EXHIBIT 10.1

ASSET PURCHASE AGREEMENT

BY AND AMONG

PAINCARE HOLDINGS, INC.,

AND

THE CENTER FOR PAIN MANAGEMENT, LLC

AND ITS

MEMBERS

EFFECTIVE DATE: DECEMBER 1, 2004.

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ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (the "Agreement") is entered into effective the
1st day of December, 2004 (the “Execution Date”), by and among The Center for
Pain Management, LLC, an Maryland limited liability company (the "Company"), and
Marc A. Loev, M.D., Lester A. Zuckerman, M.D., P. Bobby Dey, M.D., Mark H.
Coleman, M.D., Michael J. Daly, M.D. and Ali El-Mohandes, M.D.(hereinafter
collectively the "Members") and PainCare Holdings, Inc., a Florida corporation
(hereinafter referred to as “PainCare”) and PainCare Acquisition Company XV,
Inc., a Florida corporation (hereinafter called “Subsidiary”). The Company and
the Members are sometimes referred to herein as the “Sellers” and PainCare and
the Subsidiary are sometimes referred to herein as the “Acquiring Companies.”
The Acquiring Companies and the Sellers are sometimes referred to herein
individually as a “Party” and collectively as the “Parties.”

W I T N E S S E T H:

WHEREAS, the Members are licensed medical providers who reside and practice
medicine in the State of Maryland and who own one hundred percent (100%) of the
membership interest in the Company (the “Membership Interests”);

WHEREAS, the Company through its Members, physician employees and other
personnel provide pain medicine, pain management procedures and other ancillary
services (the “Business”) at the following locations: 11921 Rockville Pike, Ste.
505, Rockville, Maryland 20852, 3901 Greenspring Avenue, Ste. 304, Baltimore,
Maryland 21211, 1150 Professional Court, Ste. L, Hagerstown, Maryland 21740, and
305 Hospital Drive, Ste. 304, Glen Burnie, Maryland 21061 (the “Business
Locations”); and

WHEREAS, the Sellers are desirous of selling certain non-medical assets of the
Company; and

WHEREAS, the Acquiring Companies are desirous of buying certain non-medical
assets of the Company all on the following terms and conditions; and

WHEREAS,  as a material inducement for the Acquiring Companies to purchase such
assets the Company will enter into a Management Services Agreement with the
Subsidiary.

NOW THEREFORE, in consideration of the mutual promises and covenants herein
con­tained and the sum of $10.00 and other good and valuable consideration paid
by the Acquiring Companies to the Sellers, receipt of which is hereby
acknowledged by the Sellers, it is mutually covenanted and agreed by the parties
hereto as follows:

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1.

PURCHASE AND SALE OF ASSETS

1.1   Assets to be Transferred.  Subject to the terms and conditions of this
Agreement, on the Closing Time (as hereinafter defined), and except as otherwise
stated, PainCare shall purchase on behalf of the Subsidiary and the Members
shall cause the Company to sell, transfer, convey, assign, and deliver to
Subsidiary all of the Company’s non-medical Business rights, claims and assets
(of every kind, nature, character and description, whether real, personal or
mixed, tangible or intangible, accrued, contingent or otherwise, and wherever
situated other than the Excluded Assets specified in Section 1.2 below) which
are used, held for use or acquired or developed for use by the Company in the
Business, or developed in the course of conducting the Business or by persons
employed by the Company in the Business (collectively the "Purchased Assets").
 The Purchased Assets shall include, without limitation, all the following
assets or rights of the Company, to the extent so used, held, acquired or
developed in the Business:

(a)  Cash and Cash Equivalents and Accounts Receivable. All cash, cash
equivalents, and the Accounts Receivable of the Company as of the Closing Time
which are described in Disclosure Schedule 1.1.(a).

(b)  Personal Property.  All of  the Company's rights in, to and under all,
instruments, equipment, furniture, machinery and other items of tangible
personal property including, without limitation, the personal property leases
described in the Disclosure Schedule 1.1(b);

(c)   Inventory.  All inventories including, without limitation, supplies,
merchandise and durable medical equipment, together with related packaging and
delivery materials (collectively the "Inventory").

(d)   Books and Records.  All books and records of the Company, including
without limitation, all credit records, payroll records, computer records,
computer programs, contracts, agreements, operating manuals, schedules of
assets, correspondence, books of account, files, papers, books and all other
public and confidential business records but excluding the Company's corporate
minute books and tax records (together the "Business Records"), whether such
Business Records are in hard copy form or are electronically or magnetically
stored;.

(e)   Intellectual Property.  The Company’s interest in all of its Intellectual
Property.  As used herein, the term "Intellectual Property" shall mean and
include: (i) all trademark rights, business identifiers, trade dress, logos,
service marks, trade names and brand names, all registrations thereof and
applications therefore and all goodwill associated with the foregoing; (ii) all
copyrights, copyright registrations and copyright applications, and all other
rights associated with the foregoing and the underlying works of authorship;
(iii) all patents and patent applications, and all international proprietary
rights associated therewith; (iv) all contracts or agreements granting any
right, title, license or privilege under the intellectual property rights of any
third party; (v) all inventions, mask works and mask work registrations,
know-how, discoveries, improvements, designs, trade secrets, shop and royalty
rights, employee covenants and agreements respecting intellectual property and
non-competition and all other types of intellectual property; (vi) all computer
software (including all data and related documentation); (vii) all other
proprietary rights; (viii) all copies and tangible

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embodiments of the foregoing (in whatever form or medium); and (ix) all claims
for infringement or breach of any of the foregoing.

(f)   Contracts.  All of the Company’s rights in, to and under all contracts,
agreements, license agreements, purchase orders and sales orders (hereinafter
"Contracts") of the Company as it relates to the Business (third party payors,
licenses, etc.).  To the extent that any Contract for which assignment to
Subsidiary is provided herein is not assignable without the consent of another
party, this Agreement shall not constitute an assignment or an attempted
assignment thereof if such assignment or attempted assignment would constitute a
breach thereof. The Sellers and the Acquiring Companies agree to use their
reasonable best efforts (without any requirement on the part of the Acquiring
Companies to pay any money or agree to any change in the terms of any such
Contract) to obtain the consent of such other Party to the assignment of any
such Contract to the Subsidiary in all cases in which such consent is or may be
required for such assignment.  If any such consent shall not be obtained, the
Sellers agree to cooperate with the Acquiring Companies in any reasonable
arrangement designed to provide for the Acquiring Companies the benefits
intended to be assigned to Subsidiary under the relevant Contract, including
enforcement at the cost and for the account of the Acquiring Companies of any
and all rights of the Sellers against the other Party thereto arising out of the
breach or cancellation thereof by such other Party or otherwise.  If and to the
extent that such arrangement cannot be made, the Acquiring Companies, upon
notice to the Sellers, shall have no obligation pursuant to Section 2.1 or
otherwise with respect to any such Contract and any such Contract shall not be
deemed to be a Purchased Asset hereunder.

(g)   Computer Software.  All computer programs and other software,
documentation and related property and information of the Company.

(h)  Licenses; Permits. All franchises, licenses, permits, certificates,
approvals and other governmental authorizations necessary to own and operate any
of the Purchased Assets, a complete and correct list of which is set forth in
the Disclosure Schedule 1.1(h) (the "Licenses");

(i)  General Intangibles.  All causes of action arising out of occurrences
before or after the Closing Time, and other intangible rights and assets.

(j)

Telephone Numbers.  All of the Company's right, title and interest in, to and
under all telephone numbers used in connection with its Business, including all
extensions thereto;

(k)

 Warranties.  All rights in, to and under all representations, warranties,
covenants and guaranties made or provided by third parties to or for the benefit
of the Company with respect to any of the Purchased Assets;

(l)  Prepaids.  All of the Company's prepaid expenses, prepaid insurance,
deposits and other similar items ("Prepaid Items");

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(m) Leasehold Improvements. All rights, titles and interests in, to and under
all structures, fixtures, landings, constructions in progress, improvements,
betterments, installations, and additions constructed or located on or attached
or affixed to the leasehold estates conferred on the Company under or by virtue
of, all real property lease and sublease agreements (such real property lease
and sublease agreements are hereinafter referred to as "Real Property Leases"
which are described on the Disclosure Schedule 1.1(m)).

1.2   Excluded Assets.  Section 1.1 notwithstanding, the Company shall not sell,
transfer, assign, convey or deliver to Subsidiary, and the Acquiring Companies
will not purchase or accept the following assets of the Company:

(a)  Tax Credits and Records.  Federal, state and local income and franchise tax
credits and tax refund claims and associated returns and records. PainCare shall
have reasonable access to such records and may make excerpts therefrom and
copies thereof.

(b)   Personal Assets.  The personal assets of the Members described in
Disclosure Schedule 1.2(b).

(c)  Pharmaceuticals.

  Any of the Company's right, title and interest in, to or under, or possession
of, all drugs, pharmaceuticals, products, substances, items or devices whose
purchase, possession, maintenance, administration, prescription or security
requires the authorization or order of a licensed health care provider or
requires a permit, registration, certification or any other governmental
authorization held by a licensed health care provider as specified under any
federal or state law, or both.

(d)  Patient Records.  Any of the Company's right, title and interest in and to
records of identity, diagnosis, evaluation or treatment of patients.

(e)  Medical Policies. Any of the Company's right, title and interest in, to and
under insurance policies covering or relating to medical malpractice.

(f)  Names and Marks. The name “The Center for Pain Management, LLC” and its
associated logos and any trade name or service mark or registrations related
thereto.

(g)  Medical License. Any franchises, licenses, permits, certificates, approvals
and other governmental authorizations necessary or desirable to own and operate
the medical Business of the Company.

(h)  Medical Contracts.  Any of the Company's right, title or interest in, to or
under any contract or agreement that requires performance by a licensed health
care provider under federal or applicable state law ("Medical Contracts").

 

2.

ASSUMPTION OF LIABILITIES

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2.1   Liabilities to be Assumed.  As used in this Agreement, the term
"Liability" shall mean and include any direct or indirect indebtedness,
guaranty, endorsement, claim, loss, damage, deficiency, cost, expense,
obligation or responsibility, fixed or unfixed, known or unknown, asserted or
unasserted, liquidated or unliquidated, secured or unsecured.  Subject to the
terms and conditions of this Agreement, on the Closing Time, Subsidiary shall
assume or take subject to, as the case may be, and agrees to perform and
discharge the following, and only the following, Liabilities of the Sellers:

(a)   Certain Liabilities.  Those certain accounts payable and accrued
Liabilities listed in Disclosure Schedule 2.1(a).

(b)   Contractual Liabilities.  Liabilities that relate to periods, events or
circumstances occurring on or after the Closing Time under and pursuant to the
Contracts described in Section 1.1(f).

The Liabilities described in subsections 2.1.(a), and  2.1.(b) above are
hereinafter collectively described as the "Assumed Liabilities."

2.2   Liabilities Not to be Assumed.  Except as and to the extent specifically
set forth in Section 2.1 above, the Acquiring Companies are not assuming nor
buying the Purchased Assets subject to any Liabilities of the Sellers and all
such Liabilities shall be and remain the responsibility of the Sellers.

2.3   Taxes Arising from Transaction.  The Acquiring Companies are not assuming
nor shall they be responsible for any taxes applicable to, imposed upon or
arising out of the sale or transfer of the Purchased Assets to the Acquiring
Companies and the other transactions contemplated by this Agreement, including
but not limited to any income, transfer, sales, use, gross receipts or
documentary stamp taxes.

2.4    Income and Franchise Taxes. The Acquiring Companies are not assuming nor
shall they be responsible for any Liability of the Sellers for Federal income
taxes and any state or local income, profit or franchise taxes (and any
penalties or interest due on account thereof).

2.5   Product, Medical  Malpractice and Service Liability.  The Acquiring
Companies are not assuming nor shall they be responsible for any Liability of
the Sellers arising out of or in any way relating to or resulting from, either
directly or indirectly, any medical negligence, malpractice or professional or
personal liability or pharmaceutical, medication or product manufactured,
formulated, mixed, compounded, assembled or sold or any service performed by the
Sellers, its physicians, contractors or any of its employees whether prior to,
on, or after the Closing Time (including any Liability of the Sellers or any of
its physicians, employees, contractors or agents for claims made for injury to
person, damage to property or other damage, whether made in product liability,
tort, negligence, breach of warranty or otherwise).

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2.6   Litigation Matters.  The Acquiring Companies are not assuming nor shall
they be responsible for any Liability of the Sellers with respect to any action,
claim, suit, proceeding, arbitration, investigation or inquiry, whether civil,
criminal or administrative whether same shall occur or arise from matters prior
to, on, or after the Closing Time ("Litigation").

2.7   Infringements.  The Acquiring Companies are not assuming nor shall they be
responsible for any Liability of the Sellers with respect to a third party for
infringement of such third party's Intellectual Property whether same shall
occur or arise from matters prior to, on, or after the Closing Time.

2.8  Transaction Expenses. The Acquiring Companies are not assuming nor shall
they be responsible for any Liabilities incurred by the Sellers in connection
with this Agreement and the transactions contemplated herein except as provided
in that certain Joint Engagement of Tax Counsel Letter Agreement entered into
between the Parties on November 11, 2004.

2.9  Liability For Breach.  The Acquiring Companies are not assuming nor shall
they be responsible for any Liabilities of the Sellers for any breach or failure
to perform any of the Sellers’ covenants and agreements contained in, or made
pursuant to, this Agreement, or, prior to the Closing, any other contract or
agreement, whether or not assumed hereunder, including breach arising from
assignment of contracts hereunder without consent of third parties.

2.10   Liabilities to Affiliates.  The Acquiring Companies are not assuming nor
shall they be responsible for any Liabilities of the Sellers to its present or
former Affiliates.

2.11  Violation of Laws or Orders. The Acquiring Companies are not assuming nor
shall they be responsible for any Liabilities of the Sellers for any violation
of or failure to comply with any statute, law, ordinance, rule or regulation
(collectively, "Laws") or any order, writ, injunction, judgment, plan or decree
(collectively, "Orders") of any court, arbitrator, department, commission,
board, bureau, agency, authority, instrumentality or other body, whether
federal, state, municipal, foreign or other (collectively, "Government
Entities") whether same shall occur or arise from matters prior to, on, or after
the Closing Time.

3.

PURCHASE PRICE - PAYMENT

3.1

Purchase Price Consideration. The aggregate purchase price consideration (the
“Purchase Price Consideration”) shall consist of (i) the Closing Consideration
(the “Closing Consideration”) as hereafter defined, and (ii) the Intended
Installment Payments as determined under Section 3.4 below.  Subject to the
provisions set forth in Section 3.2 below, the adjustment as provided in Section
3.3 below and the provisions set forth in Section 10, PainCare shall deliver the
Closing Consideration to the Company (which will immediately be distributed to
the Members as provided in Section 3.1 of the Disclosure Schedules) as indicated
below subject to the satisfaction of the Closing Conditions. The “Closing
Consideration,” as such phrase is used herein, shall be comprised of: (i) Six
Million Three Hundred Seventy Five Thousand and 00/100 Dollars

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($6,375,000) (the “Closing Cash”), plus (ii) Three Million Six Hundred Eighty
Seven Thousand Five Hundred (3,687,500) PainCare Shares (the “Closing Shares”).

3.2

Payment of Closing Consideration.  The Closing Consideration shall be payable as
follows:

(a)

Subject to adjustment as provided in Section 3.3 below and the provisions set
forth in Section 10, PainCare shall deliver the Closing Cash to the Company via
wire transfer on the Closing Time to a bank account(s) designated by the
Company. The Company shall notify PainCare in writing of the bank account(s) to
which the Closing Cash shall be wired.

(b)

Subject to adjustment as provided in Section 3.3 below and the provisions set
forth in Section 10, PainCare shall deliver the Closing Shares to the Company or
alternatively, to the Members as indicated in an instruction letter from the
Company delivered to PainCare.

3.3

Closing Time Adjustments.  The Closing Consideration shall be subject to
adjustment as follows:

(a)

Transaction Related Adjustments. The Closing Cash shall be reduced by the amount
of any cash payments made by the Acquiring Companies with respect to any
expenses which the Sellers request in writing to be paid and the Acquiring
Companies agree to pay on behalf of the Sellers.

(b)

Accounts Receivable Adjustment.  If the Subsidiary, within the six (6) month
calendar period immediately following the Closing Time, does not collect an
amount equal to at least 30% of the accounts receivable (the “Required A/R
Collections”) purchased pursuant to this Agreement as indicated on that certain
accounts receivable aging report dated as of the Closing Time which is attached
hereto as Disclosure Schedule 3.3(b)(the “Acquired Accounts Receivable”), then
the Closing Cash shall be reduced dollar for dollar by the A/R Adjustment.  The
“A/R Adjustment” shall equal the difference between the Required A/R Collections
and the amount of the Acquired Accounts Receivable actually collected by the
Subsidiary during such six (6) month period. PainCare shall receive payment for
the A/R Adjustment through a lump sum cash payment from the Members (and not
from the Company) within seven (7) days of the Members receiving written demand
for same after the end of the six (6) month period.  

3.4

Intended Installment Payment.  

(a)

General.  Subject to the satisfaction of all of the Installment Payment
Conditions (as defined in 3.4(f)(iii) below), PainCare will pay to the Company a
total amount of additional consideration of Thirteen Million Seven Hundred Fifty
Thousand and 00/100 Dollars ($13,750,000), payable in three equal annual
installments of Four Million Five Hundred Eighty Three Thousand Three Hundred
Thirty Three and 33/100 Dollars ($4,583,333.33) (each an “Intended Installment
Payment”) in the form of consideration as provided in Section 3.4(d) below and
subject to adjustment as provided in Sections 3.4(b) and (c) below. The Parties
hereby acknowledge and agree that the Intended Installment Payments to be made
by PainCare, if earned, are expressly

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 subordinate to the rights and obligations to the Laurus Master Fund, Ltd.
(“Laurus”) as provided in those certain Securities Purchase Agreements, Security
Agreements and Pledge Agreements between PainCare and Laurus dated February 27,
2004, May 22, 2004 and July 1, 2004. Payment of the In­tended Installment
Payment shall be secured by a pledge of Subsidiary’s stock to the Company
pursuant to a Stock Pledge Agreement (the “PainCare Stock Pledge Agreement”) the
form of which is attached hereto as Exhibit 3.4.

(b)

Adjusted Installment Payment.  Notwithstanding Section 3.4(a) above, if the
consolidated Formula Period Profits (as defined in Section 3.4(f)(ii) below) of
the Company and the Subsidiary for any Formula Period are less than the Earnings
Threshold (as defined in Section 3.4(f)(iv) below, the amount of the Intended
Installment Payment for such Formula Period shall be recalculated to equal the
product of the Intended Installment Payment, multiplied by the applicable
Installment Payment percentage discount as provided below (the “Adjusted
Installment Payment”).  The “Adjusted Installment Payment” shall equal (i) the
Formula Period Profits (as defined in Section 3.4(f)(ii) below) for such Formula
Period divided by the Earnings Threshold; multiplied by: (ii) ninety percent
(90%) if such Formula Period Profits are $4,812,500 or more but less than the
Earnings Threshold; or (iii) seventy percent (70%) if such Formula Period
Profits are $4,125,000 or more but less than $4,812,500,000; (iv) fifty percent
(50%) if such Formula Period Profits are $3,437,500 or more but less than
$4,125,000, or (v) no Installment Payment if such Formula Period Profits are
less than $3,437,500.

(c)

Installment Payment Premium.  Notwithstanding Section 3.4(b), if (i) the Company
receives an Adjusted Installment Payment from PainCare in a Formula Period
rather than the Intended Installment Payment as a result of the Formula Period
Profits equaling less than the Earnings Threshold for such Formula Period, and
(ii) the Company's Formula Period Profits exceed the Earnings Threshold in the
Formula Period immediately subsequent to the Formula Period for which the
Adjusted Installment Payment corresponded, and (iii)  the Installment Payment
Conditions are satisfied, then PainCare shall pay to the Company the Installment
Payment Premium (as defined below). The “Installment Payment Premium” shall
equal the product of (A) the Formula Period Profits for the Formula Period in
which the Installment Payment Premium is calculated less the Earnings Threshold,
multiplied by (B) Seventy-five percent (75%).  The Installment Payment Premium
shall be paid to the Company in the same form and time as the Installment
Payments (as defined in Subsection (d) below) are due for the Formula Period for
which the Installment Payment Premium is calculated.  

(d)

Manner of Payment.  Within sixty (60) days after the end of each Formula Period,
PainCare or its Affiliate shall prepare and deliver to the Members a financial
statement presenting the Formula Period Profits for the Company for the
applicable Formula Period (the “Formula Period Profits Statement”).  Ten (10)
business days after delivery of the Formula Period Profits Statement, the
Members shall in a written notice to PainCare either accept or describe in
reasonable detail any proposed adjustments to the Formula Period Profits
Statement and the reasons therefore, and shall include pertinent calculations.
If the Members fail to deliver notice of acceptance or objection to the Formula
Period Profits Statement within such ten (10) business day period, the Members
shall be deemed to have accepted the Formula Period Profits Statement.

(e)

If the Members

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accept or fail to object to the Formula Period Profits Statement within the ten
(10) business day period set forth above, then within ninety (90) days after the
end of the Formula Period, PainCare shall pay to the Members the Intended
Installment Payment or the Adjusted Installment Payment (each an “Installment
Payment”, and collectively, the “Installment Payments”) along with any
Installment Payment Premium owed in accordance with Subsection (c) above as
follows: (i) fifty percent (50%) of the Installment Payment shall be made in
cash via wire transfer to a bank account(s) designated by the Company at least
ten (10) business days prior to the end of the Formula Period; and (ii) fifty
percent (50%) of the Installment Payment shall be made in PainCare Shares priced
at Fair Market Value (as defined below) per one share of PainCare common stock
for all Formula Periods.  In the event PainCare and the Members are not able to
agree on the Formula Period Profits Statement within thirty (30) days from and
after the receipt by PainCare of any objections raised by the Members, PainCare
and the Members shall each have the right to require that such disputed
determinations be submitted to an independent certified public accountant or
accounting firm that PainCare shall select, for computation or verification in
accordance with the provisions of this Agreement, and the Installment Payment
shall be paid by PainCare to the Members within fifteen (15) days after receipt
of the accountant's computation or verification.  The foregoing provisions for
certified public accounting firm review shall be final and binding upon the
Parties and there shall be no right of appeal from such decision.

(f)

Installment Payment Cap.  Notwithstanding anything to the contrary in this
Section 3, in no event whatsoever shall the aggregate amount of the Installment
Payments (including Installment Payment Premiums) paid to the Company from
PainCare in cash, in PainCare Shares or any other form of consideration exceed
Thirteen Million Seven Hundred Fifty Thousand and 00/100 Dollars ($13,750,000).

(g)

Definitions for Purposes of Section 3.  For purposes of Section 3 of this
Agreement:

(i)

“Fair Market Value” shall mean the value of the PainCare Shares determined as
follows:

(1)

if the principal market for the PainCare Shares is a national securities
exchange, then the “Fair Market Value” of the PainCare Shares shall equal the
thirty  (30) day trailing average of the closing prices of the PainCare Shares
ending on the last day of the first, second or third Formula Period, as
applicable, as reported by such exchange or on a composite tape reflecting
transactions on such exchange; or

(2)

if the principal market for the PainCare Shares is not a national securities
exchange, but the price of the PainCare Shares is quoted on the National
Association of Securities Dealers Automated Quotation System (“NASDAQ”) Stock
Market, and (A) actual closing price information is available with respect to
the PainCare Shares, then the “Fair Market Value of the PainCare Shares shall
equal the thirty  (30) day trailing average of the closing prices of such stock
ending on the last day of the first, second or third Formula Period, as
applicable, on the NASDAQ Stock Market; or (B) actual closing price information
is not available with respect to the PainCare

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Shares, then the “Fair Market Value” of the PainCare Shares shall equal the
thirty (30) day trailing average of the bid prices per share of such stock
ending on the last day of the first, second or third Formula Period, as
applicable, on the NASDAQ Stock Market; or

(3)

if the principal market for the PainCare Shares is neither a national securities
exchange and such stock is not quoted on NASDAQ, then the “Fair Market Value” of
the PainCare Shares shall equal the thirty (30) day trailing average of the
closing ask prices of the PainCare Shares ending on the last day of the first,
second or third Formula Period, as applicable, as reported by the OTC Bulletin
Board Service or by National Quotation Bureau, Incorporated, or a comparable
service selected by PainCare; or

(4)

if subsections (f)(i)(1)-(3) above are inapplicable or if no trades have been
made or no quotes are available for such day with respect to the PainCare
Shares, then the “Fair Market Value” of the PainCare Shares shall be determined
by an independent third party appraiser selected by PainCare.  Within ten (10)
days after the effective date of the appraiser's appointment, the appraiser
shall deliver an appraisal of the Fair Market Value of the PainCare Shares,
which shall be binding and conclusive on the Parties.  The cost of any appraisal
hereunder shall be shared equally by the Parties, and each Party shall be
responsible and financially liable for its or his own attorneys' fees; and

(5)

with the understanding that notwithstanding the Fair Market Value ascribed to
the PainCare Shares pursuant to subsections 3.4(f)(1), (2), (3) or (4) above in
no event shall the Fair Market Value of the PainCare Shares ever be less than
One Dollar and 75/00 Dollars ($1.75) per share.

(ii)

 “Formula Period Profits” shall mean the consolidated earnings before deductions
for interest, taxes, depreciation and amortization (“EBITDA”) of the Subsidiary
and the Company as calculated utilizing GAAP in accordance with EITF No. 97-2
(which shall not include as a cost or expense the Base Management and the Bonus
Management Fee as those terms are defined in the Management Agreement but will
include all other expenses of the Subsidiary and the Company (except as provided
below) including, without limitation, the Operations Fee as defined in the
Management Agreement) by PainCare’s independent certified public accountants for
the applicable Formula Period where possible, and as calculated by PainCare for
quarterly and less than quarterly periods for such Formula Period.
 Notwithstanding the foregoing, the calculation of the Formula Period Profits
shall not include any (a) income of the Company related to: (i)  the payment of
the Purchase Price Consideration, or (ii) income derived from Ancillary Services
Revenues (as defined in Section 3.4(f)(v) below), or  (b) costs or expenses
related to: (i) the corporate overhead of PainCare or other administrative or
similar charges that PainCare might impose upon the Subsidiary, except those
charges for services provided directly to and for the benefit of the Subsidiary
and the Company, as the case may be, which will be disclosed in the Company’s
interim financial statements; (ii) any non-recurring charges, losses, profits,
gains, or non-cash adjustments not related to the ongoing operations of the
Subsidiary or the Company, as the case may be, including but not limited to
discontinued operations, extraordinary items, acquisition costs and goodwill
charges incurred in connection with the transactions contemplated hereby
(excluding the write-off of any

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goodwill with respect to the Purchased Assets in accordance with FASA 142), or
unusual or infrequent items as such terms are defined pursuant to generally
accepted accounting principles, (iii) direct and indirect expenses incurred by
the Company with respect to Ancillary Services, or (iv) the cost and expense
incurred by the Company with respect to the Required Bonus as defined in Section
5.2 of those certain Employment Agreements by and between the Company and each
Member of even date herewith.

(iii)

“Installment Payment Conditions” shall mean that (i) the Company (i.e., the
Practice Operator as that term is defined in the Management Agreement) having
been and continuing to be in compliance with all of the terms and conditions
applicable to the Practice Operator in the Management Agreement, including but
in no way limited to, the timely payment in full of the Operations Fee and Base
Management Fee (as those terms are defined in the Management Agreement); (ii)
the Sellers having been and continuing to be in compliance with all of the terms
and conditions applicable to the Sellers in this Agreement and (iii) the Company
and the Members having been and continuing to be in compliance with all of the
terms and conditions applicable to them as provided in the Company’s articles of
organization and its amended and restated operating agreement. To the extent
that any of the Installment Payment Conditions are not satisfied during any of
the first, second or third Formula Period(s), then for the applicable Formula
Period where any of the Installment Payment Conditions are not satisfied, and
each subsequent Formula Period, PainCare shall not be obligated to pay, and
shall have no duty or obligation to ever pay, and the Company shall not receive,
and shall have no right to ever receive, any Intended Installment Payment (or
the Adjusted Installment Payment or the Installment Payment Premium, as the case
may be) that may otherwise be due the Company.  

(iv)

"Earnings Threshold" shall mean Five Million Five Hundred Thousand and 00/100
Dollars ($5,500,000).

(v)

“Ancillary Service Revenues” shall mean for purposes of this Agreement as any
and all revenues derived by the Company from the provision of any “Designated
Health Services”, as that term is defined at 42 USC 1395nn(h)(6) of the Federal
Physician Self-Referral Law, or “Stark Law”, including but not limited to
“physical therapy service”

3.5   Allocation of Purchase Price.  The aggregate Purchase Price Consideration
(including the assumption by the Acquiring Companies of the Assumed Liabilities)
shall be allocated among the Purchased Assets for tax purposes in accordance
with Disclosure Schedule 3.5.  The Sellers and the Acquiring Companies will
follow and use such allocation in all tax returns, filings or other related
reports made by them to any governmental agencies.  To the extent that
disclosures of this allocation are required to be made by the parties to the
Internal Revenue Service ("IRS") under the provisions of Section 1060 of the
Internal Revenue Code of 1986, as amended (the "Code") or any regulations
thereunder, the Sellers and the Acquiring Companies will disclose such reports
to the other prior to filing with the IRS.

4.

REPRESENTATIONS AND WARRANTIES OF SELLERS

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The Sellers hereby jointly and severally make the following representations and
warranties to the Acquiring Companies, each of which is true and correct on the
date this Agreement is executed and shall remain true and correct to and
including the Closing Time, shall be unaffected by any investigation heretofore
or hereafter made by the Acquiring Companies, or any knowledge of the Acquiring
Companies other than as specifically disclosed and accepted by the Acquiring
Companies in the Disclosure Schedules attached hereto and shall survive the
Closing of the transactions provided for herein.

4.1   

Organization; Authority.  The Company is a limited liability company duly
organized and validly existing under the laws of the State of Maryland. The
Members are the sole owners of the Company. The execution and delivery of this
Agreement and the other documents and instruments to be executed and delivered
by the Sellers pursuant hereto and the consummation of the transactions
contemplated hereby and thereby have been duly authorized.  No other or further
act or proceeding on the part of the Sellers or any lienholder or other party is
necessary to authorize this Agreement or the other documents and instruments to
be executed and delivered by the Sellers pursuant hereto or the consummation of
the transactions contemplated hereby and thereby. This Agreement constitutes,
and when executed and delivered, the other documents and instruments to be
executed and delivered by The Sellers pursuant hereto will constitute, valid
binding agreements of the Sellers, enforceable in accordance with their
respective terms, except as such may be limited by bankruptcy, insolvency,
reorganization or other laws affecting creditors' rights generally, and by
general equitable principles. The Company has filed a certificate of
authorization with and been approved by Maryland Department of Health and Mental
Hygiene for the use of the corporate name, The Center For Pain Management,
pursuant to Maryland Annotated Code, Corporation and Association Article,
§§5-101–134.

4.2   

No Violation.  Neither the execution and delivery of this Agreement or the other
documents and instruments to be executed and delivered by the Sellers pursuant
hereto, nor the consummation by the Sellers of the transactions contemplated
hereby and thereby (a) will violate any applicable Law or Order, (b) will
require any authorization, consent, approval, exemption or other action by or
notice to any Government Entity or (c) will conflict with, result in a breach
of, constitute a default under, result in the acceleration of, create in any
party the right to accelerate, terminate, modify, or cancel, or require any
notice under any agreement, contract, lease, license, instrument or other
arrangement to which the Sellers are a party or by which the Sellers are bound
or to which any of the Purchased Assets are subject, or will result in the
termination of, or accelerate the performance required by, or result in the
creation of any Lien (as defined in Section 4.8), upon any of the Purchased
Assets under, any term or provision of any contract, commitment, understanding,
arrangement, agreement or restriction of any kind or character to which the
Sellers are a party or by which the Sellers or any of its assets or properties
may be bound or affected.

4.3  

Tax Matters.  Except as set forth on Disclosure Schedule 4.3:  (i) all state,
foreign, county, local and other tax returns relating primarily to the Business
or the Purchased Assets, or required to be filed by or on behalf of the Sellers
in any jurisdiction or any political subdivision thereof, have been timely filed
and the taxes paid or adequately accrued; (ii) the Company has duly

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withheld and paid all taxes which it is required to withhold and pay relating to
salaries and other compensation heretofore paid to the employees, contractors
and agents of the Business; and (iii) the Sellers have not received any notice
of underpayment of taxes or other deficiency which has not been paid and there
are outstanding agreements or waivers extending the statutory period of
limitations applicable to any tax return or report relating primarily to the
Business or the Purchased Assets, or required to have been filed by the Sellers
in any jurisdiction or political subdivision thereof.

4.4   

Absence of Undisclosed Liabilities.  Except as and to the extent specifically
disclosed in Disclosure Schedule 4.4, the Company does do not have any
Liabilities, other than commercial liabilities and obligations incurred in the
ordinary course of business and consistent with past practice and none of which
has or will have a material adverse effect on the Company or the Business, or
the financial condition or results of operations of the Business.  Except as and
to the extent described in Disclosure Schedule 4.4, the Sellers have no
knowledge of any basis for the assertion against the Sellers or the Business or
the Purchased Assets of any liability and there are no circumstances,
conditions, happenings, events or arrangements, contractual or otherwise, which
may give rise to Liabilities, except commercial liabilities and obligations
incurred in the ordinary course of the Company's Business and consistent with
past practice.

4.5  

Compliance With Laws and Orders.

(a)    Compliance.  Except as set forth in Disclosure Schedule 4.5(a), the
Company and its Business (including each and all of its operations, practices,
properties and assets) is in compliance with all applicable laws and orders,
including, without limitation, those applicable to discrimination in employment,
Medicare, insurance billings, providing of medical services, sales of medication
and durable medical equipment, occupational safety and health, trade practices,
competition and pricing, product warranties, zoning, building and sanitation,
employment, retirement and labor relations, and product advertising.  Except as
set forth in Disclosure Schedule 4.5(a), the Sellers have not received notice of
any violation or alleged violation of, and are subject to no Liability for past
or continuing violation of, any laws or orders with respect to the Company and
the operation of the Business.  All reports and returns required to be filed by
the Sellers with any Government Entity have been filed, and were accurate and
complete when filed.  Without limiting the generality of the foregoing:

(i)    The operation of the Business as it is now conducted does not, nor does
any condition existing at the Business Locations, in any manner constitute a
nuisance or other tortuous interference with the rights of any person or persons
in such a manner as to give rise to or constitute the grounds for a suit,
action, claim or demand by any such person or persons seeking compensation or
damages or seeking to restrain, enjoin or otherwise prohibit any aspect of the
conduct of the Business or the manner in which it is now conducted.

(ii)   The Sellers have made all required payments to its unemployment
compensation reserve accounts with the appropriate governmental departments
where it is required to maintain such accounts with respect to the operations of
the Business, and each of such accounts has a positive balance.

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(iii)  The Sellers have timely filed, in a complete and correct manner, all
requisite claims and other reports required to be filed in connection with all
state and federal Medicare and Medicaid programs due on or before the date
hereof.  There are no claims, actions, payment reviews, or appeals pending or
threatened before any commission, board or agency, including, without
limitation, any intermediary or carrier, the Administrator of the Health Care
Financing Administration, the Maryland Department of Health and Rehabilitative
Services, the Maryland Board of Medicine or any other state or federal agency
with respect to any Medicare or Medicaid claims filed by the Sellers on or
before the Closing Time or program compliance matters, which would adversely
affect the Company, the Business, the Purchased Assets or the consummation of
the transactions contemplated hereby. No validation review or program integrity
review related to the Sellers (other than normal, routine reviews) has been
conducted by any commission, board or agency in connection with the practice of
medicine or any Medicare or Medicaid program, and no such reviews are scheduled,
pending or, threatened against or affecting the Sellers or the consummation of
the transactions contemplated hereby.

(iv)

Neither the Sellers nor any person or entity providing services for the Sellers
have engaged in any activities which are prohibited under 42 U.S.C. d1320a-7b or
the regulations promulgated thereunder, pursuant to such statutes or any other
related state or local statutes and regulations, including but not limited to
the following: (a) knowingly and willfully making or causing to be made a false
statement or representation of a material fact in any application for any
benefit or payment; (b) knowingly and willfully making or causing to be made any
false statement or representation of a material fact for use in determining
rights to any benefit or payment; (c) failing to disclose knowledge by a
claimant of the occurrence of any event affecting the initial or continued right
to any benefit or payment on its, his or her own behalf or on behalf of another,
with intent to fraudulently secure such benefit or payment; and (d) knowingly
and willfully soliciting or receiving any remuneration kickback, bribe or
rebate, directly or indirectly, overtly or covertly, in cash or in kind, or
offering to pay or receive such remuneration in return for (e) referring an
individual to a person for the furnishing or arranging for the furnishing of any
item or service for which payment may be made in whole or in part by Medicare or
Medicaid, or (f) purchasing, leasing or ordering, or arranging for or
recommending purchasing, leasing or ordering, any medication, goods, facility,
service or item for which payment may be made in whole or in part by Medicare or
Medicaid.  No physician (or his or her immediate family members) having a
“financial relationship” with the Sellers, as that term is defined in 42 U.S.C.
Section 1395nn, is in a position, directly or indirectly, to refer patients or
services to the Sellers, or any such referral complies with the requirements of
42 U.S.C. Section 1395nn and the regulations promulgated pursuant thereto.

(v)  The Sellers have filed when due any and all material cost reports and other
documentation and reports, if any, required to be filed by third-party payors
and governmental agencies in compliance with applicable contractual provisions
and/or laws, regulations and rules.

(b)  Licenses and Permits. The Sellers have all licenses, permits, approvals,
authorizations and consents of all Government Entities and insurance companies
including Medicare

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and all certificates, licenses and permits required for the conduct of the
Business. Except as set forth in Disclosure Schedule 4.5(b), the Company and the
Business (including its operations, properties and assets) are and have been in
compliance with all such permits and licenses, approvals, authorizations and
consents.

4.6  

Title to and Condition of Properties.

(a)  Marketable Title.  The Company has good and marketable title to all the
Purchased Assets, free and clear of all mortgages, liens (statutory or
otherwise), security interests, claims, pledges, licenses, equities, options,
conditional sales contracts, assessments, levies, covenants, reservations,
restrictions, exceptions, limitations, charges or encumbrances of any nature
whatsoever (collectively, "Liens") except those described in Disclosure Schedule
4.6(a).  None of the Purchased Assets are subject to any restrictions with
respect to the transferability thereof.  The Company has complete and
unrestricted power and right to sell, assign, convey and deliver the Purchased
Assets to Subsidiary as contemplated hereby.  At Closing, the Subsidiary will
receive good and marketable title to all the Purchased Assets, free and clear of
all Liens of any nature whatsoever except those described in the appropriate
Disclosure Schedule.

(b)  Condition.  All tangible assets constituting Purchased Assets hereunder are
in good operating condition and repair, free from any defects (except such minor
defects as do not interfere with the use thereof in the conduct of the normal
operations), have been maintained consistent with the standards generally
followed in the industry and are sufficient to carry on the business of the
Company as conducted during the preceding twelve (12) months and as contemplated
for the next three (3) years. All buildings and other structures owned or
otherwise leased or utilized by the Company in operating its Business are in
good condition and repair and have no structural defects or defects affecting
the plumbing, electrical, sewerage, or heating, ventilating or air conditioning
systems.

(c)  No Condemnation or Expropriation.  Neither the whole nor any portion of the
Purchased Assets is subject to any order to be sold or is being condemned,
expropriated or otherwise taken by any Government Entity with or without payment
of compensation therefore, nor to the best of the Sellers’ knowledge has any
such condemnation, expropriation or taking been proposed.

4.7

Insurance. Set forth in Disclosure Schedule 4.7 is a complete and accurate list
and description of all policies of errors and omissions, fire, liability,
product liability, workers compensation, health and other forms of insurance
presently in effect with respect to the Company, the Business and the Purchased
Assets, true and correct copies of which have heretofore been delivered to the
Acquiring Companies.  Disclosure Schedule 4.7 includes, without limitation, the
carrier, the description of coverage, the limits of coverage, retention or
deductible amounts, amount of annual premiums, date of expiration and the date
through which premiums have been paid with respect to each such policy, and any
pending claims in excess of $5,000.00. All such policies are valid, outstanding
and enforceable policies and provide insurance coverage for the Company, the
Business and the Purchased Assets, of the kinds, in the amounts and against the
risks customarily maintained by organizations similarly situated; and no such
policy (nor any previous policy) provides

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for or is subject to any currently enforceable retroactive rate or premium
adjustment, loss sharing arrangement or other actual or contingent liability
arising wholly or partially out of events arising prior to the date hereof.
 Disclosure Schedule 4.7 indicates each policy as to which (a) the coverage
limit has been reached or (b) the total incurred losses from the beginning of
the most recent fiscal year to date equal 25% or more of the coverage limit.  No
notice of cancellation or termination has been received with respect to any such
policy, and the Sellers have no information or knowledge of any act or omission
of the Sellers which could result in cancellation of any such policy prior to
its scheduled expiration date. The Company has not been refused any insurance
with respect to any aspect of the operations of the Business nor has its
coverage been limited by any insurance carrier to which it has applied for
insurance or with which it has carried insurance during the last three years.
The Sellers have duly and timely made all claims it has been entitled to make
under each policy of insurance. There is no claim by the Sellers pending under
any such policies as to which coverage has been questioned, denied or disputed
by the underwriters of such policies, and the Sellers do not know of any basis
for denial of any claim under any such policy.  The Sellers have not received
any written notice from or on behalf of any insurance carrier issuing any such
policy that insurance rates therefore will hereafter be substantially increased
(except to the extent that insurance rates may be increased for all similarly
situated risks) or that there will hereafter be a cancellation or an increase in
a deductible (or an increase in premiums in order to maintain an existing
deductible) or non-renewal of any such policy. Such policies are sufficient in
all material respects for compliance by the Sellers with all requirements of law
and with the requirements of all material contracts to which the Sellers are a
party.

4.8.

Contracts and Commitments.

(a)  Real Property Lease.  Except as set forth in Disclosure Schedule 1.1.(m),
the Sellers have no leases of real property used or held for use in connection
with the Business or the Purchased Assets.

(b)  Personal Property Leases.  Except as set forth in Disclosure Schedule
1.1(b), the Sellers have no leases of personal property used or held for use in
connection with the Business or the Purchased Assets.

(c)  Purchase Commitments.  The Sellers have no purchase commitments for
inventory items or supplies in connection with the Business in excess of $10,000
which can not be cancelled by providing at least 30 days written notice.

(d)  Sales Commitments.  The Sellers have no sales contracts or commitments to
customers or distributors in connection with or affecting the Business or the
Purchased Assets.  The Sellers have no sales contracts or commitments in
connection with or affecting the Business or the Purchased Assets except those
made in the ordinary course of business, at arm's length, and no such contracts
or commitments are for a sales price which would result in a loss to the
Company.

(e)  Contracts With Affiliates and Certain Others.  The Company has no
agreement, understanding, contract or commitment (written or oral) in connection
with or affecting

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the Company, the Business or the Purchased Assets with any Affiliate or any
other officer, employee, agent, consultant, distributor, dealer or franchisee
except for that certain Billing Services Agreement effective December 1, 2004 by
and between the Company and Pain Management Billing, LLC (the “Billing Services
Agreement”), a copy of which has been or will be provided to the Acquiring
Companies.

(f)  Powers of Attorney.  The Sellers have not given a power of attorney, which
is currently in effect, to any person, firm or corporation for any purpose
whatsoever in connection with or affecting the Company, the Business or the
Purchased Assets.

(g)  Loan Agreements.  Except as otherwise disclosed in the Disclosure
Schedules, the Company is not obligated under any loan agreement, promissory
note, letter of credit, or other evidence of indebtedness as a signatory,
guarantor or otherwise, which obligation constitutes or gives rise or could by
its terms, through the giving of notice or any other events short of judgment by
a court, give rise to a lien against the Company or any Purchased Asset.

(h)  Guarantees.  Except as otherwise disclosed in the Disclosure Schedules, the
Company has not guaranteed the payment or performance of any person, firm or
corporation, agreed to indemnify any person or act as a surety, or otherwise
agreed to be contingently or secondarily liable for the obligations of any
person, in connection with the Business or in any other way which affects the
Business or the Purchased Assets.

(i) Government Contracts.  Except as otherwise disclosed in the Disclosure
Schedules, the Sellers are not a party to any contract with any governmental
body.

(j)  Burdensome or Restrictive Agreements.  The Company is not a party to nor is
it bound by any agreement, deed, lease or other instrument in connection with or
affecting the Business or the Purchased Assets which is so burdensome as to
materially affect or impair the Company or the operation of the Business.
 Without limiting the generality of the foregoing, the Sellers are not a party
to nor is it bound by any such agreement requiring the Sellers to assign any
interest in any trade secret or proprietary information constituting Purchased
Assets hereunder, or prohibiting or restricting the Sellers in its operation of
the Business from competing in any business or geographical area or soliciting
customers or otherwise restricting it from carrying on the Business anywhere in
the world.

(k)  No Default.  The Company is not in default under any lease, license,
contract or commitment in its operation of the Business, nor has any event or
omission occurred which through the passage of time or the giving of notice, or
both, would constitute a default thereunder or cause the acceleration of any of
the Company's obligations or result in the creation of any Lien on any Purchased
Asset.  No third party is in default under any such lease, contract or
commitment to which the Company is a party, nor has any event or omission
occurred which, through the passage of time or the giving of notice, or both,
would constitute a default thereunder, or give rise to an automatic termination,
or the right of discretionary termination thereof.

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4.9.

Employee Benefit Plans. Except as described in Disclosure Schedule 4.9, there
are no pension, thrift, savings, profit sharing, retirement, incentive bonus or
other bonus, medical, dental, life, accident insurance, benefit, employee
welfare, disability, group insurance, stock purchase, stock option, stock
appreciation, stock bonus, executive or deferred compensation, hospitalization
and other similar fringe or employee benefit plans, programs and arrangements,
and any employment or consulting contracts, "golden parachutes," collective
bargaining agreements, severance agreements or plans, vacation and sick leave
plans, programs, arrangements and policies, including, without limitation, all
"employee benefit plans" (as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")), all employee manuals, and
all written or binding oral statements of policies, practices or understandings
relating to employment, which are provided to, for the benefit of, or relate to,
any persons employed or leased by the Company in its operation of the Business
("Business Employees").

4.10

Intellectual Property.  Disclosure Schedule 4.10 lists all Intellectual Property
of the type described in Section 1.1(f) which are or were used, held for use, or
acquired or developed for the Company for use in the Business, or developed in
the course of conducting the Business or by persons employed or leased by the
Company in the Business, specifying whether such Intellectual Property are
owned, controlled, used or held (under license or otherwise) by the Company, and
also indicating which of such Intellectual Property are registered.  The Company
is not infringing and has not infringed any Intellectual Property of another,
nor is any other person infringing the Intellectual Property of the Company. The
Company has not granted any license or made any assignment of any Trade Right
listed on Disclosure Schedule 4.10, and no other person has any right to use any
such Trade Right.  The Company does not pay any royalties or other consideration
for the right to use any Intellectual Property of others.  There is no
Litigation pending or threatened to challenge the Company's right, title and
interest with respect to its continued use and right to preclude others from
using any Intellectual Property of the Company.  All Intellectual Property of
the Company is valid, enforceable and in good standing, and there are no
equitable defenses to enforcement based on any act or omission of the Sellers.

4.11

Product Warranty and Product Liability.  There are no warranties, commitments or
obligations with respect to the return, repair or replacement of Products. There
are no defects in design, construction or manufacture of Products which would
adversely affect performance or create an unusual risk of injury to persons or
property.  None of the Products has been the subject of any replacement, field
fix, retrofit, modification or recall campaign and, to the Sellers’ knowledge,
no facts or conditions exist which could reasonably be expected to result in
such a recall campaign.  As used in this Section 4.11, the term "Products" means
any and all medication and other products currently or at any time previously
manufactured, compounded, mixed, formulated, distributed or sold by the Company,
or by any predecessor or affiliate of the Company under any brand name or mark
under which products are or have been manufactured, distributed or sold by the
Company.

4.12

Assets Necessary to Business.  The Purchased Assets include all property and
assets (except for the Excluded Assets), tangible and intangible, and all
leases, licenses and other agreements, which are necessary to permit Subsidiary
to carry on, as currently used or held for use in, the non-medical aspect of the
Business as presently conducted.

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4.13

No Brokers or Finders.  The Sellers have not retained, employed or used any
broker or finder in connection with the transaction provided for herein or in
connection with the negotiation thereof.

4.14

Financial Statements.  Included as Disclosure Schedule 4.14 are true and
complete copies of the financial statements of the Company consisting of (i) a
balance sheet of the Company for the year ended December 31, 2003 and the
related statement of operations as of and for the year ended December 31, 2003
(including the notes contained therein or annexed thereto), which financial
statements are unaudited, and (ii) an unaudited balance sheet of the Company for
the nine months ending September 30, 2004 (the "Recent Balance Sheet"), and the
related unaudited statements of operations for the nine (9) months ending
September 30, 2004 (the “Recent Statement of Operations”) and for the
corresponding period of the prior year (including the notes and schedules
contained therein or annexed thereto).  All of such financial statements
(including the notes and schedules contained therein or annexed thereto) present
fairly the financial condition of the Company as of such dates and the results
of the operations of the Company for such periods, are correct and complete, and
are consistent with the books and records of the Company (which books and
records are correct and complete). Except as provided in the Recent Balance
Sheet, or as fully disclosed in Disclosure Schedule 4.14, the Company does not
have any Liabilities or obligations (whether accrued, absolute, contingent,
whether due or to become due or otherwise i.e., accounts payable, accrued
expenses) which might be or become a charge against the Company since the date
of the Recent Balance Sheet.    

4.15.

   Conduct Since Date of Recent Balance Sheet.  Except as set forth in this
Agreement or as disclosed in Disclosure Schedule 4.15 hereto, none of the
following has occurred since the date of the Recent Balance Sheet:

(a)

No Adverse Change.  Any material adverse change in the financial condition,
Purchased Assets, Assumed Liabilities, Business, prospects or operations of the
Company;

(b)

No Damage.  Any material loss, damage or destruction, whether covered by
insurance or not, affecting the Company, its Business or the Purchased Assets;

(c)

No Increase in Compensation.  Any increase in the compensation, salaries or
wages payable or to become payable to any employee, contractor or agent of the
Company (including, without limitation, any increase or change pursuant to any
bonus, pension, profit sharing, retirement or other plan or commitment), or any
bonus or other employee benefit granted, made or accrued, that exceeds in the
aggregate a five percent (5%) increase in the total compensation or benefits
payable to any single employee, contractor or agent of the Company;

(d)

No Labor Disputes.  Any labor dispute or disturbance, other than routine
individual grievances which are not material to the Company, the Business or the
Purchased Assets;

(e)

No Commitments.  Any commitment or transaction by the Company

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(including, without limitation, any borrowing or capital expenditure) other than
in the ordinary course of business consistent with past practice;

(f)

No Disposition of Property.  Any sale, lease or other transfer or disposition of
any properties or assets of the Company, except in the ordinary course of
business;

(g)

No Indebtedness.  Any indebtedness for borrowed money incurred, assumed or
guaranteed by the Company;

(h)

No Liens.  Any mortgage, pledge, lien or encumbrance made on any of the
Purchased Assets;

(i)

No Amendment of Contracts.  Any entering into, amendment or termination by the
Company of any Assumed Liability, or any waiver of material rights thereunder,
other than in the ordinary course of business;

(k)

Credit.  Any grant of credit to any customer or distributor on terms or in
amounts more favorable than those which have been extended to such customer or
distributor in the past, any other change in the terms of any credit heretofore
extended, or any other change of the Company's policies or practices with
respect to the granting of credit; or

(l)

No Unusual Events.  Any other event or condition not in the ordinary course of
Business of the Company.

4.16

Company and Affiliates. Except as set forth in Disclosure Schedule 4.16, the
Company has no interest in any entity nor does the Company own or control,
directly or indirectly, any capital stock of any corporation or interest in any
limited liability company, partnership, trust or unincorporated association, or
any interest or investment in any other corporation, association or other
business entity which operates any part of the Business or otherwise has a
contract with the Sellers with respect to providing any service or product to
the Business.

4.17

Liabilities.  Except as and to the extent specifically disclosed in the Recent
Balance Sheet, or in Disclosure Schedule 4.17, the Company does not have any
material liabilities, commitments or obligations (secured or unsecured, and
whether accrued, absolute, contingent, direct, indirect or otherwise) other than
commercial liabilities and obligations incurred since the date of the Recent
Balance Sheet in the ordinary course of business and consistent with past
practice and none of which has or will have a material adverse effect on the
Company, the Business or the Purchased Assets.  Except as and to the extent
described in the Recent Balance Sheet or in Disclosure Schedule 4.17, the
Sellers have no any information, knowledge or belief of any basis for the
assertion against the Company, Business and/or Purchased Assets of any material
liability and there are no circumstances, conditions, happenings, events or
arrangements, contractual or otherwise, which may give rise to such material
liabilities, except commercial liabilities and obligations incurred in the
ordinary course of the Company's business and consistent with past practice.

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As of the Closing, other than the current trade accounts payable or otherwise
described in the Disclosure Schedules, the Company shall not have any unpaid
liabilities, including, but not limited to, any bank debt, capital leases or any
general or professional liability claims, or be obliged in any other way to
provide funds in respect of, or to guarantee or assume, any debt, obligation or
dividend of any person, except endorsements in the ordinary course of business
in connection with the deposit, in banks or other financial institutions, of
items for collection.  Except as disclosed in detail in Disclosure Schedule
4.17, the Company does not have any Liabilities or obligations which might be or
become a charge against the Subsidiary or the Company.

4.18

Accounts Receivable.  All Accounts Receivable of the Company represent arm's
length services actually provided in the ordinary course of business; are
collectible (net of the reserve shown on the Recent Balance Sheet for doubtful
accounts) in the ordinary course of business without the necessity of commencing
legal proceedings; are subject to no counterclaim or setoff; and are not in
dispute.  Disclosure Schedule 4.18 contains an aged schedule of accounts
receivable included in the Recent Balance Sheet.

The Sellers know of no reason why such accounts receivable would not be
collectible by the Subsidiary according to approximately the same ratios as
accounts receivable have been historically collectible by the Company.  All
outstanding accounts and notes receivable included on Disclosure Schedule 4.18
and generated through the Closing arose in the ordinary course of business.  The
Company has not incurred any liabilities to customers for discounts, returns,
promotional allowances or otherwise, except as provided in the Disclosure
Schedules.

4.19

Environmental Matters.  The applicable Laws relating to pollution or protection
of the environment, including Laws relating to emissions, discharges,
generation, storage, releases or threatened releases of pollutants,
contaminants, chemicals or industrial, toxic, hazardous or petroleum or
petroleum-based substances or wastes ("Waste") into the environment (including,
without limitation, ambient air, surface water, ground water, land surface or
subsurface strata) or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of Waste
including, without limitation, the Clean Water Act, the Clean Air Act, the
Resource Conservation and Recovery Act, the Toxic Substances Control Act and the
Comprehensive Environmental Response Compensation Liability Act ("CERCLA"), as
amended, and their state and local counterparts are herein collectively referred
to as the "Environmental Laws". Without limiting the generality of the foregoing
provisions of this Section, the Company is in full compliance with all
limitations, restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules and timetables contained in the Environmental Laws or
contained in any regulations, code, plan, order, decree, judgment, injunction,
notice or demand letter issued, entered, promulgated or approved thereunder.
 Except as set forth in Disclosure Schedule 4.19, there is no Litigation nor any
demand, claim, hearing or notice of violation pending or threatened against the
Sellers relating in any way to the Environmental Laws or any Order issued,
entered, promulgated or approved thereunder.  Except as set forth in Disclosure
Schedule 4.19, there are no past or present or future events, conditions,
circumstances, activities, practices, incidents, actions, omissions or plans
which may interfere with or prevent compliance or continued compliance with the
Environmental Laws or with any Order issued, entered, promulgated or approved
thereunder, or which may give rise

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to any liability, including, without limitation, liability under CERCLA or
similar state or local Laws, or otherwise form the basis of any Litigation,
hearing, notice of violation, study or investigation, based on or related to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling, or the emission, discharge, release or threatened release
into the environment, of any Waste.

4.20

Personnel.  Disclosure Schedule 4.20 attached hereto contains accurate and
complete information as to names and rates of compensation (whether in the form
of salaries, bonuses, commissions or other supplemental compensation now or
hereafter payable) of all personnel (leased or employed) of the Company,
together with information as to any contracts with any such personnel.  The
Company has no pension, profit-sharing, bonus, incentive, insurance or other
employee benefit plans (including without limitation any such plans within the
meaning of Section 3 (3) of the Employee Retirement Income Security Act of 1974,
as amended) in which any employees of the Company participate, except as set
forth on the Disclosure Schedule 4.20.

4.21

Bank Accounts.  Disclosure Schedule 4.21 sets forth the names and locations of
all banks, trust companies, savings and loan associations and other financial
institutions at which the Company, with respect to the Business, maintains a
safe deposit box, lock box or checking, savings, custodial or other account of
any nature, the type and number of each such account and the signatories
therefore, a description of any compensating balance arrangements, and the names
of all persons authorized to draw thereon, make withdrawals therefrom or have
access thereto.

4.22.  

Tax Matters.

(a)

Tax Returns.  The Company has filed all Tax Returns it was required to file.
 All such Tax Returns were correct and complete in all respects and were filed
on a timely basis.  All Taxes owed by the Company (whether or not shown on any
Tax Return) have been paid.  The Company currently is not the beneficiary of any
extension of time within which to file any Tax Return.  No claim is currently
pending by an authority in a jurisdiction where the Business or the Company is
domiciled or may be subject to taxation by that jurisdiction.  There are no
Security Interests on any of the Purchased Assets that arose in connection with
any failure (or alleged failure) to pay any Tax.

(b)

Withholding.  The Company has withheld and paid all Taxes required to have been
withheld and paid in connection with amounts paid or owing to any employee,
independent contractor, creditor, stockholder, or other third party.

(c)

No Waivers.  The Sellers have not waived any statute of limitations in respect
of Taxes or agreed to any extension of time with respect to a Tax assessment or
deficiency.

(d)

Audits of Tax Returns.  No Tax Return of the Company is currently under audit or
examination by any taxing authority, and the Sellers have not received a written
notice stating the intention of any taxing authority to conduct such an audit or
examination.  Each deficiency resulting from any audit or examination relating
to Taxes by any taxing authority has been

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paid, except for deficiencies being contested in good faith.  The revenue
agents’ reports related to any prior audits and examinations are attached as
part of Disclosure Schedule 4.22.

(e)

Period of Assessment.  There is no agreement or other document extending, or
having the effect of extending, the period of assessment or collection of any
Taxes.

(f)

Tax Agreements.  The Company is not a party to or bound by any tax sharing
agreement, tax indemnity obligation or similar agreement with respect to Taxes,
including any advance pricing agreement, closing agreement or other agreement
relating to Taxes with any taxing authority.

4.23

Insurance; Malpractice.  Disclosure Schedule 4.23 contains a list and brief
description of all policies or binders of fire, liability, product liability,
workers compensation, health and other forms of insurance policies or binders
currently in force insuring against risks to which the Company has been a party,
a named insured or otherwise the beneficiary of coverage at any time during the
five (5) years immediately preceding the Closing Time.  Disclosure Schedule 4.23
contains a description of all current malpractice liability insurance policies
of the Members, the Company, and the Company’s professional employees and all
predecessor policies in effect.  Except as set forth on Disclosure Schedule
4.17: (a) neither the Company, its professional employees, nor the Members have,
during the five (5) years immediately preceding the Closing Time, filed a
written application for any insurance coverage relating to the Company’s
business or property which has been denied by an insurance agency or carrier;
and (b) the Company, its professional employees and the Members have been
continuously insured for professional malpractice claims during the same period.
 Disclosure Schedule 4.23 also sets forth a list of all claims for any insured
loss in excess of Five Thousand and 00/100 Dollars ($5,000) per occurrence filed
by the Company, its professional employees or the Members during the five (5)
years immediately preceding the Closing Time, including workers compensation,
general liability, environmental liability and professional malpractice
liability claims.  With respect to each insurance policy listed in Disclosure
Schedule  4.17: (i) the policy is legal, valid, binding, enforceable, and in
full force and effect; (ii) the policy will continue to be legal, valid,
binding, enforceable, and in full force and effect on identical terms following
the consummation of the transactions contemplated hereby; (iii) neither the
Company, the Members, other health care professionals nor any other party to the
policy is in breach or default (including with respect to the payment of
premiums or the giving of notices), and no event has occurred which, with notice
or the lapse of time, would constitute such a breach or default, or permit
termination, modification, or acceleration, under the policy; (iv) neither the
Company nor the Members have repudiated any provision thereof and no other party
to the policy has repudiated any provision thereof; (v) there is no claim
pending under any of such policies as to which coverage has been questioned,
denied or disputed by the underwriter(s) of such policies or any notice that a
defense will be afforded with reservation of rights; (vi) neither the Company
nor the Members have received: (A) any notice that any issuer of any such policy
has filed for protection under applicable bankruptcy laws or is otherwise in the
process of liquidating or has been liquidated; or (B) any other indication that
such policies are no longer in full force and effect or that the issuer of any
such policy is no longer willing or able to perform its obligations thereunder;
and (vii) neither the Members nor the Company has received any written notice
from or on behalf of any insurance carrier issuing such

--------------------------------------------------------------------------------

policies, that there will hereafter be a cancellation, or an increase in a
deductible or non-renewal of existing policies.  The Company has been covered
during the past five (5) years by insurance in scope and amount customary and
reasonable for the business in which it has engaged during the aforementioned
period.

4.24

Litigation.  Except as noted in Disclosure Schedule 4.24, there is no
litigation, arbitration, governmental claim, investigation or proceeding,
pending or, to the Sellers’ knowledge, threatened, against the Sellers at law or
in equity, before any court, arbitration tribunal or governmental agency.  The
Sellers have no knowledge of any facts on which claims may hereafter be made
against the Sellers that will have a material adverse effect on the Company, the
Business, Purchased Assets or the Subsidiary.  All medical malpractice claims,
general liability incidents and incident reports relating to the Company or the
Business have been submitted to the Company's insurer.  All claims made or, to
each of the Sellers’ knowledge, threatened against the Sellers in excess of the
deductible are covered under the Sellers’ current insurance policies. The
Sellers have provided the Acquiring Companies with a complete list of all
general liability incidents, incident reports and malpractice claims relating to
the Business for the five (5) year period prior to the Closing Time.

4.25  

Health Care Compliance.  The Company is participating or otherwise authorized to
receive reimbursement from Medicare and Medicaid and is a party to other
third-party payor agreements set forth in Disclosure Schedule 4.25.  All
necessary certifications and contracts required for participation in such
programs are in full force and effect and have not been amended or otherwise
modified, rescinded, revoked or assigned, and no condition exists or event has
occurred which in itself or with the giving of notice or the lapse of time or
both would result in the suspension, revocation, impairment, forfeiture or
non-renewal of any such third-party payor program. The Sellers are in compliance
in all material respects with the requirements of all such third-party payors
applicable thereto.  None of the Company's physician employees, the Members, or
immediate family members of the Members, have any financial relationship
(whether investment interest, compensation interest, or otherwise) with any
entity to which any of the foregoing refer patients, except for such financial
relationships that qualify for exceptions to state and federal laws restricting
physician referrals to entities in which they have a financial interest.

4.26

Fraud and Abuse.  The Sellers and all  persons and entities providing
professional services for the Company have not engaged in any activities which
are prohibited under 42 U.S.C. § 1320a-7b, or the regulations promulgated
thereunder pursuant to such statutes, or related state or local statutes or
regulations, or which are prohibited by rules of professional conduct, including
the following:  (a) knowingly and willfully making or causing to be made a false
statement or representation of a material fact in any application for any
benefit or payment; (b) knowingly and willfully making or causing to be made any
false statement or representation of a material fact for use in determining
rights to any benefit or payment; (c) failing to disclose Knowledge by a
claimant of the occurrence of any event affecting the initial or continued right
to any benefit or payment on its own behalf or on behalf of another, with intent
to fraudulently secure such benefit or payment; and (d) knowingly and willfully
soliciting or receiving any remuneration (including any kickback, bribe, or
rebate), directly or indirectly, overtly or covertly, in cash or in kind or
offering to pay or receive

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such remuneration: (A) in return for referring an individual to a person for the
furnishing or arranging for the furnishing of any item or service for which
payment may be made in whole or in part by Medicare or Medicaid; or (B) in
return for purchasing, leasing, or ordering or arranging for or recommending
purchasing, leasing, or ordering any good, facility, service or item for which
payment may be made in whole or in part by Medicare or Medicaid.  The Sellers
have at all times complied with the requirements of Maryland Statutes which
prohibit physicians who have an ownership, investment or beneficial interest in
certain health care facilities from referring patients to such facilities for
the provisions of designated and other health services, and has at all times
complied with the Maryland Statutes.  Furthermore, the Sellers have filed all
reports required to be filed by the State of Maryland and federal law regarding
compensation arrangements and financial relationships between a physician and an
entity to which the physician refers patients.

4.27

Legal Compliance.  The Sellers and their Affiliates have complied with all
applicable Laws (including rules, regulations, codes, injunctions, judgments,
orders, decrees, and rulings of federal, state, local, and foreign governments
(and all agencies thereof)), and no action, suit, proceeding, hearing,
complaint, claim, demand, notice or investigation has been filed or commenced,
or to the Knowledge of the Sellers, threatened against the Sellers or the
Business alleging any failure so to comply.  The Sellers and all physicians and
other health care professionals engaged or employed by the Company have all
permits and licenses required by applicable Law, have made all required
regulatory filings and are not in violation of any such permit or license.  The
Company and the Business is lawfully operated in accordance with the
requirements of all applicable Laws and has in full force and effect all
authorizations and permits necessary to operate a medical practice.  There are
no outstanding notices of deficiencies relating to the Sellers or the Business
issued by any governmental authority or third-party payor requiring conformity
or compliance with any applicable law or condition for participation with such
governmental authority or third-party condition for participation with such
governmental authority or third-party payor.  The Sellers have not received
notice and the Sellers have no Knowledge or reason to believe that, such
necessary authorizations may be revoked or not renewed in the ordinary course of
business.

4.28

Rates and Reimbursement Policies.  The jurisdiction in which the Company is
located does not currently impose any restrictions or limitations on rates which
may be charged to private pay patients receiving services provided by the
Sellers except for restrictions promulgated by Maryland law and regulation on
charging of excessive fees and limitations on charges for and profits from the
sale of medications, goods and devices and free samples.  The Sellers do not
have any rate appeal currently pending before any governmental authority or any
administrator of any third-party payor program.  The Sellers have no Knowledge
of any applicable Law, which affects rates or reimbursement procedures which has
been enacted, promulgated or issued  preceding the date of this Agreement or any
such legal requirement proposed or currently pending in the State of Maryland
which could have a material adverse effect on the Sellers, the Business, or the
Purchased Assets or may result in the imposition of additional Medicaid,
Medicare, charity, free care, welfare, or other discounted or government
assisted patients of the Company or require the Subsidiary or the Company to
obtain any necessary authorization which the Company does not currently possess.
The Sellers have no Knowledge of any impending proposed reduction in
reimbursement from third party or other payors nor Knowledge of any threatened
termination of payor contracts.

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4.29

Medical Staff.  Except as set forth on Disclosure Schedule 4.29, the Sellers
have no Knowledge of a physician who is providing services on behalf of the
Company who plans, or has threatened to terminate his or her employment or other
relationship with the Company.  None of the physicians providing services on
behalf of the Company currently has plans to retire from the practice of
medicine in the next five (5) years.

4.30

Medical Providers.  During the five (5) years preceding the Closing Time, each
physician, and other health care provider who is or was employed by, or who
renders or has rendered services on behalf of, the Business or the Company:

(a)

Licenses.  Has been duly licensed and registered, and in good standing by the
State of Maryland to engage in the practice of medicine, and said license and
registration have not been suspended, revoked or restricted in any manner;

(b)

Controlled Substances.  Has current controlled substances registrations issued
by the State of Maryland and the U.S. Drug Enforcement Administration, which
registrations have not been surrendered, suspended, revoked or restricted in any
manner;

(c)

Actions.  Except as set forth on Disclosure Schedule 4.30, has not been a party
or subject to:

(i)

Malpractice Actions.  Any malpractice suit, claim (whether or not filed in
court), settlement, settlement allocation, judgment, verdict or decree;

(iv)

Disciplinary Proceedings.  Any disciplinary, peer review or professional review
investigation, proceeding or action instituted by any licensure board, hospital,
medical school, physical therapy school, health care facility or entity,
professional society or association, third party payor, peer review or
professional review committee or body, or governmental agency;

(v)

Criminal Proceedings.  Any criminal complaint, indictment or criminal
proceedings;

(vi)

Investigation. Any investigation or proceedings, whether administrative, civil
or criminal, relating to an allegation of filing false health care claims,
violating anti-kickback or fee-splitting laws, or engaging in other billing
improprieties;

(vii)

Mental Illnesses.  Any organic or mental illness or condition that impairs or
may impair such physician’s ability to practice;

(viii)

Substance Abuse.  Any dependency on, habitual use or episodic abuse of alcohol
or controlled substances, or any participation in any alcohol or controlled
substance detoxification, treatment, recovery, rehabilitation, counseling,
screening or monitoring program;

--------------------------------------------------------------------------------

(ix)

Professional Ethics.  Any allegation, or any investigation or proceeding based
on any allegation of violating professional ethics or standards, or engaging in
illegal, immoral or other misconduct (of any nature or degree), relating to his
or her practice; or

(x)

Application for Licensure.  Any denial or involuntary withdrawal of an
application in any state for licensure as a physician or physical therapist, for
medical staff privileges at any hospital or other health care entity, for board
certification or recertification, for participation in any third party payment
program, for state or federal controlled substances registration, or for
malpractice insurance.

4.31

Third-party Payors.  Disclosure Schedule 4.31 sets forth an accurate, correct
and complete list of the Company's third-party payors. The Sellers have not
received any notice nor has any Knowledge that any third-party payor intends to
terminate or materially reduce its business with, or reimbursement to, the
Sellers.  The Sellers have no reason to believe that any third-party payor will
cease to do business with the Sellers after, or as a result of, the consummation
of any transactions contemplated hereby.  The Sellers does not know of any fact,
condition or event which would adversely affect its relationship with any
third-party payor.

4.32      Disclosure.  No representation or warranty by the Sellers in this
Agreement, nor any statement, certificate, schedule or exhibit hereto furnished
or to be furnished by or on behalf of the Sellers pursuant to this Agreement or
in connection with transactions contemplated hereby, contains or shall contain
any untrue statement of material fact or omits or shall omit a material fact
necessary to make the statements contained therein not misleading.  All
statements and information contained in any certificate, instrument, disclosure
schedules or document delivered by or on behalf of the Sellers shall be deemed
representations and warranties by the Sellers.

4.33

Corporate Practice or Fee Splitting.  The actions, transactions or relationships
arising from, and contemplated by, this Agreement does not violate any law, rule
or regulation relating to the corporate practice of medicine or fee splitting.
 The Sellers accordingly agree that they will not and will not cause any other
party, in an attempt to void or nullify this Agreement or any document related
to the Transaction or any relationship involving PainCare or Subsidiary to sue,
claim, aver, allege or assert that any such document or any such relationship
violates any law, rule or regulation relating to the corporate practice of
medicine or fee splitting.

4.34

Staff Privileges.  Disclosure Schedule 4.34 lists all hospitals at which the
Members have full staff privileges.  Such staff privileges have not ever been
revoked, surrendered, suspended or terminated, and to the best of the Sellers'
knowledge, there are no, and have not been any, facts, conditions or incidents
that may result in any such revocation, surrender, suspension or termination.

4.35

 Intentions. Each Member intends to continue practicing medicine on a full-time
basis for the next five (5) years with the Company and do not know of any fact
or condition that adversely affects, or in the future may adversely affect his
ability or intention to practice medicine on a full-time basis for the next five
(5) years with the Company.

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4.36

Securities Representation.

(a)

No Registration of the PainCare Shares; Investment Intent.  The Sellers
acknowledge that the PainCare Shares to be delivered pursuant to this Agreement
have not been and will not be registered as of the Closing under the Securities
Act and may not be resold without compliance with the Securities Act and any
applicable state securities laws and regulations.  The PainCare Shares to be
acquired by the Sellers pursuant to this Agreement are being acquired solely for
their own account, for investment purposes only and with no present intention of
distributing, selling or otherwise disposing of them in connection with a
distribution other than in compliance with the Securities Act. In addition,
PainCare Shares to be acquired by the Sellers pursuant to this Agreement have
not been offered to the general public by advertisement or general solicitation

(b)

Resale Restrictions.  The Sellers covenant, warrant and represent that none of
the PainCare Shares issued to the Sellers will be offered, sold, assigned,
pledged, hypothecated, transferred or otherwise disposed of except after full
compliance with all of the applicable provisions of the Securities Act and the
rules of regulations of the Commission and applicable state securities laws and
regulations, and the applicable provisions of this Agreement.  All certificates
evidencing the PainCare Shares shall bear appropriate legends.

(c)

Ability to Bear Economic Risk. The Sellers covenant, warrant and represent that
they are able to bear the economic risk of an investment in the PainCare Shares
acquired pursuant to this Agreement and can afford to sustain a total loss of
such investment and has such Knowledge and experience in financial and business
matters that they are capable of evaluating the merits and risks of the proposed
investment and therefore has the capacity to protect their own interests in
connection with the acquisition of the PainCare Shares.  The Sellers, and the
Sellers' purchaser representative, if any, have received copies of PainCare's
most recent 10-KSB, 10-QSB and 8-K filings and other SEC filings and have had an
adequate opportunity to ask questions and receive answers from the officers of
PainCare concerning any and all matters relating to the background and
experience of the officers and directors of PainCare, the plans for the
operations of the business of PainCare, and any plans for additional
acquisitions and the like.  The Sellers, and the Sellers’ purchaser
representative, if any, have asked any and all questions in the nature described
in the preceding sentence and all questions have been answered to such
individual’s satisfaction.

(d)

Additional Representations.  Each Member and the Company hereby intend that the
PainCare Shares to be acquired by the Sellers pursuant to this Agreement qualify
under an exemption from registration pursuant to Title 11 of the Maryland
Securities Act, Subtitle 6 Exemptions,  Section 11-601, subsections (9) and/or
(15) and that it is the understanding of the Parties that no filings or other
actions on the part of PainCare or the Sellers are required to perfect such
exemption. If it is later determined that such filings or other actions are
required by the Maryland Division of Securities or any other regulatory body
then, in such event, the Parties hereby agree to undertake any and all measures
reasonably necessary to satisfy such regulatory body.

(e)

Residency.  Each Member covenants, warrants and represents that he is a resident
of the State of Maryland, and received this Agreement and first learned of the
transactions

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contemplated hereby in the State of Maryland.  He executed and will execute all
documents contemplated hereby in the State of Maryland, and intends that the
laws of the State of Maryland govern this transaction.

(f)

No Registration.  The Sellers understand, agree and acknowledge that the
PainCare Shares have not been registered under the Florida Securities Act, the
Maryland Securities Act or the Securities Act in reliance upon exemption
provisions contained therein which PainCare believes are available.

(g)

Disclosure.  The representations and warranties contained in this Section 4 do
not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements and information
contained in this Section 4 not misleading.

(h)

IT IS ACKNOWLEDGED BY THE SELLERS THAT:

THE SELLERS HAVE GIVEN AND THEIR REPRESENTATIVE(S) HAVE BEEN GIVEN THE
OPPORTUNITY TO ASK QUESTIONS OF, AND RECEIVE ANSWERS FROM, THE BUYER OR
PERSON(S) ACTING ON ITS BEHALF CONCERNING THE TERMS AND CONDITIONS OF THIS
TRANSACTION, AND TO OBTAIN ANY ADDITIONAL INFORMATION WHICH THE BUYER POSSESSES
OR CAN ACQUIRE WITHOUT UNREASONABLE EFFORT OR EXPENSE THAT IS NECESSARY FOR THE
STOCKHOLDER TO MAKE AN INVESTMENT DECISION WITH RESPECT TO THE BUYER.

THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION HAS NOT PASSED UPON THE
MERITS OF OR GIVEN ITS APPROVAL TO THIS TRANSACTION OR THE BUYER’S SHARES.  THE
PAINCARE SHARES ARE OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION.

4.37

HIPAA.  Disclosure Schedule 4.37 lists and describes all plans and other efforts
of the Sellers with respect to the practice locations to comply with the Health
Insurance Portability and Accountability Act of 1996 (“HIPAA”), including the
final regulations promulgated thereunder, whether such plans and efforts have
been put in place or are in process.  Disclosure Schedule 4.37 includes but is
not limited in any manner whatsoever to any privacy compliance plan of the
Sellers in place or in development, and any plans, analyses or budgets relating
to information systems including but not limited to necessary purchases,
upgrades or modifications to effect HIPAA compliance.

4.38

Improper and Other Payments.  (a)  Neither the Sellers, any employee agent or
representative of the Company nor any person acting on behalf of any of them,
has made, paid or received any unlawful bribes, kickbacks or other similar
payments to or from any person or authority, (b) no contributions have been
made, directly or indirectly, by the Sellers to a domestic or foreign political
party or candidate; and (c) the internal accounting controls of the Sellers are
believed to be adequate to detect any of the foregoing under current
circumstances.

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4.39

Medical Waste.  With respect to the generation, transportation, treatment,
storage, and disposal, or other handling of Medical Waste, the Sellers, with
respect to the Business, has complied with all Medical Waste Laws (as
hereinafter defined).

“Medical Waste” includes, but is not limited to, (a) pathological waste, (b)
blood, (c) sharps, (d) wastes from surgery or autopsy, (e) dialysis waste,
including contaminated disposable equipment and supplies, (f) cultures and
stocks of infectious agents and associated biological agents, (g) contaminated
animals, (h) isolation wastes, (i) contaminated equipment, (j) laboratory waste,
and (k) various other biological waste and discarded materials contaminated with
or exposed to blood, excretion, or secretions from human beings or animals.
 “Medical Waste” also includes any substance, pollutant, material, or
contaminant listed or regulated under the Medical Waste Tracking Act of 1988, 42
U.S.C. §§6992, et seq. (“MWTA”).

“Medical Waste Law” means the following, including regulations promulgated and
orders issued thereunder, all as may be amended from time to time: the MWTA; the
U.S. Public Vessel Medical Waste Anti-Dumping Act of 1988, 33 USCA §§2501 et
seq.; the Marine Protection, Research, and Sanctuaries Act of 1972, 33 USCA
§§1401 et seq.; the Occupational Safety and Health Act, 29 USCA §§651 et seq.;
the United States Department of Health and Human Services, National Institute
for Occupational Self-Safety and Health Infectious Waste Disposal Guidelines,
Publication No. 88-119; and any other federal, state, regional, county,
municipal, or other local laws, regulations, and ordinances insofar as they
purport to regulate Medical Waste, or impose requirements relating to Medical
Waste.

4.40

Earnings. Each Member covenants, warrants and represents that the net operating
income as calculated pursuant to GAAP for the Company’s practice located at 305
Hospital Drive, Ste. 304, Glen Burnie, Maryland 21061 will be, during each of
the Formula Periods, at least $1,200,000.

4.41

No Untrue or Inaccurate Representation or Warranty.  No representation or
warranty by the Sellers contains or will contain any untrue statement of fact,
or omits or will omit to state a fact necessary to make the statements therein
not misleading.

5.

REPRESENTATIONS AND WARRANTIES OF THE ACQUIRING COMPANIES.  The Acquiring
Companies represent and warrant to the Sellers that the statements contained in
this Section 5 are correct and complete as of the Closing Time.  

5.1

Organization of PainCare and Subsidiary.  PainCare is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Florida. Subsidiary is a corporation duly organized, validly existing and in
good standing under the laws of the State of Florida with authorization to do
business in Maryland.

5.2

Authorization of Transaction.  PainCare and Subsidiary have full power and
authority (including full corporate power and authority) to execute and deliver
this Agreement and to perform its obligations hereunder.  This Agreement
constitutes the valid and legally binding obligation of PainCare, enforceable in
accordance with its terms and conditions.

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5.3

PainCare Shares.  All of the Closing Shares will be validly issued to the
Company, fully paid and non-assessable.  PainCare will deliver, good and
marketable title to the Closing Shares, which shares shall be fully paid and
non-assessable and except as otherwise provided in this Agreement shall be free
and clear of all Liens.

5.4

No Violations.  Neither the execution, delivery nor performance of this
Agreement or any other documents, instruments or agreements executed by the
Acquiring Companies in connection herewith, nor the consummation of the
transactions contemplated hereby:  (a) constitutes a violation of or default
under (either immediately, upon notice or upon lapse of time) the Articles of
Incorporation or Bylaws of the Acquiring Companies, any provision of any
contract to which the Acquiring Companies or their assets may be bound, any
judgment to which the Acquiring Companies are bound or any law applicable to the
Acquiring Companies; or (b) result in the creation or imposition of any
encumbrance upon, or give any third person any interest in or right to, any or
all of the Closing Shares; or (c) result in the loss or adverse modification of,
or the imposition of any fine or penalty with respect to, any license, permit or
franchise granted or issued to, or otherwise held by or for the use of, the
Acquiring Companies.

5.5

Consents.  The execution, delivery and performance by the Acquiring Companies of
this Agreement and the consummation by the Acquiring Companies of the
transactions contemplated hereby do not require any consent that has not been
received prior to the date hereof.

5.6

Brokers.  The Acquiring Companies have no liability or obligation to pay any
fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which the Sellers or the Sellers
could become liable or obligated.

5.7

Full Disclosure.  To the best knowledge of the Acquiring Companies, no
representation or warranty by the Acquiring Companies in this Agreement, nor any
statement, certificate, schedule, document or exhibit hereto furnished or to be
furnished by or on behalf of the Acquiring Companies pursuant to this Agreement
or in connection with transactions contemplated hereby, contains or shall
contain any untrue statement of material fact or omits or shall omit a material
fact necessary to make the statements contained therein not materially
misleading.

6.

OTHER MATTERS

6.1

Restricted Period.  Each Member hereby agrees that during the time period
commencing as of the Closing Time and continuing throughout the Formula Periods
plus a period of two (2) years thereafter (the “Restricted Period”), no Member
nor any of his Affiliates, shall, other than on behalf of the Company, PainCare
or Subsidiary, directly or indirectly, for himself, or on behalf of any other
corporation, person, firm, partnership, association, or any other entity
whatsoever (whether as an individual, agent, servant, employee, employer,
officer, director, Members, investor, principal, consultant or in any other
capacity whatsoever) take any action or undertake any matter set forth in
6.1(a)(i)-(iii) below; provided, however, that the Restricted Period shall
terminate upon the earlier to occur of (i) any bankruptcy, liquidation or
assignment for the benefit of creditors applicable to either PainCare or
Subsidiary, or (ii) upon a default by PainCare or Subsidiary in any material

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covenant or term of this Agreement to be performed after the Closing or any
material covenant or term of the Management Agreement if the Members shall have
given written notice of such default to PainCare and such default shall not have
been cured within 30 business days after the giving of such notice.

(a)

Establish, operate or provide physician services at any medical office,
hospital, clinic or out-patient and/or ambulatory treatment or diagnostic
facility or become employed by, or serve as a health care consultant or medical
director to any health care provider providing services similar to those
provided by PainCare, the Subsidiary or the Company, or engage or participate in
or finance any business which engages in direct competition with the business
being conducted by PainCare, the Subsidiary or the Company at such time,
anywhere within fifty (50) mile radius of any Business Location of the Company;

(i)

Solicit or engage in the solicitation of, or serve or accept any business from
patients, insurance companies, managed care plans, employers or other customers
of the business conducted by PainCare, the Subsidiary or the Company for
services competitive with those of PainCare, the Subsidiary or the Company and
their successors and assigns;

(ii)

Request, induce or advise any patients, insurance companies, managed care plans,
suppliers, vendors, employers or other customers of the business conducted by
PainCare, the Subsidiary or the Company to withdraw, curtail or cancel their
business or other relationships with PainCare, the Subsidiary or the Company, or
assist, induce, help or join any other person or entity in doing any of the
above activities; or

(iii)

Induce or attempt to influence any employee of PainCare, the Subsidiary or the
Company to terminate his or her employment with PainCare, the Subsidiary or the
Company or to hire, recruit or solicit any such employee, whether or not so
induced or influenced.

(b)

Consideration.  The Members have carefully considered the nature and extent of
the restrictions imposed by this Section 6.1 and the rights and remedies
conferred upon the Company, PainCare and Subsidiary hereunder and hereby
expressly acknowledge and agree that: (i) the restricted territory, period, and
activities are reasonable and are necessary and fully required to protect the
legitimate business interests of PainCare and Subsidiary; (ii) any violation of
the terms of these restrictive covenants would have a substantial detrimental
effect on PainCare’s and Subsidiary’s businesses; (iii) the restrictive
covenants do not stifle the Members inherent skill and experience; and (iv)
would not operate as a bar to any of the Members’ means of support.  Because of
the difficulty of measuring economic losses to PainCare and the Subsidiary as a
result of the breach of the foregoing covenants, and because of the immediate
and irreparable damage that would be caused to PainCare and the Subsidiary for
which it would have no other adequate remedy, each Member agrees that, in the
event of a breach by him of the foregoing covenants, the covenants set forth in
this Section 6.1 may be enforced by PainCare by injunctions and restraining
orders, in addition to all other available legal remedies.

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(c)

Third-Party Beneficiaries.  All successors and assigns of the Company, PainCare,
Subsidiary, all Affiliates of PainCare and Subsidiary, and all successors and
assigns of such Affiliates are third-party beneficiaries of the restrictive
covenants contained in this Section 6.1 and the provisions of this Section 6.1
are intended for the benefit of, and may be enforced by, PainCare’s and
Subsidiary’s successors and assigns and PainCare’s and Subsidiary’s Affiliates
and such Affiliates’ successors and assigns.

(d)

No Running of Covenant During Breach.  The covenants set forth in this Section
6.1 shall apply for the applicable periods as set forth above.  If a Member
violates such covenants, and PainCare, the Subsidiary or any of their successors
and assigns or Affiliates bring a legal action for injunctive or other relief,
such party bringing the action shall not, as a result of the time involved in
obtaining the relief, be deprived of the benefit of the full period of the
covenant period, unless a court of competent jurisdiction holds that the
covenant is not enforceable in whole or in part.  Accordingly, for any time
period that a Member(s) is in violation of the covenant, such time period shall
not be included in calculating the applicable time period of the covenant.

(e)

Blue Pencil Doctrine.  The covenants set forth in this Section 6.1 are severable
and separate, and the unenforceability of any specific covenant shall not affect
the provisions of any other covenant.  Moreover, in the event any court of
competent jurisdiction shall determine that the scope, time or territorial
restrictions set forth are unreasonable, then it is the intention of the parties
that such restrictions be enforced to the fullest extent which the court deems
reasonable, and the Agreement shall thereby be reformed.

(f)

Competitive Activities.  Notwithstanding anything to the contrary in this
Section 6.1 saving Section 6.1(g) below, the parties agree that, after the
closing of the transactions contemplated by this Agreement, the Members will
have the right to engage in the following described activities which may be
competitive with the Company, Subsidiary and PainCare: opening medical practices
and clinics of the same or similar type as those of the Company outside a 15
mile radius from any of the Company’s then existing medical practices or clinics
(each a “Competitive Business Opportunity”); provided that with respect to each
Competitive Business Opportunity: (i) such Opportunity shall not unreasonably
interfere with the services to be provided to the Company by the Members
pursuant to their Employment Agreements, and (ii) PainCare shall have the right
of first refusal to purchase the Members’ interest in each such Competitive
Business Opportunity based on a pricing formula and on such terms substantially
similar to the pricing formula and terms used by PainCare to purchase the
Purchased Assets of the Company as provided herein, upon written notice from
Members setting forth their desire to sell such Competitive Business
Opportunities.  If within thirty (30) days after receipt of such notice,
PainCare does not tender a letter of intent advising the Members in writing of
its intent to enter into a definitive agreement to purchase such Competitive
Business Opportunity, then PainCare’s right of first refusal will terminate and
Members shall be free to sell such Competitive Business Opportunity to any third
party. The Acquiring Companies acknowledge and agree that Members are permitted
to use the Company’s Confidential Information in connection with the Competitive
Business Opportunities. PainCare’s right of first refusal as provided herein
with respect to any Competitive Business Opportunity will terminate on the tenth
anniversary date of the Closing of this transaction.

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(g)

Termination of Right to Engage in Competitive Business Opportunities.
Notwithstanding Section 6.1(f) above if at anytime during the Formula Periods
the Formula Period Profits of the Surviving Company in any two (2) consecutive
Formula Period calendar quarters (taken in the aggregate) are less than
$2,062,500, or if the Formula Period Profits of the Surviving Corporation in one
(1) Formula Period calendar quarter is less than $962,500 then, in such event,
PainCare by providing written notice to the Members shall have the right to
terminate the Members’ rights as provided in Section 6.1(f) above to engage in
Competitive Business Opportunities. Upon the receipt of such termination notice
the Members will immediately cease and desist from engaging, participating or
otherwise involving themselves in any further Competitive Business Opportunities
without PainCare’s prior written consent which may be withheld in its sole and
absolute discretion with the understanding that in the event of such
termination, the Members shall have the right to continue to engage and operate
any Competitive Business Opportunity which exists as of the date of such
termination.

6.2

Confidentiality, Press Releases, and Public Announcements.  

(a)

No Party shall issue any press release or make any public announcement relating
to the subject matter of this Agreement without the prior written approval of
the other Parties.

(b)

The Parties covenant and agree that from and after the Execution Date, neither
of the Parties nor their Affiliates (to the extent any such Affiliate has
received Confidential Information as defined below or Trade Secrets, as defined
below) shall disclose, divulge, furnish or make accessible to anyone any
Confidential Information or Trade Secrets, or in any way use any Confidential
Information or Trade Secrets in the conduct of any business; provided, however,
that nothing in this Section 6.2 will prohibit the disclosure of any
Confidential Information or Trade Secrets which is required to be disclosed by a
Party or any of its or his Affiliates in connection with any court action or any
proceeding before any authority.  Notwithstanding the foregoing, in the case of
a disclosure contemplated by this Section 6.2, no disclosure shall be made until
the disclosing Party shall give notice to the non-disclosing Party of the
intention to disclose such Confidential Information or Trade Secrets so that the
non-disclosing Party may contest the need for disclosure, and the disclosing
Party will cooperate (and will cause its or his Affiliates and their respective
representatives to cooperate) with the non-disclosing in connection with any
such proceeding.  Notwithstanding any provision of this Agreement which may be
to the contrary, the foregoing provisions restricting the use of Confidential
Information and Trade Secrets shall survive the Closing for the time period
equal to five (5) years from the Execution Date.  For the purpose of this
Agreement, the term “Confidential Information” shall mean all records, files,
reports, protocols, policies, manuals, databases, processes, procedures,
computer systems, materials and other documents pertaining to the operations of
a Party and the term “Trade Secrets” shall mean information, including a
formula, pattern, compilation, program, device, method, technique, or process
that: (i) derives independent economic value, actual or potential, from not
being generally known to, and not being readily ascertainable by proper means
by, other persons who can obtain

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economic value from its disclosure or use; and (ii) is the subject of efforts
that are reasonable under the circumstances to maintain its secrecy.

6.3

Bulk Sales Compliance.  Following the execution of this Agreement, the Acquiring
Companies and the Sellers shall cooperate in complying with all provisions of
the bulk sales or bulk transfer statutes of all states having jurisdiction, in
such a way as to provide the Acquiring Companies the greatest measure of
protection against the creditors of the Sellers allowable under all such
statutes.

7.

FURTHER COVENANTS OF SELLERS

The Sellers individually and severally covenant and agree as follows:

7.1    Access to Information and Records. The Sellers shall give the Acquiring
Companies, its counsel, accountants and other representatives(i)access during
normal business hours to all of the properties, books, records, contracts and
documents of the Sellers relating to the Business or the Purchased Assets or
Assumed Liabilities for the purpose of such inspection, investigation and
testing as the Acquiring Companies deem appropriate (and the Sellers shall
furnish or cause to be furnished to the Acquiring Companies and its
representatives all information with respect to the Business the Acquiring
Companies may request); (ii) access to employees, agents and representatives of
the Business for the purpose of conducting business, meetings and communications
as the Acquiring Companies reasonably desire; and (iii) access to vendors,
customers, manufacturers of its medication and equipment, and others having
business dealings with the Business.

7.2

Maintain Organization.  The Sellers will take such action as may be necessary to
maintain, preserve, renew and keep in favor and effect the existence, rights and
franchises of the Company and the Business and will use their best efforts to
preserve the Company and the Business intact, to keep available to the
Subsidiary and the Company, as the case may be, the present employees of the
Company, and to preserve for the Subsidiary and the Company their present
relationships with suppliers and customers and others having business
relationships with the Company.

7.3

No Breach.  The Sellers  will not do or omit any act, or permit any omission to
act, which may cause a breach of any contract, commitment or obligation material
to the Company or its Business, or any breach of any representation, warranty,
covenant or agreement made by the Sellers  herein, or which would have required
disclosure pursuant to this Agreement.

7.4   

Maintenance of Insurance.  The Sellers shall take all necessary action to
maintain for the benefit of the Company all of the insurance set forth in
Disclosure Schedule 4.7.

7.5

Consents.  The Sellers will use their best efforts prior to Closing to obtain
all consents necessary for the consummation of the transactions contemplated
hereby.

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7.6

Other Action.  The Sellers shall use their best efforts to cause the fulfillment
at the earliest practicable date of all of the conditions to the parties'
obligations to consummate the transactions contemplated in this Agreement.

7.7

Disclosure.  The Sellers shall have a continuing obligation which shall survive
the Closing to (i) promptly complete and deliver to PainCare any and all
Disclosure Schedules which have not been completed and delivered as of the
Closing Time all of which shall be approved in form and content by PainCare
prior to incorporating same herein, (ii) promptly complete, execute and deliver
to PainCare any and all agreements and other documents contemplated hereby all
of which shall be approved in form and content by PainCare prior to finalizing
same, and (iii) promptly notify the Acquiring Companies in writing with respect
to any matter hereafter arising or discovered which, if existing or known at the
date of this Agreement, would have been required to be set forth herein or
described in the Disclosure Schedules, but no such disclosure shall cure any
breach of any representation or warranty which is inaccurate.

8.

CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS

Notwithstanding the execution and delivery of this Agreement or the performance
of any part hereof, the Acquiring Companies’ obligation to consummate the
transaction contemplated by this Agreement shall be subject to the satisfaction
of each of the conditions set forth in this Section 8, except to the extent that
such satisfaction is waived by the Acquiring Companies in writing.

 

8.1

Representations and Warranties True on the Closing Time.  Each of the
representations and warranties made by the Sellers in this Agreement, and the
statements contained in the disclosure schedules or in any instrument, list,
certificate or writing delivered by the Sellers pursuant to this Agreement,
shall be true and correct in all material respects when made and shall be true
and correct in all material respects at and as of the Closing Time as though
such representations and warranties were made or given on and as of the Closing
Time, except for any changes permitted by the terms of this Agreement or
consented to in writing by the Acquiring Companies.

8.2  

 Compliance With Agreement.  The Sellers shall have in all material respects
performed and complied with all of its agreements and obligations under this
Agreement which are to be performed or complied with by the Sellers prior to or
on the Closing Time or the Extended Time, if agreed by PainCare, including the
delivery of the closing documents specified in this Agreement.

8.3   

Absence of Litigation.  No Litigation shall have been commenced or threatened,
and no investigation by any Government Entity shall have been commenced against
the Acquiring Companies, the Sellers or the Business with respect to the
transactions contemplated hereby.

8.4.

Consents and Approvals.  All approvals, consents and waivers that are required
to effect the transactions contemplated hereby shall have been received, and
executed counterparts thereof shall have been delivered to the Acquiring
Companies prior to the Closing Time or the Extended Time, if agreed by PainCare.
Notwithstanding the foregoing, receipt of the consent of any

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third party to the assignment of a Contract which is not (and is not required to
be) disclosed in the disclosure schedules shall not be a condition to the
Acquiring Companies' obligation to close, provided that the aggregate of all
such Contracts does not represent a material portion of the sales or
expenditures of the Company.  After the Closing, the Sellers will continue to
use its best effects to obtain any such consents or approvals, and the Sellers
shall not hereby be relieved of any liability hereunder for failure to perform
any of its covenants or for the inaccuracy of any representation or warranty.

8.5.

Completion of Due Diligence, Schedules & Exhibits.  Completion of the Acquiring
Companies’ due diligence and the completion and delivery of the Disclosure
Schedules and Exhibits required by this Agreement, all to the reasonable
satisfaction of the Acquiring Companies, based upon its knowledge and
information, of all matters relative to the Sellers, the Purchased Assets,
Assumed Liabilities and the Business.

9.

CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS

Notwithstanding the execution and delivery of this Agreement or the performance
of any part hereof, the Sellers’ obligations to consummate the transaction
contemplated by this Agreement shall be subject to the satisfaction of each of
the conditions set forth in this Section 9, except to the extent that such
satisfaction is waived in writing by the Sellers.

9.1

Representations and Warranties True on the Closing Time.  Each of the
representations and warranties made by the Acquiring Companies in this Agreement
shall be true and correct in all material respects when made and shall be true
and correct in all material respects at and as of the Closing Time as though
such representations and warranties were made or given on and as of the Closing
Time.

9.2  

Compliance With Agreement.  The Acquiring Companies shall have in all material
respects performed and complied with all of the Acquiring Companies' agreements
and obligations under this Agreement which are to be performed or complied with
by the Acquiring Companies prior to or on the Closing Time, including the
delivery of the closing documents specified in this Agreement.

10.

CLOSING

10.1

Closing. The closing of the contemplated transaction (the “Closing”) shall be
effective between the Parties as of 12:00 p.m. Eastern Daylight Time on November
30, 2004 (the “Closing Time”). However, in the event that the Parties have not
satisfied all of the conditions necessary to Close by the Closing Time
including, without limitation, the satisfaction or waiver of the conditions
precedent set forth in Sections 8 and 9 of this Agreement (hereinafter the
“Closing Conditions”) then, in such event, the transaction shall close but
PainCare may extend the time period for payment of the Closing Consideration
until such time as the Parties have satisfied, unless otherwise waived, all of
the Closing Conditions. Notwithstanding the foregoing, if such Closing
Conditions have not been satisfied by March 1, 2005 (hereinafter the “Extended
Time”) then, in such

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event, either PainCare or the Company may, by providing written notice to the
other Party, terminate this Agreement and any and all other agreements entered
into in connection herewith, rescind the transactions contemplated hereby and
cause the Parties to return to status quo as of the time immediately preceding
the Closing Time (the “Termination and Rescission”). The Parties hereby agree
that in the case of such Termination and Rescission, the Parties will take all
reasonable and necessary measures including, without limitation, the execution
of any and all documents necessary to effectuate the Termination and Rescission.

10.2

     Documents to be Delivered by the Sellers.  At the Closing or as soon
thereafter as reasonably possible (unless otherwise provided herein) but in no
event later than the Extended Time, the Sellers shall deliver to the Acquiring
Companies the following documents, in each case duly executed or otherwise in
proper form:

(a)   Bills of Sale.  Bills of sale and such other instruments of assignment,
transfer, conveyance and endorsement as will be sufficient in the opinion of the
Acquiring Companies and its counsel to transfer, assign, convey and deliver to
Subsidiary the Purchased Assets as contemplated hereby.

(b)  Compliance Certificate.  A certificate signed by the Sellers that each of
the representations and warranties made by the Sellers in this Agreement is true
and correct in all material respects on and as of the Closing Time with the same
effect as though such representations and warranties had been made or given on
and as of the Closing Time (except for any changes permitted by the terms of
this Agreement or consented to in writing by PainCare), and that the Sellers
have performed and complied with all of the Sellers’ obligations under this
Agreement which are to be performed or complied with on or prior to the Closing
Time.

    (c)

Termination of Agreements.  Copies of documents effectuating the termination of
any and all written and oral employment and independent contractor agreements,
compensation agreements, buy-sell agreements, management agreements, loan
agreements, factoring agreements, expense and/or revenue sharing agreements,
billing agreements and other similar agreements entered into by the Company and
which are in effect immediately preceding the Closing, which terminations shall
each include a complete release of the Company from all known or unknown
obligations or Liabilities except for the Assumed Liabilities.

(d)

Corporate Authorization.  A certified copy of resolution(s) of the Members of
the Company which authorizes the transactions contemplated by this Agreement in
accordance with: (a) applicable law; (b) the Company’s articles of organization
and its amended and restated operating agreement which must be approved by
PainCare; and (c) all other requirements for proper corporate authorization.

(e)

Secretary’s Certificate.  A certificate of the secretary of the Company
 certifying that the minute books, articles of organization and operating
agreement of the Company, attached as exhibits to such certificate, are true,
correct, and complete.

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(f)

Estoppel Certificates.  Sellers shall use their best efforts to obtain for the
benefit of the Acquiring Companies an estoppel certificate or status letter from
each landlord under the lease for each Business Location which estoppel
certificate or status letter will certify (i) the lease is valid and in full
force and effect; (ii) the amounts payable by the Company (or the tenant from
whom the Company subleases) under the lease and the date to which the same have
been paid; (iii) whether there are, to the knowledge of said landlord, any
defaults thereunder, and, if so, specifying the nature thereof; and (iv) that
the transactions contemplated by this Agreement will not constitute default
under the lease.

(g)

Other Documents.  All other documents, instruments or writings required to be
delivered to the Acquiring Companies pursuant to this Agreement and such other
certificates of authority and documents as the Acquiring Companies may
reasonably request including, without limitation, fully executed Employment
Agreements by and between each Member and the Company, a fully executed
Management Agreement and all agreements required to be executed in connection
with the Management Agreement, the Billing Services Agreement, the Members Stock
Pledge Agreements, the Company employee leasing (or other similar) agreement and
any sublease necessary to secure the occupancy of the Company at the Business
locations. All such agreements and documents must be approved by PainCare prior
to finalization and execution.

10.3  Documents to be Delivered by the Acquiring Companies.  At the Closing or
as soon thereafter as reasonably possible (unless otherwise provided herein) but
in no event later than the Extended Time, the Acquiring Companies shall deliver
to the Company the following consideration and documents, in each case duly
executed or otherwise in proper form:

(a)  Closing Consideration.  To the Company the Closing Cash and Closing Shares
required by Section 3.1 hereof.

(b)  Assumption of Liabilities.  Such undertakings and instruments of assumption
as will be reasonably sufficient in the opinion of the Sellers and its counsel
to evidence the assumption of the Assumed Liabilities.

(c)  Compliance Certificate.  A certificate signed by an officer of PainCare
that the representations and warranties made by the Acquiring Companies in this
Agreement are true and correct on and as of the Closing Time with the same
effect as though such representations and warranties had been made or given on
and as of the Closing Time (except for any changes permitted by the terms of
this Agreement or consented to in writing by the Sellers), and that the
Acquiring Companies has performed and complied with all of the Acquiring
Companies' obligations under this Agreement which are to be performed or
complied with on or prior to the Closing Time.

(d)  Other Documents. All other documents, instruments or writings required to
be delivered to the Sellers pursuant to this Agreement and such other
certificates of authority and documents as the Sellers may reasonably request
including, without limitation, the PainCare Stock Pledge Agreement, each
Member’s Registration Rights Agreement and the Management Agreement.

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11.

POST-CLOSING COVENANTS.  The Parties agree as follows with respect to the period
following the Closing Time:

11.1

General.  In the event that at any time after the Closing any further action is
necessary to carry out the purposes of this Agreement, each of the Parties will
take such further action (including the execution and delivery of such further
instruments and documents) as any other Party may reasonably request, all at the
sole cost and expense of the requesting Party.

11.2

Tax Returns.  The Sellers shall be responsible for preparing and filing all
income or franchise Tax Returns with respect to the Company relating to periods
of time subsequent to the Closing Time.  The Subsidiary will be responsible for
preparing and filing all income and franchise Tax Returns of the Subsidiary
relating to periods after the Closing. The Sellers will provide the Subsidiary
with an opportunity to review and comment on such Tax Returns (including any
amended returns).  The Sellers will take no positions on his Tax Returns that
relate to the tax periods after the Closing Time that could adversely affect
PainCare or the Subsidiary after the Closing.  

11.3

Transition.  Neither the Sellers nor the Acquiring Companies will take any
action that is designed, intended or likely to have the effect of discouraging
any lessor, licensor, customer, supplier or other business associate of the
Sellers from maintaining the same business relationships with the Company and
the Subsidiary after the Closing as he, she or it maintained with the Sellers
prior to the Closing.

11.4

Litigation Support.  In the event and for so long as any Party actively is
contesting or defending against any action, suit, proceeding, hearing,
investigation, charge, complaint, claim or demand in connection with: (a) any
transaction contemplated under this Agreement; or (b) any fact, situation,
circumstances, status, condition, activity, practice, occurrence, event,
incident, action, failure to act, or transaction on or prior to the Closing Time
with respect to the Company or the Business, each of the Parties will cooperate
with the contesting or defending Party and its counsel in the contest or
defense, at the sole cost and expense of the contesting or defending Party
except to the extent that the contesting or defending Party is entitled to
indemnification therefore under this Agreement.

11.5

Operational Covenants.  Without the prior written consent of the Sellers, which
shall not be unreasonably withheld, PainCare shall not, prior to the conclusion
of the third Formula Period:

(a)

reorganize the Subsidiary, whether by integrating or consolidating the business
of the Subsidiary with other operating units of PainCare or its subsidiaries or
Affiliates, except in the case that at the time of such integration or
consolidation such transaction could not reasonably be expected to have a
material adverse effect on the Formula Period Profits;

(b)

effect any reassignment, reprioritization, reallocation, restructuring, or
reduction of the Subsidiary human or other resources, their research and
development initiatives, or their marketing programs, except in a manner that at
the time of such event could not reasonably be expected to have a material
adverse effect on the Formula Period Profits or that are reasonably

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necessary in light of the Subsidiary’s results of operation;

(c)

amend the articles of incorporation or bylaws of the Subsidiary in any manner
that at the time of such amendment could reasonably be expected to have a
material adverse effect on the Formula Period Profits;

(d)

cause the Subsidiary to become a party to or terminate any agreement which at
the time such agreement is entered into or terminated could reasonably be
expected to have a material adverse effect on the Formula Period Profits or that
is reasonably necessary in light of the Company’s results of operation;

(e)

cause the Subsidiary to undertake actions outside the ordinary course of its
business which at the time of such undertaking could reasonably be expected to
have a material adverse effect on the Formula Period Profits;

(f)

sell a material portion of the Subsidiary or its assets, merge the Subsidiary
with any other entity, sell a controlling interest in the Subsidiary, or make
any fundamental change in the business of the Subsidiary unless such action(s)
at the time of such undertaking could not reasonably be expected to have a
material adverse effect on the Formula Period Profits or that is reasonably
necessary in light of the Company’s results of operation;

The parties hereby acknowledge and agree that the foregoing conditions shall
become null and void and of no further force or effect if the Formula Profits of
the Company in each of any two (2) consecutive calendar quarters during any
Formula Period are less than $2,062,500, or if the Formula Profits of the
Company in one (1) calendar quarter during any Formula period is less than
$962,500.

In the event that PainCare defaults in its performance of any of its obligations
under this Section and fails to cure such default within thirty (30) days (or
such other reasonable period if 30 days is not a sufficient amount of time to
cure such default, provided that PainCare shall have commenced in good faith and
is diligently pursuing its efforts to cure such default during such 30-day
period) of receiving a written notice of default from the Sellers, PainCare
shall be deemed to be in breach of this Agreement.

12.

REGISTRATION.

PainCare agrees to enter into with each of the Members at Closing a Registration
Rights Agreement in the form attached hereto as Exhibit 12.

13.

SURVIVAL AND  INDEMNIFICATION.

13.1

Survival of Representations and Warranties.  All of the representations,
warranties, covenants, and agreements including but not limited to the
restrictive covenants and the

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indemnification provisions contained in this Agreement are material and have
been relied upon by the Parties hereto and shall survive the Closing. The
representations and warranties contained herein shall not be affected by any
investigation, verification or examination by any Party or by anyone on behalf
of such Party.

13.2

Indemnification Provisions for the Benefit of PainCare and the Subsidiary.  In
the event of: (a) a misrepresentation (or in the event any third party alleges
facts that, if true, would mean a misrepresentation) of any of the Sellers’
representations and/or warranties contained in this Agreement; (b) a breach (or
in the event any third party alleges facts that, if true, would mean a breach)
of any of the Sellers’ covenants contained in this Agreement or any other
agreement executed in connection herewith; or (c) any Liability or Claim against
the Company, the Business or the Purchased Assets of any nature whatsoever
accrued or existing as of the Closing Time or related to actions of the Sellers
or arising out of the Company or its Business which occurred prior to the
Closing Time, which is not reflected on the Disclosure Schedules and accepted by
the Acquiring Companies, then the Sellers agrees to indemnify PainCare and
Subsidiary from and against any Adverse Consequences PainCare and Subsidiary may
suffer through and after the date of the Claim for indemnification resulting
from, arising out of, relating to, in the nature of, or caused by the
misrepresentation or breach (or alleged breach) or non-disclosed or non-accepted
Liability.  No provision of this Agreement, including but not in any way limited
to, any “Knowledge” qualifiers or materiality standards in the representations
and warranties of the Sellers, shall have any effect on the Sellers’ indemnity
for any Liability arising prior to the Closing Time.

13.3

Indemnification Provisions for the Benefit of the Sellers.  In the event of a
misrepresentation or breach (or in the event any third party alleges facts that,
if true, would mean a misrepresentation or breach) of any of PainCare’s or
Subsidiary’s representations, warranties, and covenants contained in this
Agreement, then PainCare and Subsidiary agree to indemnify the Sellers from and
against any Adverse Consequences the Sellers may suffer through and after the
date of the claim for indemnification resulting from, arising out of, relating
to, in the nature of, or caused by the breach (or the alleged breach).

13.4

Matters Involving Third Parties.  

13.4.1

Notification.  If any third party shall notify any Party (the “Indemnified
Party”) with respect to any matter (a “Third Party Claim”) which may give rise
to a claim for indemnification against the other Party (the “Indemnifying
Party”) pursuant to this Section, then the Indemnified Party shall promptly
notify the Indemnifying Party thereof in writing; provided, however, that no
delay on the part of the Indemnified Party in notifying the Indemnifying Party
shall relieve the Indemnifying Party from any obligation hereunder unless the
Indemnifying Party thereby is prejudiced and then only to the extent that the
Indemnifying Party is actually prejudiced.

13.4.2

Defense by Indemnifying Party.  The Indemnifying Party shall have the right to
defend the Indemnified Party against the Third Party Claim with counsel of its
choice satisfactory to the Indemnified Party so long as: (i) the Indemnifying
Party notifies the Indemnified Party in writing within ten (10) business days
after the Indemnified Party has given notice of the Third Party

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Claim that the Indemnifying Party will indemnify the Indemnified Party from and
against any Adverse Consequences the Indemnified Party may suffer resulting
from, arising out of, relating to, in the nature of, or caused by the Third
Party Claim; (ii) the Indemnifying Party provides the Indemnified Party with
evidence reasonably acceptable to the Indemnified Party that the Indemnifying
Party will have the financial resources to defend against the Third Party Claim
and fulfill the Indemnifying Party’s indemnification obligations hereunder;
(iii) the Third Party Claim involves only money damages and does not seek an
injunction or other equitable relief; (iv) settlement of, or an adverse judgment
with respect to, the Third Party Claim is not, in the good faith judgment of the
Indemnified Party, likely to establish a precedential custom or practice adverse
to the continuing business interests of the Indemnified Party; and (e) the
Indemnifying Party conducts the defense of the Third Party Claim actively and
diligently.

13.4.3

Satisfactory Defense.  So long as the Indemnifying Party is conducting the
defense of the Third Party Claim in accordance with Section 10.4(b) above: (i)
the Indemnified Party may retain separate co-counsel at its sole cost and
expense and participate in the defense of the Third Party Claim; (ii) the
Indemnified Party will not consent to the entry of any judgment or enter into
any settlement with respect to the Third Party Claim without the prior written
consent of the Indemnifying Party (not to be withheld or delayed unreasonably);
and (iii) the Indemnifying Party will not consent to the entry of any judgment
or enter into any settlement with respect to the Third Party Claim without the
prior written consent of the Indemnified Party (not to be withheld or delayed
unreasonably) and any such settlement must include a complete release of the
Indemnified Party.

13.4.5

Conditions.  In the event any of the conditions in Section 13.4.2 above is or
becomes unsatisfied, however: (i) the Indemnified Party may defend against, and
consent to the entry of any judgment or enter into any settlement with respect
to, the Third Party Claim in any manner it reasonably may deem appropriate (and
the Indemnified Party need not consult with, or obtain any consent from, the
Indemnifying Party in connection therewith); (ii) the Indemnifying Party will
reimburse the Indemnified Party promptly and periodically for the costs of
defending against the Third Party Claim (including reasonable attorneys’ fees
and expenses); and (iii) the Indemnifying Party will remain responsible for any
Adverse Consequences the Indemnified Party may suffer resulting from, arising
out of, relating to, in the nature of, or caused by the Third Party Claim to the
fullest extent provided in this Section 13.

13.4.6

Materiality.  Notwithstanding any provision in this Agreement to the contrary,
the indemnifying Party’s obligation to indemnify the Indemnified Party in
connection with a breach of any representation, warranty, covenant or other
agreement included in this Agreement, and the amount of damages to be
indemnified, shall be determined without regard to any “material”, “materiality”
(or correlative meanings”) or “material adverse effect” qualifications,
provisions or exceptions set forth in such representation, warranty, covenant or
other agreement, each of which shall be deemed to be given for the purposes of
this Section 13 as though there were no such qualifications, provisions or
exceptions.

13.5

Limitation.  The indemnification provisions set forth in this Section 13 shall
be limited to all claims in excess of Twenty Five Thousand and 00/100 Dollars
($25,000) (the

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“Threshold”).  Once a claim exceeds the Threshold, if a Party is entitled to
indemnification under this Section 13, such Party shall recover all appropriate
funds from the first dollar of damages.  Further, the indemnitors shall not be
liable for any liabilities resulting from claims that are covered by any
insurance policy or other indemnity or contribution agreement unless, and only
to the extent that, the full limit of such insurance policy, indemnity or
contribution agreement has been exceeded. The Party entitled to indemnification
shall have a duty to mitigate its damages.  Notwithstanding the foregoing, a
Party’s obligation to indemnify under this Section 13 shall be limited to an
amount equal to $13,750,000 plus the amount of any Installment Payments paid or
due pursuant to Section 3.4 of this Agreement; provided however that such cap
shall not be applicable to Sections 4.1, 4.3, 4.4, 4.7, 4.9, 4.19, 4.22, 4.23,
4.25, 4.26, 4.27, 4.33, 4.36, 4.37, 4.38 and 4.39.

14.

MISCELLANEOUS

14.1  Disclosure Schedules.  Information set forth in the Disclosure Schedules
specifically refers to the article and section of this Agreement to which such
information is responsive and such information shall not be deemed to have been
disclosed with respect to any other article or section of this Agreement or for
any other purpose.  The Disclosure Schedules shall not vary, change or alter the
language of the representations and warranties contained in this Agreement and,
to the extent the language in the Disclosure Schedules does not conform in every
respect to the language of such representations and warranties, such language
shall be disregarded and be of no force or effect.

14.2  Further Assurance.  From time to time, at the Acquiring Companies' request
and without further consideration, the Sellers will execute and deliver to the
Acquiring Companies such documents and take such other action as the Acquiring
Companies may reasonably request in order to consummate more effectively the
transactions contemplated hereby and to vest in Subsidiary good, valid and
marketable title to the business and assets being transferred hereunder.

14.3.  Assignment; Parties in Interest.  

(a)  Assignment.  Except as expressly provided herein, the rights and
obligations of a Party hereunder may not be assigned, transferred or encumbered
without the prior written consent of the other Party.  

(b)  Parties in Interest.  This Agreement shall be binding upon, inure to the
benefit of, and be enforceable by the respective successors and permitted
assigns of the parties hereto.  Nothing contained herein shall be deemed to
confer upon any other person any right or remedy under or by reason of this
Agreement.

14.4

Amendment and Modification.  The Acquiring Companies and the Sellers may amend,
modify and supplement this Agreement in such manner as may be agreed upon by
them in writing.

14.5

Notice.  All notices, requests, demands and other communications hereunder shall
be given in writing and shall be:  (a) personally delivered; (b) sent by
telecopier, facsimile transmission

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or other electronic means of transmitting written documents; or (c) sent to the
parties at their respective addresses indicated herein by registered or
certified U.S. mail, return receipt requested and postage prepaid, or by private
overnight mail courier service.  The respective addresses to be used for all
such notices, demands or requests are as follows:

(a)

If to the Acquiring Companies, to:

PainCare Holdings, Inc.

1030 North Orange Avenue

Suite 105

Orlando, Florida  32801

Attention: CEO

or to such other person or address as the Acquiring Companies shall furnish to
the Sellers in writing.

(b)

If to the Sellers, to:

11921 Rockville Pike

Ste. 505

Rockville, Maryland 20852

or to such other person or address as the Sellers shall furnish to the Acquiring
Companies in writing.

If personally delivered, such communication shall be deemed delivered upon
actual receipt; if electronically transmitted pursuant to this paragraph, such
communication shall be deemed delivered the next business day after transmission
(and sender shall bear the burden of proof of delivery); if sent by overnight
courier pursuant to this paragraph, such communication shall be deemed delivered
upon receipt; and if sent by U.S. mail pursuant to this paragraph, such
communication shall be deemed delivered as of the date of delivery indicated on
the receipt issued by the relevant postal service, or, if the addressee fails or
refuses to accept delivery, as of the date of such failure or refusal.  Any
Party to this Agreement may change its address for the purposes of this
Agreement by giving notice thereof in accordance with this Section.

14.6  Intentionally Omitted.

14.7

Entire Agreement.  This instrument embodies the entire agreement between the
parties hereto with respect to the transactions contemplated herein, and there
have been and are no agreements, representations or warranties between the
parties other than those set forth or provided for herein.

14.8

Counterparts.  This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

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14.9

Headings.  The headings in this Agreement are inserted for convenience only and
shall not constitute a part hereof.

14.10

Press Releases, and Public Announcements.  No Party shall issue any press
release or make any public announcement relating to the subject matter of this
Agreement without the prior written approval of the other Parties.

14.11

Governing Law; Jurisdiction; Attorney’s Fees.  This Agreement, and all
proceedings hereunder, shall be governed by and construed in accordance with the
domestic laws of the State of Florida without giving effect to any choice or
conflict of law provision or rule (either of the State of Florida or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of Florida. In the event of any suit under this Agreement
or otherwise between the parties hereto, the prevailing Party shall be entitled
to all reasonable attorney's fees and costs, including allocated costs of
in-house counsel, to be included in any judgment recovered.  In addition, the
prevailing Party shall be entitled to recover reasonable attorney's fees and
costs, including allocated costs of in-house counsel, incurred in enforcing any
judgment arising from a suit under this Agreement.  This post-judgment
attorney's fees and costs provision shall be severable from the other provisions
of this Agreement and shall survive any judgment on such suit and is not to be
deemed merged into the judgment.

14.12

Amendments and Waivers.  No amendment of any provision of this Agreement shall
be valid unless the same shall be in writing and signed by the Parties.  No
waiver by any Party of any default, misrepresentation, or breach of warranty or
covenant hereunder, whether intentional or not, shall be deemed to extend to any
prior or subsequent default, misrepresentation, or breach of warranty or
covenant hereunder or affect in any way any rights arising by virtue of any
prior or subsequent such occurrence and all waivers must be in writing, signed
by the waiving Party, to be effective.

14.13

Severability.  Any term or provision of this Agreement that is invalid or
unenforceable in any situation in any jurisdiction shall not affect the validity
or enforceability of the remaining terms and provisions hereof or the validity
or enforceability of the offending term or provision in any other situation or
in any other jurisdiction.  

14.14

Expenses.  Except as set forth herein, each of the Parties will bear its or his
own costs and expenses (including, but not limited to, legal and accounting fees
and expenses) incurred in connection with this Agreement and the transactions
contemplated hereby.

14.15

Further Assurances.  Each Party shall, at the reasonable request of any other
Party hereto, execute and deliver to such other Party all such further
instruments, assignments, assurances and other documents, and take such actions
as such other Party may reasonably request in connection with the carrying out
the terms and provisions of this Agreement.

14.16

Construction.  Any reference to any federal, state, local, or foreign statute or
law shall be deemed also to refer to all rules and regulations promulgated
thereunder, unless the context

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requires otherwise.  The word “including” shall mean including without
limitation.  Nothing in the Disclosure Schedule shall be deemed adequate to
disclose an exception to a representation or warranty made herein, unless the
Disclosure Schedule identifies the exception with reasonable particularity.  The
Parties intend that each representation, warranty, and covenant contained herein
shall have independent significance.  If any Party has breached any
representation, warranty, or covenant contained herein in any respect, the fact
that there exists another representation, warranty, or covenant relating to the
same subject matter (regardless of the relative levels of specificity) which the
Party has not breached shall not detract from nor mitigate the fact that the
Party is in breach of the first representation, warranty, or covenant.

14.17

Survival.  All of the representations, warranties, covenants and agreements made
by the Parties in this Agreement or pursuant hereto in any certificate,
instrument or document shall survive the consummation of the transactions
described herein shall survive for all applicable statute of limitations (except
as otherwise specifically provided herein), and may be fully and completely
relied upon by the Sellers and Purchasers, as the case may be, notwithstanding
any investigation heretofore or hereafter made by any of them or on behalf of
any of them, and shall not be deemed merged into any instruments or agreements
delivered at Closing or thereafter.

14.18

Incorporation of Exhibits and Schedules.  The exhibits and schedules (including
the Disclosure Schedules) identified in this Agreement and the recitals first
set forth above are incorporated herein by reference and made a part hereof.

14.19

Submission to Jurisdiction.  Each Party to this Agreement hereby submits to
exclusive jurisdiction of any state or federal court within Orange County,
Florida for purposes of all legal proceedings arising out of or relating to this
Agreement or the transactions contemplated hereby.  Each Party to this Agreement
hereby irrevocably waives, to the fullest extent permitted by law, any
objections which it may now or hereafter have to the laying of the venue of any
such proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum.

15.

DEFINITIONS.  All capitalized words that are not capitalized for purposes of
grammar and which are not defined in the text of this Agreement are defined
terms with their definitions set forth on Exhibit 1.

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IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the
date and year first above written.

“Company”

“Acquiring Companies”

The Center for Pain Management, LLC

PainCare Holdings, Inc.

By: /s/Marc A Love, M.D.

By: /s/Randy Lubinsky

Attest: /s/Lester A. Zuckerman, M.D.

Attest:/s/ Mark Szporka

PainCare Acquisition Company XV, Inc.

By:/s/ Randy Lubinsky

Attest: /s/ Mark Szporka

Members:

LESTER A. ZUCKERMAN, M.D.

MARC A. LOEV, M.D.

/s/ Lester A. Zuckerman, M.D.

/s/ Marc A. Love, M.D.

P. BOBBY DEY, M.D.

MARK H. COLEMAN, M.D.

 

/s/ P.Bobby Dey, M.D.

/s/ Mark H. Coleman, M.D.

MICHAEL J. DALY, M.D.

ALI EL-MOHANDES, M.D.

/s/ Michael J. Daly, M.D.

Ali El-Monhandes, M.D.