Document:

EX-10.2

 

Exhibit 10.2

STOCK PURCHASE AGREEMENT

     THIS STOCK PURCHASE AGREEMENT (together with the Schedules referenced herein and attached
hereto, the “Agreement”), dated as of
September 8, 2006, is by and among (i) Orion
HealthCorp Inc., a Delaware corporation or its designee (“Buyer”), (ii) On Line
Alternatives, Inc., an Alabama corporation (“OL Alternatives”); (iii) On Line Payroll
Services, Inc., an Alabama corporation (“OL Payroll” and OL Alternatives, each a
“Company” and collectively, the “Companies”) and (iv) the shareholders of OL
Alternatives and OL Payroll (each a “Shareholder” and collectively, the
“Shareholders”).

R E C I T A L S:

     WHEREAS, Shareholders collectively own one hundred percent of the issued and outstanding
shares of capital stock of OL Alternatives and OL Payroll.

     WHEREAS, Shareholders desire to sell to Buyer, and Buyer desires to purchase from
Shareholders, the Shares (as defined below) owned by each of the Shareholders, all in accordance
with the terms and conditions set forth herein.

     NOW, THEREFORE, in consideration of the foregoing and the respective representations,
warranties, covenants, and agreements, and subject to the terms and conditions, set forth herein,
the parties agree as follows:

ARTICLE I

TRANSFER OF SHARES

     Section 1.1 Sale of Shares. On the terms and subject to the conditions in this Agreement, Buyer
will purchase, and each Shareholder will convey, transfer, assign and deliver to Buyer, free and
clear of all Encumbrances (as defined below), on the Closing Date (as defined below), that number
of the shares of capital stock of each Company set forth opposite his or her name on Schedule
1.1 attached hereto (the “Shares”).

     Section 1.2 Method of Conveyance and Transfer. The conveyance and transfer of the Shares will be
effected by delivery of all certificates evidencing the Shares, duly endorsed in blank by each
Shareholder, or such other instruments of transfer as are reasonably acceptable to Buyer in each
case, vesting in Buyer good and marketable title to the Shares, free and clear of all Encumbrances.

ARTICLE II

PAYMENT OF PURCHASE PRICE

     Section 2.1 Purchase Price. Buyer agrees to pay to Shareholders at Closing, Three Million Three
Hundred Ten Thousand Nine Hundred Twenty Four Dollars ($3,310,924.00) (the “Purchase
Price”) for the Shares by delivery of (i) a promissory note in the form attached hereto

 

 

as
Exhibit A (the “Note”) in the aggregate principal amount of Eight Hundred Thirty
Three Thousand Nine Hundred Eighty One Dollars ($833,981) and (ii) cash for the balance of the
Purchase Price payable by wire transfer or delivery of immediately available funds; provided,
however that if Buyer determines in its reasonably discretion that additional cash may be needed to
operate the business after the Closing, Buyer may pay up to Seventy Five Thousand Dollars ($75,000)
of the Purchase Price by delivery of a promissory note, the form of which is attached hereto as
Exhibit B (the “Short Term Note”). The Purchase Price will be allocated among the
Shareholders in proportion to their respective holdings in OL Payroll and OL Alternatives as set
forth on Schedule 1.1 to this Agreement. The obligation to pay the Note will be subject to
the restrictions and adjustments set forth in Section 2.2 below.

     Section 2.2 Purchase Price Adjustments.

     (a) Within forty five (45) days following the end of the 12 month anniversary of the Closing
(the “Earnout Period”), Buyer shall deliver a written notice to the Shareholders detailing
the revenue of the Companies as determined on a cash basis in accordance with generally accepted
accounting principles (“GAAP”) for the twelve (12) month period following the Closing
(“Actual Revenue”). If the Actual Revenue exceeds Two Million Five Hundred Thousand Two
Hundred Fifty Nine Dollars ($2,500,259) (“Minimum Revenue Target”) then the Purchase Price
will be increased on a dollar-for-dollar basis by the lesser of (i) the amount of such excess or
(ii) Five Hundred Thousand Fifty One Dollars and Eighty Cents ($500,051.80) (“Upward
Adjustment Amount”). Within five (5) days following such determination, Buyer shall pay to
each Shareholder such Shareholder’s pro-rata portion of the Upward Adjustment Amount and the
entire balance of the Note shall be paid in full at maturity. If the Actual Revenue is less than
the Minimum Revenue Target then the principal amount of the Note shall be reduced by such amount
on a dollar-for-dollar basis (“Downward Adjustment Amount”) and the balance of the Note
shall be paid by Buyer to the Shareholders within five (5) days following such determination, in
full satisfaction of the Note. If the Downward Adjustment Amount exceeds the outstanding balance
of the Note, Shareholders shall not be required to repay such excess amount to the Buyer.

     (b) If during the Earnout Period (i) Buyer moves the principal location of the business,
including the data processing operations, out of the greater Mobile, Alabama geographic region,
(ii) Buyer terminates the employment of William Suffich and Dee Matter, without cause (as defined
in the Employment Agreements) or (ii) the employment of William Suffich and Dee Matter is
terminated by either of them for Good Reason (as defined in the Employment Agreements), there will
be no reduction in the Purchase Price as provided in Section 2.2(a) above.

ARTICLE III

REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF SHAREHOLDERS AND EACH COMPANY 

     Companies and Shareholders, jointly and severally, represent and warrant to Buyer that the
statements contained in this Article III are correct and complete as of the date of this Agreement
and will be correct and complete as of the Closing Date (as though then made and as

 

though the
Closing Date were substituted for the date of this Agreement in this Article III ) as follows:

     Section 3.1 Organization and Standing. OL Payroll is a corporation duly organized, validity
existing and in good standing under the laws of the state of Alabama. OL Alternatives is a
corporation duly organized, validly existing and in good standing under the laws of the state of
Alabama. Each Company has full corporate power and authority to own its properties and to carry on
its business as and where now conducted and to own and lease and operate its properties at and
where now owned or leased and operated by it. Each Company is qualified to do business in every
jurisdiction in which it owns or leases property, or the nature of the business conducted by it
make such qualification necessary. Neither OL Payroll nor OL Alternatives has been a party to any
merger, reorganization or consolidation nor has either changed its jurisdiction of organization.

     Section 3.2 Authority of Shareholders; Consents.

     (a) Each Shareholder represents for himself or herself that he or she has (i) the power and
authority to execute and deliver this Agreement and the other instruments and agreements to be
executed and delivered by him or her as contemplated hereby, and (ii) the power and authority to
consummate the transactions contemplated hereby and by the other instruments and agreements to be
executed and delivered by him or her contemplated hereby, including the sale, assignment,
transfer and conveyance of his or her Shares pursuant to this Agreement (the “Transaction
Documents”). Each Shareholder further represents for himself or herself that no further
action is necessary on his or her part to make the Transaction Documents valid, binding and
enforceable on him or her in accordance with their terms and when executed and delivered the
Transaction Documents shall have been duly executed and delivered by him or her and shall be the
valid and binding obligations of him or her, enforceable against him or her in accordance with
their terms.

     (b) The execution, delivery, consummation and performance of the Transaction Documents by the
Shareholders or the Companies (i) are not contrary to the Charter Documents (as defined below) of
each Company, (ii) except as set forth on Schedule 3.2, do not now and will not result in
a violation or breach of, conflict with or constitute a default (or give rise to any right of
termination, cancellation, payment or acceleration) under, result in the creation of any liens,
security interests, option, rights of first refusal, claims, easements, mortgages, charges,
indentures, deeds of trust, rights of way, restrictions on the use of real property,
encroachments,
licenses to third parties, leases to third parties, security agreements, or any other
encumbrances and other restrictions or limitations on use of real or personal property or
irregularities in title thereto (each, an “Encumbrance”) on any of the properties of
either Company, or on either Company under any term or provision of any note, bond, mortgage,
indenture, guarantee, license, franchise, permit, agreement, understanding, arrangement, contract,
commitment, lease, franchise agreement or other instrument or obligation (whether oral or written)
(each, including all amendments thereto, a “Contract”) to which any Shareholder or either
Company is a party, or by which him, her, or it or any of his, her or its properties or assets is
bound, (iii) do not result in a violation or breach of, conflict with or constitute a default
under, nor result in the creation of any Encumbrance on any of the properties of either Company
under any Environmental Law (as defined below) or any other statute, law, ordinance, rule or
regulation

 

of any Governmental or Regulatory Authority (as defined below) (individually, a
“Law”) or under any judgment, order, injunction, decree, writ, permit or license of any
Governmental or Regulatory Authority or any Arbitration Panel (individually, an “Order”)
applicable to either Company, and (iv) does not result in any acceleration or termination of any
loan or security interest agreement to which a Shareholder or either Company is a party or to
which the any Shareholder or a Company or any of their respective assets is subject or bound. For
purposes of this Agreement, “Charter Documents” means the Articles of Incorporation,
Bylaws or other similar organizational documents of each of the Companies or the Buyer, as the
case may be, and any amendments thereto, as applicable.

     (c) No consent, approval or action of, filing with or notice to, any instrumentality,
subdivision, court, administrative agency, commission, official or other authority of the United
States or any other country or any state, province, prefect, municipality, locality or other
government or political subdivision thereof, or any quasi-governmental or private body exercising
any regulatory, taxing, importing or other governmental or quasi-governmental authority
(“Governmental or Regulatory Authority”) or private third party is necessary or required
under any of the terms, conditions or provisions of any Law or Order applicable to either Company
or any Shareholder or by which any of his, her or its properties or assets may be bound, or under
any Contract to which a Company or any Shareholder is a party or by which his, her or it or any of
his, her or its assets or properties may be bound, for the execution and delivery of this
Agreement by Shareholders, the performance by Shareholders of their obligations hereunder or the
consummation of the transactions contemplated hereby.

     Section 3.3 Capitalization; Title.

     (a) The authorized capital stock of OL Payroll and OL Alternatives and the number of shares
of each class of capital stock issued and outstanding of such Company is as set forth on
Schedule 3.3(a). All of the issued and outstanding shares of each Company have been duly
authorized, validly issued, fully paid and are nonassessable and are not subject to, and were not
issued in violation of, any preemptive rights or any applicable securities laws and regulations.
There are no outstanding or authorized offers, subscriptions, conversion rights, options,
warrants, rights, convertible or exchangeable securities, stock appreciation, phantom stock,
profit participation, understandings, claims of any character, obligations or other agreements or
commitments of any nature, whether formal or informal, firm or contingent, written or oral,
relating to the capital stock of, or other equity or voting interest in, either Company,
pursuant to which such Company is or may become obligated to: (i) issue, deliver, sell or
transfer, or cause to be issued, delivered, sold or transferred, any shares of the capital stock
or other ownership or voting interests in or securities of such Company (whether debt, equity, or
a combination thereof); (ii) grant, extend, issue, deliver or enter into any such agreements or
commitments; or (iii) repurchase, redeem or otherwise acquire any capital stock or other ownership
interests in or securities of such Company.

     (b) Upon consummation of the purchase of the Shares as contemplated by this Agreement, Buyer
will be the record holder of one hundred percent (100%) of the equity interests of each Company,
free and clear of all Encumbrances.

 

     (c) There are no shareholder agreements or other agreements, commitments or arrangements of a
nature whether formal or informal, firm or contingent, written or oral, relating to the management
or ownership of any capital stock of a Company. Neither Company has any authorized or outstanding
bonds, debentures, notes or other indebtedness, the holders of which have the right to vote (or
convertible into, exchangeable for, or evidencing the right to subscribe for or acquire securities
having the right to vote) with the shareholders of that Company on any matter.

     (d) Each Shareholder represents and warrants for himself or herself that he or she has good
and marketable title to the Shares being sold by him or her to Buyer hereunder free and clear of
all Encumbrances.

     Section 3.4 Books and Records. The minute books of each Company, as previously made available to
Buyer and its officers, directors, shareholders, key employees, attorneys, agents and other
representatives (collectively, “Representatives”), contain accurate records of all meetings
of, and all corporate actions taken by (including action taken by written consent) the Board of
Directors and shareholders of that Company.

     Section 3.5 Business Relations. Schedule 3.5 lists the ten largest customers of each
Company as of December 31, 2005 and sets forth opposite the name of each such customer the
approximate amount of revenue (determined in accordance with GAAP) attributable to such customer
for the year ended December 31, 2005. Except as set forth on Schedule 3.5, no service
provider has the exclusive right to provide services to either Company. The relationships of each
Company with its customers are good commercial working relationships, and no customer has indicated
that it will refuse to do business, or materially decrease the rate of business, with that Company
in the future.

     Section 3.6 Real Property.

     (a) Neither OL Payroll nor OL Alternatives owns or has owned any real property. Schedule
3.6(a) is a true and complete list of (i) all real property leases to which a Company is a
party, and (ii) all options, deeds of trust, deeds of declaration, mortgages and land contracts
pursuant to or in which a Company has any interest (collectively, the “Real Property”).
Shareholders have furnished to Buyer or its counsel true and complete copies of each written
contract and a written description of each oral contract relating to the list set forth on
Schedule 3.6(a).

     (b) With respect to the Real Property:

     (i) there is no condemnation proceeding or eminent domain proceeding of any
kind pending or, to the knowledge of Shareholders, threatened against any of the
Real Property;

     (ii) the Real Property is occupied under valid and current certificates of
occupancy or the like, and the transactions contemplated by this Agreement will not
require the issuance of any new or amended certificates of occupancy or the like;
there are no facts known to Shareholders which would prevent each

 

location from
being occupied after the Closing Date in substantially the same manner as before;

     (iii) the Real Property does not violate, and all improvements are constructed
in compliance with, all applicable federal, state or local statutes, laws,
ordinances, regulations, rules, codes, orders or requirements, including, without
limitation, any building, zoning or fire laws or codes (the “Laws and
Ordinances”);

     (iv) Shareholders have obtained all appropriate licenses, permits, building
permits and occupancy permits that are required by the Laws and Ordinances;

     (v) to the knowledge of Shareholders, there are no outstanding variances or
special use permits affecting the Real Property or its uses;

     (vi) no notice of a violation of any Laws and Ordinances, or of any covenant,
condition, easement or restriction affecting the Real Property or relating to its
use or occupancy has been given, nor are Shareholders aware of any such violation;

     (vii) to the knowledge of the Shareholders, the Real Property has and will
have as of the Closing Date adequate water supply, storm and sanitary sewage
facilities, telephone, gas, electricity, fire protection, means of ingress and
egress to and from public highways and, without limitation, other required public
utilities. To the knowledge of the Shareholders, all utility lines and facilities
presently serving the Real Property are serviced and maintained by the appropriate
public or quasi-public entity. To the knowledge of the Shareholders, all utilities
enter the Real Property through adjoining public streets or, if they
pass through adjoining private land, they do so in accordance with valid
public easements.

     (viii) to the knowledge of Shareholders, no improvements have been made or are
contemplated to be made by any public or private authority, the costs of which are
to be assessed as special taxes or charges against the Real Property, and there are
no present assessments;

     (ix) to the knowledge of Shareholders, all improvements are without structural
defects;

     (c) With respect to the leased property comprising the Real Property including all leasehold
improvements (collectively, the “Leased Property”):

     (i) all leases are in writing and are duly executed and in full force and
effect for their full term, and none have been modified, amended, sublet or
assigned;

 

     (ii) the rental set forth in each such lease is the actual rental being paid,
and there are no separate agreements or understandings with respect to the same;

     (iii) where a Company is the lessee, the lessee under each such lease has the
full right to exercise any renewal option and on due exercise will be entitled to
enjoy the use of the leased premises for the full term of such renewal option, and
such renewal option does not terminate on assignment of such lease;

     (iv) there is no default by either Company or any other party which affects
the Leased Property of that Company;

     (v) where a Company is the lessee, on performance by the lessee of the terms
of each lease (all of which terms have been fully performed by the lessee as of the
date of this Agreement and will have been fully performed as of the Closing Date),
the lessee has the full right to enjoy the use of the premises demised for the full
term of the lease without disturbance by any other party, and there are no written
or oral contracts between either Company and any third party relating to any claim
by such third party of any right to all or any part of the interest that either
Company has in any leasehold estate or otherwise relating to the use and occupancy
by the same of such estate;

     (vi) all security deposits required by such leases have been made and have not
been refunded or returned, or their forfeiture claimed, in whole or in part, by any
lessor; and

     (vii) where a Company is the lessee, all leasehold improvements are in good
operating or working condition and repair, after taking into account ordinary wear
and tear, and are adequate for the operation of that Company’s business as
presently conducted.

     Section 3.7 Subsidiaries; Investments in Other Entities. Neither Company has a direct or indirect
equity interest, or debt or other securities convertible into any equity, ownership, proprietary or
voting interest, in any entity, corporation or otherwise, or any right, warrant or option to
acquire any such interest.

     Section 3.8 Title to and Condition of Assets. Each Company has good title to or, a valid
leasehold interest in, free and clear of all Encumbrances except for Permitted Encumbrances
necessary to operate the business of each Company as presently conducted. As used herein,
“Permitted Encumbrances” shall mean Encumbrances (i) reflected in the Most Recent Balance
Sheet (or the footnotes to the Most Recent Balance Sheet), (ii) consisting of zoning or planning
restrictions or regulations, easements, Permits (as defined below), restrictive covenants,
encroachments and other restrictions or limitations on the use of real property or irregularities
in, or exceptions to, title thereto which, individually or in the aggregate, do not materially
detract from the value of, or materially impair the use of, property used by each Company, and
(iii) for current taxes, assessments or governmental charges or levies not yet due and payable.
Each Company owns or has the exclusive right to use all of the tangible or

 

intangible personal
properties and assets currently used in the conduct of its business. All tangible and intangible
assets of each Company are in its possession or under its control. All of the tangible personal
property and assets used in the business of each Company are in good operating condition and
repair, subject only to routine maintenance and ordinary wear and tear, and are fit and adequate
for the purposes intended, and, together with the Real Property, constitute all of the assets
currently used in the conduct of such Company’s business. Each Company enjoys peaceful and quiet
possession of its assets pursuant to or by deeds, bills of sale, leases, licenses and other
agreements under which it is operating its business.

     Section 3.9 Financial Statements. Shareholders have provided Buyer with the
financial statements of the Company listed below (the “Financial Statements”) and will
provide the monthly financial statements of the Company for each full month after the date hereof
up to the Closing Date, as soon as practicable after the date of such month (the “Interim
Monthly Financial Statements”):

     (a) audited balance sheets and statements of income, changes in stockholders’ equity, and
cash flow of the Companies as of and for the fiscal years ended December 31, 2005, and December
31, 2004 (the “Audited Financial Statements’), including the notes pertaining thereto,
prepared and certified by independent accountants; and the internally prepared balance sheet and
profit and loss statement of each Company for the fiscal year ended December 31, 2003; and

     (b) unaudited balance sheets and statements of income, changes in stockholders’ equity and
cash flows as of and for the month ended April 30, 2006 (the “Most Recent Balance Sheet”).

The Financial Statements and the Most Recent Balance Sheet (and, when delivered, the Interim
Monthly Financial Statements) (i) have been prepared in accordance with GAAP throughout the
periods covered thereby, (ii) present fairly the Companies’ financial condition, results of
operations and changes in stockholder equity and cash flows as of the respective dates and periods
thereof (iii) are true and complete and (iv) are consistent with the books and records of the
Company; provided however, that the Most Recent Balance Sheet and the Interim Monthly Financial
Statements do not include footnotes and are subject to normal year-end adjustments (which will not
be material individually or in the aggregate).

     Section 3.10 Absence of Certain Changes.

     (a) Since December 31, 2005, each Company has conducted its business in the ordinary and
regular course consistent with past practice. Since such date, there has not been any Material
Adverse Effect with respect to the Companies, and no fact, circumstance or event exists or has
occurred which could result in a Material Adverse Effect with respect to the Companies. For
purposes of this Agreement, “Material Adverse Effect” shall mean any event, change or circumstance
that individually or when taken together would or could reasonably be expected to (i) have a
negative impact on revenues of the Companies of more than Three Hundred Thousand Dollars
($300,000.00) per year; (ii) create a liability not accrued for in the Most Recent Balance Sheet
of more than Twenty Five Thousand Dollars ($25,000.00); (iii) result in a decrease in the value of
the assets of the Companies (including, without limitation,

 

intangible assets) of more than Twenty
Five Thousand Dollars ($25,000.00) or (iv) hinder the ability of the Shareholders to effect the
Closing.

     (b) Except as set forth on Schedule 3.10 or as otherwise permitted under Section
17.10 of this Agreement, since December 31, 2005, neither Company has:

     (i) amended or restated its Charter Documents;

     (ii) authorized for issuance, issued, sold, delivered or agreed or committed
to issue, sell or deliver (A) any capital stock of, or other equity or voting
interest in, that Company or (B) any securities convertible into, exchangeable for,
or evidencing the right to subscribe for or acquire either (1) any ownership
interest of, or other equity or voting interest in, that Company, or (2) any
securities convertible into, exchangeable for, or evidencing the right to subscribe
for or acquire, any shares of the capital stock of, or other equity or voting
interest in, that Company;

     (iii) declared, paid or set aside any dividend or made any distribution with
respect to, or split, combined, redeemed, reclassified, purchased or otherwise
acquired directly, or indirectly, any ownership interest of, or other equity or
voting interest in, that Company, or made any other change in the capital structure
of that Company;

     (iv) increased the compensation payable (including, but not limited to, wages,
salaries, bonuses or any other remuneration) or to become payable to any officer,
employee or agent, or any director of that Company other than in the ordinary
course of business;

     (v) made any bonus, profit sharing, pension, retirement or insurance payment,
distribution or arrangement to or with any officer, employee, agent, or any
director of that Company, except for payments that were already accrued prior to
December 31, 2005, or were required by the terms of any Plan set forth on
Schedule 3.20;

     (vi) entered into, materially amended or become subject to any Contract of a
type described in Section 3.15 or outside the ordinary course of business;

     (vii) incurred, assumed or modified any indebtedness, except indebtedness
incurred, assumed or modified in the ordinary course of business consistent with
past practice;

     (viii) permitted any of its properties or assets to be subject to any
Encumbrance (other than Permitted Encumbrances);

     (ix) sold, transferred, leased (including any sale-leaseback transaction),
licensed or otherwise disposed of any assets or properties except for (A) sales of
inventory in the ordinary course of business consistent with past

 

practice and (B)
leases or licenses entered into in the ordinary course of business consistent with
past practice;

     (x) acquired any business, by merger or consolidation, purchase of substantial
assets or equity interests, or by any other manner, in a single transaction or a
series of related transactions, or entered into any Contract, letter of intent or
similar arrangement (whether or not enforceable) with respect to the foregoing;

     (xi) made any capital expenditure or commitment therefore in excess of Ten
Thousand Dollars ($10,000.00) or otherwise acquired any assets or properties or
entered into any Contract, letter of intent or similar arrangement (whether or not
enforceable) with respect to the foregoing;

     (xii) entered into, materially amended or became subject to any joint venture,
partnership, strategic alliance, members’ agreement, co-marketing, co-promotion,
co-packaging, joint development or similar arrangement;

     (xiii) written-off as uncollectible any notes or accounts receivable, except
write-offs in the ordinary course of business consistent with past practice charged
to applicable reserves;

     (xiv) cancelled or waived any claims or rights of substantial value;

     (xv) made any material change in any method of accounting or auditing
practice;

     (xvi) paid, discharged, settled or satisfied any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or otherwise),
other than payments, discharges or satisfactions in the ordinary course of business
and consistent with past practice of liabilities reflected or reserved against in
the Audited Financial Statements;

     (xvii) established, adopted, entered into, amended or terminated any Plan or
any collective bargaining, thrift, compensation or other plan, agreement, trust,
fund, policy or arrangement for the benefit of any directors, officers or
employees;

     (xviii) conducted its cash management customs and practices (including the
collection of receivables and payment of payables) other than in the ordinary
course of business consistent with past practice;

     (xix) entered into any Contract with respect to (whether or not binding), or
otherwise committed or agreed, whether or not in writing, to do any of the
foregoing;

     (xx) elected, revoked or amended any Tax election, settled or compromised any
claim or assessment with respect to Taxes, executed any

 

closing agreement, executed
or consented to any waivers extending the statutory period of limitations with
respect to the collection or assessment of any Taxes, or amended any Tax Returns.

     Section 3.11 Absence of Undisclosed Liabilities. Neither Company has any liability (whether known
or unknown, whether asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become due, including any
liability for Taxes) except for (i) liabilities set forth on the face of the December 31, 2005
balance sheet included in the Audited Financial Statements and (ii) current liabilities incurred
in the ordinary course of business since December 31, 2005.

     Section 3.12 Taxes.

     (a) Each Company has filed all Tax Returns (as defined in subsection (k) below) required to
be filed by or with such Company. All such Tax Returns were correct and complete in all respects
and were prepared in compliance will all applicable Laws. All Taxes due and owing by each Company
(whether or not shown on any Tax Return) have been paid. Neither Company has requested nor is
either Company currently the beneficiary of any extension of time within which to file any Tax
Return that has not yet been filed. Neither Company has received any notice of deficiency,
assessment or proposed deficiency with respect to Taxes and Shareholders have no knowledge of any
unassessed Tax deficiency proposed or threatened against either Company. There are no
Encumbrances on the assets of either Company as a result of any Tax liabilities except for Taxes
not yet due and payable.

     (b) Each Company has withheld and paid all Taxes required to have been withheld and paid in
connection with any amounts paid or owing to any employee, independent contractor, creditor,
stockholder, or other party.

     (c) Neither Company has been a United States real property holding corporation within the
meaning of Section 897(c)(2) of the Internal Revenue Code of 1986, as amended from time to time
and the regulations promulgated and the rulings issued thereunder (the “Code”), during the
applicable period specified in Section 897(c)(1)(A)(ii) of the Code.

     (d) Neither Company has been a party to any action or proceeding brought by any Governmental
or Regulatory Authority for the assessment or collection of Taxes, nor has any such event been
asserted or threatened against it. Neither Company is obligated to make any payments, nor is
either Company a party to any agreement that under certain circumstances could obligate it to make
any payments, that would not be deductible under Section 280G of the Code, nor is either Company
liable under any agreements to compensate any person for any excise tax imposed pursuant to
Section 4999 of the Code. Neither Company is or could be liable for the Taxes of any other Person
or entity under Treasury Regulations Section 1.1502-6 or any comparable state, local or foreign
statute or regulation, or as a transferee, successor, by contract, operation of Law or otherwise.
For purposes of this Agreement, “Person” shall mean an individual, corporation, limited
liability company, partnership, association, estate, trust, unincorporated organization,
Governmental or Regulatory Authority, or other entity or organization.

 

     (e) Neither Company has never been, nor is either Company presently a party to, a Tax sharing
agreement or any similar agreement.

     (f) There are no outstanding agreements or waivers extending the statutory period of
limitations applicable to any Tax Return of a Company for any period. No Taxing authority has
audited any Tax Return or report filed by a Company for any taxable period or otherwise commenced
any action or proceeding for the assessment or collection of Taxes, nor to Shareholders’ knowledge
has any such event been threatened. All Tax deficiencies of each Company raised as a result of
any past audits have been satisfied.

     (g) No claim has ever been made by any Taxing authority in a jurisdiction where a Company
does not file Tax Returns that such Company is or may be subject to taxation by that jurisdiction.

     (h) No adjustments have been made by either Company under Code Section 481 which will affect
the Taxes of such Company for any taxable years that end on or after the Closing Date. Neither
Company will be required to include any item of income in, or exclude any item of deduction from,
taxable income for any taxable period (or portion thereof) ending after the Closing Date as a
result of (i) a change in method of accounting, or (ii) a closing agreement as described in
Section 7121 of the Code (or any corresponding or similar provision of state, local or foreign Tax
law).

     (i) Shareholders have furnished to Buyer complete and correct copies of all Tax Returns filed
by each Company for each fiscal year beginning after December 31, 2000 and have furnished to Buyer
complete and correct copies of all audit reports received by either Company with respect to the
audit of any Tax Return for any taxable period. Schedule 3.12(i) lists all jurisdictions
in each Company currently file Tax Returns.

     (j) As to all Tax periods, or portions thereof, which end prior to, or include the Closing
Date, the liability of a Company for Taxes with respect to such periods, or portions thereof, does
not exceed the amount accrued for such liability on the Most Recent Balance Sheet, as adjusted for
operations and transactions of that Company in the ordinary course of business through the Closing
Date, in accordance with the past practice and custom of that Company.

     (k) For purposes of this Agreement, “Taxes” shall mean any and all taxes, charges,
fees, duties, levies or other assessments, including, without limitation, income, gross receipts,
value added, Alternatives or add-on minimum, estimated, excise, real or property, sales,
withholding, social security, retirement, employment, unemployment, occupation, profits, capital
gains, capital stock, severance, windfall profit, stamp, environment (including taxes under
Section 59A of the Code), use, service, service use, license, net worth, payroll, franchise,
transfer, recording and other taxes, customs and import dues, fees or other governmental charges
of any kind, imposed by any Governmental Authority (whether domestic or foreign including, without
limitation, any state, county, local or foreign government or any taxing agency thereof), whether
computed on a separate, consolidated, unitary, combined or any other basis; and such term shall
include (i) any interest, fines, penalties or additional amounts attributable to, or imposed upon,
or with respect to, any such taxes, (charges, fees, levies or

 

other assessments) and (ii) any
liability for such amounts as a result either of being a member of a combined, consolidated,
unitary or affiliated group or of a contractual obligation to indemnify any person or other
entity. “Tax Return” shall mean any report, return, document, declaration or other
information or filing required to be supplied to any taxing authority or jurisdiction (foreign or
domestic) with respect to Taxes, including, without limitation, information and estimated returns,
schedules or attachments, any documents with respect to or accompanying payments of estimated
Taxes, or with respect to or accompanying requests for the extension of time in which to file any
such report, return, document, declaration or other information and including any amendment
thereof.

     (l) OL Alternatives elected with the Internal Revenue Service to be taxed as an “S
Corporation” as of January 1, 2000 and OL Payroll elected with the Internal Revenue Service to be
taxed as an “S Corporation” as of September 29, 1997 (each an “S-Election Date”). Each
Company has been validly electing “S corporations” within the meaning of Sections 1361 and
1362 of the Code at all times since the date of the applicable S-Election Date for such
Company and will be “S corporations” up to and including the Closing Date.

     Section 3.13 Brokerage and Finder’s Fees. Neither Company has incurred or will incur any liability
to any broker, finder or agent for any brokerage fees, finder’s fees, or commissions with respect
to the transactions contemplated by this Agreement. Any liability to any broker, finder or agent
for any brokerage fees, finder’s fees, or commissions with respect to the transactions contemplated
by this Agreement is the sole responsibility of Shareholders and neither Company is or will be
responsible for any such fees.

     Section 3.14 Employment Matters. Except as set forth on Schedule 3.14:

     (a) Neither Company is a party to, participates in, or is bound by, any collective bargaining
agreement or union Contract, or employment, bonus, deferred compensation, insurance, pension,
profit sharing or similar personnel arrangement, any stock purchase, stock option or other stock
plans or programs or any employee termination or severance arrangement.

     (b) The employment by a Company of any Person (whether or not there is a written employment
agreement) may be terminated at will, without penalty or liability of any kind other than accrued
vacation pay, sick pay, other employee benefits as provided by that Company’s policies and
procedures or by applicable Law or regulations.

     (c) There are no active, pending or, to Shareholders’ knowledge, threatened administrative or
judicial proceedings under Title VII of the Civil Rights Act of 1964, the Age Discrimination in
Employment Act, the Fair Labor Standards Act, the Occupational Safety and Health Act, the National
Labor Relations Act or any other foreign, federal, state or local Law (including common law),
ordinance or regulation relating to the employees of either Company.

     (d) The relation of each Company with its employees is good and no work stoppage, slowdown or
labor strike is pending, or to Shareholders’ knowledge, threatened.

     (e) Neither Company has any Equal Employment Opportunity Commission charges or other claims
of employment discrimination pending or, to Shareholders’ knowledge, threatened against them. No
wage and hour department investigation has been made of either

 

Company. Neither Company has
received notice that there are any occupational health and safety claims against it.

     Section 3.15 Material Contracts.

     (a) Schedule 3.15(a) is a true and correct list of each Contract to which each
Company is a party or by which any of its assets, businesses or operations are bound or affected,
the subject matter of which includes any of the following:

     (i) all Contracts which contain restrictions with respect to payment of
dividends or any other distribution in respect of the capital stock or other equity
interests of that Company;

     (ii) all Contracts relating to capital expenditures or other purchases of
material, supplies, equipment or other assets or properties (other than purchase
orders for inventory or supplies in the ordinary course of business) in excess of
Ten Thousand Dollars ($10,000) individually or One Hundred Thousand Dollars
($100,000) in the aggregate;

     (iii) all Contracts involving a loan (including any guaranty of such loan)
(other than accounts receivable from trade debtors in the ordinary course of
business) or advance to (other than travel and entertainment allowances and
automobile allowances to the employees of such Company extended in the ordinary
course of business), or investment in, any Person or any Contract relating to the
making of any such loan, advance or investment;

     (iv) all Contracts involving indebtedness of such Company;

     (v) all Contracts under which any Person has directly or indirectly guaranteed
indebtedness of such Company;

     (vi) all Contracts granting or evidencing a Lien on any properties or assets
of such Company, other than liens on purchased or lease-purchased equipment;

     (vii) all management service, consulting, financial advisory or any other
similar type Contract and any Contracts with any investment or commercial bank;

     (viii) all Contracts limiting the ability of such Company to engage in any
line of business or to compete with any Person;

     (ix) all Contracts (other than this Agreement and any agreement or instrument
entered into pursuant to this Agreement) with (A) a Shareholder, any other
Affiliate of such Company or any Affiliate of any Shareholder (other than that
Company) or (B) any current or former officer or director of such Company;

 

     (x) all Contracts (including letters of intent) involving the future
disposition or acquisition of assets or properties, or any merger, consolidation or
similar business combination transaction, whether or not enforceable;

     (xi) all Contracts involving any joint venture, partnership, strategic
alliance, shareholders’ agreement, joint or similar arrangement;

     (xii) all Contracts involving any resolution or settlement of any actual or
threatened litigation, arbitration, claim or other dispute;

     (xiii) all Contracts involving (A) a confidentiality arrangement executed
outside the ordinary course of business or (B) a standstill or similar arrangement;

     (xiv) all Contracts involving leases or subleases of personal property to
which such Company is a party (as lessee or lessor) and involving an annual base
rental payment in excess of Ten Thousand Dollars ($10,000);

     (xv) all Contracts involving Ten Thousand Dollars ($10,000) or more which are
not cancelable by such Company without penalty on thirty (30) days’ or less notice;

     (xvi) all Contracts with each of the customers listed on Schedule 3.5;
and

     (xvii) all other Contracts that are material to the business of such Company.

     (b) Each Contract set forth on Schedule 3.15(a) (or required to be set forth on
Schedule 3.15(a)) is in full force and effect and there exists no (i) default or event of
default by the Company that is a party to such Contract or any other party to any such Contract
with respect to any term or provision of any such Contract or (ii) event, occurrence, condition or
act (including the consummation of the transactions contemplated hereby) which, with the giving of
notice, the lapse of time or the happening of any other event or condition, would give rise to a
right of termination or become a default or event of default by such Company or any other party
thereto, with respect to any term or provision of any such Contract. Neither Company has violated
any of the material terms or conditions of any Contract or agreement set forth on Schedule
3.15(a) (or required to be set forth on Schedule 3.15(a)) to which it is a party and
all of the covenants to be performed by any other party thereto have been fully performed in all
material respects. Shareholders have delivered to Buyer true and complete copies, including all
amendments, of each Contract set forth on Schedule 3.15(a).

     Section 3.16 Section 3.1 Litigation. Schedule 3.16 sets forth a true and complete list of all actions,
suits, proceedings at Law or in equity, arbitration or other proceedings by a Governmental or
Regulatory Authority or any other Person, or, to the knowledge of Shareholders, threatened, against
or affecting either Company and which that Company (i) has been a party since December 31, 2003, or
(ii) is currently a party and which relate to the business of such Company, including, without
limitation, proceedings that could affect title to or interests in the assets of

 

such Company or to
the Shares. Shareholders do not know of any valid basis for any such action or proceeding.
Neither Company is subject to any Order of any court or of any federal, state, local or other
Governmental or Regulatory Authority, domestic or foreign. There is no current investigation of
either Company by a Governmental or Regulatory Authority. Schedule 3.16 indicates which of
the matters listed are covered by valid insurance and the extent of such coverage.

     Section 3.17 Insurance Schedule 3.17 is a true and correct list of all the policies of insurance
(including bonding) covering the business, properties, assets and employees of each Company
(including self-insurance) presently in force (including as to each (i) risk insured against, (ii)
name of carrier, (iii) policy number, (iv) amount of coverage, (v) amount of premium, (vi)
expiration date, and (vii) the property, if any, insured, indicating as to each whether it insures
on an “occurrence” or a “claims made” basis). All of the insurance policies set forth on
Schedule 3.17 are in full force and effect and all premiums, retention amounts and other
related expenses due have been paid, and each Company is otherwise in compliance in all material
respects with the terms and provisions of such policies to which it is a party. Neither Company is
in default under any of the insurance policies to which it is a party set forth on Schedule
3.17 (or required to be set forth on Schedule 3.17) and there exists no event,
occurrence, condition or act (including the sale of the Shares hereunder) which, with the giving of
notice, the lapse of time or the happening of any other event or condition, would become a default
thereunder. Neither Company has received any notice of cancellation or non-renewal of any such
policy or arrangement nor, to the knowledge of Shareholders, has the termination of any such
policies or arrangements been threatened, and there exists no event, occurrence, condition or act
(including the sale of the Shares hereunder) which, with the giving of notice, the lapse of time or
the happening of any other event or condition, would entitle any insurer to terminate or cancel any
such policies. Schedule 3.17 also sets forth a list of all pending claims and the claims
history for each Company since December 31, 2002 (including with respect to insurance obtained but
not currently maintained). Neither Company has been refused any issuance by any insurance carrier
to which it has applied for insurance during the last five (5) years.

     Section 3.18 Employees. Schedule 3.18 is a true and correct list of all employees of each
Company, their accrued vacation and sick pay, the nature of their duties, their annual
compensation, and the date and amount of their last increase in compensation. A true, correct,
and complete copy of each written employment contract and a description of each oral employment
agreement with any employee has been delivered or made available to Buyer or its counsel.

     Section 3.19 Intellectual Property Rights.

     (a) “Intellectual Property” means all (i) patents, patent applications and patent
disclosures, as well as any reissues, continuations, continuations-in-part, divisions, extensions
or reexaminations thereof, (ii) trademarks, service marks, trade dress, trade names, logos,
slogans, designs, Internet domain names and corporate names and registrations and applications for
registration thereof, together with all of the goodwill associated therewith, (iii) copyrights and
copyrightable works and registrations and applications for registration thereof, (iv) mask works
and registrations and applications for registration thereof, (v) computer software, data, data

 

bases and documentation thereof, (vi) trade secrets and other confidential information (including
ideas, formulas, compositions, inventions (whether patentable or unpatentable and whether or not
reduced to practice), know-how, manufacturing and production processes and techniques, research
and development information, drawings, specifications, designs, plans, proposals, technical data,
pricing and cost information, financial and marketing plans and
proposals, and customer and supplier lists and information, (vii) all other intellectual
property and proprietary rights, and (viii) all copies and tangible embodiments of any of the
foregoing (in whatever form or medium).

     (b) Schedule 3.19(b) contains a complete and accurate list of the following that are
owned or used by each Company as of the Closing Date: (i) all patented or registered Intellectual
Property, (ii) all pending patent applications and applications for registrations of other
Intellectual Property, (iii) all computer software products (other than mass-marketed software
purchased or licensed for less than a total cost of One Thousand Dollars ($1,000.00)), (iv)
material unregistered trade names, corporate names, trademarks, service marks, logos, slogans,
designs and copyrights, and (v) all license or similar agreements with respect to Intellectual
Property to which either Company is a party (collectively, “License Agreements”) (other
than agreements for mass-marketed software purchased or licensed for less than a total cost of One
Thousand Dollars ($1,000.00)), in each case identifying the subject Intellectual Property. Each
License Agreement identified on Schedule 3.19(b) is in full force and effect and
enforceable in accordance with its terms, and the consummation of the transactions contemplated by
this Agreement will not cause an event of default or right of termination thereunder, breach the
terms thereof, or otherwise impair either Company’s rights thereunder.

     (c) Each Company owns and possesses, free and clear of all Encumbrances (except Permitted
Encumbrances), all right, title and interest in or to, or has the right to use pursuant to a
license agreement, all Intellectual Property necessary or used for the operation of its business
as conducted as of the Closing Date (collectively with the Intellectual Property owned by each
Company, the “Business Intellectual Property”). Each Company’s Business Intellectual
Property is existing, in full force and effect and valid and enforceable. No Governmental or
Regulatory Authority has rendered any holding, decision, or judgment that would limit, cancel or
question the validity of the same or licensed by that Company. Each Company has taken all
reasonable action to maintain and protect its respective Business Intellectual Property. There
are no claims against either Company that are presently pending contesting the validity, use,
registrability or enforceability of any of its Business Intellectual Property, and there is no
basis for any such claim. Neither Company has infringed, misappropriated the Intellectual
Property of a third party with and after the Closing Date. The use of the properties and assets
as presently used will not infringe, misappropriate or conflict with any Intellectual Property of
other Persons. Neither Company has received any notice regarding any of the foregoing (including
any demands or offers to license any Intellectual Property from any other person), and (iii) no
third party has infringed, misappropriated or otherwise conflicted with either Company’s Business
Intellectual Property. The transactions contemplated by this Agreement shall not result in the
loss or impairment of any right, title or interest of either Company and in that Company’s
Business Intellectual Property will be available for use on terms and conditions identical to
those under which each Company owned or used its Business Intellectual Property immediately prior
to the Closing Date.

 

     Section 3.20 Employee Benefit Plans and Other Plans.

     (a) Except for the plans, policies or arrangements listed on Schedule 3.20, which
Schedule includes all plans, policies and arrangements maintained by a Controlled Group member in
the past or present (hereinafter referred collectively to as the “Plans” and individually as a
“Plan”), no member of the Controlled Group (as defined below), directly or indirectly, maintains,
sponsors or has any obligation or liability with respect to any “employee benefit plan,” as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”), any fringe benefit plan, any equity compensation plan or arrangement
(including, without limitation, stock option, restricted stock and stock purchase plans), any
plan, policy or arrangement for the provision of executive compensation, incentive benefits,
bonuses or severance benefits, any employment contract, collective bargaining agreement, deferred
compensation agreement, cafeteria plan (within the meaning of Section 125 of the Code) or
split-dollar insurance arrangement, any participation or similar agreement with a multiemployer
pension fund, or any other plan, policy or arrangement for the provision of employee benefits.
For the purposes of this Agreement, “Controlled Group” shall mean the Companies, and any person,
entity or trade or business, whether or not incorporated, which is treated together with either
Company as a member of the same group under Section 414(b), (c), (m) or (o) of the Code.

     (b) No Plan is subject to Title IV of ERISA, no Plan is a part of a “multiple employer
welfare arrangement” within the meaning of Section 3(40) of ERISA, and no Plan is a “multiemployer
plan” within the meaning of Section 4001(a)(3) of ERISA or Section 414(f) of the Code or a
multiemployer plan described in clauses (i) and (ii) of Section 3(37)(A) of ERISA.

     (c) With respect to each Plan identified on Schedule 3.20:

     (i) All applicable ERISA and Code requirements with respect to such Plan as to
the filing of reports, documents and notices with the Secretary of Labor and the
Secretary of the Treasury, and the furnishing of such documents to participants or
beneficiaries, have been complied with in all respects;

     (ii) No Controlled Group member, employee of a Controlled Group member, Plan
and, to the best knowledge of each Company, no other administrator or fiduciary of
the Plan, has taken any action, or failed to take any action with respect to or in
connection with the Plan, which action or failure could subject any Controlled
Group member, or any employee of any Controlled Group member to any liability for
breach of any fiduciary duty, or for any non exempt prohibited transaction (as
defined in Section 406 of ERISA or Section 4975 of the Code);

     (iii) The Plan, each Controlled Group Member, each employee of any Controlled
Group member and, to the best knowledge of each Company, the other fiduciaries and
administrators of the Plan have at all times complied with applicable requirements
of law (including, without limitation, the Code and ERISA) that relate to the Plan
and, with respect to the Plan, there are no ongoing

 

audits or investigations by any
governmental agency and there are no actions, suits or claims (other than routine
claims for benefits) pending or threatened
against the Plan, the assets of the Plan, a Controlled Group member, any
employee, officer or director of a Controlled Group member or, to the best
knowledge of each Company, against any other trustee, fiduciary or administrator of
the Plan;

     (iv) No trust associated with the Plan has earned any unrelated business
taxable income that is subject to taxation under Section 511 of the Code;

     (v) If the Plan provides health, accident or medical benefits, (A) the Plan
sponsor and administrator have complied with the requirements of Part 6 of Subtitle
B of Title I of ERISA and, as applicable, Sections 106, 162(k) and 4980B of the
Code (herein collectively referred to as “COBRA”) and (B) the Plan does not provide
for non-terminable or non-alterable health, accident, medical or life benefits for
employees, former employees, dependents, beneficiaries or retirees, except as
otherwise required by COBRA, and then only to the extent the person pays the
“applicable premium” (as defined in Section 4980B(f)(4) of the Code) for such
coverage, or otherwise pays the full cost of such coverage;

     (vi) No changes have occurred or are expected to occur that would cause a
material increase in the cost of providing benefits under the Plan. The Plan’s
participants and benefits under the Plan are as represented and have not been
increased subsequent to the date as of which documents have been provided;

     (vii) Full payment has been made of all amounts which a Controlled Group
member is required, under applicable law or under the Plan, to have paid as a
contribution or a benefit;

     (viii) The liability of each Controlled Group member with respect to each Plan
has been fully funded based on reasonable and proper actuarial assumptions, has
been fully insured, or has been fully reserved for on its financial statements;

     (ix) The consummation of the transactions contemplated by this Agreement will
not (A) entitle any current or former employee or officer of the Corporation to
severance pay, unemployment compensation or any other similar payment, (B)
accelerate the time of payment or vesting under the Plan, (C) increase the amount
of compensation due any such employee or officer, (D) directly or indirectly cause
the Corporation to transfer or set aside any assets to fund or otherwise provide
for the benefits under the Plan for any current or former employee, officer or
director, or (E) result in any non exempt prohibited transaction described in
Section 406 of ERISA or Section 4975 of the Code; and

 

     (x) Shareholders have delivered or caused to be delivered to Buyer or Buyer’s
counsel true and correct copies of the following with respect to the Plan:

     (A) A copy of the Plan and amendments thereto to the date hereof;

     (B) A copy of each trust agreement, insurance or annuity contract and any
other document pertaining to the Plan funding or the investment of Plan assets,
including all amendments to such documents to the date hereof;

     (C) The most recent determination letter issued by the IRS with respect to
the Plan for which a determination letter has been issued and any pending
determination letter request with respect to the Plan;

     (D) The three (3) most recent Form 5500 series annual return/reports,
including all applicable schedules and audited financial statements, filed with
respect to the Plan (if required by ERISA);

     (E) The most recent actuarial valuation report and asset valuation report for
the Plan (if required by ERISA); and

     (F) A copy of the latest summary plan description (within the meaning of
Section 101(a)(1) of ERISA) of the Plan (if required by ERISA) and each subsequent
summary of material modifications (within the meaning of Section 101(b)(2) of
ERISA) thereto, which have been provided to employees and filed with the
Department of Labor (if required by ERISA).

     (d) With respect to each Plan identified on Schedule 3.20(a) that is an “employee
pension benefit plan,” as defined in Section 3(2) of ERISA:

     (i) If the Plan is funded or required to be funded under ERISA or is intended
to be qualified under Section 401(a) of the Code (A) the Plan and any associated
trust operationally comply with the applicable requirements of Section 401(a) of
the Code, (B) the Plan and any associated trust have been amended to comply with
all such requirements as currently in effect, other than those requirements for
which a retroactive amendment can be made within the “remedial amendment period”
available under Section 401(b) of the Code (as extended under Treasury Regulations
and other Treasury pronouncements upon which taxpayers may rely), (C) the Plan and
any associated trust have received a favorable determination letter from the
Internal Revenue Service stating that the Plan qualifies under Section 401(a) of
the Code, that the associated trust qualifies under Section 501(a) of the Code and,
if applicable, that any cash or deferred arrangement under the Plan qualifies under
Section 401(k) of the Code, unless the Plan was first adopted at a time for which
the above-described “remedial amendment period” has not yet expired, (D) the Plan
currently satisfies the requirements of Section 410(b) of the Code, without regard
to any retroactive amendment that may be made within the above-described “remedial
amendment period”, and (E) no contribution made to the Plan is subject to an excise
tax under Section 4972 of the Code; and

 

     (ii) If the Plan is subject to the funding requirements of Section 412, of the
Code (A) such requirements have been satisfied with respect to the Plan in
all respects, (B) no “accumulated funding deficiency” (within the meaning of
Section 302 of ERISA) exists with respect to the Plan, whether or not waived, (C)
no request for a waiver under Section 412(d) of the Code has been made with respect
to the Plan, (D) no lien has been imposed against a Controlled Group member under
Section 412(n) of the Code, and (E) the “accumulated benefit obligation” of
Controlled Group members with respect to the Plan (as determined in accordance with
Statement of Accounting Standards No. 87, “Employers’ Accounting for Pensions”)
does not exceed the fair market value of Plan assets.

     Section 3.21 Environmental Matters.

     (a) Definitions. For purposes of this Section:

     (i) “Hazardous Material” means any substance or waste containing
hazardous substances, pollutants or contaminants as those terms are governed by or
defined in Environmental Law, including but not limited to the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9601 et
seq., any other foreign, federal, state or local laws, rules or regulations
governing the manufacture, import, use, handling, storage, processing,
transportation, release or disposal of substances or wastes deemed hazardous,
toxic, dangerous or injurious to public health or to the environment. This term
Hazardous Material also includes asbestos-containing material, polychlorinated
bi-phenyls and petroleum or petroleum-based products.

     (ii) “Environmental Law” means any foreign, federal, state or local
law, order, permit or other requirement of law, including any principle of common
law, now or hereafter in effect, relating to the environment, public health or
safety, in each case as applicable to a Company or its respective Real Property.

     (iii) “Release” has the same meaning as in the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9601 et
seq.

     (b) The Company has not allowed any Hazardous Material to be used, manufactured, stored,
placed, processed or released on or off-site of the Real Property, in violation of any
Environmental Law. The Real Property and each Company are in compliance with all Environmental
Law. Neither Company or, if applicable, its Real Property is the subject of any investigation,
notice, order or agreement, or to the knowledge of Shareholders, threatened investigation
regarding any remedial action or the Release, threatened Release or presence of a Hazardous
Material.

     (c) Shareholders have provided to Buyer true and complete copies of all reports, audits,
assessments, studies, analyses, data, correspondence, summaries, maps, photographs,

 

tests and
monitoring results (completed or uncompleted) initiated by or authorized by a
Company or requested or ordered by any Governmental or Regulatory Authority within eight
years prior to the date of this Agreement pertaining to any Environmental Law, Hazardous
Materials, or human health and safety at or involving the business of one of the Companies, any of
the Real Property or any real property owned, leased or otherwise used at any time by one of the
Companies. All such documents are listed on Schedule 3.21(c).

     Section 3.22 Licenses and Rights. Each Company possesses all franchises, licenses, easements,
permits (including occupancy permits), certificates, consents or authorizations of any Governmental
or Regulatory Authority and from all other Persons or entities (each, a “Permit”) that are
necessary to permit such Company to engage in the business that it is presently conducting at all
locations and places where it is presently operating. Each Company has delivered or made available
to Buyer for inspection a true and correct copy of each Permit obtained or possessed by the Company
and all such Permits are in full force and effect and each Company is in compliance with all of its
respective Permits. Any applications for the renewal of any such Permit, which are due prior to
the Closing Date, will be timely made or filed prior to the Closing Date. No proceeding to modify,
suspend, revoke, withdraw, terminate or otherwise limit any such Permit is pending or threatened
and there is no valid basis for such proceeding, including the transactions contemplated hereby.
No administrative or governmental action or proceeding has been taken or, to the knowledge of
Shareholders, threatened, in connection with the expiration, continuance or renewal of any such
Permit.

     Section 3.23 Compliance with Laws. Each Company has complied in all respects with all applicable
Laws and Orders and is in compliance with all applicable Laws and Orders. Neither Company has
received any notice that any violation of the foregoing is being or may be alleged.

     Section 3.24 Notes; Accounts Receivable. All notes and accounts receivable of each Company are
reflected properly on its respective books and records, are valid receivables not subject to any
setoffs or counterclaims, are current and collectible, and will be collected in accordance with
their terms at their recorded amounts. Since December 31, 2005, the Companies have not offered any
discount, or setoff of, nor has either Company accelerated the payment of any note or receivable or
agreed to accept a reduced amount or settlement of any amount due.

     Section 3.25 Bank Accounts and Powers of Attorney. Set forth on Schedule 3.25 is an
accurate and complete list showing (i) the name and address of each bank in which each Company has
an account or safe deposit box, the account number of any such account or any such box and the
names of all persons authorized to draw thereon or to have access thereto, and (ii) the names of
all persons, if any, holding powers of attorney from each Company and a summary statement of the
terms thereof.

     Section 3.26 Affiliate Transactions. Except as set forth on Schedule 3.26, there are no Contracts, liabilities or
obligations between either Company, on the one hand, and a Shareholder or any Affiliate of a
Shareholder on the other hand (as used in this Agreement, “Affiliate” means, with respect
to any person or entity, any person or entity that directly or indirectly, controls, is controlled
by or is under common control with such person or entity).

 

     Section 3.27 Schedule of Government Reports. Schedule 3.27 is a true and correct list, and
Shareholders have furnished or made available to Buyer or its counsel complete and correct copies
of all reports, if any, filed on behalf of or with respect to a Company, since January 1, 2003,
with the Department of Labor, Equal Employment Opportunity Commission, Federal Trade Commission,
Department of Justice, Occupational Safety and Health Administration, Internal Revenue Service
(other than Tax Returns and standard forms relating to compensation or remuneration of employees),
Environmental Protection Agency, Securities and Exchange Commission or Pension Benefit Guarantee
Commission, or any similar state agency.

     Section 3.28 Casualty Occurrences. Schedule 3.28 is a true and correct list of all
occurrences pertaining to either Company during the last five (5) years including any injury or
damage to persons or property as well as any defects or alleged defects in any of the products or
services of a Company. All such occurrences listed on Schedule 3.28 are fully and
adequately covered by paid-for insurance.

     Section 3.29 FIRPTA. No Shareholder is a non-resident alien individual, foreign person, or foreign
corporation for the purposes of the Code Sections 871, 882 or 1445.

     Section 3.30 Indebtedness. Schedule 3.30 is a true and complete list of all indebtedness,
including, without limitation, trade accounts payable owed by each Company, including a description
of the terms of payment, and, if such indebtedness is secured, a description of all properties or
other assets pledged, mortgaged, or otherwise hypothecated (voluntarily or involuntarily) as
security.

     Section 3.31 HIPAA Compliance. Each Company is a “health care clearinghouse” and a “covered
entity” as those terms are defined and used in Subpart F (Administrative Simplification) of the
Health Insurance Portability and Accountability Act of 1996, P.L. 104-191, and the related
regulations contained in 45 C.F.R. Parts 160 and 164, as amended (collectively, the “Privacy
and Security Regulations”), the regulations contained in 45 C.F.R. Parts 160 and 162, as
amended (collectively, the “Transaction Regulations”). Each Company is in full compliance
with the Privacy and Security Regulations, the Transaction Regulations and all other Laws relating
to the privacy, security and transmission of health information (collectively, “Health
Information Laws”) with regard to its operations and the services it provides and with regard
to any and all health plans maintained for the benefit of each Company’s employees. Promptly upon
a
Company’s receipt of a request from Buyer, such Company shall provide copies of policies and
procedures and any and all other materials related to compliance with the Privacy and Security
Regulations and the Transaction Regulations. To the extent required under the Privacy and Security
Regulations, each Company is a party to compliant business associate agreements and trading partner
agreements with all appropriate parties in accordance with the Privacy and Security Regulations.
The format and transmission of information in the course of the transactions conducted by either
Company meets the standards set forth and referenced in the Transaction Regulations. Neither
Company has received any complaints or other notices or inquiries from any source of any failure to
meet the requirements of any Health Information Laws.

     Section 3.32 False Claims Act Compliance. Neither Company has knowingly presented, or caused to be
presented, a false or fraudulent claim for payment to any

 

governmental health insurance program or
other third party payor. Neither Company has violated any federal or state laws governing the
submission of claims for payment to governmental and/or non-governmental payors, including, without
limitation, the statutes codified at 18 U.S.C. 1347 and 31 U.S.C. 3729

     Section 3.33 Disclosure. This Agreement (including the Financial Statements referred to in Section
3.9 (including the footnotes thereto), any Schedule, Exhibit or certificate delivered pursuant to
this Agreement) or any document or statement in writing, which has been supplied to Buyer or its
Representatives by or on behalf of Shareholders, the Companies or any of their respective
Representatives in connection with the transactions contemplated by this Agreement, do not contain
any untrue statement of a material fact, or omit any statement of a material fact necessary to make
the statements contained herein or therein not misleading.

     Section 3.34 Cash. The cash of the Companies will be no less than Ten
Thousand Dollars ($10,000).

     Section 3.35 Securities. No Company has acquired, or agreed to acquire,
directly or indirectly, by purchase or otherwise, any voting securities or direct or indirect
rights to acquire voting securities of Buyer. No officer, director or shareholder of the Company
has acquired, or agreed to acquire, directly or indirectly, by purchase or otherwise, any voting
securities or direct or indirect rights to acquire voting securities of Buyer. Each Shareholder
acknowledges and agrees that in connection with the transactions contemplated by this Agreement he
or she is aware of material, non-public information regarding Buyer. Each Shareholder has complied
with and will comply with all federal securities laws, applicable state securities laws and the
rules of the American Stock Exchange relating to the offer and sale of securities of Buyer.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF BUYER

     Buyer represents and warrants to Shareholders as follows:

     Section 4.1 Organization and Good Standing. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware has full corporate power and
authority to carry on its business as and where now conducted and to own or lease and operate its
properties at and where now owned or leased and operated by it, and is qualified to do business in
every jurisdiction in which the property owned, leased or operated by it, or the nature of the
business conducted by it, makes such qualification necessary.

     Section 4.2 Authority of Buyer. The execution, delivery and consummation of this Agreement by
Buyer has been authorized by the Board of Directors of Buyer in accordance with all applicable laws
and the Charter Documents of Buyer. Buyer has the corporate power and authority to enter into and
perform its obligations under this Agreement. The execution and delivery of this Agreement by
Buyer and the consummation by Buyer of the transactions contemplated hereby will not (i) violate
any provisions of the Charter Documents of Buyer, (ii) violate any Law or Order or regulation
applicable to Buyer, or (iii) violate, result in a breach of or constitute a default under any
mortgage, deed of trust, indenture or other agreement or

 

instrument to which Buyer is a party, or
any Order to which Buyer is party or by which it or its assets are bound.

     Section 4.3 Enforceability. This Agreement is the valid and binding agreement of Buyer,
enforceable against Buyer in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, moratorium, reorganization and other laws of general
applicability related to or affecting creditors’ rights.

     Section 4.4 Governmental Approval. Except for the approval of the stockholders of Buyer that may
be required in connection with the Financing (as defined below) and any related filing with the SEC
in connection therewith, no consent, approval, waiver, order, authorization, registration or
declaration of, exemption by, or filing with, any Governmental or Regulatory Authority is required
in connection with the execution and delivery by Buyer of this Agreement and the consummation by
Buyer of the transactions contemplated hereby.

     Section 4.5 Securities Not Registered; Investment Intent. Buyer acknowledges that the Shares have
not been registered under the federal securities laws or the securities laws of any state or any
other jurisdiction and may not be offered or sold by Buyer unless subsequently registered under
federal securities laws and any other securities laws or unless offered or sold in a transaction
which is exempt from the registration provisions of the federal and other securities laws. Buyer
is purchasing the Shares for its own account and for investment and not with a view towards
distribution of the Shares.

ARTICLE V

CLOSING

     The closing of the transactions contemplated by this Agreement (the “Closing”) will
take place at the offices of Helmsing, Leach, Herlong, Newman & Rouse, P.C. Suite 2000, LaClede
Building, 150 Government Street, Mobile, Alabama 36602 at 10:00 a.m. Central Time on October 31,
2006 after the satisfaction or waiver of the conditions set forth in Article VI and VII
(other than any such conditions that by their terms cannot be satisfied until the Closing Date,
which conditions shall be required to be so satisfied or waived on the Closing Date) (the
“Closing Date”). If the Closing has not taken place by 11:59 PM on October 31, 2006, then,
subject to the provisions of Section 6.14, the Closing Date shall be extended to November 30, 2006.
Unless the parties otherwise agree in writing, if the Closing has not taken place by 11:59 PM on
November 30, 2006, then, subject to the provisions of Section 6.14, this Agreement will be deemed
to have been terminated and abandoned, subject to the legal rights and remedies of either party
arising out of the other party’s breach of any of the provisions of this Agreement. The parties
will use commercially reasonable efforts to cause the Closing to occur as soon as practicable;
provided that the Closing shall occur on October 31, 2006, November 30, 2006 or such later date as
is mutually agreed upon by the parties.

 

ARTICLE VI

CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER

     The obligations of Buyer under this Agreement are, at Buyer’s option, subject to satisfaction
of the following conditions at or prior to the Closing Date.

     Section 6.1 Representations True. The representations and warranties of Shareholders contained in
this Agreement or in any Schedule, Exhibit or certificate delivered pursuant to this Agreement
shall be true, complete, and accurate in all material respects on as of the Closing Date to the
same extent and with the same force and effect as if made on such date, except as affected by the
transactions contemplated by this Agreement.

     Section 6.2 All Consents Obtained. All necessary approvals or consents required to be obtained by
Shareholders have been obtained from all Governmental or Regulatory Authorities and from any other
Person or entity whose approval or consent is necessary to consummate the transactions contemplated
under this Agreement.

     Section 6.3 Performance of Obligations. Shareholders have duly performed all obligations,
covenants and agreements undertaken by Shareholders in this Agreement in all material respects and
have complied with all terms and conditions applicable to Shareholders under this Agreement to be
performed and complied with on or before the Closing Date in all material respects. For purposes
of this section 6.3, the
Shareholders shall not have performed their obligations, covenants, agreements, or complied
with their terms and conditions in all material respects if any non-performance or non-compliance
shall have resulted in or is likely to result in a negative impact on, or cost, expense, loss,
fine, penalty, interest, damage or liability to the Companies either individually or in the
aggregate of Twenty Five Thousand Dollars ($25,000) or more.

     Section 6.4 No Litigation. No suit, action, or other proceeding is threatened or pending before
any court or Governmental or Regulatory Authority in which it will be or it is sought to restrain,
prohibit or materially delay the consummation of the transactions contemplated by this Agreement or
to obtain material damages or relief in connection with this Agreement or the consummation of the
transactions contemplated by this Agreement, or which is likely to result in a Material Adverse
Effect with respect to the Companies.

     Section 6.5 Receipt of Documents by Buyer. Buyer has received:

     (a) a certificate executed by Shareholders certifying as to the fulfillment of the matters
contained in Sections 6.1, 6.2, 6.3, 6.7, 6.10 and 6.12.

     (b) a certificate from an officer of each Company, given by the officer on behalf of the
Company, certifying as to the Charter Documents of the Company and certifying as to the accuracy
of the resolutions of the board of directors and the shareholders of the Company approving this
Agreement and authorizing the consummation of the transaction contemplated hereby

 

     (c) the original certificates for the Shares, duly endorsed in blank by each Shareholder or
such other instruments of transfer as are reasonably acceptable to Buyer in each case.

     (d) a written opinion from Helmsing, Leach, Herlong, Newman & Rouse, P.C., counsel to
Shareholders, dated as of the Closing Date, addressed to Buyer, in a form reasonably satisfactory
to Buyer.

     (e) An affidavit from each Shareholder of non-foreign purchase status pursuant to section
1445 of the Code.

     (f) the written resignations of the officers and directors of each Company.

     (g) the corporate record books of the Companies.

     (h) executed copies of the employment agreements between Buyer and William Suffich and
Dorothy (Dee) Matter (“Employment Agreements”), the forms of which are attached hereto as
Exhibit C.

     Section 6.6 Record and Books.

     Shareholders have delivered or made available to Buyer all books and records of each Company
relating to or reasonably required for the operation of the business of that Company, including,
without limitation, copies of all Contracts, financial, Tax and accounting records, files and
records relating to employees, and all related correspondence.

     Section 6.7 Absence of Changes. The Companies shall not have experienced a Material Adverse
Effect since the date of this Agreement, and no events, facts or circumstances shall have occurred
which could reasonably be expected to result, individually or in the aggregate, in a Material
Adverse Effect with respect to the Companies.

     Section 6.8 Prohibition of Law. There shall not be in effect any Order by a Governmental or
Regulatory Authority restraining, enjoining or otherwise prohibiting, or any Law prohibiting, the
consummation of the transactions contemplated by this Agreement.

     Section 6.9 Financing. Buyer shall have obtained financing (“Financing”) for (i) its
acquisition of the Shares, (ii) the payment of its transaction costs relating to, among other
things, the acquisition of the Shares, and (iii) its working capital and business needs, all on
terms satisfactory to Buyer in its sole discretion. To the extent necessary, such Financing shall
have been approved by the stockholders of Buyer.

     Section 6.10 Discharge of Liabilities. Buyer has received from Shareholders evidence, satisfactory
to Buyer, that Shareholders have paid or discharged: (i) all indebtedness owed by the Companies to
third party lenders, including any bank debt, and (ii) except as set forth on Schedule 6.10, all
indebtedness owed to Affiliates of the Companies.

     Section 6.11 Termination of Affiliate Transactions. The Companies shall have
provided Buyer with evidence that all such agreements required to be disclosed on Schedule 3.26
hereof have been terminated (including, but not limited to, the agreement with Suffich and

 

Associates). Following the Closing Date, except as set forth on Schedule 6.11, the Companies and
Buyer shall not have any liability or obligation for such agreements (whether or not such liability
or obligation arose prior to or after the Closing Date).

     Section 6.12 Cash Requirement. The cash of the Companies will be no less
than Ten Thousand Dollars ($10,000) and Buyer shall have received evidence thereof satisfactory to
it that the foregoing condition has been met.

     Section 6.13 Financial Statements. Buyer has received all of the Interim
Monthly Financial Statements required to be delivered by Section 3.9 of this Agreement and has not
discovered any facts or circumstances which could have a Material Adverse Effect on the purchase of
the Shares or the financial condition and operations of the Companies.

     Section 6.14 Payment of Break-Up Fee by Buyer.

     (a) (a) Commencing at 12:01 AM November 1, 2006, the Shareholders shall have the right to
terminate this Agreement by providing written notice to Buyer on or before 11:59 PM on November 3,
2006 (the “Termination Deadline”). If the Shareholders do not provide notice of termination by
the Termination Deadline, then such termination right will lapse.

     (b) (b) In the event that the Shareholders terminate this Agreement pursuant to Section
6.14(a) and Section 8.1(e), or if the Closing has not occurred by 11:59 PM on November 30, 2006
(unless the parties otherwise agree in writing to extend the Closing Date), then Buyer shall pay
the Companies a break-up fee in the aggregate amount of One Hundred Thousand Dollars ($100,000.00)
( “Break-Up Fee”); provided, however, that Buyer shall only be required to pay the Break-Up Fee if
at the time of termination of this Agreement by the Shareholders and/or the Companies pursuant to
Section 8.1(e), or as of November 30, 2006 (provided the parties have not otherwise agreed in
writing to extend the Closing Date), as the case may be, all of the conditions to Buyer’s
obligations to close set forth in Sections 6.1, 6.2, 6.3, 6.4, 6.5, 6.6, 6.7, 6.8, 6.10, 6.11,
6.12 and 6.13 have been satisfied (or are capable of being satisfied as of such date).

     (c) For purposes of this Section 6.14 only, the Shareholders and/or the Companies shall have
satisfied the conditions set forth in Sections 6.4 and 6.8, if the suit, action or proceeding
(threatened or pending) (in the case of Section 6.4) is not against any Shareholder or any Company
or the Order or Law (in the case of Section 6.8) is not restraining, enjoining, or otherwise
prohibiting any Shareholder or any Company from consummating the transactions contemplated by this
Agreement. If paid, the Break-Up Fee shall be the sole and exclusive remedy of the Companies and
the Shareholders under this Agreement.

ARTICLE VII

CONDITIONS PRECEDENT TO OBLIGATIONS OF SHAREHOLDERS 

     The obligations of Shareholders under this Agreement are, at the option of Shareholders,
subject to satisfaction of the following conditions at or prior to the Closing Date:

 

     Section 7.1 Representations True. The representations and warranties of Buyer contained in this
Agreement or in any Schedule, Exhibit or certificate delivered pursuant to this Agreement shall be
true, complete, and accurate in all material respects on as of the Closing Date to the same extent
and with the same force and effect as if made on such date, except as affected by the transactions
contemplated by this Agreement.

     Section 7.2 All Consents Obtained.
All necessary approvals or consents required to be obtained by Buyer have been obtained from
all Governmental or Regulatory Authorities and any other Person or entity whose approval or consent
is necessary to consummate the transactions contemplated by this Agreement.

     Section 7.3 Performance of Obligations. Buyer has duly performed all obligations, covenants and
agreements undertaken by Buyer in this Agreement and has complied with all the terms and conditions
applicable to Buyer under this Agreement to be performed or complied with on or before the Closing
Date.

     Section 7.4 No Litigation. No suit, action, or other proceeding is threatened or pending before
any court or Governmental or Regulatory Authority in which it will be or it is sought to restrain,
prohibit or materially delay the consummation by the Buyer of the transactions contemplated by this
Agreement or to obtain material damages from Shareholders in connection with this Agreement or the
consummation of this Agreement.

     Section 7.5 Prohibition of Law. There shall not be in effect any Order by a Governmental or
Regulatory Authority restraining, enjoining or otherwise prohibiting, or any law prohibiting, the
consummation of the transactions contemplated by this Agreement.

     Section 7.6 Receipt of Documents by Shareholders. At the Closing, Buyer shall have delivered the
following to Shareholders:

     (a) the cash portion of the Purchase Price for the Shares as provided for in Section 2.1.

     (b) a certificate executed by the Buyer certifying as to the fulfillment of the matters
contained in Sections 7.1, 7.2, and 7.3

     (c) the Note executed by Buyer.

     (d) the Short Term Note, if applicable, executed by Buyer.

ARTICLE VIII

TERMINATION OF AGREEMENT

     Section 8.1 Termination of Agreement. This Agreement and the transactions contemplated under it
may be terminated and abandoned at any time prior to the Closing:

     (a) by mutual consent in writing of Buyer and Shareholders;

 

     (b) by Buyer or Shareholders if, in the case of Buyer, there has been a material breach of
any covenant or a material breach of the representations and warranties of the Shareholders or the
Companies made under this Agreement or if, in the case of Shareholders, there has been a material
breach of any covenant or a material breach of any of the representations and warranties of Buyer
made under this Agreement, for purposes of this section 8.1(b) “material” means more than Twenty
Five Thousand Dollars ($25,000) of negative impact either individually or in the aggregate on
either the Buyer or Shareholders, as applicable;

     (c) by Buyer if there has been a Material Adverse Effect with respect to the Companies;

     (d) by Buyer, if any of the conditions contained in Article VI, or by Shareholders, if any of
the conditions contained in Article VII, respectively, have not been fulfilled in all material
respects.

     (e) By the Shareholders in accordance with Section 6.14(a) hereof.

     Any termination pursuant to this Article VIII will not affect the obligations of the parties
under Article XIV (Expenses), Section 9.6 (Public Announcements), this Section 8.1, Section 8.2
(Procedure Upon Termination), Section 8.3 (Effect of Termination), Section 12.5 (Disclosure of
Confidential Information), Article XVI (Remedies Not Exclusive) and Section 17.5 (Governing Laws),
which shall survive any such termination of this Agreement, and, subject to the limitations of
Section 6.14 above, will be without prejudice to the terminating party’s legal rights and remedies
by reason of any breach of this Agreement occurring prior to such termination.

     Section 8.2 Procedure Upon Termination. In the event of termination by Buyer or Shareholders, or
both, pursuant to Section 8.1 hereof, written notice thereof shall promptly be given to the other
party or parties, and this Agreement shall terminate, and the transactions contemplated hereunder
shall be abandoned, without further action by Buyer or Shareholders. If this Agreement is
terminated as provided herein, each of the parties shall return all documents, and other material
of any other party relating to the transactions contemplated hereby, whether obtained before or
after the execution hereof, to the party furnishing the same.

     Section 8.3 Effect of Termination. In the event that this Agreement is terminated as provided
herein, then, other than as set forth in the last paragraph of Section 8.1, each of the parties
shall be relieved of their duties and obligations arising under this Agreement after the date of
such termination.

ARTICLE IX

CONDUCT OF THE BUSINESS PRIOR TO CLOSING

     Section 9.1 Continuation of the Business. From the date hereof until the Closing, except: (i) as contemplated by this Agreement,
(ii) as required by applicable Law, or (iii) with the prior written consent of Buyer, which consent
shall not be unreasonably withheld, each Company shall, and the Shareholders shall cause each
Company to:

 

     (a) conduct its business only in the ordinary course consistent with past practice;

     (b) not offer any discount, or setoff of, or accelerate the payment of any note or receivable
or agree to accept a reduced amount or settlement of any amount due;

     (c) use reasonable diligent efforts to (i) preserve in all respects its present business
operations, organization and goodwill and (ii) preserve in all respects its present relationship
with persons having business dealings with it;

     (d) not take any action that would adversely affect the ability of Shareholders and the
Companies to consummate the transactions contemplated by this Agreement;

     (e) not borrow any money;

     (f) not encumber any asset;

     (g) not make any single expenditure or agree to make any single expenditure, or series of
expenditures in excess of Ten Thousand Dollars ($10,000) in the aggregate, other than in the
ordinary course of business; and

     (h) not agree to take any action prohibited by this Section 9.1.

     Section 9.2 Consents. The parties hereto shall cooperate with one another and use their
commercially reasonable efforts to prepare all necessary documentation to effect promptly all
necessary filings and notices and to obtain at the earliest practicable date all consents and
approvals required to consummate the transactions contemplated by this Agreement; provided,
however, that Buyer shall not be obligated to pay any consideration to any third party from
whom consent or approval is requested. Shareholders and Buyer will promptly furnish to the other
such necessary information and reasonable assistance as the other may request in writing in
connection with the preparation of any filing or submission that is necessary to obtain any other
required approval.

     Section 9.3 Reasonable Diligent Efforts. Subject to the terms and conditions set forth in this
Agreement, Buyer and Shareholders shall use their commercially reasonable efforts to take, or cause
to be taken, and to do, or cause to be done, and to assist and cooperate with the other parties in
doing, all things (including, without limitation, executing and delivering such other documents or
agreements) necessary, advisable or appropriate to consummate and make effective as promptly as
practicable the transactions contemplated by this Agreement.

     Section 9.4 Tax Matters. Prior to Closing, without the prior written consent of Buyer, neither Company shall make or
change any Tax election, change any annual accounting period, adopt or change any accounting
method, file any amended Tax Return, enter into any closing agreement, settle any Tax claim or
assessment, surrender any right to claim a refund of Taxes, or consent to any extension or waiver
of the limitation period applicable to any Tax, in any case, if such election, adoption, change,
amendment, agreement, settlement, surrender, consent or other action would have the effect of
increasing the Tax liability of that Company for any period ending after the Closing Date or
decreasing any Tax attribute of that Company existing on the Closing Date.

 

     Section 9.5 Full Access. Shareholders will cause the Companies to permit, Buyer and its
Representatives (including legal counsel and accountants) to have full access at all reasonable
times, and in a manner so as to not interfere with the normal business operations of the Companies
to all premises, properties, personnel, books, records (including Tax records), financial or other
operating data or other information, Contracts and documents of or pertaining to the Companies to
the extent it reasonably believes necessary to familiarize itself with the Companies. Such review
shall not, however, affect the representations and warranties made by the Shareholders or the
Companies in this Agreement or the remedies of Buyer for breaches of those representations and
warranties.

     Section 9.6 Public Announcements. Neither Shareholders, the Companies nor Buyer shall, nor shall
any of their respective Representatives, without the approval of the other party, issue any press
releases or otherwise make any public statements with respect to the transactions contemplated by
this Agreement, except as may be required by applicable Law or by obligations pursuant to any
listing agreement with any national securities exchange. For the avoidance of doubt, information
provided by a party to its partners, shareholders, or others to whom it owes a contractual or
fiduciary obligation in connection with the transactions contemplated hereby shall not constitute a
public statement prohibited by this Section 9.6.

     Section 9.7 Exclusive Dealing. Shareholders shall not, and shall cause the Companies and their
respective Representatives to refrain from taking any action to, directly or indirectly, encourage,
initiate, solicit or engage in discussions or negotiations with, or provide any information to, any
Person, other than Buyer (and its Representatives and financing sources), concerning any purchase
of any capital stock or equity interests of the Companies or any merger, asset sale,
recapitalization or similar transaction involving each Company except in connection with the
transactions contemplated by this Agreement. Shareholders will not vote their capital stock of the
Companies in favor of any purchase of any capital stock or equity interests of the Companies, or
any merger, asset sale, recapitalization or similar transaction involving the Companies.
Shareholders will notify Buyer as soon as practicable if any Person makes any proposal, offer,
inquiry to, or contact with, Shareholders or the Companies (or their respective Representatives),
as the case may be, with respect to the foregoing and shall describe in reasonable detail the
identity of any
such Person and the substance and material terms of any such contact and the material terms of
any such proposal.

     Section 9.8 Notification of Certain Matters. Shareholders shall give prompt notice to Buyer of
any of the following which occurs, or of which it becomes aware, following the date hereof: (i)
any notice of, or other communication relating to, a default or event that, with notice or lapse of
time or both, would become a default under any Contract disclosed (or required to be disclosed) on
Schedule 3.15; (ii) the occurrence or existence of any fact, circumstance or event which
would reasonably be expected to result in (A) any representation or warranty made by Shareholders
in this Agreement or in any Schedule, Exhibit or certificate or delivered herewith, to be untrue or
inaccurate in any material respect or (B) the failure of any condition precedent to either party’s
obligations; and (iii) any notice or other communication from any third party alleging that the
consent of such third party is or may be required in connection with the transactions contemplated
by this Agreement.

 

ARTICLE X

SURVIVAL OF REPRESENTATIONS AND WARRANTIES;

INDEMNIFICATION; DISPUTES

     Section 10.1 Survival of Representations and Warranties. Notwithstanding the Closing of the
transactions contemplated under this Agreement, or any investigation made by or on behalf of
Shareholders or Buyer, the representations and warranties of Shareholders and Buyer contained in
this Agreement will survive the Closing for a period of two (2) years following the Closing;
provided, however, that the representations and warranties of Shareholders
contained in (i) Sections 3.2 (Authority of Shareholders; Consents) and 3.3 (Capitalization; Title)
will have no expiration date, (ii) Sections 3.12(a)-(l) (Taxes), 3.20 (Employee Benefit Plans and
Other Plans) shall survive the Closing for the applicable period of the statute of limitations plus
sixty (60) days thereafter.

     Section 10.2 Shareholders’ Indemnification. Subject to Section 10.6 of this Agreement, each
Company prior to the Closing and the Shareholders, jointly and severally, will indemnify and save
harmless Buyer and each Company after the Closing from any and all costs, expenses, losses, fines,
penalties, interest, damages and liabilities incurred or suffered, directly or indirectly, by any
of them (including, without limitation, reasonable legal fees and expenses) (collectively,
“Indemnified Costs”) resulting from or attributable to (i) the breach of any one or more of
the representations or warranties of Shareholders or the Companies set forth in this Agreement
(whether or not contained in Article III) or in any Schedule, Exhibit or certificate executed or
delivered pursuant to this Agreement, (ii) the failure of any one or more of the representations or
warranties of Shareholders of the Companies set forth in this Agreement (whether or not contained
in Article III) or in any Schedule, Exhibit or certificate executed or delivered pursuant to this
Agreement to be true and correct in all respects as of the date of this Agreement and as of the
date of Closing, (iii) the breach of any covenants of Shareholders set forth in this Agreement or
in any Exhibit delivered
pursuant to this Agreement; (iv) liabilities of each Company not discharged in connection with
the Closing as required pursuant to Section 6.10, (v) Taxes of any Person imposed upon either
Company under Treasury Regulation Section 1.1502-6 or any comparable state, foreign or local law,
or as a transferee, successor, by contract, operation of law or otherwise which Taxes relate to an
event or transaction occurring before the Closing Date, (vi) Taxes (or the non-payment thereof) of
either Company for, or with respect to, taxable periods ending on or before the Closing Date and,
with respect to taxable periods beginning before and ending after the Closing Date, Taxes of either
Company to the extent such Taxes are attributable to the portion of the taxable period ending on
the Closing Date (as determined pursuant to Section 11.2), and (vii) Taxes of either Company or
Shareholders attributable to the transactions contemplated by this Agreement.

     Section 10.3 Buyer’s Indemnification. Buyer covenants and agrees to indemnify and save harmless
Shareholders from any and all Indemnified Costs resulting from or attributable to (i) the breach of
any one or more of the representations or warranties of Buyer set forth in Article IV of this
Agreement, (ii) the failure of any one or more of the representations or warranties of Buyer set
forth in Article IV of this Agreement to be true and correct in all respects as of the date of this
Agreement and as of the Closing Date, and (iii) the breach of any covenants of Buyer set forth in
this Agreement or in any Exhibit delivered pursuant to this Agreement.

 

     Section 10.4 Defense of Third-Party Actions.

     (a) A party seeking indemnification under this Article X (an “Indemnified Party”)
shall give prompt written notice to any Person who is obligated to provide indemnification
hereunder (an “Indemnifying Party”) of the commencement or assertion of any action,
proceeding, demand, or claim by a third party other than any claim relating to Taxes (which is
covered by Section 11.5) (collectively, a “Third-Party Action”) in respect of which such
Indemnified Party shall seek indemnification hereunder; provided, that the failure to so
notify shall not relieve the Indemnifying Party of its obligations hereunder, except to the extent
that the Indemnifying Party is actually and materially prejudiced thereby. The Indemnifying Party
shall have ten (10) days after receipt of such notice to assume control of the defense of, settle,
or otherwise dispose of such Third-Party Action, through counsel reasonably acceptable to the
Indemnified Party at the expense of the Indemnifying Party, and on such terms as it deems
appropriate; provided, that the Indemnifying Party shall be entitled to assume the defense
of such action only to the extent the Indemnifying Party acknowledges its indemnity obligation and
assumes and holds such Indemnified Party harmless from and against the full amount of any loss
resulting therefrom (subject to the limitations set forth in Section 10.6(a)); and
provided, further, that: (i) the Indemnified Party shall have the right to retain
control of the defense of, settle, or otherwise dispose of such Third-Party Action on such terms
as it deems appropriate, but only if the Indemnified Party waives all claims for indemnification
from the Indemnifying Party with respect to such Third-Party Action; (ii) the Indemnified Party
shall be entitled, at its own expense, to participate in, but not control, the defense of such
Third-Party Action; and (iii) the Indemnifying Party shall not consent to the entry of any
judgment or enter
into any settlement that does not include as an unconditional term thereof the giving by each
claimant or plaintiff to each Indemnified Party a full release from all liability in respect of
such Third-Party Action.

     (b) If the Indemnifying Party does not notify the Indemnified Party within ten (10) days
after the receipt of the Indemnified Party’s notice of a claim of indemnity hereunder that it
elects to undertake the defense thereof, the Indemnified Party shall have the right to contest,
settle or compromise the claim but shall not thereby waive any right to indemnity therefor
pursuant to this Agreement.

     (c) The parties hereto shall extend reasonable cooperation in connection with the defense of
any Third-Party Action pursuant to this Article X and, in connection therewith, shall furnish such
records, information, and testimony and attend such conferences, discovery proceedings, hearings,
trials, and appeals as may be reasonably requested.

     Section 10.5 Direct Claims. In any case in which an Indemnified Party seeks indemnification
hereunder which is not subject to Section 10.4 because no Third-Party Action is involved, the
Indemnified Party shall notify the Indemnifying Party in writing of any Indemnified Costs which
such Indemnified Party claims are subject to indemnification under the terms hereof. The failure
of the Indemnified Party to exercise promptness in such notification shall not amount to a waiver
of such claim unless the resulting delay actually and materially prejudices the position of the
Indemnifying Party with respect to such claim.

 

     Section 10.6 Limitations. No Indemnifying Party shall be required to indemnify an Indemnified
Party for any Indemnified Costs under this Article X for breaches of any of the representations and
warranties set forth in this Agreement unless the aggregate of all Indemnified Costs of the
Indemnifying Party pursuant to this Article X for breaches of any of the representations and
warranties set forth in this Agreement exceeds Fifty Thousand Dollars ($50,000) (the
“Basket”); in which event such indemnity shall apply only for the amounts by which such
claim or claims exceed such Basket; provided, however, that the Basket and Cap will
not apply to breaches of the representations and warranties set forth in Section 3.2 (Authority of
Shareholder; Consents), Section 3.3 (Capitalization; Title), Section 3.12 (Taxes), Section 3.20
(Employee Benefit Plans and Other Plans), Section 3.34 (Net Worth), or the indemnification
obligations in Section 10.2(iv), (v), (vi) or (vii) of this Agreement. Anything contained in
this Agreement to the contrary notwithstanding, the total liability of the Indemnifying Party in
relation to the Indemnification obligations pursuant to this Article X shall not exceed One Million
Dollars ($1,000,000.00) (“Cap”).

ARTICLE XI

TAX MATTERS

     Section 11.1 Cooperation in Tax Matters. Buyer, Shareholders, and the Companies shall cooperate fully as and to the extent
reasonably requested by any of the parties to this Agreement, in connection with the filing of Tax
Returns pursuant to this Article XI and any audit, litigation or other proceeding with respect to
Taxes. Such cooperation shall include the retention and (upon request of any of the above-named
parties) the provision of records and information which are reasonably relevant to any such Tax
Return, audit, litigation or other proceeding. So long as taxable periods of, or related to, a
Company ending on or before the Closing Date remain open, Buyer will promptly notify Shareholders
in writing of any pending or threatened Tax audits or assessments for which Shareholders have or
may have liability. Shareholders will promptly notify Buyer in writing of any written or other
notification received by any Shareholder from the Internal Revenue Service or any other taxing
authority of any proposed adjustment raised in connection with a Tax audit, examination, proceeding
or determination of a taxable period of a Company ending on or before the Closing Date.

     Section 11.2 Tax Returns. Buyer shall prepare or cause to be prepared, and file or cause to be
filed, all Tax Returns of each Company for all Tax periods ending on or before the Closing Date (a
“Pre-Closing Period”) and for all Tax periods which begin before the Closing Date and end
after the Closing Date (a “Straddle Period”). Shareholders shall pay to the Buyer or
applicable Company, as an adjustment to the Purchase Price, an amount equal to all Taxes shown to
be due on a Pre-Closing Period Tax Return and the portion of such Taxes shown to be due on a
Straddle Period Tax Return which relates to the portion of such Straddle Period ending on the
Closing Date within fifteen (15) days after the receipt of a bill from Buyer for such Taxes. In
the case of any Taxes that are imposed on a periodic basis and are payable with respect to a
Straddle Period, the portion of such Tax which relates to the portion of such Straddle Period
ending on the Closing Date shall (x) in the case of any Taxes other than Taxes based upon or
related to income or gross receipts, be deemed to be the amount of such Tax for the entire taxable
period multiplied by a fraction the numerator of which is the number of days in the taxable period
ending on the Closing Date and the denominator of which is the number of days

 

in the entire taxable
period, and (y) in the case of any Tax based upon or related to income or gross receipts be deemed
equal to the amount which would be payable if the relevant taxable period ended on the Closing
Date.

     Section 11.3 Defense of Tax Claim.

     (a) Notwithstanding any other provision in this Agreement to the contrary, if any third party
shall notify Buyer with respect to any matter relating to Taxes (a “Tax Claim”), which may
give rise to a claim for indemnification against Shareholders pursuant to Section 10.2, then the
Buyer shall promptly notify the Shareholders thereof in writing; provided,
however, that no delay on the part of the Buyer shall relieve the Shareholders from any
obligation hereunder unless (and then solely to the extent) the Shareholders thereby are
prejudiced.

     (b) The Shareholders will have the right to defend the Buyer against the Tax Claim with
counsel of its choice reasonably satisfactory to the Buyer so long as (i) the Shareholders
notify the Buyer in writing within fifteen (15) days after the Buyer has given notice of the
Tax Claim that the Shareholders will indemnify the Buyer from and against the entirety of any
adverse consequences the Buyer may suffer resulting from, arising out of, relating to, in the
nature of, or caused by the Tax Claim, (ii) the Shareholders provide the Buyer with evidence
acceptable to the Buyer that the Shareholders have the financial resources to defend against the
Tax Claim and fulfill its indemnification obligations with respect to the Tax Claim, (iii)
settlement of, or an adverse judgment with respect to the Tax Claim will not establish a
precedential custom or practice adverse to the continuing business interests of the Company or
otherwise have an adverse effect on Buyer’s Tax position for periods beginning on or after, or
including, the Closing Date, and (iv) the Shareholders conduct the defense of the Tax Claim
actively and diligently.

     (c) So long as the Shareholders are conducting the defense of the Tax Claim in accordance
with Section 11.3(b) above, (i) the Buyer may retain separate co-counsel at its sole cost and
expense and participate in the defense of the Tax Claim, and (ii) the Shareholders may not consent
to the entry of any judgment or enter into any settlement with respect to the Tax Claim without
the prior written consent of the Buyer, which consent will not be unreasonably withheld or
delayed.

     (d) In the event any of the conditions in Section 11.3(b) above is or becomes unsatisfied,
(i) the Buyer may defend against, and consent to the entry of any judgment or enter into any
settlement with respect to, the Tax Claim in any manner it reasonably may deem appropriate (and
the Buyer need not consult with, or obtain any consent from, any Shareholder in connection
therewith), (ii) the Shareholders will reimburse the Buyer promptly and periodically for the costs
of defending against the Tax Claim (including reasonable attorneys’ fees and expenses), and (iii)
the Shareholders will remain responsible for any adverse consequences the Buyer may suffer
resulting from, arising out of, relating to, in the nature of, or caused by the Tax Claim to the
fullest extent provided in this section.

     Section 11.4 Certain Taxes and Fees. All transfer, documentary, sales, use, stamp, registration
and other such Taxes and all conveyance fees, recording charges and other fees and

 

charges
(including penalties and interest) incurred in connection with the transaction contemplated by this
Agreement shall be paid by Shareholders when due and Shareholders shall, at their own expense, file
all necessary Tax Returns and other documentation with respect to all such transfer, documentary,
sales, use, stamp, registration and other Taxes and fees.

ARTICLE XII

NON-COMPETITION AND NON-SOLICITATION

     Section 12.1 Non-Competition Agreement. Each Shareholder, for himself or herself, hereby covenants
and agrees that he or she will not during the period from and after the Closing Date through the
second (2nd) anniversary of the Closing Date (the “Non-Competition Period”),
own, manage, operate, join, control or
participate in the ownership, management, operation or control of, or be connected as a
director, officer, employee, partner, lender, consultant or otherwise with any business or
organization which, directly or indirectly, Competes (as hereinafter defined) with the Companies in
the businesses conducted by the Companies prior to the Closing Date and during the two (2) year
period following the Closing Date within a two hundred and fifty (250) mile radius of Mobile,
Alabama. For purposes of this Agreement, a business or organization shall be deemed to
“Compete” with the Companies if such business or organization (i) competes with the
business of the Companies as such business is conducted prior to or as of the Closing Date, (ii)
engages in the development, production or sale of products, or the rendering of related services,
which are the same as, similar to, or competitive with, the products being developed, provided,
sold or rendered by the Companies prior to or as of the Closing Date or (iii) engages in the
development, production or sale of products, or the rendering of services, which are the same as,
similar to or competitive with, the products or services being provided, sold or rendered to the
Companies for use in the manufacture of the Companies’ products or for resale by the Company.
Nothing in this paragraph shall prohibit any Shareholder from owning for investment purposes up to
one percent (1%) of the securities of any entity or enterprise whose securities are listed on a
national exchange.

     Section 12.2 Customer Non-Solicitation. During the Non-Competition Period, each Shareholder agrees
that he or she will not, directly or indirectly, (i) solicit, raid, entice or induce any Person
that as of the Closing Date is, and during the twelve-month period prior to the Closing Date was,
or at any time during the Non-Competition Period shall be, a customer of the Companies, to become a
customer of any Person (other than the Companies) for products or services the same as, or
competitive with, those products and services as from time to time shall be provided by the
Companies, (ii) approach any such Person for such purpose or authorize the taking of such actions
by any other Person or assist or participate with any such Person in taking such action, or (iii)
in any way interfere with the relationship between the Companies and any such Person or business
relationship (including making any negative or disparaging statements or communications about the
Companies).

     Section 12.3 Employee Non-Solicitation. For a period of two (2) years from and after the Closing
Date, each Shareholder agrees that he or she will not, directly or indirectly, induce or attempt to
influence any Person employed by a Company, as the case may be, on the date of this Agreement to
terminate his or her employment with the same nor hire such employee.

 

     Section 12.4 Acknowledgments. Each Shareholder acknowledges that the length of time pertaining to
the prohibitions in this Article XII are both reasonable and necessary for the legitimate
protection of Buyer’s business and interests. Each Shareholder expressly agrees and understands
that the remedy at law for any breach by him or her, of this Article XII, will be inadequate and
that the damages flowing from such breach are not readily susceptible to being measured in monetary
terms. Accordingly, it is acknowledged that upon adequate proof of a violation of this Article XII
by a
Shareholder or his Affiliates, Buyer may be entitled to, among other remedies, immediate
injunctive relief and may obtain a temporary restraining order restraining any threatened or
further breach. In the event any court of competent jurisdiction or Arbitration Panel determines
that the specified time period set forth in this Article XII is unreasonable, arbitrary or against
public policy, then a lesser time period that is determined by the court, or by Buyer and
Shareholders, to be reasonable, non-arbitrary and not against public policy may be enforced.

     Section 12.5 Disclosure of Confidential Information. Each Shareholder acknowledges that he or she
is in possession of confidential information concerning the Companies and its businesses and
operations and that such information is proprietary to the Companies. Except as may be required by
Law, from and after the Closing Date, no Shareholder will disclose, disseminate, divulge, discuss,
copy or otherwise use or suffer to be used any customer lists, trade secrets, know-how, and other
similar proprietary or confidential information of the Companies. Each Shareholder further agrees
that from and after the Closing Date, such Shareholder and its Representatives, upon the request of
Buyer, promptly will deliver to Buyer or destroy all confidential information in their possession
(in whatever form it may exist) without retaining any copy thereof.

ARTICLE XIII

ASSIGNMENT; THIRD PARTIES; BINDING EFFECT

     The rights under this Agreement are not assignable nor are the duties delegable by a
Shareholder or Buyer without the written consent of Buyer or Shareholders, respectively, first
having been obtained, and any attempted assignment or delegation without such consent will be null
and void; provided, that Buyer may assign its rights, interests and obligations hereunder
(i) to any direct or indirect wholly owned subsidiary or to any Affiliate of which Buyer is a
direct or indirect wholly owned subsidiary, (ii) in connection with the transfer by Buyer of all or
substantially all of the capital stock and/or assets of the Companies, and (iii) as collateral
security for the purpose of securing any financing of the transactions contemplated hereby.
Nothing contained in this Agreement is intended to convey upon any Person or entity, other than the
parties and their successors in interest and permitted assigns, any rights or remedies under or by
reason of this Agreement unless expressly stated. All covenants, agreements, representations and
warranties and indemnification rights and obligations of the parties contained in this Agreement
are binding on and will inure to the benefit of Buyer and Shareholders, respectively, and their
respective spouses, heirs, executors, personal Representatives, successors and permitted assigns.

 

ARTICLE XIV

EXPENSES

     Except as otherwise specifically set forth in this Agreement, Buyer and Shareholders will bear
their own respective expenses, including, without limitation, counsel and accountants’ fees and
investment banking fees, in connection with the preparation and negotiation of, and transactions
contemplated under, this Agreement. The Company shall not bear any expense in
connection with the preparation and negotiation of the transactions contemplated under this
Agreement.

ARTICLE XV

NOTICES

     All notices, requests, demands and other communications under this Agreement must be in
writing and will be deemed duly given, unless otherwise expressly indicated to the contrary in this
Agreement, (i) when personally delivered, (ii) upon receipt of a telephonic facsimile transmission
with a confirmed telephonic transmission answer back, (iii) three (3) days after having been
deposited in the United States mail, certified or registered, return receipt requested, postage
prepaid, or (iv) one (1) Business Day after having been dispatched by a nationally recognized
overnight courier service, addressed to the parties or their permitted assigns at the following
addresses (or at such other address or number as is given in writing by either party to the other)
as follows:

	 	 	 
	To Buyer and after the Closing
to the Companies:

	 	Orion HealthCorp Inc.
	 

	 	1805 Old Alabama Road Suite 350
	 
	 	Roswell, GA 30076

Facsimile: 678-832-1888

Attention: Chief Executive Officer
	 
	 	 
	With a copy (which shall not 

constitute notice) to:

	 	Benesch, Friedlander, Coplan & Aronoff LLP

2300 BP Tower

200 Public Square

Cleveland, Ohio 44114

Facsimile: (216) 363-4588

Attention: Ira Kaplan, Esq.
	 
	 	 
	To Shareholders

	 	On Line Payroll Services, Inc.

	 

	 	On Line Alternatives, Inc.

32 Tacon Street Suite A

Mobile, AL 36607

Facsimile:

Attention: William Suffich
	 
	 	 
	With a copy (which shall not 

constitute notice) to:

	 	Helmsing, Leach, Herlong,

Newman & Rouse, P.C.

Attention: Robert H. Rouse, Esq.

Suite 2000, LaClede Building

150 Governmental Street

Mobile, AL 36602

Fax: (251) 432-0633

 

     For purposes of this Agreement, “Business Day” means any day other than Saturday,
Sunday, or day on which commercial banks are authorized or required by law to close in Mobile,
Alabama.

ARTICLE XVI

REMEDIES NOT EXCLUSIVE

     Except as expressly provided herein, including under Section 6.14, no remedy conferred by any
of the specific provisions of this Agreement is intended to be exclusive of any other remedy, and
each and every remedy will be cumulative and will be in addition to every remedy given under this
Agreement or now or subsequently existing, at law or in equity, by statute or otherwise. The
election of any one or more remedies by Buyer or Shareholders will not constitute a waiver of the
right to pursue other available remedies.

ARTICLE XVII

MISCELLANEOUS

     Section 17.1 Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but which together shall constitute one in the same document.
Delivery by facsimile of an executed copy of this Agreement shall be deemed effective delivery and
such facsimile shall be deemed effective and enforceable as if it were an original.

     Section 17.2 Captions and Section Headings; Construction. Captions and section headings are for
convenience only, are not a part of this Agreement and may not be used in construing it. In this
Agreement, unless the context otherwise requires, words expressed in the singular number shall
include the plural and vice versa and words denoting any gender include all genders.

     Section 17.3 Waivers. Any failure by any of the parties to comply with any of the obligations,
agreements or conditions set forth in this Agreement may be waived by the other party or parties,
but any such waiver will not be deemed a waiver of any other obligation, agreement or condition
contained herein.

     Section 17.4 Entire Agreement. This Agreement, including any certificate, Schedule, Exhibit or
other document delivered pursuant to its terms, constitutes the entire agreement between the
parties. There are no verbal agreements, representations, warranties, undertakings or agreements
between the parties, and this Agreement may not be amended or modified in any respect, except by a
written instrument signed by the parties to this Agreement.

 

     Section 17.5 Governing Law. This Agreement shall be governed by and construed in accordance with
the laws of the State of Alabama as though made and to be fully performed in that State without
regard to conflicts of laws principles. No Party to this Agreement shall commence or prosecute any
suit, proceeding or claim to enforce the provisions of this Agreement, to recover damages for the
breach of or default under this Agreement or otherwise arising under or by reason of this
Agreement, other than in the courts located in the county of Mobile in the city of Mobile in the
State of Alabama. Each of the Parties irrevocably consents and submits to the jurisdiction and
venue of the federal or state courts located in the County of Mobile in the State of Alabama and
waives any and all objections to the jurisdiction that they may have under the laws of any state or
of the United States.

     Section 17.6 Knowledge. For purposes of this Agreement, “knowledge” means with respect to
an individual, that such individual is actually aware of a particular fact or other matter, or
discovers or otherwise becomes aware of such fact or other matter in the course of conducting a
reasonable inquiry of Dorothy Matter and William Suffich.

     Section 17.7 No Strict Construction. The parties hereto have participated jointly in the
negotiation and drafting of this Agreement. In the event any ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly by all parties
hereto, and no presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provision of this Agreement.

     Section 17.8 Attorneys’ Fees. If any proceeding is brought by any party hereto against any other
party hereto that arises out of, or is connected with, this Agreement, then the prevailing party in
such proceeding shall be entitled to recover reasonable attorneys’ fees and costs, including,
without limitation, expert witness fees.

     Section 17.9 Right of Inspection. From the date of this Agreement to the Closing Date,
Shareholders will give to Buyer and its Representatives, full access during normal business hours
to the agreements, books and records (including Tax records) financial and operating data and
affairs of each Company, and will furnish copies of all contracts and other instruments as Buyer or
its counsel may reasonably request. Such investigation will not affect the warranties and
representations of Shareholders under this Agreement. All such information will be treated as
confidential and will be used only for the purposes intended. If the transactions contemplated by
this Agreement do not take place, all documents and other property of each Company will be returned
to the same and all disclosures given to Buyer as contemplated under this Agreement will be treated
as confidential and not disclosed to others unless disclosed publicly by Shareholders or other
third parties without fault on the part of Buyer, or unless otherwise required by law.

     Section 17.10 Transfer of Certain Assets. Prior to the Closing, the Shareholders shall have been
permitted to remove the following personal assets from the Real Property: (i) 45 Kw Generator, (ii)
Personal furniture and furnishing identified to and agreed to by Buyer, (iii) Wall hangings and
paintings identified to and agreed to by Buyer, (iv) a personal computer, (v) subject to Section
3.34, any excess cash of the Company in excess of Ten Thousand Dollars ($10,000) and (vi) the
accounts receivable of cardiology client #13, all as further described on Schedule 17.10
attached hereto.

 

          IN WITNESS WHEREOF, the parties have duly executed this Agreement on the date first above
written.

	 	 	 	 	 
	 

	 	On Line Payroll Services, Inc.
	 	 
	 
	 	 	 	 
	 

	 	By: /s/ William Suffich Jr.	 	 
	 

	 	 
	 	 
	 

	 	Its: President	 	 
	 

	 	 
	 	 
	 
	 	 	 	 
	 

	 	On Line Alternatives, Inc.	 	 
	 
	 	 	 	 
	 

	 	By: /s/ William Suffich Jr.	 	 
	 

	 	 
	 	 
	 

	 	Its: President	 	 
	 

	 	 
	 	 
	 
	 	 	 	 
	 
	 	/s/ William Suffich Jr.	 	 
	 

	 	 	 	 
	 

	 	William Suffich Jr.	 	 
	 
	 	 	 	 
	 
	 	/s/ Carolyn Suffich	 	 
	 

	 	 	 	 
	 

	 	Carolyn Suffich	 	 
	 
	 	 	 	 
	 

	 	Orion HealthCorp Inc.	 	 
	 
	 	 	 	 
	 

	 	By: /s/ Terrence L. Bauer	 	 
	 

	 	 
	 	 
	 

	 	Its: President & CEOEX-10.3

 

    Exhibit 10.3

 

    STOCK
    PURCHASE AGREEMENT

 

    THIS STOCK PURCHASE AGREEMENT
    (“Agreement”), dated as of the
    8th day
    of September, 2006, is made and entered into on the terms and
    conditions hereinafter set forth, by and among ORION
    HEALTHCORP, INC., a Delaware corporation (the
    “Company”), PHOENIX LIFE INSURANCE
    COMPANY, a New York corporation (“Phoenix”)
    and BRANTLEY PARTNERS IV, L.P., a Delaware limited
    partnership (“Brantley” and together with
    Phoenix, “Investors”).

 

    RECITALS:

 

    1. The Company is a healthcare services organization that
    provides outsourced business services to physicians.

 

    2. The Company intends to raise capital in the amount of
    $8,000,000 by issuing $4,650,000 of a new series of its common
    stock (the “Equity Investment”) and $3,350,000
    in subordinated debt (the “Note Purchase”).

 

    3. Investors desire to acquire an aggregate of $4,650,000
    of a new series of Class D Common Stock of the Company, par
    value $0.001 per share (the “Class D Common
    Stock”) on the terms and conditions hereinafter set
    forth, and for the purpose hereinafter set forth.

 

    AGREEMENT:

 

    NOW, THEREFORE, in consideration of the agreement of Investors
    to make the Equity Investment, the mutual covenants and
    agreements hereinafter set forth, and other good and valuable
    consideration, the receipt and sufficiency of which are hereby
    acknowledged, the parties hereto covenant and agree as follows:

 

    ARTICLE 1

    

 

    DEFINITIONS

 

    1.1  Defined Terms.  As used
    in this Agreement, the following terms have the meanings
    specified below:

 

    “Acquisition Targets” shall mean Rand
    Medical Billing, Inc., On Line Alternatives, Inc. and On Line
    Payroll Services, Inc.

 

    “Agreement” has the meaning set forth in the
    Preamble.

 

    “Brantley” has the meaning set forth in
    the Preamble.

 

    “Brantley Capital Shares” means
    1,722,983 shares of Class B Common Stock issued in the
    name of Brantley Capital Corporation.

 

    “Brantley Notes” means (i) that
    certain Convertible Subordinated Promissory Note dated
    June 1, 2005 in the original principal amount of $225,000,
    as amended on May 9, 2006 and August 8, 2006, and
    (ii) that certain Convertible Subordinated Promissory Note
    dated June 1, 2005 in the original principal amount of
    $1,025,000, as amended on May 9, 2006 and August 8,
    2006.

 

    “Business Day” means any day other than
    a Saturday, Sunday or day on which banks in New York City are
    authorized or required by law to close.

 

    “Capital Stock” means any and all
    shares, interests or equivalents in capital stock (whether
    voting or nonvoting, and whether common or preferred) of a
    Person, including any and all warrants, rights or options to
    purchase any of the foregoing.

 

    “Closing” has the meaning set forth in
    Section 4.1.  

 

    “Closing Date” has the meaning set forth
    in Section 4.1.  

 

    “Class A Common Stock” means the
    Class A Common Stock, par value $0.001, of the Company.

    

 

    “Class B Common Stock” means the
    Class B Common Stock, par value $0.001, of the Company.

 

    “Class C Common Stock” means the
    Class C Common Stock, par value $0.001, of the Company.

 

    “Class D Common Stock” has the
    meaning set forth in the Recitals.

 

    “Class D Shares” has the meaning
    set forth in Section 2.1.  

 

    “Commission” means the Securities and
    Exchange Commission or any similar agency then having
    jurisdiction to enforce the Securities Act or the Exchange Act.

 

    “Company Board Recommendation” has the
    meaning set forth in Section 3.1(cc).  

 

    “Company SEC Documents” has the meaning
    set forth in Section 3.1(g).  

 

    “Equity Investment” has the meaning set
    forth in the Recitals.

 

    “Equity Investment Documents” means the
    documents and agreements entered into in connection with the
    Equity Investment.

 

    “Exchange Act” means the Securities
    Exchange Act of 1934, as amended, and the rules and regulations
    of the Commission thereunder.

 

    “Financial Statements” has the meaning
    set forth in Section 3.1(g).  

 

    “Fiscal Year” means the Company’s
    Fiscal Year, which is the period of twelve consecutive calendar
    months ending on December 31.

 

    “GAAP” means generally accepted
    accounting principles in the United States applied on a
    consistent basis.

 

    “Governmental Authority” means any
    federal, state, municipal, national, foreign or other
    governmental department, commission, board, bureau, court,
    agency or instrumentality or political subdivision thereof or
    any entity or officer exercising executive, legislative,
    judicial, regulatory or administrative functions of or
    pertaining to any government or any court, in each case whether
    associated with a state of the United States, the District of
    Columbia or a foreign entity or government.

 

    “Indemnified Party” has the meaning set
    forth in Section 5.1(a).  

 

    “Investors” has the meaning set forth in
    the Preamble.

 

    “Lien” means any mortgage, pledge,
    hypothecation, assignment, deposit arrangement, security
    interest, encumbrance, lien (statutory or otherwise),
    preference, priority or charge of any kind (including any
    agreement to give any of the foregoing, any conditional sale or
    other title retention agreement, any financing or similar
    statement or notice filed under the Uniform Commercial Code as
    adopted and in effect in the relevant jurisdiction or other
    similar recording or notice statute, and any lease in the nature
    thereof).

 

    “Losses” has the meaning set forth in
    Section 5.1(a).  

 

    “Material Adverse Change” or
    “Material Adverse Effect” means
    (a) a material adverse change in, or a material adverse
    effect upon, the business, assets, liabilities (actual or
    contingent), operations or financial condition of a Person and
    its Subsidiaries, taken as a whole; (b) a material adverse
    change in, or a material adverse effect upon, the ability of a
    Person and its Subsidiaries, taken as a whole, to perform the
    material obligations under any Equity Investment Document; or
    (c) a material adverse change in, or a material adverse
    effect upon the legality, validity, binding effect or
    enforceability against such Person of any Equity Investment
    Document to which it is a party.

 

    “Note Purchase” has the meaning set
    forth in the Recitals.

 

    “Note Purchase Documents” means the
    documents and agreements entered into in connection with the
    Note Purchase.

 

    “Outstanding Class A Common Stock”
    means, as of the close of business on the Business Day that
    immediately precedes the Closing Date, the sum of (i) the
    then-outstanding shares of Class A Common Stock,
    (i) the number of shares of Class A Common Stock into
    which the then-outstanding shares of Class B Common

    

 

    Stock are convertible (excluding the Brantley Capital Shares),
    (iii) the number of shares of Class A Common Stock
    into which the then-outstanding shares of Class C Common
    Stock are convertible, (iv) the number of shares of
    Class A Common Stock into which the Class D Shares
    would be convertible, assuming that such shares were issued as
    of such date, (v) the number of shares of Class A
    Common Stock into which the Brantley Notes are convertible,
    (vi) the number of shares of Class A Common Stock
    issuable upon exercise of the warrants and options of the
    Company specified on Schedule 1.1, solely to the
    extent that the exercise price of such warrants or options are
    equal to or less than the closing price of the Class A
    Common Stock as listed on the American Stock Exchange as of such
    date and (vii) the total number of shares of Class A
    Common Stock that have been granted as restricted stock units of
    the Company as specified on Schedule 1.1.  

 

    “Person” means any corporation,
    association, joint venture, partnership, limited liability
    company, organization, business, individual, trust, government
    or agency or political subdivision thereof or any other legal
    entity.

 

    “Phoenix” has the meaning set forth in
    the Preamble.

 

    “Properly Contested” means, in the case
    of any taxes that are not paid as and when due or payable by
    reason of the Company’s bona fide dispute concerning its
    liability to pay same or concerning the amount thereof,
    (i) such taxes are being properly contested in good faith
    by appropriate proceedings promptly instituted and diligently
    conducted; (ii) the Company has established appropriate
    reserves as shall be required in conformity with GAAP;
    (iii) the non-payment of such taxes will not have a
    Material Adverse Effect on the Company; (iv) if the taxes
    result from, or are determined by the entry, rendition or
    issuance against the Company or any of its assets of a judgment,
    writ, order or decree, execution on such judgment, writ, order
    or decree is stayed pending a timely appeal or other judicial
    review; and (vi) if such contest is abandoned, settled or
    determined adversely (in whole or in part) to the Company, the
    Company forthwith pays such taxes and all penalties, interest
    and other amounts due in connection therewith.

 

    “Proxy Statement” has the meaning set
    forth in Section 2.4(a).  

 

    “Registration Rights Agreement” has the
    meaning set forth in Section 2.3.  

 

    “Required Company Stockholder Approval”
    has the meaning set forth in
    Section 3.1(bb).  

 

    “Second Amended and Restated Certificate”
    has the meaning set forth in
    Section 2.1.  

 

    “Securities Act” means the Securities
    Act of 1933, as amended, and the rules and regulations of the
    Commission thereunder.

 

    “Significant Contracts” has the meaning
    set forth in Section 3.1(s).  

 

    “Special Committee” has the meaning set
    forth in Section 3.1(bb).  

 

    “Subsidiary” means any corporation or
    other entity of which more than fifty percent (50%) of the
    issued and outstanding Capital Stock entitled to vote for the
    election of directors or persons performing similar functions
    (other than by reason of default in the payment of dividends or
    other distributions) is at the time owned directly or indirectly
    by a Person
    and/or any
    Subsidiary of such Person.

 

    1.2  Terms Generally.  The
    definitions in Section 1.1 apply equally to both the
    singular and plural forms of the terms defined. Whenever the
    context may require, any pronoun includes the corresponding
    masculine, feminine and neuter forms. The words
    “include,” “includes” and
    “including” are deemed to be followed by the phrase
    “without limitation.” All references herein to
    Articles, Sections, Exhibits and Schedules are deemed references
    to Articles and Sections of, and Exhibits and Schedules to, this
    Agreement unless the context shall otherwise require. Except as
    otherwise expressly provided herein, any reference in this
    Agreement to any Loan Document means such document as amended,
    restated, supplemented or otherwise modified from time to time.

    

 

    ARTICLE 2

    

 

    PURCHASE
    AND SALE; STOCKHOLDER APPROVAL

 

    2.1  Sale and Issuance of the Class D
    Shares.  Subject to the terms and conditions
    contained herein, on the Closing Date:

 

    (a) Phoenix will pay to the Company Three Million Dollars
    ($3,000,000) and the Company will issue and sell to Phoenix that
    number of shares of Class D Common Stock representing
    twelve and one half percent (12.5%) of the Outstanding
    Class A Common Stock; and

 

    (b) Brantley will pay to the Company One Million Six
    Hundred Fifty Thousand Dollars ($1,650,000) and the Company will
    issue and sell to Brantley that number of shares of Class D
    Common Stock representing six and eight hundred seventy five
    one-thousandths percent (6.875%) of the Outstanding Class A
    Common Stock.

 

    The shares of Class D Common Stock being issued and sold to
    Phoenix and Brantley are collectively referred to in this
    Agreement as the “Class D Shares”. The voting
    powers, preferences and other rights of the Class D Common
    Stock, and the qualifications, limitations or restrictions
    thereof, are set forth in the proposed Second Amended and
    Restated Certificate of Incorporation of the Company (the
    “Second Amended and Restated Certificate”), a
    draft copy of which is attached as Exhibit A to this
    Agreement.

 

    2.2  Reservation of
    Shares.  The Company shall at all times
    reserve and keep available out of its authorized shares of
    Class A Common Stock, solely for the purpose of the
    issuance and delivery of the shares of Class A Common Stock
    issuable upon conversion of the Class D Shares, the maximum
    number of shares of Class A Common Stock that may be
    issuable or deliverable thereupon.

 

    2.3  Registration Rights.  On
    the Closing Date, the Company shall grant to Investor the right
    to have the Class A Common Stock issuable upon conversion
    of the Class D Shares registered under the Securities Act,
    pursuant to the terms of a Registration Rights Agreement,
    substantially in the form of Exhibit B attached
    hereto (the “Registration Rights Agreement”).

 

    2.4  Stockholder Approval.

 

    (a) To the extent that stockholder approval of the issuance
    of the Class D Shares
    and/or the
    issuance of the warrants as part of the Note Purchase is
    required by the rules of the American Stock Exchange, as
    promptly as practicable after the execution of this Agreement,
    the Company will prepare and file with the Commission a proxy
    statement setting forth the time and place for holding of a
    special meeting of the stockholders of the Company for the
    purpose of obtaining the Required Company Stockholder Approval
    (the “Proxy Statement”). The Company will
    respond promptly to any comments of the Commission and will use
    all reasonable efforts to cause the Proxy Statement to be mailed
    to the Company’s stockholders at the earliest practicable
    time.

 

    (b) The Company Board Recommendation shall be included in
    the Proxy Statement, except that the Board of Directors of the
    Company may withdraw or modify in a manner adverse to Investors
    such recommendation only if the Special Committee determines, in
    good faith, after consultation with outside legal counsel, that
    such action is required in order for the directors of the
    Company to comply with their fiduciary duties to the
    stockholders of the Company.

 

    2.5  Termination of Purchase
    Right.  Upon Closing and sale and issuance of
    the Class D Shares, the right of Brantley to purchase
    shares of Class A Common Stock for cash in an amount up to
    an aggregate of $3,000,000, as set forth in more detail in
    Section 2.4 of that certain Amended and Restated Stock
    Subscription Agreement, dated February 9, 2004, between the
    Company and Brantley, as amended, shall terminate.

    

 

    ARTICLE 3

    

 

    REPRESENTATIONS
    AND WARRANTIES

 

    3.1  The Company’s
    Representations.  In order to induce Investors
    to enter into this Agreement, the Company hereby represents and
    warrants to Investors that as of the date hereof and as of the
    Closing Date:

 

    (a) Legal Status.  The Company is a
    corporation duly formed and validly existing under the laws of
    the State of Delaware. The Company has the corporate power to
    own and operate its properties, to carry on its business as now
    conducted and to enter into and to perform its obligations under
    this Agreement and the Registration Rights Agreement. The
    Company is duly qualified to do business and in good standing in
    each state in which a failure to be so qualified would
    reasonably be expected to have a Material Adverse Effect on the
    Company.

 

    (b) Authorization.  The Company has
    the requisite corporate power and authority to conduct its
    business and affairs as currently conducted. Except for
    obtaining the Required Company Stockholder Approval, the Company
    has the requisite corporate power and authority to enter into
    and perform its obligations under this Agreement, without the
    consent or approval of any other person, firm, governmental
    agency or other legal entity. Except for obtaining the Required
    Company Stockholder Approval and any notices of sale required to
    be filed with the Commission under Regulation D of the
    Securities Act, or such post-closing filings as may be required
    under applicable federal or state securities laws, which will be
    timely filed within the applicable periods therefor, the
    execution and delivery of this Agreement, the issuance, sale and
    delivery of the Class D Shares, the execution and delivery
    of the Registration Rights Agreement, and the performance by the
    Company of its obligations thereunder are within the corporate
    powers of the Company and have been duly authorized by all
    necessary corporate action properly taken, and the Company has
    received all necessary governmental approvals, if any, that are
    required. The officer(s) executing this Agreement and the
    Registration Rights Agreement are duly authorized to act on
    behalf of the Company.

 

    (c) Validity and Binding
    Effect.  This Agreement and the Registration
    Rights Agreement are the legal, valid and binding obligations of
    the Company enforceable in accordance with their respective
    terms, subject to limitations imposed by bankruptcy, insolvency,
    moratorium or other similar laws affecting the rights of
    creditors generally or the application of general equitable
    principles.

 

    (d) Capitalization.  Attached
    hereto as Schedule 3.1(d) is a table showing the
    authorized and issued Capital Stock of the Company, as of the
    date hereof, on a fully diluted basis. As of the date hereof,
    the Company does not have outstanding any interests or
    securities convertible or exchangeable for any of its Capital
    Stock or containing any profit participation features, and does
    not have outstanding any rights or options to subscribe for or
    to purchase its Capital Stock or any stock appreciation rights
    or phantom stock plans, except as set forth on
    Schedule 3.1(d). Schedule 3.1(d)
    accurately sets forth the following with respect to all
    outstanding options and rights to acquire any of the
    Company’s Capital Stock: (i) the total number of
    shares (or equivalent) issuable upon exercise of all outstanding
    options; (ii) the range of exercise prices for all such
    outstanding options; (iii) the number of shares (or
    equivalent) issuable, the exercise price and the expiration date
    for each such outstanding option; and (iv) with respect to
    all outstanding options, warrants and rights to acquire the
    Company’s Capital Stock, the number of shares (or
    equivalent) covered, the exercise price and the expiration date.
    The Company is not subject to any obligation (contingent or
    otherwise) to repurchase, redeem, retire or otherwise acquire
    any of its Capital Stock or any warrants, options or other
    rights to acquire its Capital Stock, except as set forth on
    Schedule 3.1(d). The Company has not violated any
    applicable federal or state securities laws in connection with
    the offer, sale or issuance of any of its Capital Stock, and the
    offer, sale and issuance of the Class D Shares hereunder do
    not require registration under the Securities Act of 1933, as
    amended, or any applicable state securities laws.

 

    (e) No Conflicts.  Except as set
    forth on Schedule 3.1(e) hereto, consummation of the
    transactions contemplated hereby and the issuance of the
    Class D Shares do not conflict with, and will not result in
    any breach of, or constitute a default or trigger a Lien under,
    (i) the certificate of incorporation or bylaws of the
    Company, (ii) any mortgage, security deed or agreement,
    deed of trust, lease, bank loan or credit agreement, license,
    franchise or any other material instrument or agreement to which
    the Company or any of its

    

 

    Subsidiaries is a party or by which the Company, any of its
    Subsidiaries or their respective properties may be bound or
    affected or to which the Company or any of its Subsidiaries has
    not obtained an effective waiver, except where such event would
    not reasonably be expected to have a Material Adverse Effect on
    the Company or (iii) any federal or state judgment, order,
    writ, decree, statute, rule or regulation applicable to the
    Company.

 

    (f) Litigation.  Except as set
    forth on Schedule 3.1(f) hereto, there are no actions,
    suits, investigations, criminal prosecutions, civil
    investigative demands, impositions of civil fines or penalties,
    arbitrations, administrative hearings or other proceedings
    pending, or, to the knowledge of the Company, threatened against
    or affecting the Company or any of the Company’s property,
    any of its Subsidiaries or any property of any of such
    Subsidiaries, which, if adversely determined, would reasonably
    be expected to have a Material Adverse Effect on the Company, or
    involving the validity or enforceability of any of the Equity
    Investment Documents at law or in equity, or before any
    Governmental Authority. Neither the Company nor any Subsidiary
    is subject to any order, writ, injunction, decree or demand of
    any court or any Governmental Authority.

 

    (g) SEC Filings.  The Company has
    furnished or made available to Investor true and complete copies
    of all reports or registration statements it has filed with the
    Commission under the Securities Act and the Exchange Act for all
    periods subsequent to December 14, 2004, all in the form so
    filed (collectively, the “Company SEC
    Documents”). As of their respective filing dates, the
    Company SEC Documents complied in all material respects with the
    requirements of the Securities Act or the Exchange Act, as
    applicable, and, as of its respective filing date, no Company
    SEC Document filed under the Exchange Act contained any untrue
    statement of a material fact or omitted to state a material fact
    required to be stated therein or necessary to make the
    statements made therein, in the light of the circumstances in
    which they were made, not misleading, except to the extent
    corrected by a subsequently filed document with the Commission.
    No Company SEC Document filed under the Securities Act contained
    an untrue statement of material fact or omitted to state a
    material fact required to be stated therein or necessary to make
    the statements therein not misleading at the time such Company
    SEC Documents became effective under the Securities Act. The
    Company’s financial statements, including the notes
    thereto, included in the Company SEC Documents (the
    “Financial Statements”) comply as to form in
    all material respects with applicable accounting requirements
    and with the published rules and regulations of the Commission
    with respect thereto, have been prepared in accordance with GAAP
    and present fairly the Company’s consolidated financial
    position at the dates thereof and of its operations and cash
    flows for the periods specified (subject, in the case of
    unaudited statements, to normal audit adjustments and footnote
    disclosures). Since the date of the most recent Company SEC
    Document, the Company has not effected any change in any method
    of accounting or accounting practice, except for any such change
    required because of a concurrent change in GAAP.

 

    (h) Other Agreements; No
    Defaults.  Except as set forth in the Company
    SEC Documents or on Schedule 3.1(h), neither the
    Company nor any of its Subsidiaries is a party to any indenture,
    loan or credit agreement, lease or other agreement or
    instrument, or subject to any charter or corporate restriction,
    that, if a default occurs thereunder, such default would
    reasonably be expected to result in a Material Adverse Change to
    the Company. Except as set forth in the Company SEC Documents or
    on Schedule 3.1(h), neither the Company nor any of
    its Subsidiaries is in default in the performance, observance or
    fulfillment of any of the obligations, covenants or conditions
    contained in any agreement or instrument material to its
    business to which it is a party, including but not limited to
    this Agreement, which would reasonably be expected to result in
    a Material Adverse Change to the Company, and no other default
    or event has occurred and is continuing that with notice or the
    passage of time or both would constitute a default or event of
    default under any of the same.

 

    (i) Compliance With Law.  The
    Company and each of its Subsidiaries have obtained all licenses,
    permits, approvals and authorizations necessary or required in
    order to conduct their respective business and affairs as
    heretofore conducted (other than where the failure to so obtain
    would not reasonably be expected to have a Material Adverse
    Effect on the Company) and has ensured that all required
    licenses are in full force and effect on the Closing Date and
    have not been revoked, suspended or otherwise limited. The
    Company and each of its Subsidiaries is in compliance with all
    laws, regulations, decrees and orders applicable to it
    (including but not limited to laws, regulations, decrees and
    orders relating to environmental, occupational, and health
    standards and controls, antitrust, monopoly, restraint of trade
    or unfair competition), except to the extent that

    

 

    any noncompliance, in the aggregate, cannot reasonably be
    expected to have a Material Adverse Effect on the Company.

 

    (j) Statements Not False or
    Misleading.  No representation or warranty
    given as of the date hereof by the Company contained in this
    Agreement or any schedule attached hereto or any statement in
    any document, certificate or other instrument furnished or to be
    furnished by the Company to Investor pursuant hereto, taken as a
    whole, contains or will (as of the time so furnished) contain
    any untrue statement of a material fact, or omits or will (as of
    the time so furnished) omit to state any material fact which is
    necessary in order to make the statements contained therein not
    misleading.

 

    (k) Valid Issuance of Class D
    Shares.  The Class D Shares that are
    being purchased and acquired by Investors hereunder, when
    issued, sold and delivered by the Company in accordance with the
    terms of this Agreement for the consideration expressed herein,
    will be duly and validly issued, fully paid and nonassessable,
    and will be free of restrictions on transfer other than
    restrictions on transfer under applicable state and federal
    securities laws, including containing the restrictive legend set
    forth in Section 3.2(i) hereof.

 

    (l) Fees/Commissions.  Except for
    fees and expenses that may be owed to Stephens, Inc., the
    Company has not agreed to pay any finder’s fee, commission,
    origination fee or other fee or charge to any person or entity
    with respect to the Note Purchase or other transactions
    contemplated hereunder.

 

    (m) Limited Offering of
    Shares.  Assuming the accuracy of the
    representations and warranties of Investors contained in
    Section 3.2 hereof, the offer and sale of the
    Class D Shares is not required to be registered pursuant to
    the provisions of Section 6 of the Securities Act or the
    registration or qualification provisions of the blue sky laws of
    any state. Neither the Company nor any agent on its behalf has
    solicited or will solicit any offers to sell or has offered to
    sell or will offer to sell all or any part of the Class D
    Shares or any other similar securities to any Person so as to
    bring the sale of the Class D Shares by the Company within
    the registration provisions of the Securities Act or any state
    securities laws.

 

    (n) Subsidiaries.  Schedule 3.1(n)
    hereto is a complete list of each corporation, partnership,
    joint venture, limited liability company, or other business
    organization in which the Company or any Subsidiary of the
    Company owns, directly or indirectly, any Capital Stock or other
    equity interest, or with respect to which the Company or any
    Subsidiary of the Company, alone or in combination with others,
    is in a control position, which list shows the jurisdiction of
    incorporation or other organization and the percentage of stock
    or other equity interest of each Subsidiary owned by the Company
    or such Subsidiary. Each Subsidiary of the Company is duly
    organized, validly existing and in good standing under the laws
    of the jurisdiction of its organization and is duly qualified to
    transact business as a foreign corporation (or other entity) and
    is in good standing (or equivalent) in the jurisdictions listed
    on Schedule 3.1(n), which are the only jurisdictions
    where the properties owned or leased or the business transacted
    by it makes such licensing or qualification to do business as a
    foreign corporation (or other entity) necessary, and no other
    jurisdiction has demanded, requested or otherwise indicated that
    (or inquired whether) it is required so to qualify. The
    outstanding Capital Stock of each Subsidiary of the Company is
    validly issued, fully paid and nonassessable. Except as set
    forth on Schedule 3.1(n), the Company and the
    Subsidiaries have good and valid title to the equity interests
    in the Subsidiaries shown as owned by each of them on
    Schedule 3.1(n), free and clear of all liens,
    claims, charges, restrictions, security interests, equities,
    proxies, pledges or encumbrances of any kind. Except where
    otherwise indicated herein or unless the context otherwise
    requires, any reference to the Company herein shall include the
    Company and all of its Subsidiaries.

 

    (o) Trademarks, Patents,
    Etc.  Schedule 3.1(o) is an
    accurate and complete list of all patents, trademarks, trade
    names, trademark registrations, service names, service marks,
    copyrights, licenses, formulae and applications therefor owned
    by the Company or any of its Subsidiaries or used or required by
    the Company or any of its Subsidiaries in the operation of its
    business, title to each of which is, except as set forth on
    Schedule 3.1(o) hereto, held by the Company or a
    Subsidiary of the Company free and clear of all adverse claims,
    liens, security agreements, restrictions or other encumbrances.
    Except as set forth on Schedule 3.1(o), the Company
    and its Subsidiaries own or possess adequate (and will use their
    best efforts to obtain as expediently as possible any
    additional) licenses or other rights to use all patents,
    trademarks, trade names, service marks, trade secrets or other
    intangible property rights and know how necessary to entitle the
    Company

    

 

    or such Subsidiary to conduct its business as presently being
    conducted. There is no pending infringement action, lawsuit,
    claim or complaint which asserts that the Company’s or any
    such Subsidiary’s operations violate or infringe the rights
    or the trade names, trademarks, trademark registrations, service
    names, service marks or copyrights of others with respect to any
    apparatus or method of the Company, any of its Subsidiaries or
    any adversely held trademarks, trade names, trademark
    registrations, service names, service marks or copyrights, and
    neither the Company nor any of its Subsidiaries is in any way
    making use of any confidential information or trade secrets of
    any person, except with the consent of such person. Except as
    set forth on Schedule 3.1(o), the Company and each
    of its Subsidiaries have taken reasonable steps to protect its
    proprietary information (except disclosure of source codes
    pursuant to licensing agreements) and is the lawful owner of the
    proprietary information free and clear of any claim of any third
    party. As used herein, “proprietary information”
    includes without limitation, (i) any computer programming
    language, software, hardware, firmware or related documentation,
    inventions, technical and nontechnical data related thereto and
    (ii) other documentation, inventions and data related to
    patterns, plans, methods, techniques, drawings, finances,
    customer lists, suppliers, products, special pricing and cost
    information, designs, processes, procedures, formulas, research
    data owned or used by the Company or any of its Subsidiaries or
    marketing studies conducted by the Company or any of its
    Subsidiaries, all of which the Company considers to be
    commercially important and competitively sensitive and which
    generally has not been disclosed to third parties.

 

    (p) Debt.  Schedule 3.1(p)
    is a complete and correct list of all credit agreements,
    indentures, purchase agreements, promissory notes and other
    evidences of indebtedness, guaranties, capital leases and other
    instruments, agreements and arrangements presently in effect
    providing for or relating to extensions of credit (including
    agreements and arrangements for the issuance of letters of
    credit or for acceptance financing) in respect of which the
    Company, any of its Subsidiaries or any of their respective
    properties is in any manner directly or contingently obligated,
    and the maximum principal or face amounts of the credit in
    question that are outstanding and that can be outstanding are
    correctly stated, and all Liens of any nature given or agreed to
    be given as security therefor are correctly described or
    indicated on Schedule 3.1(p).  

 

    (q) Taxes.  The Company and each of
    its Subsidiaries has filed or caused to be filed all tax returns
    that are required to be filed (except for returns that have been
    appropriately extended by it), and has paid, or will pay when
    due, all taxes shown to be due and payable on said returns and
    all other taxes, impositions, assessments, fees or other charges
    imposed on it by any Governmental Authority, prior to any
    delinquency with respect thereto (other than taxes, impositions,
    assessments, fees and charges currently being Properly
    Contested).

 

    (r) Certain Transactions.  Except
    as set forth on Schedule 3.1(r) hereto, no officer,
    director or, to the knowledge of the Company, any member of
    their immediate families, nor any Subsidiary or affiliate of the
    Company is, directly or indirectly, interested in any material
    contract or agreement with the Company or any Subsidiary. Except
    as set forth on Schedule 3.1(r) hereto, the Company
    is not indebted, directly or indirectly, to any of its
    equityholders, officers or directors or, to the knowledge of the
    Company, their respective spouses or children, in any amount
    whatsoever, and none of said equityholders, officers or
    directors or, to the knowledge of the Company, any members of
    their immediate families, are indebted to any of the Company or
    any of its Subsidiaries or have any direct or indirect ownership
    interest in any firm or corporation with which the Company or
    any of its Subsidiaries has a business relationship. Neither the
    Company nor any of its Subsidiaries is a guarantor or indemnitor
    of any indebtedness of any other person, firm, corporation or
    other legal entity.

 

    (s) Significant
    Contracts.  Schedule 3.1(s) is a
    complete and correct list of all contracts, agreements and other
    documents pursuant to which the Company or any of its
    Subsidiaries receives revenues in excess of $500,000 per
    Fiscal Year or has committed to make expenditures in excess of
    $500,000 per Fiscal Year (collectively, the
    “Significant Contracts”). Each such Significant
    Contract is in full force and effect as of the date hereof and
    the Company does not know of any reason why any such Significant
    Contract would not remain in full force and effect pursuant to
    the terms thereof.

 

    (t) Environmental.  Except as set
    forth on Schedule 3.1(t) or the reports listed therein,
    the Company and each of its Subsidiaries has duly complied with,
    and its business, operations, assets, equipment, property,
    leaseholds or other facilities are in material compliance with,
    the provisions of all applicable federal, state and

    

 

    local environmental, health, and safety laws, codes and
    ordinances, and all rules and regulations promulgated
    thereunder. Except as set forth on Schedule 3.1(t)
    or the reports listed therein, neither the Company nor any
    Subsidiary has received written notice of, or knows of, any
    violations by the Company or any of its Subsidiaries of any
    federal, state or local environmental, health or safety laws,
    codes or ordinances, and any rules or regulations promulgated
    thereunder with respect to its businesses, operations, assets,
    equipment, property, leaseholds, or other facilities.

 

    (u) ERISA.  Neither the Company nor
    any Subsidiary of the Company has any pension plan that is
    sponsored, maintained or contributed to by the Company and that
    is subject to the requirements of Title IV of the Employee
    Retirement Income Security Act of 1974, 29 U.S.C.
    §§ 1001-1461,
    as amended from time to time. The Company and each of its
    Subsidiaries have operated and administered each of its welfare
    and pension plans in compliance with all requirements of the
    Employee Retirement Income Security Act of 1974, as amended from
    time to time, except for such instances of noncompliance as have
    not resulted in and could not reasonably be expected to have a
    Material Adverse Effect on the Company.

 

    (v) Title to Properties.  The
    Company and each of its Subsidiaries have good and marketable
    title to, or valid leasehold interests in, all its real
    properties and good title to its other assets, free and clear of
    all liens other than those liens set forth on
    Schedule 3.1(v).  

 

    (w) Registration Rights.  Except as
    set forth on Schedule 3.1(w) hereto, except as
    described in the Registration Rights Agreement, the Company is
    not under any obligation to register under the Securities Act,
    or the Trust Indenture Act of 1939, as amended, any of its
    presently outstanding securities or any of its securities that
    may subsequently be issued.

 

    (x) Employees.  Neither the Company
    nor any of its Subsidiaries has had any current strikes, work
    stoppages or similar disputes which have resulted in or which
    the Company reasonably believes would be expected to have a
    Material Adverse Effect on the Company.

 

    (y) Location of Properties, Places of
    Business.  The only jurisdictions in which the
    Company or any of its Subsidiaries maintains any tangible
    personal property or carries on business are as listed on
    Schedule 3.1(y) hereto. All billings for the supply
    of goods and services by the Company and its Subsidiaries are
    made from, and require payment to be made to, the chief
    executive office of the Company. Except as set forth on
    Schedule 3.1(y), neither the Company nor any of its
    Subsidiaries has, during the five years preceding the date of
    this Agreement, been known as or used any other corporate, trade
    or fictitious name, or acquired all or substantially all of the
    assets, Capital Stock or operating units of any Person. Neither
    the Company nor any of its Subsidiaries has, during the five
    years preceding the date of this Agreement, had a business
    location at any address other than addresses set forth on
    Schedule 3.1(y).  

 

    (z) Insurance.  The Company and
    each of its Subsidiaries carries or is covered by insurance in
    such amounts and covering such risks as is adequate for the
    conduct of its business and the value of its properties and as
    is customary for companies engaged in similar businesses in
    similar industries.

 

    (aa) Real
    Properties.  Schedule 3.1(aa)
    hereof sets forth, the address or tax parcel number of each
    parcel of real property in which the Company or any of its
    Subsidiaries has any estate or interest, together with a
    description of the estate or interest (e.g., fee simple,
    leasehold, etc.) held by the Company or such Subsidiary. The
    Company further represents and warrants that with respect to
    each parcel of such real property, neither it nor any of its
    Subsidiaries has entered into any leases, subleases or other
    arrangements for occupancy of space within such parcel, other
    than the leases described in Schedule 3.1(aa) hereof, and
    (v) each lease, sublease, or other arrangement in
    Schedule 3.1(aa) hereof, is in full force and
    effect, and, except as disclosed in Schedule 3.1(aa)
    hereof, or as otherwise disclosed to Investor in writing after
    the date hereof, there is not continuing any material default on
    the part of the Company or any of its Subsidiaries with respect
    to each lease, sublease, or other arrangement.

 

    (bb) Fairness Opinion.  The Special
    Committee of the Company has received the written opinion of
    Valuation Research Corporation, an independent financial advisor
    to the Company, to the effect that, as of the date of this
    Agreement, the price to be paid for the Class D Shares is
    fair, from a financial point of view, to the

    

 

    Company’s stockholders. The Company has provided a copy of
    such opinion to Investors, and such opinion has not been
    withdrawn or revoked or otherwise modified in any material
    respect.

 

    (cc) Special Committee; Board Recommendation;
    Required Vote.  

 

    (i) The special committee of independent directors of the
    Board of Directors of the Company (the “Special
    Committee”), at a meeting duly called and held, has, by
    unanimous vote of its members, (A) determined that this
    Agreement and the transactions contemplated by this Agreement
    are advisable and fair to and in the best interests of the
    stockholders of the Company, and (B) resolved to recommend
    that the stockholders of the Company approve the issuance of the
    Class D Shares pursuant to this Agreement (the
    “Company Board Recommendation”).

 

    (ii) The affirmative vote of (x) holders of (1) a
    majority of the voting power of the outstanding shares of the
    Company’s common stock, voting together as a single class,
    and (2) a majority of the voting power of the outstanding
    shares of the Class B Common Stock and Class C Common
    Stock, voting as separate classes, to approve filing of the
    Second Amended and Restated Certificate and (y) holders of
    a majority of the voting power of the outstanding shares of the
    Company’s common stock, voting together as a single class
    to approve the issuance of the Class D Shares
    (collectively, the “Required Company Stockholder
    Approval”), are the only votes of the holders of any
    class or series of Capital Stock of the Company necessary to
    approve the issuance of the Class D Shares pursuant to this
    Agreement.

 

    (dd) Foreign Assets Control Regulations,
    Etc.  

 

    (i) Except as a result of the identity or status of
    Investors, neither the sale of the Class D Shares by the
    Company hereunder nor its use of the proceeds thereof will
    violate the Trading with the Enemy Act, as amended, or any of
    the foreign assets control regulations of the United States
    Treasury Department (31 CFR, Subtitle B, Chapter V, as
    amended) or any enabling legislation or executive order relating
    thereto.

 

    (ii) Neither the Company nor any of its Subsidiaries is a
    Person described or designated in the Specially Designated
    Nationals and Blocked Persons List of the Office of Foreign
    Assets Control or in Section 1 of Executive Order
    No. 13,224 of September 24, 2001, Blocking Property
    and Prohibiting Transactions with Persons Who Commit, Threaten
    to Commit or Support Terrorism, 66 U.S. Fed. Reg. 49, 079
    (2001), as amended and is not a Person that, to its knowledge,
    engages in any dealings or transactions with any such Person.

 

    (ee) Status under 1940 Act.  The
    Company is not subject to regulation under the Investment
    Company Act of 1940, as amended.

 

    3.2  Representations of Each
    Investor.  Each Investor represents and
    warrants to the Company (as to itself only) that as of the date
    hereof and as of the Closing Date:

 

    (a) Legal Status;
    Authorization.  Such Investor is (a) a
    corporation duly incorporated, validly existing and in good
    standing under the laws of its jurisdiction of incorporation and
    (b) has the full power and authority to execute, deliver
    and perform its obligations under this Agreement and the
    Registration Rights Agreement and to consummate the transactions
    contemplated by this Agreement and the Registration Rights
    Agreement. The execution, delivery and performance by it of this
    Agreement and the Registration Rights Agreement and (a) has
    been duly authorized by all necessary action and (b) does
    not contravene the terms of its organizational documents, or any
    amendment thereof.

 

    (b) Validity and Binding
    Effect.  This Agreement and the Registration
    Rights Agreement are the legal, valid and binding obligations of
    such Investor enforceable in accordance with their respective
    terms, subject to limitations imposed by bankruptcy, insolvency,
    moratorium or other similar laws affecting the rights of
    creditors generally or the application of general equitable
    principles.

 

    (c) Fees/Commissions.  Such
    Investor has not agreed to pay any finder’s fee,
    commission, origination fee or other fee or charge to any person
    or entity with respect to the Equity Investment or other
    transactions contemplated hereunder.

    

 

    (d) Accredited Investor; Purchase Entirely for Own
    Account.  Such Investor is an “accredited
    investor” as that term is defined in Rule 501 of the
    Securities Act and, in making the purchase contemplated herein,
    it is specifically understood and agreed that such Investor is
    acquiring the Class D Shares for the purpose of investment
    and not with a view towards the sale or distribution thereof
    within the meaning of the Securities Act.

 

    (e) Restricted Securities.  Such
    Investor understands that the Class D Shares will not be
    registered under the Securities Act, by reason of their issuance
    by the Company in a transaction exempt from the registration
    requirements of the Securities Act, and that it must hold the
    Class D Shares indefinitely unless a subsequent disposition
    thereof is registered under the Securities Act and applicable
    state securities laws or is exempt from registration.

 

    (f) Receipt of Information.  Such
    Investor has received all the information it considers necessary
    or appropriate for deciding whether to purchase the Class D
    Shares. Such Investor further represents that it has had an
    opportunity to ask questions and receive answers from the
    Company regarding the terms and conditions of the offering of
    the Class D Shares, the business, properties, prospects and
    financial condition of the Company and to obtain additional
    information (to the extent the Company possessed such
    information or could acquire it without unreasonable effort or
    expense) necessary to verify the accuracy of any information
    furnished to it or to which it had access. The foregoing,
    however, does not limit or modify the representations and
    warranties of the Company in Section 3.1 of this
    Agreement or the right of such Investor to rely thereon. Such
    Investor learned of this investment opportunity as a result of
    direct contact by the Company or an agent of the Company and not
    by means of advertising, publication or other written materials.

 

    (g) Investment Experience.  Such
    Investor is experienced in evaluating and investing in
    securities, of companies in the development state and
    acknowledges that it is able to fend for itself, can bear the
    economic risk of its investment, and has such knowledge and
    experience in financial and business matters that it is capable
    of evaluating the merits and risks of the investment in the
    Class D Shares. Such Investor also represents that it has
    not been organized for the purpose of purchasing the
    Class D Shares.

 

    (h) Reliance Upon Investor’s
    Representations.  Such Investor understands
    that the Class D Shares are not registered under the
    Securities Act on the ground that the sale provided for in this
    Agreement and the issuance of the Class D Shares hereunder
    is exempt from registration under the Securities Act pursuant to
    Section 4(2) thereof
    and/or
    Regulation D thereunder, and that the Company’s
    reliance on such exemption is based on the representations of
    Investors set forth herein. Such Investor realizes that the
    basis for the exemption may not be present if, notwithstanding
    such representations, such Investor has in mind merely
    purchasing the Class D Shares being purchased by it for a
    fixed or determinable period in the future, or for a market
    rise, or for sale if the market does not rise. Such Investor
    does not have any such intention.

 

    (i) Legends.  The certificate
    evidencing the Class D Shares shall be endorsed with the
    legend substantially in the form set forth below, and such
    Investor covenants that, except to the extent such restrictions
    are waived by the Company, such Investor shall not transfer the
    securities represented by any such certificate without complying
    with the restrictions on transfer described in the legend
    endorsed on such certificate:

 

    “THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
    BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF 1933 OR
    THE SECURITIES LAWS OF ANY STATE, AND MAY BE OFFERED AND SOLD
    ONLY IF REGISTERED AND QUALIFIED PURSUANT TO THE RELEVANT
    PROVISIONS OF FEDERAL AND STATE SECURITIES LAWS OR IF THE
    COMPANY IS PROVIDED AN OPINION OF COUNSEL SATISFACTORY TO THE
    COMPANY (WHICH IN THE CASE OF ANY FINANCIAL INSTITUTIONAL HOLDER
    HEREOF MAY BE ITS INTERNAL COUNSEL) THAT REGISTRATION AND
    QUALIFICATION UNDER FEDERAL AND STATE SECURITIES LAWS IS NOT
    REQUIRED.”

    

 

    ARTICLE 4

    

 

    CLOSING;
    CONDITIONS TO CLOSING

 

    4.1  Closing.  The purchase
    and sale of the Class D Shares shall take place at the
    offices of the Company, 1805 Old Alabama Road, Suite 350,
    Roswell, Georgia 33076 (the “Closing”) on the
    third
    (3rd)
    Business Day after the satisfaction or waiver of the conditions
    set forth in this Article 4 (other than any such
    conditions that by their terms cannot be satisfied until the
    Closing Date, which conditions shall be required to be so
    satisfied or waived on the Closing Date), unless another time or
    date is agreed to in writing by the parties hereto (the
    “Closing Date”). Conditions precedent set forth
    in Section 4.2 below may be waived solely by both
    Investors in their sole discretion. Conditions precedent set
    forth in Section 4.3 below may be waived solely by
    the Company in its sole discretion. If the Agreement shall have
    been terminated pursuant to Section 6.1 hereof prior
    to the Closing Date, no Closing shall occur.

 

    4.2  Conditions to Investors’
    Obligations.  Investors’ obligations to
    purchase and pay for the Class D Shares at the Closing are
    subject to Investors determining, in their good faith
    discretion, that the following conditions have been satisfied
    (or Investors waiving, in their sole discretion, in writing the
    conditions that they have determined have not been satisfied),
    on or before the Closing Date:

 

    (a) No Material Adverse
    Change.  Since June 30, 2006, there has
    not occurred a Material Adverse Change to the Company or any
    Acquisition Target.

 

    (b) Representations, Warranties and
    Covenants.  Subject to the second sentence of
    this clause (b), the representations and warranties of the
    Company contained in Article 3 shall be true and
    correct in all material respects (without duplication of
    materiality qualifiers) on and as of the date when made and on
    and as of the Closing Date. The Company shall have delivered to
    each of the Investors all revisions to the representations in
    Sections 3.1(d), (g), (n), (o), (p), (q), (r), (s), (t),
    (v), (x), (y), and (aa) to give effect to the
    consummation of the Note Purchase and the acquisition of
    the Acquisition Targets, and such revisions shall be in form and
    substance satisfactory to the Investors in their good faith
    discretion. In addition, the Company will have performed, or
    shall have caused to be performed, all agreements, obligations
    and covenants required herein to be performed by it on or prior
    to the Closing Date.

 

    (c) Consummation of the Note Purchase and the
    Acquisitions.  On or prior to the Closing
    Date, the Note Purchase and the acquisition of the
    Acquisition Targets shall have been consummated in accordance
    with the terms and conditions of the Note Purchase
    Documents, the applicable acquisition agreements and all
    applicable laws. On or prior to the Closing Date, the Company
    shall have delivered to each Investor pro forma financial
    statements of the Company and its Subsidiaries giving effect to
    the acquisition of the Acquisition Targets, the consummation of
    the Equity Investment and the Note Purchase, the closing of
    the senior financing provided for in Section 4.2(h)
    below, the retirement of the Brantley Capital Shares and the
    conversion of the Brantley Notes, the Class B Common Stock
    and the Class C Common Stock, and such pro forma financial
    statements shall be satisfactory to each Investor.

 

    (d) Consent of Third Parties, Governmental
    Authorities, etc.  The Company shall have
    presented evidence satisfactory to Investors to the effect that
    (i) all consents, waivers and amendments required in
    connection with the consummation of the transactions related to
    this Agreement and the transactions contemplated hereby have
    been obtained, (ii) the transactions related to issuance of
    the Class D Shares shall not violate, or constitute or
    trigger the occurrence of a default or an event of default with
    respect to, any contractual obligations of the Company or any of
    its Subsidiaries and (iii) neither the Company nor any of
    its Subsidiaries is in violation of or default under or with
    respect to any of its material contractual obligations.

 

    (e) Stockholder Approval.  The
    Company shall have received the Required Company Stockholder
    Approval for the filing of the Second Amended and Restated
    Certificate and the consummation of the Equity Investment and
    the transactions contemplated by this Agreement on the terms and
    conditions approved by the Company Board Recommendation and such
    Company Stockholder Approval shall not be subject to any
    injunction or court, stock exchange or administrative proceeding
    challenging its legality, validity or effectiveness.

    

 

    (f) Filing of Charter.  The Company
    shall have filed the Second Amended and Restated Certificate
    with, and it shall have been accepted by, the Secretary of State
    of Delaware.

 

    (g) Reservation of Shares.  The
    Company shall have taken all corporate actions to reserve a
    sufficient number of shares of the Class A Common Stock for
    issuance on conversion of the Class D Shares.

 

    (h) Senior Financing.  On or prior
    to the Closing Date, the Company shall have consummated a
    transaction with one or more lenders for the provision of not
    less than $6,500,000 of senior secured financing.

 

    (i) Conversions; Repurchase.  On or
    before Closing, Brantley shall have converted the entire unpaid
    principal amount of, and any accrued but unpaid interest on, the
    Brantley Notes into shares of Class A Common Stock. On or
    before Closing, the Company shall have acquired all of the
    Brantley Capital Shares and have retired the same
    and/or all
    of the outstanding shares of Class B Common Stock and
    Class C Common Stock shall have been either converted into
    shares of Class A Common Stock or otherwise redeemed,
    repurchased or purchased by the Company.

 

    (j) Equity
    Investment.  Contemporaneously with Closing,
    each other Investor shall have consummated the Equity Investment
    in all material respects in accordance with the terms and
    conditions of the Equity Investment Documents and all applicable
    laws.

 

    (k) Certain Documents.  Each of the
    Investors shall have received the following closing documents,
    in form and substance satisfactory to such Investor, all of
    which shall, except as specified below, be fully executed
    originals, and shall be in full force and effect:

 

    (i) stock certificates representing the Class D Shares
    to be acquired by such Investor hereunder; a Private Placement
    Number issued by Standard & Poor’s CUSIP Service
    Bureau (in cooperation with the Securities Valuation Office of
    the National Association of Insurance Commissioners) shall have
    been obtained for each such stock certificate;

 

    (ii) the Registration Rights Agreement, duly executed by
    the Company;

 

    (iii) a certificate of the Secretary of State of Delaware
    as to the good standing of the Company in such jurisdiction
    dated as of a date within five (5) Business Days prior to
    the Closing Date;

 

    (iv) a certificate, dated as of the Closing Date, of the
    secretary of the Company certifying (A) that the copies of
    the certificate of incorporation and the bylaws of the Company,
    attached thereto and as amended to date, are true, complete and
    correct, (B) that the copies of the resolutions of the
    directors of the Company, authorizing the transactions
    contemplated by this Agreement and issuance of the Class D
    Shares are true, complete and correct, (C) as to the
    incumbency of each Person executing this Agreement, and
    (D) as to any other matters reasonably requested by
    Investors;

 

    (v) a certificate from an officer of the Company, in form
    and substance satisfactory to Investors, with respect to the
    satisfaction of the requirements under Sections 4.2(a),
    (b), (c), (e), (f), (g), (h) and (i) above;

 

    (vi) a legal opinion of the Company’s counsel, in form
    and substance satisfactory to Investors; and

 

    (vii) such other documents as such Investor may reasonably
    request in connection with this Agreement, and each such
    document shall be in form and substance reasonably satisfactory
    to such Investor. All fees and expenses of such Investor
    required to be paid pursuant to Section 7.2 hereof
    shall have been paid. Any withdrawals or modifications referred
    to in Section 2.4(b) hereof shall be satisfactory to
    such Investor in its sole discretion.

 

    4.3  Conditions to the Company’s
    Obligations.  The Company’s obligations
    to issue and sell the Class D Shares at the Closing are
    subject to the Company determining, in its reasonable
    discretion, that the following conditions have been satisfied
    (or the Company waiving in writing the conditions that it has
    determined have not been satisfied), on or before the Closing
    Date:

 

    (a) Representations, Warranties and
    Covenants.  The representations and warranties
    of each Investor contained in Article 3 shall be true and
    correct in all material respects (without duplication of
    materiality

    

 

    qualifiers) on and as of the Closing Date. In addition,
    Investors will have performed, or shall have caused to be
    performed, all agreements, obligations and covenants required
    herein to be performed by them on or prior to the Closing Date.

 

    (b) Consummation of the
    Note Purchase.  On or prior to the
    Closing Date, the Note Purchase shall have been consummated
    in all material respects in accordance with the terms and
    conditions of the Note Purchase Documents and all applicable
    laws.

 

    (c) Consent of Third Parties, Governmental
    Authorities, etc.  The Company shall have
    received evidence reasonably satisfactory to it to the effect
    that (i) all material consents, waivers and amendments
    required in connection with the consummation of the transactions
    related to this Agreement and the transactions contemplated
    hereby have been obtained, (ii) the transactions related to
    issuance of the Class D Shares shall not violate, or
    constitute or trigger the occurrence of an event of default with
    respect to, any contractual obligations of the Company or any of
    its Subsidiaries and (iii) neither the Company nor any of
    its Subsidiaries is in violation of or default under or with
    respect to any of its material contractual obligations.

 

    (d) Stockholder Approval.  The
    Company shall have received the Required Company Stockholder
    Approval for the filing of the Second Amended and Restated
    Certificate and the consummation of the Equity Investment and
    the transactions contemplated by this Agreement on the terms and
    conditions approved by the Company Board Recommendation and such
    Company Stockholder Approval shall not be subject to any
    injunction or court, stock exchange or administrative proceeding
    challenging its legality, validity or effectiveness.

 

    (e) Filing of Charter.  The Company
    shall have filed the Second Amended and Restated Certificate
    with, and it shall have been accepted by, the Secretary of State
    of Delaware.

 

    (f) Conversions; Repurchase.  On or
    before Closing, Brantley shall have converted the entire unpaid
    principal amount of, and any accrued but unpaid interest on, the
    Brantley Notes into shares of Class A Common Stock. On or
    before Closing, the Company shall have acquired all of the
    Brantley Capital Shares and have retired the same
    and/or all
    of the outstanding shares of Class B Common Stock and
    Class C Common Stock shall have been either converted into
    shares of Class A Common Stock or otherwise redeemed,
    repurchased or purchased by the Company.

 

    (g) Certain Documents.  The Company
    shall have received the following closing documents, in form and
    substance satisfactory to the Company, all of which shall,
    except as specified below, be fully executed originals, and
    shall be in full force and effect:

 

    (i) the Registration Rights Agreement, duly executed by
    Investors; and

 

    (ii) such other documents as the Company may reasonably
    request in connection with this Agreement, and each such
    document shall be in form and substance reasonably satisfactory
    to the Company.

 

    ARTICLE 5

    

 

    INDEMNIFICATION;
    SURVIVAL

 

    5.1  General Indemnification.

 

    (a) The Company, without limitation as to time, will defend
    and indemnify each of the Investors and their respective
    officers, directors, managers, employees, attorneys and agents
    (each, an “Indemnified Party”) against, and
    hold each Indemnified Party harmless from, all losses, claims,
    damages, liabilities, costs (including the costs of preparation
    and attorneys’ fees and expenses) (collectively, the
    “Losses”) incurred by any Indemnified Party as
    a result of, or arising out of, or relating to (A) any
    misrepresentation or breach of any representation or warranty
    made by the Company herein or (B) any breach of any
    covenant or agreement of the Company contained in this
    Agreement, other than in either case any Losses resulting from
    action on the part of such Indemnified Party to the extent they
    are a result of such party’s gross negligence or willful
    misconduct. The Company agrees to reimburse each Indemnified
    Party promptly for all such Losses as they are incurred by such
    Indemnified Party in connection

    

 

    with the investigation of, preparation for or defense of any
    pending or threatened claim or any action or proceeding arising
    therefrom. The obligations of the Company under this paragraph
    will survive any transfer of the Class D Shares and the
    termination of this Agreement. In the event that the foregoing
    indemnity is unavailable or insufficient to hold an Indemnified
    Party harmless, then the Company will contribute to amounts paid
    or payable by such Indemnified Party in respect of such
    Indemnified Party’s Losses in such proportions as
    appropriately reflect the relative benefits received by and
    fault of the Company and such Indemnified Party in connection
    with the matters as to which such Losses relate and other
    equitable considerations.

 

    (b) If any action, proceeding or investigation is
    commenced, as to which any Indemnified Party proposes to demand
    indemnification, it shall notify the Company with reasonable
    promptness; provided, however, that any failure by
    such Indemnified Party to notify the Company shall not relieve
    the Company from its obligations hereunder except to the extent
    the Company is prejudiced thereby. The Company shall be entitled
    to assume the defense of any such action, proceeding or
    investigation, including the employment of counsel and the
    payment of all fees and expenses. Any Indemnified Party shall
    have the right to employ separate counsel in connection with any
    such action, proceeding or investigation and to participate in
    the defense thereof, but the fees and expenses of such counsel
    shall be paid by the Indemnified Party, unless (A) the
    Company has failed to assume the defense and employ counsel as
    provided herein, (B) the Company has agreed in writing to
    pay such fees and expenses of separate counsel or (C) an
    action, proceeding, or investigation has been commenced against
    both the Indemnified Party
    and/or the
    Company and representation of both the Company and the
    Indemnified Party by the same counsel would be inappropriate
    because of actual or potential conflicts of interest between the
    parties. In the case of any circumstance described in
    clauses (A), (B) or (C) of the immediately
    preceding sentence, the Company shall be responsible for the
    reasonable fees and expenses of such separate counsel; provided,
    however, that the Company shall not in any event be required to
    pay the fees and expenses of more than one separate counsel
    (and, if deemed necessary by such separate counsel, appropriate
    local counsel who shall report to such separate counsel) for any
    related Indemnified Parties. The Company shall be liable only
    for settlement of any claim against an Indemnified Party made
    with the Company’s written consent.

 

    5.2  Limitation of
    Damages.  Neither Investors nor the Company
    shall in any event be liable to the other party for special or
    consequential damages arising from this Agreement.

 

    5.3  Survival.  All
    representations, warranties, covenants and agreements contained
    herein or made in writing by the Company or Investors in
    connection herewith (except as specifically set forth herein)
    shall survive the execution and delivery of this Agreement and
    consummation of the Equity Investment.

 

    ARTICLE 6
    

    

 

    TERMINATION

 

    6.1  Termination.  This
    Agreement and the transactions contemplated under it may be
    terminated and abandoned at any time prior to the Closing
    (notwithstanding the Company’s receipt of the Required
    Company Stockholder Approval):

 

    (a) by mutual consent in writing of the Company and each
    Investor;

 

    (b) (i) by any Investor, if there has been a breach of
    any covenant of the Company hereunder, or a breach of any of the
    representations and warranties of the Company made in
    Section 3.1 of this Agreement, or the failure of any
    condition to Closing set forth in Section 4.2
    hereof, or (ii) by the Company, if there has been a breach
    of any covenant of any Investor hereunder, a breach of any of
    the representations and warranties of any Investor made in
    Section 3.2 of this Agreement or a failure of any of
    the conditions to Closing set forth in Section 4.3
    hereof;

 

    (c) by the Company or any Investor, if there shall be any
    law of any competent Governmental Authority that makes
    consummation of the transactions contemplated hereby, illegal or
    otherwise prohibited or if any order of any competent
    Governmental Authority prohibiting such transactions is entered
    and such order shall become final and non-appealable; and

    

 

    (e) by any Investor, if the Closing shall have not occurred
    on or prior to December 31, 2006 for any reason whatsoever
    other than Investors breaching any of their undertakings
    hereunder or acting in bad faith.

 

    6.2  Effect of
    Termination.  In the event of the termination
    of this Agreement pursuant to Section 6.1, this
    Agreement, except for the provisions of this
    Section 6.2, Article 5, and
    Section 7.2, shall become void and have no effect,
    without any liability on the party of any party to this
    Agreement or their respective directors, officers, or
    stockholders. Notwithstanding the foregoing, nothing in this
    Section 6.2 shall relieve any party to this Agreement of
    liability for willful breach; provided, however, that if
    it shall be judicially determined that termination of this
    Agreement was caused by a willful breach of this Agreement,
    then, as the sole remedy of any party aggrieved by such breach
    (all other liability being hereby irrevocably waived by such
    aggrieved party and such aggrieved party hereby agrees not to
    assert any such other liability or any claim in connection
    therewith), the party to this Agreement found to have
    intentionally breached this Agreement shall indemnify and hold
    harmless such aggrieved party for the
    out-of-pocket
    costs, feels and expenses of its counsel, accountants, financial
    advisors and other experts and advisors incurred in connection
    with, as well as its other
    out-of-pocket
    fees and expenses directly incident to, the negotiation,
    preparation and execution of this Agreement and related
    documentation and the stockholders’ meeting.

 

    ARTICLE 7

    

 

    MISCELLANEOUS

 

    7.1  Successors and Assigns Included in
    Parties.  Whenever in this Agreement one of
    the parties hereto is named or referred to, the heirs, legal
    representatives, successors, successors in title and assigns of
    such parties shall be included, and all covenants and agreements
    contained in this Agreement by or on behalf of the Company or by
    or on behalf of each Investor shall bind and inure to the
    benefit of their respective heirs, legal representatives,
    successors in title and assigns, whether so expressed or not.

 

    7.2  Costs and Expenses.  The
    Company agrees to pay upon demand all reasonable
    out-of-pocket
    costs and expenses of each of the Investors in connection with
    such Investor’s due diligence investigation in connection
    with, and the preparation, negotiation, execution, delivery of,
    this Agreement, and any amendment, modification or waiver hereof
    or thereof or consent with respect hereto or thereto.

 

    7.3  Assignment.  No Investor
    may assign this Agreement or any rights or obligations
    hereunder, other than to affiliates of such Investor, without
    the prior written consent of the Company, such consent not to be
    unreasonably withheld, conditioned or delayed, provided that any
    permitted transferee shall agree in writing to be bound, with
    respect to the transferred securities, by the provisions hereof
    that apply to Investors. The Company may not assign this
    Agreement or any rights or obligations hereunder without the
    prior written consent of each Investor, except pursuant to a
    merger, recapitalization or other business combination
    transaction in which the surviving entity agrees in writing to
    assume all of the covenants, liabilities and obligations of the
    Company hereunder. Any assignment contrary to the terms hereof
    is null and void and of no force and effect. Notwithstanding the
    foregoing, nothing in this Agreement is intended to give any
    person not named herein the benefit of any legal or equitable
    right, remedy or claim under this Agreement, except as expressly
    provided herein.

 

    7.4  Severability.  If any
    provision(s) of this Agreement or the application thereof to any
    Person or circumstance shall be invalid or unenforceable to any
    extent, the remainder of this Agreement and the application of
    such provisions to other Persons or circumstances shall not be
    affected thereby and shall be enforced to the greatest extent
    permitted by law.

 

    7.5  Article and Section Headings; Defined
    Terms.  Numbered and titled article and
    section headings and defined terms are for convenience only and
    shall not be construed as amplifying or limiting any of the
    provisions of this Agreement.

 

    7.6  Notices.  Any and all
    notices, elections or demands permitted or required to be made
    under this Agreement shall be in writing, signed by the party
    giving such notice, election or demand and shall be delivered
    personally, telecopied, or sent by certified mail or overnight
    via nationally recognized courier service (such as Federal
    Express), to the other party at the address set forth below, or
    at such other address as may be supplied in writing and of which
    receipt has been acknowledged in writing. The date of personal
    delivery or telecopy (delivery

    

 

    receipt confirmed) or two (2) Business Days after the date
    of mailing (or the next Business Day after delivery to such
    courier service), as the case may be, shall be the date of such
    notice, election or demand. For the purposes of this Agreement:

 

    The address of each Investor is:

 

    Phoenix Life Insurance Company

    c/o Phoenix Investment Management, LLC

    56 Prospect Street

    Hartford, CT 06115

    Attention: Paul Chute, Managing Director

    Facsimile:
    (860) 403-7248

 

    Brantley Partners IV, L.P.

    Lakepoint

    3201 Enterprise Parkway, Suite 350

    Beachwood, Ohio 44122

    Attention: Paul H. Cascio

    Facsimile:
    (216) 464-8405

 

    in either case, with a copy to:

 

    Ober Kaler Grimes & Shriver, P.C.

    120 East Baltimore Street

    Baltimore, Maryland 21202

    Attention: Jeffrey S. Kuperstock, Esq.

    Facsimile:
    (410) 547-0699

 

    The address of the Company is:

 

    Orion HealthCorp, Inc.

    1805 Old Alabama Road, Suite 350

    Roswell, Georgia 33076

    Attention: Terrence L. Bauer

    Facsimile:
    (678) 832-1888

 

    with a copy to:

 

    Benesch Friedlander Coplan & Aronoff LLP

    2300 BP Tower

    200 Public Square

    Cleveland, Ohio 44114

    Attention: Ira C. Kaplan, Esq.

    Facsimile:
    (216) 363-4588

 

    7.7  Entire Agreement.  This
    Agreement and the other written agreements between the Company
    and Investors represent the entire agreement between the parties
    concerning the subject matter hereof, and all oral discussions
    and prior agreements are merged herein; provided, if there is a
    conflict between this Agreement and any other document executed
    contemporaneously herewith with respect to the Class D
    Shares, the provision of this Agreement shall control. The
    execution and delivery of this Agreement and the Registration
    Rights Agreement by the Company were not based upon any fact or
    material provided by Investors, nor was the Company induced or
    influenced to enter into this Agreement or the Registration
    Rights Agreement by any representation, statement, analysis or
    promise by Investors.

 

    7.8  Governing Law; Amendment or Waiver.

 

    (a) This Agreement shall be construed and enforced under
    the laws of the State of New York without regard to conflicts of
    laws.

    

 

    (b) This Agreement may be amended, and the Company may take
    any action herein prohibited, or omit to perform any act herein
    required to be performed by it, if the Company shall obtain the
    prior written consent of Investors to such amendment, action or
    omission to act.

 

    7.9  Counterparts  This
    Agreement may be executed in any number of counterparts
    (including by facsimile and by PDF transmission), each of which
    when so executed shall be deemed to be an original and all of
    which taken together shall constitute one and the same Agreement.

 

    7.10  Construction and
    Interpretation.  Should any provision of this
    Agreement require judicial interpretation, the parties hereto
    agree that the court interpreting or construing the same shall
    not apply a presumption that the terms hereof shall be more
    strictly construed against one party by reason of the rule of
    construction that a document is to be more strictly construed
    against the party that itself or through its agent prepared the
    same, it being agreed that the Company, Investors and their
    respective agents have participated in the preparation hereof.

 

    7.11  Consent to Jurisdiction; Exclusive
    Venue.  THE COMPANY HEREBY IRREVOCABLY
    CONSENTS TO THE JURISDICTION OF THE UNITED STATES DISTRICT COURT
    FOR THE SOUTHERN DISTRICT OF NEW YORK, AND ALL STATE COURTS
    SITTING IN NEW YORK CITY FOR THE PURPOSE OF ANY LITIGATION TO
    WHICH ANY INVESTOR MAY BE A PARTY AND WHICH CONCERNS THIS
    AGREEMENT. IT IS FURTHER AGREED THAT VENUE FOR ANY SUCH ACTION
    SHALL LIE EXCLUSIVELY WITH COURTS SITTING IN NEW YORK CITY,
    UNLESS SUCH INVESTOR AGREES TO THE CONTRARY IN WRITING. THE
    COMPANY WAIVES ANY OBJECTION BASED UPON LACK OF PERSONAL
    JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS. THE
    COMPANY HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT
    AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREE
    THAT SERVICE OF SUCH SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE
    MADE BY COMPLYING WITH THE PROVISIONS FOR GIVING NOTICE AS SET
    FORTH IN THIS AGREEMENT. NOTHING IN THIS AGREEMENT SHALL BE
    DEEMED OR OPERATE TO AFFECT THE RIGHT OF ANY INVESTOR TO SERVE
    LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW, OR TO
    PRECLUDE THE ENFORCEMENT BY SUCH INVESTOR OF ANY JUDGMENT OR
    ORDER OBTAINED IN SUCH FORUM OR THE TAKING OF ANY ACTION UNDER
    THIS AGREEMENT TO ENFORCE SAME IN ANY OTHER APPROPRIATE FORUM OR
    JURISDICTION.

 

    7.12  Waiver of Trial by
    Jury.  EACH OF THE INVESTORS AND THE COMPANY
    HEREBY KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF COUNSEL
    WAIVE TRIAL BY JURY IN ANY ACTIONS, PROCEEDINGS, CLAIMS OR
    COUNTERCLAIMS, WHETHER IN CONTRACT OR TORT OR OTHERWISE, AT LAW
    OR IN EQUITY, ARISING OUT OF OR IN ANY WAY RELATING TO THIS
    AGREEMENT.

 

    [Signature
    Page to Follow]

    

 

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

 

    THE COMPANY:

 

    ORION HEALTHCORP, INC., a Delaware corporation

 

			
	 	    By: 
	
    /s/  Terrence
    L. Bauer

    Name: Terrence L. Bauer

    Title: President and Chief Executive Officer

 

    INVESTORS:

 

    PHOENIX LIFE INSURANCE COMPANY,

    a New York corporation

 

			
	 	    By: 
	
    /s/  John
    H. Beers

    
Name: John
    H. Beers

    Title: Vice President

 

    BRANTLEY PARTNERS IV, L.P., a Delaware limited partnership

 

			
	 	    By: 
	
    Brantley Venture Management IV, L.P., its general partner

 

			
	 	    By: 
	
    /s/  Paul
    H. Cascio

    Name: Paul H. Cascio

    Title: General Partner

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