Case wlh Doc 908 Filed 03/21/18 Entered 03/21/18 15:31:59 Desc Main Document Page 1 of 18

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1 Document Page 1 of 18 IN THE UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION IN RE: CLAYTON GENERAL, INC., f/k/a Southern Regional Health System, Inc. d/b/a Southern Regional Medical Center, et al., Debtors. CHAPTER 11 Jointly Administered Under CASE NO wlh NOTICE OF HEARING ON MOTION TO APPROVE COMPROMISE AND SETTLEMENT WITH SOUTHSIDE MEDICAL CENTER, INC. PLEASE TAKE NOTICE that the above-captioned Debtors have filed a Motion to Approve Compromise and Settlement with Southside Medical Center, Inc. (the Motion in which the Debtors have requested that the Court approve a settlement of certain avoidance action claims with the recipient thereof. A copy of the Motion is available at regional or upon request to the undersigned. PLEASE TAKE FURTHER NOTICE that the Court will hold a hearing on the Motion in Courtroom 1403, United States Courthouse, 75 Ted Turner Drive, SW, Atlanta, Georgia at 1:30 p.m. on April 19, PLEASE TAKE FURTHER NOTICE that your rights may be affected by the Court s ruling on this Motion. You should read this Motion carefully and discuss it with your attorney, if you have one in this bankruptcy case. (If you do not have an attorney, you may wish to consult one. If you do not want the Court to grant the relief sought in the Motion, or if you want the Court to consider your views, then you and/or your attorney should attend the hearing. You may also file a written response to the Motion with the Clerk at the address stated below, but you are not required to do so. If you file a written response, you must attach a certificate stating when, how and on whom (including addresses you served the response. The address of the Clerk s Office is: Clerk, U.S. Bankruptcy Court, Suite 1340, 75 Ted Turner Drive, SW, Atlanta, Georgia You should also mail a copy of your response to the undersigned at the address stated below. Respectfully submitted, this 21st day of March, SCROGGINS & WILLIAMSON, P.C Northside Parkway Suite 450 Atlanta, Georgia T: ( F: ( E: rwilliamson@swlawfirm.com mlevin@swlawfirm.com By: /s/ Matthew W. Levin J. ROBERT WILLIAMSON Georgia Bar No MATTHEW W. LEVIN Georgia Bar No Counsel for the Debtor

2 Document Page 2 of 18 IN THE UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION IN RE: CLAYTON GENERAL, INC., f/k/a Southern Regional Health System, Inc. d/b/a Southern Regional Medical Center, et al., Debtors. CHAPTER 11 Jointly Administered Under CASE NO wlh MOTION TO APPROVE COMPROMISE AND SETTLEMENT WITH SOUTHSIDE MEDICAL CENTER, INC. COME NOW Clayton General, Inc. f/k/a Southern Regional Health System, Inc. d/b/a Southern Regional Medical Center ( CGI, Clayton General Group, Inc. f/k/a Southern Crescent Physicians Group, Inc. ( Group, Clayton General Real Estate, Inc. f/k/a Southern Crescent Real Estate, Inc., Clayton General ASC, Inc. f/k/a Southern Regional Ambulatory Surgery, Inc., Southlake ASC, LLLP f/k/a Southlake Ambulatory Surgery Center, L.L.L.P. d/b/a Mount Zion Surgery Center a/k/a Spivey Station Surgery Center and Clayton General Services, Inc. f/k/a Southern Regional Medical Services, Inc., debtors and debtors-in-possession (collectively, the Debtors and their respective bankruptcy estates, collectively, the Bankruptcy Estates in the above-styled jointly administered case (the Bankruptcy Case, and file this Motion for Approval of Compromise and Settlement with Southside Medical Center, Inc. (the Motion, and in support thereof, would respectfully show the Court as follows: SUMMARY OF SETTLEMENT 1. On July 30, 2015 (the Petition Date, the Debtors each filed a voluntary petition for relief under Chapter 11 of Title 11 of the United States Code (the Bankruptcy Code. The

3 Document Page 3 of 18 Debtors assert that during the ninety (90 days preceding the Petition Date, Southside Medical Center, Inc. ( Southside received certain transfers from one or more of the Debtors in the aggregate amount of $166, (the Transfers, which the Debtors may be entitled to avoid and recover as preferential transfers pursuant to Sections 547 and 550 of the Bankruptcy Code. By this Motion, the Debtors seek to resolve any and all of their and the Bankruptcy Estates claims against Southside related to the Transfers with the execution of mutual releases, and two payments by Southside totaling $50, JURISDICTION AND VENUE 2. This Court has jurisdiction over this matter pursuant to 28 U.S.C. 157 and This is a core proceeding pursuant to 28 U.S.C. 157(b(2(A. Venue before this Court is proper pursuant to 28 U.S.C and The statutory predicate for the relief requested in the Motion is Fed. R. Bankr. P BACKGROUND 3. As noted above, on the Petition Date, the Debtors each filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code. The Debtors are authorized to operate their businesses as debtors and debtors-in-possession pursuant to Sections 1107 and 1108 of the Bankruptcy Code. 4. No trustee or examiner has been appointed in the Bankruptcy Case. No request has been made for the appointment of a trustee or examiner. On August 11, 2015, the United States Trustee appointed the Official Committee of Unsecured Creditors for the Bankruptcy Estates (the Committee

4 Document Page 4 of 18 FACTS SPECIFIC TO THIS COMPROMISE MOTION 5. Prior to the sale of substantially all of the Debtors assets, the Debtors operated a family of healthcare providers servicing residents of Clayton County and others throughout the region south of Atlanta through traditional hospital, outpatient clinic and ambulatory care services. Southside was a vendor of certain products to the Debtors. 6. The Debtors records reflect that the Debtors paid Southside no less than $166, during the ninety (90 days preceding the Petition Date, which payments may constitute preferential transfers and may be avoided and recovered for the benefit of the Bankruptcy Estates, depending on the strength of any affirmative defenses asserted by Southside. 7. In addition, Southside may hold certain prepetition claims against the Debtors, including, but not limited to, claims arising under Section 502(h of the Bankruptcy Code. On or about June 21, 2016, Southside filed a proof of claim in the Bankruptcy Case alleging an administrative expense claim in the total amount of $55, [Claim No. 248, per the claims docket maintained by the Debtors authorized claims agent] (the Southside Claim, comprised of amounts allegedly due under a prepetition contract with CGI. 8. On July 28, 2017, the Debtors filed an adversary proceeding against Southside (Adv. Pro. No wlh, which asserted certain preference claims against Southside (the Adversary Proceeding. COMPROMISE AND SETTLEMENT 9. The Debtors are responsible for investigating, evaluating, analyzing, and determining if a resolution was possible with regard to any claims it may assert against Southside. The Debtors have conducted due diligence and have analyzed the applicable legal issues pertaining to: (i the Transfers; (ii Southside s and the Debtors prepetition business relationship; - 3 -

5 Document Page 5 of 18 (iii possible claims related to the Transfers that may be asserted by the Debtors; (iv Southside s potential defenses thereto, including the new value and ordinary course defenses; and (v the value of the Southside Claim. 10. The Southside Settlement (as defined below is the product of the Debtors and Southside s arms-length negotiations. Below is a summary of settlement terms between the Debtors and Southside (the Southside Settlement, as more fully set forth in the Settlement Agreement attached hereto as Exhibit A: A. Subject to the occurrence of the Effective Date, the Parties agree that Southside shall pay the sum of Fifty Thousand Dollars ($50, (the Settlement Payment to CGI, in full and final satisfaction of claims as detailed herein. One half of the Settlement Payment, Twenty-Five Thousand Dollars ($25,000.00, shall be paid by Southside to CGI no later than five (5 calendar days after the Effective Date. The balance of the Settlement Payment, an additional Twenty-Five Thousand Dollars ($25,000.00, shall be paid by Southside to CGI no later than ninety-five (95 calendar days after the Effective Date; B. Should Southside fail to pay either installment of the Settlement Payment, and such failure shall continue for five (5 business days after written notice of the same from CGI to Southside, Southside shall be deemed to have consented to a judgment in the Adversary Proceeding in the amount of One Hundred and Ten Thousand Dollars ($110,000.00, minus any portion of the Settlement Payment actually paid by Southside to CGI; C. Subject to the occurrence of the Effective Date, and the receipt by CGI of the Settlement Payment, the Southside Claim shall be deemed disallowed, and Southside shall have and file no further claims in the Bankruptcy Case including, but not limited to, any claims arising under Section 502(h of the Bankruptcy Code; D. Subject to the occurrence of the Effective Date and the Debtors receipt of the Settlement Payment, the Debtors and Southside shall be deemed to have mutually released all claims against the other party that (i arise under the Bankruptcy Code, or (ii arise under any non-bankruptcy law and are related to the Transfers, or otherwise related to the prepetition contract between the Parties; and E. Such other terms and agreements as are more fully set forth in the Settlement Agreement, which all parties-in-interest are encouraged to read in full

6 Document Page 6 of 18 AUTHORITY AND ANALYSIS 11. This Court has the right and the power to approve the Southside Settlement. See 11 U.S.C. 105; Fed. R. Bankr. P Bankruptcy Rule 9019(a provides, in pertinent part, [o]n motion by the trustee and after notice and a hearing, the court may approve a compromise or settlement. Fed. R. Bankr. P. 9019(a. 12. The Debtors believe that the Southside Settlement is in the best interests of the Bankruptcy Estates and the creditors thereof under the circumstances; thus, it should be approved. Settlements and compromises are a normal part of the process of reorganization. Case v. Los Angeles Lumber Prods. Co., 308 U.S. 106, 130 (1939. The Supreme Court of the United States has further said: [i]n administering [Bankruptcy] Proceedings in an economical and practical manner, it will often be wise to arrange the settlement of claims as to which there are substantially and reasonable doubts. Protective Comm. of Stockholders of TMT Trailer Ferry, Inc. v. Anderson (In re TMT Trailer Ferry, Inc., 390 U.S. 414, 424 (1968, on remand, TMT Trailer Ferry, Inc. v. Kirkland, 471 F.2d 10 (5th Cir Settlements are desirable and wise methods of bringing [closure] to... proceedings otherwise lengthy, complicated and costly. Matter of Jackson Brewing Co., 624 F.2d 599, 602 (5th Cir Under Bankruptcy Rule 9019(a, this Court may approve a compromise or settlement on motion by the trustee and after a hearing on notice to creditors, the debtor and indenture trustee.... Protective Comm. For Indep. Stockholders of TMT Ferry, Inc. v. Anderson, 390 U.S. 414, 424 (1968. In conducting a hearing under Rule 9019(a, the bankruptcy court is to determine whether the proposed compromise is fair and equitable, and in the best interests of the bankruptcy estate. Id. In making this determination, a bankruptcy court is required to apprise itself of all facts necessary for an intelligent and objective opinion of the probabilities of ultimate - 5 -

7 Document Page 7 of 18 success should the claim be litigated. Id. To determine whether a settlement should be approved under 9019, the Court should: Id. at form an educated estimate of the complexity, expense, and likely duration of such litigation, the possible difficulties of collecting on any judgment which might be obtained, and all other factors relevant to a full and fair assessment of the wisdom of the proposed compromise. Basic to this process in every instance, of course, is the need to compare the terms of the compromise with the likely rewards of the litigation. 14. The decision whether to approve a particular settlement is within the discretion of the bankruptcy court. It must be remembered that the evaluation of any lawsuit is quite problematic and calls for a significant degree of speculation. Texas Extrusion Corp. v Lockheed Corp. (In re Texas Extrusion Corp., 844 F.2d 1142, 1159 (5th Cir A reviewing court will uphold the approval of a settlement if it is the result of an adequate and intelligent consideration of the merits of the claims, the difficulties of pursuing them, the potential harm to the debtor s estate caused by delay, and the fairness of the terms of the settlement. TMT Trailer Ferry, Inc., 390 U.S. at The Eleventh Circuit has adopted the following factors to consider in evaluating the propriety of a proposed settlement or compromise: a. The probability of success in the litigation; b. The difficulties, if any, to be considered in the matter of collection; c. The complexity of the litigation involved, and the expense, inconvenience and delay necessarily attending it; and d. The paramount interest of creditors and a proper deference to their reasonable views in the premises

8 Document Page 8 of 18 In re Chira, 567 F.3d 1307, 1312 (11th Cir See also In re Justice Oaks II, Ltd., 898 F.2d 1544, 1549 (11th Cir Probability of Success on the Merits. While the Debtors are confident in their chances of success prevailing on the merits of a preference action against Southside, the Debtors believe the proposed result is certainly within the realm of potential litigation results, but without having to spend the funds necessary to litigate. In order to recover the Transfers from Southside, the Debtors would have to engage in costly and time-consuming preference litigation in the Adversary Proceeding for which Southside has asserted defenses which have some merit. 17. Difficulty in Collection and Complexity, Expense, and Likely Duration of the Litigation. There appears to be at least some issue in the ability to collect a judgment against Southside should the Debtors prevail in the Adversary Proceeding. Southside is a non-profit organization, with limited liquidity, and its ability to pay a judgment in excess of $100,000 is not a foregone conclusion. Further, if the matters subject to the Southside Settlement are litigated, that litigation would be expensive and time consuming. Such a cost and delay in the administration of the Bankruptcy Cases would be burdensome to the Bankruptcy Estates. The Bankruptcy Estates would bear substantial litigation expenses e.g., the employment of expert witnesses, depositions, pretrial-motions and brief preparation, together with the preparation for and participation in a trial. The Bankruptcy Estates possesses limited funds. Accordingly, one of the significant advantages of the Southside Settlement is to save significant administrative costs of litigating, and potentially avoid collection issues. 18. Paramount Interest of Creditors. By virtue of the proposed settlement, Southside will pay $50, to the Bankruptcy Estates, which will allow additional funds to be available - 7 -

9 Document Page 9 of 18 for distribution to creditors, and release all of its claims (which are in excess of $55,000 against the Debtors. NOTICE 19. Notice of this Motion is being provided to the Office of the United States Trustee, counsel for Southside, counsel for the Committee, and the Master Service List established in these bankruptcy cases. In light of the nature of the relief requested, the Debtors respectfully request that the Court find that no further notice is necessary. WHEREFORE, the Debtors request that the Court: (a enter an order approving the Settlement Agreement; and (b grant such other and further relief as is just and proper. Dated: March 21st, SCROGGINS & WILLIAMSON, P.C Northside Parkway Suite 450 Atlanta, GA T: ( F: ( E: rwilliamson@swlawfirm.com mlevin@swlawfirm.com By: /s/ Matthew W. Levin J. ROBERT WILLIAMSON Georgia Bar No MATTHEW W. LEVIN Georgia Bar No Counsel for the Debtors - 8 -

10 Document Page 10 of 18 EXHIBIT A Settlement Agreement

11 Document Page 11 of 18 SETTLEMENT AGREEMENT This settlement agreement (the Agreement is made and entered into this 20th day of March, 2018, by and between (i Southside Medical Center, Inc. ( Southside, and (ii Clayton General, Inc. f/k/a Southern Regional Health System, Inc. d/b/a Southern Regional Medical Center ( CGI, Clayton General Group, Inc. f/k/a Southern Crescent Physicians Group, Inc., Clayton General Real Estate, Inc. f/k/a Southern Crescent Real Estate, Inc., Clayton General ASC, Inc. f/k/a Southern Regional Ambulatory Surgery, Inc., Southlake ASC, LLLP f/k/a Southlake Ambulatory Surgery Center, L.L.L.P. d/b/a Mount Zion Surgery Center a/k/a Spivey Station Surgery Center, and Clayton General Services, Inc. f/k/a Southern Regional Medical Services, Inc., debtors and debtors-in-possession (collectively, the Debtors and their respective bankruptcy estates, collectively, the Bankruptcy Estates. Defined Terms As used in this Agreement, Adversary Proceeding shall mean and refer to the adversary proceeding styled Clayton General, Inc. f/k/a Southern Regional Health System, Inc. d/b/a Southern Regional Medical Center, et al. v. Southside Medical Center, Inc., Adv. Pro. No wlh, currently pending in the Bankruptcy Court. As used in this Agreement, Bankruptcy Case shall mean and refer to the Chapter 11 bankruptcy case styled In re Clayton General, Inc. f/k/a Southern Regional Health System, Inc. d/b/a Southern Regional Medical Center, et al., Case No wlh (jointly administered, currently pending in the Bankruptcy Court. As used in this Agreement, Bankruptcy Code shall mean and refer to Title 11, United States Code. As used in this Agreement, Bankruptcy Court shall mean and refer to the United States Bankruptcy Court for the Northern District of Georgia, Atlanta Division, with jurisdiction over the Bankruptcy Case. As used in this Agreement, Bankruptcy Approval Order shall mean and refer to an order entered by the Bankruptcy Court in the Bankruptcy Case approving this Agreement and authorizing the consummation of the settlement which is the subject of this Agreement. As used in this Agreement, Effective Date shall mean and refer to the date on which the Bankruptcy Approval Order has become final ( final, in this context, means fourteen (14 calendar days shall have passed after entry of the Bankruptcy Approval Order without a notice of appeal, motion to extend time to file an appeal, or motion for reconsideration (or any similar motion having been filed, or, if such a notice or motion is filed, such appeal shall have been conclusively resolved or such motion shall have been denied. As used in this Agreement, Party shall mean and refer to, individually, the Debtors or Southside, and the Parties shall collectively mean both the Debtors and Southside. As used in this Agreement, the Petition Date shall mean and refer to July 30,

12 Document Page 12 of 18 Recitals WHEREAS on the Petition Date, the Debtors each filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code. WHEREAS the Debtors assert that during the ninety (90 days preceding the Petition Date, Southside received certain transfers from one or more of the Debtors in the aggregate amount of $166, (the Transfers, which the Debtors may be entitled to avoid and recover as preferential transfers pursuant to Sections 547 and 550 of the Bankruptcy Code. WHEREAS, Southside asserts it has certain defenses to the avoidance and recovery of the Transfers by the Debtors. WHEREAS, on or about June 21, 2016, Southside filed a proof of claim in the Bankruptcy Case alleging an administrative expense claim in the total amount of $55, [Claim No. 248, per the claims docket maintained by the Debtors authorized claims agent] (the Southside Claim, comprised of amounts allegedly due under a prepetition contract with CGI. WHEREAS, the Parties, through their respective counsel, engaged in arms-length, honest and frank settlement negotiations relating to the Transfers and the Southside Claim. WHEREAS, the Parties believe that it is in their respective best interests to enter into this Agreement to avoid the costs and expenses associated with potential litigation related to the recovery of the Transfers and the disallowance of the Southside Claim. NOW, THEREFORE, in consideration of the foregoing and the covenants hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is hereby agreed by the parties as follows: 1. Settlement Payment. Subject to the occurrence of the Effective Date, the Parties agree that Southside shall pay the sum of Fifty Thousand Dollars ($50, (the Settlement Payment to CGI, in full and final satisfaction of claims as detailed herein. One half of the Settlement Payment, Twenty-Five Thousand Dollars ($25,000.00, shall be paid by Southside to CGI no later than five (5 calendar days after the Effective Date by wire according to instructions provided by CGI. The balance of the Settlement Payment, an additional Twenty-Five Thousand Dollars ($25,000.00, shall be paid by Southside to CGI no later than ninety-five (95 calendar days after the Effective Date by wire according to instructions provided by CGI. 2. Effect of Default in Payment. Should Southside fail to pay either installment of the Settlement Payment by the dates specified in Paragraph 1, above, and such failure shall continue for five (5 business days after written notice of the same from CGI to Southside, Southside shall be deemed to have consented to a judgment in the Adversary Proceeding in the amount of One Hundred and Ten Thousand Dollars ($110,000.00, minus any portion of the Settlement Payment actually paid by Southside to CGI by the dates specified in Paragraph 1, above. 3. Disallowance of Southside Claim. Subject to the occurrence of the Effective Date, the Southside Claim shall be deemed disallowed. Further, Southside shall have no other claims against the Debtors or the Bankruptcy Estates in any amount, including, but not limited to, any - 2 -

13 Document Page 13 of 18 claims arising under Section 502(h of the Bankruptcy Code, and Southside shall file no other claims against the Debtors or the Bankruptcy Estates. 4. Mutual Release. Subject to the occurrence of the Effective Date, and the receipt by CGI of both installments of the Settlement Payment by the dates specified in Paragraph 1, above, the Debtors on behalf of themselves and the Bankruptcy Estates, hereby release, acquit and forever discharge Southside from any and all claims, counterclaims, rights, demands, obligations, costs, damages, losses, liabilities, attorneys fees, actions, lawsuits and causes of action, of whatever kind or nature, known or unknown, fixed or contingent, which the Debtors have, had or may hereafter claim to have in law or in equity, arising on or before the date of this Agreement, that (a arise under the Bankruptcy Code, including, but not limited to, claims arising under Chapter 5 of the Bankruptcy Code to avoid and recover any amounts from Southside, including, but not limited to, the Transfers, or (b arise under any non-bankruptcy law and are related to the Transfers or otherwise related to the prepetition contract between the Parties. Subject to the occurrence of the Effective Date, and the receipt by CGI of both installments of the Settlement Payment by the dates specified in Paragraph 1, above, Southside hereby releases, acquits and forever discharges the Debtors and the Bankruptcy Estates from any and all claims, counterclaims, rights, demands, obligations, costs, damages, losses, liabilities, attorneys fees, actions, lawsuits and causes of action, of whatever kind or nature, known or unknown, fixed or contingent, which Southside has, had or may hereafter claim to have in law or in equity, arising on or before the date of this Agreement, that (a arise under the Bankruptcy Code, or (b arise under any non-bankruptcy law and are related to the Transfers, or otherwise related to the prepetition contract between the Parties. 5. Bankruptcy Approval. This Agreement, and all terms and conditions hereof, are expressly conditioned upon the Bankruptcy Approval Order being obtained in a form reasonably acceptable to Southside and becoming final (as that term is defined in the definition of Effective Date above. The Debtors agree to promptly file a motion seeking the Bankruptcy Approval Order following execution of this Agreement. Notwithstanding anything to the contrary herein, if entry of the Bankruptcy Approval Order is not obtained or does not become final on or before April 30, 2018, then, unless such condition is extended or waived in writing by the Parties, this Agreement shall become null and void and of no further force and effect. If this Agreement is not approved by the Bankruptcy Court for any reason, then this Agreement shall be null and void, and inadmissible against any party, and the parties shall be returned in all respects to the status quo ante. 6. Abatement and Dismissal of Adversary Proceeding. Following execution of this Agreement, the Parties agree to promptly file a motion seeking to abate and extend all deadlines in the Adversary Proceeding pending full consummation of this Agreement, including, but not limited to, the indefeasible payment of the entire Settlement Payment by the dates specified in Paragraph 1, above. Subject to the occurrence of the Effective Date and no later than ten (10 days after the Debtors receipt of both installments of the Settlement Payment by the dates specified in Paragraph 1, above, the Debtors shall dismiss the Adversary Proceeding with prejudice, with each party to bear its own attorneys fees and costs of suit. 7. Continuation of Adversary Proceeding in Event of Default. Should Southside fail to pay either installment of the Settlement Payment by the dates specified in Paragraph 1, above, and such failure shall continue after written notice by CGI to Southside as provided in Paragraph - 3 -

14 Document Page 14 of 18 2, above, and consistent with the provisions of Paragraph 2, above, the Adversary Proceeding shall not be dismissed, and the Debtors may then proceed to file a motion in the Adversary Proceeding seeking entry of a judgment consistent with the terms of Paragraph 2, above, which motion shall be deemed unopposed by Southside. 8. No Admission of Liability or Wrongdoing. It is understood and agreed that this Agreement is being made in connection with the settlement and compromise of disputed claims and that such settlement is not to be construed as an admission or concession of liability by any Party. 9. Attorneys Fees and Costs. The Parties shall bear their own costs and attorneys fees incurred in connection with this Agreement and consummation of the settlement which is the subject of this Agreement. 10. Joint Authorship. This Agreement is the product of the negotiation of all of the Parties and their respective counsel. By agreement of the Parties, this Agreement shall be deemed to have been drafted jointly by the Parties, and any ambiguity in this Agreement shall not be construed for or against any party by virtue of the identity of any drafter. 11. Waiver. No waiver of any breach of any one or more of the conditions or covenants of this Agreement by any Party shall be deemed to imply or constitute a waiver of any breach of any other condition or covenant in this Agreement, or a waiver of a breach of the same condition or covenant in the future. 12. Authority and Binding Effect. By their signatures below, each respective signatory represents that he or she has the express authority of the Party for which he or she executes this Agreement, and further has the express authority to bind his or her principals to the terms of this Agreement. Each Party represents that it is the sole and current owner of all of the claims released by this Agreement. This Agreement shall be binding upon the Parties and their successors and assigns, and, as to the Debtors, any trustee(s, administrator(s, liquidator(s, or any other representative that may be appointed or succeed the Debtors and whether appointed pursuant to any statute (including any provision of the Bankruptcy Code, order of the Bankruptcy Court, a confirmed Chapter 11 plan, or otherwise. 13. Entire Agreement. This Agreement, and the documents referred to herein, contain the entire understanding of the Parties with respect to the subject matter hereof and there have been no representations, warranties, statements, or promises, express or implied, upon which any Party hereto has relied except as specifically provided in this Agreement. 14. Amendments or Modifications of this Agreement. This Agreement may not be amended, modified, or changed, nor shall any waiver of any provision hereof be effective, except by an instrument in writing and signed by all of the Parties. 15. Counterparts. This Agreement may be executed in separate counterparts, including by a PDF thereof or by facsimile, with the same effect as if all Parties to this Agreement had signed the same instrument

15 Document Page 15 of Severability. The Parties agree that, if any single immaterial section or provision of this Agreement should be found unenforceable, it shall be severed and the remaining sections and provisions shall be enforced in accordance with the terms of this Agreement. 17. Consent. The Parties represent that they have read this Agreement and have consulted with their respective attorneys about the meaning and effect of this Agreement, have been represented by counsel with respect to this Agreement, and that they understand this Agreement and agree to the terms and conditions thereof and sign them freely of their own will. 18. Sections and Headings. The headings and captions used in this Agreement and the organization of the provisions of this Agreement into separate sections are for the purposes of information, ease of reference, and convenience only, and do not themselves limit, expand, construe, or modify the contents of any provision hereof or of the mutual intents hereby expressed. 19. Governing Law. This Agreement is to be interpreted and construed in accordance with the provisions of the Bankruptcy Code and, where not inconsistent, the laws of the State of Georgia. 20. Jurisdiction. Any dispute, action or proceeding arising out of or relating to this Agreement shall be within the jurisdiction of the Bankruptcy Court. In the event the Bankruptcy Court declines jurisdiction, the Parties agree that jurisdiction is proper in the state or federal courts of the State of Georgia. 21. Notice. Any notice required under this Agreement shall be sent by and first class mail, and shall be effective upon dispatch when properly addressed as follows: If to CGI: If to Southside: Matthew W. Levin Scroggins & Williamson, P.C Northside Parkway, Suite 450 Atlanta, GA Thomas V. Keough Stokes Carmichael & Ernst, LLP 2018 Powers Ferry Rd., Suite 700 Atlanta, GA [SIGNATURES ON NEXT PAGE] - 5 -

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18 Document Page 18 of 18 CERTIFICATE OF SERVICE This is to certify that on this date I served a true and correct copy of the foregoing Motion to Approve Compromise and Settlement with Southside Medical Center, Inc. and the Notice of Hearing regarding same by causing same to be deposited in the United States Mail with adequate postage affixed thereon and addressed to the following persons: Francis J. Lawall Pepper Hamilton LLP 3000 Two Logan Square Eighteenth and Arch Streets Philadelphia, PA J. Michael Lamberth Lamberth Cifelli Ellis & Nason PA 1117 Perimeter Center West Suite W212 Atlanta, GA Donald J. Detweiler Pepper Hamilton LLP Hercules Plaza, Suite N. Market Street Wilmington, DE Thomas W. Dworschak Office of The United States Trustee 75 Ted Turner Drive, SW Room 362 Atlanta, GA Thomas V. Keough Stokes Carmichael & Ernst, LLP 2018 Powers Ferry Road, Suite 700 Atlanta, GA This 21st day of March, SCROGGINS & WILLIAMSON, P.C Northside Parkway Suite 450 Atlanta, GA T: ( F: ( E: rwilliamson@swlawfirm.com mlevin@swlawfirm.com By: /s/ Matthew W. Levin J. ROBERT WILLIAMSON Georgia Bar No MATTHEW W. LEVIN Georgia Bar No Counsel for the Debtors