PARTNERSHIP INTEREST PURCHASE AGREEMENT

General Partnership Agreement

You are currently viewing:

This General Partnership Agreement involves

TRI-ISTHMUS GROUP, INC. | DEL MAR GENPAR, INC. | DEL MAR ACQUISITION, INC | SURGICAL VENTURES, INC | DAVID M. KUPFER

. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here.

Title: PARTNERSHIP INTEREST PURCHASE AGREEMENT
Governing Law: Delaware Date: 12/7/2005
Industry: CMPSRV Law Firm: Hughes & Luce, L.L.P. Sector: TECHNO

Search General Partnership Agreement by:

<PAGE>

EXHIBIT 10.1

EXECUTION COPY

PARTNERSHIP INTEREST PURCHASE AGREEMENT

BY AND AMONG

DEL MAR GENPAR, INC. AND DEL MAR ACQUISITION, INC.,

AS THE BUYERS;

SURGICAL VENTURES, INC.,

AS THE SELLER;

AND

DAVID M. KUPFER, M.D.

<PAGE>

PARTNERSHIP INTEREST PURCHASE AGREEMENT

TABLE OF CONTENTS

<TABLE>

Page

----

<S> <C>

ARTICLE I PURCHASE AND SALE.................................................................... 2

1.1 Purchase and Sale of the Purchased Interests................................................... 2

1.2 Closing Date................................................................................... 2

1.3 Consideration.................................................................................. 2

1.4 Closing Deliveries............................................................................. 3

1.5 Further Assurances............................................................................. 4

ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE SELLER AND KUPFER.............................. 4

2.1 Organization................................................................................... 4

2.2 Authority...................................................................................... 5

2.3 Formation Documents............................................................................ 5

2.4 Capitalization................................................................................. 5

2.5 Title to Securities............................................................................ 6

2.6 No Subsidiaries................................................................................ 6

2.7 Title to Assets................................................................................ 6

2.8 Condition and Sufficiency of Assets............................................................ 7

2.9 Accounts Receivable............................................................................ 7

2.10 No Violation................................................................................... 7

2.11 Governmental Authorizations.................................................................... 8

2.12 Financial Statements........................................................................... 8

2.13 Absence of Undisclosed Liabilities............................................................. 8

2.14 Absence of Certain Changes..................................................................... 9

2.15 Taxes.......................................................................................... 11

2.16 Litigation..................................................................................... 12

2.17 Compliance with Laws........................................................................... 12

2.18 Licenses....................................................................................... 12

2.19 Payors......................................................................................... 12

2.20 Medical Staff Matters.......................................................................... 12

2.21 Health Care Legal Matters...................................................................... 13

2.22 Environmental Matters.......................................................................... 15

2.23 Employee Matters............................................................................... 16

2.24 Employee Benefit Plans......................................................................... 16

2.25 Partnership Contracts.......................................................................... 18

2.26 Intellectual Property.......................................................................... 19

2.27 Competing Interests............................................................................ 19

2.28 No Conflict of Interest........................................................................ 19

2.29 Illegal Payments............................................................................... 19

2.30 Insurance...................................................................................... 20

2.31 Accredited Investor; Disclosure Materials...................................................... 20

2.32 Investment Intent.............................................................................. 20

2.33 Restricted Securities.......................................................................... 21

</TABLE>

<PAGE>

<TABLE>

Page

----

<S> <C>

2.34 Full Disclosure................................................................................ 21

ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE BUYERS......................................... 21

3.1 Organization................................................................................... 21

3.2 Authority...................................................................................... 21

3.3 No Violation................................................................................... 22

3.4 Governmental Authorizations.................................................................... 22

3.5 Litigation..................................................................................... 22

3.6 No Brokers..................................................................................... 22

3.7 Accredited Investor............................................................................ 22

3.8 Investment Intent.............................................................................. 22

3.9 Restricted Securities.......................................................................... 22

3.10 Full Disclosure................................................................................ 23

ARTICLE IV COVENANTS AND AGREEMENTS............................................................. 23

4.1 Conduct of Business............................................................................ 23

4.2 Access and Information......................................................................... 25

4.3 Supplemental Disclosure........................................................................ 25

4.4 Assistance with Licenses and Filings........................................................... 25

4.5 Substitution Guarantor......................................................................... 25

4.6 Fulfillment of Conditions by the Sellers....................................................... 25

4.7 Fulfillment of Conditions by the Buyers........................................................ 25

4.8 Distributions in Excess of Required Capital.................................................... 26

4.9 Consent to Transfers........................................................................... 26

4.10 Publicity...................................................................................... 26

4.11 Audit.......................................................................................... 26

4.12 Transaction Costs.............................................................................. 26

4.13 No-Shop Provisions............................................................................. 27

4.14 Nondisclosure.................................................................................. 27

4.15 Certain Tax Matters............................................................................ 27

4.16 Employees and Employee Benefits................................................................ 28

4.17 Treatment of Partnership Assets After Closing.................................................. 28

4.18 Mutual Walk-Away............................................................................... 28

ARTICLE V CLOSING CONDITIONS................................................................... 29

5.1 Conditions to Obligations of the Buyers........................................................ 29

5.2 Conditions to Obligations of the Seller and Kupfer............................................. 30

ARTICLE VI INDEMNIFICATION...................................................................... 31

6.1 Indemnification of the Buyers.................................................................. 31

6.2 Indemnification of the Sellers................................................................. 33

6.3 Survival....................................................................................... 33

6.4 Notice......................................................................................... 34

6.5 Defense of Claims.............................................................................. 34

</TABLE>

<PAGE>

<TABLE>

Page

----

<S> <C>

6.6 Determination of Losses........................................................................ 35

ARTICLE VII MISCELLANEOUS........................................................................ 36

7.1 Termination.................................................................................... 36

7.2 Notices........................................................................................ 37

7.3 Attorneys' Fees and Costs...................................................................... 37

7.4 Brokers........................................................................................ 37

7.5 Severability................................................................................... 38

7.6 Counterparts................................................................................... 38

7.7 Interpretation................................................................................. 38

7.8 Assignment..................................................................................... 38

7.9 Entire Agreement, Amendment.................................................................... 38

7.10 Specific Performance, Remedies Not Exclusive................................................... 38

7.11 GOVERNING LAW.................................................................................. 39

7.12 Drafting....................................................................................... 39

7.13 Usage.......................................................................................... 39

7.14 Certain Definitions............................................................................ 39

</TABLE>

iii

<PAGE>

EXECUTION COPY

PARTNERSHIP INTEREST PURCHASE AGREEMENT

This Partnership Interest Purchase Agreement (this "Agreement") is made

and entered into as of December 2, 2005 (the "Effective Date"), by and among Del

Mar GenPar, Inc., a Nevada corporation ("GenPar"); Del Mar Acquisition, Inc., a

Nevada corporation ("Newco" and, together with GenPar, each individually a

"Buyer" and collectively the "Buyers"); Surgical Ventures, Inc., a California

corporation (the "Seller"); and David M. Kupfer, M.D., an individual residing in

and licensed to practice medicine in the State of California ("Kupfer").

RECITALS

WHEREAS, the Seller is the legal and beneficial owner and holder of record

of a general partnership interest in Elite Surgical Centers, Del Mar L.P., a

California limited partnership (the "Partnership"), having a Percentage Interest

(as defined in the Partnership Agreement (as defined in Section 5.1(j))) of 1%

(the "GP Interest"), and is the sole general partner named in the Partnership

Agreement;

WHEREAS, the Seller is also the legal and beneficial owner and holder of

record of a limited partnership interest having a Percentage Interest of 60%;

WHEREAS, the remaining limited partnership interest in the Partnership,

having an aggregate Percentage Interest of 39%, is legally and beneficially

owned and held of record by the Persons (as defined in Section 2.16) identified

as "Non-Selling Limited Partners" in Schedule 2.4 to this Agreement;

WHEREAS, the Partnership engages in the business of operating the Elite

Surgical Center Del Mar located at 12264 El Camino Real, Suite 55, San Diego, CA

92130 (the "Business");

WHEREAS, the Seller desires to sell to GenPar, and GenPar desires to

purchase from the Seller, the GP Interest, on the terms and subject to the

conditions set forth in this Agreement;

WHEREAS, the Seller also desires to sell to Newco, and Newco desires to

purchase from the Seller, a limited partnership interest having a Percentage

Interest of 50% (the "LP Interest" and, together with the GP Interest, the

"Purchased Interests"), on the terms and subject to the conditions set forth in

this Agreement;

WHEREAS, Kupfer owns 100% of the issued and outstanding stock of the

Seller and will receive substantial direct and indirect benefits from the

transactions contemplated by this Agreement, and the Buyers have required that

Kupfer enter into this Agreement as a condition to the Buyers' execution hereof;

and

WHEREAS, Kupfer owns 100% of the issued and outstanding stock of Elite

Surgical Management, Inc., a California corporation ("Elite"), which provides

certain services to the

<PAGE>

Partnership, and desires to cause Elite to sell to Surgical Center Management,

Inc., a Nevada corporation and an Affiliate of the Buyers ("SCMI"), and SCMI

desires to purchase from Elite, the Elite Assets (as defined in Section 1.4(g));

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

representations, warranties, covenants and agreements set forth herein, and

other good and valuable consideration, the receipt and sufficiency of which is

hereby acknowledged, the parties agree as follows:

ARTICLE I

PURCHASE AND SALE

1.1 Purchase and Sale of the Purchased Interests.

(a) Pursuant to the terms and subject to the conditions set forth

herein, GenPar hereby agrees to purchase from the Seller, and the Seller

hereby agrees to sell to GenPar, the GP Interest, for the consideration

set forth in Section 1.3(a).

(b) Pursuant to the terms and subject to the conditions set forth

herein, Newco hereby agrees to purchase from the Seller, and the Seller

hereby agrees to sell to Newco, the LP Interest, for the consideration set

forth in Section 1.3(b).

1.2 Closing Date. The consummation of the sale and purchase of the

Purchased Interests (the "Closing") will take place at the offices of Vsource,

Inc., a Delaware corporation and indirect parent of the Buyers ("VSCE"), located

at 7855 Ivanhoe Avenue, Suite 200, La Jolla, California 92037, at 11:00 a.m.

local time on January 31, 2006, or at such other date, time and place as is

mutually agreed among the parties or, if all of the conditions to the

obligations of the parties set forth in Article V have not been satisfied or

waived by January 31, 2006, and there is no agreement among the parties as to

another day, on the day that is two business days following the date on which

all such conditions (other than those conditions to be satisfied at the time of

the Closing) have been satisfied or waived (such date being herein called the

"Closing Date"). The Closing will be effective as of 12:01 a.m. on the Closing

Date.

1.3 Consideration.

(a) As consideration in full for the sale and purchase of the GP

Interest, GenPar will pay to the Seller an aggregate of $25,000 (the "GP

Purchase Price"). The GP Purchase Price will be payable at the Closing by

the transfer by GenPar to the Seller of the Series A GP Shares (as defined

below).

(b) As consideration in full for the sale and purchase of the LP

Interest, Newco will pay to the Seller an aggregate of $1,250,000 (the "LP

Purchase Price"). The LP Purchase Price will be payable at the Closing by

the issuance by Newco to the Seller of the Series A LP Shares and the

Series B Shares (each as defined below).

<PAGE>

Preferred Stock, par value $0.01 per share, of Newco, the Certificate of

Designation of which will be substantially in the form of Exhibit A

attached hereto;

(d) "Series A GP Shares" means the 2,500 shares of Series A

Preferred Stock that will be issued to GenPar by Newco prior to the

Closing, and which will be transferred to the Seller by GenPar at the

Closing as full consideration for the sale and purchase of the GP

Interest;

(e) "Series A LP Shares" means the 29,375 shares of Series A

Preferred Stock that will be issued to the Seller by Newco at the Closing

as partial consideration for the sale and purchase of the LP Interest;

(f) "Series B Preferred Stock" means the Series B Exchangeable

Redeemable Preferred Stock, par value $0.01 per share, of Newco, the

Certificate of Designation of which will be substantially in the form of

Exhibit B attached hereto (the "Series B Certificate of Designation");

(g) "Series B Shares" means the 19,125 shares of Series B Preferred

Stock that will be issued to the Seller by Newco at the Closing as partial

consideration for the sale and purchase of the LP Interest;

1.4 Closing Deliveries. At the Closing:

(a) GenPar will transfer to the Seller the Series A GP Shares, and

will deliver to the Seller certificates representing the Series A GP

Shares, duly endorsed for transfer or accompanied by a stock power duly

executed in blank, and any other documents that are necessary to transfer

to the Seller good title to the Series A GP Shares;

(b) Newco will issue to the Seller the Series A LP Shares and the

Series B Shares, and will deliver to the Seller certificates representing

the Series A LP Shares and the Series B Shares and any other documents

that are necessary to transfer to the Seller good title to the Series A LP

Shares and the Series B Shares;

that are necessary to transfer to GenPar and Newco good title to the GP

Interest and the LP Interest, respectively, including, without limitation,

the Assignment of GP Interest and the Assignment of LP Interest (as

defined in Sections 5.1(m) and (n), respectively);

(d) GenPar will be admitted to the Partnership as successor general

partner in accordance with Section 12.19 of the Partnership Agreement;

(e) Newco will be admitted to the Partnership as a limited partner

in accordance with Section 12.8 of the Partnership Agreement;

(f) the Seller will transfer and deliver to GenPar the originals or

copies of all of the books, records, ledgers, electronic media,

proprietary information and other data and all other written or electronic

depositories of information of and relating to the Partnership;

<PAGE>

(g) Kupfer will cause Elite to execute and deliver to SCMI any

documents that are necessary to transfer to SCMI good title to, a valid

leasehold interest in or a valid and enforceable right to use, as

applicable, any and all assets owned, leased or otherwise used by Elite,

in connection with its provision of services to the Partnership or

otherwise (collectively, the "Elite Assets"), including, without

limitation, a Bill of Sale, substantially in the form of Exhibit C

attached hereto (the "Bill of Sale"), which Bill of Sale will include a

complete and accurate listing of all of the Elite Assets; and

(h) the Buyers and the Seller will execute and deliver the documents

required to be delivered by each of them pursuant to Article V.

1.5 Further Assurances. At or after the Closing, and without further

consideration, the Seller will execute and deliver to Newco or GenPar such

further instruments of conveyance and transfer as either of them may reasonably

request in order more effectively to convey and transfer the GP Interest to

GenPar or the LP Interest to Newco, respectively, or for aiding, assisting,

collecting and reducing to possession any of the Purchased Interests and

exercising rights with respect thereto. The parties agree to cooperate

reasonably with each other and with their respective representatives in

connection with any steps required to be taken as part of their respective

obligations under this Agreement before and after the Closing, and shall (a)

furnish upon request to each other such further information; (b) execute and

deliver to each other such other documents; and (c) do such other acts and

things, all as any other party may reasonably request for the purpose of

carrying out the intent of this Agreement and the transactions contemplated

hereby, including, without limitation, providing any information necessary to

complete as well as execute one or more Federal Health Care Provider/Supplier

Enrollment Application CMS Form 855B.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF THE SELLER AND KUPFER

As a material inducement to the Buyers to enter into this Agreement and

consummate the transactions contemplated hereby, the Seller and Kupfer, jointly

and severally, represent and warrant to the Buyers that the statements contained

in this Article II (subject to the disclosures contained in the Schedules

referenced herein) are true and correct as of the Effective Date. The

disclosures in any particular Schedule referenced herein shall qualify as

disclosures with respect to all other Schedules referenced herein only where

specifically cross-referenced or, in the absence of a specific cross-reference,

only where the disclosure made in any particular Schedule referenced herein is

sufficient on its face, without reference to attachments or underlying

documentation (excluding appendices to the Schedules, which shall be deemed part

of the Schedules), to alert the Buyers to the relevance of the disclosure to

such other Schedules referenced herein.

2.1 Organization. The Partnership is a limited partnership and the Seller

is a corporation, each duly organized, validly existing and in good standing

under the laws of the State of California, and each has full power to own its

properties and to conduct its business as presently conducted. The Partnership

is not qualified to do business in any foreign jurisdiction, and no such

qualification is now required or will be required prior to the Closing. Set

forth in Schedule 2.1 is

<PAGE>

a list of all fictitious business names under which the Partnership operates,

all of which are registered in the County of San Diego.

2.2 Authority. Each of the Seller and Kupfer has all requisite power,

authority and capacity, corporate, individual or otherwise, to execute, deliver

and perform under this Agreement and the other agreements, certificates and

instruments to be executed by the Seller or Kupfer in connection with or

pursuant to this Agreement (collectively, the "Seller Documents"). The

execution, delivery and performance by the Seller of each Seller Document to

which it is a party has been duly authorized by all necessary action, corporate

or otherwise, on the part of the Seller. This Agreement has been, and at the

Closing the other Seller Documents will be, duly executed and delivered by the

Seller and Kupfer (to the extent each is a party thereto). This Agreement is,

and, upon execution and delivery by the Seller and Kupfer at the Closing, each

of the other Seller Documents will be, a legal, valid and binding agreement of

the Seller and Kupfer (to the extent each is a party thereto), enforceable

against the Seller and Kupfer in accordance with its terms, except as such

enforceability may be limited by applicable bankruptcy, insolvency, fraudulent

conveyance or similar laws affecting the enforcement of creditors' rights

generally and subject to general principles of equity (regardless of whether

enforcement is sought in a proceeding at law or in equity).

2.3 Formation Documents. The Seller or Kupfer has delivered to the Buyers

true, correct and complete copies of the Partnership's certificate of limited

partnership, all partnership agreements in effect during the last five years,

minute books and equity record books, as applicable. Such records include

minutes or consents reflecting all actions taken by the general partner or the

limited partners of the Partnership from the date of organization of the

Partnership through the Effective Date.

2.4 Capitalization.

(a) Set forth in Schedule 2.4 is a complete and accurate list of all

of the ownership interests in the Partnership and the capital account

balances associated therewith. The Purchased Interests have been duly

authorized and validly issued in compliance with all applicable Laws (as

defined in Section 2.17) and the provisions of the Partnership Agreement

or any applicable predecessor operating agreement of the Partnership, and

are fully paid and nonassessable and free of preemptive rights. The

Partnership does not have any equity interests reserved for issuance.

(b) There are no outstanding options, warrants, convertible or

exchangeable securities or other rights, agreements, arrangements or

commitments obligating the Seller or the Partnership, directly or

indirectly, to issue, sell, purchase, acquire or otherwise transfer or

deliver any equity interest in the Partnership, or any agreement,

document, instrument or obligation convertible or exchangeable therefor.

There are no agreements, arrangements or commitments of any character

(contingent or otherwise) pursuant to which any Person is or may be

entitled to receive any payment based on the revenues or earnings, or

calculated in accordance therewith, of the Partnership. There are no

voting trusts, proxies or other agreements or understandings to which the

Seller or the Partnership is a party or by which the Seller or the

Partnership is bound with respect to the voting of any equity interest in

the Partnership. Neither the GP Interest nor the LP Interest was issued in

violation of the

<PAGE>

Securities Act of 1933, as amended (the "1933 Act"), or any applicable

state securities Laws.

2.5 Title to Securities. The Seller owns of record and beneficially the

Purchased Interests, free and clear of any obligation, lien, claim, pledge,

security interest, liability, charge, contingency or other encumbrance or claim

of any nature (a "Lien") other than as provided in the Partnership Agreement.

Upon sale of the Purchased Interests and delivery of certificates (or other

transfer documents included in the Seller Documents) therefor to the Buyers

hereunder, GenPar will acquire the entire legal and beneficial interests in the

GP Interest and Newco will acquire the entire legal and beneficial interests in

the LP Interest, each free and clear of any Lien and subject to no legal or

equitable restrictions of any kind other than as provided in the Partnership

Agreement.

2.6 No Subsidiaries. The Partnership does not have any subsidiaries or own

any equity or debt interest or any form of proprietary interest in any Person,

or any obligation, right or option to acquire any such interest.

2.7 Title to Assets.

(a) Set forth in Schedule 2.7(a) is a complete and accurate list

(including the street address, where applicable) of: (i) all real property

owned by the Partnership; (ii) all real property leased by the

Partnership; (iii) each vehicle owned or leased by the Partnership; and

(iv) each other tangible asset owned or leased by the Partnership and

having a book value in excess of $5,000. No tangible or intangible asset

used in or associated with the Business is owned or leased by the Seller,

Kupfer or any Affiliate (as defined in Section 7.14(a)) of the Seller or

Kupfer (other than the Partnership).

(b) The Partnership has good and marketable title to all of the

assets it purports to own and used in connection with the Business, and

owns all of such assets free and clear of any Liens, other than Liens set

forth in Schedule 2.7(b), all of which will be released at or prior to the

Closing, and Permitted Liens (as defined in Section 7.14(e)). The

Partnership holds a valid leasehold interest in or otherwise has a valid

and enforceable right to use all of the assets used in connection with the

Business that it does not own.

Property") is zoned for a classification that permits the continued use of

the Real Property in the manner currently used by the Partnership.

Improvements included in the assets of the Partnership were constructed,

and remain, in compliance with all applicable covenants, conditions,

restrictions and material Laws affecting the Real Property. Final

certificates of occupancy have been issued for the improvements on the

Real Property permitting the existing use of such improvements. There are

no actions pending or, to the Knowledge of the Seller or Kupfer,

threatened that would alter the current zoning classification of the Real

Property or alter any applicable covenants, conditions, restrictions or

material Laws that would adversely affect the use of the Real Property in

the Business. Neither the Partnership nor the Seller or Kupfer has

received notice from any insurance company or Governmental Entity (as

defined in Section 2.11) of any defects or inadequacies in the Real

Property or the improvements thereon that would adversely affect the

insurability or usability of the Real Property or such improvements or

<PAGE>

prevent the issuance of new insurance policies thereon at rates not

materially higher than present rates. To the Knowledge of the Seller or

Kupfer, no fact or condition exists that would result in the

discontinuation of necessary utilities or services to the Real Property or

the termination of current access to and from the Real Property. The

Seller is not a "foreign person" as that term is defined in Section 1445

of the Internal Revenue Code of 1986, as amended (the "Code"), and

applicable regulations.

2.8 Condition and Sufficiency of Assets. The assets of the Partnership,

including any assets held under leases or licenses: (i) include all assets used

in the Business; (ii) are in good condition and repair, ordinary wear and tear

excepted; (iii) have been properly and regularly maintained in all material

respects; (iv) conform in all material respects to all applicable Laws relating

to their construction, use, operation and maintenance; and (v) constitute all

assets used by the Partnership in the conduct of the Business.

2.9 Accounts Receivable. Set forth in Schedule 2.9 is a complete and

accurate schedule of the accounts receivable of the Partnership as of the

Effective Date, for dates of service commencing on or after __________ ___, 2005

(collectively and together with all accounts receivable of the Partnership

created after the Effective Date, the "Accounts Receivable"). The Accounts

Receivable represent or will represent valid obligations arising from sales

actually made or services actually performed by the Partnership in the ordinary

course of business. Except to the extent paid prior to the Closing Date, such

Accounts Receivable are or will be as of the Closing Date current and

collectible net of the respective reserves shown on the Latest Balance Sheet

(which reserves are adequate, commercially reasonable and calculated consistent

with past practices and will not represent a Material Adverse Effect in the

composition of such Accounts Receivable in terms of aging). Subject to such

reserves, each of such Accounts Receivable either has been or, to the Knowledge

of the Seller or Kupfer will be, collected in full, without any setoff, within

60 days after the day on which it first becomes due and payable. There is no

contest, claim, defense or right of setoff under any agreement with any account

debtor of an Account Receivable relating to the amount or validity of such

Account Receivable, other than returns in the ordinary course of business and

consistent with past practices of the Partnership or normal reductions pursuant

to contracts with the Payors (as defined in Section 2.19) which set forth lower

reimbursement rates than the gross amount of receivable invoiced.

2.10 No Violation. Except as set forth in Schedule 2.10, neither the

execution or delivery of the Seller Documents nor the consummation of the

transactions contemplated thereby, including without limitation the sale of the

Purchased Interests to the Buyers, will, to the Knowledge of the Seller or

Kupfer, conflict with or result in the breach of any term or provision of,

require any consent, approval, ratification, waiver, notification, license,

permit, order or other authorization (including any Governmental Authorization

(as defined in Section 2.11)) (collectively, "Consents") or violate or

constitute a default under (or an event that with notice or the lapse of time or

both would constitute a breach or default), or result in the creation of any

Lien on the Purchased Interests or the assets of the Partnership pursuant to, or

relieve any third party of any obligation to the Partnership or give any third

party the right to terminate or accelerate any obligation under, any charter

provision, bylaw, provision of the Partnership Agreement, Partnership Contract

(as defined in Section 2.25(a)), License (as defined in Section 2.18) or Law to

which the Seller or the Partnership is a party or by which any assets of the

Partnership or otherwise used in the Business is in any way bound or obligated.

<PAGE>

2.11 Governmental Authorizations. Except as set forth in Schedule 2.11, to

the Knowledge of the Seller or Kupfer, no Consent, franchise, grant,

identification or registration number, easement, variance, exemption or

certificate issued, granted, given or otherwise made available by or under the

authority of, or registration, qualification, designation, declaration or filing

with, any nation, state, county, city, town, village, district or other

jurisdiction of any nature; federal, state, local, municipal, foreign or other

government; governmental or quasi-governmental agency, authority, commission,

board or other body of any nature (including any governmental branch,

department, official or entity and any court or other tribunal); multi-national

organization or body; or body exercising, or entitled to exercise, any

administrative, executive, judicial, legislative, police, regulatory or taxing

authority or power of any nature (collectively, each a "Governmental Entity"),

or required pursuant to any applicable Laws (collectively, each a "Governmental

Authorization"), is required on the part of the Seller or the Partnership in

connection with the sale and purchase of the Purchased Interests or any of the

other transactions contemplated by this Agreement.

2.12 Financial Statements. Attached as Schedule 2.12 are true and complete

copies of (a) the unaudited balance sheet of the Partnership (collectively, the

"Latest Balance Sheet") as of November 30, 2005 (the "Latest Balance Sheet

Date") and the related unaudited statements of operations and cash flow of the

Partnership for the nine months then ended; and (b) the audited balance sheets

of the Partnership as of December 31, 2003 and 2004 and the related audited

statements of operations and cash flow for the periods then ended (collectively,

the "Financial Statements"). The Financial Statements present fairly the

financial condition of the Partnership at the dates specified and the results of

its operations for the periods specified and have been prepared in accordance

with generally accepted accounting principles, consistently applied ("GAAP")

except, with respect to the unaudited Financial Statements, for the absence of

footnote disclosure and for changes resulting from normal year-end adjustments

for recurring accruals (which will not be material individually or in the

aggregate). The Financial Statements do not contain any items of a special or

nonrecurring nature, except as expressly stated therein. The Financial

Statements have been prepared from the books and records of the Partnership,

which accurately and fairly reflect the transactions of, acquisitions and

dispositions of assets by, and incurrence of Liabilities (as defined in Section

2.13(a)) by the Partnership.

2.13 Absence of Undisclosed Liabilities.

(a) The Partnership has no direct or indirect debts, obligations or

liabilities of any nature, whether absolute, accrued, contingent,

liquidated or otherwise, and whether due or to become due, asserted or

unasserted (collectively, "Liabilities") except for: (i) Liabilities

reflected on the Latest Balance Sheet, including any reserves (and, for

this purpose, a Liability shall be deemed to be included in a reserve if

it is the type of Liability for which such reserve was established,

regardless of whether such Liability is actually included in the reserve,

provided that the aggregate amount of all Liabilities actually included or

deemed to be included in the reserve do not exceed the aggregate amount of

the reserve reflected on the Latest Balance Sheet, and provided further

that if the aggregate amount of all such Liabilities actually included or

deemed to be included in the reserve exceeds the aggregate amount of such

reserve, this representation and warranty will be deemed breached only to

the extent of such excess); (ii) current Liabilities incurred in the

ordinary course of business and consistent with past practices after the

Latest Balance Sheet

<PAGE>

Date; (iii) Liabilities incurred in the ordinary course of business and

consistent with past practices under the Partnership Contracts and under

other agreements entered into by the Partnership in the ordinary course of

business that are not included within the definition of Partnership

Contracts set forth in Section 2.25, which Liabilities are not required by

GAAP to be reflected in the Latest Balance Sheet; and (iv) Liabilities

disclosed in the Schedules to this Agreement.

(b) Set forth in Schedule 2.13(b) is a complete and accurate list of

the principal balance of all long-term and short-term Liabilities of the

Partnership (other than trade accounts payable incurred in the ordinary

course of business and consistent with past practices) as of the Latest

Balance Sheet Date, as well as the name of the lender or creditor with

respect to each such Liability.

include only liabilities and obligations incurred in the normal course of

business of the Partnership, consistent with past practices and amounts,

and do not include, without limitation, any Liabilities under an agreement

or otherwise that result from any breach or default (or event that with

notice or lapse of time would constitute a breach or default), tort,

infringement or violation of Law by the Partnership, the Seller or Kupfer.

2.14 Absence of Certain Changes. Since the Latest Balance Sheet Date,

except as set forth in Schedule 2.14, there has not been:

(a) any Material Adverse Effect with respect to the Partnership, or

with respect to the manner in which the Partnership conducts the Business;

(b) any declaration, setting aside or payment of any dividends or

distributions in respect of any equity interests in the Partnership or any

redemption, purchase or other acquisition by the Partnership of any of its

equity interests, except as contemplated by this Agreement;

any distribution or any repayment of indebtedness) to or for the benefit

of any equityholder of the Partnership, other than compensation and

expense reimbursements paid in the ordinary course of business and

consistent with past practice;

(d) any revaluation by the Partnership of any of its assets,

including the writing down or off of notes or Accounts Receivable and the

writing down of the value of inventory, other than in the ordinary course

of business and consistent with past practice;

(e) any entry by the Partnership into any commitment or transaction

material to the Partnership including, without limitation, incurring or

agreeing to incur capital expenditures or to make payments to customers

(other than pursuant to agreements listed in Schedule 2.25(a)) in excess

of $5,000, individually or in the aggregate;

(f) any increase in indebtedness for borrowed money, or any issuance

or sale of any debt securities, or any assumption, guarantee or

endorsement of any Liability of any other Person, or any loan or advance

to any other Person;

<PAGE>

(g) any breach or default (or event that with notice or lapse of

time would constitute a breach or default), termination or threatened

termination under any Partnership Contract binding on the Partnership or

to which any asset of the Partnership is subject;

(h) any change by the Partnership in its accounting methods,

principles or practices;

(i) any increase in the benefits under, or the establishment or

amendment of, any bonus, insurance, severance, deferred compensation,

pension, retirement, profit sharing or other employee benefit plan, or any

increase in the compensation payable or to become payable to the Seller or

any officers or employees of the Partnership, except for annual merit

increases in salaries or wages in the ordinary course of business and

consistent with past practice;

(j) the termination of employment (whether voluntary or involuntary)

of any officer or key employee of the Partnership or the termination of

employment (whether voluntary of involuntary) of employees of the

Partnership in excess of historical attrition in personnel;

(k) any theft, condemnation or eminent domain proceeding or any

damage, destruction or casualty loss affecting any asset used in the

Business, whether or not covered by insurance;

(l) any sale, assignment or transfer of any asset used in the

Business, except sales of inventory or obsolete equipment in the ordinary

course of business and consistent with past practice;

(m) any waiver by the Partnership or any equityholder of the

Partners