Case KSJ Doc 347 Filed 06/14/13 Page 1 of 7 UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF FLORIDA GAINESVILLE DIVISION

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1 Case KSJ Doc 347 Filed 06/14/13 Page 1 of 7 UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF FLORIDA GAINESVILLE DIVISION In re: CYPRESS HEALTH SYSTEMS FLORIDA, INC., d/b/a TRI COUNTY HOSPITAL WILLISTON, f/d/b/a NATURE COAST REGIONAL HOSPITAL, Debtor. / Chapter 11 Case No. 1:12-bk KSJ ORDER (I) APPROVING DEBTOR S DISCLOSURE STATEMENT ON A FINAL BASIS AND (II) CONFIRMING DEBTOR S PLAN OF LIQUIDATION UNDER CHAPTER 11 OF THE UNITED STATES BANKRUPTCY CODE THIS CASE came on for hearing before the Court on May 15, 2013, at 1:00 p.m. (the Confirmation Hearing ), to consider (i) final approval of the Disclosure Statement for Debtor s Plan of Liquidation under Chapter 11 of Title 11, United States Code dated as of April 3, 2013 [Doc. No. 241] (the Disclosure Statement ) and (ii) confirmation of the Debtor s Plan of Liquidation under Chapter 11 of Title 11, United States Code dated as of April 3, 2013 [Doc. No. 242] (the Plan ). Each of the Disclosure Statement and the Plan were filed by Cypress Health Systems Florida, Inc., as Debtor and Debtor in Possession. All capitalized terms used in this Order but not defined herein shall have the meaning ascribed to such terms in the Plan. In attendance at the Confirmation Hearing were: (i) Charles A. Postler and Elena Paras Ketchum, counsel for the Debtor; (ii) April G.H. Davidson, counsel for Drummond Community Bank f/k/a Perkins State Bank ( Drummond ); (iii) Miriam Suarez, attorney for the United States Trustee s Office; (iv) Suzy Tate, counsel for Richard Martin, M.D. 1

2 Case KSJ Doc 347 Filed 06/14/13 Page 2 of 7 ( Dr. Martin ); (v) Eric McKay, counsel for Tony Pfaff; and (vi) Debora Fridie and Bradford Herter, counsel for the State of Florida, Agency for Health Care Administration. Objections to Disclosure Statement and Confirmation of Plan. Dr. Martin filed his Objection to Debtor s Disclosure Statement and Chapter 11 Plan [Doc. No. 294] (the Martin Objection ). At the Confirmation Hearing, with respect to the Martin Objection, counsel to the Debtor announced on the record that an agreement had been reached with Dr. Martin for (i) the allowance of his proof of claim number 50 (including a priority claim in the amount of $11, under Section 507(a)(4) of the Bankruptcy Code included therein) in the amount filed in this case, and (ii) the allowance of his administrative expense claim filed at Doc. No. 269 in the amount of $11, As a result of the foregoing, counsel to Dr. Martin announced on the record that Dr. Martin was withdrawing the Martin Objection and changing his ballot to a vote for acceptance of the Plan. Tony Pfaff filed his Joinder in Richard Martin, M.D. s Objection to Debtor s Disclosure Statement and Chapter 11 Plan and Request for an Extension of Time to Make an Election under 11 U.S.C. 1111(b) [Doc. No. 297] (the Pfaff Objection ). At the Confirmation Hearing, the Court heard arguments with respect to the Pfaff Objection. After hearing arguments of counsel, the Court overruled the Pfaff Objection in all respects. In addition, Drummond filed its Objection to Confirmation of Debtor s Chapter 11 Plan [Doc. No. 301] (the Drummond Objection ). Drummond also filed its Motion to Extend the Deadline to Elect Application of 11 U.S.C. 1111(b) [Doc. No. 302] (the Drummond Motion ). At the Confirmation Hearing, counsel for the Debtor and counsel for Drummond announced on the record that an agreement had been reached between the parties as to a modification to Article 5.3 of the Plan with respect to the treatment of the Allowed Secured Claims of Drummond under Class 2 of the Plan (which modification is described in paragraph 3 below). As a result of the foregoing, counsel to Drummond announced on the record that

3 Case KSJ Doc 347 Filed 06/14/13 Page 3 of 7 Drummond was withdrawing the Drummond Objection and the Drummond Motion and changing its ballot to a vote for acceptance of the Plan. Ballot Tabulation. On May 10, 2013, the Debtor filed its Chapter 11 Ballot Tabulation [Doc. No. 307]. On May 15, 2013, the Debtor filed its Amended Chapter 11 Ballot Tabulation [Doc. No. 316]. As stated above, at the Confirmation Hearing, counsel for Drummond and counsel for Dr. Martin announced that each had changed its ballot to a vote for acceptance of the Plan. Confirmation Affidavit. Prior to the Confirmation Hearing, the Debtor filed its Confirmation Affidavit and Memorandum in Support of Confirmation executed by Randy Lindauer, the Chief Executive Officer of the Debtor [Doc. No. 311] (the Confirmation Affidavit ). At the Confirmation Hearing, counsel for the Debtor proffered (without objection) the testimony of Randy Lindauer, the Chief Executive Officer of the Debtor, in support of confirmation of the Plan. Mr. Lindauer was present in the Courtroom at the Confirmation Hearing, and all parties present at the Confirmation Hearing were given the opportunity to cross-examine Mr. Lindauer. No party objected to the proffer of Mr. Lindauer s testimony or requested an opportunity to cross-examine Mr. Lindauer. The Court finds that the statements made by Mr. Lindauer in the Confirmation Affidavit and the proffers made by counsel for the Debtor at the Confirmation Hearing in support of confirmation of the Plan are accepted. The Court finds that the Plan and this Order are fair, equitable, reasonable, and proper, in the best interest of the Debtor, the Estate, and all Creditors, and are binding upon all Creditors and Holders of Equity Interests. The Court further finds that the Plan 3

4 Case KSJ Doc 347 Filed 06/14/13 Page 4 of 7 complies with each of the applicable provisions of Title 11 of the United States Code, including without limitation the provisions of Sections 1122, 1123 and 1129 of the Bankruptcy Code. Without limiting the generality of the foregoing and by way of example, the Debtor has complied with the disclosure and solicitation requirements of Sections 1125 and 1126 of the Bankruptcy Code. For the reasons stated herein as well as the reasons stated orally and recorded in open court at the Confirmation Hearing, which shall constitute the decision of the Court, it is ORDERED: 1. The Disclosure Statement is approved on a final basis. 2. The Plan, as modified by this Order (the Modified Plan ), is confirmed in all respects. 3. Article 5.3 of the Plan shall be deleted in its entirety and the following shall be substituted therefor: 5.3 Class 2: Secured Claims of Drummond Community Bank f/k/a/ Perkins State Bank. Class 2 consists of all Secured Claims of Drummond Community Bank f/k/a/ Perkins State Bank (hereinafter defined as Perkins ). On May 8, 2013, Perkins filed two (2) amended proofs of claim in the Bankruptcy Case (Proof of Claim Nos. 45 and 46) in the amounts of $686, and $67,243.21, respectively (together, the Perkins State Bank Claim ). The Perkins State Bank Claim shall be treated as being fully secured, such that Perkins shall be paid all of its unpaid principal, unpaid Prepetition and Postpetition interest at the contract rate of seven percent (7%), unpaid property advances (such as force placed insurance premiums and the like), attorneys' fees and costs as of the Effective Date (inclusive of interest at the contract rate of seven percent (7%), attorneys fees, and costs from May 8, 2013 through the Effective Date) (collectively, the Allowed Perkins Secured Claim ). The Allowed Perkins Secured Claim will be evidenced by a new promissory note executed by Regional (the Perkins Plan Note ), which will provide for equal monthly payments to amortize the Allowed Perkins Secured Claim over a period of sixty (60) months following the Effective Date at the contract rate of seven percent (7%) per annum. The Debtor, Regional and Perkins shall cooperate to prepare the Perkins Plan Note to reflect the foregoing principal and payment terms, as well as an appropriate mortgage modification agreement to memorialize that the existing mortgage lien of Perkins secures the Perkins Plan Note in its same first lien priority. Regional shall also provide financial disclosures to Perkins consistent with the existing reporting requirements under the present mortgage.

5 Case KSJ Doc 347 Filed 06/14/13 Page 5 of 7 Class 2 is Impaired by the Plan. Perkins is entitled to vote to accept or reject the Plan. 4. The Pfaff Objection is overruled in all respects. 5. The Debtor and its directors, officers and agents are authorized and directed to take all such steps as may be necessary to effectuate and implement the Modified Plan and this Order, including, without limitation, the execution and delivery of all instruments of transfer, agreements and other documents as may be appropriate or necessary to consummate the transactions contemplated by the Modified Plan and this Order. 6. The Modified Plan and its provisions shall be binding upon the Debtor, the Debtor s Estate, all Creditors, and all Holders of Equity Interests (whether or not the Claim or Equity Interest of any such Creditors or Holders is Impaired under the Modified Plan and whether or not such Creditors or Holders have accepted the Modified Plan), all other parties in interest, and the respective successors and assigns of each of the foregoing. 7. The Modified Plan is confirmed in its entirety. The inclusion of language in this Order referring to specific provisions of the Modified Plan or authorizing specific action by the Debtor shall not be construed to imply non-approval of other provisions of the Modified Plan or non-authorization of other actions. The failure to reference or discuss any particular provision of the Modified Plan in this Order shall have no effect on the validity, binding effect and enforceability of such provision and such provision shall have the same validity, binding effect and enforceability as every other provision of the Modified Plan. 5

6 Case KSJ Doc 347 Filed 06/14/13 Page 6 of 7 8. Notwithstanding the entry of this Order and the occurrence of the Effective Date, until the Bankruptcy Case is closed, this Court shall retain the fullest and most extensive jurisdiction of the Bankruptcy Case that is permitted under applicable law, including that necessary to ensure that the purposes and intent of the Modified Plan are carried out. Without limiting the generality of the foregoing, after Confirmation of the Modified Plan and until the Bankruptcy Case is closed, this Court shall retain jurisdiction of the Bankruptcy Case for each of the specific purposes set forth in Articles 12.1 and 12.2 of the Modified Plan. 9. This Order shall be served on all parties receiving electronic noticing in this case. Notice of the entry of this Order in the form attached hereto as Exhibit A (the Confirmation Notice ) shall be sent to all Creditors of the Debtor as set forth on the Court s master mailing matrices for the Debtor s Chapter 11 case. The Confirmation Notice shall reflect that a copy of this Order is available on the Internet at Counsel for the Debtor shall thereafter file a certificate of service with the Court regarding the foregoing service of this Order and the Confirmation Notice. DONE and ORDERED in Orlando, Florida, on June 14, Copies furnished to: KAREN S. JENNEMANN Chief United States Bankruptcy Judge Elena Paras Ketchum, Esquire is directed to serve a copy of this order on interested parties and file a proof of service within 3 days of entry of the order.

7 Case KSJ Doc 347 Filed 06/14/13 Page 7 of 7 UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF FLORIDA GAINESVILLE DIVISION In re: CYPRESS HEALTH SYSTEMS FLORIDA, INC., d/b/a TRI COUNTY HOSPITAL WILLISTON, f/d/b/a NATURE COAST REGIONAL HOSPITAL, Debtor. Chapter 11 Case No. 1:12-bk KSJ / NOTICE OF CONFIRMATION OF DEBTOR S PLAN OF LIQUIDATION UNDER CHAPTER 11 OF THE UNITED STATES BANKRUPTCY CODE NOTICE IS HEREBY GIVEN, pursuant to Federal Rule of Bankruptcy Procedure 2002(f)(7), that the United States Bankruptcy Court for the Northern District of Florida, Gainesville Division, has entered its Order (I) Approving Debtor s Disclosure Statement on a Final Basis and (II) Confirming Debtor s Plan of Liquidation under Chapter 11 of the United States Bankruptcy Code dated June, 2013 (the Confirmation Order ). A copy of the Confirmation Order is available on request to undersigned counsel for the Debtor or can be reviewed at Dated: June, 2013 /s/ Elena Paras Ketchum Elena Paras Ketchum (Florida Bar No ) STICHTER, RIEDEL, BLAIN & PROSSER, P.A. 110 East Madison Street, Suite 200 Tampa, Florida PH (813) FAX (813) Attorneys for the Debtor EXHIBIT A