification rights provided in this Section 11.2 shall be the sole and exclusive remedy of the Company for any and all disputes, claims, causes of action or Losses arising out of or relating to this Agreement. Notwithstanding anything to the contrary herein, the cumulative liability of Manager, its officers, directors, employees, agents, owners and affiliates for any and all claims (including claims for indemnification pursuant to this Section 11.2), regardless of the form of action, arising out of, or relating in any way to, this Agreement, shall not exceed Five Hundred Thousand Dollars ($500,000).

12. Default; Liquidated Damages.

(a) Each of the following will be an event of default (each, an “Event of Default”) hereunder:

(i) If the Company sells the Business (or any material part thereof) to a party other than Manager (or one of Manager’s affiliates);

(ii) If the Company fails to make or cause to be made any payment to Manager required to be made hereunder;

(iii) If the Company fails in the performance of any other material obligation on its part required to be performed under this Agreement and such failure continues for a period of thirty (30) days after written notice thereof has been given to the Company; provided, however, that no such Event of Default shall be deemed to have occurred with respect to a breach which cannot reasonably be cured within thirty (30) days, so long as the Company commences to cure such breach within such thirty (30) day period, thereafter prosecutes the same to conclusion with due diligence and cure is effected within ninety (90) days after written notice of the failure of performance; or

(iv) If Manager fails in the performance of any material obligation on its part required to be performed under this Agreement, and such failure continues for a period of thirty (30) days after written notice thereof has been given to Manager; provided, however, that no Event of Default shall be deemed to have occurred with respect to a breach which cannot reasonably be cured within thirty (30) days, so long as Manager commences to cure such breach within such thirty (30) day period, thereafter prosecutes the same to conclusion with due diligence and cure is effected within ninety (90) days after written notice of the failure of performance.

(b) The parties agree that the actual damages likely to result from an Event of Default under Section 12(a)(i) above are difficult to ascertain as of the Effective Date of this Agreement and would be difficult for Manager to prove upon the occurrence of such an Event of Default. Therefore, the parties hereto agree that upon an Event of Default under Section 12(a)(i) that results in termination of this Agreement, Company shall pay Manager from the sale proceeds of a sale of the Business to a party other than Manager, as liquidated damages, the amount of Two Hundred Fifty Thousand and no/100 Dollars ($250,000.00) (“Liquidated Damages”), which the parties agree is a reasonable estimate of the actual damages that Manager will suffer arising out of such sale and termination of this Agreement; provided, however, in the event of a sale of



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the Business to a party other than Manager, and as a condition to Manager being paid the Liquidated Damages, Manager agrees to continue its management and obligations hereunder for a period of up to thirty (30) days (as needed by the Company) from the date of entry of an order in the Bankruptcy Cases approving a sale to a party other than Manager.

13. Ownership and Confidentiality of Records.

13.1. Ownership of Records. All business and medical records relating to the operation of the Business, including, but not limited to, all books of account, general administrative records and patient files, and procedure reports and images, shall be and remain the sole property of the Company and shall be confidential information thereof. Manager shall cooperate with the Company in the maintenance of accurate, complete and confidential patient records, including maintenance of an adequate filing system in conformity with governmental records and reporting requirements. Manager shall not divulge, furnish or make accessible to anyone other than the members of the Company and their respective affiliates, without the Company’s prior written approval, any such confidential information other than as may be necessary for treatment of patients or to bill and collect from third‐party reimbursement payors for professional services rendered by the Company (and then only in accordance with the HIPAA Privacy Standards discussed in Section 13.2 below), or as otherwise may be required by law.

13.2. Confidentiality of Records. The Company shall adopt procedures which shall seek to assure maximum confidentiality of the records of the Business and shall comply in all material respects with all applicable federal, state and local laws and regulations relating to the records of the Business.

13.3. Individually Identifiable Patient Information. Without limiting the generality of Section 13.2, and except as permitted or required by this Agreement or by applicable law, including, but not limited to, the Health Insurance Portability and Accountability Act of 1996, as amended (“HIPAA”), the parties hereto agree not to use or disclose patient information in a manner that would violate the requirements of 45 C.F.R. Section 164.500, et seq. (HIPAA Security and Privacy Standards), which are incorporated herein by reference. Manager and the Company expressly agree to comply with HIPAA in all respects, including the implementation of all necessary safeguards and to prevent the disclosure of protected health information, except as permitted by HIPAA, and the assurance that any subcontractors or agents provided such information have agreed to the same restrictions and conditions imposed on the parties under HIPAA. Contemporaneously with the execution of the Existing Management Agreement, the Company and Manager entered into a Business Associate Agreement, which is incorporated herein by reference and shall remain in full force and effect.

14. Access to Books and Records.

14.1. Social Security Act. To the extent required by Section 1861(v)(1)(i) of the Social Security Act, each Party shall, upon proper request, allow the United States Department of Health and Human Services, the Comptroller General of the United States, and their duly authorized representatives access to this Agreement and to all books, documents, and records necessary to verify the nature and extent of costs and services provided by any Party under this



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Agreement, at any time during the term of this Agreement and for an additional period of four (4) years after the last date services are furnished under this Agreement. If any Party carries out any of its duties under this Agreement through a permitted subcontract or similar permitted agreement between it and an individual or organization related to it, such Party shall require that a clause be included in such agreement to the effect that until the expiration of four (4) years after the furnishing of services pursuant to such agreement, and to the extent required by Section 1861(v)(1)(i) of the Social Security Act, the related organization will make available, upon written request of the Secretary of Health and Human Services or the Comptroller General of the United States, or any other duly authorized representatives, all agreements, books, documents and records of said related organization that are necessary to verify the nature and extent of the costs of services provided by that agreement. Each Party shall (and shall require its agents and subcontractors to) promptly notify the other Party in writing of any request by a government agency or official to access this Agreement or any books, documents and records necessary to verify the nature and extent of costs and services provided by any Party under this Agreement.

14.2. Access to Information. Subject to the confidentiality provisions herein, each Party shall have access to all applicable records and information, including, but not limited to, documents prepared in connection with the performance of procedures at the Business hereunder (“Records”), upon prior written notice to the other Party, in order to perform any necessary billing, to conduct utilization review or quality assurance activities, or to prepare the defense of a lawsuit in which those Records may be relevant. Subject to the confidentiality provisions herein, Manager and its employees and Independent Contractors, as applicable to their respective duties, will be given reasonable access to the Business and its records, offices and facilities, in order that Manager and its employees and Independent Contractors may carry out their obligations hereunder. Except where prohibited by applicable law, the party providing access to such Records hereunder shall have the right to redact from any such Records any information not related to the performance of procedures at the Business. Each Party hereto is solely responsible for the accuracy of the coding and billing of its own services, if any, provided at the Business.

15. Benefit and Assignment. Subject to provisions herein to the contrary, this Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective legal representatives, successors and permitted assigns and delegates. This Agreement shall not be assignable by any Party without the prior written consent of the others, except that Manager may assign this Agreement to an affiliate of Manager.

16. Notices. Except as otherwise expressly permitted herein, any notice, demand or communication required, permitted, or desired to be given hereunder must be in writing and shall be deemed effectively given when personally delivered, when received by email (so long as such email is accompanied by prompt notice by United States mail), or overnight courier, or five days after being deposited in the United States mail, with postage prepaid thereon, certified or registered mail, return receipt requested, addressed as follows:



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If to the Company: MBH Highland, LLC 2216 Abbott Martin Road, Suite 220 Nashville, TN 37215 Attn: Steve Moore [email protected] with a copy to: Bass Berry & Sims PLC

150 Third Avenue South, Suite 2800 Nashville, TN 37201 Attn: Paul Jennings [email protected]

If to the Manager: Summit BHC West Virginia, LLC

389 Nichol Mill Lane, Suite 100 Franklin, TN 37067 Attn: Scott Schwieger General Counsel & Chief Compliance Officer [email protected]

with a copy to: Waller Lansden Dortch & Davis, LLP

511 Union Street, Suite 2700 Nashville, TN 37219 Attn: David E. Lemke [email protected]

provided, however, that each Party shall have the right to change its address with notice hereunder to any other location by the giving of thirty (30) days’ notice to the other Party in the manner set forth above.

17. Attorneys’ Fees. If any litigation is initiated by any Party to this Agreement against another Party relating to this Agreement or the subject matter hereof, the Party prevailing in such litigation shall be entitled to recover, in addition to all damages allowed by law and other relief, all court costs and reasonable attorneys’ fees incurred in connection therewith.

18. Integration. This Agreement represents the entire agreement between the parties hereto, and supersedes all prior or contemporaneous oral or written understanding, negotiations, letters of intent or other agreements between such parties. This Section 18 shall be deemed a “merger” clause under Tennessee law, and this Agreement is intended as a complete integration of the parties’ agreement.

19. Governing Law; Waiver of Trial by Jury.

19.1. The parties hereto agree that this Agreement shall be governed by and construed in accordance with the laws of the State of Tennessee without giving effect to any



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choice or conflicts of law provision or rule thereof that would result in the application of the laws of any other jurisdiction other than the laws of the United States of America, where applicable.

19.2. EACH PARTY ABSOLUTELY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHTS TO TRIAL BY JURY IN CONNECTION WITH ANY PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

20. Construction. Whenever required by the context, as used in this Agreement, the singular number shall include the plural and the neuter shall include the masculine or feminine gender, and vice versa. The term “person” means any individual, corporation, partnership, trust or other entity.

21. Section Headings. The Section headings appearing in this Agreement are for convenience of reference only and are not intended, to any extent or for any purpose, to limit or define the text of any Section.

22. Counterparts. This Agreement may be executed in counterparts, each of which shall be an original but all of which shall constitute but one document.

23. Reproduction of Documents. This Agreement and all other related documents, including consents, waivers and modifications which may hereafter be executed, may, subject to the provisions of Section 13, be reproduced by the parties hereto by any photographic, photostatic, microfilm, micro‐card, miniature photographic or other similar process and the parties may destroy any original documents so reproduced. The parties hereto agree and stipulate that any such reproduction shall be admissible in evidence as the original itself in any judicial, arbitral or administrative proceeding (whether or not the original is in existence and whether or not such reproduction was made by the parties in the regular course of business) and that any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence.

24. Amendment. No modifications of, amendments to, or waivers of any rights or duties under this Agreement shall be valid or enforceable unless and until made in writing and signed by all parties hereto.

25. Waiver. The failure by any Party to specifically enforce any term or provision hereof or any rights of such Party hereunder shall not be construed as the waiver by that Party of its rights hereunder. The waiver by any Party of a breach or violation of any provision of this Agreement shall not operate as, or be construed to constitute, a waiver of any subsequent breach of the same or other provision hereof.

26. No Third‐Party Beneficiary. Except the Manager Indemnified Parties and the Company Indemnified Parties (which are third‐party beneficiaries of this Agreement with respect to the indemnification provisions of this Agreement), the terms and provisions of this Agreement are intended solely for the benefit of the parties hereto and their respective permitted successors



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or assigns, and it is not the intention of the parties to confer third‐party beneficiary rights upon any other person or entity.

27. Severability. If any provision of this Agreement is held to be illegal, invalid or unenforceable under any present or future law, and if the rights or obligations of the parties hereto will not be materially and adversely affected thereby, (a) such provisions will be fully severable, (b) this Agreement will be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part hereof, (c) the remaining provisions of this Agreement will remain in full force and effect and will not be affected by the illegal, invalid or unenforceable provision or by its severance herefrom; and (d) in lieu of such illegal, invalid or unenforceable provision, there will be added automatically as a part of this Agreement a legal, valid and enforceable provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible.

28. Regulatory Compliance. The parties hereto agree to conduct their relationship in full compliance with all applicable state, federal and local laws and regulations, including, but not limited to, the federal Anti‐Kickback Statute (42 U.S.C. § 1320a‐7b(b)). The parties hereto agree that no part of this Agreement shall be construed to induce or encourage the referral of patients or the purchase of health care services or supplies. The parties hereto acknowledge that there is no requirement under this Agreement or any other agreement between Manager or any affiliate thereof and the Company that any Party refer any patients to any health care provider or purchase any health care goods or services from any source. Additionally, no payment under this Agreement is in return for the referral of patients, if any, or in return for purchasing, leasing or ordering services from Manager or any of its affiliates. The parties hereto may refer patients to any company or person providing services and will make such referrals, if any, consistent with professional medical judgment and the needs and wishes of the relevant patients.

29. No Inferences; Sophisticated Parties. Each party hereto acknowledges and agrees to the following: (a) each Party is sophisticated and represented by counsel in the negotiation and preparation of this Agreement and the other agreements relating hereto; (b) this Agreement and the other agreements relating hereto are the result of negotiations between the parties hereto and an equal amount of drafting by such parties; (c) this Agreement and the other agreements relating hereto embody the justifiable expectations of sophisticated parties derived from arm’s‐length negotiations; and (d) no inference in favor of, or against, any Party shall be drawn from the fact that any portion of this Agreement has been drafted by or on behalf of such Party.

30. Survival. The respective indemnities, representations, warranties and covenants of the parties to this Agreement shall remain in full force and effect and shall survive the termination of this Agreement.

31. Time of the Essence. Time is of the essence with respect to this Agreement.

32. Amendment and Restatement; No Novation. This Agreement amends and restates in its entirety the Existing Management Agreement. This Agreement governs the



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present relationship between the parties hereto in respect of the transactions contemplated hereby, and all prior agreements among or between such parties, whether oral or written between the Company and Manager superseded by the terms of this Agreement. The execution and delivery of this Agreement shall constitute an amendment and restatement of, but not a novation or repayment of, the obligations incurred prior to the Effective Date, and is in no way intended, nor shall it be construed, to affect, replace, impair or extinguish the creation, attachment, perfection or priority of the security interests in, and other liens on, any of the Collateral. In addition, all obligations and liabilities and indebtedness created or existing under, pursuant to, or as a result of, the Existing Management Agreement shall continue in existence, which obligations, liabilities and indebtedness the Company acknowledges, reaffirms and confirms, and nothing contained in this Agreement shall constitute a waiver of any Event of Default in existence on or prior to the date of this Agreement.

[Signature Pages Follow]



4827-8319-2506.4

EXHIBIT C

Secured Repayment Agreement

See attached.

Case 3:20-bk-01940 Doc 92-3 Filed 04/27/20 Entered 04/27/20 18:58:00 Desc Exhibit C - Secured Repayment Agreement Page 1 of 18

Execution Version

4818-8877-7136

SECURED REPAYMENT AGREEMENT

THIS SECURED REPAYMENT AGREEMENT (this “Agreement”) is entered into and effective as of March 26, 2020 (the “Effective Date”), by and among Community Healthcare Trust Services, Inc., a Tennessee corporation (“CHCT Services”) and CHCT Lending, LLC, a Delaware limited liability company (“CHCT Lending” and together with CHCT Services, “CHCT”), on the one hand, and Summit BHC West Virginia, LLC, a West Virginia limited liability company (“Summit WVa”) and DSKT LLC, a Florida limited liability company (“DSKT” and together with Summit WVa, the “Borrowers”), on the other hand.

RECITALS:

A. Borrowers are parties to that certain Asset Purchase Agreement, dated as of March 26, 2020 (the “Purchase Agreement”), with MBH Highland, LLC (“Highland”), a Delaware limited liability company, and MBH Health Center, LLC, a Delaware limited liability company (collectively, the “Sellers”), pursuant to which Sellers have agreed to sell the Assets (as defined in the Purchase Agreement) to Borrowers subject to the terms of the Purchase Agreement and approval of the Bankruptcy Court.

B. Capitalized terms used but not otherwise defined herein shall have the meaning given to such terms as set forth in the Purchase Agreement.

C. If Borrowers are the Successful Bidder for the Assets, Summit WVa will, among other things, assume the Lease Agreement between Highland and CHCT’s affiliate, CHCT West Virginia, LLC, as amended and restated by the Phase II Lease, and Borrowers will agree to repay the Repayment Amount (defined below) pursuant to the terms and conditions set forth in this Agreement.

D. As partial consideration for entering into the Phase II Lease and certain other

transactions contemplated by CHCT and Summit WVa, including, without limitation, the transactions contemplated in this Agreement, CHCT has agreed, pursuant to the terms and conditions set forth herein, in that certain Credit Bid Agreement to entered into by and between CHCT and Borrowers on or before the Effective Date (the “Credit Bid Agreement”), and in certain other related agreements, to (i) permit Borrowers to Credit Bid the outstanding balance of the CHCT Secured Debt (as defined in the Credit Bid Agreement) as all or part of the Purchase Price under the Purchase Agreement and in conjunction with any Auction of the Assets; (ii) in the event the outstanding balance of the DIP Financing does not, as of the date of Closing, include (a) the IRS Debt, (b) the Lease Cure Amount or (c) the Cure Costs, advance at or before Closing such amounts as are necessary to satisfy the outstanding balances of the IRS Debt, the Lease Cure Amount and the Cure Costs (the “Closing Advances”) as part of the Purchase Price under the Purchase Agreement and in conjunction with any Auction of the Assets; and (iii) pay the Bank Payment Amount (as defined below).

E. As consideration for CHCT’s (i) extension of the DIP Financing and Closing Advances, (ii) payment of the Bank Payment Amount, (iii) entry into the Credit Bid Agreement, and (iv) funding of the Post Sale Expenses in accordance with the DIP Financing, Borrowers have agreed, pursuant to the terms and conditions contained herein, to repay the Repayment


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Amount (as defined herein and as set forth on Exhibit A hereto) to CHCT, and DSKT has agreed to grant CHCT a security interest in and lien on the Collateral (defined below) to secure the obligations hereunder. For the avoidance of doubt, under no circumstances shall either of the Borrowers be liable for repaying the CHCT Mezz Debt or any bank debt of Sellers in excess of the amount of the Bank Payment Balance.

NOW, THEREFORE, in consideration of the premises, the mutual covenants set forth below, and other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

1. Recitals Incorporated. The Recitals set forth above are hereby incorporated by reference as if fully set forth in the body of this Agreement.

2. Effective Date; Term. This Agreement shall be effective as of the Effective Date and shall remain in effect until the earlier of (a) the full satisfaction of payment of all amounts required to be paid by Borrowers hereunder, or (b) the termination of the Phase II Lease due to the failure of the Repayment Amount to be satisfied within eighteen (18) months after the Closing Date and in which CHCT has elected not to forgive the remaining balance of the Repayment Amount.

3. Repayment Amount; Credit Bid Agreement; Closing Advances; Excess Proceeds.

3.1. Repayment Amount. For purposes of this Agreement, (a) the “Repayment Amount” shall be the sum of the Bank Payment Balance (defined below), plus the outstanding balances of the DIP Financing and the Closing Advances as of the Closing Date, plus the Post Sale Expenses funded pursuant to the DIP Financing, plus the Credit Bid Advance (as defined in the Credit Bid Agreement), if any, plus the Tail Insurance Advance (as defined below), if any; (b) the “Bank Payment Amount” shall be the amount of $1,750,000, which CHCT Lending paid to ServisFirst in return for ServisFirst’s transfer and assignment to CHCT Lending all of ServisFirst’s right, title and interest in and to the Company Collateral; and (c) the “Bank Payment Balance” shall be the sum of the Bank Payment Amount, less all funds received by CHCT or any of their respective affiliates, in payment of the Company Note through the Closing Date. CHCT hereby agrees that (x) the availability under the DIP Financing, as set forth in the Purchase Agreement, will not be increased without the prior written consent of Summit WVa, which consent Summit WVa may withhold in its sole and exclusive discretion, or (y) if the availability under the DIP Financing is increased without Summit WVa’s prior written consent, such additional amount shall not be included as part of the Repayment Amount. 3.2 Credit Bid Agreement. On or prior to the Effective Date, the parties thereto shall execute and deliver the Credit Bid Agreement, in form and substance acceptable to the parties thereto, authorizing Borrowers to Credit Bid the outstanding balance of the CHCT Secured Debt as all or part of the Purchase Price under the Purchase Agreement and in conjunction with any Auction of the Assets.

3.3 Closing Advances. In the event the outstanding balance of the DIP Financing does not, as of the Closing Date, include payment of the IRS Debt, the Lease Cure Amount or the Cure Costs, CHCT hereby unconditionally commits and obligates itself to


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advance the Closing Advances at Closing in order to satisfy the outstanding balances of the IRS Debt, Lease Cure Amount and the Cure Costs as part of the Purchase Price.

3.4 Tail Insurance Advance. Pursuant to the Purchase Agreement, Sellers are

required to provide a certificate of insurance evidencing that all physicians and physician assistants who are, as of Closing, (i) providing services at the Facilities and (ii) covered by MBH Highland’s professional liabillty policy, are covered by an adequate tail insurance policy; provided, to the extent the cost of such tail insurace policy exceeds the amount set forth in the Budget for payment of the same and there is insufficient availability under the DIP Financing to pay such higher cost, CHCT shall advance the funds necessary to pay such additional costs for the tail insurance (the “Tail Insurance Advance”).

3.5 Excess Proceeds. In the event CHCT has received payments from Sellers

as of the Closing Date in excess of the outstanding balance of the working capital portion of the DIP Financing and has no remaining funding obligations (including Post Sale Expenses) pursuant to the DIP Financing (the “Excess Proceeds”), the Excess Proceeds shall be applied against the then outstanding balance of the Repayment Amount.

4. Collection of Accounts Receivable.

4.1 Accounts Receivable. For purposes of this Agreement, “Accounts Receivable” shall mean Sellers’ accounts receivable arising from the rendering of services to patients, billed and unbilled, recorded or unrecorded, with collection agencies or otherwise, accrued and existing in respect of services provided by Sellers prior to the Closing Date and which will be transferred and assigned to DSKT pursuant to the Purchase Agreement.

4.2. Terms of Collection. For the term of this Agreement, Summit WVa will collect the Accounts Receivable on the following terms and conditions:

(a) Unbilled Accounts Receivable. Summit WVa shall prepare and send to appropriate third parties (whether patients or payors or both) billing statements with respect to Accounts Receivable arising from services provided prior to the Effective Date which have not been billed as of the Effective Date, if any. Summit WVa shall not be responsible if one or more bills cannot be timely billed in accordance with applicable payor billing guidelines or if all or a portion of such Accounts Receivable are not collected (as is the case with all Accounts Receivable) because Sellers have not provided complete or timely supporting documentation to allow Summit WVa to process such bills.

(b) Books and Records. During the term of this Agreement, Summit WVa shall maintain books and records relating to the Accounts Receivable separate and distinct from all books and records relating to the business of Summit WVa. Summit WVa shall maintain all such books and records at a secure location designated in advance by DSKT and shall maintain and update such records in a reasonable manner. Upon termination of this Agreement, Summit WVa shall, upon request from CHCT or DSKT, provide in a reasonably orderly and usable fashion all such books and records to CHCT and DSKT.


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Summit WVa may maintain the books and records in any form permitted by applicable law.

(c) Level of Effort. CHCT and DSKT each hereby acknowledge that Summit WVa does not regularly provide or perform collection services for third parties as part of its business and, except as specifically stated elsewhere herein, Summit WVa does not otherwise provide any representations or warranties to CHCT or DSKT with respect to its performance of the collection services. In connection with Summit WVa’s collection efforts, Summit WVa shall (i) use at least the same level of skill, diligence, effort and resources that Summit WVa applies in the collection of its own accounts receivable, (ii) use the same computer systems (including hardware and software) used by the Sellers as of the Effective Date in connection with its collection activities, (iii) use the same billing and collection procedures used by Summit WVa as of the Effective Date (subject to compliance with applicable law); and (iv) comply with all applicable laws, rules, and regulations. Notwithstanding anything contained herein to the contrary, Summit WVa does not guarantee the extent to which any Accounts Receivable will be collected.

(d) Information to be Furnished. As soon as practicable following the request of CHCT or DSKT, but not more than weekly, Summit WVa shall furnish to CHCT and DSKT a report that contains: (i) an accounting of all cash collected under this Agreement that relates to the Accounts Receivable; (ii) a reconciliation of any Misdirected Payments (defined below); (iii) an accounting of any Pre-Closing Collections and Post-Closing Collections (defined below); (iv) an estimate of the amount of state and local taxes and fees due on the collections, including, without limitation, Business and Occupancy Taxes and Provider Fees (the “Taxes”); and (v) an accounting of the cash collections of the Accounts Receivable, net of the Owner’s Retention and Taxes.

(e) Misdirected Payments. The parties acknowledge that after the Effective Time, Summit WVa will own and operate the Facilities and that none of the revenues generated by Summit WVa following the Effective Time (“Post-Closing Accounts Receivable”) will be deemed Accounts Receivable for purposes of this Agreement and will be solely the property of Summit WVa as the new owner and operator of the Facilities. The parties further acknowledge that following the Effective Date collections from Post-Closing Accounts Receivable may inadvertently be paid to DSKT and that collections from Accounts Receivable may inadvertently be paid to Summit WVa (collectively, “Misdirected Payments”). In the event of any Misdirected Payments the receiving party shall promptly remit the Misdirected Payments to the other party.

(f) Transition Patients and Services. With respect to revenues attributable to items and services for patients (“Transition Patients”) who are admitted to the Facilities prior to the Effective Time but who are not discharged until after the Effective Time (“Transition Services”), the following process shall apply:


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(i) Summit WVa shall determine how much of the collections for such Transition Services (“Transition Collections”) are attributable to items and services provided to such Transition Patients before the Effective Time (“Pre-Closing Collections”) and how much of the collections for such Transition Services are attributable to items and services provided to such Transition Patients on and after the Effective Time (“Post-Closing Collections”) and will provide a reconciliation report to DSKT and CHCT. The amount of the Post-Closing Collections shall be solely the property of Summit WVa without regard to, or application of, Sections 4.2(g), 5.2(b), 5.2(c), and 5.2(d) with respect to such amounts, it being understood that Post-Closing Collections are proceeds of Summit’s Post-Closing Accounts Receivable. Summit WVa will be responsible for paying all Taxes on Post-Closing Collections and Post-Closing Accounts Receivable. The amount of the Pre-Closing Collections shall be subject to, and deposited and disbursed in accordance with, Sections 4.2(g), 5.2(a), 5.2(b), 5.2(c), and 5.2(d), it being understood that such Pre-Closing Collections are proceeds of Accounts Receivable. If Summit WVa receives any Pre-Closing Collections it shall remit them promptly to DKST, and if DKST receives any Post-Closing Collections it shall remit them promptly to Summit WVa.

(ii) If Summit WVa is unable to determine the correct allocation of collections between Pre-Closing Collections and Post-Closing Collections for a Transition Patient, then such Transition Collections shall be allocated as follows: (A) Summit WVa shall receive an amount equal to (x) the amount of the Transition Collections multiplied by (y) a fraction, the numerator of which will be the number of patient days the Transition Patient was in the Facilities from and after the Effective Time and until discharge (not counting the day of discharge), and denominator of which will be the total number of patient days the Transition Patient was in the Facilities (not counting the day of discharge), and (B) DSKT shall receive the balance of the Transition Collections, which shall be deposited and disbursed in accordance with Sections 4.2(g), 5.2(a), 5.2(b), 5.2(c), and 5.2(d).

(g) Owner’s Retention and Payment of Collection Fee.

(i) DSKT, as owner, shall retain collections (“Owner’s Retention”) based on the following schedule:

(A) Aggregate Collections Owner’s Retention $0 - $2,850,000 6% $2,851,000 - $3,600,000 10% $3,601,000 and above 30%


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(B) DSKT shall be entitled to an Owner’s Retention equal to seventy-five percent (75%) of all amounts collected on the Accounts Receivable that are greater than 180 days old as of the Closing Date.

(C) If any of the Accounts Receivable are sent to a third party collection agency before the Effective Date or if DSKT and CHCT mutually agree that any of the Accounts Receivable need to be sent to a third party collection agency after the Effective Date, the third party collection fee, plus six percent (6.00%) from the proceeds of such Accounts Receivable.

(ii) From the Owner’s Retention, DSKT shall pay to Summit

WVa a collection fee (the “Collection Fee”) equal to three percent (3%) of the aggregate collections of Accounts Receivable.

(iii) Summit WVa shall submit a written accounting to CHCT and DSKT (the “Accounting”) within fifteen (15) days after the end of each calendar month specifying the amount of the aggregate collections of the Accounts Receivable and the amounts of the Owner’s Retention and the Collection Fee for such month. DSKT shall collect the Owner’s Retention from the Collection Account and pay Summit WVa the Collection Fee from the Owner’s Retention as set forth in Section 5.2(b) of this Agreement within five (5) business days from date of receiving Summit WVa’s written accounting.

(h) Limitation of Liability.

(i) DSKT. IN NO EVENT SHALL DSKT, OR ITS DIRECTORS, OFFICERS, MANAGERS, MEMBERS, EMPLOYEES, ATTORNEYS, OR AGENTS BE LIABLE TO CHCT OR SUMMIT WVA FOR ANY INDIRECT, SPECIAL, OR CONSEQUENTIAL DAMAGES OR LOST PROFITS ARISING OUT OF OR RELATED TO THE COLLECTION SERVICES PROVIDED UNDER THIS AGREEMENT, THE PERFORMANCE OR BREACH OF ANY TERMS UNDER THIS AGREEMENT, OR ANY NEGLIGENCE OR GROSS NEGLIGENCE WITH RESPECT TO THE COLLECTION SERVICES OR PERFORMANCE UNDER THIS AGREEMENT.


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(ii) SUMMIT WVA. IN NO EVENT SHALL SUMMIT WVA OR ITS DIRECTORS, OFFICERS, MANAGERS, MEMBERS, EMPLOYEES, ATTORNEYS, OR AGENTS BE LIABLE TO CHCT FOR ANY INDIRECT, SPECIAL, OR CONSEQUENTIAL DAMAGES OR LOST PROFITS ARISING OUT OF OR RELATED TO THE COLLECTION SERVICES PROVIDED BY SUMMIT WVA UNDER THIS AGREEMENT, THE PERFORMANCE OR BREACH OF ANY TERMS UNDER THIS AGREEMENT, OR ANY NEGLIGENCE OR GROSS NEGLIGENCE WITH RESPECT TO THE COLLECTION SERVICES OR PERFORMANCE UNDER THIS AGREEMENT.

(iii) CHCT. IN NO EVENT SHALL CHCT OR ITS DIRECTORS, OFFICERS, MANAGERS, MEMBERS, EMPLOYEES, ATTORNEYS, OR AGENTS BE LIABLE TO DSKT OR SUMMIT WVA FOR ANY INDIRECT, SPECIAL, OR CONSEQUENTIAL DAMAGES OR LOST PROFITS ARISING OUT OF OR RELATED TO THE COLLECTION SERVICES PROVIDED UNDER THIS AGREEMENT, THE PERFORMANCE OR BREACH OF ANY TERMS UNDER THIS AGREEMENT, OR ANY NEGLIGENCE OR GROSS NEGLIGENCE WITH RESPECT TO THE COLLECTION SERVICES OR PERFORMANCE UNDER THIS AGREEMENT.

(i) Relationship of the Parties. It is expressly understood and agreed by the parties that nothing contained in this Agreement will be construed to create a joint venture, partnership, association, fiduciary relationship, or other such affiliation. Without limiting the generality of the foregoing, no party has any duties, whether express or implied, obligations or responsibilities to any other party except as expressly provided herein.

4.3 Termination. Notwithstanding anything in this Agreement to the contrary, including, without limitation, Section 2 above, Summit WVa, DSKT, or CHCT may terminate Summit WVa’s collection services under this Section 4 upon written notice to the other party. 5. Payment to CHCT.

5.1 Asset Payment. Summit WVa agrees to pay CHCT the amount of Two Hundred and Fifty Thousand and 00/100 Dollars ($250,000.00) (the “Asset Payment”) at Closing pursuant to the terms of this Agreement.


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5.2 Application of Accounts Receivable Collections.

(a) Collection Account. For so long as any portion of the Repayment Amount remains outstanding, all moneys received under this Agreement with respect to the Accounts Receivable shall be deposited into a collection account selected by and under the control of DSKT (the “Collection Account”).

(b) Payment from Collection Account. Any time after the first business day of each month, DSKT may withdraw from the Collection Account any accrued but unpaid Owner’s Retention and any Taxes. Within five (5) days after Summit WVa provides the Accounting to DSKT and CHCT, (1) DSKT will pay Summit WVa its Collection Fee and (2) the balance of the Collection Account shall be transferred to and deposited into a deposit account selected by and under the control of CHCT (the “CHCT Account”). CHCT may withdraw any and all sums contained in the CHCT Account at any time. Summit WVa and DSKT shall have deposit authority but no withdrawal authority over the CHCT Account.

(c) Credit Against Repayment Amount. All funds received by CHCT from collection of the Accounts Receivable, including, without limitation, all funds deposited into the CHCT Account, shall be credited against the outstanding balance of the Repayment Amount.

(d) Excess Collections. All funds received by CHCT from collection of the Accounts Receivable, including, without limitation, all funds deposited into the CHCT Account, after the Repayment Amount has been paid in full (the “Excess Collections”), shall be applied to, and shall abate, any rent owed by Summit WVa to CHCT under the Phase III Lease, to the extent the Phase III Lease is in effect, on a dollar for dollar basis.

(e) Non-Recourse Liability.

(i) DSKT. Notwithstanding anything in this Agreement (or any other agreement related hereto) to the contrary, DSKT’s sole and exclusive liability for the Repayment Amount shall be limited to the Collateral reduced by the Owner’s Retention and the Taxes. For the avoidance of doubt, CHCT shall have no recourse against DSKT or any of its directors, officers, managers, members, shareholders, employees, attorneys, agents, or their respective assets, except as provided in Section 9 with respect to the Collateral (as defined below).

(ii) Summit WVa. Notwithstanding anything in this Agreement (or any other agreement related hereto) to the contrary, Summit WVa’s sole and exclusive liability for the Repayment Amount shall be limited to the Collateral, net of


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the Owner’s Retention and the Taxes, plus the Free Cash Flow (as defined below). For the avoidance of doubt, CHCT shall have no recourse against Summit WVa or any of its directors, officers, managers, members, shareholders, employees, attorneys, agents, or their respective assets with respect to payment of the Repayment Amount, except as provided in Section 9 with respect to the Collateral.

(f) Liability for Refunds; Indemnity. CHCT, DSKT and Summit WVa agree that, in the event a liability arising out of, or with respect to, an Accounts Receivable after such Accounts Receivable has been collected, including, without limitation, any refund that may be owed to a payor or other third party (collectively, an “AR Claim”), (i) each party shall be responsible for paying such AR Claim in the proportion that they received payment for the Owner’s Retention, Collection Fee, or payment of the Repayment Amount related to such AR Clam, (ii) any CHCT payment related to clause (i) will increase the Repayment Amount in an equal amount of such payment, and (iii) each party shall indemnify and hold harmless (collectively, the “Indemnity”) the other parties, and each of their respective officers, directors, shareholders, members, managers, employees, partners, attorneys and agents (in their respective capacities as such) (each such person being an “Indemnified Person”) from and against, without limitation, any and all losses, liabilities, judgments, claims, damages, causes of action, litigation, actions or investigations, costs and expenses, including reasonable fees and disbursements (collectively referred to herein as “Losses”) of any Indemnified Person and of its legal counsel, incurred or suffered by any Indemnified Person arising out of or relating to any other party’s proportionate share of such AR Claim in the event any party fails to timely pay their proportionate share of such AR Claim (collectively, the “Indemnified Actions”), including, without limitation, (i) any Losses arising out of or relating to such Indemnified Person taking action (or omitting to take action) in accordance with the Indemnified Actions or any action already taken or omitted by such Indemnified Person in connection with the Indemnified Actions, including, without limitation, any Losses incurred by, or assessed against, such Indemnified Person in any proceedings; (ii) Losses resulting from, or arising out of, the enforcement of the Indemnified Actions and the Indemnity; and (iii) reasonable attorneys’ fees and expenses incurred by such Indemnified Person in connection with the foregoing; provided, however, that no such Indemnified Person shall be indemnified against his or her own fraud, gross negligence or willful misconduct as determined by a judgment of a court that is binding on such Indemnified Person, is final, and is not subject to review on appeal.

5.3 Positive Free Cash Flow. In addition to application of the collections of the Accounts Receivable, as set forth above, as long as there remains an outstanding balance of the Repayment Amount, Summit WVa shall also make payments to CHCT on a quarterly basis in the amount equal to all positive Free Cash Flow and such payment of positive Free Cash Flow shall be applied to the Repayment Amount. For the purpose of this Agreement, “Free Cash Flow” shall mean Summit WVa’s net income, plus depreciation and amortization, less the


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Management Payment (as defined herein) and tenant funded required capital expenditures, plus or minus changes in operating assets and liabilities, and other adjustments to reconcile net income to net cash from operating activities determined in accordance with generally acceptable accounting principles. For purposes of this Agreement, “Management Payment” shall mean a monthly amount equal to the greater of Seventy Five Thousand Dollars ($75,000) or three percent (3%) of Summit WVa’s monthly net revenues (as determined by Summit WVa in accordance with generally accepted accounting principles) to be retained by Summit WVa from such net revenues unless and until such time as the Phase III Lease becomes effective. For the avoidance of doubt, Summit WVa shall not pay-down the Repayment Amount with Free Cash Flow unless Free Cash Flow is positive. Further, once the Repayment Amount is satisfied, all Free Cash Flow shall be retained by Summit WVa. 6. Financial Statements. So long as there is an outstanding balance of the Repayment Amount, Summit WVa will furnish financial statement to CHCT on a quarterly and annual basis, with a reconciliation of Free Cash Flow.

7. Security and Pledge.

7.1 Grant of Security Interest. As collateral security for the payment and performance in full of Borrowers’ obligations to repay the Repayment Amount (the “Secured Obligations”), DSKT hereby pledges, assigns and grants to CHCT a lien on and security interest in and to all of its respective rights, title and interests in and to the Accounts Receivable, including the proceeds of the Accounts Receivable, net of Taxes (collectively, the “Collateral”). Such security interest shall give CHCT a continuing lien on and security interest in all of the Collateral; provided, however, for the avoidance of doubt, CHCT shall not have, and is not hereby granted, a lien on or security interest in any property of DSKT or Summit WVa other than the Accounts Receivable and the proceeds of the Accounts Receivable collected, net of the Owner’s Retention and Taxes.

7.2 Authority to File Financing Statements. DSKT hereby irrevocably authorizes CHCT at any time and from time to time, to file in any relevant jurisdiction any financing statements and amendments thereto that contain the information required by Article 9 of the Uniform Commercial Code of each applicable jurisdiction for the filing of any financing statement or amendment relating to the Collateral.

8. Events of Default. As used in this Agreement, the term “Event of Default” shall be the occurrence of any or all of the following:

8.1 the failure of Borrowers to pay any amount required to be paid under this Agreement, with any such failure remaining un-remedied for thirty (30) days after the original due date of any such payment; and

8.2 the failure of Borrowers to perform or discharge any other obligation, covenant, or condition contained in this Agreement, with any such failure remaining un-remedied for thirty (30) days after Borrowers’ receipt of written notice of such failure from CHCT.


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9. Remedies upon Default. Upon the occurrence of an Event of Default, CHCT’s sole and exclusive remedy shall be to sell the Collateral in any manner permitted by the Uniform Commercial Code in effect in any applicable jurisdiction and, at any sale of the Collateral, CHCT may be the purchaser, licensee, assignee or recipient of the Collateral or any part thereof and shall be entitled, for the purpose of bidding and making settlement or payment of the purchase price for all or any portion of the Collateral sold, assigned or licensed at such sale, to use and apply any of the Secured Obligations as a credit on account of the purchase price of the Collateral or any part thereof payable at such sale.

10. Prepayments. Borrowers may prepay the Secured Obligations, in whole or in part, without the written consent of CHCT.

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

CHCT: CHCT West Virginia, LLC CHCT Lending, LLC 3326 Aspen Drive, Suite 150 Franklin, TN 37067 Attn: Timothy Wallace, President [email protected] With a copy to: Baker Donelson 211 Commerce Street, Nashville, TN 37201 Attn: John H. Rowland, Esq.

[email protected] Borrowers: Summit BHC West Virginia, LLC

389 Nichol Mill Lane, Suite 100 Franklin, TN 37067 Attn: Scott Schwieger, General Counsel [email protected]

With a copy to: Waller Lansden Dortch & Davis, LLP 511 Union Street, Suite 2700 Nashville, TN 37219 Attn: David Lemke, Esq. [email protected]

and

DSKT LLC 13928 River Road, Unit 503 Pensacola, FL 32507


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Attn: Danny Carpenter [email protected]

or to such other address, and to the attention of such other person as any party may designate in writing. Notice given by a party’s counsel shall be considered notice given by that party.

12. Arbitration. Any controversy, dispute or claim arising out of or relating to this Agreement, or the breach thereof, will be settled by binding arbitration in accordance with the Rules of Procedure for Arbitration of the Alternative Dispute Resolution Service of the American Health Lawyers Association, and judgment upon the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. Such arbitration shall occur in Nashville, Tennessee. The parties will jointly appoint a mutually acceptable arbitrator. If the parties are unable to agree upon such an arbitrator within fifteen (15) days after a party has given the other party written notice of its desire to submit a dispute for arbitration, then each party shall appoint an arbitrator of its choice and the appointed arbitrators will select a third arbitrator, and the panel of three arbitrators will hear the parties and settle the dispute. Each arbitrator shall be experienced in health care finance. Each party shall be responsible for its own attorneys’ fees and costs. The compensation and expenses of the arbitrator(s) and any administrative fees or costs shall be borne equally by CHCT on the one hand and by Summit WVa and DSKT on the other. Arbitration shall be the exclusive remedy for the settlement of disputes arising under this Agreement. The decision of the arbitrator(s) shall be final, conclusive and binding, and no action at law or in equity may be instituted by any party other than to enforce the award of the arbitrator(s). The arbitrator(s) shall have the authority to award the recovery of attorneys’ fees to the prevailing party in such arbitration.

13. Governing Law. This Agreement shall be governed by and interpreted in accordance with the internal laws of the State of Tennessee (without regard to its conflicts of laws provisions). EACH PARTY ABSOLUTELY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHTS TO TRIAL BY JURY IN CONNECTION WITH ANY PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

14. Severability. In the event that any one or more terms or provisions hereof shall be held void or unenforceable by any trier-of-fact (except any term pertaining to the amount or payment of the consideration), all remaining terms and provisions hereof shall remain in full force and effect.

15. Headings. The section headings contained in this Agreement are inserted for convenience of reference only, and shall not affect the meaning or interpretation of this Agreement.

16. Assignment. This Agreement may not be assigned by any party hereto without the consent of the other parties.

17. Amendment. This Agreement may be amended, modified and supplemented only by written instrument authorized and executed by all parties.


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18. Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original and all of which, when taken together, shall be considered one and the same agreement. A facsimile or scanned copy (.pdf) signature to this Agreement shall have the same effect as an original for all purposes.

[Signature pages follow]


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

BORROWERS:

SUMMIT BHC WEST VIRGINIA, LLC

By: Name: Scott Schwieger Title: General Counsel and Chief Compliance

Officer

DSKTLLC

By: Name: Danny Carpenter Title: Sole Member

CHCT:

N Title:

[Signature Page to Secured Repayment Agreement]


4818-8877-7136

EXHIBIT A

Estimated Repayment Amount Estimated DIP Financing (all approximate): IRS Payment $1,350,000 Lease Cure Payment $1,450,000 Revolver $1,000,000 Post Sale Expenses

Post Sale Administrative Expenses $125,000 Post Sale Operating Expenses (Per Budget)

Bank Payment Amount $1,750,000 Anticipated Company Note Payment ($1,000,000) Bank Payment Balance (estimated) $750,000 Maximum of $5,425,000
