STOCK PURCHASE AGREEMENT



                                  by and among

                            IntegraMed America, Inc.,


                              IDVC Acquisition Co.,


                            The Sellers Named Herein,


                           The Guarantors Named Herein


                                       and

                          Vein Clinics of America, Inc.

                                      dated

                                 August 8, 2007












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                                Table of Contents

Recitals....................................................................1

I. Definitions..............................................................1

II. Purchase of Shares and Closing..........................................9
     2.1      Purchase and Sale.............................................9
     2.2      Purchase Price................................................9
     2.3      Escrow Funds..................................................9
     2.4      The Closing..................................................10
     2.5      Determination of Post-Closing Adjustments....................12
     2.6      Payment of Indebtedness......................................13
     2.7      Earn-Out Payments............................................13
     2.8      Sellers' Representative......................................13
     2.9      Further Assurances...........................................14

III. Representations and Warranties of Sellers.............................15
     3.1      Title to Shares..............................................15
     3.2      Incorporation; Power and Authority...........................15
     3.3      Valid and Binding Agreements.................................15
     3.4      No Claims....................................................15
     3.5      No Breach; Consents..........................................15
     3.6      Brokerage....................................................16
     3.7      Investment Intent............................................16

IV. Representations and Warranties Regarding the Company...................16
     4.1      Incorporation; Power and Authority...........................16
     4.2      Valid and Binding Agreement..................................16
     4.3      No Breach; Consents..........................................16
     4.4      Capitalization...............................................17
     4.5      Subsidiaries.................................................17
     4.6      Financial Statements.........................................18
     4.7      Absence of Undisclosed Liabilities...........................18
     4.8      Books and Records............................................18
     4.9      Absence of Certain Developments..............................19
     4.10     Property.....................................................21
     4.11     Accounts Receivable..........................................22
     4.12     Inventory....................................................22
     4.13     Tax Matters..................................................22
     4.14     Intellectual Property Rights.................................25
     4.15     Material Contracts...........................................27
     4.16     Litigation...................................................29
     4.17     Insurance....................................................29
     4.18     Compliance with Laws; Governmental Authorizations............29
     4.19     Environmental Matters........................................30
     4.20     Warranties...................................................31

                                       i

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     4.21     Employees....................................................31
     4.22     Employee Benefits............................................33
     4.23     Third-Party Payors...........................................36
     4.24     Suppliers....................................................36
     4.25     Affiliate Transactions.......................................37
     4.26     Indebtedness.................................................37
     4.27     Brokerage....................................................37
     4.28     Availability of Documents....................................37
     4.29     Disclosure...................................................37

V. Representations and Warranties of Buyer.................................37
     5.1      Incorporation; Power and Authority...........................37
     5.2      Valid and Binding Agreement..................................37
     5.3      No Breach; Consents..........................................38
     5.4      Brokerage....................................................38
     5.5      Parent Common Stock..........................................38

VI. Agreements of Parent...................................................38
     6.1      Board of Directors...........................................38

VII. Taxes.................................................................38
     7.1      Tax Matters..................................................38
     7.2      Transfer and Sales Taxes.....................................41

VIII. Conditions to Closing................................................41
     8.1      Conditions to Obligations of Parent and Buyer................41
     8.2      Conditions to Sellers' Obligations...........................42

IX. Indemnification........................................................43
     9.1      Indemnification..............................................43
     9.2      Third-Party Actions..........................................44
     9.3      Tax Adjustment...............................................45

X. Guarantees..............................................................45

XI. General................................................................46
     11.1     Press Releases and Announcements.............................46
     11.2     Expenses.....................................................46
     11.3     Amendment and Waiver.........................................46
     11.4     Notices......................................................46
     11.5     Assignment...................................................47
     11.6     No Third Party Beneficiaries.................................47
     11.7     Severability.................................................47
     11.8     Complete Agreement...........................................48
     11.9     Schedules....................................................48
     11.10    Signatures; Counterparts.....................................48
     11.11    Governing Law................................................48

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     11.12    Specific Performance.........................................48
     11.13    Jurisdiction.................................................48
     11.14    Waiver of Jury Trial.........................................49
     11.15    Construction.................................................49
     11.16    Time of Essence..............................................50


     Exhibit A--Form of Escrow Agreement
     Exhibit B--Form of Voting Agreement
     Exhibit C--Form of Opinion of McDermott Will & Emery LLP
     Exhibit D--Terms of Earn-Out Payments
     Exhibit E--Form of Kush Agarwal Employment Agreement

                                      iii

<PAGE>


                            STOCK PURCHASE AGREEMENT

         This STOCK PURCHASE AGREEMENT (this "Agreement") is made as of [August
8] , 2007 by and among IntegraMed America, Inc., a Delaware corporation
("Parent"), IDVC Acquisition Co., a Delaware corporation and wholly-owned
subsidiary of Parent ("Buyer"), D. Brian McDonagh, M.D. Trust Dated May 1, 2004
("McDonagh Seller"), Kush K. Agarwal Living Trust ("Agarwal Seller") (each of
McDonagh Seller and Agarwal Seller, a "Seller" and collectively, the "Sellers"),
Kush K. Agarwal (the "Sellers' Representative"), D. Brian McDonagh, in his
personal capacity, as guarantor of the obligations of McDonagh Seller ("McDonagh
Guarantor"), Kush K. Agarwal, in his personal capacity, as guarantor of the
obligations of Agarwal Seller ("Agarwal Guarantor") and Vein Clinics of America,
Inc., a Delaware corporation, (the "Company").

                                    Recitals

         WHEREAS, Sellers own all of the outstanding capital stock of the
Company.

         WHEREAS, Sellers desire to sell, and Buyer desires to buy, all of the
outstanding capital stock of the Company on the terms and subject to the
conditions set forth in this Agreement.

         NOW, THEREFORE, in consideration of the mutual representations,
warranties and agreements contained in this Agreement, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:

                                 I. Definitions

         The following terms have the meanings assigned to them below:

         "Active Employee" means any employee employed on the Closing Date by
the Company or a Professional Corporation who is a bargaining unit employee
currently covered by a collective bargaining agreement or employed exclusively
by the Company or a Professional Corporation, including employees on temporary
leave of absence, family medical leave, military leave, temporary disability or
sick leave, but excluding employees on long-term disability leave.

         "Admitted Claim" has the meaning set forth in Section 9.1(b).

         "Affiliate" of a specified Person means any other Person which,
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with such specified Person. For
purposes of this definition, "control" of any Person means possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of such Person, whether through the ownership of voting capital
stock or membership interests, by contract, or otherwise.

         "Agarwal Guarantor" and "Agarwal Seller" each have the respective
meanings set forth in the first paragraph of this Agreement.

         "Agreed Closing Statement" has the meaning set forth in Section 2.5.
<PAGE>

         "Agreement" has the meaning set forth in the first paragraph of this
Agreement.

         "Annual Financial Statements" has the meaning set forth in Section 4.6.

         "Buyer" has the meaning set forth in the first paragraph of this
Agreement.

         "Buyer Losses" has the meaning set forth in Section 9.1(a).

         "Capital Lease" means a lease on which the Company is a lessee that is
a capital lease as determined in accordance with GAAP.

         "Capital Source Credit Facility" means the credit agreement, dated as
of August 10, 2006, by and among the Company, CapitalSource Finance LLC, as
agent and lenders party thereto.

         "Cash Amount" has the meaning set forth in Section 2.2.

         "Closing" has the meaning set forth in Section 2.4(a).

         "Closing Date" has the meaning set forth in Section 2.4(a).

         "Closing Long-Term Liabilities" means liabilities of the Company under
the Capital Source Credit Facility classified as "long term" liabilities on a
balance sheet under GAAP, on the Closing Date.

         "Closing Working Capital" means the current assets of the Company minus
the current liabilities of the Company, as defined by GAAP, on the Closing Date,
as modified by Schedule 2.5. Closing Working Capital shall be prepared on a
basis consistent with Schedule 2.5.

         "Closing Working Capital Adjustment" means an amount equal to
$1,800,000 less Closing Working Capital. The Closing Working Capital Adjustment
may be positive or negative, it being understood that an increase in the Closing
Working Capital relative to the referenced amount will result in an increase in
the Purchase Price and a decrease in the Closing Working Capital relative to the
referenced amount will result in a reduction in the Purchase Price.

         "Code" means the Internal Revenue Code of 1986, as amended.

         "Company" has the meaning set forth in the first paragraph of this
Agreement.

         "Company Common Stock" has the meaning set forth in Section 2.1.

         "Consent" means any authorization, consent, approval, filing, waiver,
exemption or other action by or notice to any Person.

         "Contract" means a contract, agreement, lease, commitment or binding
understanding, whether oral or written, that is in effect as of the date of this
Agreement or any time after the date of this Agreement.

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<PAGE>

         "Department" has the meaning set forth in Section 4.21(c).

         "Disclosure Schedule" means the schedule delivered by Seller to Buyer
on or prior to the date of this Agreement.

         "Employment Loss" has the meaning set forth in Section 9.1(a).

         "Encumbrance" means any charge, claim, community property interest,
easement, covenant, condition, equitable interest, lien, option, pledge,
security interest, right of first refusal or restriction of any kind, including
any restriction on use, voting, transfer, receipt of income or exercise of any
other attribute of ownership.

         "Environmental Claims" means any and all administrative, regulatory or
judicial actions, suits, orders, demands, directives, claims, liens,
investigations, proceedings or written or oral notices of noncompliance or
violation by or from any person alleging (1) liability of any kind or nature
(including liability or responsibility for the costs of enforcement proceedings,
investigations, cleanup, governmental response, removal or remediation, natural
resource damages, property damages, personal injuries, penalties, contribution,
indemnification and injunctive relief) arising out of, based on or resulting
from the presence or Leak of, or exposure to, any Hazardous Material at any
location, or (2) the failure to comply with any Environmental Law.

         "Environmental Law" means any Law or Order issued, promulgated or
entered into by or with any Governmental Entity relating to pollution, the
environment, natural resources or human health and safety.

         "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations thereunder.

         "Escrow Agent" has the meaning set forth in Section 2.3.

         "Escrow Agreement" has the meaning set forth in Section 2.3.

         "Escrow Funds" has the meaning set forth in Section 2.3.

         "Final Closing Statement" has the meaning set forth in Section 2.5.

         "FIRPTA Statement" means an affidavit, under penalties of perjury,
stating that the Company is not and has not been a United States real property
holding corporation, dated as of the Closing Date and in form and substance
required under Treasury Regulation Section 1.897-2(h) for purposes of satisfying
Buyer's obligations under Treasury Regulation Sections 1.1445-1 and 1.1445-2.

         "GAAP" means United States generally accepted accounting principles, as
in effect from time to time.

                                       3
<PAGE>

         "Governmental Authorization" means any approval, consent, license,
permit, waiver, registration or other authorization issued, granted, given, made
available or otherwise required by any Governmental Entity or pursuant to Law.

         "Governmental Entity" means any federal, state, local, foreign,
international or multinational entity or authority exercising executive,
legislative, judicial, regulatory, administrative or taxing functions of or
pertaining to government.

         "Governmental Order" means any judgment, injunction, writ, order,
ruling, award or decree by any Governmental Entity or arbitrator.

         "Guarantors" means Agarwal Guarantor and McDonagh Guarantor.

         "Hazardous Substance" means any petroleum or petroleum products,
radioactive materials or wastes, asbestos in any form, polychlorinated biphenyls
and any other chemical, material, substance or waste that is prohibited, limited
or regulated under any Environmental Law.

         "Indebtedness" means, as at any date of determination thereof, (without
duplication): (a) all obligations of the Company or any of its Subsidiaries for
borrowed money or funded indebtedness or issued in substitution for or exchange
for borrowed money or fund indebtedness (including obligations in respect of
principal, accrued interest, and any applicable prepayment charges or premiums);
(b) any indebtedness evidenced by any note, bond, debenture or other debt
security; (c) capital leases; (d) any indebtedness guaranteed by the Company or
any of its Subsidiaries; and (e) any obligations with respect to the termination
of any interest rate hedging or swap agreements.

         "Indemnified Party" has the meaning set forth in Section 9.1(a).

         "Indemnified Party Claim" has the meaning set forth in Section 9.1(b).

         "Independent Accountants" has the meaning set forth in Section 2.5.

         "Insider" means (i) a shareholder, officer, director or employee of the
Company or any Subsidiary, (ii) any Member of the Immediate Family of any
shareholder, officer, director or employee of the Company or any Subsidiary or
(iii) any entity in which any of the Persons described in clause (i) or (ii)
owns any beneficial interest (other than less than one percent of the
outstanding shares of capital stock of any corporation whose stock is listed on
a national securities exchange.

         "Intellectual Property Rights" means (i) rights in patents, patent
applications and patentable subject matter, whether or not the subject of an
application, (ii) rights in trademarks, service marks, trade names, trade dress
and other designators of origin, registered or unregistered, (iii) rights in
copyrightable subject matter or protectable designs, registered or unregistered,
(iv) trade secrets, (v) rights in internet domain names, uniform resource
locators and e-mail addresses, (vi) know-how and (vii) all other intellectual
and industrial property rights of every kind and nature and however designated,
whether arising by operation of Law, Contract, license or otherwise.

                                       4
<PAGE>

         "IRS" means the United States Internal Revenue Service.

         "Knowledge" with respect to Sellers means the knowledge of any Seller
or any knowledge that should have been acquired by any such Person had such
Person acted in a commercially reasonable manner.

         "Last Fiscal Year End" has the meaning set forth in Section 4.6.

         "Latest Balance Sheet" has the meaning set forth in Section 4.6.

         "Latest Balance Sheet Date" has the meaning set forth in Section 4.6.

         "Latest Financial Statements" has the meaning set forth in Section 4.6.

         "Law" means any constitution, law, ordinance, principle of common law,
regulation, statute or treaty of any Governmental Entity.

         "Leak" means any actual or threatened release, spill, emission,
leaking, dumping, injection, pouring, deposit, disposal, discharge, dispersal,
leaching or migration into or through the environment or within any building,
structure, facility or fixture.

         "Leased Real Property" has the meaning set forth in Section 4.10(c).

         "Liability" means any liability or obligation whether accrued,
absolute, contingent, unliquidated or otherwise, whether due or to become due,
whether known or unknown, and regardless of when asserted.

         "Licensed-In Intellectual Property Rights" means Third-Party
Intellectual Property Rights used or held for use by the Company or any
Subsidiary with the permission of the owner.

         "Litigation" means any claim, action, arbitration, mediation, audit,
hearing, investigation, proceeding, litigation or suit (whether civil, criminal,
administrative, investigative or informal) commenced, brought, conducted or
heard by or before, or otherwise involving, any Governmental Entity or
arbitrator or mediator.

         "Long-Term Liabilities Adjustment" means an amount equal to $6,600,000
less Closing Long-Term Liabilities. The Long-Term Liabilities Adjustment may
only be a positive number, it being understood that an adjustment will result in
an increase in the Purchase Price.

         "Loss" means any Litigation, Governmental Order, complaint, claim,
demand, damage, deficiency, penalty, fine, cost, amount paid in settlement,
liability, obligation, Tax, Encumbrance, loss, expense or fee, including court
costs and attorneys' fees and expenses.

         "Material Adverse Effect" means any change, effect, event or condition,
individually or in the aggregate, that has had, or, with the passage of time,
could have, a material adverse effect on the business, assets, properties,
condition (financial or otherwise), results of operations or prospects of the
Company and its Subsidiaries, taken as a whole.

                                       5
<PAGE>

         "Material Contracts" has the meaning set forth in Section 4.15(a).

         "McDonagh Guarantor" and "McDonagh Seller" each have the respective
meanings set forth in the first paragraph of this Agreement.

         "Member of the Immediate Family" of a Person means a spouse, parent,
child, sibling, mother- or father-in-law, son- or daughter-in-law, and brother-
or sister-in-law of such Persons.

         "New Office Expenditures" means expenditures by the Company prior to
the Closing Date for leasehold improvements and furniture, fixtures and
equipment related to the Company's headquarters.

         "New Office Expenditures Adjustment" means an amount equal to New
Office Expenditures, not to exceed $200,000. Any adjustment will result in an
increase in the Purchase Price.

         "Notice of Objection" has the meaning set forth in Section 2.5.

         "Off-the-Shelf Software" means Software that is widely commercially
available.

         "Ordinary Course of Business" means the ordinary course of business of
the Company and the Subsidiaries consistent with past custom and practice
(including with respect to quantity and frequency) as it has been conducted
since the Last Fiscal Year End.

         "Organizational Documents" means (i) the articles or certificate of
incorporation and the bylaws of a corporation, (ii) the partnership agreement
and any statement of partnership of a general partnership, (iii) the limited
partnership agreement and the certificate of limited partnership of a limited
partnership, (iv) the limited liability company agreement and articles or
certificate of formation of a limited liability company, (v) any charter or
similar document adopted or filed in connection with the creation, formation or
organization of a Person and (vi) any amendment to any of the foregoing.

         "Owned Intellectual Property Rights" means Intellectual Property Rights
owned by the Company or any Subsidiary.

         "Owned Real Property" has the meaning set forth in Section 4.10(b).

         "Parent" has the meaning set forth in the first paragraph of this
Agreement.

         "Parent Common Stock" has the meaning set forth in Section 2.2.

         "Parent Common Stock Price" means the average closing price of Parent
Common Stock on the NASDAQ Global Market for the ten trading days ending on the
third trading day immediately preceding the Closing Date.

         "Pay-Off Letters" has the meaning set forth in Section 2.6.

                                       6
<PAGE>

         "Permitted Encumbrances" means (i) Encumbrances for Taxes and other
governmental charges and assessments (except assessments for public improvements
levied, pending or deferred against the Owned Real Property) that are not yet
due and payable or which are being contested in good faith by appropriate
proceedings (provided required payments have been made in connection with any
such contest), (ii) Encumbrances of carriers, warehousemen, mechanics' and
materialmen and other like Encumbrances arising in the Ordinary Course of
Business (provided lien statements have not been filed as of the Closing Date),
(iii) easements, rights of way and restrictions, zoning ordinances and other
similar Encumbrances affecting the Real Property and which do not unreasonably
restrict the use thereof or Buyer's proposed use thereof in the Ordinary Course
of Business, (iv) statutory Encumbrances in favor of lessors arising in
connection with any property leased to the Company or any Subsidiary, (v)
Encumbrances reflected in the Latest Financial Statements or arising under
Material Contracts and (vi) Encumbrances that will be removed prior to or in
connection with the Closing.

         "Person" means any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, labor union, Governmental
Entity or other entity.

         "Plan" means every plan, fund, contract, program and arrangement
(whether written or not) for the benefit of present or former employees,
including those intended to provide (i) medical, surgical, health care,
hospitalization, dental, vision, workers' compensation, life insurance, death,
disability, legal services, severance, sickness or accident benefits (whether or
not defined in Section 3(1) of ERISA), (ii) pension, profit sharing, stock
bonus, retirement, supplemental retirement or deferred compensation benefits
(whether or not tax qualified and whether or not defined in Section 3(2) of
ERISA) or (iii) salary continuation, unemployment, supplemental unemployment,
severance, termination pay, change-in-control, vacation or holiday benefits
(whether or not defined in Section 3(3) of ERISA), (w) that is maintained or
contributed to by the Company, any Subsidiary or a Professional Corporation, (x)
that the Company, any Subsidiary or a Professional Corporation has committed to
implement, establish, adopt or contribute to in the future, (y) for which the
Company, any Subsidiary or a Professional Corporation is or may be financially
liable as a result of the direct sponsor's affiliation with the Company, its
Subsidiaries, a Professional Corporation or the Company's shareholders (whether
or not such affiliation exists at the date of this Agreement and notwithstanding
that the Plan is not maintained by the Company, any Subsidiary or any
Professional Corporation for the benefit of its employees or former employees)
or (z) for or with respect to which the Company, any Subsidiary or any
Professional Corporation is or may become liable under any common law successor
doctrine, express successor liability provisions of Law, provisions of a
collective bargaining agreement, labor or employment Law or agreement with a
predecessor employer. Plan does not include any arrangement that has been
terminated and completely wound up prior to the date of this Agreement and for
which neither the Company, any Subsidiary or any Professional Corporation has
any present or potential liability.

         "Pre-Closing Tax Period" has the meaning set forth in Section 7.1(d).

         "Professional Corporation" means an entity organized to practice
medicine as a professional corporation and whose shareholders are physicians


                                       7
<PAGE>

licensed to practice in the jurisdiction where the entity is organized and such
entity is either (i) under contract with the Company for management services or
is (ii) owned by the Company.

         "Proposed Closing Statement" has the meaning set forth in Section 2.5.

         "Purchase Price" has the meaning set forth in Section 2.2.

         "Real Property" has the meaning set forth in Section 4.10(c).

         "Registered Intellectual Property Rights" means Intellectual Property
Rights that are the subject of a pending application or an issued patent,
trademark, copyright, design right or other similar registration formalizing
exclusive rights.

         "Remedies Exception," when used with respect to any Person, means
except to the extent enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting the enforcement
of creditors' rights generally and by general equitable principles.

         "Repaid Closing Indebtedness" has the meaning set forth in Section 2.6.

         "Return" means any return, declaration, report, estimate, information
return or statement, and any attachments or schedules thereto, pertaining to any
Taxes.

         "SEC" means the United States Securities and Exchange Commission.

         "Seller" has the meaning set forth in the first paragraph of this
Agreement.

         "Sellers Percentage Interest" shall mean the relative ownership
interest of each Seller in the Company as shown on Schedule 2.4(c).

         "Sellers' Representative" has the meaning set forth in the first
paragraph of this Agreement.

         "Shares" has the meaning set forth in Section 2.1.

         "Software" means computer programs or data in computerized form,
whether in object code, source code or other form.

         "Stock Amount" has the meaning set forth in Section 2.2.

         "Straddle Period" has the meaning set forth in Section 7.1(c).

         "Subsidiary" means any Person in which any ownership interest is owned,
directly or indirectly, by another Person. When used without reference to a
particular entity, Subsidiary means a Subsidiary of the Company.

         "Tax Affiliate" means each of the Company and the Subsidiaries, any
other Person that is or was a member of an affiliated, combined or unitary group
of which the Company or any Subsidiary is or was a member, and any such
affiliated, combined or unitary group.

                                       8
<PAGE>

         "Tax Claim" has the meaning set forth in Section 7.1(d).

         "Taxes" means all taxes, charges, fees, levies or other assessments,
including all net income, gross income, gross receipts, sales, use, ad valorem,
transfer, franchise, profits, license, withholding, payroll, employment, social
security, unemployment, excise, estimated, severance, stamp, occupation,
property or other taxes, customs duties, fees, assessments or charges of any
kind whatsoever, including all interest and penalties thereon, and additions to
tax or additional amounts imposed by any Governmental Entity upon the Company or
any Tax Affiliate.

         "Third-Party Action" has the meaning set forth in Section 9.2.

         "Third-Party Intellectual Property Rights" means Intellectual Property
Rights in which a Person other than the Company or a Subsidiary has any
ownership interest.

         "Transfer Taxes" has the meaning set forth in Section 7.2.

         "Treasury Regulations" means the rules and regulations under the Code.

         "WARN Act" means the Worker Adjustment and Retraining Notification Act
of 1988, as amended.

         "Work Permits" has the meaning set forth in Section 4.21(c).


                       II. Purchase of Shares and Closing

         2.1 Purchase  and Sale.  At the Closing and on the terms and subject to
the conditions set forth in this Agreement,  Sellers agree to sell to Buyer, and
Buyer agrees to purchase from Sellers,  all of the issued and outstanding shares
(the  "Shares") of common stock,  no par value of the Company  ("Company  Common
Stock").

         2.2 Purchase  Price.  The aggregate  consideration  for the Shares (the
"Purchase Price") is (a) TWENTY-EIGHT  MILLION DOLLARS  ($28,000,000),  plus (b)
the Earn-Out Payments, if any, minus (c) the Closing Working Capital Adjustment,
if any, plus (d) the difference,  if any, between the Stock Amount and the value
of the Parent Common Stock issued  pursuant to the next  sentence.  The Purchase
Price shall consist of TWENTY-FOUR  MILLION DOLLARS  ($24,000,000)  in cash (the
"Cash  Amount)  and that  number of shares of common  stock,  par value $.01 per
share, of Parent  ("Parent  Common Stock"),  rounded to the nearest whole share,
having an aggregate value, based on the Parent Common Stock Price, equal to FOUR
MILLION DOLLARS ($4,000,000) (the "Stock Amount").

         2.3 Escrow Funds. At the Closing,  Buyer,  Sellers'  Representative and
Wells Fargo Bank, National Association, the ("Escrow Agent") shall enter into an
escrow  agreement,  substantially  in the form of Exhibit A hereto (the  "Escrow
Agreement"),  pursuant  to which  TWO  MILLION  FIVE  HUNDRED  THOUSAND  Dollars
($2,500,000) (the "Escrow Funds") shall be deposited into escrow for the purpose
of providing  funds for any payments due to Buyer after the Closing  pursuant to
Section 2.5, Article VII or Article IX.

                                       9
<PAGE>

         2.4 The Closing.
                 -------

         (a) The closing of the transactions contemplated by this Agreement (the
"Closing") will take place on the date of this Agreement (the "Closing Date") at
the offices of IntegraMed America,  Inc. at Two Manhattanville  Road,  Purchase,
New York 10577 at 2:00 p.m.  New York City time,  or at such other  place and on
such other date as may be mutually agreed by Sellers'  Representative and Buyer,
in which case Closing Date means the date so agreed.

         (b)  Subject  to the  conditions  set forth in this  Agreement,  on the
Closing Date:

                (i) Sellers will deliver to Buyer:

                    (A) certificates  representing  all of the Shares,  free and
                clear of all Encumbrances,  duly endorsed or accompanied by duly
                executed stock powers;

                    (B) a certificate  of Sellers dated the Closing Date stating
                that the conditions set forth in Sections  8.1(a) through 8.1(k)
                have been satisfied;

                    (C) a copy of the  text of the  resolutions  adopted  by the
                board of directors  of the Company  authorizing  the  execution,
                delivery  and  performance  of this  Agreement,  certified by an
                appropriate officer of the Company;

                    (D) the minute books, stock transfer records, corporate seal
                and other materials  related to the corporate  administration of
                the Company and any Subsidiary;

                    (E)  resignations  in writing  (effective  as of the Closing
                Date) from such of the  officers  and  directors  of each of the
                Company and the  Subsidiaries  as Buyer may have requested prior
                to the Closing Date;

                    (F) duly executed copies of all Required Consents;

                    (G) a  copy,  duly  executed  by  each  Seller  of a  Voting
                Agreement in the form of Exhibit B;

                    (H) evidence of payment or  cancellation  of indebtedness of
                the Company that is to be canceled prior to the Closing Date, as
                well as duly  executed  copies of all  agreements,  instruments,
                certificates  and other documents  necessary or appropriate,  in
                the  opinion  of  Buyer's  counsel,   to  release  any  and  all
                Encumbrances  against  the  assets of the  Company,  other  than
                Permitted Encumbrances;

                    (I) a duly executed FIRPTA Statement;

                    (J)  long-form  certificates  dated as of a date not earlier
                than the second business day prior to the Closing as to the good
                standing of the Company executed by the appropriate officials of


                                       10
<PAGE>

                the State of Delaware and each jurisdiction in which the Company
                is licensed or qualified to do business as a foreign corporation
                as specified in Schedule 4.1;

                    (K)  the  Escrow   Agreement,   duly  executed  by  Sellers'
                Representative;

                    (L) an opinion of McDermott  Will & Emery LLP,  addressed to
                Buyer and Parent, substantially in the form of Exhibit C hereto;

                    (M) such other certificates,  documents and instruments that
                Buyer reasonably  requests for the purpose of (1) evidencing the
                accuracy of the Sellers'  representations  and  warranties,  (2)
                evidencing  the  performance  and  compliance  by  Sellers  with
                agreements  contained  in this  Agreement,  (3)  evidencing  the
                satisfaction of any condition  referred to in Section 8.1 or (4)
                otherwise  facilitating  the  consummation  of the  transactions
                contemplated by this Agreement;

                (ii) Buyer and Parent will deliver to Sellers' Representative:

                    (A) a  certificate  of Buyer dated the Closing  Date stating
                that the  conditions  set forth in Section 8.2(a) through 8.2(e)
                have been satisfied;

                    (B) a copy of the texts of the  resolutions  adopted  by the
                boards of directors of each of Buyer and Parent  authorizing the
                execution, delivery and performance of this Agreement, certified
                by an appropriate officer of Buyer and Parent, respectively;

                    (C) a copy of the text of  resolutions  adopted  by the sole
                shareholder  of Buyer  approving  the  purchase  of the  Shares,
                certified by an appropriate officer of Buyer;

                    (D) the Escrow Agreement, duly executed by Buyer;

                    (E) the Voting Agreement, duly executed by Parent; and

                    (F) such other certificates,  documents and instruments that
                the  Company   reasonably   requests  for  the  purpose  of  (1)
                evidencing the accuracy of Buyer's and Parent's  representations
                and warranties, (2) evidencing the performance and compliance by
                Buyer and Parent with  agreements  contained in this  Agreement,
                (3) evidencing the satisfaction of any condition  referred to in
                Section 8.2 or (4) otherwise  facilitating  the  consummation of
                the transactions contemplated by this Agreement.

         (c)  Subject  to the  conditions  set forth in this  Agreement,  on the
Closing  Date Buyer  shall (i) pay and  deliver  the Cash Amount less the Escrow
Funds to the Sellers in accordance with their Stockholders  Percentage  Interest
by means of a wire transfer of immediately available cash funds to such accounts
as are directed by Sellers'  Representative  prior to the Closing and (ii) shall
deliver  the Stock  Amount to the  Sellers  in  accordance  with  their  Sellers
Percentage  Interest,  in each  case,  upon  surrender  to the  Buyer  of  stock


                                       11
<PAGE>

certificates,  representing all of the outstanding  capital stock of the Company
duly endorsed in blank or accompanied by a stock transfer power duly endorsed in
blank.

         Each certificate representing Parent Common Stock issued pursuant to
this Agreement will be imprinted with legends substantially in the following
form:

         THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT
TO THE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE
144 OF SUCH ACT.

         THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO THE
RESTRICTIONS CONTAINED IN THAT CERTAIN VOTING AGREEMENT, DATED AS OF [AUGUST 8],
2007, BY AND AMONG THE STOCKHOLDERS NAMED THEREIN AND INTEGRAMED AMERICA, INC.

         (d) All items delivered by the parties at the Closing will be deemed to
have been  delivered  simultaneously,  and no items will be deemed  delivered or
waived until all have been delivered.

         2.5 Determination of Post-Closing Adjustments. (a) Within 90 days after
the Closing Date,  Buyer shall prepare and deliver to Sellers'  Representative a
statement  setting forth its  determination of the Closing Working Capital,  the
Closing  Long-Term  Liabilities and the New Office  Expenditures  (the "Proposed
Closing  Statement").  During the 15 days immediately  following delivery of the
Proposed Closing Statement,  Sellers' Representative shall be entitled to review
the  Proposed  Closing  Statement  and any working  papers,  trial  balances and
similar materials  relating to the Proposed Closing Statement prepared by Buyer,
and Buyer shall  provide  Sellers'  Representative  with access at the Company's
principal  office,  during normal business  hours,  to the Company's  personnel,
properties, books and records. The Proposed Closing Statement shall become final
and binding  (the "Agreed  Closing  Statement")  upon the parties  hereto on the
sixteenth  day  following  receipt  thereof by Sellers'  Representative,  unless
Sellers'  Representative  gives written  notice to Buyer of its objection to the
Proposed  Closing  Statement (a "Notice of  Objection")  prior to such sixteenth
day. Any Notice of Objection  shall specify in  reasonable  detail the nature of
any objection so asserted.

         (b) During the 15 days immediately following the delivery of any Notice
of  Objection,  Buyer and  Sellers'  Representative  shall seek in good faith to
resolve  in writing  any  differences  which  they may have with  respect to any
matter  specified in such Notice of  Objection.  During such  period,  Buyer and
Sellers'  Representative  shall each have  access to the other  party's  working
papers,  trial balances and similar  materials  prepared in connection  with the
other party's  preparation of the Proposed  Closing  Statement and the Notice of
Objection,  as the case  may be.  The  matters  set  forth  in any such  written
resolution  shall be final and binding on the parties hereto on the date of such
written resolution.

                                       12
<PAGE>

         At the end of the fifteen day period referred to in this Section
2.5(b), the parties shall mutually engage and submit such dispute to, and the
same shall be finally resolved in accordance with the provisions of this
Agreement by, the New York, New York office of Grant Thornton LLP, or such other
accounting firm of national reputation as shall be mutually acceptable to Buyer
and Sellers' Representative (the "Independent Accountants"). The Independent
Accountants shall determine and report in writing to Buyer and Sellers'
Representative as to the resolution of all disputed matters submitted to the
Independent Accountants and the effect of such determinations on the Proposed
Closing Statement within 20 days after such submission or such longer period as
the Independent Accountants may reasonably require, and such determinations
shall be final, binding and conclusive as to Buyer, Parent, Sellers, Sellers'
Representative and their respective Affiliates. The statements setting forth
such final and binding determinations as of the Closing Date are hereinafter
referred to as the "Final Closing Statement". The fees and disbursements of the
Independent Accountants shall be payable one-half by Buyer, on the one hand, and
one-half by Sellers' Representative, on the other hand.

         (c) If the Closing  Working  Capital  Adjustment as of the Closing Date
set forth in the Agreed Closing Statement or the Final Closing Statement, as the
case may be, is a negative number, then Sellers'  Representative and Buyer shall
direct the escrow  agent under the Escrow  Agreement to  distribute  to Buyer an
amount equal to the positive of such negative number from the Escrow Account. If
either  the  Closing  Working  Capital  Adjustment,  the  Long-Term  Liabilities
Adjustment or the New Office Expenditures  Adjustment as of the Closing Date set
forth in the Agreed  Closing  Statement or the Final Closing  Statement,  as the
case may be, is a positive number,  then Buyer shall pay the Sellers such amount
(pro rata according to their respective Sellers Percentage Interest).

         2.6 Payment of  Indebtedness.  Buyer will pay, or cause to be paid,  in
full at or immediately  following the Closing,  the  Indebtedness of the Company
and its  Subsidiaries  identified on Schedule 2.6,  including any legal fees and
prepayment  penalties  associated  with such  Indebtedness,  (collectively,  the
"Repaid Closing  Indebtedness"),  with the result that immediately following the
Closing  there will be no further  obligations  (monetary or  otherwise)  of the
Company  and  its   Subsidiaries   with  respect  to  any  such  Repaid  Closing
Indebtedness   outstanding  immediately  prior  to  the  Closing.  In  order  to
facilitate such repayment,  as soon as practicable before the Closing,  Sellers'
Representative  shall cause the Company and its Subsidiaries to obtain customary
payoff letters for the repayment of such  Indebtedness  and such other documents
reasonably requested by Buyer,  including  recordable form lien releases,  which
payoff letters will be in a commercially reasonable form and shall indicate that
such lenders have agreed to release immediately all applicable Liens relating to
the assets and  properties  of the Company and its  Subsidiaries,  including the
redelivery of all stock  certificates held pursuant to any such terminated stock
pledge agreements (collectively, the "Pay-Off Letters").

         2.7 Earn-Out Payments.  Parent will make the Earn-Out Payments, if any,
pursuant to the terms and conditions set forth in Exhibit D.

         2.8 Sellers' Representative.

                                       13
<PAGE>

         (a)  Sellers  appoint  Kush K.  Agarwal (or any Person  appointed  as a
successor   Sellers'   Representative   pursuant   to  Section   2.8)  as  their
representative and agent under this Agreement and the Escrow Agreements.

         (b) Until all  obligations  under this Agreement  have been  discharged
(including all  indemnification  obligations  under Article IX), Sellers who are
entitled to receive more than 50% of the Purchase Price,  may, from time to time
upon  written  notice to  Sellers'  Representative  and Buyer,  remove  Sellers'
Representative  or  appoint  a  new  Sellers'  Representative  upon  the  death,
incapacity,  resignation  or removal of Sellers'  Representative.  If, after the
death,  incapacity,   resignation  or  removal  of  Sellers'  Representative,  a
successor  Sellers'  Representative  has not been appointed by Sellers within 15
business  days after a request by Buyer,  Buyer will have the right to appoint a
Sellers' Representative to fill any vacancy so created by written notice of such
appointment to Sellers.

         (c) Sellers authorize Sellers' Representative to take any action and to
make and deliver any  certificate,  notice,  consent or  instrument  required or
permitted to be made or delivered  under this  Agreement or under the  documents
referred to in this Agreement, to waive any requirements of this Agreement or to
enter into one or more amendments or supplements to this Agreement that Sellers'
Representative   determines  in  Sellers'  Representative's  sole  and  absolute
discretion to be necessary,  appropriate or advisable,  which authority includes
the execution and delivery of the Escrow Agreements on behalf of Sellers and any
amendments  or  supplements  thereto  and  the  performance  of all  obligations
thereunder,  including  authority to collect and pay funds and dispute,  settle,
compromise  and  make all  claims.  The  authority  of  Sellers'  Representative
includes  the right to hire or  retain,  at the sole  expense of  Sellers,  such
counsel, investment bankers, accountants, representatives and other professional
advisors as Sellers'  Representative  determines in Sellers' Representative sole
and absolute  discretion to be necessary,  appropriate  or advisable in order to
perform this Agreement and the Escrow  Agreement.  Any party will have the right
to  rely  upon  any  action  taken  by  Sellers'  Representative,  and to act in
accordance with such action without independent investigation.

         (d) Buyer will have no liability to any Seller  arising out of the acts
or omissions of Sellers'  Representative  or any disputes  among Sellers or with
Sellers'  Representative.  Buyer may rely  entirely on its  dealings  with,  and
notices to and from, Sellers' Representative to satisfy any obligations it might
have under this Agreement,  the Escrow Agreement or any other agreement referred
to in this Agreement or otherwise to Sellers.

         Sellers' Representative accepts the appointment made by this Section
2.8 and agrees to abide by the provisions of this Section 2.8.

         2.9 Further Assurances

         (a) On and after the Closing  Date,  Sellers will take all  appropriate
action and execute any  documents,  instruments  or conveyances of any kind that
may be reasonably  requested by Buyer to carry out any of the provisions of this
Agreement.

                                       14
<PAGE>

                 III. Representations and Warranties of Sellers

         Each Seller, jointly and severally, represents and warrants to Buyer
and Parent that, except as described in the Disclosure Schedule, as of the date
of this Agreement and as of the Closing Date (as though made then and as though
the Closing Date were substituted for the date of this Agreement):

         3.1 Title to Shares.  Sellers own, of record and  beneficially,  all of
the Shares, free and clear of any Encumbrance. Such Shares constitute all of the
issued and  outstanding  capital  stock of the Company.  At Closing,  Buyer will
obtain good and valid title to the Shares, of record and beneficially,  free and
clear of any Encumbrance.

         3.2 Incorporation; Power and Authority. If such Seller is not a natural
Person,  it is duly organized,  validly  existing and in good standing under the
laws of the  jurisdiction  of its  organization.  Such Seller has all  necessary
power and authority to execute,  deliver and perform this Agreement,  the Escrow
Agreement and the Voting Agreement.

         3.3  Valid  and  Binding  Agreements.  If such  Seller is not a natural
Person, the execution, delivery and performance of this Agreement and the Escrow
Agreement by such Seller has been duly and validly  authorized  by all necessary
corporate or equivalent action.  Each of this Agreement and the Escrow Agreement
has been duly  executed and delivered by each Seller and  constitutes  the valid
and  binding  obligation  of each  Seller,  enforceable  against  each Seller in
accordance with its terms, subject to the Remedies Exception. This Agreement has
been duly executed and delivered by each Guarantor and constitutes the valid and
binding  obligation of each  Guarantor,  enforceable  against each  Guarantor in
accordance with its terms, subject to the Remedies Exception.

         3.4  No  Claims.  As of  the  date  hereof,  no  claim,  suit,  action,
proceeding  or  governmental  investigation  is pending or, to the  Knowledge of
Sellers,  threatened,  against any Seller or any of its  Affiliates  relating to
this Agreement.

         3.5 No Breach;  Consents.  The execution,  delivery and  performance of
this  Agreement  and the Escrow  Agreement  by Sellers  will not (a)  violate or
conflict with any Law,  Governmental  Order or Governmental  Authorization;  (b)
conflict with,  result in any breach of any of the  provisions of,  constitute a
default  (or any event  that  would,  with the  passage of time or the giving of
notice or both,  constitute a default) under, result in a violation of, increase
the  burdens  under,   result  in  the   termination,   amendment,   suspension,
modification, abandonment or acceleration of payment (or any right to terminate)
or require a Consent under any Contract or  Governmental  Authorization  that is
either  binding  upon or  enforceable  against  any  Seller or any  Governmental
Authorization  that is held by the  Company;  (c) result in the  creation of any
Encumbrance  upon the Shares;  (d) require any Governmental  Authorization;  (e)
give any  Governmental  Entity or other Person the right to challenge any of the
contemplated  transactions  or to exercise any remedy or obtain any relief under
any Law,  Governmental Order or Governmental  Authorization;  (f) cause Buyer or
Parent to become subject to, or to become liable for the payment of, any Tax.

                                       15
<PAGE>

         3.6  Brokerage.  Except as listed on Schedule  4.27,  no Person will be
entitled to receive any  brokerage  commission,  finder's fee, fee for financial
advisory  services or similar  compensation in connection with the  transactions
contemplated  by this  Agreement  based on any Contract  made by or on behalf of
Sellers for which Buyer or the Company is or could become liable or obligated.

         3.7  Investment  Intent.  Each Seller (a)  understands  that the Parent
Common Stock has not been, and will not be,  registered under the Securities Act
or under any state  securities laws, are being offered and sold in reliance upon
federal and state  exemptions for transactions not involving any public offering
and will  contain a legend  restricting  transfer;  (b) is  acquiring  shares of
Parent  Common  Stock  solely  for such  Seller's  own  account  for  investment
purposes,   and  not  with  a  view  to  the  distribution  thereof;  (c)  is  a
sophisticated  investor with  knowledge and experience in business and financial
matters;  (d) has received certain information  concerning Buyer and has had the
opportunity to obtain additional information as desired in order to evaluate the
merits and the risks inherent in holding the Parent Common Stock; (e) is able to
bear the  economic  risk and lack of  liquidity  inherent  in holding the Parent
Common Stock; and (f) is an "Accredited  Investor" as that term is defined under
Rule 501 of the Securities Act of 1933.

            IV. Representations and Warranties Regarding the Company

         Each Seller, jointly and severally, represents and warrants to Buyer
and Parent that, except as described in the Disclosure Schedule, as of the date
of this Agreement and as of the Closing Date (as though made then and as though
the Closing Date were substituted for the date of this Agreement):

         4.1 Incorporation; Power and Authority.

         (a) Each of the Company  and the  Subsidiaries  is a legal  entity duly
organized,  validly  existing  and  in  good  standing  under  the  laws  of the
jurisdiction  of its  organization,  and has all  necessary  power and authority
necessary  to own,  lease and operate its assets and to carry on its business as
conducted.  Each of the Company and the  Subsidiaries  is duly  qualified  to do
business as a foreign  corporation in each  jurisdiction  in which the nature of
its  business  or its  ownership  of property  requires  it to be so  qualified.
Schedule  4.1  lists,  for  each  of  the  Company  and  the  Subsidiaries,  the
jurisdiction  of  its  organization,  its  form  as  a  legal  entity  and  each
jurisdiction in which it is so qualified.

         (b) Each of the Company and the Subsidiaries is in full compliance with
all provisions of its Organizational Documents.

         4.2  Valid  and  Binding   Agreement.   The  execution,   delivery  and
performance of this
Agreement by the Company has been duly and validly authorized by all necessary
corporate action. This Agreement has been duly executed and delivered by the
Company and constitutes the valid and binding obligation of the Company,
enforceable against it in accordance with its terms, subject to the Remedies
Exception.

         4.3 No Breach;  Consents.  The execution,  delivery and  performance of
this  Agreement  by the Company  will not (a)  contravene  any  provision of the
Organizational  Documents  of the  Company  or any  Subsidiary;  (b)  violate or


                                       16
<PAGE>

conflict with any Law,  Governmental  Order or Governmental  Authorization;  (c)
conflict with,  result in any breach of any of the  provisions of,  constitute a
default  (or any event  that  would,  with the  passage of time or the giving of
notice or both,  constitute a default) under, result in a violation of, increase
the  burdens  under,   result  in  the   termination,   amendment,   suspension,
modification, abandonment or acceleration of payment (or any right to terminate)
or  require  a  Consent  under  any  Contract  that is  either  binding  upon or
enforceable   against  the  Company  or  any  Subsidiary  or  any   Governmental
Authorization  that is held by the Company or any Subsidiary;  (d) result in the
creation of any  Encumbrance  upon the Company or any  Subsidiary  or any of the
assets  of  the  Company  or  any  Subsidiary;   (e)  require  any  Governmental
Authorization;  (f) give any  Governmental  Entity or other  Person the right to
challenge  any of the  contemplated  transactions  or to exercise  any remedy or
obtain  any  relief   under  any  Law,   Governmental   Order  or   Governmental
Authorization;  or (g) cause Buyer to become subject to, or to become liable for
the payment of, any Tax.

         4.4 Capitalization.

         The authorized capital stock of the Company consists solely of 50
Common Voting Shares and 4,950 Common Non-Voting Shares of the Company of which
24.52 Common Voting Shares and 2,427.48 Common Non-Voting Shares are issued and
outstanding, none of which are held in treasury. Schedule 4.4 lists the share
certificate numbers, repurchase or redemption rights for the Shares in favor of
the Company, the vesting schedule and forfeiture provisions for any of such
shares that are "restricted stock," and the extent to which vesting will or may
be accelerated by the transactions contemplated by this Agreement and any
limitations on the ability of the holder of such capital stock to vote or
dispose of such shares. All of the Shares are duly authorized, validly issued,
fully paid and nonassessable, free of preemptive rights or any other third-party
rights and in certificated form, and have been offered, sold and issued by the
Company in compliance with applicable securities and corporate Laws, Contracts
applicable to the Company and the Company's Organizational Documents and in
compliance with any preemptive rights, rights of first refusal or similar
rights. The rights and privileges of the Company Common Stock are set forth in
the Company's Organizational Documents or otherwise provided by Law. Except as
listed on Schedule 4.4, there is no option, warrant, call, subscription,
convertible security, right (including preemptive right) or Contracts of any
character to which the Company is a party or by which it is bound obligating the
Company to issue, exchange, transfer, sell, repurchase, redeem or otherwise
acquire any shares of capital stock of the Company or obligating the Company to
grant, extend, accelerate the vesting of or enter into any such option, warrant,
call, subscription, convertible security, right or Contract. Except as listed on
Schedule 4.4, there are no outstanding or authorized stock appreciation, phantom
stock or similar rights with respect to the Company. Except as listed on
Schedule 4.4, there are no registration rights agreements, no voting trust,
proxy or other Contract and no restrictions on transfer with respect to any
capital stock of the Company.

         4.5 Subsidiaries. Except as listed on Schedule 4.5, neither the Company
nor any Subsidiary owns any Subsidiary.  For each of the Company's Subsidiaries,
Schedule 4.5 shows the equity  interests owned by the Company or any Subsidiary,
the names of the Persons owning such equity  interests and the percentage of the
outstanding  equity  interests  so owned.  All  issued  and  outstanding  equity
interests of each Subsidiary of the Company are duly authorized, validly issued,


                                       17
<PAGE>

fully paid and nonassessable, free of preemptive rights or any other third-party
right,  free and clear of all  Encumbrances,  and in certificated  form and have
been offered,  sold and issued by such  Subsidiary in compliance with applicable
securities and corporate Laws,  Contracts applicable to such Subsidiary and such
Subsidiary's  Organizational  Documents  and in compliance  with any  preemptive
rights, rights of first refusal or similar rights. There is no option,  warrant,
call, subscription, convertible security, right (including preemptive rights) or
Contract of any  character to which the Company or any  Subsidiary is a party or
by which it is bound  obligating any Subsidiary of the Company or the Company to
issue, exchange,  transfer,  sell,  repurchase,  redeem or otherwise acquire any
equity  interest of such Subsidiary or obligating the Company or such Subsidiary
to grant,  extend,  accelerate  the  vesting of or enter  into any such  option,
warrant, call, subscription, convertible security, right or Contract.

         4.6 Financial Statements.  The unaudited  consolidated balance sheet as
of  June  30,  2007  ("Latest  Balance  Sheet  Date")  of the  Company  and  its
consolidated  Subsidiaries  and Affiliates  (the "Latest Balance Sheet") and the
unaudited consolidated statements of income, changes in shareholders' equity and
cash flows of the Company and its  consolidated  Subsidiaries and Affiliates for
the  quarterly  period ended June 30, 2007 and the  six-month  period then ended
(such   statements  and  the  Latest  Balance  Sheet,   the  "Latest   Financial
Statements") and the audited consolidated balance sheet, as of December 31, 2006
(the "Last Fiscal Year End") and for the each of the prior fiscal year ends,  of
the Company and its  consolidated  Subsidiaries  and  Affiliates and the audited
consolidated  statements  of income,  changes in  shareholders'  equity and cash
flows, including the notes, of the Company and its consolidated Subsidiaries and
Affiliates  for  each of the  three  years  ended on the  Last  Fiscal  Year End
(collectively,  the "Annual Financial  Statements") are based upon the books and
records of the Company and the Subsidiaries and Affiliates have been prepared in
accordance  with GAAP  consistently  applied  during the periods  indicated  and
present fairly the financial  position,  results of operations and cash flows of
the Company and its  consolidated  Subsidiaries and Affiliates on a consolidated
basis at the respective dates and for the respective periods  indicated,  except
that the Latest  Financial  Statements may not contain all notes and are subject
to year-end adjustments, none of which are material.

         4.7  Absence  of  Undisclosed  Liabilities.   Except  as  reflected  or
expressly reserved against in the Latest Balance Sheet,  neither the Company nor
any Subsidiary has any Liability, and there is no known basis for any present or
future Litigation, charge, complaint, claim or demand against any of them giving
rise to any Liability,  except (a) a Liability that has arisen after the date of
the Latest  Balance  Sheet in the Ordinary  Course of Business and that is not a
Liability  for  breach of  Contract,  breach of  warranty,  tort,  infringement,
Litigation or violation of Governmental Order, Governmental Authorization or Law
or (b) obligations  under any Contract listed on a Schedule to this Agreement or
under a Contract not required to be listed on such a Schedule.

         4.8 Books and  Records.  The books of  account of the  Company  and the
Subsidiaries  are complete and correct and have been  maintained  in  accordance
with sound  business  practices.  Each  transaction  is properly and  accurately
recorded  on the books and  records  of the  Company or a  Subsidiary,  and each
document upon which entries in the Company's or a Subsidiary's books and records
are based is complete  and  accurate in all  respects.  The Company  maintains a
system of internal  accounting  controls adequate to insure that it maintains no
off-the-books  accounts and that its assets are used only in accordance with its
management  directives.  The minute books and stock or equity records of each of
the  Company  and the  Subsidiaries,  all of which have been made  available  to
Buyer, are complete and correct. The minute books of each of the Company and the


                                       18
<PAGE>

Subsidiaries  contain accurate records of all meetings held and actions taken by
the holders of stock or equity interests, the boards of directors and committees
of the boards of  directors or other  governing  body of each of the Company and
the  Subsidiaries,  and no meeting of any such  holders,  boards of directors or
other  governing  body or  committees  has been held for which  minutes  are not
contained in such minute books. At the Closing,  all such books and records will
be in the possession of the Company.

         4.9 Absence of Certain Developments.  Except as listed on Schedule 4.9,
since the Last Fiscal Year End:


         (a) there has not been any Material Adverse Effect;

         (b) neither the Company nor any Subsidiary has sold, leased,  licensed,
transferred or assigned any of its assets,  tangible or  intangible,  other than
for a fair consideration in the Ordinary Course of Business;

         (c)  neither  the  Company  nor any  Subsidiary  has  entered  into any
Contract (or series of related  Contracts) either involving more than $15,000 or
outside the Ordinary Course of Business;

         (d) no party (including the Company or any Subsidiary) has accelerated,
suspended, terminated, modified or canceled any Contract to which the Company or
any  Subsidiary is a party or by which any of them is bound that would have been
a Material Contract at the time of any such action;

         (e) no Encumbrance has been imposed on any assets of the Company or any
Subsidiary except Permitted Encumbrances;

         (f)  neither  the  Company  nor any  Subsidiary  has made  any  capital
expenditure (or series of related capital  expenditures)  either  involving more
than $15,000 or outside the Ordinary Course of Business;

         (g)  neither  the  Company  nor any  Subsidiary  has made  any  capital
investment  in, any loan to, or any  acquisition of the securities or assets of,
any  other  Person  (or  series  of  related  capital  investments,   loans  and
acquisitions)  outside the  Ordinary  Course of Business or acquired (by merger,
exchange,  consolidation,  acquisition  of stock or  assets  or  otherwise)  any
Person;

         (h) neither the Company nor any Subsidiary has issued any note, bond or
other debt security or created, incurred, assumed or guaranteed any indebtedness
for borrowed money (including advances on existing credit facilities) or Capital
Lease;

         (i) neither the Company nor any  Subsidiary  has delayed,  postponed or
accelerated the payment of accounts payable or other Liability or the receipt of
any accounts receivable, in each case outside the Ordinary Course of Business;

                                       19
<PAGE>

         (j) neither the Company nor any Subsidiary  has canceled,  compromised,
waived or  released  any right or claim (or series of related  rights or claims)
outside the Ordinary  Course of Business;  (k) except  incidental to the sale of
products or  services,  neither the Company nor any  Subsidiary  has granted any
license or  sublicense  of any rights under or with respect to any  Intellectual
Property Rights;

         (l) there has been no change made or authorized  in the  Organizational
Documents of the Company or any Subsidiary;

         (m)  neither  the  Company  nor  any  Subsidiary  has  issued,  sold or
otherwise  disposed of any of its capital stock or equity interests,  or granted
any  options,  warrants or other  rights to purchase or obtain  (including  upon
conversion, exchange or exercise) any of its capital stock;

         (n) neither the Company nor any Subsidiary  has declared,  set aside or
paid any dividend or made any distribution  with respect to its capital stock or
equity  interests  (whether  in cash  or in  kind)  or  redeemed,  purchased  or
otherwise  acquired any of its capital stock or split,  combined or reclassified
any outstanding shares of its capital stock;

         (o) neither the Company nor any Subsidiary has  experienced any damage,
destruction or loss (whether or not covered by insurance) to its property;

         (p)  neither  the  Company  nor any  Subsidiary  has  entered  into any
employment or collective bargaining agreement,  written or oral, or modified the
terms of any such existing agreement;

         (q) neither the Company nor any  Subsidiary has granted any increase in
the base compensation or made any other change in employment terms of any of its
directors, officers or employees outside the Ordinary Course of Business;

         (r)  neither  the  Company nor any  Subsidiary  has  adopted,  amended,
modified or  terminated  any Plan (or taken any such action with  respect to any
Plan);

         (s) neither the Company nor any  Subsidiary has discharged or satisfied
any Encumbrance or paid any liability,  other than current  liabilities  paid in
the Ordinary Course of Business;

         (t) neither the Company nor any Subsidiary has disclosed, to any Person
other  than  Buyer and  authorized  representatives  of Buyer,  any  proprietary
confidential  information,  other than pursuant to a  confidentiality  agreement
prohibiting the use or further  disclosure of such information,  which agreement
is listed on Schedule 4.9 and is in full force and effect;

         (u)  neither  the  Company  nor any  Subsidiary  has made any change in
accounting principles or practices from those utilized in the preparation of the
Annual Financial Statements; and

         (v) neither the Company nor any Subsidiary has committed to take any of
the actions described in this Section 4.9.

                                       20
<PAGE>

         4.10 Property.

         (a) The real  properties  owned by the  Company  or any  Subsidiary  or
demised  by the  leases  listed  on  Schedule  4.10  constitute  all of the real
property  owned,  leased  (whether  or not  occupied  and  including  any leases
assigned or leased premises sublet for which the Company remains  liable),  used
or occupied by the Company or any Subsidiary.

         (b) The Company or a Subsidiary owns good and marketable  title to each
parcel  of real  property  identified  on  Schedule  4.10 as being  owned by the
Company or a  Subsidiary  (the  "Owned  Real  Property"),  free and clear of all
Encumbrances,  except for  Permitted  Encumbrances  and  Encumbrances  listed on
Schedule 4.10.

         (c) The leases of real property listed on Schedule 4.10 as being leased
by the Company or any  Subsidiary  (the "Leased Real Property" and together with
the Owned Real Property,  the "Real Property") and are in full force and effect,
and the Company or a Subsidiary  holds a valid and existing  leasehold  interest
under each of the leases for the term listed on Schedule  4.10. To the Knowledge
of Sellers,  the Leased  Real  Property  is subject to no ground  lease,  master
lease,  mortgage,  deed of trust or other  Encumbrance  or interests  that would
entitle the holder  thereof to interfere with or disturb use or enjoyment of the
Leased  Real  Property or the  exercise  by the lessee of its rights  under such
lease so long as the lessee is not in default under such lease.

         (d) To the  Knowledge  of  Sellers,  each parcel of Real  Property  has
access sufficient for the conduct of the business as conducted or as proposed to
be conducted by the Company or any Subsidiary on such parcel of Real Property to
public roads and to all  utilities,  including  electricity,  sanitary and storm
sewer, potable water, natural gas, telephone,  fiberoptic, cable television, and
other  utilities used in the operation of the business at that location.  To the
Knowledge of Sellers,  the zoning for each parcel of Real  Property  permits the
existing  improvements  and the  continuation  of the business  being  conducted
thereon as a conforming  use. To the  Knowledge of Sellers,  neither the Company
nor any Subsidiary is in violation of any applicable  zoning  ordinance or other
Law relating to the Real  Property,  and neither the Company nor any  Subsidiary
has  received  any  notice  of  any  such  violation  or  the  existence  of any
condemnation or other  proceeding  with respect to any of the Real Property.  To
the  Knowledge of Sellers,  the  buildings  and other  improvements  are located
within the  boundary  lines of each parcel of Real  Property and do not encroach
over applicable setback lines.

         (e) To the  Knowledge  of Sellers,  there are no  improvements  made or
contemplated to be made by any Governmental Entity, the costs of which are to be
assessed as assessments,  special assessments,  special Taxes or charges against
any of  the  Real  Property,  and  there  are no  present  assessments,  special
assessments, special Taxes or charges.

         (f) Each of the Company and the  Subsidiaries  has good and  marketable
title to, or a valid leasehold interest in, the buildings,  machinery, equipment
and other tangible  assets and properties used by it, located on its premises or
shown in the Latest Balance Sheet or acquired  after the date thereof,  free and
clear of all  Encumbrances,  except for Permitted  Encumbrances and Encumbrances
listed on Schedule 4.10 and  properties  and assets  disposed of in the Ordinary
Course of Business since the date of the Latest Balance Sheet.

                                       21
<PAGE>

         (g) The buildings, improvements, building systems, machinery, equipment
and other tangible  assets and properties used in the conduct of the business of
each of the  Company  and the  Subsidiaries  are in good  condition  and repair,
ordinary  wear and tear  excepted,  and are  usable  in the  Ordinary  Course of
Business.  Each such asset is suitable for the purposes for which it is used and
is proposed to be used, is free from defects  (patent and latent),  and has been
maintained in accordance with normal industry practices. Each of the Company and
the Subsidiaries owns, or leases under valid leases,  all buildings,  machinery,
equipment and other tangible assets and properties  necessary for the conduct of
its respective business as conducted and as proposed to be conducted.

         (h) The fixed asset listing  attached as Schedule  4.10(h) includes all
buildings,  machinery, equipment and other tangible assets and properties of the
Company and its Subsidiaries as of the date of the Latest Balance Sheet.

         (i)  The  Company  owns  or  leases  all of the  assets,  tangible  and
intangible,  of any  nature  whatsoever,  necessary  to  operate  the  Company's
business in the manner operated by the Company.

         4.11 Accounts Receivable.

         All notes and accounts receivable of each of the Company and the
Subsidiaries are reflected properly on their books of account, are valid, have
arisen from bona fide transactions in the Ordinary Course of Business, are
subject to no setoff or counterclaim, and are current and collectible. Such
notes and accounts receivable will be collected in accordance with their terms
(none of which is beyond 180 days) at their recorded amounts, subject only to
the reserve for bad debts and contractual allowances on the face of the Latest
Balance Sheet as adjusted in the Company's books of account for the passage of
time through the Closing Date in the Ordinary Course of Business.

         4.12 Inventory.

         The  inventory of the Company and the  Subsidiaries  is of such quality
and  quantity as  necessary  to conduct the  Company's  business in the Ordinary
Course of Business.

         4.13 Tax Matters.

         (a) Each of the Company and any Tax  Affiliate has (i) timely filed (or
has had timely filed on its behalf) each Return  required to be filed or sent by
it, each of which was correctly completed and accurately reflected any liability
for Taxes of the  Company and any Tax  Affiliate  covered by such  Return,  (ii)
timely and  properly  paid (or had paid on its behalf) all Taxes due and payable
for all Tax periods or portions  thereof  whether or not shown on such  Returns,
(iii) established in the Company's books of account, in accordance with GAAP and
consistent with past practices,  adequate  reserves for the payment of any Taxes
not then due and payable and (iv) complied with all applicable  Laws relating to
the withholding of Taxes and the payment thereof.

         (b) There are no Encumbrances  for Taxes upon any assets of the Company
or any Tax Affiliate, except Encumbrances for Taxes not yet due.

                                       22
<PAGE>

         (c) Except as listed on Schedule 4.13,  neither the Company nor any Tax
Affiliate  has  requested any extension of time within which to file any Return,
which Return has not since been filed.

         (d) No deficiency for any Taxes has been proposed, asserted or assessed
against the Company or any Tax Affiliate  that has not been resolved and paid in
full. No waiver, extension or comparable consent given by the Company or any Tax
Affiliate  regarding the application of the statute of limitations  with respect
to any  Taxes or any  Return is  outstanding,  nor is any  request  for any such
waiver or consent pending.  Except as listed on Schedule 4.13, there has been no
Tax audit or other administrative  proceeding or court proceeding with regard to
any Taxes or any Return for any Tax year  subsequent to the year ended  December
31, 2002, nor is any such Tax audit or other proceeding  pending,  nor has there
been any notice to the Company or any Tax Affiliate by any  Governmental  Entity
regarding  any such Tax,  audit or other  proceeding,  or, to the  Knowledge  of
Sellers, is any such Tax audit or other proceeding threatened with regard to any
Taxes or Returns. There are no outstanding subpoenas or requests for information
with respect to any of the Returns of the Company or any Tax Affiliate.  Neither
the Company nor any Tax Affiliate has entered into a closing agreement  pursuant
to Section 7121 of the Code or any similar provision under any other Law.

         (e) To the Knowledge of Sellers,  no additional  Taxes will be assessed
against the Company or any Tax Affiliate  for any Tax period or portion  thereof
ending on or prior to the Closing Date,  and there are no unresolved  questions,
claims or disputes  concerning the liability for Taxes of the Company or any Tax
Affiliate that would exceed the estimated  reserves  established on its books of
account.

         (f) Neither the Company nor any Tax  Affiliate  has any  liability  for
Taxes in a jurisdiction  where it does not file a Return, nor has the Company or
any Tax Affiliate received notice from a taxing authority in such a jurisdiction
that it is or may be subject to taxation by that jurisdiction.

         (g) No current or former director,  officer,  employee or consultant of
the Company or any of its  Subsidiaries is entitled to any gross-up,  make-whole
or other  additional  payment  from the  Company or any of its  Subsidiaries  in
respect of any tax (including Federal,  state, local and foreign income,  excise
and other taxes  (including  taxes imposed under sections 4999(a) or 409A of the
Code)) or interest or penalty related thereto.

         (h) No  property of the Company or any Tax  Affiliate  is (i)  property
that the Company or any Tax  Affiliate  is or will be required to treat as being
owned by another  Person under the  provisions of Section  168(f)(8) of the Code
(as in effect prior to amendment by the Tax Reform Act of 1986), (ii)"tax-exempt
use  property"  within  the  meaning  of  Section  168(h)  of the  Code or (iii)
"tax-exempt bond financed  property" within the meaning of Section  168(g)(5) of
the Code.

         (i) Neither the Company nor any Tax Affiliate is required to include in
income any adjustment under either Section 481(a) or Section 482 of the Code (or
an  analogous  provision of Law) by reason of a voluntary  change in  accounting
method or otherwise,  and the IRS has not proposed any such adjustment or change
in accounting method.

                                       23
<PAGE>


         (j) Neither the  Company  nor any Tax  Affiliate  is a party to any Tax
allocation or sharing agreement.

         (k) Neither the Company nor any  Subsidiary (i) has been a member of an
affiliated  group filing a  consolidated  Return  (other than a group the common
parent of which was the Company) or (ii) has any  liability for the Taxes of any
Person (other than the Company or any  Subsidiary)  under  Treasury  Regulations
Section  1.1502-6  (or  any  similar  provision  of  Law),  as a  transferee  or
successor, by Contract, or otherwise.

         (l)  Neither  the  Company  nor any  Subsidiary  constitutes  either  a
"distributing  corporation" or a "controlled corporation" (within the meaning of
Section  355(a)(1)(A)  of the Code) in a distribution  of shares  qualifying for
tax-free  treatment under Section 355 of the Code (i) that took place during the
two-year  period  ending  on the  date of this  Agreement  or  (ii)  that  could
otherwise  constitute  part of a "plan"  or  "series  of  related  transactions"
(within  the  meaning of  Section  355(e) of the Code) in  conjunction  with the
purchase of the Shares.

         (m)  None of the  indebtedness  of the  Company  or any  Tax  Affiliate
constitutes  (i)  "corporate  acquisition  indebtedness"  (as defined in Section
279(b)  of the  Code)  with  respect  to which any  interest  deductions  may be
disallowed  under  Section  279 of the Code or (ii) an  "applicable  high  yield
discount  obligation" under Section 163(i) of the Code, and none of the interest
on any such  indebtedness  will be  disallowed  as a  deduction  under any other
provision of the Code.

         (n)  Neither  the  Company  nor any Tax  Affiliate  has  engaged in any
transaction  that is  subject to  disclosure  under  present or former  Treasury
Regulations Sections 1.6011-4 or 1.6011-4T, as applicable.

         (o) Neither the Company nor any Tax  Affiliate has been a member of any
partnership or joint venture or the holder of a beneficial interest in any trust
for any period for which the statute of  limitations  for any Taxes  potentially
applicable as a result of such membership or holding has not expired.

         (p) The Company  validly  elected to be an "S  corporation"  within the
meaning  of  Sections  1361 and 1362 of the Code for all  periods  since June 1,
2001,  and has maintained  its status as an "S  corporation"  at all times since
such date. The Company has also validly  elected to be an "S corporation" in all
state and local jurisdictions which recognize such status and in which it would,
absent such an election,  be subject to corporate income Tax, and has maintained
its status as an "S  corporation"  in each such  jurisdiction at all times since
the date of such election.  No facts exist, or have existed,  which would cause,
or would have  caused,  the status of the  Company as an "S  corporation"  under
federal,  state or local law to be subject to  termination  or  revocation.

         (q) Schedule  4.13(q)  identifies  each Subsidiary that is a "qualified
subchapter  S  subsidiary"  within the meaning of Section  1361(b)(3)(B)  of the
Code. Each Subsidiary so identified has been a qualified subchapter S subsidiary
at all times since the date shown on such  schedule up to an  including  the day
prior to the Closing Date.

         (r) Neither the  Company nor any  Subsidiary  has, in the past ten (10)
years,  (i) acquired  assets from another  corporation in a transaction in which


                                       24
<PAGE>

Company's  Tax basis for the  acquired  assets were  determined,  in whole or in
part,  by  reference  to the Tax  basis of the  acquired  assets  (or any  other
property)  in the  hands of the  transferor  or (ii)  acquired  the stock of any
corporation which is a qualified subchapter S subsidiary.

         4.14 Intellectual Property Rights.

         (a) Schedule  4.14(a)(i)  lists and  describes  all Owned  Intellectual
Property Rights that are Registered  Intellectual  Property Rights and all other
material Owned  Intellectual  Property Rights.  Schedule  4.14(a)(ii)  lists all
Contracts  relating  to  Licensed-In  Intellectual  Property  Rights  other than
Software  and  describes  the  Intellectual  Property  Rights  covered  by  such
Contracts;  to the extent there is no written  Contract  covering a  Licensed-In
Intellectual  Property  Right,  Schedule  4.14(a)(ii)  lists  the  licensor  and
describes the Intellectual  Property Rights so licensed.  Schedule  4.14(a)(iii)
lists all Contracts  relating to Licensed-In  Intellectual  Property Rights that
are Software other than  Off-the-Shelf  Software and describes the  Intellectual
Property  Rights  covered  thereby;  to the extent there is no written  Contract
covering any Software,  Schedule  4.14(a)(iii)  lists the licensor and describes
the Software so licensed. Schedule 4.14(a)(iv) lists and describes all materials
otherwise protectable under Intellectual Property Rights used in the business of
the Company or any  Subsidiary  as now  conducted  or  presently  proposed to be
conducted that are in the public domain. The Owned Intellectual  Property Rights
and the Licensed-In  Intellectual  Property Rights  constitute all  Intellectual
Property Rights  necessary for the business of the Company and its  Subsidiaries
as conducted or proposed to be conducted.

         (b) The  Company  owns all  right,  title  and  interest  in the  Owned
Intellectual  Property  Rights  free and  clear of all  Encumbrances  (including
royalty or other payments),  except for those licenses of the Owned Intellectual
Property Rights to Persons,  payments for use of the Owned Intellectual Property
Rights and other  Encumbrances  listed on Schedule  4.14(b).  The Company is the
official  and sole  owner of  record  of all  Registered  Intellectual  Property
Rights. No Owned  Intellectual  Property Right has been infringed by any Person.
The Company or a Subsidiary owns all  Intellectual  Property Rights developed by
its current and former employees and independent  contractors  during the period
of their  employment  or within  the scope of their  contracting  or  consulting
relationship,  as the  case may be,  with  the  Company  or any  Subsidiary.  No
employee or former  employee  or  independent  contractor  of the Company or any
Subsidiary has any claim with respect to any Intellectual  Property Right of the
Company.

         (c) All Owned  Intellectual  Property Rights are valid and enforceable,
and no Person has asserted that any Owned Intellectual Property Right is invalid
or not enforceable.  All Owned Intellectual  Property Rights that are Registered
Intellectual  Property  Rights are in full  force and  effect,  and all  actions
required to keep such rights  pending or in effect or to provide full  available
protection,  including payment of filing, examination,  annuity, and maintenance
fees and  filing  of  renewals,  statements  of use or  working,  affidavits  of
incontestability  and  other  similar  actions,  have  been  taken,  and no such
Registered  Intellectual  Property  Right is the  subject  of any  interference,
opposition, cancellation, nullity, re-examination or other proceeding placing in
question  the validity or scope of such  rights.  All products  covered by Owned
Intellectual  Property Rights or Licensed-In  Intellectual  Property Rights that
are Registered Intellectual Property Rights and all usages of Owned Intellectual
Property Rights or Licensed-In  Intellectual Property Rights that are Registered


                                       25
<PAGE>

Intellectual  Property  Rights  have been marked  with the  appropriate  patent,
trademark or other marking  required or desirable to maximize  available  damage
awards.

         (d) The documentation  relating to all trade secrets listed on Schedule
4.14(a)(i) is current, accurate and sufficient in detail and content to identify
and  explain  such trade  secrets and to allow their full and proper use without
reliance  on  the  knowledge  or  memory  of  any  individual.   All  reasonable
precautions have been taken to protect the secrecy, confidentiality and value of
the trade secrets and all other  proprietary  information used by the Company or
any  Subsidiary   including  the  implementation  and  enforcement  of  policies
requiring  each  employee  or  independent  contractor  who has  access to trade
secrets  to  execute  proprietary  information  and  confidentiality  agreements
substantially  in a standard  form,  and each  current and former  employee  and
independent  contractor  of the Company or any  Subsidiary  has executed such an
agreement. There has been no breach or other violation of such agreements.  Each
of the Company and its  Subsidiaries  has an unqualified  right to use all trade
secrets  and  other  proprietary  information  currently  used in its  business,
subject to any Contract relating to Licensed-In Intellectual Property Rights. No
such  trade  secret  or  other  proprietary  information  is part of the  public
knowledge or literature,  and no trade secret or other  proprietary  information
has been used,  divulged  or  appropriated  either for the benefit of any Person
other than the Company or a Subsidiary or to the detriment of the Company or any
Subsidiary.

         (e) Neither the Company nor any Subsidiary has taken action,  or failed
to take an action, that might have the effect of estopping or otherwise limiting
its right to enforce Owned Intellectual Property Rights against any Person.

         (f) Neither the Company nor any Subsidiary has any present  expectation
or intention of not fully performing any obligation pursuant to any license, and
there is no breach,  anticipated  breach or  default  by any other  party to any
license. There are no renegotiations of, attempts to renegotiate, demands for or
outstanding  rights to  renegotiate  any license.  All rights under each license
will be fully available to the Company or a Subsidiary after the Closing.

         (g) Each Licensed-in  Intellectual Property Right for which the Company
or any  Subsidiary  has an  exclusive  right is in full  force and  effect,  all
actions  required  to keep such right  pending  or in effect or to provide  full
protection,  including payment of filing, examination,  annuity, and maintenance
fees and  filing  of  renewals,  statements  of use or  working,  affidavits  of
incontestability  and other similar  actions,  have been taken.  No  Licensed-in
Intellectual Property Right that is a Registered Intellectual Property Right and
for which the Company or any Subsidiary has an exclusive right is the subject of
any interference,  opposition,  cancellation,  nullity,  re-examination or other
proceeding placing in question the validity or scope of such right.

         (h)   Neither   the  Company   nor  any   Subsidiary   has   infringed,
misappropriated  or otherwise  violated any  Third-Party  Intellectual  Property
Right, and neither the Company nor any Subsidiary has received any notice of any
infringement,  misappropriation or violation by the Company or any Subsidiary of
any Third-Party  Intellectual Property Right. No infringement,  misappropriation
or violation of any Third-Party Intellectual Property Right has occurred or will
occur with respect to products or services sold by the Company or any Subsidiary


                                       26
<PAGE>

or with respect to the products or services under development or with respect to
the conduct of the  business of the Company or any  Subsidiary  as  conducted or
proposed to be conducted.

         (i) All Software  that is used by the Company or any  Subsidiary  or is
present at any facility or on any equipment of the Company or any  Subsidiary is
owned  by the  Company  or a  Subsidiary  or is  subject  to a  current  license
agreement  that covers all use of the Software in the business of the Company or
any Subsidiary, as conducted or as proposed to be conducted. Each of the Company
and the  Subsidiaries  has the right to use the Software used in its business as
it is being used,  without any conflict  with the rights of others.  Neither the
Company  nor any  Subsidiary  is in breach of any license to, or license of, any
Software.  The Company and its Subsidiaries do not use, rely on or contract with
any Person to provide service bureau,  outsourcing or other computer  processing
services  to the Company or any  Subsidiary,  in lieu of or in addition to their
respective use of the Software.  Following the Closing,  each of the Company and
the  Subsidiaries  will have  sufficient  rights to all  necessary  Software  to
operate its business as it is conducted or as proposed to be conducted.

         4.15 Material Contracts.

         (a) Schedule 4.15 lists the following Contracts to which the Company or
any Subsidiary is a party or subject or by which it is bound (with the Contracts
required to be listed on Schedule 4.15, the "Material Contracts"):

                (i) each employment, agency, collective bargaining or consulting
         Contract;

                (ii) each  Contract (A) with any Insider or (B) between or among
         any Insiders relating in any way to the Company or any Subsidiary;

                (iii) each distributor,  reseller,  OEM, dealer,  manufacturer's
         representative,  broker,  sales agency,  advertising agency,  finder's,
         manufacturing or assembly Contract;

                (iv) each franchise agreement;

                (v) each  Contract or group of related  Contracts  with the same
         party for the  purchase  of products  or  services  with a  undelivered
         balance in excess of $15,000;

                (vi) each Contract or group of related  Contracts  with the same
         party for the sale of products or services with an undelivered  balance
         in excess of $15,000;

                (vii) each lease of real or  personal  property  with  aggregate
         annual payments in excess of $15,000;

                (viii) each Contract for the sale of any capital assets;

                (ix)  each  Contract  for  capital  expenditures  in  excess  of
         $15,000;

(x)      each Contract relating to the borrowing of money or to mortgaging,
         pledging or otherwise placing an Encumbrance on any of the assets of
         the Company or any Subsidiary;

                                       27
<PAGE>

                (xi)  each   written   warranty,   guaranty  or  other   similar
         undertaking  with respect to  contractual  performance  extended by the
         Company  or any  Subsidiary  other  than  in  the  Ordinary  Course  of
         Business;

                (xii) each  Contract  relating  to any surety  bond or letter of
         credit required to be maintained by the Company or any Subsidiary;

                (xiii) each  Contract  that  contains or provides for an express
         undertaking  by the Company or any  Subsidiary  to be  responsible  for
         consequential damages;

                (xiv) each Contract concerning a partnership or joint venture;

                (xv)  each  Contract   providing  for  the  development  of  any
         products,  Software or Intellectual  Property Rights or the delivery of
         any services by, for or with any third party;

                (xvi) each Contract  containing  exclusivity,  noncompetition or
         nonsolicitation provisions or that would otherwise prohibit the Company
         or any  Subsidiary  from freely  engaging  in business  anywhere in the
         world or prohibiting  the  solicitation of the employees or contractors
         of any other entity;

                (xvii)  each   Contract   pertaining   to   confidentiality   or
         non-disclosure;

                (xviii) each Capital Lease;

                (xix) each Contract  terminable by any other party upon a change
         of control of the Company or any  Subsidiary or upon the failure of the
         Company or any Subsidiary to satisfy financial or performance  criteria
         specified in such Contract;

                (xx) each power of attorney that is currently in effect; and

                (xxi) each other  Contract of the Company or any  Subsidiary not
         entered into in the Ordinary  Course of Business or that is material to
         the business,  financial condition,  results of operations or prospects
         of the Company and the Subsidiaries taken as a whole.

         (b) Each Material Contract is valid and binding, currently in force and
enforceable  in accordance  with its terms,  subject to the Remedies  Exception.
Each of the Company and the Subsidiaries has performed all obligations  required
to be performed by it in  connection  with each Material  Contract.  Neither the
Company nor any Subsidiary has received any notice of any claim of default by it
under or  termination  of any  Material  Contract.  Neither  the Company nor any
Subsidiary has any present  expectation or intention of not fully performing any
obligation  pursuant  to  any  Material  Contract,   and  there  is  no  breach,
anticipated  breach or default by the Company or a Subsidiary or any other party
to any Material  Contract.  There is no renegotiation of, attempt to renegotiate
or outstanding  right to renegotiate any material terms of any Material Contract
and no  Person  has made  written  demand  for such  renegotiation.  Each of the
Company and the Subsidiaries can perform each Material  Contract for the sale of
products or services on time, at a profit and without  unusual  expenditures  of
time and money.  Neither the Company nor any  Subsidiary  has any  obligation to


                                       28
<PAGE>

refund payments  received for work not yet performed  under a Material  Contract
where the  percentage of work  completed is less than the percentage of revenues
received to date.

         4.16 Litigation. Except as set forth on Schedule 4.16, no Litigation is
pending or, to the Knowledge of Sellers,  threatened  against the Company or any
Subsidiary and there is no reasonable  basis for Litigation  against the Company
or any  Subsidiary.  Neither the Company  nor any  Subsidiary  is subject to any
outstanding Governmental Order.

         4.17 Insurance.

         (a) Except as set forth on Schedule  4.17,  each of the Company and the
Subsidiaries has at all times maintained  insurance relating to its business and
covering property, fire, casualty, liability, workers' compensation, malpractice
and all other forms of insurance  customarily obtained by businesses in the same
industry. Such insurance (i) is in full force and effect, (ii) is sufficient for
compliance with all  requirements of applicable Law and of any Contract to which
the Company or any Subsidiary is subject,  (iii) is valid and enforceable,  (iv)
insures  against risks of the kind  customarily  insured  against and in amounts
customarily carried by businesses similarly situated and (v) to the Knowledge of
Sellers,  provides adequate insurance coverage for the activities of each of the
Company and the  Subsidiaries.  Schedule  4.17 lists each policy of insurance in
effect.

         (b) Schedule 4.17 lists by year for the current policy year and each of
the five  preceding  policy  years a summary of the loss  experience  under each
policy  involving any claim in excess of $15,000,  setting forth (i) the name of
the claimant, (ii) a description of the policy by insurer, type of insurance and
period of coverage  and (iii) the amount and a brief  description  of the claim.
Schedule  4.17 also  describes the loss  experience  for all claims in excess of
$15,000 that were self-insured, including the aggregate cost of such claims.

         4.18 Compliance with Laws; Governmental Authorizations.


         (a) Except as set forth on Schedule  4.18,  each of the Company and the
Subsidiaries  has complied with all  applicable  Laws and  Governmental  Orders.
Except as set forth on Schedule 4.18,  neither the Company nor any Subsidiary is
relying on any  exemption  from or  deferral of any Law,  Governmental  Order or
Governmental Authorization that would not be available to it after the Closing.

         (b) Each of the  Company  and the  Subsidiaries  has in full  force and
effect all Governmental Authorizations necessary to conduct its business and own
and  operate  its   properties.   Schedule   4.18(b)  lists  each   Governmental
Authorization held by the Company or any Subsidiary. Each of the Company and the
Subsidiaries has complied with all Governmental Authorizations applicable to it.

         (c) Neither the Company nor any  Subsidiary  has  offered,  authorized,
promised, made or agreed to make any gifts, payments or transfers of property of
any kind (other than  incidental  gifts of nominal value) in connection with any
actual or proposed  transaction,  except as required or permitted by the Laws of
each  applicable  jurisdiction  and in each such case has complied with the U.S.
Foreign Corrupt Practices Act.

                                       29
<PAGE>

         (d) Each transaction was properly and accurately  recorded on the books
and records of the Company or a Subsidiary, and each document upon which entries
in the books and records of the Company or a Subsidiary  were based was complete
and accurate in all respects. Each of the Company and the Subsidiaries maintains
a system of internal accounting controls adequate to ensure that it maintains no
off-the-books  accounts and that its assets are used only in accordance with its
management directives.

         (e) Each of the  Company and the  Subsidiaries  has  complied  with all
applicable  export control and trade embargo Laws in connection  with any actual
or proposed transaction.

         (f) Each of the  Company and the  Subsidiaries  has  complied  with all
applicable   antiboycott   Laws  in  connection  with  any  actual  or  proposed
transaction.

         (g)  Neither  the  Company  nor any  Subsidiary  has  ever  had a legal
obligation to file any form, report, schedule, proxy statement or other document
with the SEC, and neither the Company nor any  Subsidiary has filed with the SEC
any such form, report, schedule, proxy statement or other document.

         4.19 Environmental Matters.

         (a)      (a) Each of the Company and its Subsidiaries is, and has been,
in compliance with all Environmental Laws, and neither the Company nor any of
its Subsidiaries has received any written, or to the knowledge of the Company,
oral communication alleging that the Company or such Subsidiary is in violation
of, or may have liability under, any Environmental Law.

         (b)  Each of the  Company  and  its  Subsidiaries  possesses  and is in
compliance   in  all  material   respects  with  all  Permits   required   under
Environmental  Laws for the conduct of their  respective  operations and neither
the Company nor any of its  Subsidiaries  has been  advised by any  Governmental
Entity of any actual or potential  change in the status or terms and  conditions
of any such Permit.

         (c) There are no  Environmental  Claims pending or, to the Knowledge of
Sellers, threatened against the Company or any of its Subsidiaries.

         (d)  There  has  been no Leak of any  Hazardous  Substance  that  could
reasonably be expected to form the basis of any Environmental  Claim against the
Company or any of its  Subsidiaries or against any person whose  liabilities for
such  Environmental  Claims the Company or any of its  Subsidiaries  has, or may
have, retained or assumed, either contractually or by operation of Law.

         (e) There are no aboveground  or underground  storage tanks or known or
suspected  asbestos-containing  materials  on,  under or about  property  owned,
operated  or leased  by the  Company  or any of its  Subsidiaries,  nor,  to the
Knowledge  of Sellers,  were there any  underground  storage  tanks on, under or
about any such property in the past.

                                       30
<PAGE>

         (f) There are no past or  present  events,  conditions,  circumstances,
activities,  practices,  incidents,  actions or plans that could  reasonably  be
expected to form the basis of an Environmental  Claim against the Company or any
of its Subsidiaries.

         4.20  Warranties.  Schedule  4.20 lists all claims  pending  or, to the
Knowledge of Sellers, threatened for product liability or breach of any warranty
relating  to any  products  sold or  services  performed  by the  Company or any
Subsidiary.  Such claims in the  aggregate  are not in excess of the reserve for
product  warranty  claims  set forth on the face of the  Latest  Balance  Sheet.
Schedule 4.20 describes the  warranties for products sold or services  performed
by each of the Company and the Subsidiaries. No product or service manufactured,
sold,  leased or  delivered by the Company or any  Subsidiary  is subject to any
guaranty,  warranty or other  indemnity  other than such  warranties.  Except as
listed on Schedule  4.20,  none of the products  manufactured,  sold,  leased or
delivered by the Company or any  Subsidiary  has been the subject of any product
recall or return (whether voluntary or involuntary) during the past five years.

         4.21 Employees.

         (a) Schedule 4.21(a) lists each employee of the Company, any Subsidiary
and any  Professional  Corporation as of the date of this Agreement,  states the
total number of  employees  and  indicates  for each such  employee,  and in the
aggregate, full-time, part-time and temporary status.

         (b) Schedule 4.21(b) lists each salaried  employee of the Company,  any
Subsidiary and any Professional Corporation as of the date of this Agreement and
shows for each such  employee  annual  salary,  any other  compensation  payable
(including   compensation  payable  pursuant  to  bonus,   incentive,   deferred
compensation or commission  arrangements),  date of employment and position.  To
the Knowledge of Sellers,  no executive  employee of the Company and no group of
employees of the Company, any Subsidiary or any Professional Corporation has any
plans to  terminate  his,  her or their  employment.  Each of the  Company,  the
Subsidiaries  and the  Professional  Corporations has complied at all times with
all applicable  Laws relating to employment  and employment  practices and those
relating  to the  calculation  and  payment of wages  (including  overtime  pay,
maximum  hours  of  work  and  child  labor   restrictions),   equal  employment
opportunity  (including Laws  prohibiting  discrimination  and/or  harassment or
requiring accommodation on the basis of race, color, national origin,  religion,
gender,  disability,  age, sexual orientation or otherwise),  affirmative action
and  other   hiring   practices,   occupational   safety  and  health,   workers
compensation,  unemployment, the payment of social security and other Taxes, and
unfair labor  practices  under the National  Labor  Relations  Act or applicable
state law. Neither the Company,  any Subsidiary or any Professional  Corporation
has any labor  relations  problem  pending  or,  to the  Knowledge  of  Sellers,
threatened  and its labor  relations  are  satisfactory.  There are no  workers'
compensation  claims  pending  against  the  Company,   any  Subsidiary  or  any
Professional  Corporation or, to the Knowledge of Sellers,  any facts that would
give rise to such a claim.  No employee of the Company,  any  Subsidiary  or any
Professional  Corporation is subject to any secrecy or noncompetition  agreement
or any other  agreement or  restriction of any kind that would impede in any way
the ability of such employee to carry out fully all  activities of such employee
in furtherance of the business of the Company.

                                       31
<PAGE>

         (c) Schedule 4.21(c) lists each employee of the Company, any Subsidiary
and any  Professional  Corporation  as of the date of this Agreement who holds a
temporary  work  authorization,  including  H-1B,  L-1, F-1 or J-1 visas or work
authorizations  (the "Work Permits"),  and shows for each such employee the type
of Work  Permit  and the  length of time  remaining  on such Work  Permit.  With
respect  to each Work  Permit,  all of the  information  that the  Company,  any
Subsidiary or a Professional Corporation provided to the Department of Labor and
the  Immigration  and  Naturalization  Service  or the  Department  of  Homeland
Security  (collectively,  the  "Department")  in the  application  for such Work
Permit was true and  complete.  The Company or a  Subsidiary  or a  Professional
Corporation received the appropriate notice of approval from the Department with
respect to each such Work Permit.  Neither the Company,  any  Subsidiary  or any
Professional  Corporation  has received any notice from the Department  that any
Work Permit has been revoked. There is no action pending or, to the Knowledge of
Sellers,  threatened to revoke or adversely  modify the terms of any of the Work
Permits.  Except as set  disclosed  in  Schedule  4.21(c),  no  employee  of the
Company,  any Subsidiary or any Professional  Corporation is (a) a non-immigrant
employee  whose  status  would   terminate  or  otherwise  be  affected  by  the
transactions  contemplated by this Agreement,  or (b) an alien who is authorized
to work in the United States in non-immigrant  status.  For each employee of the
Company, any Subsidiary or any Professional  Corporation hired after November 6,
1986, the Company, such Subsidiary or such Professional Corporation has retained
an Immigration and Naturalization Service Form I-9, completed in accordance with
applicable Law.

         (d) The  employment of any terminated  former  employee of the Company,
any Subsidiary or any Professional Corporation has been terminated in accordance
with any applicable  Contract terms and applicable Law, and neither the Company,
any  Subsidiary or any  Professional  Corporation  has any  liability  under any
Contract or applicable Law toward any such terminated employee. The transactions
contemplated by this Agreement will not cause the Company, any Subsidiary or any
Professional  Corporation  to incur or  suffer  any  liability  relating  to, or
obligation to pay, severance,  termination or other payment to any Person. Since
the Last  Fiscal  Year End no employee of the  Company,  any  Subsidiary  or any
Professional  Corporation  has had its employment  terminated or provided notice
that such employee intends to terminate its employment.

         (e) Neither the Company, any Subsidiary or any Professional Corporation
has made any loans  (except  advances  for  business  travel,  lodging  or other
expenses in the Ordinary Course of Business) to any employee of the Company, any
Subsidiary or any Professional Corporation.

         (f)  Except as  disclosed  in  Schedule  4.21(f),  within the last five
years, neither the Company,  any Subsidiary or any Professional  Corporation has
experienced and, to the Knowledge of Sellers, there has not been threatened, any
strike, work stoppage, slowdown, lockout, picketing,  leafleting, boycott, other
labor dispute,  union organization attempt,  demand for recognition from a labor
organization or petition for  representation  under the National Labor Relations
Act or  applicable  state law.  Except as  disclosed  in  Schedule  4.21(f),  no
grievance,  demand for arbitration or arbitration  proceeding  arising out of or
under any  collective  bargaining  agreement is pending or, to the  Knowledge of
Sellers,  threatened.  Except as disclosed in Schedule 4.21(f), no Litigation is
pending or, to the Knowledge of Sellers,  threatened respecting or involving any
applicant for employment,  any current employee or any former  employee,  or any
class of the foregoing, including:

                                       32
<PAGE>

                (i) the Equal  Employment  Opportunity  Commission  or any other
         corresponding state or local fair employment  practices agency relating
         to any claim or charge of discrimination or harassment in employment;

                (ii)  the  United  States  Department  of  Labor  or  any  other
         corresponding  state or local  agency  relating  to any claim or charge
         concerning hours of work, wages or employment practices;

                (iii) the Occupational  Safety and Health  Administration or any
         other  corresponding  state or local  agency  relating  to any claim or
         charge concerning employee safety or health;

                (iv)  the  Office  of  Federal   Contract   Compliance   or  any
         corresponding state agency; and

                (v) the  National  Labor  Relations  Board or any  corresponding
         state  agency,  whether  relating to any unfair  labor  practice or any
         question concerning representation,

and there is no reasonable basis for any such Litigation.

         (g) No employee of the  Company,  any  Subsidiary  or any  Professional
Corporation is covered by any collective bargaining agreement, and no collective
bargaining agreement is being negotiated.

         (h)  Each  of  the  Company,  the  Subsidiaries  and  the  Professional
Corporations has paid in full to all employees all wages, salaries,  bonuses and
commissions  due and  payable to such  employees  and has fully  reserved in its
books of account all amounts for wages,  salaries,  bonuses and  commissions due
but not yet payable to such employees.

         (i) There has been no lay-off of  employees or work  reduction  program
undertaken by or on behalf of the Company,  any  Subsidiary or any  Professional
Corporation  in the past two years,  and no such program has been adopted by the
Company, any Subsidiary or any Professional Corporation or publicly announced.

         4.22 Employee Benefits.

(a) Schedule 4.22 lists all Plans by name and provides a brief description
identifying (i) the type of Plan, (ii) the funding arrangements for the Plan,
(iii) the sponsorship of the Plan, (iv) the participating employers in the Plan
and (v) any one or more of the following characteristics that may apply to such
Plan: (A) defined contribution plan as defined in Section 3(34) of ERISA or
Section 414(i) of the Code, (B) defined benefit plan as defined in Section 3(35)
of ERISA or Section 414(j) of the Code, (C) plan that is or is intended to be
tax qualified under Section 401(a) or 403(a) of the Code, (D) plan that is or is
intended to be an employee stock ownership plan as defined in Section 4975(e)(7)
of the Code (and whether or not such plan has entered into an exempt loan), (E)
nonqualified deferred compensation arrangement, (F) employee welfare benefit
plan as defined in Section 3(1) of ERISA, (G) multiemployer plan as defined in
Section 3(37) of ERISA or Section 414(f) of the Code, (H) multiple employer plan
maintained by more than one employer as defined in Section 413(c) of the Code,


                                       33
<PAGE>

(I) plan providing benefits after separation from service or termination of
employment, (J) plan that owns any Company or other employer securities as an
investment, (K) plan that provides benefits (or provides increased benefits or
vesting) as a result of a change in control of the Company, (L) plan that is
maintained pursuant to collective bargaining and (M) plan that is funded, in
whole or in part, through a voluntary employees' beneficiary association exempt
from Tax under Section 501(c)(9) of the Code.

         (b) Schedule 4.22 lists each corporation, trade or business (separately
for each category below that applies):  (i) that is (or was during the preceding
five years) under common  control with the Company within the meaning of Section
414(b) or (c) of the Code, (ii) that is (or was during the preceding five years)
in an affiliated  service  group with the Company  within the meaning of Section
414(m) of the Code,  (iii) that is (or was during the preceding  five years) the
legal employer of Persons providing  services to the Company as leased employees
within the meaning of Section  414(n) of the Code and (iv) with respect to which
the Company,  any  Subsidiary  or any  Professional  Corporation  is a successor
employer for purposes of group health or other welfare plan continuation  rights
(including Section 601 et seq. of ERISA) or the Family and Medical Leave Act.

         (c)  Schedule  4.22  lists  (i) the most  recent  determination  letter
received by the Company from the IRS regarding  each Plan,  (ii) the most recent
determination or opinion letter ruling from the IRS that each trust  established
in connection with Plans that are intended to be tax exempt under Section 501(a)
or (c) of the  Code  are so tax  exempt,  (iii)  all  pending  applications  for
rulings, determinations, opinions, no action letters and the like filed with any
governmental  agency  (including the Department of Labor,  IRS,  Pension Benefit
Guaranty  Corporation and the SEC), (iv) the financial  statements for each Plan
for the three most recent  fiscal or plan years (in audited  form if required by
ERISA) and, where applicable,  Annual  Report/Return (Form 5500) with disclosure
schedules, if any, and attachments for each Plan, (v) the most recently prepared
actuarial  valuation  report  for each  Plan  (including  reports  prepared  for
funding,  deduction and financial  accounting  purposes),  (vi) plan  documents,
trust  agreements,  insurance  contracts,  service  agreements  and all  related
contracts and documents  (including any employee summaries and material employee
communications)  with  respect  to each  Plan and  (vii)  collective  bargaining
agreements  (including  side agreements and letter  agreements)  relating to the
establishment, maintenance, funding and operation of any Plan.

         (d) Schedule 4.22 lists each employee of the Company, any Subsidiary or
any  Professional  Corporation  who is (i) absent from active  employment due to
short or long term  disability,  (ii) absent from active  employment  on a leave
pursuant to the Family and Medical  Leave Act or a comparable  state Law,  (iii)
absent from active  employment on any other leave or approved absence  (together
with the reason for each leave or absence) or (iv) absent from active employment
due to military  service  (under  conditions  that give the  employee  rights to
re-employment).

         (e) With respect to continuation  rights arising under federal or state
Law as applied to Plans that are group  health  plans (as defined in Section 601
et seq. of ERISA),  Schedule 4.22 lists (i) each  employee,  former  employee or
qualifying  beneficiary  who has elected  continuation  and (ii) each  employee,
former  employee or  qualifying  beneficiary  who has not  elected  continuation
coverage but is still within the period in which such election may be made.

                                       34
<PAGE>

         (f) (i) All Plans intended to be Tax qualified  under Section 401(a) or
Section  403(a) of the Code are so  qualified,  (ii) all trusts  established  in
connection  with Plans  intended to be Tax exempt under Section 501(a) or (c) of
the Code are so Tax exempt,  (iii) to the extent  required either as a matter of
Law or to obtain the intended Tax treatment  and Tax benefits,  all Plans comply
in all respects with the requirements of ERISA and the Code, (iv) all Plans have
been administered in accordance with the documents and instruments governing the
Plans,  (v) all reports and filings with  Governmental  Entities  (including the
Department of Labor, the IRS, Pension Benefit Guaranty  Corporation and the SEC)
required  in  connection  with  each  Plan  have  been  timely  made,  (vi)  all
disclosures  and  notices  required  by Law or Plan  provisions  to be  given to
participants  and  beneficiaries in connection with each Plan have been properly
and timely made and (vii) each of the Company  and the  Subsidiaries  has made a
good faith effort to comply with the  reporting  and taxation  requirements  for
FICA taxes with respect to any deferred compensation  arrangements under Section
3121(v) of the Code.

         (g) (i) All contributions, premium payments and other payments required
to be made in connection  with the Plans have been made,  (ii) a proper  accrual
has been made on the books of account of the Company or applicable  Professional
Corporation for all  contributions,  premium  payments and other payments due in
the current fiscal year, (iii) no contribution, premium payment or other payment
has  been  made in  support  of any  Plan  that is in  excess  of the  allowable
deduction for federal income Tax purposes for the year with respect to which the
contribution  was made (whether  under Section 162,  Section 280G,  Section 404,
Section  419,  Section 419A of the Code or  otherwise)  and (iv) with respect to
each Plan that is subject to Section  301 et seq. of ERISA or Section 412 of the
Code, the Company is not liable for any "accumulated funding deficiency" as that
term is defined in Section 412 of the Code and the projected benefit obligations
do not exceed the assets of the Plan.

         (h) The consummation of the transactions contemplated by this Agreement
will not (i) cause any Plan to increase  benefits  payable to any participant or
beneficiary,  (ii) entitle any current or former  employee of the  Company,  any
Subsidiary  or any  Professional  Corporation  to  severance  pay,  unemployment
compensation  or any other  payment,  benefit  or award or (iii)  accelerate  or
modify the time of payment or vesting,  or increase  the amount of any  benefit,
award or compensation due any such employee.

         (i) (i) No  Litigation  is pending  with  regard to any Plan other than
routine
uncontested claims for benefits, (ii) no Plan is currently under examination or
audit by the Department of Labor, the IRS or the Pension Benefit Guaranty
Corporation, (iii) neither the Company nor any Professional Corporation has any
actual or potential liability arising under Title IV of ERISA as a result of any
Plan that has terminated or is in the process of terminating, (iv) neither the
Company nor any Professional Corporation has any actual or potential liability
under Section 4201 et seq. of ERISA for either a complete withdrawal or a
partial withdrawal from a multiemployer plan and (v) with respect to the Plans,
neither the Company nor any Professional Corporation has any liability (either
directly or as a result of indemnification) for (and the transactions
contemplated by this Agreement will not cause any liability for): (A) any excise
Taxes under Section 4971 through Section 4980B, Section 4999, Section 5000 or
any other Section of the Code, (B) any penalty under Section 502(i), Section
502(l), Part 6 of Title I or any other provision of ERISA or (C) any excise


                                       35
<PAGE>

Taxes, penalties, damages or equitable relief as a result of any prohibited
transaction, breach of fiduciary duty or other violation under ERISA or any
other applicable Law; (vi) all accruals required under FAS 106 and FAS 112 have
been properly accrued on the Latest Financial Statements, (vii) no condition,
agreement or Plan provision limits the right of the Company to amend, cut back
or terminate any Plan (except to the extent such limitation arises under ERISA)
and (viii) neither the Company nor any Professional Corporation has any
liability for life insurance, death or medical benefits after separation from
employment other than (A) death benefits under the Plans and (B) health care
continuation benefits described in Section 4980B of the Code.

         4.23 Third-Party Payors.

         (a)  Schedule  4.23(i)  lists all  material  third-party  payors of the
Company, the Subsidiaries and the Professional Corporations for each of the last
two fiscal years and for the interim  period ended on the Latest  Balance  Sheet
Date. No third-party payor listed on Schedule 4.23(i) has indicated that it will
stop or decrease the rate of business done with the Company,  any  Subsidiary or
any Professional Corporation.

         (b) All claims for  reimbursement by the Company to third party payors,
including  but not  limited to claims to the  Medicare  program or any  Medicare
fiscal  intermediary  or carrier,  various state  Medicaid  programs,  any other
federal or state health care programs, and private insurance companies, are true
and correct in all material  respects and in compliance in all material respects
with all applicable  laws and  regulations  and the policies of such third party
payors.  The  Company  has  received  no notice  from any  Medicare  or Medicaid
program,  other federal health care program, or private insurance company of any
overpayments to the Company, and the Company is not aware of any grounds for any
such  notice,  other than  overpayments  made from time to time in the  ordinary
course of business by private payors.

         (c) Neither the Company nor any of its respective officers,  directors,
employees  or  agents,  on behalf of or for the  benefit  of the  Company,  has,
directly or indirectly, (i) offered or paid any amount to, or made any financial
arrangement  with, any of the Company's  past or present  customers or potential
customers in order to obtain business from such  customers,  other than standard
pricing or discount arrangements consistent with proper business practices, (ii)
given, or agreed to give, or is aware that there has been made, or that there is
an  agreement to make,  any gift or  gratuitous  payment of any kind,  nature or
description  (whether  in money,  property or  services)  to any past or present
customer, supplier, source of financing,  landlord, subtenant, licensee or other
person or entity,  (iii) made,  or agreed to make, or is aware that there is any
agreement to make, any political contribution or any contributions,  payments or
gifts of their  respective  funds or  property  to or for the private use of any
governmental official, employee or agent where either the payment or the purpose
of such  contribution,  payment or gift relates to the Company's business and is
illegal  under any Law or (iv) made,  or agreed to make,  or is aware that there
have been,  or that there is any  agreement to make,  any payments to any person
with the  intention  or  understanding  that any part of such  payment was to be
used,  directly or indirectly,  for the benefit of any past or present customer,
employee,  supplier or landlord of the  Company,  or for any purpose  other than
that reflected in the documents supporting the payments.

         4.24  Suppliers.  Schedule  4.24 lists the 10 largest  suppliers of the
Company and the  Subsidiaries  on a consolidated  basis for each of the last two
fiscal years and for the interim  period ended on the Latest  Balance Sheet Date
and  sets  forth  opposite  the  name  of each  such  supplier  the  approximate


                                       36
<PAGE>

percentage of purchases by the Company and the Subsidiaries attributable to such
supplier for each such period.  Except as listed on Schedule  4.24,  no supplier
listed on  Schedule  4.24 is a sole  source of supply  for the  Company  and the
Subsidiaries.  No supplier  listed on Schedule 4.24 has  indicated  that it will
stop or decrease the rate of business done with the Company or any Subsidiary.

         4.25  Affiliate  Transactions.  No Insider  has any  Contract  with the
Company or any Subsidiary  (other than  employment not  represented by a written
Contract  and  terminable  at  will),  any  loan to or from the  Company  or any
interest in any assets (whether real, personal or mixed, tangible or intangible)
used in or  pertaining to the business of the Company or any  Subsidiary  (other
than  ownership of capital stock of the  Company).  No Insider has any direct or
indirect interest in any competitor,  supplier or customer of the Company or any
Subsidiary  or in any Person from whom or to whom the Company or any  Subsidiary
leases  any  property,  or in any  other  Person  with whom the  Company  or any
Subsidiary  otherwise transacts business of any nature.  Schedule 4.25 lists all
transactions  between the Company or any Subsidiary and each Insider for each of
the last three fiscal years and since the Last Fiscal Year End.

         4.26   Indebtedness.   Schedule  4.26  sets  forth  a  listing  of  all
Indebtedness  of the  Company  and  its  Subsidiaries  as of the  date  of  this
Agreement.

         4.27  Brokerage.  Except as listed on Schedule  4.27, no Person will be
entitled to receive any  brokerage  commission,  finder's fee, fee for financial
advisory  services or similar  compensation in connection with the  transactions
contemplated by this Agreement based on any Contract made by or on behalf of the
Company for which Buyer or the Company is or could become liable or obligated.

         4.28  Availability  of  Documents.  Seller has made  available to Buyer
correct and complete copies of the items referred to in the Disclosure  Schedule
or in this  Agreement  (and in the case of any  items  not in  written  form,  a
written description thereof).

         4.29 Disclosure. This Agreement, the exhibits, the Disclosure Schedule,
the Annual  Financial  Statements  or the  Latest  Financial  Statements  do not
contain any untrue  statement  or omit any material  fact  necessary to make the
statements  contained herein or therein,  in light of the circumstances in which
they were made, not misleading.

                   V. Representations and Warranties of Buyer

         Parent and Buyer, jointly and severally, represent and warrant to
Sellers that as of the date of this Agreement and as of the Closing Date (as
though made then and as though the Closing Date were substituted for the date of
this Agreement):

         5.1 Incorporation;  Power and Authority.  Each of Buyer and Parent is a
corporation duly organized, validly existing and in good standing under the Laws
of its jurisdiction of  organization,  with all necessary power and authority to
execute, deliver and perform this Agreement.

         5.2  Valid  and  Binding   Agreement.   The  execution,   delivery  and
performance  of this  Agreement  by Buyer and Parent  have been duly and validly
authorized  by all  necessary  corporate  action.  This  Agreement has been duly


                                       37
<PAGE>

executed and delivered by Buyer and Parent and constitutes the valid and binding
obligation of Buyer and Parent,  enforceable against them in accordance with its
terms, subject to the Remedies Exception.

         5.3 No Breach;  Consents.  The execution,  delivery and  performance of
this  Agreement by Buyer and Parent will not (a) contravene any provision of the
Organizational  Documents of Buyer or Parent;  (b) violate or conflict  with any
Law, Governmental Order or Governmental Authority;  (c) conflict with, result in
any breach of any of the provisions of,  constitute a default (or any event that
would,  with the passage of time or the giving of notice or both,  constitute  a
default) under,  result in a violation of, increase the burdens under, result in
the   termination,   amendment,   suspension,   modification,   abandonment   or
acceleration  of  payment  (or any right to  terminate)  or  require a  Consent,
including any Consent under any Contract or Governmental  Authorization  that is
either binding upon or enforceable  against Buyer or Parent;  or (d) require any
Governmental Authorization.

         5.4  Brokerage.  No Person will be  entitled  to receive any  brokerage
commission,  finder's  fee,  fee for  financial  advisory  services  or  similar
compensation in connection with the transactions  contemplated by this Agreement
based on any  Contract  made by or on behalf of Buyer for which any Seller is or
could become liable or obligated.

         5.5 Parent Common Stock. The shares of Parent Common Stock to be issued
pursuant to this Agreement  will,  when issued and delivered in accordance  with
this  Agreement,   be  duly   authorized,   validly   issued,   fully  paid  and
nonassessable.

                            VI. Agreements of Parent

         6.1 Board of Directors.

         (a) Parent will use its commercially reasonable efforts to appoint Kush
Agarwal to its board of directors as soon as practicable after the Closing Date.

         (b) Parent will  appoint D. Brian  McDonagh as an Advisory  Director as
soon as practicable after the Closing Date.

                                   VII. Taxes

         7.1 Tax Matters.  The  following  provisions  of this Section 7.1 shall
apply notwithstanding any other provision of this Agreement.

         (a) Sellers shall  severally,  on a pro rata basis in relation to their
respective Sellers Percentage Interest, indemnify the Company, the Subsidiaries,
Buyer,  Parent, and any Affiliate of Buyer or Parent and hold them harmless from
and against any loss, claim, liability, expense, or other damage attributable to
(i) all Taxes (or the non-payment  thereof) of the Company and the  Subsidiaries
for all taxable  periods  ending on or before the  Closing  Date and the portion
through the end of the Closing Date for any taxable  period that  includes  (but
does not end on) the Closing Date;  (ii) all Taxes of any member of member of an
affiliated,  consolidated, combined or unitary group of which the Company or any
of the Subsidiaries (or any predecessor  thereof) is or was a member on or prior
to the Closing Date, including pursuant to Treasury Regulations Section 1.1502-6


                                       38
<PAGE>

or any analogous or similar  state,  local,  or foreign law or  regulation;  and
(iii)  any  and  all  Taxes  of any  Person  (other  than  the  Company  and the
Subsidiaries)  imposed on the Company or any of the Subsidiaries as a transferee
or successor,  by contract or pursuant to any law,  rule, or  regulation,  which
Taxes relate to an event or transaction occurring on or before the Closing Date.

         (b) Sellers  shall prepare and file (or cause to be prepared and filed)
all income and  franchise Tax Returns and sales and use tax returns with respect
to the Company and the  Subsidiaries  for all periods  ending on or prior to the
Closing  Date which are filed  after the Closing  Date and shall  timely pay all
Taxes shown as due on such Tax Returns. Sellers shall permit Parent and Buyer to
review and  comment on the  portions  of each such Tax Return  described  in the
preceding  sentence  relating to the Company or any Subsidiary  prior to filing.
Buyer or Parent  shall  prepare and file (or cause to be prepared and filed) all
other Tax Returns with respect to each of the Company and the  Subsidiaries  for
all  periods  ending on or prior to the  Closing  Date which are filed after the
Closing  Date.  Buyer shall permit Seller to review and comment on each such Tax
Return  described in the  preceding  sentence  prior to filing.  All Tax Returns
described in this subsection (b) shall be prepared as required by applicable law
and in a manner consistent with past practices,  except as otherwise required by
applicable law.

         (c) Buyer shall prepare or cause to be prepared and file or cause to be
filed  any and all Tax  Returns  of the  Company  and the  Subsidiaries  for all
periods  beginning before the Closing Date and ending after the Closing Date. In
the case of any taxable  period that  includes (but does not end on) the Closing
Date (a "Straddle Period"), Buyer shall prepare or cause to be prepared and file
or cause to be filed any such Tax Returns as required by applicable law and in a
manner  consistent with past practices  employed by Sellers,  the Company or the
Subsidiaries  with respect to such Tax Returns (except as otherwise  required by
applicable  law).  Sellers shall pay to Buyer within fifteen (15) days after the
date on which Taxes are paid with respect to such periods an amount equal to the
portion of such Taxes which relates to the portion of such Taxable period ending
on the Closing  Date to the extent such Taxes are not  reflected  in the reserve
for Tax liabilities  (rather than any reserve for deferred Taxes  established to
reflect timing differences between book and Tax income) shown on the face of the
Latest Balance Sheet. In order to apportion  appropriately any Taxes relating to
any taxable year or period that  includes the Closing Date,  the parties  hereto
shall,  to the extent  permitted  under  applicable law, elect with the relevant
Taxing  authority  to treat for all purposes the Closing Date as the last day of
the taxable year or period of the Company or any  Subsidiary.  In any case where
applicable law does not permit the parties to treat the Closing Date as the last
day of the taxable year or period, any portion of any such Tax that is allocable
to the portion of the period ending on the Closing Date shall be:

                (i) in the  case of Taxes  that are  either  (A)  based  upon or
         related to income or receipts,  or (B) imposed in  connection  with any
         sale or other  transfer or  assignment  of property  (real or personal,
         tangible  or  intangible),  deemed  equal to the amount  which would be
         payable if the taxable year or period ended on the Closing Date;

                (ii) in the case of Taxes  not  described  in  subparagraph  (i)
         above that are imposed on a periodic basis and measured by the level of
         any item, deemed to be the amount of such Taxes for the entire relevant
         period (or, in the case of such Taxes  determined on an arrears  basis,
         the amount of such Taxes for the immediate preceding period) multiplied


                                       39
<PAGE>

         by a fraction the  numerator of which is the number of calendar days in
         the period ending on the Closing Date and the  denominator  of which is
         the number of calendar days in the entire relevant period; and

                (iii)  for  purposes  of  determining  such  Taxes,  exemptions,
         relief,  allowances  or  deductions  that are  calculated  on an annual
         basis, such as the deduction for depreciation,  shall be apportioned in
         the manner  specified in  subparagraph  (i) above.  All  determinations
         necessary to give effect to the foregoing  allocations shall be made in
         a  manner  consistent  with  prior  practice  of the  Company  and  the
         Subsidiaries (except as otherwise required by applicable law).

         (d) Sellers,  on the one hand, and Parent and Buyer, on the other hand,
shall  promptly  notify the other  parties upon receipt of any notice of any Tax
audit, assessment,  claim or investigation (a "Tax Claim") that involves the Tax
liability  of the Company or any of the  Subsidiaries.  The failure  promptly to
give such  notice  shall not  affect  any  Indemnified  Party's  ability to seek
indemnification  hereunder  unless such  failure has  materially  and  adversely
affected the right of Seller to participate  in and contest the Tax Claim.  With
respect to any Tax Claim  relating to Taxes with respect  solely to a Tax period
ending on or prior to the Closing Date (a  "Pre-Closing  Tax  Period"),  Sellers
shall  control all  proceedings,  provided  that  Sellers  will allow the Buyer,
Company,  the Subsidiaries and their counsel to participate at their own expense
in any audits or  administrative  or court  proceeding  of Sellers  consolidated
federal income Tax Returns to the extent that such returns relate to the Company
or a  Subsidiary,  and further  provided  that Sellers  shall not enter into any
compromise  or agree to settle any such Tax Claim to the extent  that it relates
to the Company or a Subsidiary without prior written consent of Buyer or Parent,
which consent shall not be unreasonably withheld or delayed.

         (e) Buyer,  Parent,  the Company,  the  Subsidiaries,  and Seller shall
cooperate fully, as and to the extent  reasonably  requested by the other party,
in  connection  with the filing of Tax Returns  filed after the Closing Date and
any audit,  litigation,  or other  proceeding  with respect to Taxes;  provided,
however,  that Parent and Buyer shall have final  authority  with respect to any
such proceeding  other than those described in Section 7.1(d).  Such cooperation
shall include the  retention and (upon the other party's  request) the provision
of records and information which are relevant to any such audit, litigation,  or
other proceeding and making employees  available on a mutually  convenient basis
to provide additional information and explanation of any material provided under
this  Agreement.  Notwithstanding  the  foregoing,  with  respect  to any audit,
litigation,  or other proceeding  relating to a Straddle  Period,  to the extent
such proceeding relates to a Pre-Closing Tax Period,  Buyer shall not enter into
any compromise or agree to settle any claim pursuant to such proceeding  without
the written consent of Sellers, which consent shall not be unreasonably withheld
or delayed. Parent, Buyer, Sellers and the Company agree (i) to retain all books
and  records  with  respect to Tax  matters  pertinent  to the  Company  and the
Subsidiaries  relating to any taxable period  beginning  before the Closing Date
until the expiration of the statute of limitations  (and, to the extent notified
by Buyer,  Parent or Sellers,  any extensions thereof) of the respective taxable
periods,  and to abide by all record retention  agreements entered into with any
taxing  authority,  and (ii) to give the other party  reasonable  written notice
prior to transferring, destroying, or discarding any such books and records and,
if the other party so requests, the Company, the Subsidiaries or the Sellers, as
the case may be,  shall allow the other party to take  possession  of such books
and records.

                                       40
<PAGE>

         (f) Buyer, Sellers and Parent further agree, upon request, to use their
commercially reasonable efforts to obtain any certificate or other document from
any governmental  authority or any other person as may be necessary to mitigate,
reduce, or eliminate any Tax that could be imposed  (including,  but not limited
to, with respect to the transactions contemplated hereby).

         (g) All Tax sharing agreements or similar agreements with respect to or
involving the Company or the Subsidiaries  shall be terminated as of the Closing
Date and, after the Closing Date, none of the Company or the Subsidiaries  shall
be bound thereby or have any liability thereunder.

         (h) The amount or economic  benefit of any refunds,  credits or offsets
of Taxes of the  Company  or any of the  Subsidiaries  for any  Pre-Closing  Tax
Period shall be for the account of Seller. The amount or economic benefit of any
refunds,  credits or offsets of Taxes of the Company or any  Subsidiary  for any
taxable  period  beginning on or after the Closing Date shall be for the account
of Buyer.  The amount or economic  benefit of any  refunds,  credit or offset of
Taxes of the Company or any Subsidiary for any taxable period that begins before
and ends after the Closing Date shall be equitably  apportioned  between Sellers
and Buyer in accordance  with the principles set forth in Section  7.1(c).  Each
party shall  forward,  and shall cause its  Affiliates to forward,  to the party
entitled to receive the amount or economic benefit of a refund, credit or offset
to Tax  pursuant  to this  Section  7.1(h) the amount of such refund or economic
benefit within 10 days after such refund is received or such credit or offset is
allowed or applied against another Tax liability, as the case may be.

         7.2  Transfer  and  Sales  Taxes.  Sellers  shall  pay  all  applicable
documentary,  sales,  use,  stamp,  registration  and such other Taxes,  and all
conveyance  fees,  recording  charges and other fees and charges  (including any
penalties  and  interest)   ("Transfer   Taxes")  incurred  in  connection  with
consummation of the transaction contemplated by this Agreement. Sellers will, at
their own expense,  file all necessary Tax Returns and other  documentation with
respect to such Taxes,  fees and charges,  and, if required by  applicable  law,
Buyer  will  join  in  the   execution   of  any  such  Tax  Returns  and  other
documentation.

                          VIII. Conditions to Closing

         8.1 Conditions to  Obligations  of Parent and Buyer.  The obligation of
Parent and Buyer to take the actions required to be taken by each of them at the
Closing is  subject  to the  satisfaction  or  waiver,  in whole or in part,  in
Buyer's  sole  discretion  (but no such  waiver  will waive any rights or remedy
otherwise available to Parent or Buyer), of each of the following  conditions at
or prior to the Closing:

         (a) The representations and warranties set forth in Article III will be
true and correct in all material respects;

         (b)  Sellers  will  have  performed  and  complied  with  each of their
agreements contained in this Agreement in all material respects;

         (c) [Intentionally Omitted];

                                       41
<PAGE>

         (d)  Buyer  will  have  received  evidence  satisfactory  to it that no
Litigation is pending or  threatened  (i)  challenging  or seeking to prevent or
delay  consummation of any of the  transactions  contemplated by this Agreement,
(ii) asserting the illegality of or seeking to render unenforceable any material
provision  of this  Agreement,  (iii)  seeking to  prohibit  direct or  indirect
ownership,  combination  or operation by Buyer of any portion of the business or
assets  of the  Company  or any  Subsidiary,  or to  compel  Buyer or any of its
Subsidiaries  or the  Company  or any  Subsidiary  to  dispose  of,  or to  hold
separately,  or to make any change in any  portion of the  business or assets of
Buyer or its Subsidiaries or of the Company or its Subsidiaries,  as a result of
the  transactions  contemplated  by this  Agreement,  or incur any burden,  (iv)
seeking to require direct or indirect transfer or sale by Buyer of, or to impose
material  limitations  on the  ability  of  Buyer to  exercise  full  rights  of
ownership  of, any of the Shares or (v)  imposing or seeking to impose  material
damages or sanctions  directly arising out of the  transactions  contemplated by
this  Agreement  on  Parent,  Buyer or the  Company  or any of their  respective
officers or directors;

         (e) No Law or  Governmental  Order  will  have been  enacted,  entered,
enforced,   promulgated,   issued  or  deemed  applicable  to  the  transactions
contemplated by this Agreement by any Governmental  Entity that would reasonably
be  expected  to result,  directly  or  indirectly,  in any of the  consequences
referred to in Section 8.1(d);

         (f) No Person will have asserted or threatened  that such Person (i) is
the owner of, or has the right to acquire or to obtain ownership of, any capital
stock of, or any other voting,  equity or ownership  interest in, the Company or
any Subsidiary or (ii) is entitled to all or any portion of the Purchase Price;

         (g) Sellers will have delivered each of the  agreements,  certificates,
instruments and other  documents that they are obligated to deliver  pursuant to
Section  2.4(b)(i) and such  agreements  so delivered  will be in full force and
effect;

         (h) Buyer will have received  releases of all material  Encumbrances on
assets, other than Permitted Encumbrances;

         (i) Buyer will have received the Pay-Off Letters;

         (j) Each of the agreements set forth on Schedule 8.1(j) shall have been
terminated and be of no further force and effect;

         (k) Closing-Long Term Liabilities  shall not have exceeded  $6,600,000;
and

         (l) Buyer will have received long-form  certificates dated as of a date
not  earlier  than the second  business  day prior to the Closing as to the good
standing of the Company,  executed by the appropriate  officials of the State of
Delaware and each  jurisdiction in which the Company is licensed or qualified to
do business as a foreign corporation as specified in Schedule 4.1.

         8.2  Conditions to Sellers'  Obligations.  The obligation of Sellers to
take the  actions  required to be taken by them at the Closing is subject to the
satisfaction or waiver, in whole or in part, in Sellers' sole discretion (but no


                                       42
<PAGE>

such  waiver  will  waive any right or remedy  otherwise  available  under  this
Agreement), of each of the following conditions at or prior to the Closing:

         (a) The  representations and warranties set forth in Article IV will be
true and correct in all material respects;

         (b) Buyer and Parent  will have  performed  and  complied  with each of
their agreements contained in this Agreement in all material respects;

         (c) No Law or  Governmental  Order  will  have been  enacted,  entered,
enforced,   promulgated,   issued  or  deemed  applicable  to  the  transactions
contemplated  by this  Agreement by any  Governmental  Entity that prohibits the
Closing;

         (d)  Parent and Kush  Agarwal  shall have  entered  into an  employment
agreement in the form of Exhibit E; and

         (e) Buyer will have delivered each of the certificates, instruments and
other documents that it is obligated to deliver pursuant to Section 2.4(b)(ii).

                              IX. Indemnification

         9.1 Indemnification.

         (a) Sellers  will  severally,  on a pro rata basis in relation to their
respective  Sellers  Percentage  Interest,  indemnify Buyer,  Parent,  and their
officers,   directors,   Affiliates,   employees,   agents  and  representatives
(collectively the "Indemnified Parties"), in full and hold them harmless against
any Loss,  whether  or not  actually  incurred  prior to Closing  arising  from,
relating  to or  constituting  (i)  any  breach  or  inaccuracy  in  any  of the
representations  and warranties of Sellers contained in this Agreement or in the
Disclosure  Schedule or any  closing  certificate  delivered  by or on behalf of
Sellers  pursuant  to this  Agreement  (any  such  breach  or  inaccuracy  to be
determined  without  regard  to any  qualification  for  "materiality,"  "in all
material  respects"  or  similar  qualification);  (ii) any breach of any of the
agreements of Seller contained in this Agreement;  (iii) any liability under the
WARN Act or any similar  state or local Law that may result from an  "Employment
Loss," as defined by 29 U.S.C.  2101(a)(6),  caused by any action of the Company
prior to the  Closing  or by Buyer's  decision  not to retain  employees  of the
Company;   and  (iv)  any  Plan   established   or  maintained  by  the  Company
(collectively, "Buyer Losses").

         (b) If any Indemnified Party has a claim for indemnification under this
Section 9.1, that Indemnified Party will deliver to Sellers'  Representative one
or more written  notices of Buyer Losses (each an  "Indemnified  Party  Claim"),
prior to the third  anniversary of the Closing Date other than Indemnified Party
Claims  relating  to  breaches  or  inaccuracies  of  the   representations  and
warranties  contained  in Section  3.1,  the first  sentence  of Section 4.1 and
Section 4.4.  Sellers  will have no liability  under this Section 9.1 unless the
written  notices  required  by the  preceding  sentence  are  given  by the date
specified. Any Indemnified Party Claim will state in reasonable detail the basis
for such Buyer Losses to the extent then known by the Indemnified  Party and the
nature of the Buyer Loss for which  indemnification  is sought, and it may state
the amount of the Buyer Loss  claimed.  If such  Indemnified  Party Claim (or an
amended Indemnified Party Claim) states the amount of the Buyer Loss claimed and
Sellers'  Representative  notifies  the  Indemnified  Party that  Sellers do not
dispute the claim  described  in such notice or fails to notify the  Indemnified
Party within 20 business days after  delivery of such notice by the  Indemnified
Party whether Sellers dispute the claim described in such notice, the Buyer Loss
in the amount  specified in the notice will be admitted by Sellers (an "Admitted
Claim").  If Sellers have timely  disputed  their  liability  with respect to an
Indemnified  Party Claim (or an amended  Indemnified  Party  Claim)  stating the


                                       43
<PAGE>

amount of a Buyer Loss  claimed,  Seller's  Representative  and the  Indemnified
Party will proceed in good faith to negotiate a resolution of such dispute. If a
claim for indemnification has not been resolved within 30 days after delivery of
the notice, the Indemnified Party may seek judicial recourse.  If an Indemnified
Party Claim does not state the amount of the Buyer Loss  claimed,  such omission
will not preclude the Indemnified  Party from recovering from Sellers the amount
of the Buyer Loss described in such  Indemnified  Party Claim if any such amount
is  subsequently  provided in an amended  Indemnified  Party Claim.  In order to
assert its right to indemnification under this Article IX, the Indemnified Party
will not be required to provide  any notice  except as provided in this  Section
9.1(b).

         (c) Sellers shall not have any  obligation to indemnify an  Indemnified
Party  (other  than  with  respect  to (i)  Buyer  Losses  caused  by  fraud  or
intentional  misrepresentation  on the  part  of  any  Seller  or  any of  their
respective  Affiliates and (ii) breaches or inaccuracies of the  representations
contained  in  Sections  4.4 and 4.5)  unless and until,  and only to the extent
that,  the  aggregate of all such Buyer  Losses  (other than with respect to (i)
Buyer Losses caused by fraud or intentional misrepresentation of the part of any
Seller or any of their  respective  Affiliates and (ii) breaches or inaccuracies
of the representations  contained in Sections 4.4 and 4.5) exceeds $350,000,  at
which time the  Indemnified  Parties shall be entitled to indemnity for the full
amount of Losses  (and not just the  amount  in  excess of  $350,000).  Sellers'
liability  for Buyer  Losses  shall not  exceed  $14,000,000,  (other  than with
respect to (i) Buyer Losses caused by fraud or intentional  misrepresentation of
the part of any Seller or any of their  respective  Affiliates and (ii) breaches
or inaccuracies of the representations contained in Sections 4.4 and 4.5).

         (d) Any recovery pursuant to this Article IX shall be net of the amount
of any actual  recoveries  under any  insurance  policy  that are  available  to
Company,  Buyer or Parent in connection with the circumstances that give rise to
an Indemnified Party Claim.

         9.2 Third-Party Actions

         (a) An Indemnified  Party will give Seller prompt written notice of the
commencement of any Litigation  instituted by any third party arising out of the
actions or inactions of Seller (or allegations  thereof) whether occurring prior
to, on or after the  Closing  Date (any such third  party  action or  proceeding
being  referred to as a  "Third-Party  Action").  The  complaint or other papers
pursuant  to which the third party  commenced  such  Third-Party  Action will be
attached to such written notice.  The failure to give prompt written notice will
not affect any Indemnified Party's right to indemnification  unless such failure
has materially and adversely  affected  Sellers' ability to defend  successfully
such Third-Party Action.

         (b) Sellers will contest and defend such  Third-Party  Action on behalf
of any Indemnified  Party that requests that it does so. Notice of the intention


                                       44
<PAGE>

to so contest and defend will be given by Sellers to the requesting  Indemnified
Party  within 20  business  days after the  Indemnified  Party's  notice of such
Third-Party  Action (but, in all events,  at least 10 business days prior to the
date  that a  response  to such  Third-Party  Action is due to be  filed).  Such
contest  and  defense  will be  conducted  by  reputable  attorneys  retained by
Sellers.  An Indemnified Party will be entitled at any time, at its own cost and
expense,  to  participate  in such contest and defense and to be  represented by
attorneys of its own choosing. If the Indemnified Party elects to participate in
such defense,  the Indemnified  Party will cooperate with Sellers in the conduct
of such defense.  An Indemnified Party will cooperate with Sellers to the extent
reasonably  requested by Sellers in the contest and defense of such  Third-Party
Action,  including  providing  reasonable access (upon reasonable notice) to the
books, records and employees of the Indemnified Party if relevant to the defense
of such  Third-Party  Action;  provided,  that such  cooperation will not unduly
disrupt the  operations  of the business of the  Indemnified  Party or cause the
Indemnified  Party to waive any statutory or common law  privileges,  breach any
confidentiality  obligations  owed to  third  parties  or  otherwise  cause  any
confidential information of such Indemnified Party to become public.

         (c) If any Indemnified  Party does not request that Sellers contest and
defend a Third-Party Action, or if after such request Sellers do not contest and
defend a Third-Party  Action or if any Indemnified  Party reasonably  determines
that  Sellers  are not  adequately  representing  or,  because of a conflict  of
interest, may not adequately represent any interests of the Indemnified Party at
any time after  requesting  Sellers  to do so,  such  Indemnified  Party will be
entitled to conduct its own defense and to be  represented  by  attorneys of its
own choosing, all at Sellers' cost and expense. Sellers will pay as incurred (no
later than 25 days after  presentation)  the fees and  expenses  of the  counsel
retained by such Indemnified Party from the Indemnity Escrow Funds.

Neither an Indemnified Party nor Sellers may concede, settle or compromise any
Third-Party Action without the consent of the other party, which consents will
not be unreasonably withheld. Notwithstanding the foregoing, (i) if a
Third-Party Action seeks the issuance of an injunction, the specific election of
an obligation or similar remedy or (ii) if the subject matter of a Third-Party
Action relates to the ongoing business of any Indemnified Party, which
Third-Party Action, if decided against any Indemnified Party, would materially
adversely affect the ongoing business or reputation of any Indemnified Party,
the Indemnified Party alone will be entitled to settle such Third-Party Action
in the first instance and, if the Indemnified Party does not settle such
Third-Party Action, Sellers will then have the right to contest and defend (but
not settle) such Third-Party Action.

         9.3 Tax  Adjustment.  Any  payment to an  Indemnified  Party under this
Article  IX will be,  for Tax  purposes,  to the  extent  permitted  by Law,  an
adjustment to the Purchase  Price.  In calculating  any Loss, the amount will be
increased  to give  effect to any Tax  related to the receipt of any payment and
the  amount  will be  decreased  to give  effect to any  benefit  related to the
increase of such Loss to the extent actually received by Parent or Buyer.

                                 X. Guarantees

           McDonagh Guarantor hereby fully and unconditionally guarantees the
performance of all of the obligations of McDonagh Seller under this Agreement.


                                       45
<PAGE>

Agarwal Guarantor hereby fully and unconditionally guarantees the performance of
all of the obligations of Agarwal Seller under this Agreement.

                                  XI. General

         11.1  Press  Releases  and  Announcements.   Any  public  announcement,
including any announcement to employees,  customers,  suppliers or others having
dealings with the Company or any Subsidiary,  or similar  publicity with respect
to this Agreement or the  transactions  contemplated by this Agreement,  will be
issued,  if at all,  at such  time and in such  manner as Buyer  determines  and
approves. Buyer will have the right to be present for any in-person announcement
by the Company.  Unless  consented to by Buyer or required by Law,  Sellers will
keep,  and will cause each of the Company  and its  Subsidiaries  to keep,  this
Agreement and the transactions contemplated by this Agreement confidential.

         11.2  Expenses.  Except as  otherwise  expressly  provided  for in this
Agreement,  the  Sellers,  on the one hand,  and Parent and Buyer,  on the other
hand, will each pay all expenses incurred by each of them in connection with the
transactions  contemplated  by  this  Agreement,  including  legal,  accounting,
investment  banking and consulting  fees and expenses  incurred in  negotiating,
executing and  delivering  this  Agreement and the other  agreements,  exhibits,
documents  and  instruments   contemplated   by  this  Agreement   (whether  the
transactions contemplated by this Agreement are consummated or not).

         11.3  Amendment  and  Waiver.  This  Agreement  may not be  amended,  a
provision  of this  Agreement  or any  default,  misrepresentation  or breach of
warranty or agreement  under this Agreement be waived,  and a consent may not be
rendered, except in a writing executed by the party against which such action is
sought to be  enforced.  Neither  the  failure  nor any  delay by any  Person in
exercising any right,  power or privilege under this Agreement will operate as a
waiver of such right,  power or privilege,  and no single or partial exercise of
any such right,  power or privilege will preclude any other or further  exercise
of such right,  power or privilege or the exercise of any other right,  power or
privilege. In addition, no course of dealing between or among any Persons having
any interest in this Agreement  will be deemed  effective to modify or amend any
part of this  Agreement or any rights or  obligations  of any Person under or by
reason of this  Agreement.  The  rights  and  remedies  of the  parties  to this
Agreement are cumulative and not alternative.

         11.4 Notices. All notices, demands and other communications to be given
or delivered  under or by reason of the  provisions of this Agreement will be in
writing and will be deemed to have been given (i) when  delivered if  personally
delivered by hand (with written confirmation of receipt),  (ii) when received if
sent by a nationally  recognized  overnight courier service (receipt requested),
(iii) five business days after being mailed, if sent by first class mail, return
receipt requested, or (iv) when receipt is acknowledged by an affirmative act of
the party receiving notice,  if sent by facsimile,  telecopy or other electronic
transmission  device (provided that such an acknowledgement  does not include an
acknowledgment  generated  automatically  by a facsimile or telecopy  machine or
other electronic  transmission device).  Notices,  demands and communications to
Buyer,  Parent and Sellers will, unless another address is specified in writing,
be sent to the address indicated below:

                                       46
<PAGE>

         If to Buyer or Parent:

         IntegraMed America, Inc.
         Two Manhattanville Road
         Purchase, New York 10577
         Attn:  Jay Higham
         Facsimile No.:  914-253-8010

         With a copy to:

         Dorsey & Whitney LLP
         250 Park Avenue
         New York, New York 10177
         Attn:  Steven Khadavi, Esq.
         Facsimile No.:  212-953-7201

         If to Sellers:

         Kush K. Agarwal
         109 Covington Court
         Oak Brook, Illinois  60523

         With a copy to:

         McDermott Will & Emery LLP
         227 West Monroe Street
         Chicago, Illinois 60606
         Attn:  Lisa M. Kaderabek, Esq.
         Facsimile No.: 312-984-7700

         11.5  Assignment.  Neither  this  Agreement  nor  any  of  the  rights,
interests or  obligations  under this  Agreement may be assigned by any party to
this  Agreement  without the prior written  consent of the other parties to this
Agreement,  except that Buyer may assign any of its rights under this  Agreement
to one or more  Subsidiaries of Buyer, so long as Buyer remains  responsible for
the performance of all of its obligations  under this Agreement.  Subject to the
foregoing,  this  Agreement and all of the  provisions of this Agreement will be
binding upon and inure to the benefit of the parties to this Agreement and their
respective successors and permitted assigns.

         11.6 No Third Party Beneficiaries.  Nothing expressed or referred to in
this  Agreement  confers  any rights or  remedies  upon any Person that is not a
party or permitted assign of a party to this Agreement.

         11.7 Severability.  Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
Law, but if any  provision  of this  Agreement  is held to be  prohibited  by or
invalid under  applicable  Law, such provision  will be ineffective  only to the


                                       47
<PAGE>

extent of such prohibition or invalidity,  without invalidating the remainder of
such provision or the remaining provisions of this Agreement.

         11.8 Complete Agreement. This Agreement contains the complete agreement
between  the parties  and  supersede  any prior  understandings,  agreements  or
representations by or between the parties,  written or oral. Sellers acknowledge
that  Parent and Buyer  have made no  representations,  warranties,  agreements,
undertakings  or promises except for those expressly set forth in this Agreement
or in  agreements  referred to herein that survive the execution and delivery of
this Agreement.

         11.9 Schedules.  The Disclosure Schedule contains a series of schedules
corresponding  to the  sections  contained  herein.  Nothing  in the  Disclosure
Schedule is deemed  adequate to disclose an  exception  to a  representation  or
warranty made in this Agreement unless the Disclosure Schedule identifies in the
corresponding  schedule the exception with  particularity.  The schedules in the
Disclosure  Schedule  relate only to the  representations  and warranties in the
section and subsection of this Agreement to which they correspond and not to any
other  representation  or  warranty  in  this  Agreement.  In the  event  of any
inconsistency  between the  statements in this  Agreement and  statements in the
Disclosure  Schedule,  the  statements  in this  Agreement  will control and the
statements in the Disclosure Schedule will be disregarded.

         11.10 Signatures;  Counterparts.  This Agreement may be executed in one
or more  counterparts,  any one of which need not contain the signatures of more
than one party, but all such counterparts taken together will constitute one and
the same  instrument.  A  facsimile  signature  will be  considered  an original
signature.

         11.11  Governing Law. THE DOMESTIC LAW,  WITHOUT REGARD TO CONFLICTS OF
LAWS PRINCIPLES,  OF THE STATE OF NEW YORK WILL GOVERN ALL QUESTIONS  CONCERNING
THE  CONSTRUCTION,  VALIDITY  AND  INTERPRETATION  OF  THIS  AGREEMENT  AND  THE
PERFORMANCE OF THE OBLIGATIONS IMPOSED BY THIS AGREEMENT.

         11.12 Specific Performance. Each of the parties acknowledges and agrees
that the subject matter of this  Agreement,  including the business,  assets and
properties  of the  Company  and the  Subsidiaries,  is  unique,  that the other
parties would be damaged  irreparably in the event any of the provisions of this
Agreement are not performed in accordance with their specific terms or otherwise
are  breached,  and that the remedies at law would not be adequate to compensate
such other parties not in default or in breach. Accordingly, each of the parties
agrees that the other parties will be entitled to an  injunction or  injunctions
to  prevent  breaches  of the  provisions  of  this  Agreement  and  to  enforce
specifically  this  Agreement and the terms and  provisions of this Agreement in
addition to any other remedy to which they may be entitled,  at law or in equity
(without  any  requirement  that  Parent  or  Buyer  provide  any  bond or other
security).  The parties  waive any defense  that a remedy at law is adequate and
any  requirement  to post bond or provide  similar  security in connection  with
actions  instituted  for  injunctive  relief  or  specific  performance  of this
Agreement.

         11.13  Jurisdiction.   Each  of  the  parties  hereto  irrevocably  and
unconditionally  submits to the exclusive jurisdiction of (a) any New York State
court sitting in the County of New York and (b) the United States District Court


                                       48
<PAGE>

for the Southern  District of New York, for the purposes of any suit,  action or
other proceeding  arising out of this Agreement or any transaction  contemplated
hereby.  Each of the  parties  waives any defense of  inconvenient  forum to the
maintenance  of any action or proceeding so brought and waives any bond,  surety
or other  security that might be required of any other party with respect to any
such action or  proceeding.  The  parties  agree that either or both of them may
file a copy of this paragraph with any court as written evidence of the knowing,
voluntary and bargained  agreement between the parties  irrevocably to waive any
objections to venue or to  convenience  of forum.  Nothing in this Section 11.13
will  affect the right of any party to serve legal  process in any other  manner
permitted by law or in equity.

         11.14 Waiver of Jury Trial. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY
CONTROVERSY THAT MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED
AND DIFFICULT ISSUES,  AND THEREFORE IT IRREVOCABLY AND  UNCONDITIONALLY  WAIVES
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY  LITIGATION  DIRECTLY
OR INDIRECTLY  ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE  TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT.  EACH PARTY CERTIFIES AND ACKNOWLEDGES  THAT (I)
NO  REPRESENTATIVE,  AGENT OR  ATTORNEY  OF ANY  OTHER  PARTY  HAS  REPRESENTED,
EXPRESSLY  OR  OTHERWISE,  THAT SUCH  OTHER  PARTY  WOULD  NOT,  IN THE EVENT OF
LITIGATION,  SEEK TO ENFORCE THE FOREGOING  WAIVER,  (II) IT UNDERSTANDS AND HAS
CONSIDERED  THE  IMPLICATIONS  OF  SUCH  WAIVER,  (III)  IT  MAKES  SUCH  WAIVER
VOLUNTARILY  AND (IV) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG
OTHER THINGS, THE MUTUAL WAIVER AND CERTIFICATIONS IN THIS SECTION 11.14.

         11.15  Construction.  The parties  and their  respective  counsel  have
participated  jointly in the  negotiation  and  drafting of this  Agreement.  In
addition, each of the parties acknowledges that it is sophisticated and has been
advised by  experienced  counsel and, to the extent it deemed  necessary,  other
advisors in connection with the  negotiation and drafting of this Agreement.  In
the event an  ambiguity  or question of intent or  interpretation  arises,  this
Agreement  will  be  construed  as if  drafted  jointly  by the  parties  and no
presumption or burden of proof will arise  favoring or disfavoring  any party by
virtue of the authorship of any of the provisions of this Agreement. The parties
intend  that each  representation,  warranty  and  agreement  contained  in this
Agreement  will have  independent  significance.  If any party has  breached any
representation, warranty or agreement in any respect, the fact that there exists
another  representation,  warranty or  agreement  relating  to the same  subject
matter (regardless of the relative levels of specificity) that the party has not
breached  will not detract from or mitigate the fact that the party is in breach
of the first  representation,  warranty or  agreement.  Any reference to any Law
will be deemed to refer to all rules  and  regulations  promulgated  thereunder,
unless the  context  requires  otherwise.  The  headings  preceding  the text of
articles  and  sections  included  in this  Agreement  and the  headings  to the
schedules  and exhibits are for  convenience  only and are not be deemed part of
this Agreement or given effect in  interpreting  this  Agreement.  References to
sections,  articles,  schedules  or  exhibits  are  to the  sections,  articles,
schedules and exhibits  contained in, referred to or attached to this Agreement,


                                       49
<PAGE>

unless  otherwise  specified.  The word  "including"  means  "including  without
limitation."  A statement that an action has not occurred in the past means that
it is also not  presently  occurring.  When any  party  may take any  permissive
action, including the granting of a consent, the waiver of any provision of this
Agreement or otherwise,  whether to take such action is in its sole and absolute
discretion. The use of the masculine,  feminine or neuter gender or the singular
or plural  form of words  will not limit any  provisions  of this  Agreement.  A
statement that an item is listed, set forth disclosed or described means that it
is correctly  listed,  set forth disclosed or described,  and a statement that a
copy of an item has been delivered means a true and correct copy of the item has
been delivered.

         11.16 Time of Essence.  With  regard to all dates and time  periods set
forth or referred to in this Agreement, time is of the essence.



                                       50
<PAGE>


         IN WITNESS WHEREOF, Buyer, Parent, Sellers, Sellers' Representative and
the Company have executed this Agreement as of the date first above written.


PARENT:                                    SELLERS:

INTEGRAMED AMERICA, INC.                   D. BRIAN MCDONAGH , M.D.
                                           TRUST DATED MAY 1, 2004
By:/s/Jay Higham
      --------------------------
Name: Jay Higham                           By:/s/D. Brian McDonagh
Title:President and CEO                             ----------------------------
                                           Name: D. Brian McDonagh, as Trustee



                                           KUSH K. AGARWAL LIVING TRUST
BUYER:
                                           By:
IDVC ACQUISITION CO.                       Name: Kush K. Agarwal, as Trustee


By:/s/Jay Higham                           GUARANTORS:
    ----------------------------
Name:  Jay Higham
Title: President                           D. BRIAN MCDONAGH
       -------------------------
                                           /s/D. Brian McDonagh
                                           ------------------------------------

                                           KUSH K. AGARWAL

                                          /s/ Kush K. Agarwal
                                           ------------------------------------


                                           COMPANY:

                                           VEIN CLINICS OF AMERICA, INC.


                                           By:/s/Kush K. Agarwal
                                              --------------------------
                                           Name:Kush K. Agarwal
                                           Title: President


                                           SELLERS' REPRESENTATIVE:

                                           KUSH K. AGARWAL






<PAGE>



                                                                     EXHIBIT D

                           TERMS OF EARN-OUT PAYMENTS

         1. Definitions. In addition to those terms defined elsewhere in this
Agreement, the following definitions shall apply to this Exhibit D:

                  "Annual Period" means the 12 month period ending on December
31.

                  "Corporate" describes the business operations or expenses of
         the Parent, exclusive of its subsidiaries.

                  "EBITDA" means the net income of the Company for the relevant
         Annual Period, calculated in accordance with GAAP as consistently
         applied by Parent, plus interest, income taxes, depreciation and
         amortization expenses of the Company for such Annual Period, as
         adjusted in accordance with Section 2 of this Exhibit D.

                  "Sellers' Accountants" means McGladrey & Pullen LLP.

         2. Adjustments to EBITDA. EBITDA shall be adjusted as set forth herein:

         (a) Expenses paid by the Corporate office on behalf of the Company that
are agreed to in advance between Sellers' Representative and Parent for goods
and services that (i) are provided directly to or solely for the benefit of the
Company or (ii) are necessary for the operation of the Company regardless of
whether it was a subsidiary of Parent, will be assigned to the Company for
purposes of calculating EBITDA. This assignment shall be made by the Chief
Accounting Officer of Parent based upon the actual costs of the given expense
items.

         (b) Gains from the disposition of property, plant and equipment shall
not be included as revenue, expense or gain for purposes of calculating EBITDA.

         (c) For purposes of calculating EBITDA, (i) all effects of purchase
accounting adjustments caused by the acquisition of the Company by Parent shall
be disregarded and (ii) legal, accounting, broker and advisory fees and other
expenses directly and exclusively related to the acquisition of the Company by
Parent (whether incurred by the Company, Buyer, Sellers, or Parent), the cost of
the Rosenfeld dispute and settlement (including attorney fees), Escrow Agreement
expenses, any prepayment penalties and related expenses associated with the
Capital Source Credit Facility and reserves for incentive bonuses paid or to be
paid by the Company to certain members of management of the Company shall be
disregarded. For the avoidance of doubt, all costs and expenses associated with
any office moves and all repayments of amounts previously paid by Medicare shall
not be disregarded.

         (d) For purposes of calculating  First Earn-Out Year (as defined below)
EBITDA, net income of the Company will be reduced by the expenses  pertaining to
corporate  office  and  overhead  headcount  planned  additions,as  set forth on
Schedule I hereto to the extent such expenses have not been actually incurred by
the Company during the First Earn-Out Year.

<PAGE>

         (e) For purposes of calculating Second Earn-Out Year (as defined below)
EBITDA, net income of the Company will be reduced by the expenses pertaining to
corporate office and overhead headcount planned additions in the agreed upon
budget, to the extent such expenses have not been actually incurred by the
Company during the Second Earn-Out Year.

         3. Procedures for calculating EBITDA.

         (a) EBITDA shall be calculated by Parent at the end of each Annual
Period in cooperation with the Company. For purposes of this Section 3, any
reserves for contractual allowances and reserves for allowances for
uncollectible accounts receivables shall be calculated on a basis consistent
with the Company's audited financial statements for the Last Fiscal Year End
based upon the facts and circumstances existing at the time of the Earn-Out
calculation. Parent shall issue a report to Sellers' Representative containing
the EBITDA calculation within sixty (60) days of the end of each Annual Period.

         (b) For a period of fifteen (15) days after receipt of the report,
Sellers shall have the right to request that Sellers' Accountants commence, and
complete as soon as reasonably possible thereafter, an audit of the books and
records of the Company and, limited to the extent necessary to verify whether
allocations have been made in accordance with Section 2(a) of this Exhibit D,
the books and records of Parent. Sellers shall be solely responsible for all
costs and expenses of the audit.

         (c) If the report prepared by Sellers' Accountants contains a
calculation of EBITDA that is greater than EBITDA as calculated by Parent,
Parent and Sellers' Representative shall seek in good faith to resolve in
writing any differences which they may have. If the dispute is not resolved
within thirty (30) days of the issuance of the report by the Sellers'
Accountants, the parties shall mutually engage and submit such dispute to, and
the same shall be finally resolved in accordance with the provisions of the
Agreement by the Independent Accountants. The Independent Accountants shall
determine and report in writing to Parent and Sellers' Representative as to the
resolution of all disputed matters submitted to the Independent Accountants and
the effect of such determinations on the EBITDA calculation within twenty (20)
days after such submission or such longer period as the Independent Accountants
may reasonably require, and such determinations shall be final, binding and
conclusive as to Parent, Sellers, Sellers' Representative and their respective
Affiliates. The fees and disbursements of the Independent Accountants shall be
payable one-half by Parent, on the one hand, and one-half by Sellers'
Representative, on the other hand.

         (d) The Earn-Out Payment shall be calculated based upon (i) the
calculation of EBITDA prepared by Parent in accordance with Section 3(a) of this
Exhibit D unless the matter has been resolved in accordance with Section 3(c) of
this Exhibit D; in which case, (ii) the determination of EBITDA determined in
accordance with Section 3(c) of this Exhibit D. Notwithstanding the above, the
Sellers' Representative and Parent may agree in writing that a different amount
for EBITDA be used for the calculation of the Earn-Out Payments.

         4. Earn-Out Payments.

                                       2
<PAGE>

         (a) For the Annual Period ending on December 31, 2007 (the "First
Earn-Out Year"), Parent shall pay the Sellers (pro rata according to their
respective Sellers Percentage Interest) an Earn-Out Payment equal to FOUR
HUNDRED PER CENT (400%) of that portion of EBITDA in excess of THREE MILLION
NINE HUNDRED THOUSAND DOLLARS ($3,900,000) (the "First Earn-Out Payment");
provided, however, that the Earn-Out Payment otherwise payable under this
Section 4(a) shall be reduced: (i) by one-third if the Company has not opened
three or more new clinics (net of any clinics closed during such period) during
the First Earn-Out Year; or (ii) by two-thirds if the Company has not opened at
least two new clinics (net of any clinics closed during such period) during the
First Earn-Out Year; or (iii) to zero if the Company has not opened any new
clinics (net of any clinics closed during such period) during the First Earn-Out
Year. For the avoidance of doubt, the clinic opened in St. Louis in 2007 prior
to the completion of the sale of the Company to Buyer shall qualify as a clinic
opened during the First Earn-Out Year.

         (b) For the Annual Period ending on December 31, 2008 (the "Second
Earn-Out Year") Parent shall pay the Sellers (pro rata according to their
respective Sellers Percentage Interest) an Earn-Out Payment equal to FOUR
HUNDRED PER CENT (400%) of that portion of EBITDA in excess of FOUR MILLION
THREE HUNDRED THOUSAND DOLLARS ($4,300,000) (the "Second Earn-Out Payment");
provided, however that the Second Earn-Out Payment otherwise payable under this
Section 4(b) shall be reduced: (i) by one-fourth if the Company has not opened
eight or more new clinics (net of any clinics closed during such period) during
the Earn-Out Years; or (ii) by one-half if the Company has not opened at least
seven new clinics (net of any clinics closed during such period) during the
Earn-Out Years; or (iii) by three-fourths if the Company has not opened at least
six new clinics (net of any clinics closed during such period) during the
Earn-Out Years; or (iv) to zero if the Company has opened five or fewer clinics
(net of any clinics closed during such period) during the Earn-Out Years. The
Company's Chief Executive Officer shall prepare a detailed schedule and timeline
for the opening of new clinics in the Second Earn-Out Year which shall be
presented to Parent and updated regularly. Such schedule shall provide for at
least one new clinic to open in each quarter of the Second Earn-Out Year and the
Company and the Chief Executive Officer of the Company will use their best
efforts to cause such new clinics to open in accordance with such schedule. As
used herein, "Earn-Out Years" shall mean the First Earn-Out Year and the Second
Earn-Out Year together; and "Earn-Out Payments" shall mean the First
Earn-Out Payment and the Second Earn-Out Payment, together.

         (c) A clinic shall be deemed to have been "opened" for purposes of this
Section 4 if (i) it is operational and has scheduled, and is actually seeing,
patients or (ii) a currently effective lease has been signed and exists for the
clinic space, a physician has been identified and assigned to the clinic and has
commenced training and the clinic would have been operational but for a natural
disaster, force majeure or similar cause.

         5. Payment of Earn-Out Amount. An Earn-Out Payment shall be distributed
to Sellers within thirty (30) days after the Earn-Out Payment has been
calculated in accordance with Section 3(d) of this Exhibit D. Each Earn-Out
Payment shall be made one-half in cash and one-half in Parent Common Stock. For
purposes of this Section 5, the number of shares of Parent Common Stock to be
issued shall be determined based on the average closing price of Parent Common


                                       3
<PAGE>

Stock on the NASDAQ Global Market for the ten trading days ending on the third
trading day immediately preceding an Earn-Out Payment.

         6. Operation of the Company during Earn-Out Period. Until the end of
the Second Earn-Out Year, the President and Chief Executive Officer of the
Company shall be Kush Agarwal or another person satisfactory to the Sellers'
Representative. The Company's President and Chief Executive Officer shall have
authority over the day-to-day operations of the Company and the Company's
business as is typical for such an officer, including without limitation, the
right to hire, fire and retain employees, formulate policies, determine and
implement clinic expansion/closing plans, prepare the Company's operating and
capital budgets, determine the Company's primary office location, and generally
operate and manage the business of the Company, all subject to the reasonable
approval of Parent. The Company's President and Chief Executive Officer shall
report directly to Parent's Chief Executive Officer. Until the completion of the
Second Earn-Out Year, the Company shall continue to exist and operate as a
separate business of Parent, in the business segment contemplated by its current
projections.


                                       4
<PAGE>




                                   Schedule I
<TABLE>

                             Infrastructure Expenses


2007
<CAPTION>
                                  -------------------------------------------------------------------------------------------------
                                    May          June    July      August    September    October   November    December    Total
                                    ===          ====    ====      ======    =========    =======   ========    ========    =====
                                   2007          2007    2007       2007       2007         2007      2007        2007
                                   ====          ====    ====       ====       ====         ====      ====        ====
                                  -------------------------------------------------------------------------------------------------


Home Office Infrastructure
<S>                                              <C>      <C>       <C>         <C>       <C>          <C>        <C>       <C>
VP New Clinic Development                                                                                        12,917     12,917
=========================                                                                                        ======     ======
Regional Managers                                         7,500     7,500       7,500     7,500        7,500      7,500     45,000
=================                                         =====     =====       =====     =====        =====      =====     ======
Accountants                                      4,583    4,583     4,583       4,583     4,583        4,583      4,583     32,081
===========                                      =====    =====     =====       =====     =====        =====      =====     ======
IT                                                        8,000     8,000       8,000     8,000        8,000      8,000     48,000
==                                                        =====     =====       =====     =====        =====      =====     ======
Receptionist                                              2,917     2,917       2,917     2,917        2,917      2,917     17,500
============                                              =====     =====       =====     =====        =====      =====     ======
Accounting Administrative                                 2,917     2,917       2,917     2,917        2,917      2,917     17,500
=========================                                 =====     =====       =====     =====        =====      =====     ======
Human Resources Asst (GK)              6,667     6,667    6,667     6,667       6,667     6,667        6,667      6,667     53,333
=========================              =====     =====    =====     =====       =====     =====        =====      =====     ======
Administrative (TW)                    3,333     3,333    3,333     3,333       3,333     3,333        3,333      3,333     26,667
===================                    =====     =====    =====     =====       =====     =====        =====      =====     ======
Manager of MD Referral Marketing                 2,500    2,500     2,500       2,500     2,500        2,500      2,500     17,500
================================                 =====    =====     =====       =====     =====        =====      =====     ======
                                  -------------------------------------------------------------------------------------------------
Total Incremental                     10,000    17,083   38,416    38,416      38,416    38,416       38,416     51,333    270,498
=================                     ======    ======   ======    ======      ======    ======       ======     ======    =======
                                  -------------------------------------------------------------------------------------------------


</TABLE>