Document:

Execution Copy

                            ASSET PURCHASE AGREEMENT
                            ------------------------

     THIS ASSET PURCHASE AGREEMENT (this "Agreement") is entered into as of this
3rd day of May, 2004, by and among REHABCARE GROUP, INC., a Delaware corporation
("Parent"),  PHASE 2 CONSULTING,  INC., a Delaware  corporation and wholly-owned
subsidiary of Parent  ("Buyer"),  PHASE 2 CONSULTING,  INC., a Utah  corporation
("Seller")  and each of JOHN H.  SHORT,  PETER F.  SINGER and  HOWARD W.  SALMON
("Shareholders").

                                    RECITALS
                                    --------

     WHEREAS,  Shareholders own 100% of the issued and outstanding capital stock
of Seller; and

     WHEREAS,  Seller is in the business of providing healthcare  management and
economic  consulting to healthcare  organizations,  physician practices and long
term care and behavioral health providers and specializes in strategic planning,
clinical operations and productivity improvement,  business planning, market and
financial feasibility studies and market research and analysis (the "Business");
and

     WHEREAS,  Seller  and  Shareholders  desire  to sell,  assign,  convey  and
transfer to Buyer,  and Buyer  desires to acquire from Seller and  Shareholders,
certain of Seller's assets  associated  with the Business  pursuant to the terms
and conditions of this Agreement; and

     WHEREAS,   each  of  the  parties  hereto  desires  to  set  forth  certain
representations,   warranties,  covenants  and  indemnity  obligations,  and  to
establish  certain closing  conditions,  made to induce the other to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.

     NOW,  THEREFORE,  in  consideration  of the  premises,  the  covenants  and
agreements  herein  contained,  and other good and valuable  consideration,  the
receipt and  sufficiency  of which hereby are  acknowledged,  the parties hereto
agree as follows:

                                   ARTICLE 1
                                   ---------

                           SALE AND PURCHASE OF ASSETS
                           ---------------------------

1.1   Description of Purchased Assets; Closing.
      ----------------------------------------

(a)  At the  Closing on the  Closing  Date (each term as defined in Section  3.1
     hereof),  subject to the terms and conditions set forth in this  Agreement,
     Seller shall sell to Buyer,  and Buyer shall  purchase  from  Seller,  only
     those assets of Seller,  tangible or intangible,  wherever located, used in
     the conduct of the  Business,  which are set forth in this Section  1.1(a),
     free and clear of all liens, mortgages, security interests and encumbrances
     (collectively, the "Purchased Assets"):

     (i)  All right,  title and interest of Seller in and to all client accounts
          and client  contracts  existing in connection  with the Business which
          are set forth on Schedule  1.1(a)(i),  including,  but not limited to,
          all claims and rights under such client  contracts,  written and oral,
          all claims and rights relating to such clients served by Seller in the
          Business but not under written contracts,  all client lists,  records,
          computer  records  and other  similar  data  relating  to such  client
          accounts (collectively the "Client Contracts" and the Business clients
          the "Client Accounts");
<PAGE>

     (ii) Subject to any required consents, all right, title and interest in and
          to all Leases (as  defined  in  Section  4.4(b)) of real and  personal
          property set forth on Schedule  1.1(a)(ii)  attached hereto,  together
          with all deposits relating thereto;

     (iii)All property and equipment and other tangible  personal  property used
          or usable by Seller in the  Business  which are set forth on  Schedule
          1.1(a)(iii),  including,  without limitation,  leasehold improvements,
          furniture,   furnishings,   machinery,   equipment,  vehicles,  office
          supplies,  together  with all manuals,  records,  written  warranties,
          licenses and similar documents and rights relating thereto;

     (iv) All  right,  title and  interest  in and to all  written  bids,  sales
          orders,  purchase orders, sales contracts,  supply contracts and other
          contract  rights,  oral or written,  of Seller related to the Business
          which  are  set  forth  on   Schedule   1.1(a)(iv)   attached   hereto
          (collectively, the "Assumed Contracts");

     (v)  All accounts  receivable,  net of reserves for bad debt,  with current
          active  clients  arising from  transactions  of Seller in the Business
          outstanding  as of the Closing Date and those billed after the Closing
          Date for services rendered by Seller prior to the Closing Date whether
          such accounts  receivable  have been fully reserved for as uncollected
          accounts  receivable  or written off as  uncollectible  accounts  (the
          "Accounts Receivable");

     (vi) All  right,  title and  interest  of  Seller  in and to the  following
          intellectual   property  used  in  the  Business:   (i)  all  patents,
          trademarks,  service marks, artwork designs, trade dress, logos, trade
          names,  including the trade name "Phase 2  Consulting,"  and corporate
          names,  together with all translations,  adaptations,  derivations and
          combinations  thereof and including all goodwill associated  therewith
          and  all  applications,   registrations  and  renewals  in  connection
          therewith,  (ii)  all  copyrightable  works,  all  copyrights  and all
          applications,  registrations and renewals in connection therewith, and
          (iii)  all  trade  secrets  and  confidential   business   information
          (including technical data, know-how, mailing lists, customer files and
          account  histories,  customer  and  supply  lists,  pricing  and  cost
          information and business and marketing plans and proposals)  which are
          set forth on Schedule  1.1(a)(vi) attached hereto  (collectively,  the
          "Intellectual Property");

     (vii)All files,  books and records  (including  computer records) of Seller
          relating to the foregoing items; and

     (viii) The Business as a going concern, including all goodwill thereof.

(b)  Excluded Assets.  Notwithstanding  the provisions of Section 1.1(a),  Buyer
     shall not be entitled to  purchase,  nor shall  Seller be required to sell,
     whether  or not  relating  to the  Business,  any  other  asset of  Seller,
     including  without  limitation,  the following  assets  (collectively,  the
     "Excluded Assets"):

                                      -2-
<PAGE>

     (i)  Income  and  franchise  tax  returns,  information  returns,  reports,
          elections  and work  papers of Seller (it being  understood  that upon
          request,  Buyer  shall  have  reasonable  access to copies of any such
          documents   relating  to  the  Business   subject  to  any  applicable
          confidentiality  obligations  of Seller with respect to such documents
          imposed by applicable  law),  and any rights to income tax refunds and
          prepaid income taxes;

     (ii) Any right and  interest  of  Seller  in this  Agreement  and any other
          agreements and instruments to be executed by Seller in connection with
          the sale of the Purchased Assets and other  transactions  contemplated
          by this Agreement;

     (iii)Except  as  otherwise   provided  herein,  any  and  all  of  Seller's
          insurance policies, including all rights to coverage, all proceeds and
          all prepaid insurance under such policies;

     (iv) The cash, cash  equivalents,  investments and securities of Seller and
          accounts  receivables  of Seller not related to the Business (it being
          understood  that Buyer is  purchasing  the Accounts  Receivable as set
          forth in Section 1.1(a)(v));

     (v)  All real  property  owned or  leased  by  Seller  and  whether  or not
          relating to the Business,  except as specifically set forth in Section
          1.1(a);

     (vi) All of Seller's rights and liabilities  under the Verus stock purchase
          agreement,  which shall include any subsequent  investment in Verus by
          Seller;

     (vii)All  contracts and  agreements  of Seller,  whether or not relating to
          the  Business,  other  than  the  Client  Contracts  and  the  Assumed
          Contracts set forth in Section 1.1(a);

     (viii) Seller's corporate seal, charter and minutes and stock record books;

     (ix) All motor  vehicles  owned or leased by Seller whether or not relating
          to the Business; and

     (x)  All assets and rights of Seller,  whether used in the Business or not,
          not set forth in Section 1.1(a).

1.2   Purchase Price.
      ---------------
The  aggregate  consideration  to be paid by Buyer to Seller  for the  Purchased
Assets shall be cash in the aggregate  amount of Five Million and 00/100 Dollars
($5,000,000.00)  (the "Purchase  Price"),  subject to adjustment as set forth in
Section 1.3, payable as follows:

(a)  by delivery to Seller on the Closing  Date the amount of  $4,709,277.33  by
     wire  transfer of  immediately  available  funds  pursuant to written  wire
     transfer instructions provided to Buyer by Seller at least two (2) business
     days prior to the Closing Date; and

(b)  by delivery to U.S Bank on the Closing  Date the amount of  $290,722.67  by
     wire  transfer of  immediately  available  funds  pursuant to written  wire
     transfer instructions provided to Buyer by U.S. Bank.

                                      -3-
<PAGE>

1.3   Purchase Price Adjustment for Closing Working Capital.
      ------------------------------------------------------

(a)  Subject to the adjustments  set forth below in this Section 1.3(a),  Seller
     shall use its reasonable best efforts to have on the Closing Date,  Working
     Capital (as  defined in this  Section  1.3(a)) in an amount  equal to Eight
     Hundred  Seventy-Four  Thousand Dollars  ($874,000.00) (the "Agreed Working
     Capital").  For purposes of this Section  1.3(a),  the term Working Capital
     shall mean the amount by which the aggregate book value of Seller's current
     assets  exceeds the aggregate book value of Seller's  current  liabilities,
     all as  determined  in accordance  with United  States  generally  accepted
     accounting  principles as in effect on the date of this Agreement  ("GAAP")
     applied  on a  consistent  basis  throughout  the  periods  covered by such
     statements,  except  for the  exclusion  of  deferred  bonus  and  deferred
     partnership distribution liabilities,  and consistent with the presentation
     in the balance  sheet as of March 31,  2004 as attached  hereto on Schedule
     1.3(a) (the "Reference Balance Sheet"),  but  notwithstanding any provision
     of GAAP to the contrary,  specifically including in Seller's current assets
     all  work-in-process  as of the Closing Date and specifically  including in
     Seller's  current  liabilities  the aggregate  amount of all obligations of
     Seller under any long-term  capital  leases and  specifically  including in
     Seller's  current  assets  any  deposits  associated  with  the  management
     retreat. For purposes of determining  Seller's current liabilities,  in the
     event that the  Closing  shall occur on a date not the end of the month the
     amount of each expense historically accrued by Seller on a monthly or other
     non-daily basis,  including any expense for Taxes,  shall,  notwithstanding
     any  provision of GAAP to the  contrary,  be calculated by (i) dividing the
     aggregate  amount  of such  historical  monthly  accrual  by 30,  and  (ii)
     multiplying such per diem amount by the number of days expired in the month
     up to and  including  the Closing  Date.  To the extent,  if any,  that the
     Actual  Working  Capital (as defined in Section  1.3(b) below) is less than
     the Agreed Working Capital,  Seller and/or  Shareholders  shall, within the
     earlier to occur of ninety  (90)  calendar  days  after the  Closing or the
     final  determination  (as set forth in Section  1.3(c) below) of the Actual
     Working  Capital,  deliver to Buyer a check in the amount required to bring
     the Actual Working  Capital up to the Agreed Working  Capital level. In the
     event the Actual Working Capital exceeds the Agreed Working Capital,  Buyer
     shall  deliver a check to Seller in an amount  equal to the Actual  Working
     Capital in excess of the Agreed Working Capital within the same timeframe.

(b)  Not more than 60 days after the  Closing  Date,  Buyer  shall  prepare  and
     deliver to  Shareholders  a balance  sheet of Seller as of the Closing Date
     (the "Closing Balance Sheet")  indicating,  among other things, the Working
     Capital of Seller as of the Closing  Date (the "Actual  Working  Capital").
     Such  Closing   Balance  Sheet  shall  be  prepared   consistent  with  the
     presentation  in the Reference  Balance Sheet and in accordance  with GAAP,
     applied  on a  consistent  basis  throughout  the  periods  covered by such
     statement,  subject  to the  exceptions  specifically  set forth in Section
     1.3(a).  Seller  and/or  Shareholders  shall  have  thirty  (30) days after
     receipt of the  Closing  Balance  Sheet to  independently  verify  that the
     information  contained  thereon is both  accurate  and complete and to give
     written notice to Buyer of any  discrepancies.  Buyer shall  cooperate with
     Seller  and  Shareholders  during  the  verification  period  by  providing
     documentation  and  other  information  which  Seller or  Shareholders  may
     reasonably request to assist in verifying the information  contained on the
     Closing  Balance Sheet.  The costs and expenses  related to the preparation
     and  verification  of the Closing  Balance  Sheet as  contemplated  in this
     Section  1.3(b)  shall  be  borne  by the  party  incurring  such  costs or
     expenses.

(c)  The parties  shall in good faith attempt to resolve the  discrepancies,  if
     any, in the Closing  Balance  Sheet.  Should the parties be unable to agree
     within five (5) days after the end of the  verification  period,  then such
     dispute  shall be  submitted  for  resolution  to the St. Louis office of a
     nationally  recognized public accounting firm acceptable to the parties and
     the determination of such firm shall be binding upon the parties. Buyer and
     Shareholders  shall  direct  such  firm to  render a  determination  on any
     submitted  dispute within thirty (30) days after its retention.  Buyer,  on
     the one hand, and  Shareholders,  on the other,  shall each pay one-half of
     such firm's fees and expenses in connection with such services.

                                      -4-
<PAGE>

1.4   Purchase Price Allocation.
      --------------------------
Following  the  Closing,  Buyer and Seller  agree to use their  best  efforts to
allocate the Purchase  Price  between and among the  Purchased  Assets.  Neither
Buyer nor  Seller  shall take a  position  in any Return (as  defined in Section
4.3), examination or other administrative or judicial proceeding relating to any
Return, that is inconsistent with such allocation.

1.5   Further Assurances.
      -------------------
At any time and from time to time before and after the  Closing,  at the request
of any party and  without  further  consideration,  each  party  promptly  shall
execute and deliver such instruments of sale, transfer,  conveyance,  assignment
assumption and  confirmation,  and take such other action,  as may be reasonably
requested to more effectively carry out the intent of this Agreement.

                                   ARTICLE 2

                        ASSUMPTION OF CERTAIN LIABILITIES

2.1   Assumed Liabilities.
      --------------------
At the Closing,  Seller shall  assign,  and Buyer shall assume and agree to pay,
discharge or perform, as applicable,  pre-closing liabilities to the extent that
such   liabilities  are  included  in  the  Closing  Balance  Sheet  as  current
liabilities,  and those  obligations and liabilities  accruing after the Closing
Date under the Client  Contracts and Assumed  Contracts  transferred and validly
assigned to Buyer in accordance  with Section 1.1(a) hereof  (collectively,  the
"Assumed Liabilities").

2.2   Excluded Liabilities.
      ---------------------
Notwithstanding  the  provisions  of Section  2.1,  Buyer shall not assume,  and
Seller shall remain liable for, any and all liabilities, obligations, claims and
commitments of or against Seller which are not  specifically set forth herein as
being  expressly  assumed by Buyer (and  regardless  of whether set forth on any
Schedule hereto),  whether the same are known or unknown,  existing,  contingent
upon future events or circumstances, accrued, funded, unfunded or otherwise (the
"Excluded Liabilities"), including, without limitation:

(a)  any Taxes (as defined in Section  4.3)  imposed on Seller  (including  with
     respect to the  Excluded  Assets at any time) or relating  to the  Business
     (including the Purchased Assets) for any period (or portion thereof) ending
     on or prior to the Closing Date;

(b)  any liability or obligation resulting from any formal or informal,  written
     or unwritten,  agreement with respect to employee  compensation,  severance
     pay, bonus, partner  distributions,  pension,  retirement,  profit sharing,
     health or medical  benefit,  welfare plan, or any other employee benefit or
     fringe  benefit  plan  and  any  stock  option  arrangements,  warrants  or
     employment  agreements  for services for periods on or prior to the Closing
     Date;

(c)  any  liability or obligation  relating to the Business or Purchased  Assets
     arising  out of any event or  occurrence  or a claim  arising  prior to the
     Closing Date;

(d)  any liabilities or obligations of Seller relating to the Excluded Assets;

(e)  any  liability or  obligation  of Seller  arising or incurred in connection
     with the  negotiation,  preparation and execution of this Agreement and the
     consummation of the transactions  contemplated  hereby,  including  without
     limitation,  fees  and  expenses  of its  counsel,  accountants  and  other
     advisors;

                                      -5-
<PAGE>

(f)  any  liabilities  of Seller for  commissions  or fees owed to any finder or
     broker   retained  by  Seller  or   Shareholders  in  connection  with  the
     transactions contemplated hereby;

(g)  any obligation,  liability,  injury or damage arising, accruing or existing
     prior to the Closing  Date with  respect to Seller's  employees,  including
     without  limitation  any matters  arising  under laws  governing  wages and
     hours, employment  discrimination,  sexual harassment,  occupational safety
     and  health,   workers'  compensation,   the  payment  and  withholding  of
     employment taxes and any alleged violations of law;

(h)  any liability of Seller or with respect to the Business for any  violations
     of any law, regulation or rule to the extent arising from acts or omissions
     prior to the Closing Date, including, without limitation, applicable health
     care laws, rules and  regulations,  including those relating to the payment
     or receipt of illegal  remuneration,  including  42 U.S.C.  ss.1395nn  (the
     Stark Statute), 42 U.S.C. ss.1320a-7a, 42 U.S.C. ss.1320a-7b(a),  42 U.S.C.
     ss.1320a-7b(c)  and any  applicable  state  laws  governing  kickbacks  and
     matters  similar to such  federal  statutes  (collectively,  the "Fraud and
     Abuse Laws"); and

(i)  any liability that  represents  amounts owed by Seller that are past due or
     contractually  due on or prior to the Closing  Date,  including any amounts
     owing by Seller under any of the Client Contracts on or prior to Closing.

                                   ARTICLE 3
                                   ---------

                            CLOSING AND CLOSING DATE
                            ------------------------

3.1   Closing.
      --------
The  closing  ("Closing")  of  the  sale  of  the  Purchased  Assets  and  other
transactions  contemplated  by this Agreement shall take place at the offices of
Thompson Coburn LLP, One US Bank Plaza, St. Louis,  Missouri 63101 commencing at
9:00 a.m.,  local time, on May 3, 2004 or on such other date  ("Closing  Date"),
not later  than  June 30,  2004,  or at such  other  place as Buyer  and  Seller
mutually shall agree.

3.2   Simultaneous Closing.
      ---------------------
All actions taken at the Closing shall be deemed to be performed  simultaneously
and the Closing shall not be deemed to have occurred until all required  actions
of the parties pursuant to this Agreement have been performed. The parties shall
deliver  such  additional  documents  and take such  additional  actions  as may
reasonably be deemed necessary to complete the transactions contemplated by this
Agreement.

                                   ARTICLE 4
                                   ---------

            REPRESENTATIONS AND WARRANTIES OF SELLER AND SHAREHOLDERS
            ---------------------------------------------------------

     Seller and Shareholders  hereby jointly and severally represent and warrant
to Buyer on the date of this Agreement, and again on and as of the Closing Date,
as follows:

                                      -6-
<PAGE>

4.1   Status of Seller.
      -----------------

(a)  Existence and Status.  Seller is a corporation duly organized,  entitled to
     conduct  business and validly  existing in good standing  under the laws of
     the State of Utah.

(b)  Articles of Incorporation and Bylaws of Seller.  Attached to this Agreement
     as Exhibit A and Exhibit B,  respectively,  are copies of: (i) the original
     Articles  of  Incorporation  of Seller  and all  amendments,  restatements,
     articles of merger,  or other  filings with respect  thereto,  and (ii) the
     currently  effective  Bylaws of Seller.  All amendments to, and articles of
     merger and other filings with respect to, the Articles of  Incorporation of
     Seller were made in accordance  with the Articles of  Incorporation  (as in
     effect  before  the  amendment  of the  articles  or filings  with  respect
     thereto),  and the Bylaws and applicable law of Seller without violation of
     any preemptive  rights, and Seller has otherwise complied with its Articles
     of Incorporation and Bylaws as in effect at the applicable time.

(c)  Corporate  Power of  Seller.  Seller  has the  power to own and  lease  the
     Purchased  Assets  and  otherwise  to conduct  the  Business  as  currently
     conducted.

(d)  Ownership  Interests.  Seller has no subsidiaries or any equity  securities
     of, investment in or loans or advances to any business enterprise or person
     or any agreements or commitments  for such (other than trade terms extended
     to  customers  in the ordinary  course of  business),  or is subject to any
     arrangement  that could be treated as a partnership  for federal income tax
     purposes.

(e)  Foreign  Qualification.  Schedule 4.1(e) lists the  jurisdictions  in which
     Seller is  qualified to do business as a foreign  corporation,  and nothing
     (including  the  nature  of or the  manner  in which  Seller  conducts  its
     business,  the character or location of the  properties  which Seller owns,
     leases or uses or the actions or location of  employees  or agents)  either
     requires  Seller to be  qualified  in any other  jurisdiction  or  subjects
     Seller to any cost, restriction or penalty for failing to qualify.

(f)  Authorization.

     (i)  Seller and each  Shareholder  has the right,  power and  authority  to
          enter into this  Agreement  and each other  agreement,  instrument  or
          other  document  contemplated  hereunder  (collectively,   the  "Other
          Agreements")  to  which  they  are a  party,  and  to  consummate  the
          transactions contemplated by, and otherwise to comply with and perform
          their  respective  obligations  under,  this Agreement and each of the
          Other Agreements referred to herein;

     (ii) The execution  and delivery by Seller of this  Agreement and the Other
          Agreements to which it is a party,  and the  consummation by Seller of
          the  transactions  contemplated  by,  and  other  compliance  with and
          performance of its obligations  under,  this Agreement and each of the
          Other Agreements, have been duly authorized by all necessary corporate
          action  on the part of  Seller  in  compliance  with the  Articles  of
          Incorporation  and Bylaws  (each as amended) of Seller and  applicable
          law; and

     (iii)This  Agreement  and each of the Other  Agreements to which Seller and
          each  Shareholder  are  parties,  constitute  the  valid  and  binding
          agreement of Seller and each Shareholder, as the case may be, that are
          enforceable  against Seller and each Shareholder,  as the case may be,
          in accordance with its terms.

                                      -7-
<PAGE>

(g)  Absence of Violations or Conflicts. Except as disclosed in Schedule 4.1(g),
     the  execution and delivery of this  Agreement and the Other  Agreements by
     Seller  and   Shareholders   and  the   consummation  of  the  transactions
     contemplated  by,  or other  compliance  with or  performance  under,  this
     Agreement and the Other  Agreements do not and will not with the passage of
     time or giving of notice or both:

     (i)  constitute a violation of, be in conflict  with,  constitute a default
          or require any payment  under,  permit a termination  of,  require any
          consent or approval  under, or result in the creation or imposition of
          any lien,  encumbrance  or other adverse claim or interest upon any of
          the Purchased  Assets under (A) any contract,  agreement,  commitment,
          undertaking or  understanding to which any of the Purchased Assets are
          subject  or  bound,   (B)  any  judgment,   decree  or  order  of  any
          governmental  authority to which Seller, any of Shareholders or any of
          the Purchased  Assets are subject or bound, (C) any applicable law, or
          (D) any  governing  or  applicable  agreements,  instruments  or other
          documents to which Seller (including its Articles of Incorporation and
          Bylaws (each as amended)) is a party; or

     (ii) create,  result in a Material  Adverse  Change (as  defined in Section
          4.2(c)(i))  to or cause  the  acceleration  of the  maturity  of,  any
          Assumed Liabilities.

(h)  No  Governmental  Consents  Required.  No  consent,   approval,   order  or
     authorization  of,  or  registration,   declaration  or  filing  with,  any
     governmental authority on the part of Seller is required in connection with
     the execution or delivery of this  Agreement,  the Other  Agreements or the
     consummation of the transactions  contemplated by, or other compliance with
     or performance under, this Agreement or the Other Agreements.

4.2   Financial Matters.
      ------------------

(a)  Seller Financial  Statements.  Copies of the unaudited financial statements
     of Seller as of and for the fiscal  years ended  December 31, 2003 and 2002
     and the three  months  ended  March 31, 2004 (all of which,  including  the
     notes  thereto,  are  collectively  referred  to in this  Agreement  as the
     "Seller Financial Statements," with the balance sheet of Seller as of March
     31, 2004 referred to separately as the "Seller Balance Sheet") are attached
     hereto as  Schedule  4.2.  Seller  Financial  Statements  were  prepared in
     accordance  with the  books and  records  of Seller  and are  complete  and
     accurate in all material respects,  fairly present the financial  condition
     of Seller as of their  respective  dates and the results of  operations  of
     Seller for the  respective  periods  then ended and have been  prepared  in
     accordance with GAAP applied on a consistent  basis  throughout the periods
     covered by such statements,  except for the exclusion of deferred bonus and
     deferred partnership distribution liabilities.

(b)  Absence of Undisclosed  Liabilities.  Except as and to the extent expressly
     reflected  in Seller  Financial  Statements  or reserved  against in Seller
     Balance Sheet, there are no other liabilities of any nature relating to the
     Purchased Assets, whether accrued, direct, indirect, absolute,  contingent,
     changing,  known,  unknown,   determinable,   indeterminable,   liquidated,
     unliquidated or otherwise and whether due or to become due, relating to any
     existing or prior act, omission, condition or state of facts.

(c)  Absence of Certain  Changes.  Since March 31, 2004,  there has not been any
     activity  with  respect  to Seller  other  than in the  ordinary  course of
     business and, without limiting the foregoing, there has not been:

                                      -8-
<PAGE>

     (i)  any material  adverse change in or loss to the Purchased Assets or the
          operations,   liabilities,   earnings,   relationships  with  existing
          clients,  business  or  condition  (financial  or  otherwise)  of  the
          Business  which  have  been or could  reasonably  be  expected  to be,
          individually  or in  the  aggregate  with  other  changes,  materially
          adverse to the Business or the Purchased  Assets (a "Material  Adverse
          Change");

     (ii) any increase in the  compensation  payable by Seller to any officer of
          Seller or Retained  Employee  (as defined  herein)  other than routine
          increases made in the ordinary course of business consistent with past
          practice  and not in  excess  of five  percent  (5%) of such  Retained
          Employee's  annual  salary,  or  any  bonus,  incentive  compensation,
          service  award  or  other  like  benefit,  granted,  made or  accrued,
          contingently or otherwise, to or for the credit of any of such officer
          or Retained Employee, or any employee welfare, pension,  retirement or
          similar  payment or  arrangement  made or agreed to by Seller in which
          any such officer or Retained Employee participates;

     (iii)any capital  expenditure  or commitment to make a capital  expenditure
          with respect to the Purchased  Assets  (exclusive of expenditures  for
          repair or maintenance in the ordinary course of business);

     (iv) any  incurrence  of any  extraordinary  loss or knowing  waiver of any
          rights  of value by  Seller  in  connection  with  any  aspect  of the
          Business, whether or not in the ordinary course of business;

     (v)  any  cancellation,  termination or amendment by Seller of any contract
          or agreement included in the Purchased Assets and to which Seller is a
          party or by which Seller is bound;

     (vi) any  failure  on the part of Seller to  operate  the  Business  in the
          ordinary  course so as to preserve its business  organization  intact,
          including  the  services of Seller's  present  officers,  professional
          staff and employees and the goodwill of Seller's suppliers,  customers
          and others having business relations with Seller;

     (vii)any sale, assignment or transfer (including,  without limitation,  any
          collateral  assignment  or the  granting  or  permitting  of any lien,
          encumbrance or other claim) of any of the Purchased  Assets other than
          in the ordinary course of business and consistent with past practices;

     (viii) any amendment, modification, waiver or cancellation of any debt owed
          to, or claim  of,  Seller,  or  settlement  by  Seller of any  dispute
          involving any payment or other  obligation due to or owed by Seller to
          be made or performed after the Closing Date which constitutes an Asset
          or an Assumed Liability; or

     (ix) any  agreement by or  commitment  of Seller to do or permit any of the
          foregoing.

4.3   Taxes.
      ------
Notwithstanding  anything in this  Agreement to the  contrary,  this Section 4.3
shall not apply with  respect to any Tax or Taxes (as such terms are  defined in
this  Section  4.3) to the extent  that from and after  Closing,  the  Purchased
Assets  are not  subject  to a lien  for  such Tax or  Taxes,  and  Buyer or its
affiliates are not liable for such Tax or Taxes.

                                      -9-
<PAGE>

(a)  Definitions. For purposes of this Agreement:

     (i)  the term  "Code"  shall mean the  Internal  Revenue  Code of 1986,  as
          amended.  All citations to the Code or to the regulations  promulgated
          thereunder shall include any amendments or any substitute or successor
          provisions thereto;

     (ii) the  term   "Returns"   shall   mean,   collectively,   all   reports,
          declarations,  estimates, returns, information statements, and similar
          documents  relating  to, or  required  to be filed in respect  of, any
          Taxes; and

     (iii)the term "Taxes" shall mean (A) all income, net income,  gross income,
          gross receipts, sales, use, ad valorem,  franchise,  profits, license,
          lease, service, service use, withholding, employment, payroll, excise,
          severance,  transfer,  documentary,   mortgage,  registration,  stamp,
          occupation,   environmental,  premium,  property,  windfall,  profits,
          customs,  duties, and other taxes, fees, assessments or charges of any
          kind  whatever,  together  with  any  interest,  penalties  and  other
          additions with respect thereto,  imposed by any federal,  territorial,
          state, local or foreign government;  and (B) any penalties,  interest,
          or other additions to tax for the failure to collect, withhold, or pay
          over any of the foregoing,  or to accurately file any Return;  and the
          term "Tax" shall mean any one of the foregoing  Taxes.  When used with
          reference  to specified  persons (for example and without  limitation,
          "Taxes of  Seller"),  the terms  "Taxes" and "Tax" shall  include only
          amounts of, or in respect of, Taxes for which such person is, or could
          become,  liable in whole or part (including,  without limitation,  any
          obligation in connection with a duty to collect, withhold, or pay over
          any Taxes,  any  obligation  to contribute to the payment of any Taxes
          determined  on  a  consolidated,   combined,  or  unitary  basis,  any
          liability as a transferee, or any liability as a result of any express
          or implied  obligation  to  indemnify  or pay the Tax  obligations  of
          another person).

(b)  Returns  Filed and Taxes  Paid.  Except  as set forth on  Schedule  4.3(b),
     Seller duly filed or caused to be filed,  on or before the due date thereof
     (as appropriately  extended) with the appropriate taxing  authorities,  all
     Returns that it is required to file,  and each such Return  (including  any
     amendment thereto) is true, correct, and complete in all material respects.
     All Taxes of Seller due with  respect  to, or shown to be due on, each such
     Return (or amendment) or subsequent  assessment with regard  thereto,  have
     been  timely  paid.  There  is no valid  basis  for the  assessment  of any
     deficiency  with  regard  to any such  Return  and  except  as set forth on
     Schedule 4.3(b), there are no extensions of time to file which are pending.
     No other  Taxes of Seller are due with  respect to any  taxable  periods or
     portions  of periods  ending on or before the  Closing  Date.  There are no
     liens, attachments,  or similar encumbrances on any of the Purchased Assets
     of Seller  with  respect to any Taxes,  other than liens for Taxes that are
     not yet due and payable. Seller has collected or withheld all Taxes that it
     is required to collect or withhold.

(c)  Audit  History  and  Other  Proceedings.  There are no  pending  or, to the
     Knowledge  (as  defined in  Section  4.15(b))  of Seller and  Shareholders,
     threatened (either in writing or verbally,  formally or informally) audits,
     investigations,  claims,  suits or other proceedings for or relating to any
     material liability in respect of Taxes of Seller. No material  deficiencies
     for Taxes of Seller have been  claimed,  proposed or assessed by any taxing
     or other  governmental  authority and there are no matters under discussion
     with any governmental  authorities with respect to Taxes, that could result
     in any  additional  amount of Taxes of Seller and that could  reasonably be
     expected to affect the Business or the Purchased  Assets. No extension of a
     statute of limitations  (whether  arising by reason of a waiver,  claim for
     refund,  or  otherwise) in respect of such Taxes is in effect and there are
     no  requests  for rulings or  determinations  in respect of Taxes of Seller
     pending with any governmental authority.

                                      -10-
<PAGE>

4.4   Title to and Condition of Purchased Assets.
      ------------------------------------------

(a)  Title to  Purchased  Assets.  Except as set forth on Schedule  4.4(a):  (i)
     Seller has good and marketable  title to all of the Purchased  Assets;  and
     (ii) none of the  Purchased  Assets is subject to any lien,  claim or other
     encumbrance whatsoever, except (A) liens for taxes not yet due and payable,
     (B) liens shown and described in Seller Balance Sheet, (C) liens imposed by
     law and incurred in the ordinary course of business for obligations not yet
     due and payable to landlords, carriers, warehousemen, laborers, materialmen
     and the like,  and (D) liens to secure  repayment  of the  indebtedness  of
     Seller under any of the Debt  Instruments (as defined in Section 4.6(a) and
     more  fully  described  on  Schedule  4.6(a)  hereto)  (collectively,   the
     "Permitted Liens").

(b)  Leases;  Subleases.  For  purposes  of this  Agreement,  "Lease"  means any
     written  or oral  lease,  sublease  or rental  agreement  (and any  related
     contract and agreement)  included as part of the Purchased Assets,  and all
     amendments,  modifications and supplements thereof and waivers and consents
     thereunder pursuant to which Seller leases,  subleases or rents any real or
     personal  property  included  in the  Purchased  Assets,  either as lessor,
     lessee,  landlord or tenant.  Schedule 1.1(a)(ii) lists all Leases included
     in the Purchased  Assets,  except those which (i) can be canceled by Seller
     upon 30 or fewer  days'  notice  without  penalty  or the  acceleration  of
     rentals,  (ii) do not grant an option to purchase the leased property,  and
     (iii)  involve an annual  rental of $15,000  or less.  Schedule  1.1(a)(ii)
     describes all oral Leases required to be disclosed in Schedule  1.1(a)(ii),
     and true and complete copies of all written Leases required to be disclosed
     have been  heretofore  delivered  to  Buyer.  With  respect  to each of the
     Leases:  (A) neither Seller nor, to the best of Seller's and  Shareholders'
     Knowledge, any other party is in default in connection with such Lease; (B)
     no act or event has occurred  which,  with notice or lapse of time or both,
     would  constitute a default  under such Lease with respect to Seller or, to
     the best of Seller's and  Shareholders'  Knowledge,  any other  party;  (C)
     there is no basis for any claim of default under such Lease with respect to
     Seller or, to the best of Seller's and Shareholders'  Knowledge,  any other
     party;  (D) Seller has not given or received any notice of  cancellation or
     termination in connection with such Lease;  (E) such Lease is the valid and
     binding agreement of Seller, and, to the best of Seller's and Shareholders'
     Knowledge, the other party thereto which is in full force and effect and is
     enforceable  in  accordance  with its terms,  except,  with respect to such
     other party, to the extent that such  enforceability  may be limited by, or
     subject  to:  (i) the  effect  of any  applicable  bankruptcy,  insolvency,
     reorganization,  fraudulent  conveyance,  moratorium  or other similar laws
     affecting  the  enforcement  of  creditors'  rights  generally;   (ii)  the
     availability of the remedies of specific  performance or injunctive relief,
     which  may be  subject  to the  discretion  of the court  before  which any
     proceeding for such remedies may be brought;  and (iii) the exercise by any
     court of equitable  judicial  discretion before which any proceeding may be
     brought; (F) except as disclosed on Schedule 4.4(b), such Lease will not be
     affected  by, or require  the  consent of or payment to any other  party to
     avoid an event of default,  an event of termination or other adverse effect
     with  respect to such by reason of the  transactions  contemplated  by this
     Agreement;  and (G) such  Lease is a "true"  lease for  federal  income tax
     purposes.

(c)  Adequacy;  Condition.  Except  as set  forth in  Schedule  4.4(c):  (i) the
     Purchased  Assets are fit for use in the  business  of Seller as  presently
     conducted;  (ii) the  Purchased  Assets are in good  repair  and  operating
     condition, normal wear and tear excepted, and structurally and mechanically
     sound,  as  applicable;  (iii)  Seller is in material  compliance  with all
     applicable  building,  zoning,  land use or other similar  statutes,  laws,
     ordinances,   regulations,  permits,  health  and  safety  codes  or  other
     requirements  in respect of any of the Purchased  Assets subject to a Lease
     (and  Seller's  current  use of  such  properties  does  not  constitute  a

                                      -11-
<PAGE>

     nonconforming  use) and Seller has not received any notice  alleging such a
     violation;  (iv) to the Knowledge of Seller and  Shareholders,  none of the
     Purchased  Assets  subject to a Lease has ever been used as a  landfill  or
     otherwise  been used for the  disposal,  storage or treatment of any waste,
     trash, garbage,  industrial by-product,  chemical or hazardous substance of
     any  nature;  (v) Seller has not  caused  the  installation  of any of such
     property with asbestos  insulation or any electrical  equipment  containing
     polychlorinated  biphenyls  and, to Seller's and  Shareholders'  Knowledge,
     none  of  the  Purchased  Assets  subject  to  a  Lease  contains  asbestos
     insulation or electrical  equipment containing  polychlorinated  biphenyls;
     and (vi) to Seller's and Shareholders' Knowledge,  there are no outstanding
     requirements or  recommendations by fire underwriters or rating boards, any
     insurance  companies or holders of mortgages  or other  security  interests
     requiring or recommending  any repairs or work to be done with reference to
     any of the Purchased Assets subject to a Lease.

(d)  All  Necessary   Properties.   The  Purchased  Assets  (together  with  the
     intangible properties disclosed, or not required to be disclosed,  pursuant
     to Sections 4.5 and 4.6 of this Agreement) constitute all of the properties
     which  Seller uses in  connection  with the  operation  of the  Business as
     presently  conducted and the consummation of the transactions  contemplated
     by this  Agreement  (provided  that all consents  relating to the Purchased
     Assets have been  obtained) will not alter the rights or impair the ability
     of Seller to use such Purchased Assets in the conduct of the Business as it
     is now being conducted.  4.5 Intellectual  Property;  Patents;  Trademarks,
     Trade  Names.  All  Intellectual  Property and all  contracts,  agreements,
     commitments, arrangements,  undertakings and understandings relating to the
     use or license of technology, know-how or processes by Seller that are part
     of the Purchased Assets (the "Intellectual  Property  Licenses") are listed
     in Schedule 1.1(a)(vi). Except as disclosed in Schedule 4.5 with respect to
     all  Intellectual  Property that is included in the Purchased  Assets;  (a)
     Seller owns, or has the sole and exclusive  right to use, all  Intellectual
     Property,  whether under Intellectual Property Licenses or otherwise,  used
     in or  necessary  for  the  ordinary  conduct  of  its  business;  (b)  the
     consummation  of the  transactions  contemplated by this Agreement will not
     alter or impair any such rights;  and (c) no  Intellectual  Property owned,
     licensed or used by Seller,  or Intellectual  Property License of Seller is
     the  subject  of a  lawsuit  or any  other  proceeding,  nor has any  party
     challenged  or, to Seller's  and  Shareholders'  Knowledge,  threatened  to
     challenge  Seller's  respective right to use such Intellectual  Property or
     Intellectual Property License or application for any of the foregoing; and,
     to Seller's  and  Shareholders'  Knowledge,  there is no basis for any such
     challenge.

4.6   Loans and Contracts.
      --------------------

(a)  Indebtedness.  Schedule  4.6(a) sets forth (i) a complete and accurate list
     or description of all instruments or other documents  ("Debt  Instruments")
     relating  to any direct or  indirect  indebtedness  for  borrowed  money of
     Seller,  as well as indebtedness  by way of capital leases,  lease-purchase
     arrangements,  guarantees,  undertakings  on which others rely in extending
     credit and all conditional  sales  contracts,  chattel  mortgages and other
     security  arrangements  with respect to personal  property used or owned by
     Seller  and (ii) a list of all loans of money to the  respective  officers,
     affiliates  employees  of Seller or  Shareholders  (specifically  excluding
     travel and similar advances in the ordinary course of business).

(b)  Client Contracts; Client Accounts.

     (i)  Seller has  delivered to Buyer true,  complete and accurate  copies of
          all  of  the  Client  Contracts  and  Assumed  Contracts.  All  Client
          Contracts and Assumed  Contracts are legal,  valid,  binding,  in full
          force and effect and enforceable against Seller, and, to the Knowledge
          of Seller and  Shareholders,  against each other party thereto.  There

                                      -12-
<PAGE>

          does not exist  under any  Client  Contract  or Assumed  Contract  any
          violation,  breach or event of default,  or event or  condition  that,
          after notice or lapse of time or both,  would  constitute a violation,
          breach or event of  default  thereunder,  on the part of Seller or, to
          the  Knowledge  of Seller  and  Shareholders,  any other  person.  The
          enforceability  of all Client Contracts and Assumed Contracts will not
          be affected in any manner by the execution, delivery or performance of
          this Agreement  (except that any Client Contract and Assumed  Contract
          assumed by Buyer may be enforceable  by Buyer and not Seller),  and no
          Client Contract or Assumed Contract  contains any assignment or change
          in control or similar terms or conditions that will become  applicable
          as a result of the  consummation of the  transactions  contemplated by
          this Agreement;  provided,  however,  it is understood that certain of
          the Client Contracts  and/or Assumed  Contracts may
          require the consent of the other  parties  thereto to assign the same,
          which consents Seller shall obtain prior to the Closing.

     (ii) Except  as set  forth  on  Schedule  4.6(b),  no  Client  Account  has
          materially  delayed or  decreased  or  terminated,  or to  Seller's or
          Shareholders' Knowledge, threatened to materially delay or decrease or
          terminate,  or given notice of its  intention to  materially  delay or
          decrease or terminate its usage of Seller's services.

     (iii)All consents (if they are required)  from Seller's  present  customers
          needed to enable Buyer to assume the Client  Contracts and the Assumed
          Contracts  and  continue the Business  without  interruption  shall be
          received prior to the Closing.  Only those Client  Accounts  listed on
          Schedule  4.6(b) hereto require consent before the assignment of their
          Client Contract.

(c)  Insurance.  All  insurance  policies  of  Seller  now in  force  (including
     comprehensive  general  liability,  personal  and  professional  liability,
     comprehensive  general casualty and extended coverage,  automobile,  boiler
     and machinery, fire and lightning,  marine,  endowment,  life, and worker's
     compensation)  ("Insurance  Policies") are listed in Schedule  4.6(c),  and
     such policies will be through Closing.

(d)  Status. Except as disclosed on Schedule 4.6(d): (i) Seller has not assigned
     any of its rights or obligations under (and is not otherwise restricted for
     any reason from enjoying the full benefits under) any Intellectual Property
     License, Debt Instrument, Client Contract or Assumed Contract; (ii) neither
     Seller nor, to Seller's and Shareholders'  Knowledge, any other party is in
     material default in connection with any Intellectual Property License, Debt
     Instrument,  Client  Contract or Assumed  Contract;  (iii) to Seller's  and
     Shareholders' Knowledge, no act or event has occurred which, with notice or
     lapse of time or both,  would  constitute  a  material  default  under  any
     Intellectual Property License, Debt Instrument,  Client Contract or Assumed
     Contract; (iv) to Seller's and Shareholders'  Knowledge,  there is no basis
     for any claim of material default under any Intellectual  Property License,
     Debt  Instrument,  Client  Contract  or Assumed  Contract;  (v) there is no
     outstanding  notice of  cancellation  or termination  received by Seller in
     connection with any Intellectual Property License, Debt Instrument,  Client
     Contract or Assumed Contract; (vi) each Intellectual Property License, Debt
     Instrument,  Client Contract and Assumed  Contract is the valid and binding
     agreement of the parties  thereto  which is in full force and effect and is
     enforceable in accordance with its terms except, with respect to such other
     party, to the extent that such enforceability may be limited by, or subject
     to:   (A)   the   effect   of  any   applicable   bankruptcy,   insolvency,
     reorganization,  fraudulent  conveyance,  moratorium  or other similar laws
     affecting  the  enforceability  of  creditors'  rights  generally,  (B) the
     availability  of specific  performance or injunctive  relief,  which may be
     subject to the discretion of the court before which any proceeding for such
     remedies  may be brought,  and (C) the  exercise by any court of  equitable
     judicial  discretion before which any proceeding may be brought;  and (vii)
     neither  Seller nor any of  Shareholders  has  received  any  communication
     proposing any termination, material amendment or change to any Intellectual
     Property License, Debt Instrument, Client Contract or Assumed Contract.

                                      -13-
<PAGE>

4.7   Officers and Managers; Employment Relationships. Schedule 4.7
      ------------------------------------------------ ------------
sets forth a true and  complete  list of all of the  officers  and  managers  of
Seller, specifying their office and annual rate of compensation,  and a true and
complete list of employees of Seller as of the date of this  Agreement,  setting
forth each such employee's  title,  compensation and date of hire.  Schedule 4.7
sets forth  Seller's  policies  and  practices  with respect to  scheduling  and
eligibility of employee  compensation  increases and bonuses.  All  compensation
increases and bonuses  awarded by Seller during the twelve month period prior to
the date hereof have been in compliance with such policies and practices.

4.8   Employee and Fringe Benefit Plans.
      ----------------------------------
Except as set forth in Schedule 4.8, Seller,  with respect to employees,  former
employees or agents of Seller, does not maintain,  is not required to contribute
to and does  not  otherwise  participate  in (and has not  since  its  inception
maintained,  contributed  to or  otherwise  participated  in)  either:  (i)  any
employee  pension benefit plan  ("Pension/Profit  Sharing  Plan"),  any employee
welfare   benefit   plan   ("Welfare   Plan")   or   any   multi-employer   plan
("Multi-Employer  Plan") (as such terms are defined in the  Employee  Retirement
Income  Security  Act of 1974,  as amended  ("ERISA")),  including  any pension,
profit sharing, retirement, thrift, stock purchase or stock option plan; or (ii)
any other  compensation,  welfare,  fringe benefit or retirement plan,  program,
policy,  understanding or arrangement of any kind whatsoever,  whether formal or
informal, providing for benefits for or the welfare of any or all of the current
or former employees or agents of Seller or their beneficiaries or dependents.

     True and complete  copies of the  following  documents  with respect to the
plans  set forth on  Schedule  4.8 have been  delivered  to Buyer:  (i) the most
recent plan document and trust agreement  (including any amendments  thereto and
prior plan  documents,  if amended  within the last three years),  (ii) the last
five years IRS Form 5500 filings and  schedules  thereto,  (iii) the most recent
IRS determination  letter, (iv) all summary plan descriptions,  (v) each written
communication  to employees  intended to describe a plan or any benefit provided
in such plans, and (vi) all  correspondence  with the IRS or Department of Labor
concerning any controversy with respect to such plans.

     Each plan listed on Schedule 4.8 is and has been  maintained  in compliance
in all material respects with applicable law, including but not limited to ERISA
and the Code and with any other applicable contractual obligations.

     Each plan listed on Schedule 4.8 that is intended to be tax qualified under
Code section 401(a) has been  determined by the Internal  Revenue  Service to be
exempt from tax under the provisions of Code section 501(a) and, to Seller's and
Shareholders' Knowledge, nothing has occurred, including the adoption or failure
to adopt any plan amendment,  which would adversely affect its  qualification or
tax-exempt status.

     Except as reflected on Schedule 4.10,  there are no pending or, to Seller's
or Shareholders'  Knowledge,  threatened claims, actions or lawsuits, other than
routine  claims for  benefits in the  ordinary  course,  asserted or  instituted
against  (i) any plan or its assets or (ii) any  fiduciary  with  respect to any
plan for with Seller,  it  subsidiaries  or affiliates,  may be directly  liable
through indemnification obligations or otherwise.

                                      -14-
<PAGE>

4.9   Labor Relations.
      ----------------
Seller is (and, at all times, has been) in material compliance with all federal,
state,  local and other  applicable  laws  respecting  employment and employment
practices,  terms and  conditions  of employment  and wages and hours.  There is
(and, at all times,  has been) no unfair labor  practice,  complaint,  charge or
other  matter  against or  involving  employees,  former  employees or agents of
Seller  pending or threatened  before any  Governmental  Authority.  There is no
(and, at all times, has not been) labor strike, dispute, organizing effort, slow
down, stoppage or other labor difficulty pending,  involving or, to Seller's and
Shareholders' Knowledge,  threatened, against or affecting the employees, former
employees or agents of Seller.  No grievance  which might have an adverse effect
on Seller or on the  conduct  of the  Business  nor any  arbitration  proceeding
arising out of or under collective  bargaining  agreements relating to employees
of Seller is pending, and no claim therefor exists. There is (and, at all times,
has been) no collective bargaining agreement which is binding on Seller.

4.10   Litigation.
       -----------
Except as set forth on Schedule 4.10,  Seller is not (and, at all times, has not
been) (i) engaged in, a party to,  subject to or, to Seller's and  Shareholders'
Knowledge,  threatened  with any  claim,  legal or  equitable  action,  or other
proceeding  (whether as plaintiff,  defendant or otherwise and regardless of the
forum or the nature of the opposing party) which seeks damages, an injunction or
other relief against Seller,  which action,  individually  or collectively  with
such other actions,  would have a Material Adverse Effect on the Business or the
Purchased Assets; (ii) to Seller's and Shareholders'  Knowledge,  subject to any
unasserted claim, the assertion of which is likely and which, if asserted,  will
seek  damages,  an  injunction  or  other  relief  against  Seller  which  claim
individually or  collectively  with such other  unasserted  claims if made would
have a Material Adverse Effect on the Business or the Purchased Assets; or (iii)
a party to or subject to any  judgment,  order or decree  against  Seller or the
Purchased  Assets.  There has been no  reservation  of  rights by any  insurance
carrier,  and, to Seller's and Shareholders'  Knowledge,  no such reservation is
threatened,  concerning  the  coverage  of Seller  with  respect  to any  matter
described in this Section 4.10.

4.11  Compliance with Laws.
      ---------------------

(a)  Generally.  Except as set forth in Schedule 4.11(a)  attached  hereto,  and
     except  with  respect  to  compliance  with  Environmental  Laws  which  is
     addressed under Section 4.11(c) below,  Seller is in full compliance in all
     material respects with all applicable laws, rules,  regulations  including,
     without limitation,  the Health Care Laws (as defined below), ordinances or
     orders  of  any  court  or  federal,  state,  county,  municipal  or  other
     governmental   department,    commission,    board,   bureau,   agency   or
     instrumentality,  and  Seller  has not  received  any  notice,  written  or
     otherwise,  of noncompliance  with respect thereto.  All financial records,
     patient  records and other  documents  required to be  maintained by Seller
     have been  continuously  maintained by Seller for a period of at least five
     (5) years from the date of creation of such document.  For purposes of this
     Agreement,  the term "Health Care Laws" shall mean all applicable  federal,
     state or local health care laws, rules and regulations,  including  without
     limitation   those   relating   to  the   payment  or  receipt  of  illegal
     remuneration,  including 42 U.S.C. ss.  1320a-7b(b) (the  Medicare/Medicaid
     anti-kickback statute), 42 U.S.C. 1395nn (the Stark Statute), 42 U.S.C. ss.
     1320a-7a,  42 U.S.C. ss.  1320a-7b(a),  42 U.S.C.  ss.  1320a-7b(c) and any
     applicable  state laws  governing  kickbacks  and  matters  similar to such
     federal statutes.

(b)  Permits.  Without  limiting the  foregoing,  except for those failures that
     would not  reasonably be expected to have a Material  Adverse  Effect:  (i)
     Seller has all material occupancy certificates and other licenses,  permits
     and  certificates  ("Permits")  required in connection  with its ownership,
     possession,  use,  occupancy or operation  of any of the  Purchased  Assets
     owned,  leased or used by it; (ii) all of the Permits are in full force and
     effect;  (iii)  Seller is (and has been) in  material  compliance  with the
     Permits;  and (iv) none of the Permits will be  materially  affected by, or
     require  the   consent  of  any  party  by  reason  of,  the   transactions
     contemplated by this Agreement.  Schedule 4.11(b) sets forth a complete and
     accurate  listing of all  Permits  required  for the  conduct  of  Seller's
     business,  except for those Permits,  the failure of which to obtain, would
     not reasonably be expected to have a Material Adverse Effect.

                                      -15-
<PAGE>

(c)  Environmental.  Except as set forth on Schedule  4.11(c),  to Seller's  and
     Shareholders' Knowledge, no person or party (including, but not limited to,
     any  Governmental  Authority)  has  asserted  any claim or, to Seller's and
     Shareholders' Knowledge, has any basis for any action or proceeding against
     Seller relating to any violation of  Environmental  Law (as defined below),
     relating to any  existing  or prior act,  omission,  condition  or state of
     facts.  To Seller's and  Shareholders'  Knowledge,  Seller has not received
     oral or written notice of, nor does Seller or  Shareholders  have reason to
     believe  there is, any existing or pending  violation,  citation,  claim or
     complaint  relating  to the  business  of  Seller  or any  facility  now or
     previously owned or operated by Seller arising under any Environmental Law.
     For purposes of this Agreement, the term "Environmental Law" means federal,
     state and local environmental  statutes,  laws, ordinances,  orders, rules,
     regulations,  moratoria,  judgments and consent  decrees,  or any licenses,
     authorizations,  waivers, closures, or approvals required pursuant thereto,
     relating  to  human  health  and  the   environment,   including,   without
     limitation,  the Clean Air Act, as amended;  the  Federal  Water  Pollution
     Control  Act,  as amended;  the Safe  Drinking  Water Act, as amended;  the
     Resource  Conservation and Recovery Act, as amended; the Hazardous Material
     Transportation  Act, as amended;  the Occupational Safety and Health Act of
     1970, as amended; the Comprehensive  Environmental  Response,  Compensation
     and   Liability   Act,  as  amended  by  the   Superfund   Amendments   and
     Reauthorization Act of 1986, as amended.

4.12   Transactions with Affiliates.
       -----------------------------
Except as disclosed in Schedule  4.12,  no  Shareholder,  officer or director of
Seller,  nor any  "affiliate" or  "associate"  (as such terms are defined in the
rules and  regulations  of the  Securities  and  Exchange  Commission  under the
Securities Act of 1933, as amended) of any of the foregoing:

(a)  has been a party to any lease, sublease, contract,  agreement,  commitment,
     understanding or other  arrangement of any kind  whatsoever,  involving any
     such person and Seller;

(b)  owns directly or indirectly,  in whole or in part, any property that Seller
     uses or otherwise has rights in respect of; or

(c)  has any cause of  action or other  claim  whatsoever  against,  or owes any
     amount  to,  Seller  other  than  (i) for  compensation  (including  fringe
     benefits) to officers and employees  disclosed  pursuant to Section 4.7 and
     for reimbursement of ordinary and necessary expenses incurred in connection
     with employment by Seller; and (ii) as otherwise disclosed pursuant to this
     Agreement.

4.13   Accounts Receivable. Schedule 4.13
       -------------------- -------------
attached hereto sets forth all Accounts  Receivable in existence as of March 31,
2004 for Seller and all such Accounts  Receivable,  notes  receivable and claims
arising  from such date through  Closing,  represent  or will  represent,  valid
claims  against  the  obligors  thereof  which arose in the  ordinary  course of
business and no  entitlements to or claims of offset or reduction have been made
or exist except to the extent specifically set forth in Schedule 4.13.

4.14   Commissions.
       ------------
No person,  firm or  corporation  is entitled to any  commission  or broker's or
finder's fee in connection with the transactions  contemplated by this Agreement
by reason of any act or omission of Seller or Shareholders.

                                      -16-
<PAGE>

4.15  Generally.
      ----------

(a)  No  representation  or warranty by Seller or Shareholders in this Agreement
     or in any  Exhibit,  Schedule  or closing  certificate  furnished  or to be
     furnished to Buyer  pursuant to this  Agreement or in  connection  with the
     transactions  contemplated  by this Agreement  contains or will contain any
     untrue  statement  of a  material  fact,  or omits or will  omit to state a
     material  fact,  necessary  to make the  statements  herein or therein  not
     misleading.

(b)  As used in this Agreement,  the term "Knowledge" shall mean, in the case of
     each Shareholder,  the  Shareholder's  actual awareness without the duty to
     investigate beyond what a reasonably prudent  shareholder would be expected
     to  discover,  and in the  case of  Seller,  the  actual  awareness  of the
     officers and directors of Seller without a duty to investigate  beyond what
     a reasonably prudent individual would be expected to discover in the course
     of carrying out the duties of his or her office.

                                   ARTICLE 5
                                   ---------

               REPRESENTATIONS AND WARRANTIES OF BUYER AND PARENT
               --------------------------------------------------

            Buyer and Parent hereby jointly and severally represent and warrant
to Seller and Shareholders as of the date of this Agreement as follows:

5.1   Status of Buyer.
      ----------------

(a)  Corporate  Existence and Status.  Buyer is a corporation duly incorporated,
     organized,  entitled  to conduct  business  and  validly  existing  in good
     standing under the laws of the State of Delaware.

(b)  Corporate  Power.  Buyer  has the  corporate  power  to own and  lease  its
     properties and otherwise to conduct its business.

(c)  Qualification.  Buyer is qualified to do business as a foreign  corporation
     in each  jurisdiction  in which the nature of or the manner in which  Buyer
     conducts its business,  the character or location of the  properties  which
     Buyer owns,  leases or uses or the actions or location of Buyer's employees
     or agents either  requires  Buyer to be qualified or subjects  Buyer to any
     cost,  restriction or penalty for failing to qualify (including  assessment
     of taxes, fees or penalties for prior periods).

(d)  Authorization.

     (i)  Buyer has the right,  power and authority to enter into this Agreement
          and the related  agreements  referred to herein to which it is a party
          and to consummate the  transactions  contemplated by, and otherwise to
          comply with and perform its obligations  under, this Agreement and the
          related agreements referred to herein;

     (ii) The execution and delivery by Buyer of this  Agreement and the related
          agreements  referred  to  herein  to which  Buyer  is a party  and the
          consummation by Buyer of the  transactions  contemplated by, and other
          compliance  with  and  performance  of  its  obligations  under,  this
          Agreement and the related agreements referred to herein have been duly
          authorized by all necessary  corporate  action on the part of Buyer in
          compliance  with  governing or applicable  agreements,  instruments or
          other   documents   (including   its   Articles  or   Certificate   of
          Incorporation and Bylaws (each as amended)) and applicable law; and

                                      -17-
<PAGE>

     (iii)Each of this Agreement and the related  agreements  referred to herein
          to which Buyer is a party  constitutes the valid and binding agreement
          of Buyer that is  enforceable  against  Buyer in  accordance  with its
          terms.

(e)  Absence of  Violations  or  Conflicts.  The  execution and delivery of this
     Agreement by Buyer and the  consummation of the  transactions  contemplated
     by, or other compliance with or performance  under,  this Agreement and the
     related agreements  referred to herein do not and will not with the passage
     of time or giving of notice or both:

     (i)  constitute a violation of, be in conflict  with,  constitute a default
          or require any payment  under,  permit a termination  of,  require any
          consent  under,  or result in the creation or  imposition of any lien,
          encumbrance  or  other  adverse  claim  or  interest  upon  any of the
          properties  of  Buyer  under  (A) any  material  contract,  agreement,
          commitment,  undertaking or understanding to which Buyer is a party or
          to which  Buyer or any of its  assets or  properties  are  subject  or
          bound, (B) any judgment, decree or order of any governmental authority
          to which Buyer or any of its properties are subject or bound,  (C) any
          applicable  law,  or  (D)  any  governing  or  applicable  agreements,
          instruments  or other  documents to which Buyer is a party  (including
          Articles  or  Certificate  of   Incorporation   and  Bylaws  (each  as
          amended)); or

     (ii) create,  or cause  the  acceleration  of the  maturity  of,  any debt,
          obligation or liability of Buyer.

(f)  No  Governmental  Consents  Required.  No  consent,   approval,   order  or
     authorization  of,  or  registration,   declaration  or  filing  with,  any
     governmental  authority on the part of Buyer is required in connection with
     the  execution  or delivery of this  Agreement or the  consummation  of the
     transactions  contemplated  by,  or other  compliance  with or  performance
     under, this Agreement by Buyer.

5.2   Commissions and Fees.
      ---------------------
Except  for A.G.  Edwards & Sons,  Inc.,  whose fee will be paid by  Parent,  no
person,  firm or  corporation  is  entitled  to any  commission  or  broker's or
finder's fee in connection with the transactions  contemplated by this Agreement
by reason of any act or omission of Buyer or Parent.

5.3   Generally.
      ----------
No  representation  or warranty by Buyer in this  Agreement  or in any  Exhibit,
Schedule or closing certificate  furnished or to be furnished to Seller pursuant
to this Agreement or in connection  with the  transactions  contemplated by this
Agreement  contains or will contain any untrue  statement of a material fact, or
omits or will omit to state a material  fact,  necessary to make the  statements
herein or therein not misleading.

                                      -18-
<PAGE>

                                   ARTICLE 6
                                   ---------

                               COVENANTS OF SELLER
                               -------------------

6.1   Conduct of Business by Seller.
      ------------------------------
From the date hereof to the Closing Date,  except for transactions  contemplated
by this  Agreement or which are expressly  approved in writing by Buyer,  Seller
shall refrain from and Shareholders shall ensure that Seller refrains from:

(a)  subjecting  any of the Purchased  Assets to any lien,  encumbrance or other
     claim of any kind;

(b)  modifying,  amending,  altering or terminating  (whether by written or oral
     agreement, or any manner of action or inaction) any of the Client Contracts
     or Assumed Contracts; and

(c)  taking  or  permitting  any  other  action  that,  if  taken  or  permitted
     immediately  prior to the execution of this Agreement,  would  constitute a
     breach of or an exception to the  representations and warranties in ARTICLE
     4 hereof or the covenants in ARTICLE 6 and ARTICLE 7 hereof.

6.2   Affirmative Covenants Relating to Seller and Shareholders.
      ----------------------------------------------------------
From the date  hereof to the Closing  Date,  Seller and  Shareholders  shall use
their reasonable best efforts to ensure that Seller shall:

(a)  maintain Seller's  property and professional  insurance in amounts and with
     coverage  at least as great as the  amounts  and  coverage in effect on the
     date of this Agreement;

(b)  keep in Seller's employ the present  officers and key employees,  including
     the professional  staff, of Seller to preserve the goodwill of those having
     business relations with Seller;

(c)  maintain the books,  accounts and records of Seller in a manner  consistent
     with past practice;

(d)  allow,  upon the  prior  consent  of  Seller,  which  consent  shall not be
     unreasonably withheld,  Buyer and Buyer's employees,  attorneys,  auditors,
     accountants  and other  authorized  representatives,  free and full  access
     during  Seller's   normal   business  hours  to  the  facilities,   plants,
     properties,   books,  records,  documents  and  correspondence  of  Seller,
     including,  but not  limited  to,  historical  financial  information  with
     respect  to the Client  Contracts  and  Assumed  Contracts  and  employment
     records  with respect to the  Retained  Employees,  in order that Buyer may
     have full opportunity to make such investigation as Buyer may desire of the
     Business;  provided,  however,  that such  access  shall  not  unreasonably
     interfere   with   the   operations   of   Seller,   and  any   contractual
     confidentiality  requirements  between  Buyer and  Seller  or  Shareholders
     existing prior to this Agreement shall remain in full force and effect,  as
     supplemented  hereby,  except as otherwise  required by law  (including any
     required disclosure of the execution of this Agreement);

(e)  (i) comply with all applicable law relating to Seller, or to the conduct of
     the  Business,  and (ii) conduct such  Business in such a manner so that on
     the Closing  Date the  representations  and  warranties  contained  in this
     Agreement  shall be  materially  true as though  such  representations  and
     warranties were made on and as of such date,  except for changes  permitted
     or contemplated by the terms of this Agreement;

                                      -19-
<PAGE>

(f)  provide  Buyer with  prompt  written  notice of any  change in the  assets,
     operations,  liabilities,  earnings,  business or condition  (financial  or
     otherwise) of Seller which would have a Material Adverse Effect; and

(g)  operate the  Business  only in the  ordinary  course with the  objective of
     preserving Seller's business organizations intact, including using its best
     efforts to retain the services of Seller's  present  officers and employees
     and the goodwill of its customers and others having business relations with
     Seller.

6.3   Consents and Closing Conditions.
      --------------------------------
Seller and  Shareholders  shall use their  reasonable best efforts (a) to obtain
such third party and governmental consents, authorizations,  approvals, releases
and terminations as may be required hereunder, and to take such other actions as
may be  appropriate  in order to fulfill the  closing  conditions  contained  in
Section 8.1  hereof,  and (b) to cause the  representations  and  warranties  of
Seller in ARTICLE 4 to be true and correct on and as of the Closing Date.

6.4   Obligations Concerning Employees.
      ---------------------------------

(a)  From the date hereof  through the Closing Date,  Buyer shall have the right
     upon  reasonable  notice to Seller during normal business hours and without
     undue  disruption  of the  operation  of the  Business,  to  interview  the
     employees of Seller,  perform drug tests on said  employees  and  otherwise
     conduct  hiring  procedures  with  regard  to its  possible  hiring  of the
     employees  of Seller.  Subject to the  satisfactory  completion  of Buyer's
     employment  screening  process,  Buyer shall offer employment at Closing to
     the  employees  of  Seller  listed  on  Schedule   6.4(a)  (the   "Retained
     Employees").

(b)  On or prior  to the  Closing  Date,  at such  time as  shall be  reasonably
     acceptable  to Buyer,  Seller shall  notify all of the  employees of Seller
     that the  assets of  Seller  are being  sold to  Buyer,  that the  Retained
     Employees  will be offered  employment by Buyer,  and that any decisions by
     Buyer regarding its hiring  procedures or the hiring of Seller's  employees
     will be communicated to the employees by Buyer.

(c)  As soon as  practicable  after the Closing Date,  Seller shall issue to all
     employees of Seller as of the Closing Date payroll  checks,  for all earned
     salary, wages,  incentive bonuses,  accrued sick pay, vacation or paid time
     off and other compensation and benefits (net of usual withholdings) owed or
     accruing to such employees for their services  rendered  through 11:59 p.m.
     on the Closing Date.

(d)  Seller shall comply with all  provisions  of federal and state law relating
     to the continuation of health insurance benefits for terminated  employees.
     Seller shall be responsible for providing Worker  Adjustment and Retraining
     Notification Act, 29 U.S.C. ss. 2101 et. seq. ("WARN Act") notices,  if and
     to the extent  required,  in connection  with any  terminations of Seller's
     employees  effected  pursuant  to  this  Agreement,  and  shall  be  solely
     responsible for, and will, hold Buyer harmless from, any WARN Act liability
     arising as a result of any  employee  termination(s)  occurring on or after
     the Closing Date.

6.5   Negotiations with Others.
      -------------------------
During the period from the date of this  Agreement to the Closing Date, or until
such date as this  Agreement may be  terminated  in  accordance  with its terms,
neither  Seller  nor  any of  Seller's  members,  managers,  officers,  counsel,
accountants, auditors or other agents retained by or acting on behalf of Seller,
will (i) seek, solicit,  initiate,  encourage or otherwise facilitate (including
by way of furnishing  information)  the  submission  of inquiries,  proposals or
offers from any corporation, partnership, person or other entity or group (other

                                      -20-
<PAGE>

than Buyer) relating to the possible acquisition of stock or equity interests of
Seller or the possible  purchase of all or  substantially  all of the  Purchased
Assets, or any tender or exchange offer, merger, reverse merger,  consolidation,
business combination,  recapitalization,  spin-off, liquidation, dissolution, or
similar  transaction  involving,   directly  or  indirectly,   Seller  (each  an
"Acquisition  Proposal"),  (ii)  enter  into,  participate  or  cooperate  in or
consider or pursue any discussions or negotiations  regarding or that reasonably
may be expected to lead to an  Acquisition  Proposal or furnish to any person or
entity   information   concerning   Seller  for  purposes  of  facilitating  any
Acquisition  Proposal,  or (iii) otherwise solicit or cooperate in any way with,
or assist,  participate in, facilitate or encourage any effort or attempt by any
person to make or enter into an Acquisition Proposal.  Seller shall notify Buyer
in writing  within 24 hours  following  receipt of any  unsolicited  Acquisition
Proposal  or  request  for  information  from  any  third  party.  Such  written
notification  shall  describe  in  reasonable  detail  any such  occurrence  and
identify the person or persons involved.

6.6   Employment Agreements.
      ----------------------
John H. Short, Ph.D. shall enter into a Termination  Compensation Agreement with
Parent on or before the Closing Date, such agreement to be in substantially  the
form set forth as Exhibit C hereto and  incorporated  herein by  reference  (the
"Short Employment Agreement"). Each other Shareholder and each associate partner
of Seller  shall enter into an  Employment  Agreement  with Buyer on the Closing
Date in  substantially  the form set forth as Exhibit D hereto and  incorporated
herein by reference (the "Phase 2 Employment Agreements").

6.7   Disposition of Performance Bonus Pursuant to Consulting Agreement.
      ------------------------------------------------------------------
Seller and  Shareholders,  on the one hand, and Parent and Buyer,  on the other,
agree that after the Closing Date, the  performance  bonus due Seller under that
certain letter agreement for consulting services effective as of June 3, 2003 by
and between  Seller and Parent (the  "Consulting  Letter") for the first quarter
2004, if any,  shall be computed and paid to  Shareholders  by Parent as soon as
practicable  after  such  computation.  No  performance  bonuses  for any period
subsequent  to the first  quarter of 2004 shall be computed or paid to Seller or
Shareholders.

                                   ARTICLE 7
                                   ---------

                         COVENANTS REGARDING TAX MATTERS
                         -------------------------------

7.1   Returns and Payment of Taxes.
      -----------------------------
Each party shall be  responsible  for filing  Forms W-2 with respect to the 2004
taxable year in accordance with the "Standard Procedure" described in Rev. Proc.
96-60,  1996-2.C.B.  399. The responsibility  for all other information  Returns
shall be allocated  similarly.  Seller shall be  responsible  for payment of any
sales  or use tax  liability  or  other  Taxes  resulting  from  the sale of the
Purchased Assets as contemplated by this Agreement.

7.2   Cooperation and Records Retention.
      ----------------------------------
Seller shall cause its accountants and other representatives to provide to Buyer
on a timely basis the information  (including but not limited to all work papers
and  records  relating  to  Seller)  that  Seller  or its  accountants  or other
representatives  have within their control and that may be reasonably  necessary
in connection with the  preparation of any and all Returns  required to be filed
by Buyer or any other  examination  by any taxing  authority  or  administrative
proceeding  relating to Taxes.  Seller agrees that it will cooperate with Buyer,
its accountants and its other representatives, in a prompt and timely manner, in
connection with the preparation and filing of any and all Returns required to be
filed  by  Buyer  or  any  other   examination   by  any  taxing   authority  or
administrative  proceeding  relating to Taxes.  Seller and Buyer shall retain or
cause to be retained,  until the applicable  statutes of limitations  (including
any extensions and carryovers)  have expired,  copies of all Returns for all tax
periods  beginning  before the  Closing  Date,  together  with  supporting  work
schedules and other records or information that may be relevant to such Returns.

                                      -21-
<PAGE>

7.3   Employee Benefit Plans.
      -----------------------

(a)  401(k) Plan.  The parties agree as follows with respect to the 401(k) Plan:
     (i) Buyer shall (A) assume  sponsorship  of the 401(k) Plan effective as of
     the Closing  Date,  (B)  continue  the 401(k)  Plan for the maximum  period
     permitted under Code section 410(b)(6)(C),  and (C) fund the 401(k) Plan on
     substantially  the same terms as past practice;  provided,  however,  in no
     event  shall the 401(k)  Plan be  operated in a manner that would cause the
     401(k) Plan to lose its tax-qualified status; (ii) the 401(k) Plan shall be
     amended to provide that (A) Seller shall make a contribution  to the 401(k)
     Plan for all eligible  employees of Seller who are employed by Seller as of
     the day  immediately  preceding  the  Closing  Date based on such  eligible
     employee's  compensation  paid  during  the  current  plan  year  up to and
     including the day  immediately  prior to the Closing Date,  (B) Buyer shall
     make a contribution to the 401(k) Plan for all eligible employees of Seller
     who are employed by Buyer as of December 31, 2004 based on the compensation
     of such  eligible  employees  from  the  Closing  Date up to and  including
     December 31, 2004; provided,  however, that the aggregate  contribution for
     any participant for the plan years commencing on January 1, 2004 and ending
     on December 31, 2005 shall be substantially the same as past practice,  (C)
     this transaction does not constitute a severance of employment and will not
     permit participants to receive a distribution from the 401(k) Plan, and (D)
     any other modifications deemed necessary by Buyer or required by the IRS to
     maintain the 401(k) Plan's tax-qualified status.

(b)  Health  Plan.  Subject to the consent of the  insurance  company  providing
     benefits under the Health Plan,  Buyer agrees to assume  sponsorship of the
     Health  Plan and to  continue  its  coverage  for the plan  year  after the
     current plan year, provided that the costs to Parent increase at no greater
     rate than the costs associated with Parent's other health care plans.

                                   ARTICLE 8
                                   ---------

                             CONDITIONS TO CLOSING
                             ---------------------

8.1   Buyer's Conditions to Closing.
      ------------------------------

The  obligations of Buyer to consummate the  transactions  contemplated  by this
Agreement shall be subject to the fulfillment to Buyer's reasonable satisfaction
of each of the following conditions on or prior to the Closing Date:

(a)  Continued Truth of Warranties.  The  representations and warranties of each
     of Seller and  Shareholders  contained herein shall be true in all respects
     on and as of the Closing Date with the same force and effect as though made
     as of such date, except for any variations permitted by this Agreement.

(b)  Performance  of  Covenants.  Each of Seller  and  Shareholders  shall  have
     performed in all respects all covenants and obligations and complied in all
     respects with all conditions  required by this Agreement to be performed or
     complied with by it and them on or prior to the Closing Date.

(c)  No Material Adverse Effect.  There shall have been no change in the assets,
     operations,  liabilities,  earnings,  business or condition  (financial  or
     otherwise)  of Seller  having a Material  Adverse  Effect on the  Purchased
     Assets or the Business since the date of the Reference Balance Sheet.

                                      -22-
<PAGE>

(d)  Permits and Consents. The parties hereto shall have secured all appropriate
     orders,  consents,   approvals  and  clearances,   in  form  and  substance
     satisfactory to Buyer, by and from all third parties  reasonably  requested
     by Buyer,  including  but not limited to  governmental  authorities,  whose
     order,  consent  and  approval  or  clearance  is  required  by contract or
     applicable   law  for  the   consummation   of  the   transactions   herein
     contemplated.

(e)  Action or Proceeding.  No action or proceeding  before a court of any other
     governmental  agency or body shall have been instituted or threatened which
     would restrain or prohibit the transactions contemplated by this Agreement.

(f)  Fairness  Opinion.  The  disinterested  members  of the  Parent's  Board of
     Directors  shall have  received  a written  opinion  from  their  financial
     advisor for the asset purchase transaction  contemplated in this Agreement,
     A.G.  Edwards & Sons,  Inc., to the effect that the  consideration  paid in
     such transaction is fair to Parent from a financial point of view.

(g)  Closing Documents. Each of Seller and Shareholders shall have delivered all
     documents  required to be delivered  by it or them at the Closing,  as more
     specifically  set forth in  ARTICLE  9, in each case in form and  substance
     satisfactory to Buyer.

8.2   Seller's and Shareholders' Conditions to Closing.
      -------------------------------------------------
The  obligations  of Seller and  Shareholders  to  consummate  the  transactions
contemplated  by this Agreement  shall be subject to the fulfillment to Seller's
and  Shareholders'  reasonable  satisfaction  of the following  conditions on or
prior to the Closing Date:

(a)  Continued Truth of Warranties.  The representations and warranties of Buyer
     herein  contained  shall be true in all material  respects on and as of the
     Closing Date with the same force and effect as though made as of such date,
     except for any variations permitted by this Agreement.

(b)  Performance  of  Covenants.  Buyer  shall have  performed  in all  material
     respects  all  covenants  and  obligations  and  complied  in all  material
     respects with all conditions  required by this Agreement to be performed or
     complied with by it on or prior to the Closing Date.

(c)  Permits and Consents. The parties hereto shall have secured all appropriate
     orders,  consents,   approvals  and  clearances,   in  form  and  substance
     reasonably  satisfactory to Seller and Shareholders,  by and from all third
     parties,  including  but not  limited to  governmental  authorities,  whose
     order, consent, approval or clearance is required by contract or applicable
     law for the consummation of the transactions herein contemplated.

(d)  Action  or  Proceeding.  No  action  or  proceeding  before  a court of any
     governmental  agency or body shall have been instituted or threatened which
     would restrain or prohibit the transactions contemplated by this Agreement.

(e)  Closing  Documents.  Buyer shall have  delivered the Purchase Price and all
     documents  required  to  be  delivered  by  it  at  the  Closing,  as  more
     specifically  set  forth in  ARTICLE  9, in form and  substance  reasonably
     satisfactory to each of Seller and Shareholders.

                                      -23-
<PAGE>

                                   ARTICLE 9
                                   ---------

                      DOCUMENTS TO BE DELIVERED AT CLOSING
                      ------------------------------------

9.1   Documents to be Delivered by Seller.  At the Closing, Seller shall:
      ------------------------------------
(a)  Execute and deliver to Buyer any and all  instruments  of sale,  assignment
     and transfer and other documents  reasonably requested by Buyer in order to
     effect  the  transfer  of the  Purchased  Assets  to Buyer,  to effect  the
     assumption of the Assumed  Liabilities  by Buyer or otherwise to facilitate
     the transactions contemplated hereby;

(b)  Deliver to Buyer a certificate of incumbency and copies of the  resolutions
     adopted by the board of directors of Seller and  Shareholders,  authorizing
     the execution and delivery of this  Agreement and the  consummation  of the
     transactions  contemplated hereby, duly certified as of the Closing Date by
     the Secretary of Seller;

(c)  Deliver to Buyer a certificate of Seller,  dated as of the Closing Date, to
     the  effect  that  the   representations   and  warranties  of  Seller  and
     Shareholders  as  contained  in  ARTICLE 4 of this  Agreement  are true and
     correct  as of such  Closing  Date,  and that the  covenants  of  Seller as
     contained  in  ARTICLE 6 and  ARTICLE 7 of this  Agreement  required  to be
     performed  or complied  with on or prior to the  Closing  Date have been so
     performed or complied with;

(d)  Deliver to Buyer a certificate  of good standing or its  equivalent,  dated
     not more than ten (10) days prior to the  Closing  Date,  attesting  to the
     good  standing  of Seller as a  corporation  under the laws of the State of
     Utah;

(e)  To the extent any assignments,  consents or approvals shall be necessary to
     any of the transactions herein  contemplated,  including but not limited to
     the transfer of the Contracts from Seller to Buyer, deliver to Buyer copies
     of all such assignments, consents or approvals; and

(f)  Deliver to Buyer the definitive Short Employment  Agreement and the Phase 2
     Employment Agreements duly executed by all parties thereto.

9.2   Documents to be Delivered by Buyer.  At the Closing, Buyer shall:
      ----------------------------------
(a)  Execute and deliver to Seller any and all  documents  identified in Section
     9.1(a),  to the  extent  appropriate  in order to effect  the  transactions
     contemplated hereby;

(b)  Deliver to Seller a certificate of Buyer,  dated as of the Closing Date, to
     the effect that the representations and warranties of Buyer as contained in
     ARTICLE 5 of this Agreement are true and correct as of such Closing Date;

(c)  To the extent any  consents or  approvals  shall be necessary to any of the
     transactions  herein  contemplated,  Buyer  shall  deliver  to Seller  upon
     request copies of all such consents or approvals as obtained by Buyer;

(d)  Deliver to Seller the Purchase Price;

(e)  Deliver to Seller the definitive Short Employment Agreement and the Phase 2
     Employment Agreements duly executed by all parties thereto.

                                      -24-
<PAGE>

                                   ARTICLE 10
                                   ----------

                                 INDEMNIFICATION
                                 ---------------

10.1   Indemnification of Buyer.
       -------------------------
Subject to the  provisions  of this Article 10, by execution of this  Agreement,
Shareholders   hereby  acknowledge  that  each  Shareholder  shall  jointly  and
severally  indemnify  Buyer  and its  officers,  directors,  employees,  agents,
representatives,  affiliates,  successors and assigns (collectively,  the "Buyer
Parties")  and hold each of them  harmless from and against and pay on behalf of
or reimburse such Buyer Parties in respect of the following:

(a)  any and all loss,  liability or damage (including  judgments and settlement
     payments) (a "Loss"),  incurred by Buyer incident to, arising in connection
     with or resulting from any  misrepresentation,  breach,  nonperformance  or
     inaccuracy  of any  representation,  warranty  or  covenant  of  Seller  or
     Shareholders  made  or  contained  in  this  Agreement  or in any  Exhibit,
     Schedule,  certificate or other document executed and delivered to Buyer by
     Shareholders  or by or on  behalf  of  Seller  under  or  pursuant  to this
     Agreement or the transactions contemplated herein;

(b)  any Excluded Liability;

(c)  any and all reasonable  costs and expenses and all other Losses incurred in
     claiming,   contesting   or   remedying   any  breach,   misrepresentation,
     nonperformance  or  inaccuracy  described  in  this  Section  10.1,  or  in
     enforcing  the  Buyer  Parties'   rights  to   indemnification   hereunder,
     including, by way of illustration and not limitation,  all reasonable legal
     and accounting fees, other reasonable  professional expenses and all filing
     fees  and  reasonable  collection  costs  incident  thereto  and  all  such
     reasonable fees, costs and expenses  incurred in defending claims which, if
     successfully prosecuted, would have resulted in a Loss.

Buyer's remedy for any  indemnification  of Losses hereunder may be satisfied by
proceeding  against one or more of the Shareholders  individually for all or any
portion of such Loss.  Notwithstanding the preceding  sentence,  Buyer agrees to
use commercially  reasonably  efforts to pursue its remedies against each of the
Shareholders individually in a manner consistent with the amount of the Purchase
Price distributed to each Shareholder by Seller hereunder.

10.2   Indemnification of Shareholders.
       --------------------------------
Subject to the  provisions  of this Article 10, by execution of this  Agreement,
Buyer hereby  acknowledges  that Buyer shall indemnify each Shareholder and each
of their respective agents, representatives,  affiliates, successors and assigns
(collectively,  the "Seller  Parties")  and hold each of them  harmless from and
against and pay on behalf of or reimburse  such Seller Parties in respect of the
following

(a)  any and all  Losses  incurred  by  Shareholders  incident  to,  arising  in
     connection   with  or  resulting   from  any   misrepresentation,   breach,
     nonperformance or inaccuracy of any representation, warranty or covenant by
     Buyer made or  contained in this  Agreement  or in any  Exhibit,  Schedule,
     certificate or other  document  executed and delivered to  Shareholders  by
     Buyer;

(b)  the Assumed Liabilities;

(c)  any  liability or obligation  relating to the Business or Purchased  Assets
     arising out of any event or occurrence arising after the Closing Date; and

                                      -25-
<PAGE>

(d)  any and all  reasonable  costs and  expenses  and all  Losses  incurred  in
     claiming,   contesting   or   remedying   any  breach,   misrepresentation,
     nonperformance  or  inaccuracy  described  in  this  Section  10.2,  or  in
     enforcing  the  Seller  Parties'  rights  to   indemnification   hereunder,
     including, by way of illustration and not limitation,  all reasonable legal
     and accounting fees, other reasonable  professional expenses and all filing
     fees  and  reasonable  collection  costs  incident  thereto  and  all  such
     reasonable fees, costs and expenses  incurred in defending claims which, if
     successfully prosecuted, would have resulted in a Loss.

10.3  Notice of and Procedures for Collecting Indemnification.
      -------------------------------------------------------

(a)  Initial Claim Notice.  When either Buyer, on the one hand, or Shareholders,
     on the other hand, becomes aware of a situation which may result in damages
     for which it or they would be entitled to be indemnified hereunder,  Buyer,
     on the one hand, or  Shareholders,  on the other (the  "Indemnitee")  shall
     submit  promptly a written notice (the "Initial Claim Notice") to the other
     party from which  indemnification  may be  forthcoming  pursuant to Section
     10.1 or 10.2 (the  "Indemnitor")  to such effect after first becoming aware
     of such matter and shall furnish the Indemnitor with such information as is
     available  demonstrating a right or possible right to receive indemnity. If
     the potential  claim is predicated on, or later results in, the filing by a
     third party of any action at law or in equity (a "Third Party Claim"),  the
     Indemnitee shall provide promptly to the Indemnitor a supplemental  Initial
     Claim Notice not later than twenty (20)  calendar days prior to the date on
     which a responsive pleading must be filed, and shall also furnish a copy of
     such claim (if made in  writing)  and of all  documents  received  from the
     third party in support of such  claim.  In  addition,  each  Initial  Claim
     Notice shall name, when known,  the person or persons making the assertions
     which are the basis for such claim. Failure by the Indemnitee to deliver an
     Initial  Claim  Notice or an update  thereof in a timely  manner  shall not
     relieve  the  Indemnitor  of any of its  obligations  under this  Agreement
     except to the extent of actual and material prejudice to the Indemnitor.

(b)  Rights of Indemnitor.  If, prior to the expiration of 30 calendar days from
     the mailing of an Initial  Claim Notice (the "Claim  Answer  Period"),  the
     Indemnitor  shall request in writing that such claim not be paid,  the same
     shall not be paid, and the Indemnitor shall settle,  compromise or litigate
     in good faith such  claim,  and  employ  attorneys  of its choice to do so;
     provided,  however,  that Indemnitee  shall not be required to refrain from
     paying any claim  which has  matured by court  judgment  or decree,  unless
     appeal is taken  therefrom and proper appeal bond posted by the Indemnitor,
     nor shall it be required to refrain from paying any claim where such action
     would  result  in the  foreclosure  of a lien  upon any of its  assets or a
     default in a lease or other contract except a lease or other contract which
     is the subject of the dispute. The Indemnitee shall cooperate fully to make
     available to the Indemnitor and its attorneys,  representatives and agents,
     all pertinent  information under its control. The Indemnitee shall have the
     right to elect to settle or  compromise  all other  contested  claims  with
     respect to which the  Indemnitor  has not,  within the Claim Answer Period,
     acknowledged  in writing (i) liability  therefor,  and (ii) its election to
     assume full responsibility for the settlement,  compromise,  litigation and
     payment of such claim.

(c)  Final Claims Statement. At such time as damages for which the Indemnitor is
     liable hereunder are incurred by Indemnitee by actual payment thereof or by
     entry of a final  judgment,  the  Indemnitee  shall  forward a Final Claims
     Statement  to the  Indemnitor  setting  forth the amount of such damages in
     reasonable detail on an itemized basis. The Indemnitee shall supplement the
     Final Claims Statement with such supporting  proof of loss (e.g.  vouchers,
     canceled checks,  accounting  summaries,  judgments,  settlement agreement,
     etc.) as the  Indemnitor  may  reasonably  request in writing within thirty
     (30) calendar days after receipt by Indemnitor of a Final Claims Statement.
     All amounts  reflected on Final Claims Statements shall be paid promptly by
     the Indemnitor to the Indemnitee and the Indemnitee shall have the right to
     immediate payment of proceeds from insurance policies paid to Indemnitor in
     connection with the claim for which the indemnification right arose.

                                      -26-
<PAGE>

10.4   Payment of Claims for Indemnification.
       --------------------------------------
Any amounts payable to Buyer Parties  pursuant to the provisions of Section 10.1
shall be the  responsibility  of Shareholders.  Any additional  amounts shall be
paid promptly upon notice of Buyer to  Shareholders  of incurrence of such loss,
liability,  cost, expense or damage and an explanation of the losses for Buyer's
demand for  indemnification  under  Article 10 of this  Agreement.  Any  amounts
payable to Seller  Parties  pursuant to the  provisions  of Section 10.2 of this
Agreement shall be the  responsibility  of Buyer and shall be paid promptly upon
notice of  Shareholders  to Buyer of incurrence of such loss,  liability,  cost,
expense or damage and an explanation of the losses for Shareholders'  demand for
indemnification under Section 10.2 of this Agreement.

10.5   Exclusive Remedy.
       -----------------
The sole and  exclusive  remedy  of the Buyer  Parties  and the  Seller  Parties
hereunder,  under the Agreement or otherwise in connection with the transactions
contemplated hereby will be restricted to the  indemnification  rights set forth
in this Article 10.

10.6   Certain Limitations.
       --------------------

(a)  The representations and warranties  contained in Sections 4.3 (Taxes),  4.8
     (Employee And Fringe Benefits),  and 4.11(a) and (c) (Compliance with Laws)
     shall survive until ninety (90) days after the expiration of the statute of
     limitations period applicable  thereto.  The representations and warranties
     contained  in  Sections  4.1 (Status of Seller),  4.14  (Commissions),  5.1
     (Status  of  Buyer)  and  5.2   (Commissions   and  Fees)   shall   survive
     indefinitely.  There shall be no time  limitations  on claims for indemnity
     based upon the payment by the party seeking indemnification of any Excluded
     Liability or Assumed  Liability  that is the  obligation of the other party
     under this Agreement.  All other representations and warranties,  covenants
     and agreements  contained in this  Agreement  shall survive until the first
     anniversary of the Closing Date provided that any representation, warranty,
     covenant or agreement  with respect to which  indemnity may be sought under
     this Article 10 shall survive the time that it would otherwise terminate if
     notice of the breach  thereof  giving rise to the right to indemnity  shall
     have been given to the party  against  which  indemnity  is sought prior to
     such date.

(b)  No damages  shall be  recoverable  by the Seller  Parties or Buyer  Parties
     pursuant to the  provisions of this Article 10, and no claim  therefor will
     be asserted for any purpose whatsoever hereunder,  unless the amount of the
     Seller  Parties' or Buyer  Parties',  as the case may be, damages equals at
     least Fifty Thousand and 00/100 Dollars  ($50,000.00)  in the aggregate but
     upon  exceeding  Fifty  Thousand  and 00/100  Dollars  ($50,000.00)  in the
     aggregate,  the  party  seeking  indemnification  shall be  entitled  to be
     indemnified from the first dollar.

(c)  The aggregate amount of damages recoverable pursuant to this Article 10 for
     breaches of  representations  and warranties will be limited to One Million
     Five Hundred Thousand and 00/100 Dollars  ($1,500,000.00).  Such limitation
     shall not apply to claims for indemnity based upon the payment by the party
     seeking indemnification of any Excluded Liability or Assumed Liability that
     is the  obligation of the other party under this  Agreement or to any claim
     in which the party seeking  indemnification  has  established  fraud and/or
     intentional misrepresentation.

                                      -27-
<PAGE>

(d)  The amount which any Indemnitor is or may be required to pay any Indemnitee
     pursuant to this Article 10 shall be reduced by any  insurance  proceeds or
     other  amounts  actually  recovered by or on behalf of such  Indemnitee  in
     reduction of the related  Loss.  If an  Indemnitee  shall have received the
     payment  required by this Agreement from an Indemnitor in respect of a Loss
     and shall subsequently actually receive insurance proceeds or other amounts
     in respect of such Loss, then such Indemnitee  shall pay to such Indemnitor
     a sum  equal to the  amount of such  insurance  proceeds  or other  amounts
     actually received (net of any expenses in obtaining the same).

                                   ARTICLE 11
                                   ----------

                                  MISCELLANEOUS
                                  -------------

11.1   Notices.
       --------
Any notices or other communications required or permitted hereunder to any party
hereto shall be  sufficiently  given if delivered in person or sent by certified
or registered mail, postage prepaid, addressed as follows:

                  In the case of Buyer:

                        RehabCare Group, Inc.
                        7733 Forsyth Boulevard, Suite 2300
                        St. Louis, Missouri  63105
                        Attn: H. Edwin Trusheim, Chairman of the Board

                  With a copy to:

                        Thompson Coburn LLP
                        One US Bank Plaza
                        St. Louis, Missouri  63101
                        Attn: Robert M. LaRose, Esq.

                  In the case of Seller and Shareholders:

                        Phase 2 Consulting, Inc.
                        2120 South 2100 East, 3rd Floor
                        Salt Lake City, Utah 84101
                  Attn: John H. Short, Ph.D., Managing Director

                  With a copy to:

                        Jones, Waldo, Holbrook & McDonough
                        170 South Main Street, Suite 1500
                        Salt Lake City, Utah 84101
                        Attn: Bruce E. Babcock, Esq.

or such substituted address as any party shall have given notice to the others
in writing in the manner set forth in this Section 11.1.

                                      -28-
<PAGE>

11.2   Amendment.
       ----------
This  Agreement  may be  amended  or  modified  in whole  or in part  only by an
agreement  in  writing  executed  by all  parties  hereto  and  making  specific
reference to this Agreement.

11.3   Waiver; Investigation.
       ----------------------
The  parties  hereto  may,  by  written  agreement:  (a) extend the time for the
performance of any of the obligations or other acts of the parties  hereto;  (b)
waive any inaccuracies in the representations  contained in this Agreement;  (c)
waive compliance with, or modify,  any of the covenants or conditions  contained
in this Agreement; and (d) waive or modify performance of any of the obligations
of any of the parties hereto; provided,  however, that no such waiver or failure
to insist upon strict  compliance with such obligation,  covenant,  agreement or
condition  shall  operate as a waiver of, or an  estoppel  with  respect to, any
subsequent insistence upon such strict compliance other than with respect to the
matter so waived or modified.  Buyer  acknowledges that its officers,  employees
and  authorized  representatives  and agents have been given an  opportunity  to
examine the agreements, instruments, documents and other information relating to
Seller that they have  requested to examine.  Any  inspection,  preparation,  or
compilation of information or Schedules, or audit of the receivables,  payables,
properties,  financial condition,  or other matters relating to Seller conducted
by or on behalf  of Buyer  pursuant  to this  Agreement  shall in no way  limit,
affect,  or  impair  the  ability  of  Buyer to rely  upon the  representations,
warranties,  covenants,  and  agreements  of  Seller  set  forth  herein or seek
indemnification for any matter as set forth in ARTICLE 10 hereof.

11.4   Termination.
       ------------
This Agreement may be terminated by the parties hereto prior
to Closing as follows:

(a)  by mutual written consent of Buyer, Seller and Shareholders;

(b)  upon  written  notice from Buyer to Seller and  Shareholders  if any of the
     conditions  precedent to Buyer's  obligations  hereunder  shall have become
     incapable of fulfillment through no fault of Buyer;

(c)  upon written  notice from  Shareholders  to Buyer if any of the  conditions
     precedent to Seller's or  Shareholders'  obligations  hereunder  shall have
     become incapable of fulfillment through no fault of Seller or Shareholders,
     as the case may be;

(d)  by Buyer, on the one hand, or Seller and  Shareholders,  on the other hand,
     in the  event of a breach  by the  other  party  to this  Agreement  of any
     representation, warranty or agreement contained herein, which breach is not
     cured to the  reasonable  satisfaction  of the  non-breaching  party within
     fifteen (15)  business days after  written  notice  thereof is given to the
     breaching  party  by  the  non-breaching  party  or is  not  waived  by the
     non-breaching party during such period; or

(e)  at the election of Buyer or Seller and  Shareholders if the Closing has not
     occurred on or prior to June 30 2004.

In the  event of such  termination  as  provided  above,  this  Agreement  shall
forthwith  terminate  and  there  shall  be no  liability  on the part of any of
Shareholders, Seller or Buyer or their respective officers and directors, except
for  liabilities  arising  from  a  breach  of  this  Agreement  prior  to  such
termination;  provided,  however,  that the  provisions  of the  confidentiality
agreement between the parties shall continue in full force and effect.

                                      -29-
<PAGE>

11.5   Counterparts.
       -------------
This Agreement may be executed in one or more  counterparts,  all of which taken
together shall constitute one instrument.

11.6   Binding on Successors and Assigns.
       ----------------------------------
This Agreement shall be binding upon, inure to the benefit of and be enforceable
by and against the parties hereto and their respective successors and assigns in
accordance with the terms hereof.  No party hereto may assign its interest under
this Agreement  without the prior written  consent of the other parties  hereto;
provided, however, that Buyer may assign its interest herein to any affiliate or
subsidiary  of  Buyer   without   obtaining  the  prior  consent  of  Seller  or
Shareholders.

11.7   Severability.
       -------------
In the event that any one or more of the provisions  contained in this Agreement
or any application  thereof shall be invalid,  illegal or  unenforceable  in any
respect, the validity, legality or enforceability of the remaining provisions of
this  Agreement  and  any  other  application  thereof  shall  not in any way be
affected or impaired thereby; provided, however, that to the extent permitted by
applicable  law,  any  invalid,  illegal,  or  unenforceable  provision  may  be
considered  for  the  purpose  of  determining  the  intent  of the  parties  in
connection with the other provisions of this Agreement.

11.8   Headings.
       ---------
The  headings in the  sections  and  subsections  of this  Agreement  and in the
Schedules are inserted for convenience only and in no way alter, amend,  modify,
limit or restrict the contractual obligations of the parties.

11.9   Expenses of Litigation.
       -----------------------
In the event of any litigation  arising from the breach of this  Agreement,  the
prevailing  party in such  litigation  shall be entitled  to recover  reasonable
attorneys' fees and costs, including appeals.

11.10   List of Exhibits and Schedules.
        -------------------------------
As mentioned in this Agreement, there are attached hereto or delivered herewith,
the following Exhibits and Schedules:

                                    EXHIBITS
                                    --------
                                                         Section
  Exhibit            Document                           Reference
  -------            --------                           ---------

     A               Articles of Incorporation            4.1(b)
     B               Bylaws                               4.1(b)
     C               Short Employment Agreement           6.6 and 9.1(f)
     D               Phase 2 Employment Agreements        6.6 and 9.1(f)

                                    SCHEDULES
                                    ---------
  Schedule
     No.             Schedule Caption
  --------           ----------------

   1.1(a)(i)         Client Accounts and Contracts
   1.1(a)(ii)        Leases
   1.1(a)(iii)       Personal Property
   1.1(a)(iv)        Assumed Contracts
   1.1(a)(vi)        Intellectual Property
   1.3               Balance Sheet
   4.1(e)            Foreign Qualifications
   4.1(g)            Violations or Conflicts
   4.2               Seller Financial Statements

                                      -30-
<PAGE>

   4.3(b)            Tax Matters
   4.4(a)            Title to Purchased Assets
   4.4(b)            Leases
   4.4(c)            Adequacy
   4.5               Exceptions to Intellectual Property
   4.6(a)            Indebtedness
   4.6(b)            Client Account Notices
   4.6(c)            Insurance
   4.6(d)            Status
   4.7               Officers and Directors
   4.8               Employee and Fringe Benefit Plans
   4.10              Litigation
   4.11(a)           Compliance with Laws
   4.11(b)           Permits
   4.11(c)           Environmental
   4.12              Transactions With Affiliates
   4.13              Accounts Receivable
   6.4(a)            Retained Employees

Each of the  foregoing  Exhibits and  Schedules is  incorporated  herein by this
reference and expressly made a part hereof.

11.11   Expenses.
        ---------
Each of the parties  hereto shall bear its own expenses  incurred in  connection
with this Agreement and the transactions herein contemplated, including, but not
limited to, legal and accounting fees and expenses.

11.12   Further Assurances and Cooperation.
        -----------------------------------
Seller and Shareholders shall execute,  acknowledge and deliver to Buyer any and
all other assignments,  consents, approvals, conveyances,  assurances, documents
and instruments reasonably requested by Buyer at any time and shall take any and
all other actions  reasonably  requested by Buyer at any time for the purpose of
more effectively assigning, transferring,  granting, conveying and confirming to
Buyer, the Purchased Assets. After consummation of the transactions contemplated
herein,  the parties agree to cooperate with each other in regard to all matters
arising from the purchase by Buyer of the Purchased Assets.

11.13   Confidentiality and Publicity.
        ------------------------------
The parties  hereto shall hold in confidence the  information  contained in this
Agreement and all information related to this Agreement,  which is not otherwise
known to the  public,  shall be held by each party  hereto as  confidential  and
proprietary  information  and shall not be disclosed  without the prior  written
consent of the other  parties.  Accordingly,  Buyer and  Shareholders  shall not
discuss with, or provide  nonpublic  information to, any third party (except for
such  party's  attorneys,  accountants,  directors  of an affiliate of any party
hereto,  and  other  consultants  and  professional  advisors)  concerning  this
transaction  prior to the  Closing,  except:  (i) as  required  in  governmental
filings,   securities   filing  or  judicial,   administrative   or  arbitration
proceedings;  or (ii)  pursuant  to  public  announcements  made  with the prior
written approval of Shareholders and Buyer.

11.14   Fair Meaning.
        -------------
This  Agreement  shall be  construed  according  to its fair  meaning  and as if
prepared by all parties hereto.

11.15   Gender and Number and Construction.
        -----------------------------------
All  references  to the neuter  gender  shall  include the feminine or masculine
gender and vice versa,  where  applicable,  and all  references  to the singular
shall  include the plural and vice versa,  where  applicable.  Unless  otherwise
expressly  provided,  the word "including"  followed by a listing does not limit
the preceding words or terms and shall mean "including, without limitation."

                                      -31-
<PAGE>

11.16   Tax Effect.
        -----------
Neither of the parties (nor such party's counsel or accountants)  has made or is
making  any  representations  to any other  party (nor such  party's  counsel or
accountant)  concerning any of the tax effects of the transactions  provided for
in this Agreement and each party hereto represents that it has obtained,  or may
obtain,  independent  tax advice with  respect  thereto and upon which it, if so
obtained, has solely relied.

11.17   Time is of the Essence.
        -----------------------
Time is of the  essence  for all  dates  and  time  periods  set  forth  in this
Agreement and each performance called for in this Agreement.

11.18   Entire Agreement.
        -----------------
All prior negotiations and agreements among the parties hereto are superseded by
this Agreement, and there are no representations,  warranties, understandings or
agreements  other  than  those  expressly  set forth  herein or in an Exhibit or
Schedule delivered pursuant hereto,  except as modified in writing  concurrently
herewith or subsequent hereto.

11.19   Governing Law.
        --------------
This Agreement shall be governed by and construed and  interpreted  according to
the laws of the State of Missouri,  determined without reference to conflicts of
law  principles.  To the extent  permitted  by law,  each of the parties  hereto
hereby  irrevocably  submits to the  jurisdiction of any Missouri state court or
United States federal  court,  in either case sitting in Missouri over any suit,
action or other  proceeding  brought by any party  arising out of or relating to
this  Agreement,  and each of the  parties  hereto  irrevocably  agrees that all
claims with respect to any such suit,  action or other proceeding shall be heard
and determined in such courts.

                  [Remainder of page intentionally left blank.]

                                      -32-
<PAGE>

            IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized representatives on the day and year first
above written.

Buyer:                                   Seller:

PHASE 2 CONSULTING, INC.                 PHASE 2 CONSULTING, INC.

By /s/ Vincent L. Germanese              By /s/ John H. Short, Ph.D.
  ----------------------------------       ------------------------------------
    Vincent L. Germanese                      John H. Short, Ph.D.
                                              President

Parent:                                  Shareholders:

                                         /s/ John H. Short, Ph.D.
REHABCARE GROUP, INC.                    --------------------------------------
                                         John H. Short, Ph.D.

By /s/ H. Edwin Trusheim                 /s/ Peter F. Singer
  ----------------------------------     --------------------------------------
    H. Edwin Trusheim                    Peter F. Singer
    Chairman of the Board
                                         /s/ Howard W. Salmon
                                         --------------------------------------
                                         Howard W. Salmon

                                      -33-
<PAGE>

                                    Exhibit A

                            Articles of Incorporation

<PAGE>

                                    Exhibit B

                                     Bylaws

<PAGE>

                                    Exhibit C

                           Short Employment Agreement

<PAGE>

                                    Exhibit D

                         Phase 2 Employment AgreementsEXHIBIT 10.18  

            STOCK REDEMPTION AGREEMENT

                      THIS AGREEMENT  is entered into this 14th day of March, 2005, by and between David G. Kreher (“David”) and Pamela Kreher (“Pamela”), individuals residing at 1216 Saddle Crest Road, Wildwood, Missouri 63038 (hereinafter sometimes referred to together as “Sellers”) and Reliv International, Inc., a Delaware corporation, having its principal place of business at 136 Chesterfield Industrial Boulevard, Chesterfield, Missouri (the “Company).

                    WHEREAS, Sellers are the owners of 450,000 shares of the common stock of the Company (such shares hereinafter referred to as the “Shares”) owned as follows:

	 	David G. Kreher and Pamela S. Kreher	384,128 Shares	 
	 	Pamela S. Kreher 	65,872 Shares	 

	                WHEREAS, Sellers desire to sell and Company desires to purchase and redeem all of the Shares on the terms
and conditions provided herein.

                NOW, THEREFORE, in consideration of the premises and of the terms, covenants and conditions hereinafter contained,
the parties hereto agree as follows:

                1.
            Sale and Purchase of Shares.  Subject to and on the terms and conditions hereof, in reliance on the representations and warranties
herein and for the consideration herein, Sellers agree to sell to the Company, and the Company agrees
to purchase and redeem from Sellers, all of the Shares at the price and on the terms provided herein.

                2.
            Purchase Price.  The aggregate purchase price for all of the Shares shall be $4,050,000, or $9.00 per share.

                3.
            Payment.  In full payment of the purchase price hereunder, the Company shall deliver to each of Sellers in
accordance with their interests at the Closing duly executed Promissory Notes in the form attached
hereto as Exhibits A and B in the principal sum of $3,457,152 and $592,848, respectively, the Promissory
Note provided for as Exhibit A bearing interest at the rate of Four Percent (4%) per annum. Payment
of the Purchase Price herein shall be made against, and is subject to the condition of, delivery
to the Company of certificates for all of the Shares, duly endorsed in blank, by Sellers.

                4.
            Closing and Transfer.  The Closing of the transactions provided for herein shall be held at the offices of the Company on
March 14, 2005. At the Closing:

	 

	 	                  4.1           the Company shall deliver to each
of Sellers duly executed Promissory Notes in the form attached hereto as Exhibits A and B;

	

1

	 	                4.2           Sellers shall deliver to the Company
a certificate or certificates representing all of the Shares duly endorsed in blank or with stock
power attached endorsed in blank.

	 
	
               Effective at the time of Closing, the Company shall be entitled to transfer all of the Shares on the
books of the Company.

                5.            Representations and Warranties of Kreher.  Sellers each represent and warrant to the Company, to the best of their knowledge and belief, as
of the date hereof and as of the date of Closing, and acknowledge and agree as follows:

	 

	 	                5.1           Sellers
are the sole owner of, and have good and marketable title to, the Shares free and clear of any and
all contracts, options, commitments, agreements, liens, claims or encumbrances whether or not of
record,
		 
	 	                5.2           Sellers
have the full right, power and authority to sell and transfer the Shares in accordance with the terms
hereof.
		 
	 	                5.3           Sellers
represent, warrant, acknowledge and agree that: (i) each of Sellers is fully informed concerning
the business, condition, financial and otherwise, assets, operations and prospects of the Company;
(ii) David is a senior executive officer of the Company and has full access to, and knowledge of,
any and all material information concerning the Company; (iii) the Company has filed all reports
required by it to be filed with the Securities and Exchange Commission, including all Reports
on Form 10-K and Form 10-Q and Sellers have read and have knowledge of all of such reports, and (iv)
during the period payments are being made to Sellers under the Promissory Note issued hereunder,
and thereafter, the market value of the Company’s common stock as traded on the Nasdaq Stock
Market, or otherwise, many increase to an amount in excess of the purchase price for the Shares,
and nevertheless, Sellers have determined and desire to sell the Shares on the terms and at the price
provided herein.

	 
	
                The
representations and warranties of Sellers herein shall survive the Closing for a period of five years
from the date thereof.

                6.
           Representations and Warranties of the Company.  The Company represents and warrants to Sellers as of the Closing, as follows:

	 

	 	                6.1           The
Company has all necessary corporate power and authority to enter into this Agreement, and the Promissory
Notes provided for herein, and to perform its obligations hereunder and thereunder and each have
been duly and validly authorized by proper action of the Board of Directors of this Company. This
Agreement, and the Promissory Notes provided for herein, each have been duly executed and delivered
by the Company and constitute valid and binding obligations of the Company, enforceable against the
Company in accordance with their respective terms;

	

2

	 	                6.2           The
Company has filed all Reports required by it to be filed with the Securities and Exchange Commission,
including all Reports on Form 10-K and Form 10-Q.
		 
	 	                6.3           The
Company has filed, or shall timely file, and make any and all reports or disclosures, required to
be made or filed, concerning or related to this Agreement and the transactions provided for herein;
		 
	 	                6.4           The
Company acknowledges that during the period payments are being made to Sellers under the Promissory
Notes issued hereunder, and thereafter, the market value of the Company’s common stock as traded
on the Nasdaq Stock Market, or otherwise, many decrease to an amount below the purchase price for
the Shares, and nevertheless, the Company has determined and desires to purchase the Shares on the
terms and at the price provided herein.
		 
	 	7.             Indemnification of Sellers.

	 
	
               The
Company agrees that it shall indemnify, hold harmless and defend each of Sellers against any and
all loss, claim, damage or liability (which shall include, but not be limited to, all costs of defense
and attorneys fees), to which Sellers or either of them may become subject by reason of any claim,
action or proceeding made or instituted by any third party arising out of or in connection with this
Agreement or the transactions provided for herein. With respect to any action, claim or proceeding
as to which Sellers, or either of them, shall be entitled to indemnification hereunder, the Company
shall not make any settlement thereof without the consent of Sellers, which consent shall not unreasonably
be withheld. 

                8.            
Specific Enforcement.

                The
obligations of Sellers hereunder are of a special, unique, unusual and extraordinary character, thereby
giving this Agreement peculiar value so that the loss of the Shares or violation by Sellers of this
Agreement could not reasonably or adequately be compensated in damages in an action at law. Therefore,
in addition to other remedies provided by law, the Company shall have the right to compel specific
performance hereof by Sellers or to obtain injunctive relief against violations hereof by Sellers.

                9.
            Further Assurances. Sellers and the Company shall take such other and further actions, execute such other and further
documents as shall be reasonably necessary or appropriate to effect and consummate the sale contemplated
herein.

                10.
          Notices. All notices or other communications required or permitted to be given hereunder shall be in
writing and shall be delivered or personally mailed, certified mail, return receipt requested, postage
pre-paid, to the parties as follows:

	

3

	 	If to Kreher, to: 	David G. Kreher and Pamela S. Kreher
	 	 	1216 Saddle Crest Road
	 	 	Wildwood, Missouri 63038
	 	 	 
	 	If to Company, to:	Robert L. Montgomery
	 	 	Chief Executive Officer
	 	 	Reliv International, Inc.
	 	 	136 Chesterfield Industrial Boulevard
	 	 	Chesterfield, Missouri 63005
	 	 	 

	
Any notice mailed in accordance with the terms hereof shall be deemed received on the third day following
date of mailing.

                11.
          Entire Agreement. This Agreement constitutes the entire agreement among the parties hereto with respect to the subject
matter hereof and supersedes all prior written or oral warranties, representations, inducements,
understandings, commitments, agreements or contracts. This Agreement may not be modified except by
a writing signed by all of the parties.

                12.
          Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective,
heirs, personal representatives, successors and assigns.

                13.
          Governing Law. This Agreement shall be governed by and construed and enforced in all respects in accordance with
the laws of the State of Missouri.

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

	 

	 	RELIV INTERNATIONAL, INC.
	 	 
	 	By:	/s/ Robert L. Montgomery
	 	 	
	 
	 	 	Robert L. Montgomery, CEO
	ATTEST:	 	 
	/s/ Stephen M. Merrick	 	 
	
	 	 	 
	Secretary	 	 
	 	 	/s/ David G. Kreher
	 	 	
	 
	 	 	DAVID G. KREHER
	 	 	 
	 	 	/s/ Pamela S. Kreher
	 	 	
	 
	 	 	PAMELA S. KREHER

	

4

	EXHIBIT A

     TERM PROMISSORY NOTE

	 
	$3,457,152	March 14, 2005
	 	 

	
                                FOR VALUE RECEIVED, RELIV INTERNATIONAL, INC., a Delaware corporation (the “Maker”), hereby
unconditionally promises to pay to the order of DAVID G. KREHER and PAMELA S. KREHER (the “Payee”),
at the address of Payee 1216 Saddle Crest Road, Wildwood, Missouri 63038, or at such other place
as the Payee or any holder hereof may from time to time designate, the principal sum of THREE MILLION
FOUR HUNDRED FIFTY-SEVEN THOUSAND ONE HUNDRED FIFTY-TWO AND NO/100 DOLLARS ($3,457,152) in lawful
money of the United States of America and in immediately available funds in installments in the following
amounts and dates:

                                On March 31, 2005, the sum of $307,152

                                On March 31, 2006, the sum of $900,000

                                On March 31, 2007, the sum of $900,000

                                On March 31, 2008, the sum of $675,000

                                On March 31, 2009, the sum of $675,000

                                Provided, however, that, in the event that the Employment Agreement among Maker and David G. Kreher
for a term expiring on December 31, 2007 shall not be renewed or extended by Maker and shall expire
and terminate as of December 31, 2007, the amount set forth herein as being due and payable on March
31, 2008 and on March 31, 2009, shall be due and payable as of January 15, 2008. 

                                Maker hereby further promises to pay interest to the order of Payee on the amountof the unpaid principal
balance hereof from and after April 1, 2005 at the Interest Rate (as hereinafter defined). Interest
on the outstanding principal balance shall accrue on and after April 1, 2005. Such interest shall
be paid commencing July 1 , 2005 and on the first day of each calendar quarter thereafter until the
indebtedness evidenced by this Note is paid in full. Interest payable upon and after an Event of
Default shall be payable upon demand.

                                For purposes hereof, (a) the term “Interest Rate” shall mean four percent (4%) per annum;
provided, that, the Interest Rate shall mean a rate of two and three quarters percent (2.75%) per annum in excess
of the Interest Rate upon and after an Event of Default and, (b) the term “Event of Default”
shall mean the failure of Maker to make any payment of principal or interest when due and within
ten (10) days after written notice of such failure shall have been given to Maker by Payee.

	

5

	
                                In the event of an Event of Default, Payee shall be entitled, by written notice to Maker, to accelerate
the payment of all outstanding principal and interest hereunder and, upon the date of such acceleration,
the entire outstanding principal balance and all accrued interest hereunder be and become immediately
due and payable.

                                This Note is issued pursuant to the terms and provisions of a Stock Redemption Agreement among Payee
and Maker dated March 14, 2005. 

                                Maker (i) waives diligence, demand, presentment, protest and notice of any kind, (ii) agrees that it
will not be necessary for Payee to first institute suit in order to enforce payment of this
Note and (iii) consents to any one or more extensions or postponements of time of payment, release,
surrender or substitution of collateral security, or forbearance or other indulgence, without notice
or consent. The pleading of any statute of limitations as a defense to any demand against Maker is
expressly hereby waived by Maker.

                                In the event of an Event of Default, Payee shall be entitled to recover their costs of collection incurred
by them including a reasonable sum for their attorneys fees.

                                The validity, interpretation and enforcement of this Note and any dispute arising in connection herewith
or therewith shall be governed by the internal laws of the State of Missouri (without giving effect
to principles of conflicts of law).

                                The execution and delivery of this Note has been authorized by the Board of Directors and by any necessary
vote or consent of the stockholders of Maker. This Note shall be binding upon the successors and
assigns of Maker and inure to the benefit of Payee and its successors, endorsees and assigns. Whenever
used herein, the term “Maker” shall be deemed to include its successors and assigns and
the term “Payee” shall be deemed to include Payee’s successors, endorsees and assigns.
If any term or provision of this Note shall be held invalid, illegal or unenforceable, the validity
of all other terms and provisions hereof shall in no way be affected thereby.

	 

	ATTEST:	RELIV INTERNATIONAL, INC.
	 	 
	By ______________________________________	By ______________________________________
	Its ______________________________________	Its ______________________________________
	 	 
	            [Corporate Seal]	 

	

6

	EXHIBIT B 

    PROMISSORY NOTE

    
	 
	$592,848 	March 14, 2005
	 	 

	
                                FOR
VALUE RECEIVED, RELIV INTERNATIONAL, INC., a Delaware corporation (the “Maker”), hereby
unconditionally promises to pay to the order of PAMELA S. KREHER (the “Payee”), at the
address of Payee, 1216 Saddle Crest Road, Wildwood, Missouri 63038, or at such other place as the
Payee or any holder hereof may from time to time designate, the principal sum of FIVE HUNDRED NINETY-TWO
THOUSAND EIGHT HUNDRED FORTY-EIGHT AND NO/100 DOLLARS ($592,848) in lawful money of the United States
of America and in immediately available funds on March 31, 2005.

                                This
Note shall not bear interest on the principal amount outstanding prior to March 31, 2005. After March
31, 2005, interest on the outstanding principal amount hereof outstanding from time to time shall
bear interest at the rate of Six and Three Quarters Percent (6.75%) per annum.

                                This
note is issued pursuant to the terms and provisions of a Stock Redemption Agreement among Payee and
Maker dated March 14, 2005.

                                Maker
(i) waives diligence, demand, presentment, protest and notice of any kind, (ii) agrees that it will
not be necessary for Payee to first institute suit in order to enforce payment of this Note and (iii)
consents to any one or more extensions or postponements of time of payment, release, surrender, or
forbearance or other indulgence, without notice or consent. The pleading of any statute of limitations
as a defense to any demand against Maker is expressly hereby waived by Maker.

                                The
validity, interpretation and enforcement of this Note and any dispute arising in connection herewith
or therewith shall be governed by the internal laws of the State of Missouri (without giving effect
to principles of conflicts of law).

                                The
execution and delivery of this Note has been authorized by the Board of Directors and by any necessary
vote or consent of the stockholders of Maker. This Note shall be binding upon the successors and
assigns of Maker and inure to the benefit of Payee and its successors, endorsees and assigns. Whenever
used herein, the term “Maker” shall be deemed to include its successors and assigns and
the term “Payee” shall be deemed to include Payee’s successors, endorsees and assigns.
If any term or provision of this Note shall be held invalid, illegal or unenforceable, the validity
of all other terms and provisions hereof shall in no way be affected thereby.

	

7

	ATTEST:	RELIV INTERNATIONAL, INC.
	 	 
	By ______________________________________	By ______________________________________
	Its ______________________________________	Its ______________________________________
	 	 
	            [Corporate Seal]	 

	

8

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