PARTNERSHIP INTEREST PURCHASE AGREEMENT

 

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                                                                    EXHIBIT 10.1

 

                     PARTNERSHIP INTEREST PURCHASE AGREEMENT

 

      THIS PARTNERSHIP INTEREST PURCHASE AGREEMENT (this "AGREEMENT") is made as

of the 30th day of December, 2004, by and between Endocare, Inc., a Delaware

corporation (the "SELLER") and Advanced Medical Partners, Inc., a Delaware

corporation (the "BUYER").

 

                                   WITNESSETH

 

      WHEREAS, the Seller owns, manages, and operates certain entities that own

medical devices and other equipment which provide cryosurgical therapy for

prostate cancer (the "BUSINESS"); and

 

      WHEREAS, the Seller desires to sell, assign and transfer to the Buyer, and

the Buyer desires to purchase from the Seller, the Seller's general partnership

interests, limited partnership interests and other equity and ownership

interests of any kind or nature in the partnerships described herein; and

 

      WHEREAS, the parties wish to set forth their agreement with respect to the

purchase and sale of the Interests (as defined in Section 1.1(B) below) and

other matters.

 

      NOW THEREFORE, in consideration of the foregoing and the mutual covenants

and promises herein contained, the parties agree as follows:

 

      1.    PURCHASE, SALE, AND ASSIGNMENT OF THE INTERESTS.

 

            1.1 PURCHASE, SALE AND ASSIGNMENT.

 

                  (A) Subject to the terms and conditions hereof, at the Initial

Closing (as defined in Section 1.4 hereof) the Seller shall sell, assign, convey

and otherwise transfer to the Buyer, and the Buyer shall purchase from the

Seller, all right, title and interest of Seller in and to (i) each limited

partnership and other ownership or equity interest (including, without

limitation, each option or other right to purchase or acquire any such limited

partnership and other ownership or equity interest) as set forth and described

on Schedule 1.1 hereto (collectively, the "INITIAL INTERESTS"), in the

partnerships or that constitute a portion of the Business as listed on Schedule

1.1 hereto (collectively, the "PARTNERSHIPS"), (ii) a ninety-nine percent (99%)

interest in each general partnership interest and each option or other right to

purchase or acquire any such general partnership interest, as set forth and

described in Schedule 1.1, in the Partnerships ("FIRST TRANCHE GP INTERESTS,"

the Initial Interests and the First Tranche GP Interests are collectively

referred to herein as the "FIRST TRANCHE INTERESTS"), (iii) any management

agreements or other similar agreements between Seller and/or its affiliates, on

the one hand, and any of the Partnerships, on the other hand (the "MANAGEMENT

AGREEMENTS"); (iv) any rights of Seller and/or any of Seller's products in any

territory ("DISTRIBUTION RIGHTS"); and (v) 1,134,922 shares of Class A Common

Stock (the "U.S.M.D. INTEREST") of U.S. Medical Development, Inc., a Nevada

corporation ("U.S.M.D."), in each case, free and clear of any and all security

interests, liens, charges, claims, agreements (other than the obligations of

Buyer under the Partnership Agreements from and after the Initial Closing),

obligations and encumbrances of any nature whatsoever (as defined in Section

2.2) ("ENCUMBRANCES").

 

                  (B) Subject to the terms and conditions hereof, at the Second

Closing (as defined in Section 1.4 hereof) the Seller shall sell, assign, convey

and otherwise transfer to Buyer, and the Buyer shall purchase from the Seller,

all right, title and interest of Seller in and to the Seller's then remaining

one percent (1%) interests in each general partnership interest of the Seller,

as set forth and described in Schedule 1.1, in the Partnerships (the "SECOND

TRANCHE GP INTERESTS"; the First Tranche Interests and the

 

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Second Tranche GP Interests are collectively referred to herein as the

"INTERESTS"), free and clear of any and all Encumbrances.

 

                  (C) The Seller and Buyer hereby expressly acknowledge and

agree that Buyer is purchasing and Seller is selling at and as of the Initial

Closing, with respect to the First Tranche Interests and at and as of the Second

Closing, with respect to the Second Tranche GP Interests, each and every

economic and financial interest of Seller in and to the Partnerships, including

without limitation, the right to receive distributions under the Partnership

Organizational Documents (as defined in Section 2.2 below). Without limiting the

generality of the foregoing, if and to the extent that the transfer of any of

the Interests hereunder or the consummation of any of the Transactions is deemed

to have been a transfer that is not a "Permitted Transfer" (as such term is

defined in the Partnership Agreements) under any of the Partnership Agreements,

the Seller, as general partner for each Partnership for which such Seller is a

general partner, in accordance with Section 10.03 of each of the Partnership

Agreements, hereby elects to recognize such transfer notwithstanding that such

transfer may be deemed to not be a "Permitted Transfer."

 

            1.2 PURCHASE PRICE. In consideration of the sale, assignment and

transfer of the Interests pursuant to Section 1.1 hereof, the Buyer agrees to

pay to Seller, within twenty (20) days of the Second Closing Date (the

"CONSIDERATION DATE"), the sum of $850,000 (the "CONSIDERATION") by wire

transfer of immediately available funds to an account designated by the Seller.

 

            1.3 NO ASSUMPTION OF LIABILITY. Except as expressly provided in this

Agreement, neither party shall assume or shall be deemed to have assumed any

liability or obligation of any other party of any kind, character, or

description, whether known or unknown, absolute or contingent, accrued or

unaccrued, disputed or undisputed, liquidated or unliquidated, secured or

unsecured, joint or several, due or to become due, vested or unvested,

executory, determined, determinable or otherwise (a "LIABILITY").

 

            1.4 CLOSING.

 

                  (A) INITIAL CLOSING. The initial closing of the transactions

contemplated hereby, other than the transactions contemplated by Section 1.1(B)

hereof, (the "INITIAL CLOSING") shall be held on December 30, 2004 (the "INITIAL

CLOSING DATE"), at the offices of Haynes and Boone, LLP, 201 Main Street, Suite

2200, Fort Worth, Texas 76102, or at such other location as the Buyer shall

designate.

 

                  (B) SECOND CLOSING. The closing of the transactions

contemplated by Section 1.1(B) hereof (the "SECOND CLOSING"; the Initial Closing

and the Second Closing are sometimes collectively referred to herein as the

"CLOSINGS") shall be held on December 31, 2004 (the "SECOND CLOSING DATE") at

the offices of Haynes and Boone, LLP, 201 Main Street, Suite 2200, Fort Worth,

Texas 76102, or at such other location as the Buyer shall designate. The parties

agree that the effective date of the transactions contemplated by this

Agreement, for accounting and employment purposes, shall be the Second Closing

Date.

 

                  (C) TRANSACTIONS. For purposes of this Agreement,

"TRANSACTIONS" shall mean any and all of the transactions contemplated by this

Agreement.

 

      2.    REPRESENTATIONS AND WARRANTIES OF SELLER.

 

      The Seller, on its own behalf and on behalf of the Partnerships, as

applicable, represents and warrants to the Buyer, as follows, as of the date

hereof, except as set forth on the disclosure schedule furnished to Buyer and

attached hereto which sets for the exceptions to the representations and

warranties

 

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contained in this Section 2 and certain other information called for by this

Section 2 (the "SELLER DISCLOSURE SCHEDULE") which Seller Disclosure Schedule

identifies any such exceptions with reasonable particularity and is arranged in

sections corresponding to the numbered and lettered sections contained in this

Agreement. The parties acknowledge and agree that disclosure of any fact or item

in any particular section of the Seller Disclosure Schedule shall be deemed to

be made in any other specific section or sections of the Seller Disclosure

Schedule to which such disclosure reasonably relates.

 

            2.1 AUTHORITY. The Seller possesses full corporate power and

authority to execute and deliver this Agreement and to consummate the

Transactions. This Agreement has been duly and validly executed and delivered by

the Seller and constitutes the legal, valid and binding obligation of the

Seller, enforceable against it in accordance with its terms, except as such

enforceability may be limited by bankruptcy, insolvency or other similar laws

from time to time in effect which affect the enforcement of creditors' rights

generally and by general principles of equity.

 

            2.2 NO VIOLATION. The execution and delivery of this Agreement by

the Seller and the performance by it of the Transactions will not (A) violate

any provision of the Partnership Organizational Documents, (B) violate any law

or regulation of any United States federal, territorial, state or local

governmental or regulatory agency or authority (an "AUTHORITY"), (C) require any

consent or approval of, notice to or filing with any Authority which has not

been obtained or made, except where the failure to obtain such consent or

approval, or to provide such notice or filing, would not have a Material Adverse

Effect (as defined below) on the Partnerships, (D) result in a breach of any

provision of, or require the consent or approval of any third party which has

not been obtained under any material contract or agreement to which the Seller

or any of the Partnerships is a party, or (E) result in the creation or

imposition of any Encumbrance upon any portion of the assets of the Partnerships

pursuant to the terms of any contract or agreement to which the Seller or any of

the Partnerships is a party (the consents, approvals and notices, if any,

required to be obtained or made and referred to in clauses (C) and (D) above are

collectively referred to herein as "PARTNERSHIP CONSENTS"). Seller has

heretofore delivered to the Buyer true, correct and complete copies of (X) the

certificates of limited partnership of the Partnerships and all amendments

thereto (collectively, the "PARTNERSHIP CERTIFICATES"), (Y) the limited

partnership agreements of the Partnerships and all amendments thereto

(collectively, the "PARTNERSHIP AGREEMENTS"), and (Z) all other organizational

documents, if any, of the Partnerships governing the ownership, operation,

voting and control of any of the Partnerships (the documents described in

clauses (X), (Y) and (Z) above are, collectively referred to herein as the

"PARTNERSHIP ORGANIZATIONAL DOCUMENTS").

 

            2.3 TITLE TO THE INTERESTS.

 

                  (A) The list of the Partnerships set forth in Schedule 1.1

hereto is a true, correct and complete list of each partnership through which

the Business (or any portion thereof) is conducted by the Seller.

 

                  (B) The list of the Interests set forth and described in

Schedule 1.1 hereto is a true, correct and complete list of each general

partnership, limited partnership and other ownership or equity interest

(including, without limitation each option or other right to purchase or acquire

any such general partnership, limited partnership and other ownership or equity

interest), of the Partnerships owned beneficially or of record by the Seller.

 

                  (C) The Seller is the record and beneficial owner of and has

good and valid title to the Interests in the percentages set forth in Schedule

1.1, free and clear of any and all Encumbrances.

 

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                  (D) The delivery by the Seller of the Interests to the Buyer

at the Initial Closing or the Second Closing, as provided herein, shall convey

to the Buyer good and valid title to the Interests, free and clear of all, and

shall not result in Buyer being subject to any, Encumbrances.

 

                  (E) During the Ownership Period (as defined in Section 9.10

below), each of the issued and outstanding general partnership, limited

partnership and other equity ownership interests (including, without limitation,

each option or other right to purchase or acquire any such general partnership,

limited partnership and other equity ownership interests), in the Partnerships,

including, without limitation, the Interests, has been issued in full compliance

with the Partnership Organizational Documents applicable thereto and in full

compliance with all applicable securities laws, rules, regulations and

requirements. Each subsequent transfer during the Ownership Period, if any, of

any such general partner interests (including the First Tranche GP Interests and

the Second Tranche GP Interests), was made in full compliance with the

Partnership Organizational Documents applicable thereto and, in full compliance

with all applicable securities laws, rules, regulations and requirements.

 

                  (F) The Seller has made any and all capital contributions

required to be made by it during the Ownership Period (including, without

limitation, any required initial capital contributions) to the Partnerships as

required by the Partnership Organizational Documents. The Seller has no

obligation to make any other capital contribution or any loan or other payment

or any other transfer of assets or services to the Partnerships.

 

            2.4 OTHER OWNERSHIP INTERESTS. During the Ownership Period, no other

person has any right to obtain or acquire any general partnership, limited

partnership or other ownership or equity interest (including, without

limitation, any option or other right to purchase or acquire any such general

partnership, limited partnership or other ownership or equity interest), in or

to any of the Partnerships or its capital, profits or distributions.

 

            2.5 CONTRACTS AND COMMITMENTS.

 

                  (A) CONTRACTS. Set forth in Section 2.5 of the Seller

Disclosure Schedule is a true, correct and complete list of each of the

following agreements, whether written or oral, to which the Partnerships (or any

of them) is a party:

 

                        (1) any lease of real property, or legally binding

commitment, contract, obligation or agreement for the purchase or sale of real

property (hereinafter, legally binding commitments, contracts, obligations and

agreements of any nature shall all be included in the term "AGREEMENT");

 

                        (2) any employment agreement with any officer, employee,

director or consultant which is not terminable without severance liability in

excess of $50,000.00 at the discretion of such Partnership on thirty (or fewer)

days' notice from such Partnership;

 

                        (3) any agreement to lend or borrow money in excess of

$50,000;

 

                        (4) any collective bargaining agreement with any labor

union or other representative of employees;

 

                        (5) any agreement guaranteeing the payment or

performance of the obligations of others, except in the ordinary course of

business;

 

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                        (6) any lease of any personal property under the express

terms of which such Partnership shall hereafter be obligated to make aggregate

annual payments exceeding one hundred thousand dollars ($100,000.00);

 

                        (7) any ongoing agreement for the sale or purchase of

products or services by such Partnership under the terms of which such

Partnership could hereafter be entitled to receive or obligated to make

aggregate annual payments exceeding one hundred thousand dollars ($100,000.00)

for any such agreement;

 

                        (8) any partnership or joint venture agreement the

existence of which the Seller has not informed the limited partners of the

Partnerships;

 

                        (9) any security or pledge agreement;

 

                        (10) any management or similar agreement, or

 

                        (11) any amendments Partnership Organizational Documents

made during the Ownership Period;

 

                        (12) any agreement (written or oral) pursuant to which

the Seller has granted to any person the exclusive right to conduct procedures

provided by the Partnerships; and

 

                        (13) any other agreement material to any of the

Partnerships.

 

                  (B) ENFORCEABILITY AND ASSIGNABILITY. Each of the agreements

set forth in Section 2.5 of the Seller Disclosure Schedule and the requirements

relating to the indebtedness referenced in Section 2.6 (the "CONTRACTS") is

enforceable and in full force and effect, except as such enforceability and

effectiveness may be limited by bankruptcy, insolvency or other similar laws

from time to time in effect which affect the enforcement of creditors rights

generally and by general principles of equity; and none of the Partnerships is

in breach or default, nor are there any facts that with notice or lapse of time

would cause a breach or default by the Partnerships under any of the Contracts,

nor is the Seller aware of any existing breach or default or of any facts that

with notice or lapse of time would constitute a breach or default of any such

Contract by any other party thereto. Each of the written Contracts incorporates

all of the material terms and conditions agreed to by the parties thereto. The

consummation of the Transactions will not be deemed to be an assignment of any

of the Contracts requiring the consent of any other person.

 

            2.6 INDEBTEDNESS OF THE PARTNERSHIPS. None of the Partnerships has,

during the Ownership Period, nor shall the consummation of the Transactions

result in any of the Partnerships being subject to, any debt, guaranty,

liability or obligation of any nature, whether accrued, absolute, contingent or

otherwise, due or to become due, or known or unknown, other than such

liabilities incurred in the ordinary course of business consistent with past

practices or which have not had or could not reasonably be expected to result in

a Material Adverse Effect on the Partnerships.

 

            2.7 LITIGATION. Except as disclosed in the Seller SEC Reports (as

defined in Section 9.10 below) filed prior to the date hereof, there is no suit,

action or other proceeding, or injunction or final judgment relating thereto,

pending, or to the knowledge of the Seller, threatened (i) against either the

Seller or the Partnerships, nor, to the knowledge of the Seller, any

investigation that might result in any such suit, action or proceeding, (ii)

that, to the knowledge of the Seller, otherwise relates to or may affect the

Business or (iii) that challenges, or that may have the effect of preventing,

delaying, making illegal or otherwise interfering with, any of the Transactions.

 

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            2.8 ABSENCE OF CHANGES. During the Ownership Period, except for (i)

the execution and delivery of this Agreement and the Transactions and (ii) as

disclosed in the Seller SEC Reports filed prior to the date hereof, there has

not been any event or development which could reasonably be expected to result

in a Material Adverse Effect (as hereafter defined) on the Partnerships. For

purposes of this Agreement, "MATERIAL ADVERSE EFFECT" means, for any person, a

material adverse effect (a) on the business, operations, financial condition,

assets and properties, liabilities or prospects of such person, taken as a

whole, or (b) on the ability of such person to consummate the Transactions,

provided, however, that it shall not include any of the following, either alone

or in combination any effect or change occurring as a result of (i) general

economic or financial conditions, or (ii) other developments which are not

unique to the person but also uniformly affect each of the other persons who

participate or are engaged in the lines of business in which the person

participates or is engaged.

 

            2.9 TANGIBLE PERSONAL PROPERTY. All tangible personal property and

equipment used by the Partnerships in the conduct of the Business is listed in

Section 2.9 of the Seller Disclosure Schedule (the property and equipment listed

in such section is referred to herein as the "PARTNERSHIPS EQUIPMENT"). Each of

the Partnerships is in possession of and has good title to the Partnerships

Equipment, except where the failure to hold such title, interest or right would

not have a Material Adverse Effect either individually or in the aggregate on

the Partnerships (or any of them).

 

            2.10 COMPLIANCE WITH LEGAL REQUIREMENTS; GOVERNMENTAL

AUTHORIZATIONS. Except as otherwise disclosed in the Seller SEC Reports filed

prior to the date hereof, during the Ownership Period:

 

                  (A) Both the Seller (with respect to the conduct and

operations of the Business) and the Partnerships are, and have been during the

Ownership Period, in compliance with each legal requirement that is or was

applicable to it or to the conduct or operation of the Business or the ownership

or use of any of its assets, except where failure to comply would not result in

a Material Adverse Effect.

 

                  (B) No event has occurred or circumstance exists during the

Ownership Period that (with or without notice or lapse of time) (i) may

constitute or result in a violation by the Seller and the Partnerships (or any

of them) of any legal requirement with respect to the conduct and operation of

the Business, except where such violation would not result in a Material Adverse

Effect on the Partnerships (or any of them) or (ii) may give rise to any

obligation on the part of the Seller and the Partnerships (or any of them) to

undertake, or to bear all or any portion of the cost of, any remedial action of

any nature with repect to the conduct or operations of Business, except where

the cost of such remedial action would not have a Material Adverse Effect.

 

                  (C) Neither the Seller nor the Partnerships has received any

written notice or other written communication from any Authority or any other

person during the Ownership Period regarding (i) any actual, alleged, possible,

or potential violation of, or failure to comply with, any legal requirement with

respect to the conduct and operation of the Business, or (ii) any actual,

alleged, possible, or potential obligation on the part of the Seller and the

Partnerships (or any of them) to undertake, or to bear all or any portion of the

cost of, any remedial action of any nature with respect to the conduct and

operation of the Business.

 

            2.11 ENVIRONMENTAL MATTERS. Except as otherwise disclosed in the

Seller SEC Reports filed prior to the date hereof:

 

                  (A) Each of the Partnerships is in compliance with all

applicable Environmental Laws (as defined below) except where such failure could

not reasonably be expected to have a Material Adverse Effect, and there are no

circumstances which may materially prevent or interfere with such

 

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compliance in the future. Neither the Seller nor the Partnerships have received

during the Ownership Period any communication (whether written or oral), whether

from an Authority, citizen group, employee or otherwise, that alleges that the

Partnerships (or any of them) or any of their respective assets or properties

used in the Business is not in full compliance with Environmental Laws. All

permits, registrations and other governmental authorizations currently held by

the Seller and the Partnerships (or any of them) pursuant to Environmental Laws

(collectively, "ENVIRONMENTAL PERMITS") represent all permits necessary for the

conduct of the Business as currently conducted, except where the failure to hold

such Environmental Permits (or any of them) could reasonably be expected to have

a Material Adverse Effect. Neither the Seller nor the Partnerships has been

notified by any relevant Authority during the Ownership Period that any permit

will be modified, suspended or revoked or cannot be renewed in the ordinary

course of business.

 

                  (B) There is no Environmental Notice (as defined below) that

is (i) pending or, to the knowledge of the Seller, threatened against any of the

Partnerships or (ii) to the knowledge of the Seller, pending or threatened

against any person whose liability for such Environmental Notice may have been

retained or assumed by or could reasonably be imputed or attributed to the

Seller and the Partnerships (or any of them).

 

                  (C) To the knowledge of the Seller, there are no past or

present actions, activities, circumstances, conditions, events or incidents

arising from the operation, ownership or use of any property currently or

formerly owned, operated or used by the Partnerships during the Ownership

Period, including, without limitation, the release, emission, discharge or

disposal of any Material (as defined below) into the Environment (as defined

below), that (i) could reasonably be expected to result in the incurrence of

costs under Environmental Laws or (ii) could reasonably be expected to form the

basis of any Environmental Notice against or with respect to the Partnerships or

against any person whose liability for any Environmental Notice may have been

retained or assumed by or could be imputed or attributed to the Seller and the

Partnerships (or any of them).

 

                  (D) For purposes of this Section 2.11:

 

                        (1) "ENVIRONMENT" means any surface water, ground water,

drinking water supply, land surface or subsurface strata, ambient air and any

indoor workplace.

 

                        (2) "ENVIRONMENTAL NOTICE" means any written notice by

any person alleging potential liability (including, without limitation,

potential liability for investigatory costs, cleanup costs, governmental costs,

harm or damages to person, property, natural resources or other fines or

penalties) arising out of, based on or resulting from (a) the emission,

discharge, disposal, release or threatened release in or into the Environment of

any Material or (b) circumstances forming the basis of any violation, or alleged

violation, of any applicable Environmental Law.

 

                        (3) "ENVIRONMENTAL LAWS" means all national, state,

local and foreign laws, codes, regulations, common law, requirements,

directives, orders, and administrative or judicial interpretations thereof, all

as in effect on the date hereof or on the Initial Closing Date, that may be

enforced by any Authority, relating to pollution, the protection of the

Environment.

 

                        (4) "MATERIAL" means pollutants, contaminants or

chemical, industrial, hazardous or toxic materials or wastes, including, without

limitation, petroleum and petroleum products.

 

 

 

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            2.12 TAX MATTERS.

 

              (A) Each of the Partnerships has filed on a timely basis during

the Ownership Period all Tax Returns (as defined below) that it was required to

file, and all such Tax Returns were complete and accurate in all material

respects. Each Partnership has paid on a timely basis all Taxes that were due

and payable during the Ownership Period, or if not yet due and payable, such

Taxes are accrued on the books and records of the Partnerships. None of the

Partnerships has any actual or potential liability for any Tax obligation of any

other taxpayer (including any affiliated group of entities that included the

Partnerships. All Taxes that the Partnerships are or were required by law to

withhold or collect during the Ownership Period have been duly withheld or

collected and, to the extent required, have been paid to the proper Authority.

 

                  (B) Seller has made available to Buyer complete and accurate

copies of all federal income Tax Returns with repect to the Ownership Period,

and has delivered to Buyer complete and accurate copies of all examination

reports and statements of deficiencies, if any, assessed against or agreed to by

the Partnerships during the Ownership Period. Seller has delivered to Buyer or

made available to Buyer complete and accurate copies of all other Tax Returns of

the Seller and the Partnerships, together with all related examination reports

and statements of deficiency during the Ownership Period. To the knowledge of

the Seller, no examination or audit of any Tax Return of the Partnerships by any

Authority is currently in progress or, threatened or contemplated. Neither the

Seller nor the Partnerships has been informed in writing by any jurisdiction

during the Ownership Period that the jurisdiction believes that the Partnerships

(or any of them) were required to file any Tax Return that was not filed. The

Partnerships have not, during the Ownership Period, waived any statute of

limitations with respect to Taxes or agreed to an extension of time with respect

to a Tax assessment or deficiency.

 

                  (C) For purposes of this Agreement:

 

                        (1) "TAX" (and, with correlative meaning, "TAXES,"

"TAXABLE" and "TAXING") means (i) any federal, state, local or foreign income,

alternative or add-on minimum tax, gross income, gross receipts, sales, use, ad

valorem, transfer, franchise, profits, license, withholding, payroll,

employment, excise, severance, stamp, occupation, premium, property,

environmental or windfall profit tax, custom, duty or other tax, governmental

fee or other like assessment or charge of any kind whatsoever, together with any

interest or any penalty, addition to tax or additional amount imposed by any

Authority responsible for the imposition of any such tax (domestic or foreign),

(ii) any liability for payment of any amounts of the type described in (i) as a

result of being a member of an affiliated, consolidated, combined, unitary or

other group for any Taxable period and (iii) any liability for the payment of

any amounts of the type described in (i) or (ii) as a result of any express

obligation to indemnify any other person.

 

                        (2) "TAX RETURN" means any return, report, information

return, schedule or other document (including any related or supporting

information) filed or required to be filed with respect to any taxing authority

with respect to Taxes.

 

            2.13 PERMITS. All permits used in and material, individually, or in

the aggregate, to the Partnerships for the conduct of the Business during the

Ownership Period are currently effective and valid and have been validly issued.

Upon written request, the Seller shall provide the Buyer a list of such permits.

To the knowledge of Seller and the Partnerships, no additional permits are

necessary to enable the Partnerships (or any of them) to conduct the Business in

material compliance with all applicable federal, state and local laws. Neither

the execution, delivery or performance of this Agreement nor the mere passage of

time will have any effect on the continued validity or sufficiency of such

permits, nor will any additional permits be required by virtue of the execution,

delivery or performance of this Agreement to enable the conduct of the Business

as now conducted.

 

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            2.14 REGULATORY COMPLIANCE. Except as disclosed in the Seller SEC

Reports filed prior to the date hereof:

 

                  (A) Each Partnership has timely filed or otherwise provided

all registrations, reports, data, and other information and applications with

respect to its medical device, pharmaceutical, consumer, health care, and other

governmentally regulated products (the "REGULATED PRODUCTS") required to be

filed with or otherwise provided during the Ownership Period to the United

States Food and Drug Administration (the "FDA") or any other Authority with

jurisdiction over the manufacture, use, or sale of the Regulated Products, has

complied in all material respects during the Ownership Period with all legal

requirements of the FDA or other Authority with respect to the Regulated

Products (including but not limited to the Federal Food, Drug, and Cosmetic Act,

the Medicare Anti-Kickback Statute, the Health Insurance Portability and

Accountability Act, the Federal False Claims Act, the Federal laws concerning

physician self-referral known as "Stark Laws", and the rules and regulations of

the Joint Commission on Accreditation of Healthcare Organizations) in all

material respects, and all regulatory licenses or approvals in respect thereof

are in full force and effect. All documentation, correspondence, reports, data,

analyses and certifications relating to or regarding any medical devices of the

Partnerships filed with or delivered by or on behalf of the Partnerships during

the Ownership Period to any Authority was in all material respects true and

accurate when so filed or delivered and, to the knowledge of the Seller, remains

true and accurate in all material respects. Each Regulated Product is being

distributed and marketed in all material respects in compliance with all

applicable requirements under all applicable laws.

 

                  (B) No request has been made during the Ownership Period to

recall, withdraw, suspend or discontinue any Regulated Product distributed or

managed by the Partnerships (whether voluntarily or otherwise). To the knowledge

of the Seller, no proceedings (whether completed or pending) seeking the recall,

withdrawal, suspension or seizure of any Regulated Product managed or

distributed by the Partnerships during the Ownership Period are pending or, to

the knowledge of the Seller, threatened against the Partnerships, nor have any

such proceedings ever been instituted during the Ownership Period.

 

                  (C) Neither the Seller nor the Partnerships has received any

written notice from the FDA or any other Authority during the Ownership Period

of any action to withdraw its approval or request the recall of any Regulated

Product with repect to the conduct or operation of the Business, any action to

enjoin production of any such Regulated Product.