EXHIBIT 10.1

 

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ASSET PURCHASE AGREEMENT

 

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DATED AS OF JULY 1, 2005

 

AMONG

 

RXCROSSROADS, L.L.C.,

 

RXINNOVATIONS, LLC,

 

MAKING DISTRIBUTION INTELLIGENT, L.L.C.,

 

LOUISVILLE PUBLIC WAREHOUSE COMPANY

 

AND

 

OMNICARE, INC.

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ASSET PURCHASE AGREEMENT

 

This is an ASSET PURCHASE AGREEMENT (the “Agreement”), dated as of July 1, 2005,
by and among RxCrossroads, L.L.C., a Kentucky limited liability company
(“RxCrossroads”), RxInnovations, LLC, a Kentucky limited liability company and a
wholly-owned subsidiary of RxCrossroads (“RxInnovations”), Making Distribution
Intelligent, L.L.C., a Kentucky limited liability company (“MDI” and, together
with RxCrossroads and RxInnovations, the “Sellers”), Louisville Public Warehouse
Company, a Kentucky corporation and the holder of 100% of the membership
interests of each of RxCrossroads and MDI (“Holder”), and Omnicare, Inc., a
Delaware corporation (“Buyer”).

 

Recitals

 

A. WHEREAS, RxCrossroads and RxInnovations are out-sourced commercialization
firms offering services ranging from pre-launch tactical consulting to
implementation and management of complex reimbursement programs (the
“RxCrossroads/RxInnovations Business”);

 

B. WHEREAS, MDI is a third party logistics services provider, offering
outsourced order entry, warehousing, shipping and financial services principally
to manufacturers in the pharmaceutical/biotech, medical device and plasma
industries (together with the RxCrossroads/RxInnovations Business, the
“Business”);

 

C. WHEREAS, Holder is an S corporation and each of the Sellers is a disregarded
entity for federal income tax purposes; and

 

D. WHEREAS, the Sellers desire to sell to Buyer (or, if applicable, Buyer
Designee), and Buyer (or, if applicable, Buyer Designee) desires to purchase, on
the terms and subject to the conditions set forth in this Agreement, certain of
the rights, properties and assets relating to the Business, and the Sellers
desire to assign to Buyer (or, if applicable, Buyer Designee), and Buyer (or, if
applicable, Buyer Designee) desires to assume, certain of the liabilities
relating to the Business.

 

NOW, THEREFORE, in consideration of the mutual representations, warranties,
covenants and agreements herein contained, the parties hereto agree as follows:

 

ARTICLE I.

DEFINITIONS

 

1.1. Definitions. For purposes of this Agreement and any attachments, including
the Disclosure Schedule, the terms defined in this Agreement when capitalized
and used in this Agreement or any attachments shall have the respective meanings
specified

 

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in this Agreement. In addition, the following terms when capitalized and used in
this Agreement or any attachments shall have the meanings set forth below:

 

“18 Month Anniversary” shall have the meaning set forth in Section 3.2(b)(ii).

 

“Accounts Receivable” shall mean: (a) all trade accounts receivable and other
rights to payment from customers of the Business and the full benefit of all
security for such accounts or rights to payment, including all trade accounts
receivable representing amounts receivable in respect of goods shipped or
products sold or services rendered to customers of the Business; (b) all other
accounts or notes receivable of the Business and the full benefit of all
security for such accounts or notes; and (c) any claim, remedy or other right
related to any of the foregoing.

 

“Acquired Assets” shall mean all assets, properties and rights owned, used or
held for use in or necessary for the Business as of the Closing, including all
of the Sellers’ rights, title and interests in and to the following assets:

 

  (a) All Accounts Receivable;

 

  (b) All Restricted Cash;

 

  (c) All prepaid and similar items of the Business, including all prepaid
expenses, advance payments, security deposits, employee travel and expense
advances and other prepaid items, all to the extent assignable to Buyer (which
items, if not assignable, will be deemed to be Excluded Assets);

 

  (d) All leasehold interests of the Business and owned leasehold improvements
pertaining to the Leased Real Estate;

 

  (e) All owned personal property of the Business or personal property used or
held for use in connection with the Business, including all machinery and
equipment, tools and dies, computer equipment, materials, furniture, office
equipment, cars, trucks and other vehicles;

 

  (f) All supplier lists of the Business;

 

  (g) All customer lists of the Business;

 

  (h) All Contracts relating to the Business, including all leases of personal
property (whether or not capitalized), licenses, conditional sale or title
retention agreements and guarantees;

 

  (i) All intangibles and related rights, including Proprietary Rights;

 

  (j)

All permits, franchises, licenses, bonds, approvals, qualifications and the like
of the Business issued by any government or governmental unit,

 

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agency, board, body or instrumentality, whether federal, state or local and all
applications therefor pertaining to the Business, all to the extent assignable;

 

  (k) All sales literature, promotional literature and similar materials
relating exclusively to the Business;

 

  (l) Any Kentucky Jobs Development Act Program credits;

 

  (m) Copies of all business books and records of the Business, including copies
of all financial, operating, personnel, payroll and customer records,
correspondence and files; provided however, that if any such books or records
are subject to any legal privilege, the Parties agree to cooperate to protect
such privilege to the extent practicable; and further provided that, if any of
the foregoing items have been used by the Sellers in a manner unrelated to the
Business, the Sellers shall retain a joint ownership interest in such items and
shall be entitled to possess and use such items in a manner consistent with the
Sellers’ past use;

 

  (n) All rights under Contracts relating to the Business including
non-competition, confidentiality or non-solicitation obligations enforceable
against a third party; and

 

  (o) All assets reflected on the Interim Balance Sheet and all assets used to
generate revenue and income reflected on the Income Statement, which Interim
Balance Sheet and Income Statement are set forth on Schedule 1.1(o), other than,
in each case, assets disposed of after the date of such Interim Balance Sheet
and Income Statement and on or prior to the Closing in the ordinary course of
business consistent with past practice,

 

but excluding therefrom the Excluded Assets.

 

“Active Employee” shall have the meaning set forth in Section 16.1(a).

 

“Actual Net Working Capital” shall have the meaning set forth in Section 3.3(a).

 

“Affiliate” shall mean, with respect to any Person, any other Person directly or
indirectly controlling, controlled by or under common control with such Person,
whether such control is through voting securities, contract or otherwise.

 

“Agreement” shall have the meaning set forth in the preamble.

 

“Allocation Schedule” shall have the meaning set forth in Section 3.5.

 

“Alternative Proposal” shall have the meaning set forth in Section 6.15(b).

 

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“Ancillary Agreements” shall have the meaning set forth in Section 4.2.

 

“Assignment and Assumption Agreement” shall have the meaning set forth in
Section 11.1.

 

“Assumed Contracts” shall mean the Contracts included in the Acquired Assets.

 

“Assumed Liabilities” shall have the meaning set forth in Section 2.2.

 

“Bill of Sale” shall have the meaning set forth in Section 11.4.

 

“Business” shall have the meaning set forth in the Recitals.

 

“Business Benefit Plans” shall have the meaning set forth in Section 4.19(a).

 

“Business Days” shall mean a day other than a Saturday, Sunday or other day on
which commercial banks in Kentucky are authorized or required by Law to close.

 

“Buyer” shall have the meaning set forth in the preamble.

 

“Buyer Designee” shall have the meaning set forth in Section 2.1.

 

“Buyer Indemnified Parties” shall have the meaning set forth in Section 15.1.

 

“Buyer Indemnity Basket Exclusions” shall have the meaning set forth in Section
15.6(a).

 

“Buyer’s Welfare Plans” shall have the meaning set forth in Section 16.1(c).

 

“Buyer Termination Fee” shall have the meaning set forth in Section 14.4(a).

 

“Cash” shall mean all cash and cash equivalent items held for the Business as of
the Closing, including checks or drafts received by the Business for which the
Sellers have not received funds on or prior to the Closing Date, certificates of
deposit, time deposits, marketable securities and other liquid investments.

 

“Closing” shall have the meaning set forth in Section 3.1.

 

“Closing Date” shall have the meaning set forth in Section 3.1.

 

“Closing Date Cash Payment” shall have the meaning set forth in Section
3.2(b)(i).

 

“Code” shall mean the Internal Revenue Code of 1986, as amended.

 

“Confidentiality Agreement” shall have the meaning set forth in Section 6.11.

 

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“Consent” shall mean any consent, approval or authorization of, notice to, or
designation, registration, declaration or filing with, any Person.

 

“Contract” shall mean any note, bond, mortgage, indenture, contract, agreement,
permit, license, lease, plan, authorization, purchase order, sales order,
document or other instrument, arrangement or other commitment, obligation or
understanding, written or oral, to which a Person is a party or by which a
Person or its assets or properties are bound.

 

“Contract Requiring Consent” shall have the meaning set forth in Section 4.15.

 

“Direct Claim Notice” shall have the meaning set forth in Section 15.4.

 

“Disclosure Schedule” shall mean the schedules delivered by the Sellers to Buyer
as of the date of this Agreement that set forth the exceptions to the
representations and warranties contained in Article IV and certain other
information called for by this Agreement.

 

“Domain Name Assignment Agreement” shall have the meaning set forth in Section
11.8.

 

“Downward Purchase Price Adjustment” shall have the meaning set forth in Section
3.3(a).

 

“Effective Time” shall have the meaning set forth in Section 3.1.

 

“Election Period” shall have the meaning set forth in Section 15.3(b).

 

“Employee Benefit Plan” shall have the meaning set forth in Section 4.19(a).

 

“Environmental Law” shall have the meaning set forth in Section 4.9(f)(i).

 

“ERISA” shall have the meaning set forth in Section 4.19(a).

 

“Escrow Agent” shall mean LaSalle Bank National Association.

 

“Escrow Payment” shall have the meaning set forth in Section 3.2(b)(ii).

 

“Excluded Assets” shall mean the following rights, properties and assets of the
Business or the Sellers as the same shall exist as of the Closing:

 

  (a) All Cash, other than Restricted Cash;

 

  (b) All rights, properties and assets of the Sellers used by the Business
which shall have been transferred or disposed of by the Sellers prior to the
Closing in transactions conducted in the ordinary course of business, consistent
with past practice and not in breach of this Agreement;

 

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  (c) All intercompany or intracompany accounts or other receivables;

 

  (d) All current and deferred federal, state and local income Tax assets,
credits and refunds (including interest) arising out of the conduct of the
Business or attributable to periods prior to the Closing, other than any
Kentucky Jobs Development Act Program credits;

 

  (e) All rights of recovery relating to the Excluded Liabilities and Excluded
Assets and all other claims and litigation against third parties, including
claims for refunds and insurance claims, to the extent that such claims are not
related to the Acquired Assets or the Assumed Liabilities;

 

  (f) All amounts prepaid on any insurance policy and any rights to recoveries
under any insurance policy maintained by the Sellers on behalf of the Business
prior to the Closing;

 

  (g) All books of account, checkbooks, cancelled checks, bills and vouchers in
support thereof, bank accounts and any other deposit accounts wherever located;

 

  (h) All assets related to the selling, general and administrative functions of
the Business afforded to the Business by the Sellers or any of their respective
Affiliates, including any site license for the corporate financial reporting
system or other information systems or any license held by the Sellers or any of
their respective Affiliates with respect to the Business which is not used in or
held for use in, necessary for or otherwise relating to, the Business; and

 

  (i) All assets, whether or not used in the conduct of the Business, listed on
Schedule 1.1(j).

 

“Excluded Liabilities” shall have the meaning set forth in Section 2.3.

 

“Facilities” shall mean collectively the facilities located at (i) 240 Shorland
Drive, Walton, Kentucky, (ii) 4500 Progress Boulevard, Louisville, Kentucky, and
(iii) 10350 Ormsby Park Place (Suite 1500 and Lower Level), Louisville,
Kentucky, and improvements thereon which comprise the Leased Real Estate.

 

“Final Closing Date Statement” shall have the meaning set forth in Section
3.3(a).

 

“Final Closing Date Statement Target Date” shall have the meaning set forth in
Section 3.3(a).

 

“Financial Statements” shall have the meaning set forth in Section 4.5.

 

“FIRPTA Certificate” shall have the meaning set forth in Section 11.6.

 

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“GAAP” shall mean United States generally accepted accounting principles applied
in a manner consistent with past practice of the Sellers and Holder as applied
to the Business.

 

“Governmental Approval” shall mean the required filings, notice to, Consent of,
any Governmental Authority other than any actions, Consents or filings otherwise
expressly referred to in this Agreement.

 

“Governmental Authority” shall mean any United States federal, state or local or
any foreign government, governmental, regulatory or administrative authority,
instrumentality, agency or commission or any court, tribunal, judicial or
arbitral body.

 

“Hazardous Substance” shall have the meaning set forth in Section 4.9(f)(ii).

 

“Holder” shall have the meaning set forth in the preamble.

 

“HSR Act” shall have the meaning set forth in Section 6.7.

 

“Income Statement” shall mean the income statement as of May 31, 2005 relating
to the Business.

 

“Indemnification Escrow Agreement” shall have the meaning set forth in Section
3.2(b)(ii).

 

“Indemnified Party” shall have the meaning set forth in Section 15.3(a).

 

“Indemnifying Party” shall have the meaning set forth in Section 15.3(a).

 

“Indemnity Basket” shall have the meaning set forth in Section 15.6(a).

 

“Indemnity Cap” shall have the meaning set forth in Section 15.6(b).

 

“Indemnity Claim” shall have the meaning set forth in Section 15.3(a).

 

“Indemnity Environmental Claim” shall mean any Indemnity Claim relating to the
representations and warranties contained in Section 4.9 (Environmental Matters).

 

“Indemnity No Solicitation Claim” shall mean any Indemnity Claim relating to the
covenants contained in Section 6.16 (No Solicitation of Employees).

 

“Indemnity Non-Competition Claim” shall mean any Indemnity Claim relating to the
covenants contained in Section 6.17 (Non-Competition).

 

“Indemnity Tax Claim” shall mean any Indemnity Claim relating to the
representations and warranties contained in Section 4.13 (Taxes) or relating to
Excluded Liabilities that are liabilities for Taxes.

 

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“Interim Balance Sheet” shall have the meaning set forth in Section 4.5.

 

“James S. Karp Agreement” shall have the meaning set forth in Section 10.5.

 

“Knowledge” or “awareness” or words of similar import shall mean the knowledge,
after reasonable inquiry, of the management of Buyer, the Sellers or Holder, as
the case may be, consisting, with respect to the Sellers and Holder, of the
individuals identified on Schedule 1.1(k).

 

“Laws” shall mean all federal, state, local or foreign laws, orders, writs,
injunctions, decrees, ordinances, awards, stipulations, statutes, judicial or
administrative doctrines, rules or regulations enacted, promulgated, issued or
entered by a Governmental Authority.

 

“Lease Amendment” shall have the meaning set forth in Section 6.21(a).

 

“Leased Real Estate” shall have the meaning set forth in Section 4.7.

 

“Liens” shall mean all title defects or objections, mortgages, liens, claims,
charges, pledges or other encumbrances of any nature whatsoever, including
licenses, leases, chattel or other mortgages, collateral security arrangements,
pledges, title imperfections, defect or objection liens, security interests,
conditional and installment sales agreements, easements, encroachments or
restrictions, of any kind and other title or interest retention arrangements,
reservations or limitations of any nature.

 

“Long-Term Executive Incentive Obligations” shall mean any long-term executive
incentive compensation obligations of the Sellers to Nitin Sahney, David
Hileman, Cheryl Pryor and Cynthia Padgett, which obligations constitute all such
obligations of the Sellers.

 

“Loss” shall have the meaning set forth in Section 15.1.

 

“Material Adverse Effect” shall mean a material adverse effect on (a) the
Acquired Assets or the Assumed Liabilities or the business, operations, assets,
liabilities, condition (financial or otherwise) or results of operations of the
Business (excluding matters which are not specific to the Acquired Assets,
Assumed Liabilities or the Business, but rather events and conditions affecting
the industry generally within which the Business operates or the economy
generally; provided, that such event or condition does not have a
disproportionate effect on the Business) or (b) the timely consummation of the
transactions contemplated by this Agreement.

 

“Material Contracts” shall have the meaning set forth in Section 4.15.

 

“Net Working Capital” shall mean the difference between (i) the current assets
of the Business as of and including the Closing Date and (ii) the current
liabilities of the Business as of and including the Closing Date. Net Working
Capital shall not include any Excluded Liabilities or Excluded Assets.

 

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“Nitin Sahney Agreement” shall have the meaning set forth in Section 8.6.

 

“Organizational Documents” shall mean the certificate of incorporation, by-laws
or other similar governing documents of a Person.

 

“Owned Rights” shall have the meaning set forth in Section 4.22(a)(vi).

 

“Parties” shall mean collectively the Sellers, Holder and Buyer.

 

“Permits” shall have the meaning set forth in Section 4.21.

 

“Permitted Liens” shall have the meaning set forth in Section 4.10.

 

“Person” shall mean any individual, sole proprietorship, partnership, limited
liability company, joint venture, trust, unincorporated association,
corporation, entity or government (whether federal, foreign, state, county, city
or otherwise, including any instrumentality, division, agency or department
thereof).

 

“Preliminary Closing Date Statement” shall have the meaning set forth in Section
3.3(a).

 

“Promptly” shall mean within two (2) Business Days.

 

“Proprietary Rights” shall have the meaning set forth in Section 4.22(a)(i).

 

“Purchase Price” shall have the meaning set forth in Section 3.2(b).

 

“Release” shall have the meaning set forth in Section 4.9(f)(iii).

 

“Restricted Cash” shall mean all cash collected on customer owned accounts
receivable or otherwise held for the benefit of customers.

 

“RxCrossroads/RxInnovations Business” shall have the meaning set forth in the
Recitals.

 

“Sellers” shall have the meaning set forth in the preamble.

 

“Sellers Indemnified Parties” shall have the meaning set forth in Section 15.2.

 

“Sellers Indemnity Basket Exclusions” shall have the meaning set forth in
Section 15.6(a).

 

“Sellers Rights” shall have the meaning set forth in Section 4.22(a)(i).

 

“Sellers Names” shall have the meaning set forth in Section 6.20.

 

“Seller Termination Fee” shall have the meaning set forth in Section 14.4(b).

 

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“Subject Names” shall have the meaning set forth in Section 6.20.

 

“Sublease” shall have the meaning set forth in Section 6.21(b).

 

“Sublease Amendment” shall have the meaning set forth in Section 6.21(b).

 

“Subsidiary” shall mean any company or entity of which at least 50% of the
capital stock or other equity interests having voting power under ordinary
circumstances shall at the time be held, directly or indirectly, by such Person.

 

“Tax” shall have the meaning set forth in Section 4.13(j)(i).

 

“Taxes” shall have the meaning set forth in Section 4.13(j)(i).

 

“Tax Return” shall have the meaning set forth in Section 4.13(j)(ii).

 

“Taxing Authority” shall mean any national, provincial, state or local
government, or any subdivision, agency, commission or authority thereof
exercising tax regulatory, enforcement, collection or other authority.

 

“Termination Fee” shall have the meaning set forth in Section 14.4(b).

 

“Third Party” shall have the meaning set forth in Section 15.3(a).

 

“Third Party Claim” shall have the meaning set forth in Section 15.3(a).

 

“Third Party Claim Notice” shall have the meaning set forth in Section 15.3(a).

 

“Trade Secrets” shall have the meaning set forth in Section 4.22(a)(i).

 

“Trademark Assignment Agreement” shall have the meaning set forth in Section
11.9.

 

“Trademarks” shall have the meaning set forth in Section 6.20.

 

“Transaction Documents” shall collectively refer to this Agreement and the
Ancillary Agreements as amended, modified or supplemented from time to time in
accordance with the terms thereof and all other instruments, certificates and
agreements executed by any Party in connection with transactions contemplated by
such agreements, including the Disclosure Schedule; provided that, “Transaction
Documents” shall not include other documents, projections or information
delivered by or on behalf of the Sellers or Holder to Buyer or Buyer’s agents or
representatives during the due diligence process or otherwise in connection with
the transactions contemplated by this Agreement.

 

“Transferred Employee” shall have the meaning set forth in Section 6.16.

 

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“Upward Purchase Price Adjustment” shall have the meaning set forth in Section
3.3(a).

 

“Year End Balance Sheet” shall have the meaning set forth in Section 4.5.

 

1.2. Interpretations. When reference is made in this Agreement to an Article,
Section, Exhibit or Schedule, such reference is to an Article or Section of, or
an Exhibit or Schedule to, this Agreement unless otherwise indicated. The
headings contained in this Agreement are for reference purposes only and shall
not affect the interpretation of this Agreement. Whenever the words “include”,
“includes”, or “including” are used in this Agreement, they shall be deemed to
be followed by the words “without limitation”. Whenever the words “hereof”,
“herein”, “hereunder” and words of similar import are used in this Agreement,
they refer to this Agreement as a whole and not to any particular provision of
this Agreement. All terms defined in this Agreement and the other Transaction
Documents shall have the defined meanings given therein when used in any
certificate or other document made or delivered pursuant to this Agreement
unless otherwise defined therein. The definitions contained in this Agreement
are applicable to the singular as well as the plural forms of such terms and to
the masculine as well as to the feminine and neuter genders of such term. Any
agreement or instrument referred to in this Agreement or any other Transaction
Document means such agreement or instrument as from time to time amended,
modified or supplemented. All references to statutes in this Agreement or any
other Transaction Document shall be deemed to include the applicable regulations
promulgated under such statutes as of the date of this Agreement. All dollar
amounts referred to in the Transaction Documents are in United States Dollars.

 

ARTICLE II.

PURCHASE AND SALE

 

2.1. Purchase and Sale of Acquired Assets. At the Closing, and on the terms and
subject to the conditions of this Agreement, the Sellers shall, and Holder shall
cause the Sellers to, sell, convey, transfer, assign and deliver to Buyer (or
one or more direct or indirect subsidiaries of Buyer as Buyer may designate (the
“Buyer Designee”)), and Buyer shall (or, if applicable, shall cause Buyer
Designee to) purchase and acquire from the Sellers, good and valid title to (or,
to the extent applicable, leasehold interest or license in and to, on the same
terms as the Sellers), and all the Sellers’ rights and interests in and to, the
Acquired Assets, free and clear of all Liens (other than Permitted Liens).

 

2.2. Assumed Liabilities. At the Closing, Buyer will not assume or agree to
undertake to pay, satisfy, discharge or perform in respect of, and will not be
deemed by virtue of the execution and delivery of this Agreement or any document
delivered at the Closing pursuant to this Agreement, or as a result of the
consummation of the transactions contemplated by this Agreement, to have
assumed, or to have agreed to pay, satisfy, discharge or perform in respect of,
any liability, obligation, indebtedness or Taxes of the Sellers or of any other
Person or in any way relating to the Business (whether primary or secondary,
direct or indirect, known or unknown, absolute or contingent, matured or
unmatured, or otherwise) other than the following obligations and liabilities of
the Sellers:

 

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(a) the obligations and liabilities arising after the Closing Date pursuant to
the terms of the Assumed Contracts, to the extent, and only to the extent, that
such Assumed Contracts are actually assigned to Buyer (or with respect to which
Buyer obtains the benefits pursuant to Section 6.12 hereof) and such obligations
and liabilities that relate to the period from and after the Closing and (b) the
liabilities as of the Closing Date set forth on Schedule 2.2 (clauses (a) and
(b) together, the “Assumed Liabilities”).

 

2.3. Excluded Liabilities. Except as otherwise expressly set forth in Section
2.2 and Section 3.7 of this Agreement, Buyer does not assume or agree or
undertake to pay, satisfy, discharge or perform in respect of, and will not be
deemed by virtue of the execution and delivery of this Agreement or any document
delivered at the Closing pursuant to this Agreement, or as a result of the
consummation of the transactions contemplated by this Agreement, to have
assumed, or to have agreed to pay, satisfy, discharge or perform in respect of,
any liability, obligation, indebtedness or Taxes of the Sellers or of any other
Person or in any way relating to the Business (whether primary or secondary,
direct or indirect, known or unknown, absolute or contingent, matured or
unmatured, or otherwise) other than the Assumed Liabilities (such liabilities
and obligations retained by the Sellers, including all liabilities and
obligations with respect to the Excluded Assets, being referred to herein as the
“Excluded Liabilities”). It is specifically agreed that the Sellers shall remain
liable for all of the Excluded Liabilities.

 

ARTICLE III.

CLOSING, PURCHASE PRICE AND ADJUSTMENTS

 

3.1. Closing. Subject to the conditions contained in this Agreement, the closing
of the transactions contemplated by this Agreement (the “Closing”) shall take
place at the offices of Frost Brown Todd LLC, at 10:00 a.m., local time, on the
first Business Day following the date on which the last of the conditions set
forth in Articles VII, VIII, IX and X shall be waived or fulfilled in accordance
herewith (other than those conditions that by their nature are to be satisfied
at the Closing, but subject to the satisfaction or waiver of those conditions),
or at such other place, date and time as the Parties may agree in writing. The
date on which the Closing occurs is referred to in this Agreement as the
“Closing Date.” The effective time of the Closing shall be 12:01 a.m., local
time, on the Closing Date (the “Effective Time”).

 

3.2. Purchase Price; Payment. In consideration of the conveyance to Buyer of all
right, title and interest in and to the Acquired Assets and the other rights
granted to Buyer hereunder, and subject to the terms and conditions hereof,
Buyer shall (or, if applicable, shall cause Buyer Designee to):

 

(a) at the Closing, assume the Assumed Liabilities; and

 

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(b) pay an aggregate amount of $235,000,000 (the “Purchase Price”), adjusted in
accordance with the terms of this Article III and Section 15.12 hereof, which
shall be delivered as follows:

 

(i) at the Closing, Buyer shall (or, if applicable, shall cause Buyer Designee
to) pay to the Sellers in cash an aggregate of $215,000,000 in immediately
available funds (the “Closing Date Cash Payment”); and

 

(ii) subject to the terms of Section 3.3 hereof, Buyer shall (or, if applicable,
shall cause Buyer Designee to) pay to the Sellers, within two (2) Business Days
of the eighteen (18) month anniversary of the Closing Date (the “18 Month
Anniversary”) (or such later date as set forth in Section 3.3 hereof), an
aggregate amount of $20,000,000 in cash, or such lesser or greater amount as
determined in accordance with Section 3.3(b) and Section 15.12 hereof, in
immediately available funds (the “Escrow Payment”), such sum to be paid on the
Sellers’ behalf on the Closing Date to the Escrow Agent to be held and released
in accordance with the Indemnification Escrow Agreement in substantially the
form attached hereto as Exhibit A (the “Indemnification Escrow Agreement”).

 

3.3. Post-Closing Purchase Price Adjustment.

 

(a) The Parties agree that, on the Closing Date, the Net Working Capital should
be no less than $4,000,000 and no greater than $5,000,000. In the event the
actual Net Working Capital as of the Closing Date (the “Actual Net Working
Capital”) is less than $4,000,000, the Purchase Price shall be adjusted
downward, dollar-for-dollar, by the extent to which $4,000,000 exceeds the
Actual Net Working Capital (the “Downward Purchase Price Adjustment”). In the
event the Actual Net Working Capital is greater than $5,000,000, the Purchase
Price shall be adjusted upward, dollar-for-dollar, by the extent to which the
Actual Net Working Capital exceeds $5,000,000 (the “Upward Purchase Price
Adjustment”). Buyer, in conjunction with its independent accountants (and in
concurrence with the Sellers’ independent accountants), shall prepare and
present to the Sellers a balance sheet setting forth the Actual Net Working
Capital, which shall be determined and computed in accordance with GAAP (the
“Preliminary Closing Date Statement”) promptly, but not more than sixty (60)
calendar days after the Closing Date. The Sellers, together with their
representatives and accountants, shall have the right to review the workpapers
of Buyer and Buyer’s accountants utilized in preparing the Preliminary Closing
Date Statement for purposes of verifying the accuracy and fairness of the
presentation of the Preliminary Closing Date Statement. The Sellers shall notify
Buyer of any dispute with the Preliminary Closing Date Statement promptly, but
not more than thirty (30) calendar days after its receipt by the Sellers (such
date to be referred to as the “Final Closing Date Statement Target Date”). The
Preliminary Closing Date Statement, together with any adjustments or corrections
agreed upon by Buyer and the Sellers or determined by an independent accounting
firm as described below, as applicable, shall set forth the Actual Net Working
Capital and shall be referred to herein as the “Final Closing Date Statement.”
All items on the Final Closing Date Statement shall be determined and computed
in accordance with this Section 3.3(a) and GAAP, and shall be audited or
reviewed by an independent accounting firm at Buyer’s expense. If

 

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the Parties cannot agree on any adjustments or corrections to the Preliminary
Closing Date Statement within thirty (30) calendar days after the delivery of
the Preliminary Closing Date Statement to the Sellers by Buyer, the Parties
shall submit the dispute to a mutually acceptable “Big 4” accounting firm having
no material relationship to Buyer or the Sellers and their respective Affiliates
and having offices in locations suitable to conduct such review. The
determination by such independent accounting firm shall be final, binding and
conclusive on the Parties and judgment may be entered thereon in a court of
competent jurisdiction. Buyer and the Sellers shall make their respective
submissions to the independent accounting firm within five (5) Business Days
after selecting such independent accounting firm pursuant to this Section
3.3(a). Buyer and the Sellers shall use reasonable efforts to cause the
independent accounting firm to make their determination within thirty (30)
calendar days after accepting their selection. The fees and expenses of the
independent accounting firm shall be borne by the non-prevailing Party.

 

(b) In satisfaction of the Downward Purchase Price Adjustment, if any, pursuant
to Section 3.3(a) hereof, at the option of Buyer, (i) Sellers shall, within two
(2) Business Days of the final agreement as to the Final Closing Date Statement,
pay to Buyer the amount of such Downward Purchase Price Adjustment, or (ii) the
Escrow Agent shall release to Buyer the amount of such Downward Purchase Price
Adjustment in accordance with the terms of the Indemnification Escrow Agreement;
provided, that if the Final Closing Date Statement cannot be agreed to on or
before the Final Closing Date Statement Target Date, then the undisputed portion
of such Downward Purchase Price Adjustment shall be paid to Buyer within two (2)
Business Days of the Final Closing Date Statement Target Date and the disputed
portion shall be paid within two (2) Business Days after such disagreement is
finally resolved pursuant to the terms of Section 3.3(a) hereof. If the amount
of the Downward Purchase Price Adjustment exceeds the amount otherwise payable
to the Sellers pursuant to Section 3.2(b)(ii) hereto, (i) the Sellers shall,
within two (2) Business Days, pay to Buyer such amount in excess of the Escrow
Payment and (ii) the Escrow Agent shall release to Buyer the entire amount of
the Escrow Payment in accordance with the terms of the Indemnification Escrow
Agreement; provided, that if there is a disagreement with respect to the Final
Closing Date Statement, such amounts shall be paid to Buyer within two (2)
Business Days after such disagreement is finally resolved pursuant to the terms
of Section 3.3(a) hereto. In satisfaction of the Upward Purchase Price
Adjustment, if any, pursuant to Section 3.3(a) hereof and subject to the terms
of this Article III and Section 15.12 hereof, Buyer shall (or, if applicable,
shall cause Buyer Designee to), within two (2) Business Days of the final
agreement as to the Final Closing Date Statement, pay to the Sellers the amount
of such Upward Purchase Price Adjustment; provided, that if the Final Closing
Date Statement cannot be agreed to on or before the Final Closing Date Statement
Target Date then the undisputed portion of such Upward Purchase Price Adjustment
shall be paid to Seller within two (2) Business Days of the Final Closing Date
Statement Target Date and the disputed portion shall be paid within two (2)
Business Days after such disagreement is finally resolved pursuant to the terms
of Section 3.3(a) hereof. For greater certainty, the Indemnification Escrow
Agreement shall set forth the manner in

 

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which the Escrow Payment is to be released to the Sellers and/or Buyer together
with any interest accrued thereon.

 

3.4. [Reserved.]

 

3.5. Tax Allocation. All amounts constituting consideration within the meaning
of, and for the purposes of, Section 1060 of the Code and the regulations
thereunder shall be allocated among the Acquired Assets and any other assets or
rights acquired by Buyer hereunder in the manner required by Section 1060 of the
Code and the regulations thereunder and all applicable Laws. No later than
ninety (90) calendar days after Buyer and the Sellers reach final agreement on
the Final Closing Date Statement, Buyer shall provide Holder with a proposed
schedule (the “Allocation Schedule”) allocating all such amounts as provided
herein. The Allocation Schedule shall become final and binding on the Parties
fifteen (15) calendar days after Buyer provides such schedule to Holder, unless
Holder objects in writing to Buyer, specifying the basis for its objection and
preparing an alternative allocation. If Holder does object, Buyer and Holder
shall in good faith attempt to resolve the dispute within fifteen (15) calendar
days of receipt by Buyer of written notice of Holder’s objection. Any such
resolution shall be final and binding on the Parties. Any unresolved disputes
shall be promptly submitted to an independent accounting firm selected in the
manner described in Section 3.3(a) for determination, which determination shall
be final and binding on the Parties. Buyer and Holder will each pay one-half of
the fees and expenses of the independent accounting firm. The Parties shall
cooperate with each other and the independent accounting firm in connection with
the matters contemplated by this Section 3.5, including by furnishing such
information and access to books, records (including accountants work papers),
personnel and properties as may be reasonably requested. Each of the Parties
agrees to (a) prepare and timely file all Tax Returns, including IRS Form 8594
(and all supplements thereto) in a manner consistent with the Allocation
Schedule as finalized and (b) act in accordance with the Allocation Schedule for
all tax purposes. The Parties will revise the Allocation Schedule to the extent
necessary to reflect any subsequent adjustments to the Purchase Price, including
those in respect of payments made under Article XV hereof. In the case of any
such payment, Buyer shall propose a revised Allocation Schedule, and the Parties
shall follow the procedures described above with respect to review, dispute and
resolution in respect of such revision.

 

3.6. Transfer Taxes. Notwithstanding any other provision in this Agreement, any
documentary, transfer, sales, use, registration, stamp and similar Taxes imposed
by reason of the transfers of Acquired Assets provided in this Agreement shall
be the responsibility of and be timely paid by the Buyer. The Parties shall
cooperate in the timely making of all filings, returns, reports and forms as may
be required in connection therewith.

 

3.7. Prorations.

 

(a) Any ad valorem, real and personal property and similar Taxes, arising from,
or relating to, the Acquired Assets or the conduct of the Business, which become
due and payable on or after the Closing Date and relate to periods both before
and after the Closing Date, shall be prorated and adjusted between the Sellers
and Buyer as of the

 

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Closing Date on a per diem basis and the Sellers shall be responsible for and
pay to Buyer the portion of such amounts allocable to the period or portion
thereof ending on the Closing Date for which payment is due after the Closing
Date at least ten (10) Business Days prior to the date such Taxes become due and
payable.

 

(b) Any sales, use or similar Taxes incurred, collected or withheld by the
Sellers shall be timely remitted to the appropriate Taxing Authority by the
Sellers to the extent permitted by Law. In the event that Buyer is required to
remit to a Taxing Authority sales, use or similar Taxes that relate to
transactions on or before the Closing Date, and such amount is not (i) reflected
as part of Accounts Receivable as of the Closing Date and (ii) offset as part of
accounts payable on Schedule 2.2, the Sellers shall be responsible for and shall
pay to Buyer such amounts at least ten (10) Business Days prior to the date such
Taxes become due and payable.

 

3.8. Withholding Taxes. All payments made by Buyer pursuant to or in connection
with this Agreement shall be net of applicable withholding taxes, if any.

 

ARTICLE IV.

REPRESENTATIONS AND WARRANTIES OF SELLERS AND HOLDER

 

The Sellers and Holder, as applicable, hereby represent and warrant to Buyer as
of the date hereof and as of the Closing Date as follows:

 

4.1. Entity Existence. Holder is a corporation, duly organized, validly existing
and in good standing under the Laws of the Commonwealth of Kentucky and has all
requisite corporate power and authority to own, lease, operate and otherwise
hold its properties and assets and to carry on its business as presently
conducted. Each of the Sellers is a limited liability company, duly organized,
validly existing and in good standing under the Laws of the Commonwealth of
Kentucky and has all requisite limited liability company power and authority to
own, lease, operate and otherwise hold its properties and assets and to carry on
its business (including the Business) as presently conducted. Each of the
Sellers and Holder is duly qualified to do business and is in good standing as a
foreign limited liability company and a foreign corporation, as applicable, in
each jurisdiction where required to be qualified, licensed or in good standing,
except for such jurisdictions where the failure to be so qualified, licensed or
in good standing could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.

 

4.2. Authorization; Enforceability. Each of the Sellers and Holder has the
requisite limited liability company and corporate power and authority, as
applicable, to execute, deliver and perform its obligations under this Agreement
and the Ancillary Agreements to which they are a party. The execution, delivery
and performance of this Agreement and the Ancillary Agreements by each of the
Sellers and Holder has been duly authorized by all necessary limited liability
company and corporate actions, as applicable. This Agreement has been, and the
other agreements, documents and instruments required to be executed and
delivered in accordance with the provisions of this Agreement (the “Ancillary
Agreements”) to which they are a party will be, duly executed and delivered on

 

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behalf of each of the Sellers and Holder. This Agreement constitutes, and the
Ancillary Agreements to which they are a party when executed and delivered will
constitute the legal, valid and binding obligations of each of the Sellers and
Holder, enforceable against each of the Sellers and Holder in accordance with
their respective terms.

 

4.3. No Conflict. Except as disclosed on Schedule 4.3, neither the execution,
delivery or performance of this Agreement or any Ancillary Agreement to which
they are a party by the Sellers or Holder nor consummation by the Sellers or
Holder of the transactions contemplated by this Agreement or any Ancillary
Agreement to which they are a party nor compliance by the Sellers or Holder with
any of the provisions hereto or thereto will violate, conflict with or result in
the breach of any term, condition or provision of, or require the Consent of any
other Person under, (a) any existing Law to which the Sellers or Holder or the
Business are or may be subject, (b) any judgment, order, writ, injunction,
decree or award of any court, arbitrator or governmental or regulatory official,
body or authority which is applicable to the Sellers, Holder or the Business,
(c) each of the Sellers’ and Holder’s Organizational Documents, or (d) any
Contract, to which any of the Sellers or Holder is a party and which relates to
the Business or by which any of the Acquired Assets may be bound or affected, or
give any party with rights thereunder the right to terminate, modify, accelerate
or otherwise change the existing rights or obligations of any of the Sellers or
Holder under such documents, except to the extent that such violations,
conflicts and breaches could not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect. No filing with, and no Permit or
Consent of any Governmental Authority or any other Person is required in
connection with the execution, delivery and performance of this Agreement.

 

4.4. Assets Used in the Business. The Acquired Assets and the Excluded Assets
constitute all of the rights, properties and assets used or held for use in or
necessary for the conduct or operation of the Business as presently conducted
consistent with past practice. Except as set forth on Schedule 4.4, each of the
Sellers is the sole owner of the Acquired Assets and the Assumed Liabilities
(except those Acquired Assets held pursuant to lease or license, in which case,
the Sellers shall be the sole lessee or licensee, as the case may be). Except as
set forth on Schedule 4.4, immediately following the Closing, none of the
Sellers or Holder (or any of their respective Affiliates) will own, license or
lease any rights, or have any rights with respect to, any properties or assets
which are used or held for use in or necessary for the conduct of the Business
as presently conducted.

 

4.5. Financial Statements. The Sellers and Holder have made available to Buyer
copies of (i) the audited balance sheet of the Business as of and for the year
ended November 30, 2004 (the “Year End Balance Sheet”) and the related
statements of income and cash flows (including the related notes) as of and for
the year ended November 30, 2004 (together with the Year End Balance Sheet, the
“Financial Statements”), and (ii) an unaudited balance sheet of the Business as
of May 31, 2005 (the “Interim Balance Sheet”). The Financial Statements present
fairly in all material respects, generally in accordance with GAAP, the
consolidated financial position and results of operations of the Business,
subject to the exceptions set forth on Schedule 4.5. Except as set forth on
Schedule 4.5 and

 

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subject to normal year-end and other adjustments required by GAAP, the Interim
Balance Sheet presents fairly in all material respects the financial position of
the Business as of its date.

 

4.6. Absence of Certain Changes. Except as set forth on Schedule 4.6, since
November 30, 2004, (a) each of the Sellers has operated the Business in the
ordinary course of business consistent with past practice, (b) there has not
occurred any event or condition that, individually or in the aggregate, has had
or is reasonably likely to have a Material Adverse Effect, (c) the Business has
not suffered the loss of service of any personnel who are material, individually
or in the aggregate, to the operations or conduct of the Business, (d) there
have been no cancellations or terminations by any material supplier, customer or
contractor with respect to any of the Acquired Assets or the Business and (e)
there has been no material damage to or loss or theft of any of the Acquired
Assets.

 

4.7. Real Property; Facilities. All real property and improvements thereon
leased by the Sellers and used in connection with the Business (the “Leased Real
Estate”) is listed on Schedule 4.7. The Sellers enjoy peaceful possession of the
Leased Real Estate. The Sellers do not own any real property.

 

4.8. Condition of Tangible Assets. To the Knowledge of Sellers, all buildings,
structures, Facilities, equipment and other material items of tangible property
and assets that are included in the Acquired Assets are in good operating
condition and repair, subject to normal wear and maintenance.

 

4.9. Environmental Matters.

 

(a) Except as set forth on Schedule 4.9 and except in the ordinary course of
business and in compliance with Environmental Laws, to the Knowledge of each of
the Sellers and Holder, no Hazardous Substances are present at or have been
Released or threatened to be Released from, onto or under any of the properties
(including soils, groundwater, surface water, buildings or other structures)
currently owned, leased or operated by any of the Sellers or the Business.

 

(b) Except as set forth on Schedule 4.9 and except in the ordinary course of
business and in compliance with Environmental Laws, to the Knowledge of each of
the Sellers and Holder, no Hazardous Substances were present at or Released or
threatened to be Released from, onto or under any of the properties formerly
owned, leased or operated by the Sellers or their respective predecessors or the
Business during the period of ownership, lease or operation by the Sellers or
their respective predecessors or the Business; provided that the Sellers and
Holder have made no inquiry regarding the actions or omissions of their
respective predecessors.

 

(c) Except as set forth on Schedule 4.9, to the Knowledge of each of the Sellers
and Holder, none of the Sellers or their respective predecessors to the
Business, the Acquired Assets nor the Business are subject to any liability or
obligation in connection with Hazardous Substances present at any location
owned, leased or operated

 

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by any third party; provided that the Sellers and Holder have made no inquiry
regarding any liability or obligation of their respective predecessors.

 

(d) Except as set forth on Schedule 4.9, to the Knowledge of each of the Sellers
and Holder, there are no circumstances or conditions involving the Sellers, or
the Holder in connection with the Business, the Acquired Assets or the Business
or any assets (including real property) or businesses previously owned, leased
or operated by the Sellers in connection with the Business, that could
reasonably be expected to result in any Losses to the Sellers, any of the
Acquired Assets or the Business arising under or pursuant to Environmental Law
or in any Material Adverse Effect on the ownership, use or transfer of any of
the Acquired Assets arising under or pursuant to any Environmental Law.

 

(e) The Sellers have provided to Buyer copies of all material reports in the
custody or control of the Sellers relating to the environmental condition of the
Business or the Acquired Assets or the compliance of the Sellers, the Business
or the Acquired Assets with Environmental Laws.

 

(f) As used herein, the term: (i) “Environmental Law” means any Law relating to
the protection, investigation or restoration of the environment (including
natural resources) or the health or safety of human or other living organisms,
including the manufacture, introduction into commerce, export, import, handling,
use, presence, disposal, Release or threatened Release of any Hazardous
Substance; (ii) “Hazardous Substance” means any element, compound, substance or
other material (including any pollutant, contaminant, hazardous waste, hazardous
substance, chemical substance, or product) that is listed, classified or
regulated pursuant to any Environmental Law, including any petroleum product,
by-product or additive, asbestos, presumed asbestos-containing material,
asbestos-containing material, medical waste, lead-containing paint or plumbing,
polychlorinated biphenyls, radioactive material or radon; and (iii) “Release”
means any release, pumping, pouring, emptying, injecting, escaping, leaching,
migrating, dumping, seepage, spill, leak, flow, discharge, disposal or emission.

 

4.10. Title to Assets and Properties. Each of the Sellers has good and valid
title to (or a valid leasehold interest to) all of its owned or leased, as
applicable, tangible properties and assets that are included in the Acquired
Assets, free and clear of all Liens, pledges, security interests, charges,
claims, restrictions and other encumbrances and defects of title of any nature
whatsoever, except for (collectively, the “Permitted Liens”) (i) liens for
current real or personal property Taxes which are not yet due and payable, (ii)
liens and rights of third parties disclosed on Schedule 4.10 including pursuant
to existing leases, licenses and possession or occupancy agreements, (iii)
worker’s compensation, carrier’s and materialman’s liens, (iv) liens that are
immaterial in character, amount and extent, and which do not detract from the
value or interfere with the present or proposed use of the properties they
affect, and which do not adversely affect the conduct of the Business as
presently conducted, (v) zoning, building, fire, health, environmental and
pollution control laws, ordinances, rules and safety regulations and other
similar restrictions, and which do not adversely affect the conduct of the
Business as presently conducted, and (vi) acts done,

 

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or suffered to be done by, and judgments against, Buyer or any of its Affiliates
and those claiming by, through or under Buyer or any of its Affiliates.

 

4.11. Accounts Receivable. All Accounts Receivable that are reflected on the
Year End Balance Sheet and the Interim Balance Sheet or that are otherwise
included in the Acquired Assets represent or will represent valid obligations
arising from sales actually made or services actually performed by the Business
and, to the Knowledge of each of the Sellers and Holder, are not subject to any
defenses, offsets or counterclaims other than reserves reflected on the Year End
Balance Sheet and Interim Balance Sheet.

 

4.12. Brokers. Other than JMP Securities LLC (whose fees Holder acknowledges are
its sole responsibility), no broker, finder, investment banker or other third
party is entitled to any brokerage, finder’s or other fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of Holder or the Sellers.

 

4.13. Taxes.

 

(a) All Tax Returns required to be filed and relating in any manner to any of
the Acquired Assets or the Business have been timely filed. All such Tax Returns
(i) were prepared in the manner required by applicable Law and (ii) are true,
correct and complete in all material respects.

 

(b) All Taxes due with respect to any of the Acquired Assets or the Business,
whether or not shown (or required to be shown) on a Tax Return, have been timely
paid; and such Taxes paid include those for which Holder or any of the Sellers
may be liable in its own right, or as the transferee of the assets of, or as
successor to, any other entity.

 

(c) Except as disclosed on Schedule 4.13, there has been no notice of a
deficiency or assessment or other claim relating in any manner to any of the
Acquired Assets or the Business from any Taxing Authority which has not been
fully paid or finally settled. There are no current audits or examinations of,
and no notice of audit or examination of, any Tax Return that relates to any of
the Acquired Assets or the Business. There has been no waiver or extension of
any statute of limitations relating to the payment of Taxes relating to any of
the Acquired Assets or the Business.

 

(d) The Sellers and Holder have complied with all applicable Laws, rules and
regulations relating to the withholding of Taxes and the payment thereof to the
appropriate Taxing Authority, including Taxes required to have been withheld and
paid in connection with amounts paid or owing to any employee or independent
contractor.

 

(e) No claim has ever been made by any Taxing Authority in a jurisdiction where
any of Holder or the Sellers does not file Tax Returns with respect to any of
the Acquired Assets or the Business that such Person may be subject to taxation
in that jurisdiction with respect to any of the Acquired Assets or the Business.

 

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(f) There are no encumbrances or security interests on any of the Acquired
Assets that arose in connection with any failure (or alleged failure) to pay any
Taxes and, except for Liens for real and personal property Taxes that are not
yet due and payable, there are no Liens for any Tax upon any Acquired Asset.
Buyer will not be liable for, and none of the Acquired Assets will be subject to
a Lien with respect to, any Taxes arising out of, relating to or in respect of
the Business or any of the Acquired Assets for any tax period or portion thereof
ending on or prior to the Closing Date.

 

(g) None of the Acquired Assets is (i) “tax-exempt use property” within the
meaning of Section 168(h) of the Code, (ii) “tax-exempt bond financed property”
within the meaning of Section 168(g)(5) of the Code or (iii) property that is
required to be treated as owned by another Person pursuant to the provisions of
Section 168(f)(8) of the Internal Revenue Code of 1954, as amended, and in
effect immediately prior to the enactment of the Tax Reform Act of 1986, and no
depreciation or amortization with respect to such assets will be disallowed as a
deduction under Section 197(f)(9) of the Code or otherwise.

 

(h) The Acquired Assets do not include any shares of capital stock of, or any
other interest in, any Affiliate of the Sellers, or any other Person.

 

(i) Each of the Sellers is a disregarded entity for U.S. federal income tax
purposes, and Holder is an S corporation for U.S. federal income tax purposes.

 

(j) For purposes of this Agreement:

 

(i) “Tax” and “Taxes” mean any and all federal, state, local and foreign taxes,
assessments and other governmental charges, duties, impositions, levies and
liabilities, including taxes based upon, measured by, or with respect to income,
net income, gross income, earnings, profits or gross receipts, or any sales,
use, ad valorem, transfer, franchise, license, withholding, payroll, employment,
excise, severance, stamp, occupation, premium, property, windfall profits,
environmental, alternative, add-on minimum, custom duties, capital stock, social
security (or similar), unemployment, disability, gains, recapture, estimated, or
other taxes, fees, assessments or charges of any kind whatsoever, together with
any interest, penalty, and addition thereto.

 

(ii) “Tax Return” means any return, declaration, report, claim, election, notice
or information return or statement or other document (including any related or
supporting information, schedules, or exhibits) filed or required to be filed
with any federal, state, local or foreign Governmental Authority or other
authority in connection with any Tax.

 

4.14. No Default. None of the Sellers or Holder has committed, or received
notice of, any default under or violation (and no event has occurred which with
notice or lapse of time or both would constitute a default or violation or loss
of any material benefit)

 

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of any term, condition or provision of (a) any Contract to which any of the
Sellers is a party or may be subject that is included in the Acquired Assets or
the Assumed Liabilities or otherwise relates to or affects the Business or (b)
any order, writ, injunction, decree, statute, treaty, rule or regulation
applicable to the Business or any of the Acquired Assets or the Assumed
Liabilities.

 

4.15. Contracts and Commitments. Except as set forth on Schedule 4.15, the
Sellers and Holder are not, with respect to the Business, a party to any:

 

(a) agreement, contract or commitment providing for annual cash payments of more
than $50,000.00, which may not be terminated without penalty or upon less than
three months notice, with any present or former employee or consultant, or for
the employment of any Person, including any consultant, who is engaged in the
conduct of the Business;

 

(b) agreement, contract or commitment for the required future purchase of, or
payment for, supplies, raw materials or products, or for the future performance
of services by a third party, used in the conduct of the Business involving in
any one case $50,000.00 or more;

 

(c) agreement, contract or commitment to sell or supply products or to perform
services in connection with the Business involving in any one case $50,000.00 or
more;

 

(d) distribution, dealer, representative or sales agency agreement, contract or
commitment relating to the Business;

 

(e) lease, sublease, rental, licensing or other similar contract under which the
Sellers are either lessor or lessee of any real property or personal property or
a guarantee of any such lease, sublease, rental, licensing or other similar
contract involving in any one case required annual payments of $50,000.00 or
more, or the guarantee of any such lease, sublease, rental, licensing or other
similar contract;

 

(f) agreement, contract or commitment for any required capital expenditure or
leasehold improvement in excess of $50,000.00 (individually or in the aggregate)
relating to the Business;

 

(g) agreement, contract or commitment limiting or restraining the Business or
any successor thereto from engaging or competing in any manner or in any
business or divulging any confidential information of the Sellers or any third
parties, nor, to the Knowledge of each of the Sellers and Holder, is any
employee of the Sellers or Holder engaged in the conduct of the Business subject
to any such agreement, contract or commitment;

 

(h) agreement, contract or commitment establishing a joint venture, partnership
or similar arrangement for the sharing of profits and expenses of the Business;

 

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(i) agreement, contract or commitment with any labor union or association
representing any Active Employee;

 

(j) capitalized lease, pledge, conditional sale or title retention agreement
involving the Acquired Assets with a payment of more than $50,000.00 annually;

 

(k) mortgage, indenture, note, bond, letter of credit or other agreement or
instrument of indebtedness relating to the Acquired Assets; or

 

(l) license, franchise, distributorship or other agreement including the
required payment or receipt of more than $50,000.00 which relates in whole or in
part to any software, patent, trademark, trade name, service mark or copyright
or to any ideas, technical assistance or other know-how of or used by the
Sellers or Holder in the conduct of the Business.

 

(m) agreement, contract (other than employment contract) or commitment with any
Affiliates of the Sellers or Holder or any of the Seller’s current or former
officers, directors, stockholders, employees, consultants, agents or other
representatives or with an entity in which any of the foregoing is a controlling
person;

 

(n) contract for the purchase or sale of materials, supplies or equipment
(including computer hardware and software), or the provision of services
(including consulting services, data processing and management, project
management services and clinical trial management), involving annual payments in
excess of $50,000.00 or containing any escalation, renegotiation or
redetermination provisions which could reasonably be expected to cause such
contract to involve annual payments in excess of $50,000.00, which contracts are
not terminable by the Sellers or Holder upon fewer than thirty (30) days’ notice
without liability, premium or penalty;

 

(o) contract which provides primarily for the protection of confidential
information of the Sellers or any third parties; and

 

(p) any other contract material to the Business.

 

Each of the Contracts listed on Schedule 4.15 (each, a “Material Contract” and
collectively, the “Material Contracts”) is valid and enforceable in accordance
with its terms against each of the Sellers or Holder that is a party thereto,
and to the Knowledge of each of the Sellers and Holder, against the other party
to those Contracts. Each Contract that requires the Consent of any party in
connection with the transactions contemplated by this Agreement (individually, a
“Contract Requiring Consent” and collectively, the “Contracts Requiring
Consent”) is appropriately identified as such on Schedule 4.15. None of the
Sellers or Holder have received any notice (or are otherwise aware) that any
customer or supplier of each of the Sellers intends to cancel any Contract or
materially reduce the level of business it conducts with the Business.

 

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4.16. Conduct of the Business. Except as otherwise set forth herein or on
Schedule 4.16, since the date of the Year End Balance Sheet, the Sellers and
Holder have not, with respect to the Business:

 

(a) sold, assigned or transferred any portion of the assets used in, or useful
to, the Business in a single transaction or series of transactions in an amount
in excess of $50,000.00 except in the ordinary course of business;

 

(b) incurred any liabilities that would be required to be accrued on their
financial statements in accordance with their past practices, other than
liabilities incurred in the ordinary course of business or liabilities pursuant
to a bank loan or other credit arrangement with a bank for working capital for
the Business, or discharged or satisfied any lien or encumbrance, or paid any
liabilities, other than in the ordinary course of business consistent with past
practice or failed to pay or discharge when due any liabilities of which the
failure to pay or discharge has caused or will cause any material damage or risk
of material loss to the Business or Acquired Assets;

 

(c) incurred or guaranteed any indebtedness for money borrowed, except in the
ordinary course of business;

 

(d) mortgaged, pledged or subjected any of the Acquired Assets to any mortgage,
lien, pledge, security interest, conditional sales contract or other encumbrance
of any nature whatsoever, except for Permitted Liens;

 

(e) materially changed the accounting principles, methods or practices used by
the Business, except in each case to conform to changes in GAAP;

 

(f) suffered any damage of, destruction to or loss of any material asset of the
Business (whether or not covered by insurance);

 

(g) suffered any repeated, recurring or prolonged shortage, cessation or
interruption of supplies or utility or other services required to conduct the
Business;

 

(h) received notice or had Knowledge of any actual or threatened labor trouble,
strike or other occurrence, event or condition of any similar character which
has had or might have a Material Adverse Effect on the Business or Acquired
Assets;

 

(i) except for the actions set forth in Section 6.2(d) and (j), taken any of the
other actions set forth in Section 6.2; or

 

(j) entered into any agreement or commitment with respect to any of the matters
referred to in paragraphs (a) through (i) of this Section 4.16.

 

4.17. Litigation. Except as set forth on Schedule 4.17, no litigation, including
any arbitration, investigation or other proceeding of or before any court,
arbitrator or governmental or regulatory official, body or authority, is pending
or, to the Knowledge of each of the Sellers and Holder, threatened against the
Sellers or the Holder relating to the

 

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Acquired Assets, the Assumed Liabilities or the Business. There are no
judgments, orders, writs, injunctions, decrees or awards of any court,
arbitrator or governmental or regulatory official, body or authority that the
Sellers or the Holder are party to, subject to or that apply, in whole or in
part, to the Acquired Assets, the Assumed Liabilities or the Business and
restricts the ownership or use of the Acquired Assets, the Assumed Liabilities
or the Business in any way.

 

4.18. Labor and Employment Matters. In the previous two years there have been no
strikes, slowdowns, picketing, work stoppages or other labor disputes by any
union or other group of employees of the Business. Except as disclosed on
Schedule 4.18, no unfair labor practice charges or complaints are pending
concerning the Business or, to the Knowledge of each of the Sellers and Holder,
threatened against any of the Sellers concerning the Business before the
National Labor Relations Board or before any similar state or local agency.
There is no collective bargaining agreement covering any employees of the
Business. Except with respect to (i) Employee Benefit Plans and (ii) any payment
obligations of any Seller that are to be assumed by Holder (to the reasonable
satisfaction of Buyer) prior to Closing, which are set forth on Schedule 4.18,
none of the Sellers is obligated to make payments to any employee of the
Business under any written employment agreements, deferred compensation
agreements, bonus arrangements or severance plans. There are no pending
collective bargaining negotiations relating to any employees of the Business and
there are no pending petitions for recognition of, a labor union or association
as the exclusive bargaining agent for any or all of the employees of the
Business. Seller is in compliance in all material respects with all applicable
Laws, rules and regulations respecting employment, employment practices, terms
and conditions of employment, health and safety, classification of employment or
service status, withholding and wages and hours, in each case, with respect to
current and former employees and service providers of the Business.

 

4.19. Employee Benefit Plans and Arrangements.

 

(a) Schedule 4.19 contains a complete list of all Employee Benefit Plans
sponsored or maintained by any of the Sellers or any of their respective
Affiliates that are available to former or current employees of the Business
(“Business Benefit Plans”). The term “Employee Benefit Plan” includes all plans,
funds, programs, policies, arrangements, practices, customs and understandings
providing benefits of economic value to any Business employee, former employee,
or present or former beneficiary, dependent or assignee of any such employee or
former employee other than regular salary, wages or commissions paid
substantially concurrently with the performance of the services for which paid.
Without limitation, the term “Employee Benefit Plan” includes all employee
welfare benefit plans within the meaning of Section 3(1) of the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”) and all employee
pension benefit plans within the meaning of Section 3(2) of ERISA.

 

(b) Except as disclosed on Schedule 4.19, none of the Business Benefit Plans are
subject to Section 412 of the Code or Title IV of ERISA and no condition exists

 

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which presents a material risk to the Sellers of incurring a liability to or on
account of an Employee Benefit Plan.

 

(c) None of the Business Benefit Plans is a multi-employer plan within the
meaning of Section 3(37) of ERISA, and none of the Sellers is required to
contribute, with respect to any of the employees of the Business, to any
multi-employer plan.

 

(d) Except as set forth on Schedule 4.19 and except for any obligations of any
Seller that are to be assumed by Holder (to the reasonable satisfaction of
Buyer) prior to Closing, no director, officer, employee or consultant of the
Business will be entitled to any additional economic benefit (including the
acceleration of the time of payment or vesting of any economic benefit) as a
result of the consummation of the transactions contemplated by this Agreement.

 

4.20. Insurance. Schedule 4.20 contains a complete and accurate list of all
insurance policies (including, but not limited to, fire, theft, casualty,
comprehensive general liability, workers compensation, business interruption,
environmental, product liability and automobile insurance policies and bond and
surety arrangements) relating to the Acquired Assets or the Business to which
the Sellers or their Affiliates are a party, all of which are in full force and
effect. To the Knowledge of each of the Sellers and Holder, there is no claim
pending under any such policy as to which coverage has been questioned, denied
or disputed by the underwriter of such policy, and otherwise in compliance in
all material respects with the terms of such policies. None of the Sellers has
received notice of any actual or threatened termination of any such policy. For
clarification, the aforementioned does not apply to Proprietary Rights, which
shall be covered in Section 4.22.

 

4.21. Compliance with Law; Permits. The Business is being and has been conducted
in compliance with all Laws to which the Business is subject, except where such
noncompliance could not reasonably be expected to have a material effect on the
Business. Each of the Sellers owns, holds, possesses or lawfully uses in the
operation of the Business all material franchises, licenses, approvals, notices,
permits, easements, rights, applications, filings, registrations and other
authorizations, including all authorizations necessary for the Business to
obtain reimbursement under the Medicare program, each state Medicaid program and
all other governmental reimbursement programs under which the Business has
obtained reimbursement (the “Permits”) which are used or held for use in or
necessary for the conduct the Business as now conducted under and pursuant to
all applicable Laws or for the ownership and use of the Acquired Assets. All
such Permits are listed and described on Schedule 4.21. To the Knowledge of each
of the Sellers and Holder, there has been no material change in the facts or
circumstances reported or assumed in the application for or granting of any
Permits which would invalidate or, to the Knowledge of each of the Sellers and
Holder, result in the denial of renewal or loss of material benefits of such
Permits. No outstanding violations are or have been recorded in respect of any
of the Permits. No proceeding is pending or, to the Knowledge of each of the
Sellers and Holder, threatened to suspend, revoke, withdraw, modify or limit any
Permit, and, to the Knowledge of each of the Sellers and Holder, there is no
fact, error or admission relevant to any Permit that would permit the
suspension, revocation, withdrawal, modification or limitation of, or result in
the

 

27

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threatened suspension, revocation, withdrawal, modification or limitation of, or
in the loss of any Permit. None of the Sellers and Holder has Knowledge of any
facts or circumstances which would cause the Permits transferable to Buyer to be
invalid or not in full force and effect following the Closing; provided that,
with respect to the matters covered by this Section 4.21, none of the Sellers
and Holder have conducted any inquiry into specific facts or circumstances
relating to Buyer or any of its Affiliates.

 

4.22. Intellectual Property Matters.

 

(a) Except as set forth on Schedule 4.22(a): (i) the Sellers and Holder are the
sole owners of, free and clear of any Lien, or have a valid license to, without
the payment of any royalty except with respect to off-the-shelf software and
otherwise on commercially reasonable terms in the reasonable business judgment
of the Sellers and Holder, and after the Closing Buyer will be the sole owner
of, free and clear of any Lien, or will have a valid license on the same terms
as the Sellers or Holder (without the payment of any sublicense or other fee
related to the transactions contemplated hereby) to, all U.S. and non-U.S.
trademarks, service marks, logos, designs, trade, assumed, d/b/a and corporate
names, Internet domain names, and the goodwill of the business connected with
and symbolized by any of the foregoing, patents, registered designs, copyrights,
computer software (including all information systems, data files and databases,
source and object codes, user interfaces, manuals and other specifications and
documentation related thereto and all intellectual property and proprietary
rights incorporated therein), whether or not registered, web sites and related
items (and all intellectual property and proprietary rights incorporated
therein) and all trade secrets, research and development, formulae and know-how
(“Trade Secrets”) and all other proprietary and intellectual property rights and
information, including all grants, registrations and applications relating
thereto (collectively, the “Proprietary Rights”) necessary for the conduct or
operation of the Business as presently conducted (such Propriety Rights owned by
or licensed to the Sellers, collectively, the “Sellers Rights”); (ii) the
Sellers’ rights in the Sellers Rights are valid and enforceable, and, to the
Knowledge of the Sellers and Holder, following the Closing, Buyer’s rights in
the Sellers Rights will be valid and enforceable; (iii) none of the Sellers or
Holder has received a demand, claim, notice or inquiry from any Person in
respect of the Sellers Rights that challenges, threatens to challenge or
inquires as to whether there is any basis to challenge, the validity of, or the
rights of the Sellers in, any such Sellers Rights, and the Sellers and Holder
know of no basis for any such challenge; (iv) the Sellers and Holder are not in
violation or infringement of, and have not violated or infringed, any
Proprietary Rights of any other Person; (v) to the Knowledge of the Sellers and
Holder, no Person is infringing any Sellers Rights; (vi) the Sellers and Holder
have obtained from all individuals who participated (as employees, consultants,
employees of consultants or otherwise) in any respect in the invention or
authorship of any Sellers Rights that are owned by the Sellers (“Owned Rights”)
effective waivers of any and all ownership rights of such individuals in such
Owned Rights, and/or assignments to the Sellers of all rights with respect
thereto, (vii) the Sellers Rights will not be adversely affected by the
completion of the transactions contemplated by this Agreement and (viii) none of
the Sellers or Holder has, nor to the Knowledge of the

 

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Sellers and Holder has any officer, employee or agent of any of the Sellers
divulged, furnished to or made accessible to any Person, any Trade Secrets
without prior thereto having obtained an agreement of confidentiality from such
Person.

 

(b) Schedule 4.22(b) contains a complete and accurate list of the Sellers Rights
and all license and other agreements relating thereto (excluding Trade Secrets
and non-material unregistered copyrights).

 

4.23. Material Misstatements or Omissions. To the Knowledge of each of the
Sellers and Holder, the information contained in any of the Transaction
Documents that are furnished by or on behalf of the Sellers and Holder, as
applicable, and when delivered, will be true and correct in all material
respects and will not contain any material misstatement of fact. The Sellers and
Holder will promptly notify Buyer if either learn of any material inaccuracy or
misstatement in, or material omission from, any information contained in any of
the Transaction Documents previously delivered to Buyer.

 

ARTICLE V.

REPRESENTATIONS AND WARRANTIES OF BUYER

 

Buyer represents and warrants to the Sellers and Holder as follows:

 

5.1. Corporate Existence. Buyer is a corporation duly organized, validly
existing and in good standing under the Laws of the State of Delaware and is
duly qualified or licensed to do business as a foreign corporation and is in
good standing in each jurisdiction where required to be qualified, licensed or
in good standing except for such jurisdictions where the failure to be so
qualified, licensed or in good standing could not, individually or in the
aggregate, be reasonably likely to have a Material Adverse Effect.

 

5.2. Corporate Authorization; Enforceability. Buyer has the corporate power and
authority to execute, deliver and perform its obligations under this Agreement
and the Ancillary Agreements to which it is a party. The execution, delivery and
performance by Buyer of this Agreement and the Ancillary Agreements to which
Buyer is a party have been duly authorized by all necessary corporate action.
This Agreement has been, and the Ancillary Agreements to which Buyer is a party
will be, duly executed and delivered by Buyer. This Agreement constitutes, and
the Ancillary Agreements when executed and delivered will constitute, the legal,
valid and binding obligations of Buyer enforceable against Buyer in accordance
with their respective terms.

 

5.3. No Conflict. None of the execution, delivery or performance of this
Agreement or any Ancillary Agreement, to which Buyer is a party, by Buyer nor
consummation by Buyer of the transactions contemplated by this Agreement or any
Ancillary Agreement, nor compliance by Buyer with any of the provisions hereto
or thereto will violate, conflict with or result in the breach of any term,
condition or provision of, or require the consent of any other Person under, (a)
any existing Law to which Buyer is or may be subject, (b) any judgment, order,
writ, injunction, decree or award of any court, arbitrator or governmental or
regulatory official, body or authority which is applicable to

 

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Buyer, (c) the charter documents or by-laws of, or any securities issued by,
Buyer, or (d) any mortgage, indenture, agreement, contract, commitment, lease,
plan or other instrument, document or understanding, oral or written, to which
Buyer is a party or by which Buyer is otherwise bound, or give any party with
rights thereunder the right to terminate, modify, accelerate or otherwise change
the existing rights or obligations of Buyer under such documents except to the
extent that such violations, conflicts and breaches could not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect. No
filing with, and no Permit or Consent of any Governmental Authority or any other
Person is required in connection with the execution, delivery and performance of
this Agreement or any Ancillary Agreement.

 

5.4. Financial Capability. Buyer has, and on and after the Closing Date, will
have sufficient financial resources and credit available to enable it to
consummate the transactions contemplated by this Agreement and fulfill its
obligations hereunder.

 

5.5. Brokers. Other than Lazard Frères & Co. LLC (whose fees Buyer acknowledges
are its sole responsibility), no broker, finder, investment banker or other
third party is entitled to any brokerage, finder’s or other fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of Buyer.

 

ARTICLE VI.

COVENANTS

 

6.1. Sellers’ Conduct of Business Prior to Closing. From the date of this
Agreement until the Closing Date, Sellers shall, and Holder shall cause the
Sellers’ and their respective officers and employees to:

 

(a) conduct the Business in the ordinary course consistent with past practice
until the Closing, except as expressly provided in this Agreement;

 

(b) pay all of its liabilities and Taxes when due, subject to good faith
disputes;

 

(c) use reasonable commercial efforts to preserve intact the Acquired Assets and
present organization of the Business in substantially the same manner as has
been the consistent past practice;

 

(d) use its reasonable commercial efforts to keep available the services of the
present employees and agents of the Business; and

 

(e) use its reasonable commercial efforts to maintain the relations and goodwill
with suppliers, customers, warehouse and other distributors, commissioned
representatives and any others having business relations with the Business.

 

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6.2. Restrictions on Conduct of Business Prior to Closing. Except as set forth
on Schedule 6.2, from the date of this Agreement until the Closing Date, the
Sellers shall not, and Holder shall cause the Sellers’ and their respective
officers and employees not to:

 

(a) make any new commitments or increase any previous commitments for capital
expenditures for the Business or the Acquired Assets in an amount exceeding
$50,000.00 in the aggregate;

 

(b) enter into, create, incur or assume any borrowings or any other obligations,
other than in the ordinary course of business;

 

(c) take any other action or fail to take any action, in any case which could
reasonably be anticipated to have a Material Adverse Effect or adversely affect
the Business, the Acquired Assets, the Assumed Liabilities or Buyer’s ability to
conduct the Business in substantially the same manner and condition as currently
conducted by the Sellers;

 

(d) sell, transfer, lease, license, encumber or otherwise dispose of any of the
Acquired Assets (excluding Restricted Cash transferred in the ordinary course of
business consistent with past practice);

 

(e) provide any confidential information concerning the Business or its
properties or assets to any third party other than in the ordinary course of
business or as may be required by Law which could not reasonably be expected to
have a Material Adverse Effect;

 

(f) take any action reasonably likely to impair the rights, title and interest
of Buyer in and to the Acquired Assets or the Business;

 

(g) change any of the terms of its accounts or payables or Accounts Receivable
or take any action directly or indirectly to cause or encourage, or which would
have the effect of causing or encouraging, any acceleration or delay in the
payment, collection or generation of Accounts Receivable of the Business, other
than in the ordinary course of business consistent with past practice;

 

(h) fail to maintain the Acquired Assets or the Business, as a whole, in good
repair, order and condition, reasonable wear and tear excepted;

 

(i) increase the rate of compensation for any of the employees of the Business
or otherwise enter into or alter any benefit plan or employment, consulting or
managerial services agreement affecting employees of the Business in any
material respect, except in the ordinary course consistent with past practice;

 

(j) change (or permit to be changed) any accounting or Tax procedure or practice
or make (or permit to be made) any Tax election or settle or compromise any
liability for Taxes, in each case, relating to the Business or any of the
Acquired Assets;

 

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(k) enter into, amend, modify or terminate any Material Contract;

 

(l) enter into any transaction or any Contract with any Affiliate relating to
the Business;

 

(m) assign, license, sublicense, abandon, fail to maintain or, except in the
ordinary course of business consistent with past practice, enter into, amend or
terminate any Contract with respect to, any Acquired Asset or other property or
asset relating to the Business;

 

(n) waive any material rights; or

 

(o) take, or agree to take, any of the foregoing actions or any action which
would make any representation or warranty of the Sellers or Holder, as
applicable, contained in this Agreement untrue or incorrect as of the date when
made or as of any future date (as if made as of such date), subject to the
limitation set forth in Section 15.5, or which could prevent the satisfaction of
any condition to Closing set forth in Articles VII, VIII, IX or X hereof.

 

6.3. Access. Prior to the Closing, the Sellers shall, and Holder shall cause the
Sellers to give to Buyer’s officers, employees, counsel, accountants and other
representatives reasonable access during normal business hours to all of the
premises, properties, personnel, assets, records, Contracts and other documents
relating to the Business, the Acquired Assets and the Assumed Liabilities, and
shall permit them to consult with the officers, accountants, counsel and agents
of the Sellers and Holder, as Buyer shall reasonably request; provided, that
such activities of Buyer shall not interfere with the Sellers’ and Holder’s
business operations. The Sellers shall permit Buyer and its agents to make such
physical inventories and inspections of the Acquired Assets as Buyer may
reasonably request from time to time.

 

6.4. Public Announcements. No Party or their respective Affiliates will issue
any press release or otherwise make any public statement with respect to this
Agreement and any Transaction Document and the transactions contemplated thereby
without the prior written Consent of the other Party (which Consent shall not be
unreasonably withheld) except as may be required by applicable Law or the
requirements of any regulatory authority or securities exchange.

 

6.5. Notification.

 

(a) The Sellers and Holder shall Promptly notify Buyer, and Buyer shall Promptly
notify the Sellers and Holder, of any litigation, arbitration or administrative
proceeding pending or, to their Knowledge, threatened against the Sellers,
Holder or Buyer, as the case may be, which challenges the transactions
contemplated by this Agreement or any Ancillary Agreement.

 

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(b) Between the date of this Agreement and the Closing Date, the Sellers shall
provide prompt written notice to Buyer of any change in any of the information
contained in the representations and warranties made by the Sellers and Holder
in Article IV hereof or any exhibits or Disclosure Schedules referred to herein
or attached hereto and shall promptly furnish any information which Buyer may
reasonably request in relation to such change; provided, however, that such
notice shall not operate to in any way modify any of the representations,
warranties covenants or agreements made by the Sellers and Holder in Article IV
hereof or any exhibits or schedules referred to herein or attached hereto or
cure any breach of any representations, warranties covenants or agreements of
the Sellers or Holder in this Agreement or any of the exhibits or Disclosure
Schedules referred to herein or attached hereto.

 

6.6. Bulk Transfer Law. The Parties hereby waive compliance with the
requirements of any applicable bulk sales Law provisions of the Uniform
Commercial Code of the jurisdictions in which the Acquired Assets are situated
or which may otherwise be applicable to the transactions contemplated hereby.
This provision shall not be deemed to in any way limit the indemnity provided
for in Article XV hereof.

 

6.7. Hart-Scott-Rodino Filings. Each of Buyer, the Sellers and Holder shall, if
required, promptly make its filings under the Hart-Scott-Rodino Antitrust
Improvement Act of 1976, as amended (the “HSR Act”) and shall make any required
submissions under the HSR Act with respect to the transactions contemplated
hereby, and shall cooperate with respect to the foregoing; provided, however,
that Buyer shall not be required to hold separate or divest (including through
an independent trustee, if necessary) particular assets or categories of assets,
or operations, of the Business, Buyer or any of its Affiliates or agree to any
limitations or restrictions on its conduct. Each of Buyer, the Sellers and
Holder shall give prior notice and consult prior to any meeting Buyer, the
Sellers or Holder has with the United States Federal Trade Commission or
Department of Justice with respect to the filings of Buyer, the Sellers and
Holder under the HSR Act or any review by any of the foregoing agencies. The
filing fees of all such HSR Act filings shall be paid 50% by Buyer and 50% by
Sellers.

 

6.8. Consents to Assignment.

 

(a) Prior to the Closing, the Sellers and Holder shall use reasonable commercial
efforts (which shall not include any obligation by Seller or Holder to make any
material payment) to obtain the Consents (or amendments or effective waivers
thereof) of assignment from those Persons whose Consents are required for the
consummation of the transactions contemplated by this Agreement.

 

(b) The Sellers and Holder agree that if any required Consent to the transfer of
any Acquired Asset to Buyer as provided for herein is not obtained prior to the
Closing, the Sellers shall, and Holder shall cause the Sellers to, provide Buyer
with all of the benefits of such Acquired Asset as though the required Consents
had been obtained (and, to the extent, but, notwithstanding anything herein to
the contrary, only to the extent, such benefits are provided, Buyer shall assume
the corresponding obligation) and shall

 

33

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continue to use their best efforts to obtain such Consent. This Section 6.8(b)
shall not apply to Contracts Requiring Consent, which shall be governed by
Section 6.8(c) hereof.

 

(c) The terms of this Section 6.8(c) shall govern the transfer of the benefits
of any Contract Requiring Consent where the required Consent has not been
obtained by the Closing Date. Notwithstanding anything herein to the contrary,
the Parties acknowledge and agree that at the Closing, the Sellers shall not
assign to Buyer any Contract Requiring Consent unless the applicable Consent has
been obtained prior to the Closing Date. With respect to each such unassigned
Contract Requiring Consent that Buyer has agreed to assume after the Closing
Date, the Sellers shall continue to deal with the other contracting party(ies)
to such Contract Requiring Consent as the prime contracting party and shall use
their best efforts to obtain the Consent of all required parties to the
assignment of such Contract Requiring Consent, but Buyer shall be entitled to
all of the benefits of such Contract Requiring Consent accruing after the
Closing Date to the extent that the Sellers may provide Buyer with such benefits
without violating the terms of such Contract Requiring Consent. Buyer agrees to
perform at its sole expense all of the obligations of the Sellers to be
performed after the Closing Date under such Contracts Requiring Consent the
benefits of which Buyer is receiving after the Closing Date, and to reimburse
the Sellers for any required expenses previously approved by Buyer incurred by
the Sellers on Buyer’s behalf in keeping such Contracts Requiring Consent in
effect.

 

6.9. Insurance. Coverage of the Business under all insurance policies of the
Sellers and their Affiliates shall cease as of the Closing Date for operations
of the Business. From and after the Closing Date, Buyer will be responsible for
obtaining and maintaining all insurance coverage with respect to the Business.
Neither Buyer nor the Business will have any rights with respect to any
insurance policies of the Sellers or any of their Affiliates.

 

6.10. Further Assurances. The Sellers shall, and Holder shall cause the Sellers
to, from time to time after the Closing, at Buyer’s request, execute,
acknowledge and deliver to Buyer such other instruments of conveyance and
transfer and will take such other actions and execute and deliver such other
documents, certifications and further assurances as Buyer may reasonably require
in order to vest more effectively in Buyer, or to put Buyer more fully in
possession of, any of the Acquired Assets, or to better enable Buyer to
complete, perform or discharge any of the Assumed Liabilities. Each of the
Parties will cooperate with the other and execute and deliver to the other
Parties such other instruments and documents and take such other actions as may
be reasonably requested from time to time by any other Party as necessary to
carry out, evidence and confirm the intended purposes of this Agreement.

 

6.11. Confidentiality. The Parties acknowledge that all information related to
the transactions contemplated hereby shall be kept confidential in accordance
with the terms of that certain Confidentiality Agreement, dated March 17, 2005,
between the Sellers and Buyer (the “Confidentiality Agreement”), the terms of
which are hereby incorporated herein by reference.

 

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6.12. Assistance with Tax Credits. Each of the Sellers and Holder shall
cooperate with Buyer and shall render such assistance to Buyer in securing the
benefit of the Kentucky Jobs Development Act Program credits transferred
hereunder as Buyer shall reasonably request.

 

6.13. Reasonable Commercial Efforts.

 

(a) Upon the terms and subject to the conditions of this Agreement, each of the
Parties shall (and, if applicable, Buyer shall cause Buyer Designee to) use
reasonable commercial efforts to take, or cause to be taken, all actions, and to
do, or cause to be done, all things necessary, proper or advisable under
applicable Laws to consummate and make effective the transactions contemplated
by this Agreement and the Ancillary Agreements as promptly as practicable,
including (i) the prompt preparation and filing of all forms, registrations and
notices required to be filed, including any filings required under Section 6.7,
to consummate the transactions contemplated by this Agreement and the Ancillary
Agreements and the taking of such reasonable actions as are necessary to obtain
any requisite Consents, Permits, orders, exemptions or waivers by any
Governmental Authority or any other Person; provided, however, that Buyer shall
not be required to hold separate or divest (including through an independent
trustee, if necessary) particular assets or categories of assets, or operations,
of the Business, Buyer or any of its Affiliates or agree to any limitations or
restrictions on its conduct and (ii) using its reasonable commercial efforts to
cause the satisfaction of all conditions to Closing. Each Party shall (and, if
applicable, Buyer shall cause Buyer Designee to) promptly consult with the
others with respect to, provide any necessary information with respect to and
provide the other (or its counsel) copies of, all filings made by such Party
with any Governmental Authority or any other Person or any other information
supplied by such Party to a Governmental Authority or any other Person in
connection with this Agreement and the transactions contemplated by this
Agreement.

 

(b) Each Party shall Promptly inform the others of any communication from any
Governmental Authority regarding any of the transactions contemplated by this
Agreement and the Ancillary Agreements. If any Party (or Affiliate thereof)
receives a request for additional information or documentary material from any
such Governmental Authority with respect to the transactions contemplated by
this Agreement, then such Party will endeavor in good faith to make, or cause to
be made, as soon as reasonably practicable and after consultation with the other
Party, an appropriate response in compliance with such request.

 

6.14. Release of Liens. At or prior to the Closing, the Sellers shall, and
Holder shall cause the Sellers to, cause the release of all Liens (other than
Permitted Liens) on the Acquired Assets, so that such Acquired Assets and rights
are free and clear of any Liens (other than Permitted Liens).

 

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6.15. No Solicitation.

 

(a) (i) The Sellers shall, and the Sellers shall cause its officers, employees,
subsidiaries, Affiliates, agents and other representatives to and (ii) Holder
shall, and Holder shall cause its agents, representatives and Affiliates and the
Sellers to, immediately cease any existing discussions or negotiations with
respect to any Alternative Proposal and shall not, and shall cause such Persons
not to, directly or indirectly, encourage, solicit, participate in, initiate or
facilitate discussions or negotiations with, or provide any information to, any
corporation, partnership, Person or other entity or group (other than Buyer or
its directors, officers, employees, subsidiaries, agents or other Affiliates)
concerning any Alternative Proposal. The Sellers and Holder shall immediately
communicate to Buyer any such inquiries or proposals regarding an Alternative
Proposal, including the terms thereof.

 

(b) “Alternative Proposal” shall mean any of the following involving the
Sellers, the Business, the Acquired Assets or the Assumed Liabilities (other
than the transactions expressly contemplated by this Agreement): any inquiry or
proposal relating to a sale of stock, merger, consolidation, share exchange,
business combination, partnership, joint venture, disposition of assets (or any
interest therein) or other similar transaction.

 

6.16. No Solicitation of Employees. For a period of five (5) years after the
Closing Date, the Sellers and Holder shall not, and shall cause their Affiliates
not to, directly or indirectly, without the prior written Consent of Buyer,
solicit, employ or contract with any party to an Employment Agreement or any
employee of the Business who has accepted employment with Buyer pursuant to
Section 16.1(a) hereof (each, a “Transferred Employee”); provided, however, that
nothing shall prohibit the Sellers, Holder and their Affiliates from performing,
or having performed on their behalf, a general solicitation for employees not
specifically focused at the Transferred Employees through the use of media,
advertisement, electronic job boards or other general, public solicitations;
provided further that this Section 6.16 shall not apply to James S. Karp in his
individual capacity.

 

6.17. Non-Competition. From the Closing and for a period of ten (10) years
thereafter, the Sellers and Holder shall not, and shall cause their Affiliates
not to, directly or indirectly, lend funds to, or provide any management,
consulting, financial, administrative or other services to, or own any interest
or invest in, any business which engages in out-sourced commercialization or
third party logistics services for companies in the pharmaceutical/biotech,
medical device and plasma industries; provided that this Section 6.17 shall not
apply to James S. Karp in his individual capacity.

 

6.18. Collection of Accounts Receivable.

 

(a) As of the Closing Date, the Sellers and Holder hereby authorize Buyer to
open any and all mail addressed to the Sellers or Holder relating to the
Business and delivered to the offices of the Business or otherwise to Buyer if
received on or after the Closing Date (unless marked personal, confidential or
the like, and unless from a Taxing

 

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Authority), and hereby appoint Buyer its attorney-in-fact to endorse, cash and
deposit any monies, checks or negotiable instruments received by Buyer after the
Closing Date with respect to the Accounts Receivable and any accounts receivable
or rebates receivable included in the Acquired Assets made payable or endorsed
to the Sellers or their order, for Buyer’s own account.

 

(b) As of the Closing Date, the Sellers and Holder on the one hand and Buyer on
the other hand, agree that they Promptly shall forward to the other Party any
monies, checks or negotiable instruments received by it after the Closing Date
relating to any Accounts Receivable for the other Party’s account.

 

6.19. Post-Closing Agreements.

 

(a) The Parties acknowledge that Buyer (and, if applicable, Buyer Designee) may
not have all required Permits to take title to all of the Acquired Assets at the
Closing and thereafter operate all aspects of the Business. The Sellers agree to
cooperate with Buyer in timely obtaining such Permits, and further agree (i) to
hold such of the Acquired Assets that cannot be transferred at the Closing in a
constructive trust for the benefit of Buyer (or, if applicable, Buyer Designee)
until such transfer is permissible and (ii) to operate such aspects of the
Business as may not be operated by Buyer (or, if applicable, Buyer Designee)
after the Closing for the benefit of Buyer (or, if applicable, Buyer Designee)
until such operation by Buyer (or, if applicable, Buyer Designee) is
permissible.

 

(b) Notwithstanding the foregoing:

 

(i) In the event that the Sellers retain any Acquired Assets or operate any
aspects of the Business for Buyer’s (or, if applicable, Buyer Designee’s)
benefit after the Closing, the Parties agree that Buyer (or, if applicable,
Buyer Designee) shall be treated for all Tax purposes as owning such Acquired
Assets and operating such aspects of the Business after the Closing;

 

(ii) the Sellers and Holder shall not be required to incur any costs or expenses
or to expend any sums in connection with the operation of the Business after the
Closing, unless such sums are advanced to Sellers or Holder, as appropriate, by
Buyer (or, if applicable, Buyer Designee); and

 

(iii) Buyer Promptly shall pay all costs and expenses in connection with the
operation of the Business, and shall indemnify, defend and save harmless the
Sellers from and against any and all liability, of every kind and nature in
connection with the operation of the Business by the Sellers after the Closing.

 

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(c) Section 6.19(b) hereof shall not be deemed to limit the representations,
warranties, covenants and indemnification obligations of the Buyer, Sellers and
Holder contained elsewhere in this Agreement. If the failure to obtain any
Permit due to an act or omission by the Sellers or Holder results in liability
or damages to Buyer, this Section 6.19 does not preclude indemnification of
Buyer by the Sellers and Holder for such liability.

 

6.20. Use of Marks and Names. Without limiting the effect of the assignment
thereof provided for herein, from and after the Closing Date, the Sellers and
Holder shall have no right to, and shall not use, or continue any business
operations under or using, any trademarks or service marks (the “Trademarks”),
assumed, d/b/a, trade or corporate names owned or used by the Sellers, or any
similar names theretofore used in connection with the Business, including
Sellers’ respective trade and entity names (the “Sellers Names” and,
collectively with the Trademarks, the “Subject Names”), other than in or for
such business operations as are in furtherance of the terms and provisions of
this Agreement and as are for the benefit of, and at the express request of,
Buyer. The Sellers and Holder agree that they shall cause their Affiliates to
refrain from conducting any business operations after the Closing Date under or
using the Subject Names, other than such business operations as are in
furtherance of the terms and provisions of this Agreement and as are for the
benefit of, or at the express request of, Buyer. Effective as of the Closing
Date, the Sellers agree to provide executed assignments transferring to Buyer
(or, if applicable, Buyer Designee) ownership of, or, if such assignment is not
possible, appropriate amendments, withdrawals or cancellations (or other
equivalent instruments) of, the Seller Names, including assumed, d/b/a, trade,
limited liability company or similar names appropriate for filing in every
jurisdiction in which such Sellers Names have been registered.

 

6.21. Real Estate Lease Amendments.

 

(a) No fewer than three (3) Business Days prior to the Closing, Holder shall
present to Buyer an amendment, in substantially the form attached hereto as
Exhibit B (the “Lease Amendment”), to that certain Lease Agreement, dated as of
June 19, 1996, by and between Louisville Warehouse Company and Holder, relating
to the premises of the Business located at 4500 Progress Boulevard, Louisville,
Jefferson County, Kentucky; provided, however, that such lease amendment shall
provide for (a) a term of no less than 3 years and (b) rent payments comparable
to the rates currently in effect.

 

(b) Immediately following the assignment by RxCrossroads to Buyer (or, if
applicable, Buyer Designee) of all of RxCrossroads’ right, title and interest as
tenant under the Lease Agreement by and between Holder and RxCrossroads, dated
as of December 1, 2003, relating to the premises of the Business located at 4500
Progress Boulevard, Louisville, Jefferson County, Kentucky (the “Sublease”) at
the Closing, Holder and Buyer (or, if applicable, Buyer Designee) shall enter
into an agreement to amend the Sublease, in substantially the form attached
hereto as Exhibit I, (the “Sublease Amendment”).

 

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6.22. Buyer Designee. Buyer shall cause Buyer Designee to execute, deliver and
perform its obligations under each Ancillary Agreement to which Buyer Designee
is a party (if any).

 

6.23. Long-Term Executive Incentive Compensation. No fewer than three (3)
Business Days prior to the Closing, the Sellers shall assign to Holder and
Holder shall assume all of the Long-Term Executive Incentive Obligations.

 

ARTICLE VII.

CONDITIONS PRECEDENT TO THE OBLIGATIONS OF EACH PARTY TO CLOSE

 

The respective obligations of each Party to effect the Transaction Documents and
to consummate the transactions contemplated herein shall be subject to the
fulfillment or written waiver, to the extent permitted by Law, at or prior to
the Closing of the following conditions:

 

7.1. Litigation; Proceedings. No litigation or other proceeding by any
Governmental Authority or other third Person shall have been commenced that
challenges the validity or legality of the transactions contemplated hereby. No
judgment order, injunction or decree issued by any Governmental Authority or
other legal restraint or prohibition preventing the consummation of the Closing
shall be in effect. No Law that prohibits, materially restricts or makes illegal
the consummation of the Closing shall be in effect.

 

7.2. Governmental Approvals. All Governmental Approvals required to consummate
the transactions contemplated by the Transaction Documents shall have been
obtained or made and shall be in full force and effect.

 

ARTICLE VIII.

CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLERS TO CLOSE

 

The obligations of the Sellers to effect the Transaction Documents and to
complete the transactions contemplated thereby shall be subject to the
fulfillment or written waiver at or prior to the Closing of the following
conditions precedent:

 

8.1. Representations and Warranties. The representations and warranties of Buyer
set forth in the Transaction Documents shall be true and correct in all material
respects (without regard to any materiality or Material Adverse Effect
qualifiers therein) as of the date of this Agreement and as of the Closing Date
(as though made on and as of the Closing Date except to the extent such
representations and warranties are by their expressed provisions made as of a
specified date, which such representations and warranties shall be true and
correct as of such specified date).

 

8.2. Performance of Covenants and Obligations. Buyer shall have performed in all
material respects all covenants and obligations required to be performed by it
under the Transaction Documents at or prior to the Closing Date.

 

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8.3. Certificate of Buyer. The Sellers shall have received a certificate, dated
as of the Closing Date, executed on behalf of Buyer, by an authorized executive
officer thereof, certifying that the conditions specified in Section 8.1 and
Section 8.2 hereof have been fulfilled.

 

8.4. Closing Date Cash Payment. Buyer (or, if applicable, Buyer Designee) shall
have delivered to the Sellers on or prior to the Closing Date the Closing Date
Cash Payment.

 

8.5. Escrow Payment. Buyer (or, if applicable, Buyer Designee) shall have
delivered to the Escrow Agent on the Closing Date on the Sellers’ behalf the
Escrow Payment.

 

8.6. Nitin Sahney Agreement. Buyer shall have entered into an employment
agreement with Nitin Sahney substantially in the form attached hereto as Exhibit
C (the “Nitin Sahney Agreement”).

 

8.7. Ancillary Agreements. The Buyer shall have delivered to the Sellers, on or
prior to the Closing Date, the Ancillary Agreements, in each case, duly executed
by Buyer (and/or, if applicable, Buyer Designee) and in full force and effect.

 

ARTICLE IX.

CONDITIONS PRECEDENT TO OBLIGATIONS OF HOLDER TO CLOSE

 

The obligations of Holder to effect the Transaction Documents and to complete
the transactions contemplated thereby shall be subject to the fulfillment or
written waiver at or prior to the Closing of the following conditions precedent:

 

9.1. Representations and Warranties. The representations and warranties of Buyer
set forth in the Transaction Documents shall be true and correct in all material
respects (without regard to any materiality or Material Adverse Effect
qualifiers therein) as of the date of this Agreement and as of the Closing Date
(as though made on and as of the Closing Date except to the extent such
representations and warranties are by their expressed provisions made as of a
specified date, which such representations and warranties shall be true and
correct as of such specified date).

 

9.2. Performance of Covenants and Obligations. Buyer shall have performed in all
material respects all covenants and obligations required to be performed by it
under the Transaction Documents at or prior to the Closing Date.

 

9.3. Certificate of Buyer. Holder shall have received a certificate, dated as of
the Closing Date, executed on behalf of Buyer, by an authorized executive
officer thereof, certifying that the conditions specified in Section 9.1 and
Section 9.2 hereof have been fulfilled.

 

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ARTICLE X.

CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER TO CLOSE

 

The obligations of Buyer to effect the Transaction Documents and to complete the
transactions contemplated thereby shall be subject to fulfillment or written
waiver at or prior to the Closing of the following conditions precedent:

 

10.1. Representations and Warranties. The representations and warranties of the
Sellers and Holder set forth in the Transaction Documents shall be true and
correct in all material respects (without regard to any materiality or Material
Adverse Effect qualifiers therein) as of the date of this Agreement and as of
the Closing Date (as though made on and as of the Closing Date except to the
extent such representations and warranties are by their expressed provisions
made as of a specified date, which such representations and warranties shall be
true and correct as of such specified date).

 

10.2. Performance of Covenants and Obligations. The Sellers and Holder shall
have performed in all material respects all covenants and obligations required
to be performed by it under the Transaction Documents at or prior to the Closing
Date.

 

10.3. Certificate of Sellers. Buyer shall have received a certificate, dated as
of the Closing Date, executed on behalf of each of the Sellers, by an authorized
representative thereof, certifying that the conditions specified in Section 10.1
and Section 10.2 hereof have been fulfilled.

 

10.4. Certificate of Holder. Buyer shall have received a certificate, dated as
of the Closing Date, executed on behalf of Holder, by an authorized
representative thereof, certifying that the conditions specified in Section 10.1
and Section 10.2 hereof have been fulfilled.

 

10.5. Agreement among James S. Karp and Buyer. At or prior to Closing, Mr. Karp
and Buyer shall enter into an agreement substantially in the form attached
hereto as Exhibit D (the “James S. Karp Agreement”), such agreement to be duly
executed by and satisfactory to the parties thereto. The James S. Karp Agreement
shall provide, among other things, that Mr. Karp shall not, directly or
indirectly, (i) for a period of ten (10) years following the Closing Date, carry
on or participate in the ownership, management or control of, or the financing
of, or be employed by, or consult with or otherwise render services to, any
out-sourced commercialization firm or third party logistics services provider
providing services to manufacturers in the pharmaceutical/biotech, medical
device and plasma industries or (ii) for a period of five (5) years following
the Closing Date, solicit the employment of any former or present employee of
the Sellers employed by the Business or otherwise performing substantial
services in connection with the operation of the Business.

 

10.6. Contracts Requiring Consent. All Consents necessary to the assignment of
any Contracts Requiring Consent shall have been obtained (without any material
limitation, restriction or condition not already applicable to the Sellers or
Holder being imposed on Buyer or its ownership or use of any of the Acquired
Assets or the conduct or

 

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operation of the Business) in written instruments reasonably satisfactory to
Buyer, subject to the terms of Section 6.8 hereof.

 

10.7. Liens. All Liens (other than Permitted Liens) on the Acquired Assets shall
have been released and evidence thereof delivered to Buyer.

 

10.8. Permits. Buyer shall have obtained all Permits necessary to own or use the
Acquired Assets and operate the Business as set forth in Section 4.21.

 

10.9. Material Adverse Effect. There shall not have occurred any events that
have had, or are, individually or in the aggregate, reasonably likely to have a
Material Adverse Effect.

 

10.10. Ancillary Agreements; FIRPTA. The Sellers shall have delivered to Buyer,
on or prior to the Closing Date, the Ancillary Agreements and the FIRPTA
Certificate (as defined in Section 11.6), in each case, duly executed, and, in
the case of the FIRPTA Certificate, duly notarized, and in full force and
effect.

 

10.11. Lease Amendment. On or prior to the Closing Date, Holder shall have
delivered to Buyer the Lease Amendment, duly executed and in full force and
effect.

 

10.12. Long-Term Executive Incentive Compensation. On or prior to the Closing
Date, the Sellers and Holder shall have delivered to Buyer assignment,
assumption and release agreements relating to the Long-Term Executive Incentive
Obligations, duly executed and in full force and effect.

 

ARTICLE XI.

DELIVERIES AT THE CLOSING BY SELLERS

 

At the Closing, and subject to the terms and conditions herein contained, the
Sellers shall, and Holder shall cause the Sellers to, deliver to Buyer the
following:

 

11.1. Assignment and Assumption Agreement. An Assignment and Assumption
Agreement, duly executed by the Sellers, in substantially the form attached
hereto as Exhibit E (the “Assignment and Assumption Agreement”);

 

11.2. Officer’s Certificate. A certificate executed by the President or Chief
Executive Officer or similar executive officer of each of the Sellers addressing
the matters described in Section 10.3 hereof and in the form and substance
mutually agreed to by the Parties and approved by their respective counsels;

 

11.3. Consents. All Consents required for the transfer of the Business and the
Acquired Assets or to prevent a breach or termination of any Contract;

 

11.4. Bill of Sale. A Bill of Sale, duly executed by the Sellers, in
substantially the form attached hereto as Exhibit F (the “Bill of Sale”);

 

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11.5. Liens. Evidence of release, discharge, removal or termination, in form and
substance reasonably satisfactory to Buyer, of all Liens (other than Permitted
Liens) to which any Acquired Assets being conveyed at the Closing are subject,
which shall each be effective at or prior to the Closing;

 

11.6. FIRPTA Certificate. A certification from the Person that, for U.S. federal
income tax purposes, owns the Acquired Assets that it is not a foreign person
(within the meaning of U.S. Treasury regulation Section 1.1445-2(b)(2)(i)) and
that it is the owner for U.S. federal income tax purposes of the Acquired
Assets, in accordance with U.S. Treasury regulation Section 1.1445-2(b)(2) and,
except to the extent that this Section 11.6 requires otherwise, in the form
provided in U.S. Treasury regulation Section 1.1445-2(b)(2)(iv)(B) (such
certification, the “FIRPTA Certificate”);

 

11.7. Title. Certificates of Title to the motor vehicles, duly endorsed,
completed and acknowledged for transfer;

 

11.8. Domain Name Assignment Agreement. A Domain Name Assignment Agreement, duly
executed by the Sellers or Holder, if applicable, in substantially the form
attached hereto as Exhibit G (the “Domain Name Assignment Agreement”);

 

11.9. Trademark Assignment Agreement. A Trademark Assignment Agreement, duly
executed by the Sellers or Holder, if applicable, in substantially the form
attached hereto as Exhibit H (the “Trademark Assignment Agreement”); and

 

11.10. Other Documents. Such other documents, instruments or assignments as
shall be reasonably requested by Buyer and its counsel or required to be
delivered by the Sellers pursuant to this Agreement or in any other instrument
or document delivered by any of the Parties pursuant to this Agreement.

 

ARTICLE XII.

DELIVERIES AT THE CLOSING BY HOLDER

 

At the Closing, and subject to the terms and conditions herein contained, Holder
shall deliver to Buyer the following:

 

12.1. Certificate. The certificate referenced in Section 10.4 hereof;

 

12.2. James S. Karp Agreement. The James S. Karp Agreement, duly executed by
James S. Karp and Buyer;

 

12.3. Sublease Amendment. The Sublease Amendment, duly executed by Holder; and

 

12.4. Other Documents. Such other documents, instruments or assignments as shall
be reasonably requested by Buyer and its counsel or required to be delivered by
Holder pursuant to this Agreement or in any other instrument or document
delivered by any of the Parties pursuant to this Agreement.

 

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ARTICLE XIII.

DELIVERIES AT THE CLOSING BY BUYER

 

13.1. At the Closing, and subject to the terms and conditions herein contained,
Buyer shall (or, if applicable, shall cause Buyer Designee to) deliver to the
Sellers the following:

 

(a) Closing Date Cash Payment. The Closing Date Cash Payment by wire transfer of
immediately available funds to the account or accounts of the Sellers designated
by the Sellers no later than two (2) Business Days prior to the Closing;

 

(b) Officers’ Certificate. A certificate executed by the President or Chief
Executive Officer or similar executive officer of Buyer addressing the matters
described in Section 8.3 and in the form and substance mutually agreed to by the
Parties and approved by their respective counsels;

 

(c) Secretary’s Certificate. A certificate executed by the corporate Secretary
of Buyer in the form and substance mutually agreed to by the Parties and
approved by their respective counsels;

 

(d) Nitin Sahney Employment Agreement. The Nitin Sahney Agreement, duly executed
by Nitin Sahney and Buyer;

 

(e) Bill of Sale. The Bill of Sale, duly executed by Buyer (and, if applicable,
Buyer Designee);

 

(f) Domain Name Assignment Agreement. The Domain Name Assignment Agreement, duly
executed by Buyer (and, if applicable, Buyer Designee);

 

(g) Trademark Assignment Agreement. The Trademark Assignment Agreement, duly
executed by Buyer (and, if applicable, Buyer Designee);

 

(h) Assignment and Assumption Agreement. The Assignment and Assumption
Agreement, duly executed by Buyer (and, if applicable, Buyer Designee); and

 

(i) Other Documents. Such other documents, instruments or assignments as shall
be reasonably requested by the Sellers and their counsel or required to be
delivered by Buyer (or, if applicable, Buyer Designee) pursuant to this
Agreement or in any other instrument or document delivered by any of the Parties
pursuant to this Agreement.

 

13.2. Deliveries at Closing by Buyer to Holder. At the Closing, and subject to
the terms and conditions herein contained, Buyer shall (or, if applicable, shall
cause Buyer Designee to) deliver to Holder the following:

 

(a) Officer’s Certificate. The officer’s certificate referenced in Section 9.3
hereof;

 

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(b) Sublease Amendment. The Sublease Amendment, duly executed by Buyer; and

 

(c) Other Documents. Such other documents, instruments or assignments as shall
be reasonably requested by the Holder and its counsel or required to be
delivered by Buyer (or, if applicable, Buyer Designee) pursuant to this
Agreement or in any other instrument or document delivered by any of the Parties
pursuant to this Agreement.

 

13.3. Deliveries at Closing by Buyer to Escrow Agent. At the Closing, and
subject to the terms and conditions herein contained, Buyer shall (or, if
applicable, shall cause Buyer Designee to) deliver to the Escrow Agent, the
Escrow Payment.

 

ARTICLE XIV.

TERMINATION

 

14.1. Events of Termination. This Agreement may be terminated at any time before
the Closing: (i) by mutual written consent of the Sellers, Holder and Buyer;
(ii) by the Sellers or Holder if there is a material breach of or failure by
Buyer to perform in any material respect any of the representations, warranties,
commitments, covenants or conditions under any Transaction Document, which
breach or failure is not cured within thirty (30) days after written notice
thereof describing the default is given to Buyer, but only if Sellers and Holder
are not in breach of their representations, warranties, commitments and
covenants under this Agreement; (iii) by Buyer if there is a material breach of
or failure by the Sellers or Holder to perform in any material respect any of
the representations, warranties, commitments, covenants or conditions under any
Transaction Document, which breach or failure is not cured within thirty (30)
days after written notice thereof describing the default is given to the Sellers
or Holder but only if Buyer is not in breach of its representations, warranties,
commitments and covenants under this Agreement; or (iv) by either the Sellers,
Holder or Buyer if (A) the Closing does not occur on or before September 15,
2005 (or such later date as the Parties shall mutually agree in writing), unless
the failure of the Closing to occur by such date shall be due to the action or
failure to act of the Party seeking to terminate this Agreement, which action or
failure to act constitutes a breach of this Agreement, or (B) a Governmental
Authority shall have issued an order, decree or ruling or taken any other action
(which order, decree or ruling the Parties shall use their reasonable commercial
efforts to lift), in each case permanently restraining, enjoining or otherwise
prohibiting the transactions contemplated by this Agreement and such order,
decree, ruling or other action shall have become final and nonappealable.

 

14.2. Procedure and Effect of Termination. In the event of termination and
abandonment by any Party as above provided in clauses (ii), (iii), or (iv)(A) of
Section 14.1, written notice shall Promptly be given to the other Party, which
notice shall specify the condition precedent or breach or failure of such
notified Party to perform or satisfy its obligations under this Agreement, and
this Agreement shall become null and void and of no further force or effect, and
no Party (or any of its Affiliates, directors, officers, agents or
representatives) shall have any liability or obligation hereunder (except for
any liability of any Party then in breach and except as provided in Section 14.4
hereof); provided, however,

 

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that the provisions of Sections 6.4 (Public Announcements), 6.11
(Confidentiality), 14.3 (Return of Materials), 14.4 (Termination Fee), 17.2
(Expenses), 17.4 (Assignment and Binding Effect), 17.6 (Notices) and 17.8
(Governing Law) shall survive any such termination. Nothing contained in this
Section 14.2 shall relieve any Party from liability for any breach of this
Agreement.

 

14.3. Return of Materials. In the event of termination of this Agreement, Buyer
shall Promptly deliver or cause to be delivered to the Sellers, all documents,
reports, papers, schedules and exhibits received or obtained in connection with
the investigation of the Business or the Sellers and the negotiation and
execution of this Agreement, and Buyer shall (and, if applicable, shall cause
Buyer Designee) not use or make available to any other Person (except as
required by Law) any information received with respect to the Business or the
Sellers or the financial condition or results of the operation of the Business
or the Sellers received or obtained by it.

 

14.4. Termination Fee; Specific Performance.

 

(a) If Sellers or Holder terminate this Agreement as provided in Section
14.1(ii) due to the failure by Buyer to perform, in any material respect, any of
its commitments or covenants under any Transaction Document or due to the
failure of any of Buyer’s representations or warranties contained in the
Transaction Documents to be true and correct as of the date of this Agreement,
Buyer shall pay to Sellers a termination fee of $10,000,000 (the “Buyer
Termination Fee”), which amount shall be paid in immediately available funds
within 30 days of such termination by Sellers or Holder.

 

(b) If Buyer terminates this Agreement as provided in Section 14.1(iii) due to
the failure by the Sellers or Holder to perform, in any material respect, any of
their commitments or covenants under any Transaction Document or due to the
failure of any of the Sellers’ or Holder’s representations or warranties
contained in the Transaction Documents to be true and correct as of the date of
this Agreement, Sellers or Holder shall pay to Buyer a termination fee of
$10,000,000 (the “Seller Termination Fee” and, together with the Buyer
Termination Fee, the “Termination Fee”), which amount shall be paid in
immediately available funds within 30 days of such termination by Buyer.

 

(c) The Parties hereby agree that damages and costs to be incurred by the
terminating Party pursuant to Sections 14.1(ii) or 14.1(iii), as applicable, in
connection with such termination will be difficult to determine and/or prove,
and that the Buyer Termination Fee and Seller Termination Fee are reasonable in
light of the time and costs expended in connection with this Agreement and, as
such, shall act as liquidated damages and not as a penalty.

 

(d) The rights to the Termination Fee under this Section 14.4 shall be the sole
and exclusive remedy for money damages under this Agreement with respect to
termination of this Agreement pursuant to Sections 14.1(ii) and 14.1(iii), and
the Parties shall not be entitled to pursue, and hereby expressly waive, any and
all rights that may

 

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otherwise be available either at law or in equity with respect to such
termination except for the remedy set forth in Section 14.4 (e) hereof.

 

(e) The Parties agree that if any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached,
irreparable damage could occur, there may exist no adequate remedy at Law and
damages could be difficult to determine. Therefore, as an alternative to the
Termination Fee any Party shall, in its sole discretion, be entitled to specific
performance of the terms hereof, in addition to any other remedy at Law or
equity; provided that any Party seeking specific performance hereunder shall
waive any and all rights such Party may have to a Termination Fee regardless of
whether such Party succeeds in obtaining specific performance.

 

ARTICLE XV.

INDEMNIFICATION

 

15.1. Indemnification by Sellers and Holder. The Sellers and Holder shall
jointly and severally indemnify, defend and hold harmless Buyer and any
Subsidiary, Affiliate, director, officer, stockholder or agent of Buyer, and
their respective representatives, successors and permitted assigns (“Buyer
Indemnified Parties”) from and against and pay on behalf of or reimburse such
party in respect of, as and when incurred, all out-of-pocket losses,
liabilities, demands, claims, actions or causes of action, costs, damages,
judgments, debts, settlements, assessments, deficiencies, Taxes, penalties,
fines or expenses, whether or not arising out of any claims by or on behalf of a
third party, including interest, penalties, reasonable attorneys’ fees and
expenses and all reasonable amounts paid in investigation, defense or settlement
of any of the foregoing (“Loss”) incurred or suffered by any Buyer Indemnified
Party that results from, relates to or arises out of:

 

(a) any inaccuracy in, or breach of, any representation or warranty made by the
Sellers or Holder under this Agreement or any Ancillary Agreement (without
regard to any materiality qualifiers therein);

 

(b) any breach or non-fulfillment of any covenant or agreement on the part of
the Sellers or Holder under this Agreement or any other Ancillary Agreement;

 

(c) the ownership or operation of the Acquired Assets or the conduct or
operation of the Business or the activities of the Sellers or Holder in
connection with the Acquired Assets or the Business on or prior to the Closing
Date, to the extent not an Assumed Liability;

 

(d) any claim which may at any time be made or brought by a third party against
a Buyer Indemnified Party as a result of, in respect of or arising out of the
existence or the assertion of any Liens, other than Permitted Liens, on any of
the Acquired Assets, any defect or deficiency in the Sellers’ title to any of
the Acquired Assets on or prior to Closing, or the existence of any agreement,
option or other right or

 

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privilege outstanding in favor of any Person for the purchase from the Sellers
of the Business or of any of the Acquired Assets out of the ordinary course;

 

(e) any applicable bulk sales Law as a result of the actions contemplated by
Section 6.6 hereof;

 

(f) any fees, expenses or other payments incurred or owed by the Sellers or
Holder to any agent, broker, investment banker or other firm or Person retained
or employed in connection with the transactions contemplated by this Agreement;

 

(g) the Excluded Liabilities; or

 

(h) any third party claim relating to the ownership by Sellers of any software,
content or web site-related development (provided to Sellers by third party
providers).

 

15.2. Indemnification by Buyer. Buyer will indemnify, defend and hold harmless
the Sellers, Holder and any Subsidiary, Affiliate, director, officer,
stockholder or agent of the Sellers and Holder and their respective
representatives, successors and permitted assigns (“Sellers Indemnified
Parties”) from and against and pay on behalf of or reimburse such party in
respect of, as and when incurred, any Loss incurred or suffered by any Sellers
Indemnified Party that results from, relates to or arises out of:

 

(a) any inaccuracy in, or breach of, any representation or warranty made by
Buyer under this Agreement or any Ancillary Agreement (without regard to any
materiality qualifiers therein);

 

(b) any breach or non-fulfillment of any covenant or agreement on the part of
Buyer under this Agreement or any other Ancillary Agreement;

 

(c) the ownership or operation of the Acquired Assets or the conduct or
operation of the Business or the activities of Buyer or any assignee of Buyer in
connection with the Acquired Assets or the Business after the Closing Date, to
the extent not an Excluded Liability;

 

(d) any fees, expenses or other payments incurred or owed by Buyer to any agent,
broker, investment banker or other firm or Person retained or employed in
connection with the transactions contemplated by this Agreement; or

 

(e) the Assumed Liabilities.

 

15.3. Third Party Claims; Procedure.

 

(a) Indemnified Parties. As used in this Article XV, the term “Indemnified
Party” shall mean any Buyer Indemnified Party or Sellers Indemnified Party, as
the case may be, which shall assert an indemnity claim for Loss pursuant to
Section 15.1 or Section 15.2 of this Agreement (“Indemnity Claim”). Any Party
against whom an Indemnity Claim is asserted by an Indemnified Party pursuant to
this Article XV is

 

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referred to herein as an “Indemnifying Party.” In the event that a Person who is
not a Buyer Indemnified Party or a Sellers Indemnified Party (a “Third Party”)
asserts any claim or seeks to collect any Loss from an Indemnified Party (a
“Third Party Claim”), such Indemnified Party shall give prompt written notice to
the Indemnifying Party of such event (a “Third Party Claim Notice”). A Third
Party Claim Notice shall specify, to the extent known by the Indemnified Party,
the nature of and specific basis for any Third Party Claims or the nature of and
specific basis of any suit, action, investigation or proceeding set forth
therein, the amount or the good faith estimated amount thereof to the extent
then practicable and the basis of the Indemnified Party’s request for
indemnification under this Agreement. The failure to provide such notice will
not affect any rights hereunder except to the extent the Indemnifying Parties
are materially prejudiced thereby.

 

(b) Third Party Claims; Procedure. In the event that any Indemnified Party seeks
indemnification hereunder based on a Third Party Claim, the Indemnifying Party
shall have the right (without prejudice to the right of the Indemnified Party to
employ separate counsel at its own expense and to participate in the defense of
such Third Party Claim and in any compromise, settlement or strategic decision
relating thereto; provided that if the Indemnified Party reasonably determines
that representation by the Indemnifying Party’s counsel of the Indemnifying
Party and the Indemnified Party may present such counsel with a conflict of
interests, then the Indemnifying Party shall pay the reasonable fees and
expenses of the Indemnified Party’s counsel) to defend or prosecute such Third
Party Claim at its own expense through counsel of its own choosing if the
Indemnifying Party gives notice thereof to the Indemnified Party within thirty
(30) days after receipt of the Third Party Claim Notice or such shorter time
period as required so that the interests of the Indemnified Party would not be
materially prejudiced as a result of the failure to have received such notice
(the “Election Period”). Notwithstanding the preceding sentence, the Indemnified
Party is hereby authorized during the Election Period to file any motion, answer
or other pleading that shall be necessary or appropriate to protect its rights
or the rights of the Indemnifying Party. If (i) the Election Period expires or
(ii) the Indemnifying Party notifies the Indemnified Party during the Election
Period that the Indemnifying Party does not elect to defend or prosecute the
Third Party Claim for which the Indemnified Party would be entitled to
indemnification hereunder, then the Indemnified Party shall be entitled
prosecute or defend the Third Party Claim and recover from the Indemnifying
Party all of the reasonable costs and expenses (including reasonable attorney’s
fees) associated therewith. Notwithstanding the assumption of the defense of any
Third Party Claim by the Indemnified Party pursuant to this paragraph, the
Indemnifying Party shall have the right to approve the terms of settlement of
any Third Party Claim, which approval shall not be unreasonably delayed or
withheld. So long as the Indemnifying Party is contesting any such claim in good
faith, the Indemnified Party shall not pay or settle any such claim without the
Indemnifying Party’s consent, which consent shall not to be unreasonably delayed
or withheld. If the Indemnifying Party is not contesting such claim in good
faith, then the Indemnified Party may conduct and control, through counsel of
their own choosing and at the expense of the Indemnifying Party, the settlement
or defense thereof, and the Indemnifying Party shall

 

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cooperate with them in connection therewith. The failure of the Indemnified
Party to participate in, conduct or control such defense shall not relieve the
Indemnifying Party of any obligation they may have hereunder.

 

(c) Cooperation. The Parties agree reasonably to cooperate with one another and
their respective counsel in contesting and defending any Third Party Claim in
any manner the other Party may reasonably request (including furnishing evidence
and testimony and granting reasonable access to the pertinent books, records and
personnel (to the extent such personnel are available) in their possession or
control) so as to not unreasonably expose the other to undue risk of loss or, if
appropriate and related to the Third Party Claim in question, in making (i) any
counterclaim against the Third Party, or (ii) any cross complaint against any
Person.

 

(d) No Settlement. Notwithstanding anything in this Section 15.3 to the
contrary, the Indemnifying Party shall not, without the prior written consent of
the Indemnified Party (which consent shall not be unreasonably withheld or
delayed), (i) settle or compromise any Third Party Claim or consent to the entry
of any judgment with respect to such Third Party Claim that does not include as
an unconditional term thereof the delivery by the Third Party claimant or
plaintiff to the Indemnified Party of a written release from all liability in
respect to such Third Party Claim, (ii) settle or compromise any Third Party
Claim in any manner that may materially and adversely affect the Indemnified
Party, or (iii) settle or compromise any Third Party Claim in a manner that will
require the Indemnified Party to pay any money, except as contemplated by
Section 15.3(b).

 

15.4. Direct Claims. In the event that the Indemnified Party asserts an
Indemnity Claim, including an Indemnity Claim hereunder, that does not involve a
Third Party Claim, the Indemnified Party shall transmit to the Indemnifying
Party a written notice (the “Direct Claim Notice”). A Direct Claim Notice shall
specify, to the extent known by the Indemnified Party, the nature of and
specific basis for any such Indemnity Claim or the nature of and specific basis
of any suit, action, investigation or proceeding set forth therein, the amount
or the good faith estimated amount thereof to the extent then practicable and
the basis of the Indemnified Party’s request for indemnification under this
Agreement. The failure to provide such notice will not affect any rights
hereunder except to the extent the Indemnifying Parties are materially
prejudiced thereby. If the Indemnifying Party does not notify the Indemnified
Party within fifteen (15) days from its receipt of the Direct Claim Notice that
it disputes such Indemnity Claim, the Indemnity Claims specified in the Direct
Claim Notice will be deemed payable by the Indemnifying Party hereunder. If the
Indemnifying Party has timely disputed such Indemnity Claim, the Parties shall
negotiate in good faith for a thirty (30) day period after receipt of the Direct
Claim Notice to resolve such Indemnity Claim. If no resolution is reached within
such thirty (30) day period, the dispute regarding the Indemnity Claim shall be
resolved by litigation in a court of competent jurisdiction.

 

15.5. Survival of Representations and Warranties and Time Limitation on
Indemnification. All of the representations and warranties set forth in this
Agreement shall

 

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survive the Closing and the consummation of the transactions contemplated by
this Agreement for a period of eighteen (18) months following the Closing Date
and, if a claims notice has been provided by such date, shall remain in full
force and effect until final resolution thereof. Notwithstanding the foregoing
and without limiting any other rights and remedies available to the Parties, the
representations and warranties contained in Section 4.10 (Title to Assets and
Properties), Section 4.9 (Environmental Matters) and Section 4.13 (Taxes) shall
survive and remain in full force and effect until sixty (60) days after the
expiration of the applicable statute of limitations (including any extension
thereof) and, if a claims notice has been provided by such date, shall remain in
full force and effect until final resolution thereof. The covenants and
agreements of the Sellers, Holder and Buyer contained in this Agreement shall
survive and remain in full force and effect for the applicable period specified
therein, or if no such period is specified, indefinitely. The provisions of this
Article XV shall survive for so long as any other Section of this Agreement
shall survive. The indemnification obligations of Sellers and Holder under
Sections 15.1(c), (e) and (f) and the indemnification obligations of Buyer under
Sections 15.2(c), and (e) shall terminate on the date eighteen (18) months
following the Closing Date, except with respect to Indemnity Claims made prior
to such date.

 

15.6. Limitation on Indemnity.

 

(a) Indemnity Basket of Buyer, Sellers and Holder. Notwithstanding any other
provision of this Agreement to the contrary, the Buyer, Sellers and Holder
acknowledge and agree that, except for any Indemnity Environmental Claim,
Indemnity No Solicitation Claim, Indemnity Non-Competition Claim or Indemnity
Tax Claim, an Indemnifying Party shall not be liable to an Indemnified Party in
respect of any Indemnity Claim made pursuant to Section 15.1(a), (b) or (c), or
Section 15.2(a), (b) or (c) hereunder until the amount of Losses comprising the
Indemnity Claim(s), individually or in the aggregate, exceeds $200,000.00 (the
“Indemnity Basket”), whereupon, if such Indemnity Claims exceed the amount of
the Indemnity Basket, an Indemnifying Party shall be liable and the Indemnified
Party may recover, all such Losses to the extent they exceed the Indemnity
Basket, subject to the Indemnity Cap (as defined in Section 15.6(b)). The
Indemnity Basket shall not apply to Indemnity Claims by Buyer Indemnified
Parties arising from fraud, willful or criminal misconduct of the Sellers
Indemnified Parties (collectively, the “Sellers Indemnity Basket Exclusions”).
The Sellers and the Holder shall be responsible for the full amount of all
Claims arising from the Sellers Indemnity Basket Exclusions, and the amount of
such Claims shall be included in the determination as to whether the Indemnity
Basket is met for all other Indemnity Claims by Buyer Indemnified Parties. The
Indemnity Basket shall not apply to Indemnity Claims by Sellers Indemnified
Parties arising from fraud, willful or criminal misconduct by the Buyer
Indemnified Parties (collectively, the “Buyer Indemnity Basket Exclusions”).
Buyer shall be responsible for the full amount of all Claims arising from the
matters addressed in the Buyer Indemnity Basket Exclusions, and the amount of
such Losses shall be included in the determination as to whether the Indemnity
Basket is met for all other Losses by Sellers Indemnified Parties.

 

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(b) Indemnity Cap of Buyer, Sellers and Holder. Buyer, the Sellers and Holder
acknowledge and agree that, except for any Indemnity Environmental Claim,
Indemnity No Solicitation Claim, Indemnity Non-Competition Claim or Indemnity
Tax Claim, in no event shall an Indemnifying Party ever be required to indemnify
an Indemnified Party for Indemnity Claims made pursuant to Section 15.1(a), (b)
or (c), or Section 15.2(a), (b) or (c) of this Agreement to the extent that the
amount of such Indemnity Claim results in the aggregate Indemnity Claims by: (i)
the Buyer Indemnified Parties against the Sellers and Holder exceeding
$25,000,000; and (ii) the Sellers Indemnified Parties against Buyer exceeding
$25,000,000 (each, an “Indemnity Cap”). The respective Indemnity Caps shall not
apply to Losses arising from or relating to the Sellers Indemnity Basket
Exclusions and the Buyer Indemnity Basket Exclusions, and Losses arising from or
relating to the Sellers Indemnity Basket Exclusions and the Buyer Indemnity
Basket Exclusions shall not be used to determine whether the applicable
Indemnity Cap has been met. Whenever an Indemnifying Party is required to
indemnify and hold harmless an Indemnified Party from and against, or to
reimburse an Indemnified Party for a Loss, such Indemnifying Party will, subject
to the provisions of this Article XV, pay the Indemnified Party the amount of
such Loss reduced by the net proceeds of any insurance policy received by the
Indemnified Party with respect to such Loss.

 

15.7. Payment. Subject to Section 15.10, upon the determination of the liability
for a claimed Loss under this Article XV, the appropriate Party shall pay to the
other, as the case may be, within five (5) days after such determination, the
amount of such claimed Loss.

 

15.8. Other Limitations. Anything to the contrary in this Article XV
notwithstanding, no Party may assert or recover consequential damages, special
damages, incidental damages, indirect damages, punitive damages, lost profits or
similar items, whether asserted as an Indemnity Claim or otherwise.

 

15.9. Effect of Taxes. The amount of any Loss for which indemnification is
provided under this Article XV shall be (a) increased to take account of any net
Tax cost actually incurred by the Indemnified Party arising from the receipt or
accrual of indemnity payments hereunder (grossed up for such increase) and (b)
reduced to take account of any net Tax benefit actually realized by the
Indemnified Party arising from the incurrence of the Loss that gave rise to such
Indemnity Claim.

 

15.10. Exclusive Remedy. The Parties acknowledge that their sole and exclusive
remedy after the Closing for any breach of any representation, warranty or
covenant contained in this Agreement shall be the indemnification provisions set
forth in this Article XV. In addition, each Party acknowledges that all of its
obligations in this Agreement to indemnify any other Party are subject to and
shall be in accordance with this Article XV. Notwithstanding anything to the
contrary contained in this Agreement, Buyer shall have no right to
indemnification under Section 15.1 with respect to any Loss or alleged Loss if
Buyer shall have received a commensurate reduction in the Purchase Price based
on either the Preliminary Closing Date Statement or the Final Closing Date
Statement; provided that

 

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such commensurate reduction relates to the facts and matters that are the
subject of such Loss or alleged Loss.

 

15.11. Tax Treatment of Indemnification. For all Tax purposes, the Parties agree
to treat (and shall cause each of their respective Affiliates to treat) any
indemnity payment under this Agreement as an adjustment to the Purchase Price,
except as otherwise required by applicable Laws.

 

15.12. Relation of Indemnity to Escrow Payment. The amount of the Escrow Payment
shall be reduced by any unpaid amount that is owed under this Article XV by the
Sellers or Holder to any Buyer Indemnified Party at the time the Escrow Payment
is due. Any such reduction in the Escrow Payment shall have the same effect as a
direct payment by Sellers or Holder of such amount owing under this Article XV
to Buyer. The rights of any Buyer Indemnified Party under the preceding sentence
are in addition to any other rights and remedies that such Buyer Indemnified
Party may have under this Agreement.

 

15.13. Relation to Escrow. Each of the Sellers and Holder further acknowledges
and agrees that its obligations to Buyer under this Agreement, including its
indemnification obligations under this Article XV, are not, in any way, limited
to funds set aside pursuant to the Indemnification Escrow Agreement. To the
extent that the amount set aside pursuant to the Indemnification Escrow
Agreement is not sufficient to satisfy the Sellers’ and Holder’s obligations
under this Article XV, the Sellers and Holder shall remain fully liable for such
obligations.

 

ARTICLE XVI.

EMPLOYEE MATTERS

 

16.1. Employment.

 

(a) Effective immediately after the Closing, Buyer shall (or, if applicable,
shall cause Buyer Designee to) offer employment to each Person employed by the
Business on the Closing Date, including those Persons on approved leaves of
absence, who will be offered employment upon their return from leave (an “Active
Employee”). Such offers of employment shall be for the base compensation and
have benefit levels comparable in the aggregate to the benefits enjoyed by
Active Employees immediately prior to the Closing. Except as provided in this
Article XVI with respect to specific types of benefits, Buyer shall, and shall
cause its Affiliates to, give full credit for each Active Employee’s period of
service with any of the Sellers or their Affiliates prior to the Closing for all
purposes (except benefit accrual in a defined benefit pension plan) under any
employee benefit plans, programs or arrangements sponsored by Buyer or its
Affiliates after the Closing in which any of the Active Employees are eligible
to participate.

 

(b) Effective as of Closing Date, the Sellers shall terminate the employment of
each Active Employee and each Active Employee who is an active participant in
any Business Benefit Plans shall cease to be an active participant. All of the
Active

 

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Employees shall become immediately eligible to participate in each of Buyer’s
employee benefit plans in accordance with the applicable provisions of this
Agreement and the eligibility and other terms and conditions of each such plan.
The Sellers agree that they are responsible for terminating the active
participation of such employees in the Business Benefit Plans pursuant to
applicable Laws and shall seek any necessary approvals with respect to the
termination of any such active participation.

 

(c) Buyer’s welfare and fringe benefit plans, programs, policies or arrangements
(“Buyer’s Welfare Plans”) made available to Active Employees shall treat service
by Active Employees with the Sellers in the same manner as service with Buyer
for purposes of eligibility to participate in such plans, programs, policies or
arrangements, and Buyer shall cause any limitations thereunder on participation
or coverage of pre-existing conditions to be waived with respect to Active
Employees and their eligible dependents and beneficiaries. Buyer’s Welfare Plans
shall give full credit for deductible and co-payment amounts incurred under
Business Benefit Plans for the calendar year in which the Closing occurs when
determining deductibles and co-payments under Buyer’s Welfare Plans with respect
to Active Employees.

 

(d) WARN Act Compliance. For a period of sixty (60) days after the Closing Date,
Buyer shall not effect any termination or layoff that results in an employment
loss at any single site of employment during any 30-day period of more than 33%
or fifty (50) of the Active Employees working full-time and Buyer shall not
effect a plant closing that results in an employment loss during any 30-day
period of fifty (50) or more of the Active Employees working full-time. For
purposes of this Section 16.1(d), the number of employees shall be based on the
number of Active Employees at the Closing Date. For sixty (60) days after
Closing, Buyer shall not take any action which would trigger an obligation to
provide advance notice of termination pursuant to the Worker Adjustment and
Retraining Notification Act or any other applicable advance notice or
notification Law.

 

16.2. Savings Plan. The Sellers agrees to permit each Active Employee to effect
a “direct rollover” (within the meaning of Section 401(a)(31) of the Code) of
his or her account balances under the Seller’s savings plan if such rollover is
elected in accordance with applicable Law by such Active Employee. Without
limiting the generality of the foregoing, and provided that the Sellers are
reasonably satisfied consistent with the regulations under Section 401(a)(31) of
the Code that Buyer’s savings plan meets the requirements for qualification
under Section 401(a) of the Code, the Sellers may provide that one or more
Active Employees may elect to effect, and, provided that Buyer is reasonably
satisfied consistent with the regulations under Section 401(a)(31) of the Code
that the Sellers’ savings plan meets the requirements for qualification under
Section 401(a) of the Code, Buyer agrees to cause Buyer’s savings plan to
accept, a “direct rollover” to Buyer’s saving plan of such Active Employee’s
account balances under the Sellers’ savings plan if such rollover is elected in
accordance with applicable Law by such Active Employee, provided that the Active
Employees will be required to settle any and all

 

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outstanding loan balances in the Sellers’ savings plan in accordance with its
terms prior to such transfer.

 

16.3. Maintenance of Books and Records. Each of Buyer, the Sellers and Holder
shall preserve until the seventh (7th) anniversary of the Closing Date all
records, including electronic data records, possessed or to be possessed by such
Party relating to any of the assets, liabilities or business of the Business
prior to the Closing Date. After the Closing Date, where there is a legitimate
purpose (which shall be deemed to include tax filings of either Party), such
Party shall provide the other Party with access, upon prior reasonably written
request specifying the need therefor, during regular business hours, to (a) the
management employees of the Business or Buyer, as applicable, (b) the books of
account and records of such Party related to the Business, and (c) the payroll
and personnel records of the Business, but, in each case, only to the extent
relating to the assets, liabilities or business of the Business prior to the
Closing Date, and the other Parties and their representatives shall have the
right to make copies of such books and records; provided, however, that the
foregoing right of access shall not be exercisable in such a manner as to
interfere unreasonably with the normal operations and business of such Party;
and provided further, that, as to so much of such information as constitutes
trade secrets or confidential business information of such Party, the requesting
Party and its officers, directors and representatives will use due care to not
disclose such information except (i) as required by Law, (ii) with the prior
written Consent of such Party, which Consent shall not be unreasonably withheld,
or (iii) where such information becomes available to the public generally, or
becomes generally known to competitors of such Party, through sources other than
the requesting Party, its Affiliates or its officers, directors or
representatives. After the above referenced seven year anniversary, such records
may nevertheless be destroyed by a Party if such Party sends to the other
Parties written notice of its intent to destroy records, specifying with
particularity the contents of the records to be destroyed. Such records may then
be destroyed after the 30th day after such notice is given unless another Party
objects to the destruction in which case the Party seeking to destroy the
records shall deliver such records to the objecting Party.

 

ARTICLE XVII.

MISCELLANEOUS

 

17.1. Brokers’ and Finders’ Fees. Each Party shall be responsible for the
payment of any fees to brokers or finders engaged by such Party in connection
herewith.

 

17.2. Expenses. Except as otherwise provided in this Agreement (including
Section 3.6 hereof), each Party shall pay its own expenses incidental to the
preparation of this Agreement, the carrying out of the provisions of this
Agreement and the consummation of the transactions contemplated by this
Agreement. Buyer shall pay the fees and expenses associated with any title or
leasehold insurance (including, any survey) for the Leased Real Estate, and any
fees and expenses associated with any environmental surveys.

 

17.3. Entire Agreement. The Transaction Documents contain the entire agreement
between the Parties, and all of the Sellers’, Holder’s and Buyer’s
representations

 

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and warranties, with respect to the transactions contemplated by this Agreement
and supersede all other prior agreements, understandings and letters related
hereto, whether written or oral, except for the terms and conditions of the
Confidentiality Agreement which will continue in full force and effect.

 

17.4. Assignment and Binding Effect. This Agreement may not be assigned prior to
the Closing by any Party without the prior written consent of the other Party;
provided, that Buyer may assign all or part of its rights or obligations
hereunder to one or more direct or indirect subsidiaries of Buyer; provided
further, that in the event of any such assignment, Buyer shall remain liable in
full for the performance of its obligations hereunder. All of the terms and
provisions of this Agreement shall be binding upon and inure to the benefit of
and be enforceable by the successors and assigns of the Parties.

 

17.5. Extension; Waiver. Any term or provision of this Agreement may be waived
at any time by the Party entitled to the benefit thereof by written notice to
the other Parties. The waiver of a breach of any provision of this Agreement
shall not operate or be construed as a waiver of compliance with any
representations, warranties, conditions or covenants contained in this Agreement
or of any subsequent breach.

 

17.6. Notices. Any notice, request, demand, waiver, Consent or other
communication that is required or permitted under this Agreement or any other
Transaction Document shall be in writing and shall be deemed given when
delivered personally (including reputable overnight courier) or sent by telecopy
(with an appropriate acknowledgment of receipt) or five (5) days after sending
by registered or certified mail, postage prepaid, return receipt requested, as
follows:

 

If to Buyer, to:

 

Omnicare, Inc.

1600 RiverCenter II

100 East RiverCenter Boulevard

Covington, Kentucky 41011

Telecopy: 859-392-3333

Attention: Tracy Finn

 

With a simultaneous copy to:

 

Dewey Ballantine LLP

1301 Avenue of the Americas

New York, New York 10019

Telecopy: 212-259-6333

Attention: Morton A. Pierce

                 Michael J. Aiello

 

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If to any of the Sellers or Holder, to:

 

Louisville Public

Warehouse Company

10350 Ormsby Park Place, Suite 500

Louisville, Kentucky 40223

Attn: James S. Karp, Chairman &

Chief Executive Officer

Fax: 502.454.9027

 

With a simultaneous copy to:

 

Frost Brown Todd LLC

400 West Market Street

32nd Floor

Louisville, Kentucky 40202-3363

Attn: C. Edward Glasscock

Fax: 502.581.1087

 

or to such other address as the addressee may have specified in a notice duly
given to the sender as provided herein, which notice will be effective only upon
receipt.

 

17.7. Amendment. This Agreement may be amended or supplemented by the Parties.
The Parties shall make such technical changes to this Agreement, not
inconsistent with the purposes hereof, as may be required to effect or
facilitate any Governmental Approval or acceptance of this Agreement or to
effect or facilitate any filing or recording required for the consummation of
any of the transactions contemplated hereby. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the Parties.

 

17.8. Governing Law. This Agreement shall be construed in accordance with the
Laws of the Commonwealth of Kentucky without regard to any applicable conflicts
of law.

 

17.9. Binding Effect; No Third Parties. The representations, warranties,
covenants and agreements contained in this Agreement are for the sole benefit of
the Parties and their respective successors and permitted assigns, and they
shall not be construed as conferring any rights on any other Persons.

 

17.10. Invalidity. In the event that any one or more of the provisions contained
in this Agreement or the other Transaction Documents shall, for any reason, be
held to be invalid, illegal or unenforceable in any respect, then to the maximum
extent permitted by Law, (a) such provision will be fully severable, (b) this
Agreement or the other Transaction Documents will be construed and enforced as
if such illegal, invalid, or unenforceable

 

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provision had never comprised a part hereof or thereof, (c) the remaining
provisions of this Agreement or the other Transaction Documents will remain in
full force and effect and will not be affected by the illegal, invalid, or
unenforceable provision or by its severance from this Agreement or the other
Transaction Documents and (d) in lieu of such illegal, invalid or unenforceable
provision, there will be added automatically as a part of this Agreement or the
other Transaction Documents a legal, valid and enforceable provision as similar
in terms to such illegal, invalid or unenforceable provision as may be possible.

 

17.11. Counterparts; Facsimile. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but such counterparts shall
together constitute one and the same instrument. The Agreement may be executed
and delivered by facsimile transmissions, and a facsimile signature of any Party
shall be effective as an original signature.

 

17.12. Construction. The Parties have participated jointly in the negotiation
and drafting of this Agreement and the other Transaction Documents. In the event
an ambiguity or question of intent or interpretation arises, this Agreement and
the other Transaction Documents shall be construed as if drafted jointly by the
Parties and no presumptions or burden of proof shall arise favoring or
disfavoring any Party by virtue of the authorship of any of the provisions of
this Agreement or the other Transaction Documents.

 

17.13. Payments Received. Buyer and the Sellers each agree that after the
Closing they will hold and will Promptly transfer and deliver (or cause to be
transferred and delivered) to the other, from time to time as and when received
by them (or their respective Affiliates), any cash, checks with appropriate
endorsements (using their reasonable commercial efforts not to convert such
checks into cash), or other property that they may receive on or after the
Closing which properly belongs to the other Party, including any insurance
proceeds, and will account to the other for all such receipts. From and after
the Closing, Buyer shall have the right and authority to endorse without
recourse the name of the Sellers on any check or any other evidence of
indebtedness received by Buyer on account of the Business and the Acquired
Assets transferred to Buyer (or, if applicable, Buyer Designee) hereunder.

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the Parties have duly executed this Asset Purchase Agreement
as of the date first written.

 

Sellers:

      RXCROSSROADS, L.L.C.            

By

 

/s/ JAMES S. KARP

               

Name:

 

James S Karp

               

Title:

 

Chief Executive Officer

        RXINNOVATIONS, LLC            

By

 

/s/ JAMES S. KARP

               

Name:

 

James S Karp

               

Title:

 

Chief Executive Officer

        MAKING DISTRIBUTION INTELLIGENT, L.L.C.            

By

 

/s/ JAMES S. KARP

               

Name:

 

James S Karp

               

Title:

 

Chief Executive Officer

Holder:

      LOUISVILLE PUBLIC WAREHOUSE COMPANY            

By

 

/s/ JAMES S. KARP

               

Name:

 

James S Karp

               

Title:

 

Chief Executive Officer

Buyer:

      OMNICARE, INC.            

By

 

/s/ TRACY FINN

               

Name:

 

Tracy Finn

               

Title:

 

Vice President