ASSET PURCHASE AGREEMENT

         This AGREEMENT is made on the 11th day of August, 1995 by and among
MEDIQ Imaging Services, Inc. and its wholly-owned subsidiaries American
Cardiovascular Imaging Labs, Inc. and Southeastern Diagnostics, Inc., with
offices located at One Mediq Plaza, Pennsauken, New Jersey 08110 (hereinafter
referred to collectively as "Sellers") and NMC Diagnostics Services Inc., a
Delaware corporation (hereinafter referred to as "Buyer").

                              W I T N E S S E T H:

         WHEREAS, Sellers own and operate a diagnostic testing business
throughout the United States (the "Business"); and
         WHEREAS, Sellers desire to sell to Buyer and Buyer desires to purchase
from Sellers certain assets of the Business.
         NOW, THEREFORE, the parties agree as follows:
I.       Terms of Purchase and Sale
          A.     Subject to the terms and conditions hereinafter set forth,
                 Sellers hereby agree to sell, convey, transfer and deliver to
                 Buyer, and Buyer agrees to purchase and accept from Sellers,
                 all of Sellers' right, title and interest in and to the
                 following assets of the Business (the "Assets") to the extent
                 such Assets do not constitute Excluded Assets (hereinafter
                 defined):

                  1.       all inventory, wherever located, used or held for
                           sale in connection with the conduct of the
                           Business, including, without limitation, supplies,
                           raw materials, scrap, containers, packaging materials
                           and spares;
                  2.       all machinery, equipment, parts, tooling, motor
                           vehicles, furniture, furnishings, fixtures,
                           supplies, plant and office equipment and all other
                           tangible personal property of the Business, wherever
                           located;
                  3.       all files and operating data and records primarily
                           relating to the Business and the conduct of
                           the Business, including, without limitation, all
                           books, manuals, fixed assets records, documents,



                                        2
<PAGE>


                           computer software, operating procedures, customer
                           lists, sales records, credit information,
                           correspondence, literature, sales and advertising
                           materials, designs and drawings, models, patterns,
                           slogans and books of account;
                  4.       all customer and supplier lists primarily relating
                           to, or otherwise material to the conduct of,
                           the Business;
                  5.       the leases for real property for space solely
                           occupied by Sellers set forth on Exhibit
                           II.I (the "Leases");
                  6.       leases, subleases and assignments (whether as
                           lessee, sublessee, or assignee) of machinery,
                           equipment and other personal property used
                           primarily by the Business (the "Equipment Leases");
                  7.       all of the Business' accounts and notes receivable
                           reflected on the books of the Sellers on the
                           Closing Date;
                  8.       all of the Sellers' cash, cash in banks, cash
                           equivalents, deposits, investments, securities,
                           advance payments, prepaid items and expenses,
                           deferred charges, rights of offset and credits and
                           claims for refund;
                  9.       all contracts and agreements of the Sellers relating
                           to the operations of the Business (except as excluded
                           herein); all purchase and sale orders (and orders
                           evidenced solely by order acknowledgements),
                           contracts and agreements of the Sellers relating to
                           the purchase of products, materials or services used
                           in connection with the conduct of the Business; all
                           agreements of the Sellers with medical providers; the
                           Leases; the Equipment Leases; and all other contracts
                           and agreements entered into by Sellers in the conduct
                           of the Business including, without limitation, all
                           agreements set forth on Exhibit II.J, (except those
                           contracts required to be included on Exhibit II.J,
                           but which are not included if such contracts are not
                           in compliance with laws in effect on the Closing
                           Date) (collectively, the



<PAGE>


                                        3

                           "Assigned Contracts");
                  10.      all intellectual property which is or has been used
                           to conduct the Business, including, without
                           limitation, all patents, patent applications,
                           copyrights and copyright applications; registered and
                           unregistered trademarks and service marks, trademark
                           and service mark registrations, trademark and service
                           mark applications for registration; all patent,
                           trademark, service mark, trade name and know-how
                           rights granted to the Business under licensing or
                           other agreements; and all know-how, proprietary
                           information, production methods, trade and business
                           secrets and computer software;
                  11.      all rights, claims or causes of action against third
                           parties primarily relating to the Assets, Business or
                           operation of the Business;
                  12.      all assignable third party warranties and guarantees
                           with respect to any of the Assets; and
                  13.      all franchises, approvals, permits, licenses, orders,
                           registrations, certificates, variances, tax
                           abatements and other similar permits or rights and
                           all pending applications therefor related to the
                           Business ("Permits"), other than Medicare provider
                           numbers but including such provider numbers for South
                           Carolina and Colorado.
         B.       Excluded Assets.  Notwithstanding anything contained in
                  Section I.A. hereof to the contrary, Sellers are not selling,
                  assigning, transferring or conveying to Buyer any asset or
                  item not described in Section I.A.  Without limiting the
                  foregoing, the following assets, rights and properties are
                  excluded from the transactions contemplated in this Agreement
                  (the "Excluded Assets"):
                  1.       any equipment and other personal property, wherever
                           located, owned by third parties who are not
                           affiliated with Sellers, and any equipment and other
                           personal property not presently used or being stored,
                           prepared or repaired for use by Sellers primarily in
                           the



<PAGE>


                                        4

                           operation of the Business as it is currently being
                           conducted.



                  2.       the name "MEDIQ" and any derivation thereof:
                  3.       to the extent not reflected as assets on the Closing 
                           Balance Sheet, refunds for taxes paid and any claim
                           that Sellers or any of their affiliates may have,
                           have had or will have against a third party with
                           respect to any events or acts occurring prior to the
                           Closing;
                  4.       to the extent not reflected on the Closing Balance
                           Sheet, accounts receivable from Sellers' affiliates,
                           Sellers' pension, profit-sharing or other funded
                           employee benefit plan assets or liabilities;
                  5.       the capital stock of or owned or held by Sellers;
                  6.       all corporate minute books and stock books and
                           records of Sellers;
                  7.       the assets, properties and rights not primarily used
                           in the Business owned or held by any affiliate of any
                           Seller (other than any other Seller);
                  8.       Sellers' Medicare and Medicaid provider numbers
                           other than the provider numbers for South Carolina
                           and Colorado;
                  9.       banking or financial institution accounts or any
                           deposit or concentration accounts or safety deposit
                           boxes (but not the cash or cash equivalents in such
                           accounts or boxes);
                  10.      all bonds and letters of credit including, but not
                           limited to, those posted to support Sellers' and the
                           Business' workers' compensation obligations and
                           general liability and other insurance obligations,
                           policies and premiums;
                  11.      books and records that Sellers are required to
                           retain pursuant to any statute, rule, regulation or
                           ordinance; and
                  12.      assets, properties and rights of any nature that are
                           not reflected on the Closing Balance Sheet and either
                           (i) are used by Sellers or their affiliates
                           (including, without limitation, Mediq or any
                           subsidiary or division thereof) in providing general
                           corporate, insurance and





                                        5

<PAGE>


                           administrative services to divisions, subsidiaries or
                           operating units of Sellers or their affiliates as
                           well as to the Business or (ii) used by Sellers or
                           their affiliates (including, without limitation,
                           Mediq or any subsidiary or division thereof) in any
                           business or businesses other than the Business.
         C.       Obligations Under Assigned Contracts; Assumed Liabilities.
                  1.       Subject to the terms and conditions of this
                           Agreement, at the Closing, Sellers will assign and
                           transfer to Buyer the Assigned Contracts, and Buyer
                           will assume and in a timely fashion will pay, perform
                           and/or discharge: (1) all of Sellers' obligations and
                           liabilities under the Assigned Contracts (other than
                           any such obligations and liabilities which were to be
                           performed on or prior to the Closing Date
                           ("Pre-Closing Performance") unless (x) if such
                           Pre-Closing Performance involved the payment of
                           money, such monetary obligation is reflected as a
                           liability on the Closing Balance Sheet or (y) if such
                           Pre-Closing Performance did not involve the payment
                           of money, such obligation is of a nature arising in
                           the ordinary course of the Business and does not
                           constitute a violation of laws in effect on the
                           Closing Date) and the assigned Permits in accordance
                           with the respective terms thereof; (2) liabilities
                           and expenses of the Sellers of a nature required to
                           be set forth, and that are set forth on the Proposed
                           Balance Sheet; (3) the Liens (as hereinafter
                           defined); (4) the obligations and liabilities of the
                           Business arising from events occurring after Closing;
                           (5) accounts payable and accrued expenses to the
                           extent set forth on the Closing Balance Sheet (6) to
                           the extent of any Unused Basket Amount (as
                           hereinafter defined), any other liabilities of the
                           Sellers; (7) taxes to be paid by Buyer pursuant to
                           Section I.D below and (8) the obligations and
                           liabilities set forth on Exhibit I.C (collectively
                           the liabilities and obligations described in



                                        6
<PAGE>


                           clauses (1) through (8) are referred to as the
                           "Assumed Liabilities"). Buyer assumes no other
                           liabilities of the Sellers unless specifically
                           assumed by Buyer in this Agreement. Without limiting
                           the foregoing, Buyer is not assuming any tax
                           liability accruing prior to the Effective Date, and
                           is not assuming any litigation based solely on events
                           occurring prior to the Effective Date, is not
                           assuming any liability of any nature under any of
                           Sellers' pension plans (other than the obligation, if
                           any, to pay the amount of any payable or expense
                           expressly accrued on the Closing Balance Sheet).
                  2.       Except as herein provided, to the extent that any
                           lease, contract, license, permit, agreement, sales or
                           purchase order, commitment, property interest,
                           qualification or other Asset described in Section
                           I.A, and not otherwise excluded in Section I.B, to be
                           sold, assigned or conveyed to Buyer, cannot be sold,
                           assigned or conveyed, without the approval, consent
                           or waiver ("Consent") of any third person (including
                           any landlord or any government or governmental unit),
                           or if such sale, assignment or conveyance or
                           attempted sale, assignment or conveyance would
                           constitute a breach thereof or a violation of any
                           law, decree, order, regulation or other governmental
                           edict, this Agreement shall not (unless and until
                           such Consent is obtained) constitute or require a
                           sale, assignment or conveyance thereof, or an
                           attempted sale, assignment or conveyance thereof.
                           Buyer and Seller shall each use good faith efforts,
                           and shall cooperate with each other, to obtain all
                           Consents necessary to sell, assign or convey the
                           Assets to Buyer as soon as practicable at no cost or
                           liability to Sellers. If any of the Consents have not
                           been obtained by Buyer or Sellers as of the Closing,
                           (i) the Purchase Price set forth in Section I.E shall
                           not be affected thereby and Buyer shall purchase all
                           remaining Assets and (ii) the liabilities




                                        7

<PAGE>


                           and obligations assumed by Buyer pursuant to Section
                           I.C shall not be affected thereby and Buyer shall
                           assume, pay, perform and discharge the Assumed
                           Liabilities in respect of all Assigned Contracts and
                           Permits as if all consents had been obtained and all
                           Assigned Contracts and Permits were sold, assigned
                           and conveyed to Buyer.
                  3.       In order, however, to provide Buyer the full
                           realization and value of every Assigned Contract on
                           and after the Closing Date the Sellers shall, by
                           themselves or by their agents, at the request and
                           expense of Buyer, and in such manner as Buyer shall
                           reasonably specify and as shall be permitted by law
                           and shall not be in violation of the Assigned
                           Contracts, take all such reasonable action (including
                           without limitation the appointment of the Buyer as
                           attorney-in-fact for the Sellers or, upon receipt of
                           indemnity from Buyer reasonably satisfactory to the
                           Sellers, the subcontracting with Buyer to effect a
                           "pass-through" of the rights and obligations that
                           will remain with the Seller that is a primary party
                           to such Assigned Contract) and do or cause to be done
                           all such things as shall be necessary or proper (i)
                           to assure that the rights and obligations of Sellers
                           under such Assigned Contracts shall be preserved for
                           the benefit of Buyer and (ii) to facilitate receipt
                           of the consideration to be received by the Sellers in
                           and under any such Assigned Contract, which
                           consideration the Sellers shall hold for the benefit
                           of, and upon request of Buyer shall deliver to, Buyer
                           to the extent herein provided
         D.       Payment of Taxes and Other Charges; Prorations.
                  1.       At the Closing or thereafter at the request of
                           Sellers, Buyer shall pay all real property transfer
                           taxes, sales and use taxes, documentary stamp taxes,
                           recording charges and other fees and taxes imposed


                                        8



                           by any governmental entity in connection with the
                           transfer of the Assets (the "Transactional Taxes").
                           Buyer shall (a) pay the cost of obtaining title
                           insurance, if any, including, without limitation, all
                           premiums and title closing costs required to be paid
                           in connection therewith, and (b) pay the cost of all
                           real property surveys and investigation, if any,
                           obtained by Buyer in connection with the transactions
                           contemplated hereunder and any costs associated with
                           obtaining landlord or other consents to the
                           transaction contemplated hereby; however, Sellers
                           will be responsible for their internal costs of
                           obtaining such consents. Buyer shall prepare and
                           file, and Sellers shall fully cooperate with Buyer
                           with respect to such preparation and filing of, any
                           returns and other filings relating to any such taxes,
                           fees, charges or transfers, as may be required.
                  2.       Any and all taxes (other than sales and use, excise,
                           payroll, income, franchise, corporate or similar
                           taxes, including any taxes payable to local franchise
                           authorities, which are imposed or assessed against
                           either party based upon or measured by revenues of
                           such party), rents, utilities, payments and receipts,
                           rentals, costs, charges, fees or expenses connected
                           with or used in the operations of the Business, and
                           any and all revenues in connection with the Assumed
                           Contracts shall be prorated between the parties as of
                           the close of business on the date immediately
                           preceding the Effective Date and Sellers shall bear
                           their proportion of the costs and shall be entitled
                           to their proportion of the revenues through the date
                           immediately preceding the Effective Date and Buyer
                           shall bear its proportion of the costs and shall be
                           entitled to its proportion of the revenues from the
                           Effective Date. Taxes (other than sales and use,
                           excise, payroll, income, franchise, corporate or
                           similar taxes, including any taxes payable to local
                           franchise authorities, which are imposed or


                                        9

<PAGE>


                           assessed against either party based upon or measured
                           by revenues of such party) shall be prorated on the
                           basis of the taxable year of the authority levying
                           such taxes as of the close of business on the date
                           immediately preceding the Effective Date and all
                           other amounts shall be prorated as of the close of
                           business on the date immediately preceding the
                           Effective Date based on a thirty (30) day month and a
                           360-day year. Each party agrees to promptly make
                           payments to the other party in respect of amounts due
                           and owing such other party for adjustments required
                           by this Section as soon as such amounts are
                           determined or determinable. Notwithstanding anything
                           to the contrary herein, in no event shall Sellers
                           have any liability to Buyer for prorations pursuant
                           to this Section to the extent such prorations are
                           reflected on the Closing Balance Sheet.
         E.       The aggregate purchase price for the Assets and covenants not
                  to compete hereunder (the "Purchase Price") shall be the sum
                  of $19,400,000.00. The Purchase Price will be allocated as set
                  forth in Exhibit I.E. The parties hereto agree to file all
                  income, franchise and other tax returns in a manner consistent
                  with such allocation. No party shall take any position with
                  any taxing authority inconsistent with such allocation unless
                  otherwise required by applicable law.
         F.       No sooner than five business days nor later than one business
                  day prior to the Closing Date, Sellers will provide to Buyer a
                  proposed Closing Balance Sheet (as hereinafter defined), and a
                  good faith estimate (the "Estimated Adjustment") of the
                  "Purchase Price Adjustment" (as hereinafter defined) based on
                  the Sellers' consolidated records at such date. Such proposed
                  Closing Balance Sheet ("Proposed Balance Sheet") will be
                  prepared by Sellers based upon Sellers' financial condition at
                  May 31, 1995 updated to reflect an estimate of the results of
                  operations for June 1995 (but without estimate of the results
                  of operations for July 1995 even


                                       10

<PAGE>

                  though such results will be reflected in the Closing Balance
                  Sheet). The Proposed Balance Sheet and Estimated Adjustment
                  are attached hereto as Exhibit I.F(1). The "Purchase Price
                  Adjustment" shall be the amount by which the Adjusted Book
                  Value of the Sellers differs from $5,812,000 (the "Beginning
                  Balance") (e.g. if the Adjusted Book Value exceeds the
                  Beginning Balance, the Purchase Price will be increased by the
                  amount of the excess, or if the Adjusted Book Value is less
                  than the Beginning Balance, the Purchase Price will be
                  decreased by the amount of such difference). As used herein,
                  the "Adjusted Book Value" of the Sellers shall mean the amount
                  by which (a) the aggregate amount of the assets reflected on
                  the Closing Balance Sheet exceeds (b) the aggregate amount of
                  the liabilities reflected on the Closing Balance Sheet,
                  exclusive of goodwill, Sellers' inter-company payables and
                  receivables, federal and state taxes and deferred taxes, all
                  as reflected on the Closing Balance Sheet. The parties agree
                  that the reserve for uncollectible accounts receivable to be
                  used on the Proposed Balance Sheet and Closing Balance Sheet
                  shall be calculated as set forth on Exhibit I.F(2). In the
                  event Buyer collects more than the amount reflected on the
                  Closing Balance Sheet net of such reserve in respect of
                  accounts receivable of the Sellers outstanding on the Closing
                  Date, Buyer shall promptly from time to time remit such excess
                  to Sellers and in any event within twenty (20) days of receipt
                  by Buyer of any applicable payment.
         G.       As soon as practicable, but in any event within 60 days
                  following the Closing Date, Sellers shall prepare and deliver
                  to Buyer (x) a consolidated balance sheet of the Sellers
                  prepared as of a point in time immediately prior to the close
                  of business on the Effective Date (the "Closing Balance
                  Sheet") prepared in accordance with generally accepted
                  accounting principles ("GAAP") and reflecting accounting
                  principles consistent with those used in the preparation of
                  the Proposed Balance Sheet and the



                                       11
<PAGE>

                  consolidated balance sheet of Sellers attached hereto as
                  Exhibit I.G (all such principles not in accordance with GAAP
                  are detailed in notes to Exhibit I.G) (the "Accounting
                  Principles") and (y) a calculation of the proposed final
                  Purchase Price Adjustment (the "Purchase Price Adjustment
                  Calculation"). Buyer acknowledges that the Proposed Balance
                  Sheet was prepared assuming Closing occurred on June 30, 1995
                  and that the Closing Balance Sheet will be prepared as
                  aforesaid as of the close of business on the actual Effective
                  Date and accordingly will reflect the results of operations
                  and change in financial condition arising between such dates
                  in addition to any other adjustments that would have otherwise
                  been made in preparing the Closing Balance Sheet. If Sellers
                  have not obtained reactivation of existing provider numbers
                  for Florida or New Jersey before the delivery of the Closing
                  Balance Sheet, the receivables with respect to those states
                  which Sellers are unable to collect without such reactivated
                  provider numbers will not be included on the Closing Balance
                  Sheet; provided, however, that at such time as Sellers obtain
                  such reactivated provider numbers, Buyer will collect those
                  receivables pursuant to Section IV.K for Sellers' account and
                  shall promptly pay any such amounts collected to Sellers.
                  Buyer shall give Sellers such access to the employees and
                  books and records of the Business as may be necessary to allow
                  Sellers to prepare the Closing Balance Sheet and the Purchase
                  Price Adjustment Calculation. The Closing Balance Sheet and
                  the Purchase Price Adjustment Calculation (and the resulting
                  Purchase Price Adjustment), when delivered to Buyer, shall be
                  deemed conclusive and binding on the parties, unless Buyer
                  notifies Sellers, within 30 days after receipt of the Closing
                  Balance Sheet, of its disagreement therewith (which notice
                  shall state with reasonable specificity the reasons for any
                  disagreement and the amounts in dispute). If there is a
                  disagreement regarding the Purchase Price Adjustment
                  Calculation (and the resulting



                                       12
<PAGE>

                  Purchase Price Adjustment) and Closing Balance Sheet, and such
                  disagreement cannot be resolved by the parties within 30 days
                  following receipt by Buyer of the Closing Balance Sheet and
                  the Purchase Price Adjustment Calculation, the dispute shall
                  be submitted to a nationally recognized firm of independent
                  auditors acceptable to both Buyer and Sellers, and the
                  determination by such independent auditing firm shall be
                  binding and conclusive upon the parties. Buyer and Sellers
                  shall each pay one-half of the cost of the fees and expenses
                  of such independent auditing firm. Delivery and acceptance of
                  the Closing Balance Sheet will not diminish Buyer's rights
                  under Article V of this Agreement; provided, however, that the
                  amounts accrued for an item on the Closing Balance Sheet will
                  be taken into account in assessing the amount of any damages
                  to which Buyer may be entitled pursuant to Article V.
         H.       To the extent the Purchase Price Adjustment as finally
                  determined pursuant to subsection G exceeds the Estimated
                  Adjustment by a positive amount, Buyer shall pay the
                  difference to Sellers. To the extent the Purchase Price
                  Adjustment is less than the Estimated Adjustment or exceeds
                  the Estimated Adjustment by a negative amount, Sellers shall
                  pay the difference to Buyer. Any amount due pursuant to this
                  Section shall be paid by Buyer to Sellers or by Sellers to
                  Buyer, as the case may be, within 10 days after any disputes
                  have been resolved and the final determination of the Purchase
                  Price Adjustment is made.
         I.       On the Closing Date, Buyer shall pay to Sellers by wire
                  transfer the Purchase Price adjusted by the amount calculated
                  in Section I.F.

II.      Representations and Warranties of Sellers
         Sellers represent, warrant, and agree as follows:
         A.       Sellers are corporations duly incorporated, validly existing
                  and in good standing under the laws of their respective states
                  of incorporation, have


                                       13


<PAGE>

                  filed and paid all applicable annual reports and fees with the
                  applicable Secretaries of State, and have the corporate power
                  to own their respective properties and assets and carry on
                  their respective business as is presently being conducted.
                  Sellers have furnished to Buyer certified copies of Articles
                  of Organization and By-Laws and a certificate of good standing
                  certified by the applicable Secretary of State of their
                  respective states of incorporation. These documents are
                  contained in Exhibit II.A.
         B.       Sellers are owned as shown on Exhibit II.B which exhibit sets
                  forth the state of incorporation of each Seller.
         C.       The execution and delivery of this Agreement do not, and the
                  consummation of the purchase and sale will not, violate any
                  provision of, or result in the acceleration of any obligation
                  under any mortgage, lien, lease, agree- ment, instrument,
                  order, license, arbitration award, judgment, or decree to
                  which the Sellers are a party or by which each is bound (other
                  than agreements, if any, wherein the consent of the other
                  party thereto is required and the loan agreement with Congress
                  Financial Corporation) in such a way as to have a material
                  adverse effect on the Business taken as a whole (a "Material
                  Adverse Effect").
         D.       Except as set forth on Exhibit II.F, Sellers have, or will
                  have prior to the Closing Date, all permits and licenses
                  necessary for the operation of Business as conducted at
                  Closing, including valid Medicare provider numbers, and to
                  receive private, state and federal government payment for
                  furnishing diagnostic testing and related products and
                  services other than any permits or licenses the failure of
                  which to have would not have a Material Adverse Effect. A
                  listing of all such licenses and permits and current license
                  numbers has been provided to Buyer.
         E.       There are now no pending or to Sellers' knowledge, threatened
                  claims, suits, actions, assessments, arbitration awards or
                  proceedings at law or in equity or before any governmental
                  instrumentality or other agency which,


                                       14

<PAGE>


                  if adversely determined, would have a Material Adverse Effect
                  to which Sellers are a party or which the Business is or may
                  be subject except as described in Exhibit II.E attached
                  hereto. No suits or actions by any referring physician of
                  Sellers has been settled in the past year. Sellers are not in
                  violation of or in default with respect to any judgment,
                  order, award, writ, injunction or decree of any court,
                  governmental department, commission, agency, instrumentality,
                  arbitrator, administrative agency or governmental authority,
                  where such violation or default, severally or in the
                  aggregate, would have a Material Adverse Effect or will
                  prevent the consummation of the transactions contemplated
                  hereby.
         F.       Except as disclosed on Exhibit II.F, to Sellers' knowledge,
                  Sellers are not now nor have they ever been at any time during
                  which a majority of their capital stock was owned directly or
                  indirectly by Mediq Incorporated, a Delaware corporation
                  ("Mediq"), investigated, charged or implicated in any
                  violation of any state or federal statute or regulation
                  involving fraudulent and abusive practices with respect to
                  participation in state and/or federally sponsored
                  reimbursement programs, including but not limited to
                  fraudulent billing practices. The Business has properly billed
                  all intermediaries and third party payors for all products
                  supplied and services rendered by the Business and has
                  maintained its records to reflect such billing practices
                  except where any failure to do so would not have a Material
                  Adverse Effect. No funds are now or will be withheld by any
                  Medicare intermediary or other insurance carrier except those
                  disclosed to Buyer on Exhibit II.F. All Medicare or third
                  party overpayments have been properly reported and returned to
                  the applicable party as required by law or contract except
                  where any failure to do so would not have a Material Adverse
                  Effect.
         G.       The consolidated balance sheets of the Sellers as of January
                  31, 1995, and the related income statements for the period
                  then ended, all attached hereto as Exhibit I.G, (the "Balance
                  Sheet"), fairly present in all material

                                       15
<PAGE>


                  respects the financial position of the Sellers as of January
                  31, 1995 in accordance with GAAP (except that Buyer
                  acknowledges that such financial statements do not reflect any
                  effect that may result from the matters described in Exhibits
                  II.E, II.F, or II.K). Except as set forth on Exhibit II.K,
                  since January 31, 1995, the Business has been operated in the
                  normal course of business in all material respects.
         H.       Sellers have good and marketable title to and own free and
                  clear of any liens or encumbrances, except for Liens, all the
                  Assets. As used herein, "Liens" shall mean (a) minor
                  imperfections of title, none of which, individually or in the
                  aggregate, materially detracts from the value of or impairs
                  the use of the affected item, affects Buyer's ability to sell
                  the item (other than liens resulting from liabilities
                  reflected on the Proposed Balance Sheet) or impairs the
                  operations of the Business, (b) liens for current taxes not
                  yet due and payable, (c) encumbrances for debts which will be
                  released on or before the Closing Date, and (d) as disclosed
                  on Exhibit II.H. No other warranties, express or implied, are
                  made by Sellers, and Buyer waives all such warranties, other
                  than as set forth expressly in this Agreement, regarding the
                  title, value, condition and use of the Assets, including, but
                  not limited to, warranties, of habitability, merchantability
                  or fitness for a particular purpose. Buyer hereby affirms that
                  Sellers, their agents, employees and/or attorneys have not
                  made nor has Buyer relied upon any representation, warranty or
                  promise with respect to the Assets or any other subject matter
                  of this Agreement except as expressly set forth in this
                  Agreement. The Assets include all of the assets and interests
                  in assets of Sellers and their affiliates that are used in the
                  operation of the Business as presently conducted, other than
                  the Excluded Assets.
         I.       The Leases and the copies of leases annexed to Exhibit II.I
                  are true and complete copies of all real and all material
                  personal property leases of the


                                       16

                  Sellers. No other warranties, express or implied, are made by
                  Sellers, and Buyer waives all such warranties, other than as
                  set forth expressly in this Agreement regarding the title,
                  value, condition and use of the real properties together with
                  the leasehold improvements, fixtures, and equipment therein
                  which are the subject of such Leases, including, but not
                  limited to, warranties of habitability, merchantability or
                  fitness for a particular purpose. Buyer hereby affirms that
                  Sellers, their agents, employees and/or attorneys have not
                  made nor has Buyer relied upon any representation, warranty or
                  promise with respect to such real property or any other
                  subject matter of this Agreement except as expressly set forth
                  in this Agreement. No party to any Lease has sent written
                  notice to the other claiming that such party is in default
                  thereunder, which default remains uncured. There has not
                  occurred any event which would constitute a breach of or
                  default in the performance of any material covenant, agreement
                  or condition contained in any Lease by Sellers and, to the
                  best of Sellers' knowledge, any other party thereto which
                  would have a Material Adverse Effect. Sellers are not
                  obligated to pay any leasing or brokerage commission relating
                  to any Lease which has not been paid prior to the date hereof,
                  and does not have any enforceable obligation to pay any
                  leasing or brokerage commission upon the renewal or extension
                  of any Lease. Except as expressly set forth in the Leases,
                  none of the Leases imposes any restrictions that would
                  materially interfere with the continued operation of the
                  Business as currently conducted. No renewal option under any
                  Lease has been exercised unless the renewal notice is attached
                  as Exhibit II.I.
         J.       The contracts listed on Exhibit II.J and the copies of such
                  contracts annexed to Exhibit II.J are true and complete copies
                  of all contracts of Sellers relating to the operations of the
                  Business of (i) all employment agreements, consulting
                  agreements in amounts with payments exceeding


                                       17
<PAGE>

                  $40,000.00 per year (unless with a referring physician, all of
                  which are attached), joint venture, and agency agreements to
                  which the Sellers are a party and which would continue to bind
                  the Sellers one year beyond the date hereof; (ii) with
                  principal suppliers of the Business with payments exceeding
                  $40,000.00 per year, $200,000 over the term of the contract or
                  for a term in excess of two years; (iii) bonus, incentive
                  compensation, profit-sharing, deferred compensation and
                  post-termination obligations and trust agreements of the
                  Sellers in effect or under which any amounts which exceed
                  $40,000.00 remain unpaid on the date hereof or are to become
                  effective after the date hereof; (iv) any contract limiting
                  the freedom of the Business to compete in any line of business
                  or with any entity; and (v) all other contracts, the loss of
                  which would have a Material Adverse Effect, not otherwise set
                  forth in other Exhibits hereto. To the best of Sellers'
                  knowledge, except as set forth in Exhibit II.K, there is no
                  existing breach or default by any other party to any Contract,
                  and to the best of Sellers' knowledge, except as set forth in
                  Exhibit II.K, no event has occurred which with the passage of
                  time or giving of notice would constitute a breach or default
                  by any party under an Assigned Contract, result in a loss of
                  rights or result in the creation of any encumbrance under an
                  Assigned Contract, except any of the foregoing which would not
                  have a Material Adverse Effect.
         K.       Except as set forth on Exhibit II.K, since January 31, 1995:
                  1.       There has been no material adverse change in the
                           financial condition, results of operations, assets,
                           liabilities, licenses, permits, material agreements,
                           method of accounting or manner of conducting the
                           Business taken as a whole other than, in each case,
                           changes in the ordinary course of business and other
                           than changes relating to the economy in general or
                           industry conditions.
                  2.       There has been no damage, destruction or other
                           casualty loss

                                       18
<PAGE>

                           materially and adversely affecting the business,
                           properties, financial condition or results of
                           operations of the Business taken as a whole except
                           any such loss which is covered by insurance.
                  3.       There has been no increase in compensation payable or
                           to become payable by the Sellers to any of its
                           officers, employees or agents other than increases in
                           the ordinary course of business.
                  4.       The Sellers have not entered into any material
                           contracts, agreements or licenses which would be
                           required to be forth in Exhibit II.I or II.J other
                           than those set forth in Exhibit II.I or II.J and
                           previously delivered to Buyer.
                  5.       The Sellers have not incurred any indebtedness for
                           borrowed money or purchase money indebtedness other
                           than in the ordinary course of business.
         L.       There are no outstanding options or rights to purchase the
                  stock of the Sellers that would affect this transaction.
         M.       To Sellers' knowledge, as of January 31, 1995, all 
                  liabilities of Sellers required by GAAP to be set forth on a
                  balance sheet that was prepared on and as of January 31, 1995,
                  are reflected on the Balance Sheet (except that Buyer
                  acknowledges that such Balance Sheet does not reflect any
                  effect that may result from the matters described in Exhibits
                  II.E, II.F, or II.K). Any and all attorneys' and accountants'
                  fees and disbursements and other costs incurred on behalf of
                  Sellers in connection with this Agreement and related
                  agreements shall not become Assumed Liabilities.
         N.       During each of the past ten calendar years, or such shorter
                  period as such entity has been directly or indirectly majority
                  owned by Mediq, the Sellers have been and presently are
                  insured against the normal risks of their business on a
                  claims-made basis, including, without limitation, professional
                  liability, and general liability insurance in aggregate annual
                  amounts of not

                                       19
<PAGE>

                  less than $5,000,000.00, and with a deductible not exceeding
                  $250,000.00. Sellers will, at Sellers' option, either maintain
                  such claims-made coverage or purchase "tail" coverage
                  affording professional liability and general liability
                  insurance for a period of three years following the Effective
                  Date. Certificates evidencing such policies that are currently
                  in place (the "Insurance Policies") are attached as Exhibit
                  II.N. All premiums due on the Insurance Policies or renewals
                  thereof have been paid and to Sellers' knowledge, Sellers are
                  not in default under any of the Insurance Policies. Sellers
                  have not received any notice or other communication from any
                  issuer of the Insurance Policies canceling or materially
                  amending any of the Insurance Policies, materially increasing
                  any deductibles or retained amounts thereunder, or materially
                  increasing the annual or other premiums payable thereunder,
                  and, to the best of Sellers' knowledge, no such cancellation,
                  amendment or increase of deductibles, retainages or premiums
                  is threatened.
         O.       The present conduct of the Business by Sellers complies in all
                  respects with the applicable provisions of federal, state, and
                  local laws (including the Federal False Claims Act, the RICO
                  Statute, 42 U.S.C. 1320a-7b, 42 U.S.C. 1395 nn, or any related
                  state self-referral statutes) and all government licenses,
                  permits, and other authorizations applicable thereto, except
                  where failure to comply would not have a Material Adverse
                  Effect.
         P.       No work stoppages or other labor disputes involving the 
                  Business are pending or, to the best of Sellers' knowledge,
                  threatened during the last 3 years. Sellers have no knowledge
                  that any individual (other than Stephen Doppelt) having an
                  annual salary in excess of $40,000.00 currently has an
                  intention to terminate his/her employment except as set forth
                  in Exhibit II.P. Sellers have no collective bargaining
                  agreements currently in effect. Seller has no material
                  arrearages in the payment of wages, taxes or worker's
                  compensation assessments or penalties.



                                       20
<PAGE>

                  1.       Exhibit II.P contains a complete list of Sellers'
                           (i) current pension, profit sharing, stock bonus,
                           deferred compensation, retirement or other "employee
                           pension benefit plans," as that term is defined in
                           Section 3(2) of the Employee Retirement Income
                           Security Act of 1974, as amended ("ERISA") (the
                           "Pension Plans"); (ii) current "employee welfare
                           benefit plans" as that term is defined in Section
                           3(1) of ERISA, whether insured or otherwise (the
                           "Welfare Benefit Plans"); and (iii) other material
                           employee benefit plans, policies and practices
                           including deferred compensation arrangements or other
                           similar programs (the "Non-ERISA Plans"), maintained
                           or contributed to with respect to any employee of the
                           Business (all of such plans shall hereinafter be
                           referred to collectively as "Employee Plans"). A copy
                           of each Employee Plan has been furnished to Buyer.
                           None of the Employee Plans are "voluntary employees'
                           beneficiary associations" ("VEBAs") as described in
                           Section 501(c)(9) of the Internal Revenue Code of
                           1986, as amended (the "Code").
                  2.       Sellers do not contribute, are not required to
                           contribute, and have never been required to
                           contribute to any multiemployer plan within the
                           meaning of Section 3(37) of ERISA.
                  3.       Except for medical insurance coverage required by law
                           to be provided to former employees, no Employee Plan
                           provides health or life insurance benefits for
                           retirees.
                  4.       No Employee Plan, any trust created thereunder, or,
                           to the best of Sellers' knowledge, any trustee or
                           fiduciary (as defined in Section 3(21) of ERISA)
                           thereof, has engaged in a "prohibited transaction" as
                           such term is defined in Section 4975 of the Code or
                           Section 406 of ERISA which would have a Material
                           Adverse Effect.
                  5.       Sellers have made all contributions, paid all
                           premiums and satisfied


                                       21
<PAGE>

                           all liabilities with respect to the Employee Plans
                           which are payable as of the date hereof except any of
                           the foregoing which would not have a Material Adverse
                           Effect.
         Q.       Sellers have filed all tax returns required to be filed by
                  them commencing with the taxable period the Sellers were first
                  majority-owned by Mediq through the fiscal year ended
                  September 30, 1993, and has timely filed all extensions of
                  time for the period ending September 30, 1994, and has paid,
                  or has set up adequate reserves for or will have set up
                  adequate reserves for the payment of all taxes (other than the
                  Transactional Taxes) required to be paid in respect of the
                  periods covered by such returns and extensions and, except as
                  aforesaid, has set up adequate reserves for the payment of all
                  income, franchise, property, sales, use, employment, Social
                  Security, or other taxes anticipated to be payable in respect
                  of the period subsequent to September 30, 1993 (including any
                  federal, state or local income, sales or franchise tax or
                  other taxes measured by income or profits arising out of, or
                  attributable to, the transactions contemplated hereby) and,
                  except as aforesaid, for the payment of all other taxes
                  (including, without limitation, all employment taxes, sales or
                  use taxes, or stamp taxes). Sellers are not delinquent in the
                  payment of any tax, assessment or governmental charge nor,
                  except as set forth on Exhibit II.Q, have the Sellers during
                  the time directly or indirectly majority owned by Mediq
                  requested any extensions of time within which to file any tax
                  returns which have not since been filed other than the period
                  ended September 30, 1994 except for those taxes whose
                  nonpayment would not have a Material Adverse Effect. Except as
                  set forth on Exhibit II.Q, no deficiencies for any tax,
                  assessment or governmental charge have been proposed
                  (tentatively or definitively), asserted or assessed against
                  the Sellers during the time directly or indirectly
                  majority-owned by Mediq, and no requests for waivers of the
                  time to assess any such tax are pending.

                                       22
<PAGE>

                  Except as set forth on Exhibit II.Q, the federal, state, local
                  or foreign income tax returns of the Sellers have never been
                  audited by the Internal Revenue Service (or comparable state
                  or foreign agency). Except as set forth on Exhibit II.Q,
                  Sellers are not currently subject to any outstanding federal,
                  state or local tax audit. For the purpose of this agreement,
                  the term "tax" shall include all federal, state, local, and
                  foreign taxes. Copies of all state and federal income tax
                  returns of the Sellers for the preceding three years have been
                  delivered to Buyer prior to Effective Date.
         R.       Exhibit II.R hereto is a complete and accurate list as of the
                  date hereof of the name, position and compensation of each
                  current employee, including any individual on disability or
                  leave of absence (whether paid or unpaid) of the Sellers. All
                  individuals included on Exhibit II.R are herein referred to as
                  the "Employees".
         S.       The Sellers have no patents, trademarks, or applications for
                  the same. To Sellers' knowledge, the Business is not
                  infringing upon the valid patents, trademarks or copyrights of
                  others.
         T.       "Hazardous Substances" means (i) a pollutant or contaminant
                  as defined in 42 U.S.C.ss.9601(33); (ii) any hazardous waste
                  as defined in 40 C.F.R. Part 260 (iii) any "hazardous
                  substance" as defined in 42 U.S.C.ss. 9601(14); (iv) any
                  petroleum, crude oil, natural gas, synthetic gas, or fraction
                  or compound thereof; (v) any radioactive substance; (vi) any
                  radioactive material; or (vii) any other hazardous substance
                  subject to any other law, regulation, or ordinance regulating
                  or establishing standards of conduct concerning the protection
                  of the environment each in effect as of the date hereof.
                  "Environmental Law" means the Comprehensive Environmental
                  Response Compensation and Liability Act of 1980, as amended;
                  the Resource Conservation and Recovery Act; the Toxic
                  Substances Control Act; statutes and regulations regulating
                  radioactive material, and the state counterparts

                                       23
<PAGE>

                  of these laws and any regulations promulgated pursuant to such
                  laws each in effect as of the date hereof.
                  "Routine Business Activities" means the use of lubrication,
                  cleaning, and other substances used in building maintenance;
                  the use of office supplies in retail quantities; consumer
                  products; the use of gardening supplies commonly used for
                  normal landscaping and the use, handling, generation,
                  transportation, treatment or disposal of Hazardous Substances
                  in the ordinary course of the diagnostic testing business.
                  The operations of the Company and Subsidiaries are in
                  compliance with the terms of all applicable Environmental Laws
                  and with all permits or orders issued to the Sellers pursuant
                  to any Environmental Law except for such non-compliance which
                  would not reasonably be expected to have a Material Adverse
                  Effect.
                  To the best of Sellers' knowledge, there has been no leak,
                  spill, discharge or release in a reportable quantity of any
                  Hazardous Substance which requires remediation at or from the
                  real property owned or leased by Sellers while a direct or
                  indirect majority-owned subsidiary of Mediq except as set
                  forth on Exhibit II.T.
                  To the best of Sellers' knowledge (other than those used in
                  Routine Business Activities), there are not Hazardous
                  Substances located on or at any of Sellers' business locations
                  in material violation by Sellers of any applicable
                  Environmental Law, nor, to the best of Sellers' knowledge,
                  have there been any underground storage tanks located at any
                  of any such business locations, except as set forth in Exhibit
                  II.T.
                  To the best of Sellers' knowledge, the Business'
                  operating locations have not been used as a regulated
                  hazardous waste site.
         U.       The responses of Sellers contained in the correspondence from
                  Sellers to Sellers' counsel attached hereto as Exhibit II.U
                  are true in all material respects.

                                       24
<PAGE>

III.     Representation of Buyer
         Buyer represents and warrants as follows:
         A.       Buyer is a corporation duly incorporated, validly existing
                  and in good standing under the laws of the State of
                  Delaware, and has the corporate power to own the properties
                  and assets to be conveyed herein to Buyer and carry on its
                  business and the Business of Sellers as it is presently being
                  conducted. Buyer has furnished to Sellers a copy of its
                  Articles of Organization and a copy of a Certificate of Good
                  Standing certified by the Secretary of State of Delaware.
                  These documents are contained in Exhibit III.A.
         B.       Buyer has the corporate power to enter into and to perform
                  all of its obligations under this Agreement and all
                  appropriate corporate action has been taken by Buyer to
                  approve the execution, delivery, and performance by Buyer of
                  this Agreement. The execution, delivery, and performance by
                  Buyer of this Agreement have been approved by the Board of
                  Directors of Buyer's parent company. The execution and
                  delivery of this Agreement do not, and the consummation of
                  this purchase and sale will not, violate any provision or
                  result in the acceleration of any obligation under any
                  mortgage, lien, lease, agreement, instrument, order, license,
                  arbitration award, judgment or decree to which Buyer is a
                  party or by which it is bound (other than agreements, if any,
                  wherein the consent of the other party thereto is required) in
                  such a way as to materially affect the Buyer and will not
                  violate and conflict with any other material restriction of
                  any kind or character to which the Buyer is subject.
         C.       Buyer has available to it sufficient resources to pay in full
                  the Purchase Price. The Guaranty by National Medical Care,
                  Inc. ("NMC") set forth on the signature page hereto has been
                  duly executed by NMC and is a legal and valid binding
                  obligation of NMC enforceable against NMC in accordance with
                  its terms.

                                       25
<PAGE>

         D.       There are no pending or to Buyer's knowledge threatened
                  claims, suits, actions, assessments, arbitration awards or
                  proceedings at law or in equity or before any governmental
                  instrumentality or other agency to which Buyer is a party or
                  to which it is subject which would reasonably be expected to
                  restrain or prohibit the consummation of the transactions
                  contemplated hereby.
         E.       The balance sheet attached as Exhibit III.E fairly presents
                  the financial condition of NMC. Buyer is an indirect
                  wholly-owned subsidiary of NMC.
IV.      Covenants and Agreements of the Parties
         A.       Sellers and Buyer represent and warrant that all negotiations
                  relative to this Agreement have been carried out directly with
                  each other, without the intervention of any person, other than
                  each party's respective counsel, and other than KBL
                  Healthcare, Inc. and Woodbury Associates, Inc. Sellers agree
                  to indemnify and hold Buyer harmless against and in respect of
                  any claim for brokerage or other commissions relative to this
                  Agreement or to the purchase and sale contemplated hereby
                  incurred by Sellers (including amounts owed to KBL Healthcare,
                  Inc.) and also in respect of all expenses of any character
                  incurred by the Sellers in connection with this Agreement or
                  such purchase and sale other than any expenses accrued on the
                  Closing Balance Sheet, to the extent accrued on the Closing
                  Balance Sheet. Buyer agrees to indemnify and hold Sellers
                  harmless against and in respect of any claim for brokerage or
                  other commissions relative to this Agreement or to the
                  purchase and sale contemplated hereby incurred by Buyer
                  (including amounts owed to Woodbury Associates, Inc.) and also
                  in respect of all expenses of any character incurred by the
                  Buyer in connection with this Agreement or such purchase and
                  sale.
         B.       Sellers and Buyer shall cooperate to comply with any and all
                  public health, health planning and licensure statutes and
                  regulations and will, if required, notify the appropriate
                  governmental agencies, either state or federal, of the

                                       26
<PAGE>

                  transactions contemplated by this Agreement, to the extent so
                  required, in order to preserve and/or transfer to Buyer the
                  state and federal approvals and any other permits and licenses
                  of the Business included in the Assets. Sellers shall not be
                  required to pay any third-party expenses or incur any
                  liability in connection with their undertaking under this
                  Section. Buyer will reimburse Sellers for reasonable
                  third-party out-of-pocket expenses.
         C.       Covenant Not to Disclose Trade Secrets
                  Sellers acknowledge that in the course of owning the Assets
                  and operating the Business, Sellers have become privy to
                  various trade secrets of the Business.
                  Sellers agree not to disclose to any person, firm or
                  corporation any information known by Sellers to be trade
                  secrets of the Business included in the Assets, including, but
                  not limited to, information of the Business regarding: the
                  identity and relationships of patients, employees, customers
                  or vendors affiliated with the Business, compensation of
                  employees or independent contractors, financial data, pricing
                  information, regulatory approval and reimbursement strategies,
                  marketing and sales programs, data, operations and clinical
                  manuals and expansion of the Business' market, provided,
                  however, Sellers shall not be prohibited from disclosing any
                  such information to the extent Sellers are required to
                  disclose such information by law, to the extent such
                  information is publicly-known or becomes publicly-known
                  through no unauthorized act or fault of Sellers or in
                  connection with any lawsuit or other judicial or
                  administrative proceeding.
                  Covenant Not to Solicit Employees
                  Sellers agree that the Business has invested substantial time
                  and effort in assembling and training its present staff of
                  personnel. In addition, as a result of employment by the
                  Business such personnel have gained knowledge of the business
                  affairs, marketing, patients and methods of operation of the
                  Business. Accordingly, for a period of two years after the

                                       27
<PAGE>

                  Effective Date, Sellers will not directly or indirectly induce
                  or solicit any of the Employees to leave their employment with
                  the Buyer, provided, however, that Sellers may offer
                  employment at any time to any of such Employees who approach
                  any Seller seeking employment or who are no longer employed by
                  Buyer at the time Sellers approach any such Employee. Nothing
                  contained herein shall affect any right Buyer may have against
                  any Employee pursuant to any agreement between Buyer and such
                  Employee or otherwise.
                  Covenant Not to Compete
                  For a period of 7 years after the Effective Date,
                  Sellers will not engage, directly or indirectly, through a
                  parent, subsidiary or otherwise, either as principal, agent,
                  proprietor, shareholder of more than 5% of the voting rights,
                  owner or partner, or participate in the ownership, management,
                  operation or control of any facility or business providing
                  diagnostic testing of the types set forth on Exhibit IV.C
                  within the United States. Notwithstanding anything to the
                  contrary contained herein, the restrictions contained herein
                  shall not restrict Sellers or any of their affiliates
                  (including, without limitation, Mediq or any subsidiary or
                  division thereof) from operating or owning any of their
                  existing businesses or investments, provided that they do not
                  expand into the foregoing prohibited activities. The
                  restrictions contained in this paragraph shall not be binding
                  upon any third party purchaser of any assets, stock, division
                  or business unit of Mediq or any affiliate thereof or of
                  Mediq; provided such purchaser is not more than 5% owned by
                  Mediq.
                  Sellers acknowledge that the foregoing restrictions are
                  necessary for the protection of the Buyer and that any breach
                  thereof may cause the Buyer irreparable damage. The Buyer
                  shall be entitled to the issuance by a court of competent
                  jurisdiction of an injunction in favor of the Buyer enjoining
                  the breach or threatened breach of said restrictions. The
                  foregoing provision



                                       28
<PAGE>

                  shall not constitute a waiver of any other remedies the Buyer
                  may have in law or in equity.
                  In the event a court of competent jurisdiction determines
                  that the foregoing restrictions are unreasonable,
                  then the restrictions shall be reduced by the court to the
                  extent necessary to be enforced by the court.
         D.       Buyer and Sellers will cooperate in securing all consents, 
                  approvals, waivers or permits relating to the sale and
                  transfer of the Assets from each person or governmental
                  authority whose consent, approval, waiver or permit is
                  necessary to or for the operation and conduct of the Business
                  after the Effective Date at no cost or liability to Sellers,
                  including approvals required by the Hart-Scott-Rodino
                  Antitrust Improvements Act of 1976 ("HSR Act"). Sellers shall
                  not be required to pay any third-party expenses or incur any
                  liability in connection with their undertaking under this
                  Section. Buyer will reimburse Sellers for reasonable
                  third-party out-of-pocket expenses.
         E.       Subject to the provisions of Sections I.F and IV.K, Sellers
                  and Buyer will cooperate to ensure the orderly transition of
                  collection responsibility to Buyer for any Accounts Receivable
                  outstanding as of the Closing Date at no cost or liability to
                  Sellers.
         F.       For the period of 3 years after the date hereof, Sellers and
                  Buyer agree to keep the terms of this Agreement confidential
                  and will not disclose the terms to any third persons or entity
                  except in connection with claims asserted under this
                  Agreement, as required by law (including, without limitation,
                  any filing with any governmental agency or instrumentality) or
                  for the operation of the Business and except that Sellers or
                  their affiliates may issue press releases regarding this
                  Agreement and the transactions contemplated hereby with
                  Buyer's consent, which consent shall not be unreasonably
                  withheld.
         G.       Buyer and Sellers shall each, from time to time after the
                  date hereof, at the

                                       29
<PAGE>

                  request of the other and without further consideration,
                  execute and deliver such further instruments of assignment,
                  transfer or assumption and take such further action as the
                  other may reasonably request in order more effectively to
                  transfer, reduce to possession and record title to any of the
                  Assets or to implement the assumption of Assumed Liabilities.
                  Any and all out-of-pocket expenses involved in compliance with
                  this Section shall be promptly reimbursed by the requesting
                  party to the other.
         H.       After the Closing Date, Buyer will make available to Sellers 
                  and their affiliates, accountants, attorneys and
                  representatives upon reasonable request during normal business
                  hours reasonable access to all records, data and personnel of
                  the Business necessary in connection with Sellers' conduct of
                  litigation and tax matters or as otherwise reasonably
                  requested by Sellers, at no cost to Buyer other than Buyer's
                  internal costs (e.g., Sellers will reimburse Buyer for
                  reasonable third-party out-of-pocket expenses). Sellers will
                  make available to Buyer upon reasonable request during normal
                  business hours reasonable access to all records and data
                  relating to the Business not transferred to Buyer as
                  reasonably necessary to continue operations of the Business at
                  no cost to Sellers other than Sellers' internal costs (e.g.,
                  Buyer will reimburse Sellers for reasonable third-party
                  out-of-pocket expenses).
         I.       Buyer shall use commercially reasonable efforts, and shall
                  cooperate with Sellers, to (1) cause Buyer to be substituted
                  in all respects for Sellers or any of their affiliates,
                  effective as of the Effective Date, in respect of all
                  obligations of Sellers and any such affiliate under any
                  contract or agreement included in the Assumed Liabilities and
                  under each of the guaranties, letters of credit, bonds and
                  letters of comfort obtained by Sellers or any of such
                  affiliates relating to the Assets (collectively, the
                  "Guaranties") listed on Exhibit IV.I and (2) cause Sellers and
                  their affiliates to be released from all Assumed Liabilities
                  under the contracts,

                                       30
<PAGE>

                  agreements and Guaranties described in the preceding clause
                  (1).
         J.       Effective as of the Closing Date, Sellers' employment of the
                  Employees shall cease. Effective as of the Closing Date, Buyer
                  shall offer "at-will" employment to all of the Employees
                  except Stephen Doppelt who shall be offered a consulting
                  arrangement on the terms and conditions set forth on Exhibit
                  IV.J. All Employees who accept Buyer's offer of employment are
                  herein referred to as the "Transferred Employees". Buyer's
                  offer of employment to the Transferred Employees shall be at
                  the substantially similar salary or wage level as applicable
                  to such Transferred Employees immediately before the Closing
                  and on terms and conditions that are substantially similar to
                  those provided by Buyer to its current employees of like rank
                  and job title.
                  Effective as of the Closing Date, Buyer shall designate a
                  pre-existing group health insurance plan ("Buyer's Health
                  Plan") that will provide coverage to all Transferred Employees
                  and their dependents. Buyer's Health Plan shall not contain
                  any exclusion or limitation with respect to any pre-existing
                  condition of any Transferred Employees or their dependents.
                  If any Transferred Employee becomes covered by any employee
                  benefit plan, program or policy of the Buyer, such Transferred
                  Employee shall be given credit under such plan, program or
                  policy for all service with Sellers prior to the Closing Date
                  for all purposes; provided, however, that such service shall
                  not be credited for purposes of benefit accruals under any
                  defined benefit pension plan.
         K.       Commencing one month after the Effective Date, Buyer shall
                  provide reports, monthly for the first three months following
                  Closing and quarterly thereafter, to Sellers regarding the
                  amounts collected on the accounts receivable of the Business
                  outstanding as of the Effective Date (the "Accounts
                  Receivable") and Buyer's efforts to collect such accounts.
                  Buyer shall, at Buyer's election, either (i) apply at least
                  the same efforts in the

                                       31
<PAGE>

                  collection of the Accounts Receivable as Buyer applies in the
                  collection of its own accounts receivable or (ii) use the same
                  personnel and procedures to collect the Accounts Receivable as
                  were used by the Business immediately prior to the Effective
                  Date, in the same positions, with the same responsibilities
                  and at the same salaries and hours. The collection of all
                  accounts receivable received from an account debtor of the
                  Business as of the Effective Date shall be applied to the
                  oldest outstanding invoice with such account debtor which is
                  not then in dispute consistent with Buyer's general
                  overpayment policies; provided, however, notwithstanding the
                  foregoing, any payments made by an account debtor in respect
                  of a designated account shall be applied to the account so
                  designated. For purposes of the preceding sentence, a disputed
                  invoice is an invoice that is the subject of a written dispute
                  from the account debtor which is reasonably recognized by
                  Buyer as disputed in accordance with its general policies;
                  upon the resolution of any such dispute, such invoice shall no
                  longer be considered disputed and collections from the account
                  debtor shall be applied in accordance with the previous
                  sentence as if such dispute had not arisen. Provided that
                  Buyer has collected in respect of Accounts Receivable at least
                  the amount set forth on the Closing Balance Sheet in respect
                  of such Accounts Receivable net of the reserve calculated as
                  herein set forth, promptly after the first anniversary of the
                  Effective Date, Buyer shall transfer to Sellers, at no cost to
                  Sellers, all Accounts Receivable that remain uncollected at
                  such time. Following a transfer of any Accounts Receivable to
                  Sellers, Buyer acknowledges that Sellers may collect such
                  Accounts Receivable for Sellers' benefit in any manner Sellers
                  deem appropriate, provided such efforts do not materially
                  jeopardize Buyer's business relationship with the account
                  debtor. Except as expressly provided in Section IV.K, Buyer
                  makes no representation regarding its ability to collect the
                  Accounts Receivable.


                                       32
<PAGE>

         L.       Provided that the failure to pay does not cause Buyer to
                  breach any Assigned Contract, Buyer shall not pay any amounts
                  in respect of bonuses accrued on the Proposed Balance Sheet or
                  Closing Balance Sheet to any Employees until the earlier of
                  (i) 90 days after Closing or (ii) such time as the parties
                  have resolved the Closing Balance Sheet in accordance with
                  Section I.G and any adjustment to the Purchase Price has been
                  paid.
         M.       Buyer acknowledges and agrees that the name and service mark
                  "MEDIQ" and all derivations thereof (the "Name") is owned by
                  Sellers and that by the sale of the Assets, or otherwise,
                  Sellers are not relinquishing any interest in or rights to the
                  Name, nor permitting Buyer (after the Effective Date) to use,
                  license or otherwise have any rights in or to the Name, except
                  on such terms as are expressly set forth in this Section.
                  Sellers will permit use of the name by Buyer for transition
                  purposes during a period not to exceed eight months subsequent
                  to the Effective Date (the "Transition Period"), on the
                  following terms and conditions:
                  a.       By the end of the Transition Period, Buyer shall
                           have caused the removal of the Name from all of the
                           Assets including any motor vehicles, stationery,
                           business cards, and other documents. During the
                           Transition Period Buyer shall not affix, or cause to
                           be affixed, the Name to any of the Assets or its
                           assets, vehicles, machinery or equipment.
                  b.       Within a reasonable period of time after the
                           Effective Date, Buyer and the Business shall notify
                           its customers, suppliers and others with whom the
                           Buyer and the Business does business of the Business'
                           change of name.
                  c.       Buyer may use the name solely in connection with the
                           Business in accordance with this Section IV.M and
                           shall have no right to license, assign or otherwise
                           transfer any rights in or to the Name.
V.       Survival of Representations and Warranties; Indemnification


                                       33
<PAGE>

         A.       The representations and warranties made by any party hereto
                  in this Agreement or in any Schedule, Exhibit, certificate or
                  other document delivered by or on behalf of any party hereto
                  pursuant to this Agreement shall be deemed to be continuing
                  and shall survive the Effective Date, but shall expire on
                  December 31, 1996, except matters with respect to Section II.Q
                  (taxes) and Section II.P (employee benefits), which shall
                  expire on the expiration of the applicable statute of
                  limitations (the "Representation Expiration Date"), unless a
                  specific claim in writing with respect to any such
                  representation or warranty shall have been made, or any action
                  at law or in equity shall have been commenced or filed in
                  respect thereof, prior to such Representation Expiration Date.
                  Nothing in this section shall terminate or affect the
                  obligations and indemnities of the parties with respect to
                  covenants and agreements contained or referenced in this
                  Agreement that are to be performed by their specific terms, in
                  whole or in part, after the Closing Date or the
                  above-referenced Representation Expiration Date.
         B.       Sellers shall indemnify, defend, save and hold harmless Buyer
                  and its successors and assigns, and their employees,
                  representatives, officers, directors and agents (collectively,
                  the "Buyer Indemnified Parties") from and against any and all
                  debts, losses, claims, damages, costs, demands, fines,
                  judgments, penalties, obligations, payments and liabilities,
                  including, without limitation, those arising out of any breach
                  of warranty, representation or covenant, lawsuit, action or
                  proceeding, together with any reasonable costs and expenses
                  (including, without limitation, reasonable attorneys' fees and
                  out-of-pocket expenses) incurred in connection with any of the
                  foregoing whether by a third party or a party to this
                  Agreement (collectively, "Claims") resulting from (a) any
                  breach of or inaccuracy in any representation or warranty made
                  by Sellers in this Agreement, (b) any breach of any covenant
                  of Sellers contained in this Agreement, (c) any

                                       34
<PAGE>

                  liability of the Business other than the Assumed Liabilities;
                  (d) any amounts Buyer reasonably determines it is required to
                  pay pursuant only to the express terms of, and actually does
                  pay to Employees pursuant only to the express terms of, the
                  agreements set forth on Exhibit V.A ("Key Employee
                  Agreements") solely as a result of Buyer's termination of the
                  employment of such Employee within 60 days of the Effective
                  Date, or (e) enforcing any rights to indemnification under
                  this section. For indemnification purposes, in determining
                  whether a breach of any warranty, representation, or covenant
                  has occurred; any language referring to a Material Adverse
                  Effect or any materiality limits will not be considered.
                  Notwithstanding the foregoing, Sellers shall not be liable for
                  any Claims pursuant to section V.A or V.B until the aggregate
                  amount of such Claims exceeds the Basket Amount and then only
                  to the extent of such excess. The "Basket Amount" shall mean
                  $50,000 less any amounts actually paid by Buyer in respect of
                  liabilities of Sellers pursuant to Section I.C(6) and "Unused
                  Basket Amount" shall mean the positive difference (if any)
                  between $50,000 and the amount of any Claims for which Buyer
                  would be entitled to indemnification pursuant to section V.A
                  or V.B but for the preceding sentence. The Sellers indemnity
                  obligation in respect of Section V.B(d) shall only arise to
                  the extent Buyer reasonably determines an obligation to pay
                  exists and actually does pay under any Key Employee Agreement,
                  there is no modification of the Key Employee Agreements by
                  Buyer and shall exist only to the extent that amounts payable
                  to an Employee covered thereby are in excess of amounts such
                  Employee would be entitled to under Buyer's severance policies
                  as applicable to such Employee in accordance with the terms of
                  this Agreement (and then only for the amount of such excess).
                  The Sellers shall be liable for all other Claims, and the
                  aggregate liability of all Sellers hereunder with respect to
                  any and all Claims shall be limited to the Purchase Price;
                  provided, however, that Buyer's right to



                                       35
<PAGE>

                  indemnification under clause (a) of this Section V.B shall
                  expire on the Representation Expiration Date applicable to
                  such claim unless Sellers shall have received written notice
                  of a specific Claim prior to such expiration date, in which
                  case such indemnification shall not expire with respect to
                  such Claim until it is resolved.
         C.       In addition to the indemnification set forth in Section V.B,
                  Sellers shall indemnify, defend, save and hold harmless the
                  Buyer Indemnified Parties from and against all Claims arising
                  solely from or settlements of, and shall assume the defense
                  and all expenses related thereto of the potential
                  investigation and/or inquiry of the Department of Health and
                  Human Services pending in the United States Attorney's Office
                  in the Northern District of New Jersey. Buyer's right to
                  indemnification under this Section V.C is conditioned upon
                  Sellers' unconditional right, notwithstanding anything to the
                  contrary contained in Section V.E, to assume the defense of
                  the proceedings described in this Section V.C using counsel of
                  Sellers' choice and to control the defense of and settlement
                  of such proceedings without complying with the requirements
                  set forth in Section V.E. unless Buyer becomes a party in the
                  suit (in which case the provisions of Section V.E shall
                  apply). Provided that such Employees are at the time employed
                  by Buyer, Buyer will make available to Sellers such Employees
                  and access to books and records as Sellers may reasonably
                  request in connection with such proceedings, at no expense to
                  Buyer.
         D.       Buyer shall indemnify, defend, save and hold harmless Sellers
                  and their successors and assigns, and their employees,
                  representatives, officers, directors and agents (collectively
                  the "Seller Indemnified Parties") from and against any and all
                  Claims resulting from (a) any breach of or inaccuracy in any
                  representation or warranty made by Buyer in this Agreement, or
                  (b) any breach of any covenant of Buyer contained in this
                  Agreement, or (c) the Assumed Liabilities, or any liabilities
                  or obligations of the Business


                                       36
<PAGE>

                  accruing for acts or omissions taking place after the
                  Effective Date, or (d) any guarantee or obligation to assure
                  performance given or made by Sellers or any of their
                  affiliates with respect to any obligation or liability of
                  Sellers disclosed on Exhibit IV.I. Sellers' right to
                  indemnification under clause (a) shall expire on the
                  Representation Expiration Date unless Buyer shall have
                  received written notice of a specific Claim prior to such
                  expiration date, in which case such indemnification shall not
                  expire with respect to such Claim.
         E.       1.       A party seeking indemnification pursuant to this
                           Article V (an "Indemnified Party") shall give prompt
                           notice to the party from whom such indemnification is
                           sought (the "Indemnifying Party") of the assertion of
                           any matter reasonably anticipated to bring rise to a
                           Claim by a third party or by the Indemnified Party in
                           respect of which indemnity may be sought hereunder (a
                           "Third Party Claim") and shall give the Indemnifying
                           Party such information with respect thereto as the
                           Indemnifying Party may reasonably request, but no
                           failure to give such notice shall relieve the
                           Indemnifying Party of any liability hereunder (except
                           to the extent the Indemnifying Party has suffered
                           actual prejudice thereby). If the Indemnifying Party
                           establishes to the reasonable satisfaction of the
                           Indemnified Party that the Indemnifying Party has
                           (and will continue to have) adequate financial
                           resources to satisfy and discharge such Claim, the
                           Indemnifying Party shall have the right, exercisable
                           by written notice (the "Notice") to the Indemnified
                           Party (which notice shall state that the Indemnifying
                           Party expressly agrees that as between the
                           Indemnifying Party and the Indemnified Party, the
                           Indemnifying Party shall be solely obligated to
                           satisfy and discharge the Third Party Claim) within
                           fourteen (14) days of receipt of notice from the
                           Indemnified Party of the commencement of or assertion
                           of any Third


                                       37


<PAGE>

                           Party Claim, to assume the defense of such Third
                           Party Claim, using counsel selected by the
                           Indemnifying Party and reasonably acceptable to the
                           Indemnified Party; provided that the Indemnifying
                           Party shall not have the right but has the
                           obligation, to the extent set forth herein, if
                           requested by the Indemnified Party to assume the
                           defense of a Third Party Claim (A) seeking an
                           injunction, restraining order, declaratory relief or
                           other non-monetary relief or (B) if the named parties
                           to any such action (including any impleaded parties)
                           includes both the Indemnified Party and the
                           Indemnifying Party, and the Indemnified Party shall
                           have been advised in writing by counsel that under
                           applicable standards of professional conduct
                           (assuming no waiver of conflict is given) the
                           Indemnified Party and Indemnifying Party may not be
                           represented by the same counsel, in which case such
                           Indemnified Party shall have the right to assume
                           control of the defense of a Third Party Claim of the
                           type set forth in clause (A) above and to participate
                           in the defense of a Third Party Claim of the type set
                           forth in clause (B) above and all Claims in
                           connection therewith shall be reimbursed by the
                           Indemnifying Party. In addition, if the Indemnifying
                           Party fails to give the Indemnified Party the Notice
                           complying with the provisions stated above within the
                           stated time period, the Indemnified Party shall have
                           the right to assume control of the defense of the
                           Third Party Claim and all Claims in connection
                           therewith shall be reimbursed by the Indemnifying
                           Party upon demand of the Indemnified Party.
                  2.       If at any time after the Indemnified Party assumes
                           the defense of a Third Party Claim pursuant to
                           Section E.1, the conditions set forth in clauses E.1
                           (A) or (B) above no longer exist, the Indemnifying
                           Party shall have the right to assume the defense as
                           set forth above as if the Indemnified Party never
                           assumed the defense of such

                                       38
<PAGE>

                           Claim.
                  3.       The Indemnifying Party or the Indemnified Party, as
                           the case may be, shall in any event have the right to
                           participate, at its own expense, in the defense of
                           any Third Party Claim which the other is defending.
                  4.       The Indemnifying Party, if it shall have assumed the
                           defense of any Third Party Claim in accordance with
                           the terms hereof, shall have the right, upon thirty
                           (30) days prior written notice to the Indemnified
                           Party, to consent to the entry of judgment with
                           respect to, or otherwise settle such Third Party
                           Claim unless (i) the Third Party Claim involves
                           equitable or other non-monetary damages or (ii) in
                           the reasonable judgment of the Indemnified Party such
                           settlement would have a Material Adverse Effect on
                           the Indemnified Party's business (including any
                           material impairment of its relationships with
                           customers and suppliers) in which case such
                           settlement only may be made with the written consent
                           of the Indemnified Party, which consent shall not be
                           unreasonably withheld. At the expense of the
                           Indemnifying Party, the Indemnified Party shall have
                           the sole and exclusive right to settle any Third
                           Party Claim, on such terms and conditions as it deems
                           reasonably appropriate, (x) if the Indemnifying Party
                           fails to assume the defense in accordance with the
                           terms hereof or (y) to the extent such Third Party
                           Claim involves only equitable or other non-monetary
                           relief or would have a Material Adverse Effect on the
                           Indemnified Party's business, with the consent of the
                           Indemnifying Party, which consent shall not be
                           unreasonably withheld.
                  5.       Whether or not the Indemnifying Party chooses to
                           defend or prosecute any Claim involving a third
                           party, all the parties hereto shall cooperate in the
                           defense or prosecution thereof and shall

                                       39
<PAGE>

                           furnish such records, information and testimony, and
                           attend such conferences, discovery proceedings,
                           hearings, trials and appeals as may be reasonably
                           requested in connection therewith.
         F.       1.       Buyer and Sellers acknowledge and agree that their
                           sole and exclusive remedy with respect to any and all
                           claims relating to the subject matter of this
                           Agreement shall be pursuant to the indemnification
                           provisions set forth in this Article V. In
                           furtherance of the foregoing, Buyer and Sellers
                           hereby waive, to the fullest extent permitted under
                           applicable law, any and all rights, claims and causes
                           of action (including rights of contribution, if any)
                           it may have against Sellers or any of Sellers'
                           affiliates (in the case of Buyer), or Buyer or any of
                           Buyer's affiliates (in the case of Sellers) arising
                           under or based upon any federal, state or local
                           statute, law, ordinance, rule, regulation or judicial
                           decision (including, without limitation, any such
                           relating to environmental matters or arising under or
                           based upon any securities law, common law or
                           otherwise); provided, however, that no party waives
                           its rights to commence proceedings to enforce its
                           rights under this Article in accordance with the
                           provisions of Section VIII.F.
                  2.       The amount of any Claim for which indemnification is
                           provided under this Article V shall be net of (i) any
                           amounts recovered (less costs of collecting) by the
                           Indemnified Party pursuant to any indemnification by
                           or indemnification agreement with any third party who
                           was primarily liable for the Claim (a "Collateral
                           Source") and (ii) any benefit (including any tax
                           benefit if and when realized) that accrues to Buyer
                           or Sellers in respect of the matter for which a Claim
                           is asserted. If the amount to be netted hereunder
                           from any payment required in Section V.B, V.C or V.D
                           is determined after payment by the Indemnifying Party
                           of any amount otherwise

                                       40
<PAGE>

                           required to be paid to an Indemnified Party pursuant
                           to this Article V, the Indemnified Party shall repay
                           to the Indemnifying Party, promptly after such
                           determination, any amount that the Indemnifying Party
                           would not have had to pay pursuant to this Article V
                           had such determination been made at the time of such
                           payment. Indemnification under this Article V shall
                           not be available to any Indemnified Party unless such
                           Indemnified Party first seeks recovery from a
                           Collateral Source for such Claim before making any
                           claim for indemnification by the Indemnifying Party.
                           Provided an Indemnifying Party has satisfied all
                           Indemnification obligations to the Indemnified Party,
                           any Indemnifying Party may, in its sole discretion,
                           require any Indemnified Party to grant an assignment
                           of the right of such Indemnified Party to assert a
                           Claim against any Collateral Source. In the event of
                           such assignment, the Indemnifying Party shall pursue
                           such Claim at its own expense.
         G.       Notwithstanding anything to the contrary contained herein, no
                  Buyer Indemnified Party shall be entitled to indemnification
                  hereunder for any "Claim" that arises in connection with (1)
                  any cost in respect of a compliance program except with
                  respect to, and to the extent of, the costs of implementing a
                  compliance program that Buyer is required to institute solely
                  as a result of actions of Sellers occurring prior to Closing
                  and not as a result of any event or occurrence taking place
                  after Closing or (2) any loss of business or revenues
                  resulting from a future change in business practice required
                  to comply with law or resulting from the litigation,
                  investigation or inquiry referred to in Section V.C, to the
                  extent the basis and claims of such litigation, investigation
                  or inquiry have been disclosed to Buyer prior to the date
                  hereof, or Buyer is otherwise aware of such basis and claims
                  prior to the date hereof, or (3) any loss of business or
                  revenues resulting from an amendment to any agreement or
                  change in manner of

                                       41
<PAGE>

                  doing business entered into or effected (x) prior to the date
                  hereof that has been disclosed to Buyer by or on behalf of
                  Sellers (or Buyer is otherwise aware of prior to the date
                  hereof) or (y) after the date hereof by Buyer. Nothing in this
                  Section V.G shall be taken to expand Sellers' indemnification
                  obligations set forth in any other Section of this Agreement.
VI.      Conditions Precedent
         A.       The obligation of Buyer to complete Closing under this
                  Agreement is subject to the waiver by Buyer or the fulfillment
                  prior to, or on the Closing Date of each of the following
                  conditions:
                  1.       Sellers' representations and warranties contained in
                           this agreement shall be true in all material respects
                           on the Closing Date as though such representations
                           and warranties were made at such time except that any
                           such representation and warranty made as of a
                           specified date shall have been true in all material
                           respects on and as of such date.
                  2.       The Sellers shall have performed and complied in all
                           material respects with all agreements and conditions
                           required by this Agreement to be performed or
                           complied with by them prior to or on the Closing
                           Date.
                  3.       Sellers shall have delivered to Buyer a certificate
                           of Sellers executed by the President or any Vice
                           President and the Chief Financial Officer, Treasurer
                           or any Assistant Treasurer and dated as of the
                           Closing Date certifying that the conditions specified
                           in Sections VI.A.1 and VI.A.2 have been satisfied.
                  4.       Sellers shall have delivered to Buyer a favorable
                           opinion of the attorney for Sellers, dated as of the
                           Closing Date and in the form attached as Exhibit
                           VI.A, to the effect that:
                           a.       Sellers are duly incorporated and validly
                                    existing under the laws of the state where
                                    incorporated and are in good


                                       42

                                    standing in that state; that each of the
                                    Sellers has corporate power and authority to
                                    own all its property and assets;
                           b.       The execution and delivery of this Agreement
                                    and the consummation of the purchase and
                                    sale have been duly authorized by all
                                    necessary corporate action on the part of
                                    Sellers.
                  5.       Sellers shall have accrued all benefits arising prior
                           to Closing to employees of the Business up through
                           the Effective Date.
                  6.       No claim, action, suit, investigation or other
                           proceeding shall be pending or threatened before any
                           court or governmental agency which presents a
                           substantial risk of the restraint or prohibition of
                           the transactions contemplated by this Agreement.
                  7.       All governmental filings, approvals and consents
                           shall have been accomplished or obtained that are
                           necessary in order that the transactions contemplated
                           hereby may be accomplished in compliance with law and
                           all waiting periods, including the waiting period
                           under the HSR Act shall have expired without
                           extensions or been earlier terminated, other than any
                           such filings, approvals, consents or waiting periods
                           as are not (in the aggregate) material.
         B.       All obligations of Sellers to complete Closing under this
                  Agreement are subject to the waiver by Sellers or the
                  fulfillment prior to, or on, the Closing Date of each of the
                  following conditions:
                  1.       Buyer's representations and warranties contained in
                           this Agreement shall be true in all material respects
                           on the Closing Date as though such representations
                           and warranties were made at such time except that any
                           such representation and warranty made as of a
                           specified date shall have been true in all material
                           respects on and as of such date.
                  2.       Buyer shall have performed and complied in all
                           material respects


                                       43
<PAGE>

                           with all agreements and conditions required by this
                           Agreement to be performed or complied with by them
                           prior to or on the Closing Date.
                  3.       Buyer shall have paid the Purchase Price as adjusted
                           pursuant to Section I.F to Sellers on the Closing
                           Date.
                  4.       Buyer shall have delivered to Sellers a favorable
                           opinion of the attorney for Buyer dated as of the
                           Closing Date and in the same form attached hereto as
                           Exhibit VI.B.
                  5.       Buyer shall have delivered to Sellers a certificate
                           of Buyer executed by the President or any Vice
                           President and the Treasurer or Assistant Treasurer of
                           Buyer and dated as of the Closing Date certifying
                           that the conditions specified in Sections VI.B.1 and
                           VI.B.2 have been satisfied.
                  6.       No claim, action, suit, investigation or other
                           proceeding shall be pending or threatened before any
                           court or governmental agency which presents a
                           substantial risk of the restraint or prohibition of
                           the transactions contemplated by this Agreement.
                  7.       All governmental filings, approvals and consents
                           shall have been accomplished or obtained that are
                           necessary in order that the transactions contemplated
                           hereby may be accomplished in compliance with law and
                           all waiting periods, including the waiting period
                           under the HSR Act shall have expired without
                           extension or been earlier terminated, other than any
                           such filings, approvals, consents or waiting periods
                           as are not (in the aggregate) material.
VII.     Right To Proceed; Closing
         A.       The purchase and sale hereby contemplated shall be consummated
                  and closed (the "Closing") at the offices of counsel to
                  Sellers at 10:00 a.m. local time on Friday, August 11, 1995,
                  or at such time and place as the parties shall agree (the
                  "Closing Date") and is effective as of the close of business
                  on July 31, 1995 (the "Effective Date").

                                       44
<PAGE>

         B.       On the Effective Date, Sellers shall deliver to Buyer the
                  following:
                  All documents necessary to transfer the Assets to Buyer,
                  including all documents to be attached as Exhibits hereto.
                  1.       The certificate required by Section VI.A.3.
                  2.       The opinion of counsel required by section VI.A.4.
                  3.       Access to all records, and other instruments and
                           documents held by Sellers relating to the Business,
                           or the properties or business of the Business.
                  4.       The Lease Assignments attached as Exhibit VII.B(4)
                           (a), for the sites attached as Exhibit VII.B(4)(b).
                  5.       The Assignment of Contracts attached as Exhibit VII.
                           B(5).
         C.       On the Closing Date, Buyer shall deliver to Sellers the
                  following:
                  1.       The Purchase Price as adjusted pursuant to Section
                           I.F by wire transfer of immediately available funds
                           to an account designated by Seller.
                  2.       The opinion of counsel and certificates referred to
                           in Section VI.B.
                  3.       An Assumption Agreement in the form of Exhibit VII.C.
VIII. Miscellaneous
         A.       Any notices or other circumstances required or permitted
                  hereunder shall be sufficiently given if hand-delivered (by
                  express delivery service or otherwise), sent by certified
                  mail, express mail service or overnight delivery service,
                  postage prepaid, addressed as follows:
                           To Buyer:

                           NMC Diagnostics Services, Inc.
                           c/o National Medical Care, Inc.
                           Reservoir Place
                           1601 Trapelo Road
                           Waltham, MA 02154
                           Attention:  DSD/Law Department

                           To Sellers:


                                       45
<PAGE>


                           MEDIQ, Inc.
                           One Mediq Plaza
                           Pennsauken, NJ  08110
                           Attn:    Michael Sandler
                                    and Alan S. Einhorn

                           With Copies To:

                           Dechert Price & Rhoads
                           4000 Bell Atlantic Tower
                           1717 Arch Street
                           Philadelphia, PA  19103
                           Attn:  Henry N. Nassau


                  or such other address as shall be furnished in writing by
                  either party, and such notice or communication shall be deemed
                  to have been given when delivered if delivered by hand (by
                  express delivery or otherwise), or five days after the date of
                  mailing if mailed prepaid and properly addressed.
         B.       This Agreement shall be binding upon and shall inure to the
                  benefit of the parties hereto and their respective successors,
                  heirs, and assigns, provided that this Agreement may not be
                  assigned by either party without the consent of the other
                  party. Any attempted assignment of this Agreement in violation
                  of the provisions of this section is void.
         C.       This Agreement may be amended with respect to any of the
                  terms contained herein only by means of a writing signed by
                  all the parties hereto.
         D.       This Agreement may be executed in one or more counterparts,
                  all of which shall be considered one and the same agreement
                  and shall become effective when one or more counterparts have
                  been signed by each of the parties and delivered to the other
                  party.
         E.       This Agreement shall be governed by and interpreted in
                  accordance with the laws of the Commonwealth of Massachusetts.
         F.       In the event that any dispute or controversy arises between
                  the parties out

                                       46

                  of or relating to this Agreement, a party shall notify the
                  other party in writing of the existence of the dispute or
                  controversy, and the parties shall meet and negotiate in good
                  faith to attempt to resolve the matter. If such efforts do not
                  resolve the dispute or controversy, each party shall appoint
                  an arbitrator of choice from a list of arbitrators recognized
                  by the American Arbitration Association. The appointed
                  arbitrators will appoint a third arbitrator from the list to
                  hear the parties and settle the dispute or controversy. The
                  proceedings shall be governed by the Commercial Rules of the
                  American Arbitration Association then in effect and shall be
                  conducted in Philadelphia, Pennsylvania. The arbitrators shall
                  have no power to award punitive or exemplary damages, to
                  ignore or vary the terms of the Agreement, and shall be bound
                  to apply controlling law. Arbitration shall be binding and the
                  exclusive remedy for the settlement of the dispute or
                  controversy. The party who prevails on entry of the award of
                  judgment shall be entitled to its costs and expenses,
                  including reasonable attorney's fees incurred in connection
                  therewith.
         G.       Whether the transactions contemplated by this Agreement are
                  consummated or fail to be consummated for any reason
                  whatsoever, each of the parties hereto shall pay its own
                  expenses and the fees and expenses of its counsel and
                  accountants and other experts, except as otherwise
                  specifically provided herein.
         H.       If any term, provision, covenant or restriction of this
                  Agreement that is not material to the benefits to be received
                  or obligations to be performed hereunder by either party
                  hereto is held by a court of competent jurisdiction to be
                  invalid, void or unenforceable, the remainder of the terms,
                  provisions, covenants and restrictions of this Agreement shall
                  remain in full force and effect and shall in no way be
                  affected, impaired or invalidated.
         I.       This Agreement contains the entire agreement between the
                  parties hereto with respect to the subject matter hereof and,
                  except for the Confidentiality

                                       47
<PAGE>

                  Agreement, supersedes all prior and contemporaneous agreements
                  and understandings, oral or written, with respect to such
                  transactions.
         J.       As used in this Agreement, all references to "Seller's
                  knowledge" shall mean the actual knowledge of Stephen Doppelt,
                  David Perocchi, Nancy Pacious, Daniel Burneika, Mark Foley,
                  Michael Sandler, John Mitchell, Daniel Nye, Susan Van Houten
                  and Edward Crouch. All representations and warranties in this
                  Agreement regarding or made by any Seller are made only with
                  respect to time periods during which such Seller was directly
                  or indirectly majority owned by Mediq.
         K.       Any information disclosed in any Exhibit will be considered as
                  disclosed in each of the Exhibits. The disclosure of any
                  matter in the Exhibits should not be construed as indicating
                  that such matter is required to be disclosed in order for any
                  representation or warranty in this Agreement to be true and
                  correct.
         L.       The section and other headings contained in this Agreement are
                  for reference purposes only and shall not affect the meaning
                  or interpretation of this Agreement. All references to
                  Sections or Articles contained herein mean Sections or
                  Articles of this Agreement unless otherwise stated. All
                  capitalized terms defined herein are equally applicable to
                  both the singular and plural forms of such terms.
         M.       It is understood and agreed that neither the specification of
                  any dollar amount in the representations and warranties
                  contained in this Agreement nor the inclusion of any specific
                  item in the Schedules or Exhibits is intended to imply that
                  such amounts or any higher or lower amount, or the items so
                  included or other items, are or are not material, or are
                  required to be included in the Exhibits, and neither party
                  shall use the fact of the setting of such amounts or the fact
                  of the inclusion of any such item in the Exhibits in any
                  dispute or controversy between the parties as to whether any
                  obligation, item or matter is or is not material or are
                  required to be

                                       48
<PAGE>

                  included in the Exhibits, for purposes of this Agreement.
         N.       Except as expressly contemplated herein, nothing in this
                  Agreement is intended (i) to confer any right or benefit on
                  any person other than the parties to this Agreement and their
                  respective successors and permitted assigns; or (ii) to modify
                  or discharge the obligation or liability of any third person
                  to any party to this Agreement, and no provision hereof shall
                  give any third person any right of subrogation or action
                  against any party to this Agreement. In no event shall Sellers
                  be liable to third parties other than Buyer's successor, if
                  any, in connection with any aspect of the transactions
                  contemplated by this Agreement, nor shall any third party be
                  or become a beneficiary of such rights, nor shall Buyer act or
                  hold itself out as Sellers' agent in any activity including,
                  but not limited to, dealings with any such third party.


                                       49
<PAGE>

         IN WITNESS WHEREOF, this Agreement has been signed by the parties and
each of the corporate parties has caused this Agreement to be executed by a duly
authorized person, all as of the day first above written.

                                           MEDIQ IMAGING SERVICES, INC.,

                                           AMERICAN CARDIOVASCULAR
                                           IMAGING LABS, INC., and
                                           SOUTHEASTERN DIAGNOSTICS, INC.


                                            By:/s/ Stephen Doppelt
                                               -----------------------------
                                               Stephen Doppelt
                                               President



                                             NMC DIAGNOSTICS SERVICES, INC.


                                              By:/s/ Leon Maraist
                                                 ----------------------------
                                                 Leon Maraist
                                                 Vice President



                                       50


GUARANTEE:

         The performance of all of the covenants, liabilities and obligations of
NMC Diagnostics Services, Inc. hereunder are unconditionally and irrevocably
guaranteed as surety by National Medical Care, Inc., its parent.


By:/s/ Ernestine M. Lowrie
   ----------------------------------
    Ernestine M. Lowrie
    Senior Vice President

GUARANTEE:

         The performance of all of the covenants, liabilities and obligations of
Mediq Imaging Services, Inc., American Cardiovascular Imaging Labs, Inc. and
Southeastern Diagnostics, Inc. hereunder are unconditionally and irrevocably
guaranteed as surety by Mediq Incorporated, its parent and Mediq Incorporated
agrees to be bound by the provisions of Section IV.C hereof.


By:/s/ Michael F. Sandler
   ----------------------------------
     Michael F. Sandler
     Senior Vice President of Finance



                                       51



                                    EXHIBITS
                                    --------
<TABLE>

<S>                        <C>
EXHIBIT I.C                Assumed Liabilities
EXHIBIT I.E                Purchase Price Allocation
EXHIBIT I.F(1)             Proposed Closing Balance Sheet and Estimated Adjustment
EXHIBIT I.F(2)             Receivables Reserve
EXHIBIT I.G                Balance Sheet
EXHIBIT II.A                       Articles of Incorporation, By-Laws, Certificate of Good
                                   Standing of Sellers
EXHIBIT II.B                       Ownership
EXHIBIT II.E                       Claims
EXHIBIT II.F                       Medicare and Third Party Investigations/Funds Withheld
EXHIBIT II.H                       Liens
EXHIBIT II.I              Leases
EXHIBIT II.J              Contracts
EXHIBIT II.K                       Financial or Business Changes
EXHIBIT II.N                       Insurance
EXHIBIT II.P                       Employee Benefit Plans
EXHIBIT II.Q                       Taxes
EXHIBIT II.R                       List of Employees
EXHIBIT II.T                       Hazardous Material Disclosure
EXHIBIT III.A                      Corporate Documents of the Buyer
EXHIBIT III.E                      Balance Sheet of National Medical Care, Inc.
EXHIBIT IV.C              Sellers' PRNs
EXHIBIT IV.I                       Guaranties
EXHIBIT IV.J                       Doppelt Consulting Agreement
EXHIBIT V.A                        Key Employee Agreement
EXHIBIT VI.A              Legal Opinion Letter of Sellers
EXHIBIT VI.B              Legal Opinion Letter of Buyer
EXHIBIT VII.B(4)(a)                Lease Assignments
EXHIBIT VII.B(4)(b)                List of Business Locations
EXHIBIT VII.B(5)          Assignment of Contracts
EXHIBIT VII.C             Assumption Agreement

</TABLE>