Document:

EX-10.10

EXHIBIT 10.10

STOCK PURCHASE AGREEMENT

     THIS STOCK PURCHASE AGREEMENT (this “Agreement”) is made and entered into this 12th
day of September, 2008 by and among American Claims Evaluation, Inc., a New York corporation
(“Purchaser”), John Torrens, an individual with an address at 6368 East Seneca Turnpike,
Jamesville, NY 13078 (the “Majority Shareholder”), Kyle Palin Torrens, an individual with
an address at 6368 East Seneca Turnpike, Jamesville, NY 13078 (“K. Torrens”), and Carlena
Palin Torrens, an individual with an address at 6368 East Seneca Turnpike, Jamesville, NY 13078
(“C. Torrens”). Each of the Majority Shareholder, K. Torrens and C. Torrens are sometimes
hereinafter individually referred to as a “Seller” and collectively as the
“Sellers”.

RECITALS

          WHEREAS, Interactive Therapy Group Consultants, Inc., a New York corporation (the
“Company”) is engaged in the business of providing a comprehensive range of services to
children with developmental delays and disabilities (the “Business”) and owns or leases the
assets and properties related thereto;

          WHEREAS, the Sellers own fifty one (51) shares of common stock, no par value, of the Company
(“Capital Stock”), which represents all of the outstanding shares of capital stock of the
Company (collectively, the “Company Shares”); and

          WHEREAS, Purchaser desires to purchase, and Sellers desire to sell, all of the Company Shares,
all on the terms and conditions set forth in this Agreement.

          NOW, THEREFORE, in consideration of the mutual promises and other consideration provided for
in this Agreement, and intending to be legally bound, the parties hereby agree as follows:

ARTICLE I

PURCHASE OF COMPANY SHARES AND PURCHASE PRICE

     1.1 Purchase and Sale of Company Shares. Upon the terms and subject to the conditions
hereof, at the Closing (as defined in Section 2.1), Sellers shall sell to Purchaser, and Purchaser
shall purchase from Sellers, all of the Company Shares, free and clear of all mortgages, liens,
pledges, security interests, charges, claims, restrictions and encumbrances of any nature
whatsoever (“Liens”).

     1.2 Purchase Price. The consideration for the Company Shares to be acquired (the
“Purchase Price”) will be: $570,000.00 (the “Base Purchase Price”) by wire transfer at the
Closing, subject to adjustment as provided in Section 1.4 below. The Purchase Price, prior to the
adjustment pursuant to Section 1.4, shall be delivered by Purchaser to Sellers at the Closing as
follows: (i) $428,529.42 by wire transfer to the Majority Shareholder; (ii) $18,235.29 by wire
transfer to K. Torrens; (iii) $$18,235.29 by wire transfer to C. Torrens; and (iv) $105,000.00 paid
to the escrow agent pursuant to the Escrow Agreement as provided in Section 1.3 hereof.

     1.3 Escrow. At the Closing, the parties hereto agree to place an aggregate of
$105,000 of the Base Purchase Price in an interest bearing escrow account to be held by JPMorgan
Chase Bank (the “Escrow Account”) pursuant to the terms of an Escrow Agreement in the form
of Exhibit 1.3 attached hereto (the “Escrow Agreement”). The Escrow Account shall
secure the Majority Shareholder’s obligation to (i) indemnify Purchaser for amounts paid by the
Company in connection with the claim of the New York State Insurance Fund for unpaid worker’s
compensation premiums in the amount of $81,354.00 which amounts shall also include any penalties,
fines and legal fees incurred by the Company or Purchaser in connection with the payment or
settlement of such claim for workers’ compensation premiums (collectively, the “Workers’
Compensation Claim”) and (ii) secure the collectability of the A/R with respect to services
rendered in the conduct of the Business prior to the Closing Date (as defined in Section

 

 

2.1). For purposes of this Agreement, “A/R” shall mean all accounts receivable,
notes, and other amounts receivable, and the proceeds thereof, together with unpaid financing and
other charges accrued thereon.

     1.4 Minimum Adjusted Tangible Net Deficiency. The Minimum Adjusted Tangible Net
Deficiency of the Company (“Minimum Net Deficiency”), as hereinafter defined, as of the
close of business on the Closing Date, shall be $(180,000.00). In the event that the Minimum Net
Deficiency is more or less than $(180,000.00), then the Base Purchase Price payable pursuant to
Section 1.2 hereof shall be increased or reduced, as the case may be, dollar for dollar, by the
amount of any excess or shortfall.

     The Minimum Net Deficiency shall be determined by the firm of Holtz Rubenstein Reminick LLP
(“HRR”), the independent public accountants (“Auditing Accountants”), whose
determination shall be final and binding, except in the event of manifest error, gross negligence
or fraud. The calculation of Minimum Net Deficiency shall be tentatively made (the “Tentative
Calculation”) based upon the Company’s unaudited balance sheet for the period ended on the last
day of the month immediately proceeding the month in which the Closing Date occurs. Such Tentative
Calculation shall be finalized ( the “Final Calculation”) based upon the Company’s audited
financial statements for the period ending with the Closing Date as prepared by the Auditing
Accountants (the “Closing Balance Sheet”). The Final Calculation shall be prepared and
submitted to the parties hereto by such Auditing Accountants within forty-five (45) days after the
Closing Date.

     For purposes of this Agreement, the Minimum Net Deficiency shall mean and be computed by the
aggregate of the Company’s tangible assets, less all liabilities, fixed or contingent. Such
calculation shall be made by the Auditing Accountants in accordance with U.S. generally accepted
accounting principles consistently applied (“GAAP”) and, to the extent consistent therewith
in accordance with the Company’s regular practices and procedures, and further in accordance with,
but not limited to, the following:

	 	(i)	 	Fixed assets, including but not limited to furniture, fixtures, automobiles and
machinery and equipment, shall be taken at the value at which these items appear on the
Company’s books, less reserves for depreciation and obsolescence;
	 
	 	(ii)	 	Goodwill and other intangible assets of the Company shall be deemed to be of no
value;
	 
	 	(iii)	 	The value of inventory on hand shall be established by an inventory and shall
be valued at the lower cost or fair market value on a first-in, first-out basis;
	 
	 	(iv)	 	Cash in the bank or on hand shall be taken at face value;
	 
	 	(v)	 	A/R shall be taken at their net value after setting up reserves for bad debts,
if required; and
	 
	 	(vi)	 	Provision and/or reserves for all liabilities, present or contingent, including
taxes shall be made.

     In the event the Minimum Net Deficiency is less than $(180,000.00), then, within fifteen days
of delivery of the Closing Balance Sheet, Purchaser shall pay Sellers an amount equal to such
deficiency. In the event that the Minimum Net Deficiency exceeds $(180,000.00), then, within
fifteen days of delivery of the Closing Balance Sheet, Sellers shall pay Purchaser an amount equal
to such excess.

     1.5 Transfer Taxes. Any transfer, recording or similar taxes due as a result of the
transactions provided for herein shall be paid by Purchaser.

     1.6 Employment of Majority Shareholder. Effective as of the Closing, the Company
shall employ Majority Shareholder in an executive capacity on terms and conditions satisfactory to
each pursuant to a Majority Shareholder Employment Agreement, in the form of Exhibit A
hereto, executed simultaneously herewith.

     1.7 Election of Majority Shareholder to Board of Directors. For so long as Majority
Shareholder is employed by the Company under the Majority Shareholder Employment Agreement or any
successor agreement, Purchaser shall ensure that Majority Shareholder holds a seat on the Company’s
board of directors.

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ARTICLE II

CLOSING

     2.1 Closing; Closing Date. The closing (the “Closing”) of the purchase and
sale of the Assets under this Agreement shall occur simultaneously with the execution of this
Agreement on September 10, 2008. The date on which the Closing occurs is referred to herein as the
“Closing Date”.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

     3.1 Representations and Warranties of the Majority Shareholder. The Majority
Shareholder represents and warrants to Purchaser (and hereby acknowledges that Purchaser is relying
on such representations and warranties in connection with the purchase of the Company Shares) that,
as of the date of the Closing:

          (a) Organization, Qualification and Corporate Power of the Company. The Company is a
corporation validly existing and in good standing under the laws of the State of New York. The
Company does not have any subsidiaries and does not own any shares of capital stock or other
securities of any other Person (as hereinafter defined). The Company is duly authorized to conduct
business and is in good standing under the laws of each other jurisdiction where such qualification
is required. The Company has full corporate power and authority to carry on the business in which
it is engaged and to own and use the properties owned and used by it.

          (b) Authorization. Each Seller has full power to enter into, execute and deliver this
Agreement and each and every agreement and instrument contemplated hereby to which he or she is or
will be a party and to perform his or her obligations hereunder and thereunder.

          (c) No Breach or Conflict.

                    (i) Except as provided in Schedule 3.1(c) hereto, the execution, delivery and
performance of this Agreement and the other agreements, documents and instruments executed and
delivered by Sellers in connection herewith, the performance of Sellers’ obligations hereunder and
thereunder and the consummation by Sellers of the transactions contemplated hereby and thereby do
not and will not (a) conflict with, violate or result in any breach of the terms, conditions or
provisions of the Company’s Certificate of Incorporation or Bylaws, (b) conflict with, violate or
result in any breach of, or constitute a default (or constitute an event or circumstance that with
notice or lapse of time, or both, would result in a default) or give rise to any right of
termination, cancellation or acceleration, or loss of any right or benefit under, or create any
mortgage, lien, pledge, security interest, charge, claim, restriction or encumbrance of any nature
whatsoever (“Liens”) (other than the Liens disclosed in Schedule 3.1(g) hereto (the
“Permitted Liens”)) pursuant to, any of the terms, conditions or provisions of (x) any
agreement to which the Company is a party or by which the Company or any of its assets may be
bound, or (y) any statute, ordinance, law, common law, rule, regulation, permit, order, code, writ,
judgment, award, injunction or decree of the United States, or any state, territory, county, city,
municipality, province or any subdivision thereof, or any foreign jurisdiction, or any court,
arbitral body or arbitrator (whether formal or informal), administrative or regulatory agency or
unit or commission thereof, in each case applicable to the Company or by which any of its assets
may be bound (a “Requirement of Law;” any such court, arbitral body or arbitrator,
administrative or regulatory agency or unit or commission being a “Governmental Entity”),
or (z) require any filing, declaration or registration with, or permit, consent, approval, waiver,
clearance, order or authorization of, or the giving of any notice to, any Governmental Entity or
other Person (including, without limitation, under the WARN Act, or any state statute of similar
import). For purposes of this Agreement, “Person” means a natural person, a partnership, a
corporation, a limited liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization, any other business entity or Governmental Entity (or any
department, agency or political subdivision thereof).

                    (ii) Neither the execution and delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, by Sellers will (i) violate any Requirement of Law or other
restriction of any Governmental Entity to which Sellers are subject, (ii) conflict with, result in
a breach of, constitute

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a default under, result in the acceleration of, create in any party the right to accelerate,
terminate, modify or cancel, or require any notice under, any commitment to which Sellers are a
party or by which they are bound or to which any of their assets is subject, (iii) result in the
imposition or creation of a Lien upon or with respect to any Company Shares or (iv) result in the
suspension, revocation, impairment, withdrawal, forfeiture (for dormancy or otherwise) or
non-renewal of any material permit, license or authorization related to the Business. Sellers need
not give any notice to, make any filing with, or obtain any authorization, consent or approval of
any Governmental Entity or other third party in order to consummate the transactions contemplated
by this Agreement.

          (d) Third-Party Consents. Each Person whose consent to the execution, delivery or
performance of this Agreement by Sellers is legally or contractually required is identified on
Schedule 3.1(d) hereto (the “Third-Party Consents”).

          (e) Enforceability. This Agreement has been and each and every agreement and
instrument contemplated hereby to which Sellers are or will be a party will be, duly executed and
delivered by Sellers and constitutes, and will constitute, a valid and binding obligation of
Sellers enforceable in accordance with its terms except as may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or similar laws affecting creditor’s
rights generally or by the principles of equity.

          (f) Fees and Utilities. Except for the Workers’ Compensation Claim, the Company has
paid in full any and all license fees, copyright fees, business permit costs, unemployment and
worker’s compensation insurance contributions and utility bills related to the Business that were
required to be paid on or prior to the date hereof.

          (g) Property. Except with respect to liens arising in connection with the Permitted
Liens, the Company has good, valid and marketable title to and owns all its assets, free and clear
of all Liens. Except for the Permitted Liens, all of the assets that are not owned by the Company
are leased or licensed pursuant to valid and existing leases or license agreements and such
interests are not subject to any Liens. The Company’s tangible assets are in good operating
condition and repair, subject to ordinary wear and tear. The Company’s assets are sufficient to
conduct the Business as it is currently conducted by the Company, and include all of the assets
used in or relating to the Business.

          (h) Capital Stock Ownership. The authorized capital stock of the Company consists of
51 Company Shares, all of which are outstanding.  All of the outstanding Company Shares
are held of record by the Seller as set forth in Schedule 3.1(h) hereto. There are no
outstanding or authorized options, warrants, purchase rights, subscription rights, conversion
rights, exchange rights, or other commitments that could require the Company to issue, sell or
otherwise cause to become outstanding any of its capital stock. There are no outstanding or
authorized stock appreciation, phantom stock, profit participation or similar rights with respect
to the Company. There are no voting trusts, proxies or other agreements or understandings with
respect to the voting of the capital stock of the Company.

          (i) Company Shares. Sellers hold of record and own beneficially the number of Company
Shares set forth in Schedule 3.1(h), free and clear of any restrictions on transfer (other
than restrictions under the Securities Act of 1933, as amended, and state securities laws), Taxes,
Liens, options, warrants, purchase rights, Commitments, equities, claims, and demands. Sellers are
not a party to any option, warrant, purchase right, or other commitment (other than this Agreement)
that could require them to sell, transfer or otherwise dispose of any capital stock of the Company.
Sellers are not a party to any voting trust, proxy or other agreement or understanding with
respect to the voting of any capital stock of the Company. 

          (j) Financial Statements. Attached as Exhibit 3.1(j) hereto is an unaudited
balance sheet of the Company as at July 31, 2008 (the “Interim Balance Sheet”) and the
related unaudited statements of income and cash flows for the eight (8) months then ended,
including the notes thereto (collectively, the “Financial Statements”).

               (1) The Financial Statements have been prepared from the books and records of the Company and
fairly present in all material respects the financial position, results of operations and cash
flows of the Company as of the dates and for the periods set forth therein, all in accordance with
GAAP throughout the periods covered thereby, except as otherwise noted therein, subject in the
case of interim financial statements, to normal recurring year-end adjustments (the effect of
which will not, individually or in the aggregate, be significant) and the absence of notes (that,
if presented, would not differ materially from those included in the balance sheet of the Company
as at December 31, 2007).

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               (2) Except as set forth in Schedule 3.1(j), there are no differences between the Financial
Statements and the financial records maintained and accounting methods applied by the Company for
Tax purposes.

               (3) The Company’s books and records are complete and correct in all material respects and
have been maintained in accordance with good business practice.

               (4) Sellers do not know of any basis for the assertion against the Company of any liability
or loss contingency, except as set forth in Schedule 3.1(j) or in the Financial
Statements.

          (k) No Material Adverse Change. Since January 1, 2008, the Company has operated the
Business in the ordinary course of business. Since January 1, 2008, there has not been: (i) any
material adverse change in the assets, liabilities, operations, business, prospects, financial
condition or results of operations of the Business, or (ii) any material damage, destruction, loss
or casualty to any property or assets of the Company used in connection with the Business, whether
or not covered by insurance. Since January 1, 2008, the Company has not incurred any fees or
expenses or removed any assets or incurred any liabilities related to the Business except in the
ordinary course of business. For the purposes of this Section 3.1(j), a “material adverse change”
is any change that is materially adverse to the assets, business, financial condition, results of
operations or prospects of the Company, taken as a whole, or has had a material adverse effect on
the ability of the Sellers to perform their obligations hereunder, except for changes arising from
or relating to: (i) general business, industry or economic conditions; (ii) local, regional,
national or international political or social conditions, including the engagement by the United
States in hostilities, whether or not pursuant to the declaration of a national emergency or war,
or the occurrence of any military or terrorist attack; (c) changes in financial, banking, or
securities markets (including any disruption thereof and any decline in the price of any security
or any market index); (d) changes in GAAP; (e) changes in Requirements of Law; (f) the taking of
any action contemplated by this Agreement; (g) the announcement of the transactions contemplated by
this Agreement; or (h) any actions or omissions by the Purchaser or any of its Affiliates.

          (l) Tax Matters. Except as set forth on Schedule 3.1(l) hereto, the Company
has (a) timely filed in accordance with all applicable Requirements of Law (taking into account
valid extensions) all Returns required to be filed by it, (b) paid all Taxes shown to have become
due pursuant to such Returns, and (c) paid all Taxes for which a notice of, or assessment or demand
for, payment has been received or which are or may become otherwise due or payable. All Returns
filed by the Company with respect to Taxes were true and complete in all material respects as of
the date on which they were filed or as subsequently amended as of the date of amendment. Prior to
the date hereof, the Company has provided to Buyer copies of all revenue agent’s reports and other
written assertions of deficiencies or other liabilities for Taxes of the Company with respect to
past periods. All amounts required to be collected or withheld by the Company with respect to
Taxes have been duly collected or withheld and any such amounts that are required to be remitted to
any taxing authority have been duly remitted. There are no waivers or extensions of any applicable
statute of limitations for the assessment or collection of Taxes with respect to any Return that
relates to the Company which remain in effect. There are no Tax rulings, requests for rulings,
transfer pricing agreements, closing agreements or similar agreements relating to the Company.
There are no pending examinations of the Company’s Tax Returns, and other than any examination set
forth on Schedule 3.1(l) there have been no such examinations. The Company is not a party
to, nor is it bound by, any Tax allocation or Tax sharing agreement or arrangement and has no
current contractual or legal obligation (actual or potential) to indemnify any other Person with
respect to Taxes (including as a result of being part of the same consolidated, combined or
affiliated group). No taxing authority in a jurisdiction where the Company or any shareholder of
the Company does not file Returns has made a claim, assertion or threat that the Company is or may
be subject to taxation by such jurisdiction. Any adjustment of Taxes of the Company made by the
Internal Revenue Service (“IRS”) in any examination which is required to be reported to the
appropriate state authorities has been reported, and any additional Taxes due with respect thereto
have been paid. For purposes of this Agreement, (i) “Tax” or “Taxes” shall mean
any liability for any federal, state, county, local, foreign or other income, excise, sales,
withholding, value-added, capital stock, transfer, use, gross receipts, franchise, employment,
payroll related, property or any other tax of any sort, including interest, penalties and additions
to tax thereon and obligations under any tax sharing, tax allocation or similar agreement to which
the Company or any Seller is a party attributable to any period ending on or before the Closing
Date relating to the Company or any Seller’s income, assets and operations, including the Business
and its assets, or arising out of the transactions contemplated by this Agreement and (ii)

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“Returns” means any report, return, statement, claim, estimate, declaration, notice,
form or other information supplied or required to be supplied to a taxing authority in connection
with Taxes.

          (m) Compliance with Laws. Except as disclosed on Schedule 3.1(m) hereto, the
Company is in compliance with, and since January 1, 2002, has conducted and is conducting the
Business and using its assets in compliance with, all Requirements of Law, and the Company has not
received, at any time since January 1, 2002, any notice that it is in breach of any thereof. No
event has occurred which, with or without the passage of time or the giving of notice, or both,
would constitute a non-compliance with or violation of any Requirement of Law. The Company is not
subject to any Requirement of Law or, to the best knowledge of Sellers, any proposed Requirement of
Law, which individually or in the aggregate has had or could have an adverse effect on the Business
or the Company’s assets or on Purchaser’s ability to acquire any property or conduct the Business
in substantially the same manner as it is currently conducted by the Company. Except as disclosed
on Schedule 3.1(m), the Company has not had any disputes with, and to the best knowledge of
Sellers, has not been subject to any investigation by, any Governmental Entity.

          (n) Litigation. Except as set forth in Schedule 3.1(n) hereto, there is no
claim, action, suit, proceeding, inquiry or investigation (a “Claim”) pending or, to the
knowledge of Sellers, threatened, by or against the Company or any Seller, or any affiliate,
director, officer, key employee or sales representative of the Company, or with respect to the
Business or the transactions contemplated hereby, whether at law or in equity or before or by any
Governmental Entity, which could have an adverse affect on the Company, the Business, or the
Company’s assets, and, to the knowledge of Sellers, there is no valid basis for any such Claim.

          (o) Clients. Schedule 3.1(o) hereto sets forth by dollar volume for each of
the two calendar years ending on December 31, 2007, and December 31, 2006, the ten (10) largest
clients or customers of the Company (“Clients”) of the Company in connection with the
Business. Except as specifically identified on Schedule 3.1(o), no single Client is of
material importance to the Business. To the knowledge of Sellers, the relationship between the
Company and each of its Clients is a good commercial working relationship. Except as disclosed on
Schedule 3.1(o), since July 31, 2007, no Client of the Company has: (i) terminated, or
threatened in writing to terminate, its relationship with the Company; or (ii) materially
decreased, or threatened to materially decrease, its usage of the Company’s services. To the
knowledge of Sellers, the consummation of the transactions contemplated hereby will not adversely
affect the relationship of the Company with any such Client. True and correct copies of all Client
lists of the Company have been delivered to Purchaser.

          (p) Operations of the Business. Except as set forth on Schedule 3.1(p)
hereto, from the date of the Interim Balance Sheet through the date hereof the Company, in
connection with the Business, has not:

               (1) canceled or compromised any claims, or waived any other rights, or sold, transferred,
abandoned or otherwise disposed of any assets or properties of the Business, other than in the
ordinary course of business;

               (2) made, or agreed to make any change in: (i) its accounting methods or practices; or (ii)
its depreciation or amortization policies or rates;

               (3) materially changed, or agreed to materially change, any of its business policies or
practices that relate to the Business, including, without limitation, advertising, marketing,
pricing, purchasing, personnel, sales, budget policies or practices;

               (4) entered into, or agreed to enter into, any lease (whether as lessor or lessee) on behalf
of the Business, except in the ordinary course of business;

               (5) granted or suffered, or agreed to grant or suffer, any Lien on any of the assets or
properties of the Business being sold hereunder or incurred any indebtedness for borrowed money
(except for the Permitted Liens);

               (6) entered into or amended, or agreed to enter into or amend, any contract or other
agreement pursuant to which the Company has agreed either: (i) to indemnify any party on behalf
of the Business; (ii) to refrain from competing with any party with respect to the Business;

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               (7) sold, transferred or otherwise disposed of, permitted to lapse, or disclosed to any
Person, any material Intellectual Property, except for disclosures in the ordinary course of
business consistent with past practices and in furtherance of the interests of the Business;

               (8) incurred or assumed, or agreed to incur or assume, any liability (whether or not
currently due and payable) relating to the Business or any of its assets except in the ordinary
course of business;

               (9) entered into or amended, or agreed to enter into or amend, any material contract related
to the Business (for purposes of this clause (9), a “material” contract is a contract providing
for payments to or from the Company of at least $10,000 in the aggregate in any 12-month period)
other than in the ordinary course of business; or

               (10) agreed in writing or otherwise to take any actions described in this Section 3.1(p).

          (q) Insurance.

               (1) No Seller has received, or been informed by a third party of the receipt by it of, any
notice from any insurance carrier or organization: (i) threatening a suspension, revocation,
modification or cancellation of any insurance policy or a material increase in any premium in
connection therewith or (ii) informing Seller that any coverage will or may not be available in
the future on substantially the same terms as now in effect. To the knowledge of Sellers, there
is no basis for the issuance of any such notice or the taking of any such action.

               (2) Schedule 3.1(q) hereto contains a complete list of all of the Company’s policies
of insurance currently in effect, including the effective date and expiration date thereof.

               (3) Schedule 3.1(q) sets forth in respect of the Company, by year, for the current
policy year and each of the three (3) preceding policy years: (A) a summary of the loss
experience under each policy of insurance; (B) a statement describing each claim under a policy of
insurance for an amount in excess of five thousand dollars ($5,000), which sets forth: (i) the
name of the claimant; (ii) a description of the policy by insurer, type of insurance and period of
coverage; and (iii) the amount and a brief description of the claim; and (C) a statement
describing the loss experience for all claims in excess of $5,000 that were self-insured,
including the number and aggregate cost of such claims.

          (r) Client Contracts. Schedule 3.1(r) hereto sets forth a complete list of
all of the Company’s contracts, engagement letters and other arrangements with Clients (“Client
Contracts”). Sellers have provided Purchaser with a complete copy of each Client Contract and
each Client Contract is (and immediately after the Closing will be) in full force and effect and
valid, binding and enforceable in accordance with its terms against the Company and, to the
Sellers’ knowledge, any other parties thereto. The Company has and, to the knowledge of the
Sellers, all other parties to each of the Client Contracts have, performed all obligations required
to be performed to date under the Client Contracts in all material respects, and neither the
Company nor any such other party is in material default or arrears under the terms thereof, and no
condition exists or event has occurred which, with the giving of notice or lapse of time or both,
would constitute a material breach or default thereunder. The Client Contracts do not include any
obligations to Clients that have not been incurred in the ordinary course of the Company’s
business.

          (s) Intellectual Property.

               (1) Except as set forth Schedule 3.1(s) hereto, there are no: (i) patents,
registered trademarks, registered copyrights, websites or domain names owned or ordinarily used in
connection with the Business; or, with the exception of “click-wrap,” “shrink-wrap” or similar
licenses with respect to factory pre-installed or “off-the-shelf” computer software, (ii) patents,
trademarks, copyrights, technology or processes used in connection with the Business pursuant to a
license or other right granted by a third party. The Intellectual Property constitutes all of the
intellectual property which is necessary, or used, to operate the Business.

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               (2) No Claims are pending or, to the knowledge of Sellers, threatened, questioning the
validity of any of the Intellectual Property or asserting that the Company is infringing or
otherwise adversely affecting the rights of any Person with regard to any intellectual property of
such Person. To the knowledge of Sellers, no Person is infringing the rights of the Company with
respect to any Intellectual Property.

               (3) All of the Intellectual Property owned by the Company is owned solely by the Company,
free and clear of all Liens (except for the Permitted Lien), and all Intellectual Property that is
licensed or otherwise used by the Company is licensed pursuant to license agreements that, to the
knowledge of Sellers, are valid and in full force and effect.

               (4) To the knowledge of Sellers, and subject to the consent of any third party required under
any license agreement or similar Contract, the consummation of the transactions contemplated by
this Agreement will not result in the Purchaser’s inability to use the Intellectual Property
following the Closing.

               (5) For purposes of this Agreement, “Intellectual Property” shall mean registered or
unregistered names, domain names, websites, telephone numbers, trademarks, patents, patents
pending, trade or brand names, service marks, copyrights (including, applications for, rights to
acquire and other rights with respect to patents, patents pending, trademarks, trade names,
service marks and copyrights), designs, licenses, franchises, data, know-how, trade secrets,
formulae, technology, processes, inventions, technology, statutory names, marketing and management
know-how, together with any goodwill associated therewith and all rights of action on account of
past, present and future unauthorized use or infringement thereof, including, without limitation,
the tradename “Interactive Therapy Group,” the items described in Schedule 3.1(s), and/or
all other intellectual property, whether registered or unregistered, owned or licensed or
ordinarily used by the Company in respect of the Business (together with all drawings, plans,
specifications and other documents relating thereto).

          (t) Environmental Matters. The Company is, and at all times has been, in compliance
with all Requirements of Law relating to the environment or public health or safety (an
“Environmental Law”). The Company does not have any liability under any Environmental Law
with respect to the real property leased by it, or with respect to any other properties and assets
(whether real, personal, or mixed) in which the Company (or any predecessor) has or had an
interest. There are no Hazardous Materials (as defined below) present on or in the environment at
the real property owned or leased by the Company. No notices of any violation or alleged violation
of any Environmental Law relating to the operations or properties of the Company have been received
by Sellers. For the purposes of this Section 3.1(t), “Hazardous Materials” means any
substance, material or waste which is regulated by any governmental authority, including any waste
which is defined as a “hazardous waste,” “hazardous material,” “hazardous substance,” “extremely
hazardous waste,” “restricted hazardous waste,” “biohazardous waste,” “biomedical waste,” “medical
waste,” “sharps,” “contaminant,” “pollutant,” “toxic waste” or “toxic substance” under any
provision of Environmental Law, and including petroleum, petroleum products, asbestos, presumed
asbestos-containing material or asbestos-containing material, radon and urea formaldehyde,
radioactive materials, polychlorinated biphenyls, mold, mildew and fungus.

          (u) Equipment. Schedule 3.1(u) hereto includes a complete list of all
Equipment owned or leased by the Company with an initial, undepreciated value of at least $500.
Copies of all leases under which the Equipment are being leased by the Company (the “Equipment
Leases”) have been provided by Sellers to Purchaser. All payments required to be paid by the
Company pursuant to each Equipment Lease have been paid when due and the Company is not otherwise
in default in meeting its obligations thereunder. To the knowledge of Sellers, the lessor under
each Equipment Lease is not in default in meeting its obligations thereunder.

          (v) Premises. Sellers have made available to Purchaser a copy of each real property
lease to which the Company is a party (“Leases”). All payments required to be paid by the
Company pursuant to each Lease have been paid when due and the Company is not otherwise in default
in meeting its obligations thereunder. To the knowledge of Sellers, the landlord under each Lease
is not in default in meeting any of its obligations under each such Lease. The premises covered by
the Leases are the only premises used by the Company in connection with the Business.

          (w) Employees. Schedule 3.1(w) hereto sets out a complete list of all
employees (including any employees on pregnancy or parental leave or short-term disability leave)
of the Company (collectively, the “Employees”), along with the following information related to
each, as applicable: (i) salary (including any written or oral understanding or arrangement
regarding compensation); (ii) current bonus compensation arrangement; (iii)

8

 

deferred compensation arrangement; (iv) profit sharing; (v) pension; (vi) retirement; (vii)
stock option; (viii) stock purchase; (ix) hospitalization insurance; and (x) other plans or
arrangements providing benefits to such Employee. The Company is not a party to, or otherwise
bound by, any labor or collective bargaining agreement and, to the best knowledge of Sellers, there
are no current or threatened attempts to organize or establish any labor union or association or
employee association. There are no Claims pending or, to the best knowledge of Sellers,
threatened, against the Company under any Requirement of Law relating to employment, including
Claims involving wages, hours, human rights, withholding, or the payment of unemployment insurance
or taxes. Sellers have furnished to Purchaser a true and correct copy of each written employment
agreement (as amended to date) with an Employee.

          (x) Benefit Plans. Schedule 3.1(x) hereto sets forth a true and complete list
of each “employee benefit plan” (as such term is defined in the Employee Retirement Income Security
Act of 1974, as amended (“ERISA”) Section 3(3)), whether or not subject to ERISA, and each
employment, consulting, independent contractor, bonus, incentive, equity purchase, option or other
equity-based, deferred compensation, loan, severance, termination, retention, change of control,
collective bargaining or other agreement with any works council or association, profit sharing,
pension, retirement, 401(k), vacation, medical or other welfare, disability, fringe benefit and any
other employee or retiree benefit or compensation plan, funding mechanism, agreement, program,
policy or other arrangement, whether or not subject to ERISA or written or unwritten or legally
binding or not, and (i) that is maintained, sponsored or contributed to by the Company or any ERISA
Affiliate for the benefit of any current or former employee, officer or independent contractor of
the Company, or the beneficiaries or dependents of any such individual, or (ii) under which the
Company may have or could have any outstanding liability (“Employee Benefit Plan”).
“ERISA Affiliate” means any trade or business, whether or not incorporated, that, together
with the Company, is or would have been at any date of determination occurring within the preceding
six years, treated as a single employer within the meaning of Section 414 of the Internal Revenue
Code of 1986, as amended, and the rules and regulations promulgated thereunder (“Code”).

               (1) Each Employee Benefit Plan has been established, operated and administered in all
respects in accordance with its terms, and each such Employee Benefit Plan is in compliance with
all applicable laws. All contributions (including all employer contributions and employee salary
reduction contributions) and premiums required to have been paid by the Company and its ERISA
Affiliates to any Employee Benefit Plan under the terms of any such Employee Benefit Plan or its
related trust, insurance contract or other funding arrangement, or pursuant to any applicable law
have been paid within the time prescribed by any such Employee Benefit Plan, trust, contract or
arrangement, or applicable Requirement of Law. All contributions and premiums for any period
ending on or before the Closing Date that are not yet due have been made to each such Employee
Benefit Plan or its related trust, insurance contract or other funding arrangement, or have been
accrued in accordance with past practice and custom.

          (y) A/R and Work-in-Progress. All A/R and unbilled work-in-progress related to the
Business have been bona fide created in the ordinary course of business and the provision for
doubtful accounts established in connection therewith is reasonable. Except as set forth in
Schedule 3.1(y) hereto, none of such A/R have been extended, re-billed or rolled over in
order to make them current nor are any of the A/R subject to valid setoffs or counterclaims.

          (z) Improper Payments. Neither the Company nor any Seller nor any of its directors,
officers, agents, employees or other Persons acting on its behalf, has directly or indirectly made
or received any illegal or improper payments to or from, or directly or indirectly provided any
illegal or improper benefit or inducement for, any governmental official (whether domestic or
foreign), supplier, client or other Person, in an attempt to influence any such Person to take or
to refrain from taking any action relating to the Business.

          (aa) Certain Claims. There is no pending Claim that has been commenced against the
Company or any Seller that challenges, or that may have the effect of preventing, delaying, making
illegal or otherwise interfering with, any of the transactions contemplated by this Agreement. To
the knowledge of Sellers, no such Claim has been threatened.

          (bb) Directors and Officers. Schedule 3.1(bb) hereto lists the directors and officers
of the Company as of the date hereof. Except as set forth on Schedule 3.1(bb), there are
no outstanding powers of attorney executed on behalf of the Company.

          (cc) Material Commitments. Schedule 3.1(cc) hereto sets forth a complete list
of all of the material commitments to which the Company is a party and/or to which the Company or
the Business may be bound

9

 

or subject (“Material Commitments”) other than commitments which arise in the ordinary
course of business. Sellers have provided Purchaser with a complete copy of each Material
Commitment, and (i) each Material Commitment is (and immediately after the Closing will be) in full
force and effect and valid, binding and enforceable in accordance with its terms against the
Company, and to the Sellers’ knowledge, any other parties thereto, (ii) neither the Company nor the
other parties to any Material Commitment is, to Sellers’ knowledge, in material default under any
Material Commitment (beyond any applicable notice and cure period), and (iii) to the Sellers’
knowledge, no condition exists which, with the passage of time or the giving of notice, or both,
will become a material default under any Material Commitment.

          (dd) Outstanding Indebtedness. Except as set forth in Schedule 3.1(dd) hereto
immediately prior to the Closing, the Company has no indebtedness for borrowed money.

          (ee) Disclosure. This Agreement does not contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements contained herein
not misleading in light of the circumstances under which they were made.

     3.2 Representations and Warranties of Purchaser. Purchaser represents and warrants to
Sellers (and hereby acknowledges that Sellers are relying on such representations and warranties in
connection with the sale of the Company Shares) that, as of the Closing:

          (a) Organization. Purchaser is a corporation organized, validly existing, and in good
standing under the laws of the state of New York. Purchaser is qualified to do business in all
jurisdictions where the conduct of its business requires it to be so qualified.

          (b) Authorization. Purchaser has full corporate power to enter into, execute and
deliver this Agreement and each and every agreement and instrument contemplated hereby to which
Purchaser is or will be a party and to perform its obligations hereunder and thereunder, and the
execution, delivery and performance hereof and thereof and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by all requisite corporate action.

          (c) No Breach or Conflict. Except as set forth on Schedule 3.2(c) hereto,
neither the execution and delivery of this Agreement or any other agreement or instrument
contemplated hereby, the consummation of the transactions contemplated hereby or thereby nor the
performance of this Agreement or any other agreement or instrument contemplated hereby in
accordance with their respective terms and conditions by Purchaser (a) violates any provision of
Purchaser’s Certificate of Incorporation, Bylaws or other governing instruments; (b) requires the
approval or consent of any Governmental Entity or of any other Person, or (c) conflicts with or
results in any breach or violation of, results in a material modification of the effect of,
otherwise causes the termination of or gives any other contracting party the right to terminate, or
constitutes (or with notice or lapse of time or both would constitute) a default under, any
agreement, indenture, note, bond, loan, instrument, lease, conditional sale contract, mortgage,
license, franchise, commitment or other binding arrangement, certificate of incorporation, bylaw,
judgment, decree, or Requirement of Law applicable to Purchaser.

          (d) Third-Party Consents. Each Person whose consent to the execution, delivery or
performance of this Agreement by Purchaser is legally or contractually required is identified on
Schedule 3.2(d) hereto (the “Purchaser Third-Party Consents”).

          (e) Certain Claims. There is no pending Claim that has been commenced against
Purchaser that challenges, or that may have the effect of preventing, delaying, making illegal or
otherwise interfering with, any of the transactions contemplated by this Agreement. To the
knowledge of Purchaser, no such Claim has been threatened.

          (f) Enforceability. This Agreement has been and each and every agreement and
instrument contemplated hereby to which Purchaser is or will be a party will be, duly executed and
delivered by Purchaser and constitutes, and will constitute, a valid and binding obligation of
Purchaser enforceable in accordance with its terms except as may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or similar laws affecting creditor’s
rights generally or by the principles of equity.

     3.3 “Knowledge” Defined. For purposes of this Agreement, whenever any statement in
this Agreement is made by a Person “to the knowledge” of such Person, or words of similar intent or
effect: (i) an individual shall be deemed to have “knowledge” of a particular fact or other matter
if: (1) such individual is actually

10

 

aware of such fact or other matter, (2) such individual received written notice of such fact
or other matter, or (3) a prudent individual could be expected to have discovered or otherwise
become aware of such fact or other matter in the normal course of performing his or her duties; and
(ii) a Person (other than an individual) shall be deemed to have “knowledge” of a particular fact
or other matter if: (1) any individual who is serving as a director, executive officer, general
partner, trustee or similar capacity of such Person has knowledge of such fact or other matter, (2)
such Person received written notice of such fact or other matter, or (3) a prudent individual in
any such position could be expected to have discovered or otherwise become aware of such fact or
other matter in the normal course of performing his or her duties.

ARTICLE IV

COVENANTS OF THE PARTIES

     Except and to the extent agreed otherwise in writing, Sellers, jointly and severally, and
Purchaser covenant and agree as follows:

     4.1 Access. Sellers shall, for a period of six (6) years from the Closing Date, (i)
have access to, and the right to copy, at their expense, for bona fide business purposes and during
usual business hours upon reasonable prior written notice to Purchaser, all books and records
relating to the operation of the Business prior to the Closing; and (ii) have access to employees
of the Company for bona fide purposes in connection with any pending claim, litigation or
proceeding, the facts of which the employee may have knowledge during usual business hours upon
reasonable prior notice to Purchaser. Purchaser shall retain and preserve all such books and
records for such six (6) year period.

     4.2 Expenses. Except to the extent otherwise expressly provided in this Agreement,
the parties to this Agreement shall bear their respective direct and indirect expenses incurred in
connection with the negotiation, preparation, execution and performance of this Agreement and the
transactions contemplated hereby, including, without limitation, all fees, charges, disbursements
and expenses of agents, representatives, counsel and accountants.

     4.3 Post-Closing Third Party Consents and Governmental Permits and Approvals. Seller
shall use commercially reasonable best efforts to obtain necessary third-party consents and
governmental permits and approvals to the transactions contemplated by this Agreement prior to the
Closing; however, the parties agree that it will be impossible for Seller to obtain all such
consents, permits and approvals by such time and that Seller’s obtaining such consents, permits and
approvals shall not be a condition precedent to Purchaser’s performance of its obligations
hereunder. As such, following the Closing, the parties shall cooperate in good faith to obtain all
necessary consents, permits and approvals not obtained prior to the Closing.

     4.4 Privacy of Education Records. Seller and Purchaser shall, at all times, comply
with the applicable provisions of the Family Educational Rights and Privacy Act, 20 U.S.C. § 1232g,
as amended, the Individuals with Disabilities Education Act, 20 U.S.C. § 1400 et seq., as amended,
and all applicable regulations promulgated thereunder, in connection with the transfer,
maintenance, use and disclosure of any “education records” or other confidential student or patient
information included in the Company’s assets.

     4.5 Further Assurances. Sellers and Purchaser will at any time after closing execute
any and all such further assurances as the other party may reasonably request in order to carry out
the transactions contemplated hereunder.

     4.6 Tax Provisions.

          (a) Sellers shall be responsible for the preparation of the Company’s federal and state Tax
Returns for the taxable years which end on or prior to the Closing Date and such Tax Returns shall
be prepared in a manner consistent with the prior practice of the Company. Sellers shall provide
Purchaser with an opportunity to review and comment on such Tax Returns at least ten (10) Business
Days prior to the date that such Returns are due to be filed (taking into account extensions of the
due date thereof). Any Company Tax due with respect to such Tax Returns or, in the case of any Tax
Returns for taxable years which include the Closing Date, the portions of such Tax relating to
pre-Closing Tax periods (including in each case payments of estimated Tax) shall, to the extent not

11

 

accrued by the Company (the amount accrued by the Company shall be paid by the Company) be
paid by Sellers to the Company on the later of two (2) days before the first date on which such Tax
becomes due and payable without interest or penalties or two (2) days after Purchaser’s request for
such payment, and upon receipt by the Company shall be promptly paid over by the Company to the
relevant taxing authority. If the amount due pursuant to the immediately preceding sentence is not
paid by Sellers by the due date specified therein, the same shall carry interest, without
duplication of interest included in the definition of Taxes, from (and including) such due date to
(but not including) the date of payment at an annual rate of interest equal to the reference or
“prime” rate from time to time of JPMorgan Chase Bank.

          (b) The Majority Shareholder shall indemnify and hold harmless, without duplication, Purchaser
and the Company (collectively, the “Tax Indemnified Parties”) from and against any and all
Liabilities and Losses of the Company or Purchaser based upon, resulting from or arising out of
Company Taxes arising (or deemed to arise) with respect to pre-Closing Tax periods. In the case of
any Tax relating to a taxable period of the Company that includes but does not end on the Closing
Date, the portion of such Tax relating to the portion of such taxable period which ends on the
Closing Date shall be computed for purposes of clause (a) of this Section 4.6 in a manner which is
consistent with the same computation undertaken for purposes of the preparation of the Financial
Statements.

          (c) After the Closing Date, Sellers shall make reasonably available to Purchaser, and
Purchaser shall make reasonably available to Sellers, all information, records or documents within
their possession or control relating to Tax Liabilities or potential Tax Liabilities of the Company
with respect to pre-Closing Tax periods, and shall preserve all such information, records and
documents until the expiration of any applicable statute of limitations or extensions thereof.
Sellers shall afford Purchaser, and Purchaser shall afford Sellers, the right to take extracts
therefrom and to make copies thereof to the extent reasonably necessary to permit Purchaser or
Sellers to prepare Returns, to conduct negotiations with tax authorities, and to implement the
provisions of, and to investigate any claims between the Parties arising under this Agreement.
Sellers and Purchaser shall also cooperate, in all other respects, with each other as is reasonably
necessary for Purchaser or Seller to prepare such Returns, conduct any such negotiations, and
investigate any such claims referred to herein.

          (d) As between Purchaser and Sellers, Purchaser shall to the maximum extent possible pay, and
shall file all necessary Returns and other documentation with respect to, all transfer (excluding
transfer gains), documentary, sales, use, stamp, registration and other such Taxes (including any
penalties, interest, additions to tax, and costs and expenses relating to such Taxes) incurred in
connection with the consummation of the transactions contemplated by this Agreement. If Sellers are
required by applicable Law to pay such Taxes and/or file such Returns, Purchaser shall prepare such
Returns and/or pay Seller at Closing or promptly thereafter any amounts Sellers are obligated to
pay (as applicable). Sellers shall cooperate with Purchaser in the preparation of all such Returns,
and, if required by applicable Law, Sellers will join in the execution of any such Returns and
other documentation.

          (e) A. Subject to the provisions of this subsection (e) of this Section 4.6, Sellers shall
have the right, at their own expense, to control, manage and be responsible for any audit, contest,
claim, proceeding or inquiry with respect to Taxes of the Company for any Tax period ending on or
before the Closing Date and shall have the right to settle or contest in their discretion any such
audit, contest, claim, proceeding or inquiry; provided, however, that (i) Sellers
shall not have the right to control, settle or contest any such proceeding unless it first
acknowledges in writing its obligation to fully indemnify the Tax Indemnified Parties for the Taxes
payable by the Company at issue in the proceeding; (ii) no settlement or disposition of any such
proceeding shall be made without Purchaser’s prior written consent, which shall not be unreasonably
withheld, if such settlement or disposition reasonably could be expected to affect the Company’s
liability for Tax in any taxable period or portion of a taxable period ending after the Closing
Date and (iii) Purchaser shall have the right to attend and participate in, at its own expense, any
such proceeding controlled by Seller pursuant to this Section 4.6(e) only if such proceedings
reasonably could be expected to affect the Company’s liability for Taxes (it being understood that
Purchaser shall not unreasonably withhold its consent if Sellers request that certain limited
meetings with agents of a taxing authority be held without Purchaser’s representative in
attendance, provided that Purchaser is kept fully informed with respect to any such meeting).

          B. The Company shall, at its own expense, control, manage and solely be responsible for any
audit, contest, claim, proceeding or inquiry with respect to Taxes for any taxable period ending
after the Closing Date (including a taxable period that straddles the Closing Date), and shall have
the exclusive right to settle or

12

 

contest any such audit, contest, claim, proceeding or inquiry without the consent of any other
Party. Sellers shall have no liability for Purchaser’s or the Company’s Taxes with respect to any
period after the Closing Date.

          (f) The Company shall promptly pay over to Sellers any refunds of Income Tax actually received
in cash with respect to Pre-Closing Tax Periods, net of any Income Tax imposed on and actually paid
by the Company as the result of the receipt of such Tax refunds.

          (g) Notwithstanding anything that may be to the contrary in this Agreement, neither Purchaser
nor any of its Affiliates shall have the right to receive or obtain any information relating to the
Taxes of Sellers, other than information relating solely to the Company.

     4.7 Section 338(h)(10) Election. Sellers and Purchaser shall join in making an
election under Section 338(h)10) of the Internal Revenue Code of 1986, as amended, (and any
corresponding elections under state or local tax law (collectively, a “Section 338(h)(10)
Election”) with respect to the purchase and sale of the Company Shares. Sellers agree to sign
and deliver a Form 8023 (“Form 8023”) to Purchaser at Closing so that Purchaser may file
such Form with the IRS to make the Section 338(h)(10) Election.

ARTICLE V

DELIVERIES AT CLOSING

     5.1 Sellers’ Deliveries at Closing. At Closing, Sellers shall deliver or cause to be
delivered the following to Purchaser:

          (a) Stock Certificates. Stock certificates representing all of the Company Shares,
endorsed in blank or accompanied by duly executed stock powers.

          (b) Secretary’s Certificate. A certificate executed on behalf of Seller by the
Secretary of Seller authenticating Seller’s Certificate of Incorporation, as amended, and By-Laws.

          (c) Escrow Agreement. The Escrow Agreement, duly executed by Sellers.

          (d) Consents, Permits, etc. All third-party consents and governmental permits and
approvals obtained by Sellers prior to the Closing.

          (e) Majority Shareholder Employment Agreement. The Majority Shareholder Employment
Agreement, executed by Majority Shareholder.

          (f) Resignations. Resignations of all officers and directors of the Company.

          (g) Form 8023. The Form 8023 duly signed by Sellers.

          (h) Good Standing Certificate. A certificate of Good Standing as to the Company
issued by the Secretary of State of the State of New York.

     5.2 Purchaser’s Deliveries at Closing. At Closing, Purchaser shall deliver the
following to Seller:

          (a) Purchase Price. In connection with the payment of the Purchase Price in
accordance with Section 1.2 hereof:

               (1) $428,529.42 to the Majority Shareholder by wire transfer to an account specified in
writing by the Majority Shareholder;

               (2) $18,235.29 to K. Torrens by wire transfer to an account specified in writing by K.
Torrens; and

               (3) $18,235.29 to C. Torrens by wire transfer to an account specified in writing by C.
Torrens.

          (b) Escrow Agreement. The Escrow Agreement, duly executed by Purchaser.

13

 

          (c) Secretary’s Certificate. A certificate executed on behalf of Purchaser by the
Secretary of Purchaser (i) authenticating Purchaser’s Restated Certificate of Incorporation and
By-Laws; (ii) certifying as to resolutions of the Board of Directors of Purchaser authorizing the
transactions contemplated by this Agreement; and (iii) concerning the incumbency of officers
signing this Agreement and other documents related hereto.

     5.3 Company’s Delivery at Closing. At Closing, Sellers shall cause the Company to
deliver the following to the Majority Shareholder and Purchaser:

          (a) Majority Shareholder Employment Agreement. The Majority Shareholder Employment
Agreement, duly executed by the Company.

ARTICLE VI

RESTRICTIVE COVENANTS

     6.1 Non-competition. Sellers acknowledge that reasonable limits on their respective
ability to engage in activities competitive with Purchaser and the Business are warranted to
protect Purchaser’s investment in acquiring the Assets and the Business. Accordingly, each Seller
covenants and agrees that, commencing on the Closing Date and ending on the fifth anniversary
thereof, such Seller shall not engage in the Business or in any business that is in competition
with the Business within the states of Connecticut or New York whether directly or indirectly,
through any subsidiary, affiliate, partnership, licensee, joint venture or agent, or as a partner,
owner, manager, operator, advisor, agent or consultant of or to any Person; provided, however, that
nothing herein shall prevent such Seller from investing as a less than one (1%) percent shareholder
in the securities of any company listed on a national securities exchange or quoted on an automated
quotation system in which Seller does not, directly or indirectly, exercise any operational or
strategic control.

     6.2 Non-Solicitation. For a period of five (5) years after the Closing Date, each
Seller covenants and agrees that such Seller will not, directly or indirectly, either for itself or
for any Person (i) solicit any employee of the Business to terminate his or her employment with the
Company or employ such individual during his or her employment with the Company and for a period of
six (6) months after such individual terminates employment with the Company, or (ii) make any
disparaging statements concerning the Company, the Business or its officers, directors, or
employees, that could injure, impair or damage the relationships between the Company or the
Business on the one hand and any of the employees, clients or suppliers of the Business, or any
lessor, lessee, vendor, supplier, client, distributor, employee or other business associate of the
Business.

     6.3 Non-Disclosure. Each Seller acknowledges that in connection with Seller’s
ownership and operation of the Company, Seller has Confidential Information, and Seller agrees
that, after Closing, Seller will not disclose to any Person any Confidential Information, except
with the prior written consent of Purchaser. The term “Confidential Information” means any
information which is proprietary or unique to the Business, including but not limited to trade
secret information, matters of technical nature such as processes, devises, techniques, data and
formulas, research subject and results, marketing methods, plans and strategies, operations,
products, revenues, expenses, profits, sales, key personnel, clients, suppliers, pricing policies,
and any information concerning the marketing and other business affairs and methods of the Business
which is not readily available to the public.

     6.4 Injunctive Relief. If the provisions of Sections 6.1 through 6.3 are violated in
whole or in part, Purchaser shall be entitled upon application to any court of proper jurisdiction,
to a temporary restraining order or preliminary injunction to restrain and enjoin Seller from such
violation without prejudice as to any other remedies Purchaser may have at law or in equity.

ARTICLE VII

SURVIVAL

     7.1 Survival of Representations and Warranties. The representations and warranties of
each party contained in this Agreement or in any document delivered pursuant hereto shall be deemed
to be continuing and shall survive until 12:01 a.m. EDT on the second anniversary of the Closing
Date except that the Majority

14

 

Shareholder’s representations in Sections 3.1(l) and 3.1(t) shall survive the Closing until
the expiration of the applicable statutes of limitations.

ARTICLE VIII

INDEMNIFICATION

     8.1 Obligation of the Majority Shareholder to Indemnify. The Majority Shareholder
shall indemnify, defend and hold harmless Purchaser, its directors, officers, employees and
successors and assigns and Purchaser’s past, present and future shareholders from and against any
losses, liabilities, damages, deficiencies, costs or expenses (including interest, penalties,
fines, amounts paid in settlements and reasonable attorneys’ and environmental and other licensed
consultants’ fees and disbursements) (collectively, “Losses”) based upon, arising out of or
otherwise in respect of:

          (a) During the period of survival of such representation or warranty, any inaccuracy in or any
breach of any representation or warranty of the Majority Shareholder contained in this Agreement or
any certificates or schedules delivered by the Majority Shareholder pursuant hereto;

          (b) The failure by Sellers to comply with any covenant of Sellers set forth herein or in any
instrument or certificate delivered hereunder;

          (c) Any undisclosed liability or obligation, or claim against, the Company or any affiliate
thereof;

          (d) Any Claim: (i) relating to the Business or any of its assets during any period prior to
the Closing Date; or (ii) arising out of or relating to any facts or circumstances, or any acts or
omissions regarding the operation of the Business or any of its assets, existing prior to the
Closing Date whether or not such liability or obligation was known at the time of Closing,
including, without limitation, the Workers’ Compensation Claim; or

          (e) Any A/R that is not collected in full within 240 days of the Closing.

     8.2 Obligations of Purchaser to Indemnify. Purchaser shall indemnify, defend and hold
harmless Sellers and all of their respective heirs, successors and assigns from and against any
Losses based upon, arising out of or otherwise in respect of:

          (a) During the period of survival of such representation or warranty, any inaccuracy in or any
breach of any representation, warranty of Purchaser contained in this Agreement or any certificate
delivered by Purchaser pursuant hereto;

          (b) The failure to comply with any covenant of Purchaser set forth herein or in any instrument
or certificate delivered hereunder; or

          (c) Any Claim: (i) relating to the Business or any of its assets during any period on or
after the Closing Date; or (ii) arising out of (1) any facts or circumstances of, or (2) any acts
or omission regarding the operation of the Business or any of its assets, existing at or after the
Closing Date.

     8.3 Limitation of Liability.

          (a) Limitation of Liability of the Majority Shareholder.

               (1) The Majority Shareholder shall not have any liability (for indemnification or otherwise)
with respect to claims under Section 8.1 until the total amount of Losses with respect to such
matters exceeds $25,000, but then for the entire amount of such Losses; provided, however, that
this Section 8.3(a)(1) will not apply to claims under Sections 8.1(b) through 8.1(e) or to matters
arising in respect of Section 9.3 or to any inaccuracy in or breach of any of the Majority
Shareholder’s representations and warranties of which the Majority Shareholder had knowledge at
any time prior to the date on which such representation and warranty is made.

               (2) Further, the Majority Shareholder shall not have any liability (for indemnification or
otherwise) with respect to matters described in Section 8.1(a) to the extent that all Losses with
respect to such matters exceed $750,000; provided, however, that this Section 8.3(a)(2) will not
apply to matters

15

 

arising under Sections 3.1(l) or 3.1(t) or any inaccuracy in or breach of any of the Majority
Shareholder’s representations and warranties of which the Majority Shareholder had knowledge at
any time prior to the date on which such representation and warranty is made.

          (b) Limitation of Liability of Purchaser. 

               (1) Purchaser will have no liability (for indemnification or otherwise) with respect to
claims under Section 8.2 until the total amount of Losses with respect to such matters exceeds
$25,000, but then for the entire amount of such Losses; provided, however, that this Section
8.3(b)(1) will not apply to claims under Sections 8.2(b) through 8.2(c) or to matters arising in
respect of Section 9.3 or to any inaccuracy in or breach of any of Purchaser’s representations and
warranties of which the Purchaser had knowledge at any time prior to the date on which such
representation and warranty is made.

               (2) Further, Purchaser will have no liability (for indemnification or otherwise) with respect
to matters described in Section 8.2(a) to the extent that all Losses with respect to such matters
exceed $750,000; provided, however, that this Section 8.3(b)(2) will not apply to any inaccuracy
in or breach of any of Purchaser’s representations and warranties of which Purchaser had knowledge
at any time prior to the date on which such representation and warranty is made.

     8.4 General Indemnification Provisions.

          (a) For the purposes of this Section 8.4, the term “Indemnitee” shall refer to the Person or
Persons indemnified, or entitled, or claiming to be entitled to be indemnified, pursuant to the
provisions of Section 8.1 or 8.2, as the case may be; the term “Indemnitor” shall refer to the
Person or Persons having the obligation to indemnify pursuant to such provisions.

          (b) An Indemnitee shall promptly give the Indemnitor written notice (provided that the failure
to promptly give notice shall relieve the Indemnitor of its indemnification obligations hereunder
only to the extent, if any, that it is materially prejudiced thereby) of any matter which an
Indemnitee has determined has given or could give rise to a right of indemnification under this
Agreement. If an Indemnitee shall receive notice of any Claim of any third party that is subject
to the indemnification provided for in this Article IX (“Third Party Claims”) the
Indemnitee shall give the Indemnitor prompt written notice (“Notice”) of such Third Party
Claim (provided that the failure to promptly give such Notice shall relieve the Indemnitor of its
indemnification obligations hereunder only to the extent, if any, that it is materially prejudiced
thereby). The Indemnitee shall permit the Indemnitor, at its option, to assume and control the
defense of such Third Party Claim at its expense and through counsel of its choice (which counsel
shall be reasonably acceptable to the Indemnitee) if it gives written notice of its intention to do
so to the Indemnitee within 20 days after its receipt of the Notice. After notice from the
Indemnitor to the Indemnitee of the Indemnitor’s election to assume the defense of such Third-Party
Claim, the Indemnitor will not, so long as it diligently conducts such defense, be liable to the
Indemnitee for any fees of other counsel or any other expenses with respect to the defense of such
Third-Party Claim, in each case subsequently incurred by the Indemnitee in connection with the
defense of such Third-Party Claim, other than reasonable costs of investigation; provided, however,
if the Indemnitee reasonably believes that counsel chosen by the Indemnitor would have a conflict
of interest or if one or more defenses exist for the Indemnitee and not for the Indemnitor, the
Indemnitee shall have the right, at the Indemnitor’s expense, to be represented by counsel of its
own choosing in addition to counsel chosen by the Indemnitor. In the event the Indemnitor
exercises its right to undertake the defense against any such Third Party Claim as provided above,
the Indemnitee shall cooperate with the Indemnitor in such defense and make available to the
Indemnitor all witnesses, pertinent records, materials and information in its possession or under
its control relating thereto as is reasonably required by the Indemnitor. In the event that the
Indemnitor shall elect not to undertake such defense, or within a reasonable time after Notice of
any such claim from the Indemnitee shall fail to defend, the Indemnitee (upon further written
notice to the Indemnitor) shall have the right to undertake the defense, compromise or settlement
of such claim, by counsel or other representatives of its own choosing, on behalf of and for the
account and risk of the Indemnitor (subject to the right of the Indemnitor to assume the defense of
such claim at any reasonable time prior to settlement, compromise or final determination thereof).
In the event the Indemnitee is, directly or indirectly, conducting the defense against any such
Third Party Claim, the Indemnitor shall cooperate with the Indemnitee in such defense and make
available to it all such witnesses, records, materials and information in its possession or under
its control relating thereto as is reasonably required by the Indemnitee. Except for the
settlement of a Third Party Claim which involves the payment of money only and for which the
Indemnitee is totally

16

 

indemnified by the Indemnitor, no Third Party Claim may be settled by the Indemnitor without
the prior written consent of the Indemnitee. An Indemnitee may not settle or compromise a Third
Party Claim without the prior written consent of the Indemnitor, provided that the Indemnitor has
given the Indemnitee written notice that Indemnitor will fully indemnify the Indemnitee for such
Third Party Claim.

ARTICLE IX

GENERAL PROVISIONS

     9.1 Further Assurances. Purchaser on the one hand, and Sellers, on the other, shall
from time to time at the request of the other and without further consideration execute and deliver
to the other such additional instruments of conveyance, consents or other documents which shall be
reasonably requested by the other to evidence more fully the transfer by Sellers of the Company
Shares to Purchaser.

     9.2 Publicity. All public announcements relating to this Agreement or the
transactions contemplated hereby, including, without limitation, announcements to clients, vendors
and employees, shall be made only with the prior written consent of Purchaser and Sellers, not to
be unreasonably withheld; provided that Purchaser may make such public disclosures as may be
necessary or appropriate under applicable securities laws or listing agreements without seeking
Sellers’ consent.

     9.3 Finder’s Fees. Each party represents to the others that there is no finder,
broker, or similar Person entitled to a fee for the negotiation or execution of this Agreement or
the consummation of the transactions contemplated by this Agreement retained on its behalf, except
that Majority Shareholder has engaged The March Group Delaware, LLC (“March Group”) to
provide to Majority Shareholder certain services in connection with the transactions contemplated
by this Agreement and Sellers shall be solely responsible for the payment of any fees and expenses
of March Group.

     9.4 Governing Law; Arbitration.

          (a) This Agreement shall be governed by, and construed and enforced in accordance with, the
laws of the State of New York without regard to its provisions concerning conflicts or choice of
laws.

          (b) Any dispute or controversy arising under or in connection with this Agreement and the
transactions contemplated thereby shall be resolved by confidential binding arbitration which shall
be conducted before a panel of three (3) arbitrators in New York, New York, or at such other
location as the parties involved may mutually agree upon, in accordance with the Commercial
Arbitration Rules of the American Arbitration Association (“AAA”) then in effect. Unless
the parties involved agree otherwise, the panel of arbitrators will be selected by the AAA. The
panel of arbitrators shall not have the authority to add to, detract from or modify any provision
of this Agreement nor to award special, consequential or punitive damages to any injured party. A
decision by a majority of the panel of arbitrators shall be final and binding and judgment may be
entered on the award of the arbitrators by any court of competent jurisdiction. All fees and
expenses of the arbitration proceeding, including the fees and expenses of the AAA and the panel of
arbitrators, and the reasonable legal fees and expenses of the prevailing party, shall be borne by,
and be the responsibility of, the non-prevailing party.

     9.5 Notices. All notices, communications and deliveries hereunder shall be made in
writing signed by or on behalf of the party making the same and shall be delivered personally or by
facsimile or other electronic transmission or sent by registered or certified mail (return receipt
requested) or by any national overnight courier service (with postage and other fees prepaid) as
follows:

     If to Majority Shareholder to:

Mr. John Torrens

6368 East Seneca Turnpike

Jamesville, NY 13078

17

 

     If to K. Torrens to:

Kyle Palin Torrens

c/o John Torrens

6368 East Seneca Turnpike

Jamesville, NY 13078

     If to C. Torrens to:

Carlena Palin Torrens

c/o John Torrens

6368 East Seneca Turnpike

Jamesville, NY 13078

     in each case with a copy (which shall not constitute notice) to:

Sherrard & Roe, PLC

424 Church Street, Suite 2000

Nashville, TN 37219

Attn: Elizabeth E. Moore, Esq.

Facsimile: (615) 742-4539

     If to Purchaser to:

American Claims Evaluation, Inc.

One Jericho Plaza

Jericho, NY 11753

Attn: Gary Gelman

Fax: (516) 938-0405

     with a copy (which shall not constitute notice) to:

Siller Wilk LLP

675 Third Avenue

New York, NY 10017

Attn: Joel I. Frank, Esq.

Facsimile: (212) 752-6380

or to such other representative or at such other address of a party as such party may furnish to
the other party in writing. Any such notice, communication or delivery shall be deemed given or
made (a) on the date of delivery if delivered in person (by courier service or otherwise), (b) upon
transmission by facsimile or other electronic transmission if receipt is confirmed by telephone,
provided transmission is made during regular business hours, or if not, the next business day, or
(c) on the fifth (5th) business day after it is mailed by registered or certified mail.

     9.6 Entire Agreement; Amendments. This Agreement (including the schedules and
exhibits hereto) sets forth the entire agreement of the parties with respect to the subject matter
of this Agreement and supersedes any and all prior discussions, agreements, terms sheets or
understandings between them with respect to such matters. This Agreement may be modified only in
writing signed by all the parties hereto.

     9.7 Counterparts. This Agreement may be executed and delivered by facsimile or other
electronically-scanned signature pages and in one or more counterparts, each of which shall be
deemed an original, but all of which together will constitute one and the same instrument.

     9.8 Binding Effect; Assignment. This Agreement shall be binding upon and shall inure
to the benefit of, and be enforceable by, the parties and their permitted successors and assigns.
This Agreement may not be assigned by any party without the prior written consent of the other
parties; provided, however, that Purchaser may: (i) assign any or all of its rights and interests
hereunder to one or more of its affiliates or subsidiaries; or (ii) designate one or more of its
affiliates or subsidiaries to perform its obligations hereunder. Except as set forth in this

18

 

Agreement, nothing herein is intended to, nor shall it, create any rights in any Person other
than the parties and their respective successors and assigns.

     9.9 Amendments; Waiver; Consents. No amendment or waiver of any provision of this
Agreement nor consent to any departure therefrom shall in any event be effective unless the same
shall be in writing and signed by Purchaser and Sellers, and then such amendment or waiver shall be
effective only in the specific instance and for the specific purpose for which given, and shall not
operate as a waiver of, or estoppel with respect to, any subsequent or other breach of such
provision or be deemed to be or constitute a waiver of any other provision hereof. The failure by
a party to insist upon strict adherence to any provision of this Agreement on one or more occasions
shall not be considered a waiver or deprive it of the right thereafter to insist upon strict
adherence to that provision of any other provision of this Agreement. Whenever this Agreement
requires a permit or consent by or on behalf of either party hereto, such consent shall be
effective only if given in writing in a manner consistent with the requirements for a waiver of
compliance as set forth above.

     9.10 Headings. The Article and Section headings contained in this Agreement are for
reference purposes only and will not affect in any way the meaning or interpretation of this
Agreement.

     9.11 Specific Performance. Sellers and Purchaser each acknowledge that Purchaser
would not have an adequate remedy at law for money damages in the event that this Agreement were
not performed in accordance with its terms and therefore agree that Purchaser shall be entitled to
specific enforcement of the terms hereof in addition to any other remedy to which it may be
entitled at law or in equity.

     9.12 Severability of Provisions. If any provision or any portion of any provision of
this Agreement or the application of any such provision or any portion thereof to any Person or
circumstance, shall be held invalid, unenforceable or unreasonable, the remaining portion of such
provision and the remaining provisions of this Agreement, or the application of such provision or
portion of such provision as is held invalid, unenforceable or unreasonable to persons or
circumstances other than those as to which it is held invalid, unenforceable or unreasonable, shall
not be affected thereby and such provision or portion of any provision as shall have been held
invalid, unenforceable or unreasonable shall be deemed limited or modified to the extent necessary
to make it valid, enforceable and reasonable (including, without limitation, reformation as to the
maximum time, geographic or business limitation) and in no event shall this Agreement be rendered
void or unenforceable.

     9.13 Construction and References.

          (a) Words used in this Agreement, regardless of the number or gender specifically used, shall
be deemed and construed to include any other number, singular or plural, and any other gender,
masculine, feminine or neuter, as the context shall require. Unless otherwise specified, all
references in this Agreement to Sections, paragraphs or clauses are deemed references to the
corresponding Sections, paragraphs or clauses in this Agreement, and all references in this
Agreement to Schedules are references to the corresponding Schedules attached to this Agreement.

          (b) This Agreement shall not be construed for or against any party to this Agreement because
that party or its legal representative drafted all or any part of this Agreement.

[signature page to follow]

19

 

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

	 	 	 	 	 
	 	PURCHASER:

AMERICAN CLAIMS EVALUATION, INC.

 	 
	 	By:  	/s/ Gary Gelman
 	 
	 	Name:  	Gary Gelman 	 
	 	Title:  	President and Chief Executive Officer 	 
	 
	 	MAJORITY SHAREHOLDER:

 	 
	 	/s/ John Torrens
 	 
	 	John Torrens 	 
	 	 	 
	 
	 	K. TORRENS

 	 
	 	By:  	/s/ John Torrens
 	 
	 	John Torrens, as parent for a minor child 	 
	 	 	 	 
	 
	 	C. TORRENS

 	 
	 	By:  	/s/ John Torrens
 	 
	 	John Torrens, as parent for a minor child 	 
	 	 	 	 
	 

20EX-10.11

EXHIBIT 10.11

ESCROW AGREEMENT

     THIS ESCROW AGREEMENT (this “Agreement”) is made and entered into this 12th day of
September, 2008 by and among American Claims Evaluation, Inc., a New York corporation
(“Purchaser”), John Torrens (“Torrens”), Kyle Palin Torrens (“K. Torrens”),
Carlena Palin Torrens (“C. Torrens” and collectively with Torrens and K. Torrens the
“Sellers”) and Siller Wilk LLP, a New York limited liability partnership, as escrow agent
(“Escrow Agent”).

RECITALS

     WHEREAS, Purchaser and Sellers have entered into a Stock Purchase Agreement dated September
12, 2008 (the “Stock Purchase Agreement”) pursuant to which Sellers have agreed to sell to
Purchaser, and Purchaser has agreed to purchase from Sellers, all of the outstanding shares of
capital stock of Interactive Therapy Group Consultants, Inc., a New York corporation
(“ITG”), subject to the terms and conditions of the Stock Purchase Agreement; and

     WHEREAS, pursuant to the Stock Purchase Agreement, Purchaser has agreed to deposit a portion
of the Base Purchase Price (as defined in the Stock Purchase Agreement) in escrow with Escrow Agent
to be held and distributed by Escrow Agent on the terms and conditions set forth herein.

     NOW, THEREFORE, in consideration of the mutual promises and agreements set forth in this
Agreement, the parties hereto hereby agree as follows (capitalized terms used and not otherwise
defined in this Agreement have the respective meanings assigned to them in the Stock Purchase
Agreement):

     1. Appointment of Escrow Agent. Purchaser and Torrens hereby designate and appoint
Escrow Agent as escrow agent to receive, hold and disburse the Escrow Funds (as hereinafter
defined), and Escrow Agent hereby accepts such appointment and agrees to act in accordance with the
terms and conditions of this Agreement.

     2. Purpose.

          2.1 The purpose of the Escrow Funds is to assure that there are funds available to satisfy
Torrens’ indemnification obligations pursuant to Section 8.1(d) of the Stock Purchase Agreement in
respect of any amounts paid by ITG or Purchaser pursuant to a claim by the New York State Insurance
Fund for non-payment of workers’ compensation premiums in the amount of $81,354.00 which amounts
shall also include any penalties, fines and legal fees incurred by the Company or Purchaser in
connection with the payment or settlement of such claim for workers’ compensation premiums
(collectively, the “Workers’ Compensation Claim”) within 240 days of the Closing Date and
(ii) Section 8.1(e) of the Stock Purchase Agreement in respect of any A/R that is not collected in
full within 240 days of the Closing Date, as more fully set forth herein and in the Stock Purchase
Agreement.

          2.2 Purchaser, Torrens and Escrow Agent recognize that the Escrow Funds is established as a
non-exclusive source for the satisfaction of Torrens’ indemnification obligations in respect of the
(i) Workers’ Compensation Claim and (ii) Reimbursement Claim and the availability of the Escrow
Funds is not intended, nor does it constitute any limitation on the liability of Torrens under the
Stock Purchase Agreement and the other agreements or documents executed and delivered in connection
therewith, and it is not intended nor does it constitute the sole remedy available to Purchaser in
the event any such indemnification liability in excess of the Escrow Funds is asserted against
Torrens.

     3. Effective Date and Term. This Agreement will become effective on the date hereof
and shall remain in effect during the period set forth herein.

     4. Deposits. On the date hereof, Purchaser will deliver to Escrow Agent an amount
equal to $105,000 of the Purchase Price as set forth in Section 1.3 of the Stock Purchase
Agreement, $80,000 of which shall be held in respect of the Worker’s Compensation Claim (the
“W/C Escrow Funds”) and $25,000 of which shall be held in respect of the collectability of
the A/R (the “A/R Escrow Funds”) and together with the W/C Escrow Funds, the “Escrow
Funds”) by authorized transfer of funds to be held in escrow and disposed of in accordance with
the

 

 

provisions of this Agreement. Escrow Agent shall have no responsibility for enforcement of
deposit requirements hereunder.

     5. Investments of Escrow Funds. Until the release of the Escrow Funds in accordance
with the terms of this Agreement, Escrow Agent shall invest the Escrow Funds in an interest bearing
IOLA escrow account at the Bank listed on Schedule 1 attached hereto.

     6. Interest. All interest earned on the Escrow Funds shall be added to and considered
a part of the Escrow Funds and shall be proportionately allocated to the party or parties who
ultimately receive the Escrow Funds or portion thereof.

     7. Disposition of W/C Escrow Funds. Escrow Agent shall hold and disburse the W/C
Escrow Funds in accordance with the following procedures:

          7.1 In the event that following the date that is two hundred and forty (240) days following
the Closing Date (the “W/C Escrow Termination Date”), any amounts are claimed to be due
from the Company pursuant to the Worker’s Compensation Claim, Purchaser shall so notify Escrow
Agent and Torrens in writing (a “W/C Notice of Claim”), which written notice shall specify
the basis and amount of the W/C Escrow Funds (a “W/C Claim”) that is to be delivered to
Purchaser in satisfaction of Torrens’ indemnification obligations in Section 8.1(d) of the Stock
Purchase Agreement. Torrens shall give written notice of objection to such W/C Claim to Purchaser
and Escrow Agent within twenty (20) days after its receipt of a W/C Notice of Claim, provided that
any notice of objection shall identify the matters set forth in the W/C Notice of Claim which are
disputed and shall provide with reasonable specificity the amount of the W/C Claim which is in
dispute and the portion of the W/C Escrow Funds specified in the W/C Notice of Claim that Torrens
believes should not be delivered to Purchaser (the “Disputed W/C Escrow Funds”). Promptly
following delivery by Torrens of a notice of objection, or, in the absence of delivery of a notice
of objection within such 20-day period, then promptly following such 20-day period, Escrow Agent
shall, with respect to the undisputed amount of such W/C Claim or W/C Claims, deliver to Purchaser
out of the W/C Escrow Funds either (i) the amount of W/C Escrow Funds specified in the W/C Notice
of Claim if either (x) Torrens fails to deliver to Escrow Agent and Purchaser a notice of objection
during such 20-day period or (ii) all the W/C Escrow Funds specified in the W/C Notice of Claim
other than the Disputed W/C Escrow Funds, if any, in the case a notice of objection is delivered by
Torrens. Failure of Torrens to deliver a notice of objection within such 20-day period shall
constitute an irrevocable waiver on the part of Torrens of his right to object to the delivery to
Purchaser of the W/C Escrow Funds specified in the W/C Notice of Claim.

          7.2 If Escrow Agent receives a written notice of objection within the 20-day period referred
to in Section 7.1, then, concurrently with the payment to Purchaser of the undisputed amount of a
W/C Claim, if any, in accordance with Section 7.1, Escrow Agent shall continue to hold that portion
of the W/C Escrow Funds in dispute (an “W/C Disputed Fund”). In the event that a notice of
objection is timely given and Torrens, on the one hand, and Purchaser on the other hand fail to
reach agreement as to the disposition of any W/C Claims within thirty (30) days after receipt by
Purchaser and Escrow Agent of the notice of objection, Torrens and Purchaser may proceed to enforce
their respective rights by arbitration as provided in the Stock Purchase Agreement. Escrow Agent
shall distribute the portion of the W/C Escrow Funds accounted for as a W/C Disputed Fund promptly
upon delivery of and in accordance with the terms of (i) a joint written notice of Purchaser and
Torrens providing instructions therein and certifying that the dispute with respect to such W/C
Disputed Fund has been finally resolved, or (ii) the issuance of an arbitration award, directing
Escrow Agent as to the proper distribution of any amount so held. Torrens or Purchaser shall
deliver to Escrow Agent a certified copy of any order or decree in any award in such arbitration.
Escrow Agent shall act upon such judgment, award, order or decree which has become final (and not
subject to appeal) in like manner as though it constituted the joint instructions of Torrens and
Purchaser.

          7.3 If by the date that is five (5) days following the W/C Escrow Termination Date, Escrow
Agent has not received a W/C Notice of Claim from Purchaser, Escrow Agent shall release the W/C
Escrow Funds to Torrens.

     8. Disposition of A/R Escrow Funds. Escrow Agent shall hold and disburse the A/R
Escrow Funds in accordance with the following procedures:

          8.1 In the event that following the date that is two hundred and forty (240) days following
the Closing Date (the “A/R Escrow Termination Date”), any A/R is not collected in full,
Purchaser shall so notify

2

 

Escrow Agent and Torrens in writing (an “A/R Notice of Claim”), which written notice
shall specify the basis and amount of the A/R Escrow Funds (an “A/R Claim”) that is to be
delivered to Purchaser in satisfaction of Torrens’ indemnification obligations in Section 8.1(e) of
the Asset Purchase Agreement. Torrens shall give written notice of objection to such A/R Claim to
Purchaser and Escrow Agent within twenty (20) days after its receipt of an A/R Notice of Claim,
provided that any notice of objection shall identify the matters set forth in the A/R Notice of
Claim which are disputed and shall provide with reasonable specificity the amount of the A/R Claim
which is in dispute and the portion of the A/R Escrow Funds specified in the A/R Notice of Claim
that Torrens believes should not be delivered to Purchaser (the “Disputed A/R Escrow
Funds”). Promptly following delivery by Torrens of a notice of objection, or, in the absence
of delivery of a notice of objection within such 20-day period, then promptly following such 20-day
period, Escrow Agent shall, with respect to the undisputed amount of such A/R Claim or A/R Claims,
deliver to Purchaser out of the A/R Escrow Funds either (i) the amount of A/R Escrow Funds
specified in the A/R Notice of Claim if either (x) Torrens fails to deliver to Escrow Agent and
Purchaser a notice of objection during such 20-day period or (ii) all the A/R Escrow Funds
specified in the A/R Notice of Claim other than the Disputed A/R Escrow Funds, if any, in the case
a notice of objection is delivered by Torrens. Failure of Torrens to deliver a notice of objection
within such 20-day period shall constitute an irrevocable waiver on the part of Torrens of his
right to object to the delivery to Purchaser of the A/R Escrow Funds specified in the A/R Notice of
Claim.

          8.2 If Escrow Agent receives a written notice of objection within the 20-day period referred
to in Section 8.1, then, concurrently with the payment to Purchaser of the undisputed amount of an
A/R Claim, if any, in accordance with Section 8.1, Escrow Agent shall continue to hold that portion
of the A/R Escrow Funds in dispute (a “A/R Disputed Fund”). In the event that a notice of
objection is timely given and Torrens, on the one hand, and Purchaser on the other hand fail to
reach agreement as to the disposition of any A/R Claims within thirty (30) days after receipt by
Purchaser and Escrow Agent of the notice of objection, Torrens and Purchaser may proceed to enforce
their respective rights by arbitration as provided in the Stock Purchase Agreement. Escrow Agent
shall distribute the portion of the A/R Escrow Funds accounted for as an A/R Disputed Fund promptly
upon delivery of and in accordance with the terms of (i) a joint written notice of Purchaser and
Torrens providing instructions therein and certifying that the dispute with respect to such A/R
Disputed Fund has been finally resolved, or (ii) the issuance of an arbitration award, directing
Escrow Agent as to the proper distribution of any amount so held. Torrens or Purchaser shall
deliver to Escrow Agent a certified copy of any order or decree in any award in such arbitration.
Escrow Agent shall act upon such judgment, award, order or decree which has become final (and not
subject to appeal) in like manner as though it constituted the joint instructions of Torrens and
Purchaser.

          8.3 If by the date that is five (5) days following the A/R Escrow Termination Date, Escrow
Agent has not received an A/R Notice of Claim from Purchaser, Escrow Agent shall release the A/R
Escrow Funds to Torrens.

     9. Disbursement Disputes. If a controversy arises between one or more of the parties
hereto, or between any of the parties hereto and any Person not a party hereto, as to whether or
not or to whom Escrow Agent shall deliver the Escrow Funds, or any portion thereof, or as to any
other matter arising out of or relating to the Escrow Funds or this Agreement, Escrow Agent shall
not determine the same and shall not make any delivery of any disputed portion of the Escrow Funds,
but shall retain the same until the rights of the parties to the dispute shall have finally been
determined by written agreement among the parties to the dispute in accordance with Section 9.4 of
the Stock Purchase Agreement. Escrow Agent shall be entitled to assume that no such controversy
has arisen unless it has received written notice that such a controversy has arisen which refers
specifically to this Agreement and identifies by name and address the adverse claimants to the
controversy. If a controversy of the type referred to in this Paragraph 9 arises, Escrow Agent may
(but shall not be obligated to), in its sole discretion, commence interpleader or similar actions
or proceedings for the determination of the controversy.

     10. Escrow Agent’s Responsibilities. Escrow Agent’s sole responsibilities shall be
for the acceptance and safekeeping, the investment and disbursement and the disposition of the
Escrow Funds, all in accordance with the terms of this Agreement. Escrow Agent shall not be
required to take any other actions with reference to any matters which might arise in connection
with the Escrow Funds or this Escrow Agreement. Escrow Agent shall be entitled to rely upon the
authorizations of Purchaser and/or Torrens (as required herein) and may act upon any such written
instruction or other instruments which Escrow Agent in good faith believes to be genuine and what
they purport to be.

     Escrow Agent shall not be liable for any actions taken by it in good faith and believed to be
authorized or within the rights or powers conferred upon it by this Escrow Agreement or for any
actions which Escrow Agent may

3

 

take or refrain from taking in connection herewith, unless Escrow Agent is guilty of gross
negligence or willful misconduct. Escrow Agent may consult with legal counsel of its choice, and
shall have full and complete authorization and protection for any action taken or suffered by it
hereunder in good faith and in accordance with the opinion of such counsel, except actions
constituting gross negligence or willful misconduct. Escrow Agent has no duty to determine or
inquire into any happening or occurrence or performance or failure of performance by Purchaser or
Torrens or any other Person with respect to agreements or arrangements with each other or with any
other Person.

     11. Indemnification. Purchaser and Torrens each indemnify, defend and hold harmless
Escrow Agent against and from any and all Losses) that may arise out of or in connection with its
acting as Escrow Agent under this Agreement, except any Losses resulting from Escrow Agent’s
willful misconduct. The provisions of this Paragraph will survive the termination of this
Agreement.

     12. Waiver of Conflict; Reimbursement of Expenses.

          12.1 Purchaser and Torrens acknowledge that Escrow Agent is acting solely as escrow agent
hereunder without compensation and solely as an accommodation to Purchaser and Torrens. Escrow
Agent has performed and shall continue to perform legal services for Purchaser. Purchaser and
Torrens each waive any conflict with respect to the performance of such services and the
performance of the duties of the Escrow Agent pursuant to this Agreement.

          12.2 Escrow Agent shall be reimbursed for any reasonable expenses incurred, including any
legal fees and expenses arising out or in connection with its duties under this Agreement or that
may be incurred in the event that any disputes require the engagement of legal counsel to protect
the interests of Escrow Agent. Such reasonable expenses charged and/or incurred by Escrow Agent
will be shared equally by Purchaser and Torrens.

     13. Resignation of Escrow Agent. Escrow Agent may resign as escrow agent upon ten
(10) days prior written notice to Purchaser and Torrens, specifying the date upon which such
resignation shall become effective. Upon the effective date of such resignation, Escrow Agent
shall be discharged from any further obligation under this Agreement and the Stock Purchase
Agreement. In such event, Escrow Agent will cooperate fully with Purchaser and Torrens in the
orderly transfer of all funds, reports and other documents applicable to the Escrow Funds.

     14. Removal of Escrow Agent. Escrow Agent may be removed as escrow agent upon ten
(10) days prior written notice to Escrow Agent signed by Purchaser and Torrens, specifying the date
upon which such removal shall become effective. Upon the effective date of such removal, Escrow
Agent shall be discharged from any further obligations under this Agreement and the Stock Purchase
Agreement. In such event, Escrow Agent will cooperate fully with Purchaser and Torrens in the
orderly transfer of all funds, reports and other documents applicable to the Escrow Funds.

     15. Termination. This Escrow Agreement shall terminate upon the happening of any one
of the following events:

          15.1 Disposition of the entire Escrow Funds in accordance with the provisions of Paragraphs 7
and 8.

          15.2 Resignation of Escrow Agent in accordance with Paragraph 13.

          15.3 Removal of Escrow Agent in accordance with Paragraph 14.

     16. Binding Effect; Assignment. This Agreement shall be binding upon and shall inure
to the benefit of, and be enforceable by, the parties and their successors and permitted assigns.
This Agreement may not be assigned by any party without the prior written consent of the other
parties; provided, however, that Purchaser may (i) assign any or all of its rights and interests
hereunder to one or more of its affiliates or subsidiaries or (ii) designate one or more of its
affiliates or subsidiaries to perform its obligations hereunder. Except as set forth in this
Agreement, nothing herein is intended to, nor shall it, create any rights in any Person other than
the parties and their respective successors and permitted assigns.

     17. Notices. All notices, communications and deliveries hereunder shall be made in
writing signed by or on behalf of the party making the same and shall be delivered personally or by
facsimile or other electronic

4

 

transmission or sent by registered or certified mail (return receipt requested) or by any
national overnight courier service (with postage and other fees prepaid) as follows:

	 	 	 
	     If to Torrens to:
	 	 
	 
	 	 
	 

	 	Mr. John Torrens
	 

	 	6368 East Seneca Turnpike
	 

	 	Jamesville, NY 13078
	 
	 	 
	     If to K. Torrens to:
	 	 
	 
	 	 
	 

	 	Kyle Palin Torrens
	 

	 	c/o John Torrens
	 

	 	6368 East Seneca Turnpike
	 

	 	Jamesville, NY 13078
	 
	 	 
	     If to C. Torrens to:
	 	 
	 
	 	 
	 

	 	Carlena Palin Torrens
	 

	 	c/o John Torrens
	 

	 	6368 East Seneca Turnpike
	 

	 	Jamesville, NY 13078
	 
	 	 
	     In each case with a copy (which shall not constitute notice) to:
	 
	 	 
	 

	 	Sherrard & Roe, PLC
	 

	 	424 Church Street, Suite 2000
	 

	 	Nashville, Tennessee 37219-3304
	 

	 	Attn: Elizabeth E. Moore, Esq.
	 

	 	Facsimile: (615) 742-4539
	 
	 	 
	     If to Purchaser to:
	 	 
	 
	 	 
	 

	 	American Claims Evaluation, Inc.
	 

	 	One Jericho Plaza
	 

	 	Jericho, NY 11753
	 

	 	Attn: Gary Gelman
	 

	 	Facsimile: (516) 938-0405
	 
	 	 
	     with a copy (which shall not constitute notice) to:
	 
	 	 
	 

	 	Siller Wilk LLP
	 

	 	675 Third Avenue
	 

	 	New York, NY 10017
	 

	 	Attn: Joel I. Frank, Esq.
	 

	 	Facsimile: (212) 752-6380
	 
	 	 
	If to Escrow Agent to:
	 	 
	 
	 	 
	 

	 	Siller Wilk LLP
	 

	 	675 Third Avenue
	 

	 	New York, NY 10017
	 

	 	Attn: Joel I. Frank, Esq.
	 

	 	Facsimile: (212) 752-6380

or to such other representative or at such other address of a party as such party may furnish to
the other party in writing. Any such notice, communication or delivery shall be deemed given or
made (a) on the date of delivery if delivered in person (by courier service or otherwise), (b) upon
transmission by facsimile or other electronic transmission if receipt is confirmed by telephone,
provided transmission is made during regular business hours, or if not, the next business day, or
(c) on the fifth (5th) business day after it is mailed by registered or certified mail.

5

 

     18. Governing Law. This Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of New York without regard to its provisions concerning
conflicts or choice of laws.

     19. Entire Agreement; Amendments. This Agreement (including the schedule hereto) sets
forth the entire agreement of the parties with respect to the subject matter of this Agreement and
supersedes any and all prior discussions, agreements, terms sheets or understandings between them
with respect to such matters. This Agreement may be modified only in writing signed by all the
parties hereto.

     20. Counterparts. This Agreement may be executed and delivered by facsimile or other
electronically-scanned signature pages and in one or more counterparts, each of which shall be
deemed an original, but all of which together will constitute one and the same instrument.

     21. Headings. The Article and Section headings contained in this Agreement are for
reference purposes only and will not affect in any way the meaning or interpretation of this
Agreement.

     IN WITNESS WHEREOF, the parties hereto intending to be legally bound, have read and executed
this Agreement the day and year first above stated.

	 	 	 	 	 
	 	

AMERICAN CLAIMS EVALUATION, INC.

 	 
	 	By:  	/s/ Gary Gelman
 	 
	 	 	    Gary Gelman 	 
	 	 	    President and Chief Executive Officer 	 
	 
	 	 	 
	 	                                                                       /s/ John Torrens
 	 
	 	          John Torrens 	 
	 	 	 
	 
	 	 	 
	 	                                                                       /s/ John Torrens
 	 
	 	          John Torrens, as 	 
	 	          parent of Kyle Palin Torrens 	 
	 
	 	 	 
	 	                                                                       /s/ John Torrens
 	 
	 	          John Torrens, as  	 
	 	          parent of Carlena Palin Torrens 	 
	 

	 	 	 	 	 
	 	SILLER WILK LLP

 	 
	 	By:  	/s/ Joel I. Frank
 	 
	 	Title:	 Partner 	 
	 	 	 	 
	 

6

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