ASSET PURCHASE AGREEMENT

Exhibit 10.22

ASSET PURCHASE AGREEMENT

     This Asset Purchase Agreement (this “Agreement”) is made and entered into as of October 28, 2004, by and between OP Therapy, Inc., a Michigan corporation (“Purchaser”), and The Mobile Medical Group, Inc., a Michigan corporation (“Seller”). Purchaser and Seller are sometimes referred to collectively as the “Parties” and individually as a “Party”.

RECITALS:

     A. Seller provides ancillary health care services (the “Business”), including portable x-ray and physical therapy services, to patients who primarily reside in skilled care nursing centers (the “Facilities”).

     B. Seller desires to sell to Purchaser, and Purchaser desires to purchase, certain of Seller’s assets used in connection with the Business, on the terms and subject to the conditions set forth in this Agreement.

     NOW, THEREFORE, for and in consideration of the foregoing Recitals, the mutual covenants and undertakings set forth below and other good and valuable consideration, the receipt and adequacy of which are acknowledged, the Parties hereby agree as follows:

1. CERTAIN DEFINITIONS

     1.1. Definitions. The terms defined in this Section 1 have the meanings so stated:

          (a) “Accounts” means all of the accounts of the Seller on the Closing Date, as “account” is defined in Section 9-102(1)(b) of the Michigan Uniform Commercial Code, MCLA 440.9102(1)(b).

          (b) “Agreement” means this Asset Purchase Agreement, as the same may be amended.

          (c) “Assets” means all of the assets and properties (other than Excluded Assets) used or usable in connection with or related to the Business, as the same shall exist on the Closing Date, whether known or unknown, tangible or intangible, real or personal, wherever situated, and owned by Seller or in which Seller has any right, title or interest, including, without limitation, the following (but only to the extent the same are not Excluded Assets):

               (i) All furniture, fixtures, leasehold improvements, and other fixed assets;

               (ii) All patents, patent applications, trademarks, trademark applications and registrations, copyrights, copyright applications and registrations, service marks and service names, service mark applications and registrations, commercial and technical trade

secrets, technology, computer and electronic data processing programs and software, web sites and domain names, inventions, processes, know-how, confidential information and other proprietary property rights and interests (collectively, “Intellectual Property”) used or usable in the operation of the Business and in which Seller has any right, title or interest (“Seller’s Intellectual Property”; provided, however, that the term “Seller’s Intellectual Property” shall not include any computer or electronic data processing programs and software that are not assignable, or any confidential information regarding potential transactions considered by Seller or belonging to any third-party, that is subject to an agreement prohibiting its dissemination (“Third-Party Confidential Information”));

               (iii) All good will, advertising and promotional materials, customer lists, sales and business records, directory listings, telephone numbers, mailing lists, and all other books and records of every kind and nature, including, without limitation, the name “The Mobile Medical Group” and all derivations of such name;

               (iv) All equipment, machinery, tools, office equipment and vehicles, including, without limitation, those listed on the attached Schedule 1.1(c)(iv);

               (v) All Inventory; and

               (vi) All prepaid expenses and lease deposits.

          (d) “Assumed General Contracts” means (i) all of the General Contracts listed on the attached Schedule l.l(d); (ii) all General Contracts between Seller and any of the Facilities (each a “Facility Contract”); and (iii) any General Contract not listed on the attached Schedule l.l(d), which both (A) require less than sixty days prior notice for cancellation by Seller without penalty, and (B) provide for annual payments, either by or to Seller, of less than $10,000.00. Notwithstanding anything to the contrary in the definition of Assumed General Contracts, no Employee Benefit Plan shall be an Assumed General Contract or assumed by Purchaser.

          (e) “Environmental Laws” means any and all international, federal, state, and local statutes, laws, regulations, ordinances, orders, common law, judgments, orders, decrees, rulings, settlement agreements, consent decrees and similar provisions having the force or effect of law, including but not limited to, the Federal Air Pollution Control Act, 42 U.S.C. §7401 et seq., the Federal Water Pollution Control Act, 33 U.S.C. §1251 et seq., the Safe Drinking Water Act, 42 U.S.C. § § 300f-300j, the Resource Conservation Recovery Act (“RCRA”), 42 U.S.C. §6901 et seq., the Toxic Substances Control Act, 15 U.S.C. §2601 et seq., the Hazardous Materials Transportation Act, 49 U.S.C. § 1801 et seq., the Atomic Energy Act 42 U.S.C. § 2011 et seq.; or the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), 42 U.S.C. §9601 et seq. whether currently in existence or hereafter enacted or which govern: (i) the existence, cleanup, removal and/or remedy of contamination or threat of contamination of the environment; (ii) the emission, leak, discharge, spill or release of Hazardous Materials into the environment; (iii) the control of Hazardous Materials; (iv) the use, generation, transport, treatment, storage, collection, labeling, disposal, removal, recycling, handling or recovery of Hazardous Materials, including building materials; (v) pollution or

pollution control; (vi) protection of the environment and natural resources; or (vii) protection of public health or safety.

          (f) “Excluded Assets” means the following assets, which shall not be included in the definition of Assets and shall not be sold by Seller to Purchaser pursuant to this Agreement:

               (i) The minute books, stock books, corporate seals and other corporate records of Seller relating to its organization and existence;

               (ii) All cash and cash equivalents, credits, rebates and refunds, notes receivable, loan receivables, and Accounts;

               (iii) All workers’ compensation and other insurance refunds and dividends (including refundable self-insurance reserves) payable to Seller;

               (iv) All claims and rights concerning any litigation in which Seller is a claimant;

               (v) Any ownership interest of Seller in The Home Dental Management Group, L.L.C., Lighthouse Hospice Limited Partnership (“Lighthouse”), The Home Services & Staffing Group, LLC, and The Home Services Care Group, LLC (the “Subsidiaries”); and

               (vi) All Tax Returns (as defined in Section 5.14 (c) below) of Seller.

          (g) “General Contracts” means all written contracts and agreements, including all governmental or third party payor participation agreements, other than the Real Property Leases and the Personal Property Leases, entered into by Seller in connection with the Business.

          (h) “Hazardous Materials” means any material or substance: (i) which is or becomes defined as a “hazardous substance”, “pollutant” or “contaminant” pursuant to CERCLA and amendments thereto and regulations promulgated thereunder; (ii) which is or contains gasoline, oil, diesel fuel or other petroleum products, or fractions thereof, (iii) which is or becomes defined as a “hazardous waste” pursuant to RCRA and amendments thereto and regulations promulgated thereunder; (iv) which is or contains polychlorinated biphenyls (PCBs); (v) which is or contains asbestos; (vi) which is radioactive; (vii) which is biologically hazardous or infectious or carcinogenic; (viii) the presence of which requires investigation or remediation under any federal, state or local statute, regulation, ordinance or policy; (ix) which is or becomes defined as a “hazardous waste”, “hazardous substance”, “pollutant” or “contaminant” or other such terms used to define a substance having an adverse effect on the environment under any federal, state or local statute, regulation or ordinance; (x) any toxic, explosive, ignitable, dangerous, corrosive, reactive or otherwise hazardous substance, material or waste which is or becomes regulated by any federal, state or local governmental authority; or (xi) which causes a nuisance upon or waste to real property.

          (i) “Inventory” means all of the inventory of the Seller on the Closing Date, wherever located, as “inventory” is defined in Section 9-102(l)(vv)(iv) of the Michigan Uniform Commercial Code, MCLA 440.9102(l)(vv)(iv).

          (j) “Knowledge of Seller” means the actual knowledge of Leo S. Eisenberg, Deb Gutterson, Barry Zasloff, Robin Cook or John Cook after at least one of them has made reasonable inquiry into the matter in question (if any such inquiry is reasonably appropriate under the circumstances).

          (k) “Leased Personal Property” means all personal property currently used in connection with the Business and covered under the Personal Property Leases.

          (1) “Leased Real Property” means the real property currently used in connection with the Business and set forth on the attached Schedule 1.1 (l).

          (m) “Leases” mean the Personal Property Leases and the Real Property Leases.

          (n) “Personal Property Leases” means all written personal property leases entered into by Seller which cover personal property used in connection with or related to the Business, a complete list of which, together with a list of the Assets subject to such leases, are set forth on the attached Schedule 1.1 (n).

          (o) “Purchase Price” means and shall equal $44,283,000.00.

          (p) “Real Property Leases” means all written real property leases entered into by Seller which cover the Leased Real Property, a complete list of which are set forth on the attached Schedule 1.1 (p).

          (r) “Safety Laws” means the Occupational Safety and Health Act, 29, U.S.C. § 651 et seq. (“OSHA”), as amended, and any regulations promulgated thereunder or any laws (including rules, regulations, codes, plans, injunctions, judgments, orders, decrees, rulings, and charges thereunder) of state governments (and all agencies thereof), each as amended, pertaining or relating to the protection of the health and safety of employees in the workplace (but excluding workers compensation and wage and hour laws).

2. PURCHASE AND SALE OF ASSETS; ASSIGNMENTS

     2.1. Purchase and Sale of the Assets. On the Closing Date (defined in Section 10.1 below), Seller shall transfer, sell and assign to Purchaser, and Purchaser shall purchase from Seller, on the terms and subject to the conditions set forth in this Agreement, the Assets, free and clear of all Liens (defined in Section 5.6 below) other than the Permitted Liens (defined in Section 5,6 below).

     2.2. Assignments. Seller shall, at the Closing, assign to Purchaser (pursuant to the Assignment and Assumption Agreement attached to this Agreement as Exhibit E): (a) all Assumed General Contracts; (b) all Personal Property Leases; (c) all Real Property Leases; (d) all assignable third party warranties and claims for warranties relating to the Assets or the Leased Personal Property; (e) all assignable Licenses (as defined in Section 5.6), permits, registrations and certifications, including, without limitation, portable x-ray certifications, necessary to operate the Assets and the Business; and (f) any and all assignable governmental or third party payor participation agreements. The agreements and leases described in clauses (a), (b), and (c) (other than any Facility Contract) and all assignable agreements, warranties, claims for warranties, Licenses, permits, registrations and certifications described in clauses (d), (e), and (f) are collectively referred to as the “Assignable Items.” All warranties, claims for warranty, Licenses, permits, registrations, certifications, and governmental or third party payor participation agreements that are not-assignable are collectively referred to as the “Non-Assignable Items.” To the extent the assignment of any Assignable Items requires the consent of a party (other than Seller), Seller shall not be obligated to obtain any of such consents, until such time as Purchaser has procured a firm commitment for the financing of the Purchase Price (the “Financing Commitment”) and Purchaser has paid the commitment fee or other fee initially due and payable upon the signing of the commitment (the “Commitment Fee”), if any. Upon Purchaser procuring the Financing Commitment and paying the Commitment Fee, Purchaser shall deliver a copy of the Financing Commitment to Seller and evidence of payment of the Commitment Fee. To the extent the Financing Commitment is contingent upon Seller obtaining consents to the assignment of any Assignable Item (the “Required Consents”), Seller shall use reasonable efforts to obtain all Required Consents prior to the Closing. To the extent the Financing Commitment is contingent upon Purchaser obtaining the rights and benefits of any Non-Assignable Items (the “Required Approvals”), then Purchaser shall endeavor to obtain the rights and benefits under all such Non-Assignable Item prior to the Closing by obtaining its own licenses, permits, registrations, certifications, and governmental or third party payor participation agreements (and Seller shall fully cooperate with Purchaser in that regard). Without limiting the generality of the foregoing, if requested by Purchaser, Seller shall provide all applicable Government Programs and Private Programs with the required notice of any lease arrangement (in whole, or in part) that the Parties enter into with regard to either a portable x-ray certification, in accordance with, but not limited to 42 CFR Section 489.19.

     2.3. Non-Assignable Items. After the Closing, if requested by Purchaser, Seller shall use reasonable efforts to the extent legally permitted to provide Purchaser with the rights and benefits of each Assignable Item for which the consent of a third party was not received prior to Closing and each Non-Assignable Item that Purchaser failed to obtain its own prior to Closing, in order to accomplish the goal of the Parties to transfer all benefits, costs and obligations arising from and after the Closing Date of each Assignable Item and each Non-Assignable Item to Purchaser. Without limited the generality of the foregoing, under such circumstances, the Parties shall endeavor, to the extent legally permitted, to (a) subcontract Seller’s performance under such Assignable Items and Non-Assignable Items to Purchaser, (b) have Seller complete performance under such Assignable Items and Non-Assignable Items for the account and benefit of Purchaser, but at no cost to Seller, in which case Purchaser shall make the Assets and Purchaser’s employees available to Seller for such purposes, and all profits, losses and costs relating to such agreements shall accrue to Purchaser, and/or (iii) enter into any other reasonable

structure, method or series of transactions between the Parties designed to accomplish the foregoing purposes and objectives.

3. LIABILITIES ASSUMED

     3.1. Assumed Liabilities. In connection with its acquisition of the Assets, Purchaser shall assume those liabilities arising from and after the Closing Date with respect to: (a) the Assumed General Contracts, the Personal Property Leases, and the Real Property Leases, (b) those term loans or installment loans payable by Seller and listed on the attached Schedule 3.1(b) but only to extent the proceeds of such loan payables were used to acquire equipment or vehicles used in the ordinary course of the Business, and (c) the employment matters specified in Article 8 (collectively, the “Assumed Liabilities”). The Parties acknowledge that until the Closing, Seller may make or incur capital expenditures with respect to the Business and may expand into territories in which Seller currently does not conduct its Business, but such capital expenditures or expansion are subject to the prior written consent of Purchaser in accordance with Section 7.4. If, in the ordinary course of the Business, Seller desires to make or incur such capital expenditures or expand its Business and the same is consented to by Purchaser in writing pursuant to Section 7.4, then Seller may finance such expenditures and costs of expansion by borrowing sufficient funds from Standard Federal Bank and the new loans payable by Seller shall be added to Schedule 3.1 (b) and assumed by Purchaser at Closing as an Assumed Liability; provided, however, that the terms of such borrowings and loans must be approved by Purchaser in writing in accordance with Section 7.4. Notwithstanding anything to the contrary contained in this Agreement, to the extent Seller desires to make or incur such capital expenditures or expand its Business and the same is not consented to by Purchaser in writing pursuant to Section 7.4, then Seller shall have no liability whatsoever to Purchaser for Seller’s failure to make or incur such capital expenditures or expand its Business. Purchaser shall be in entitled to withhold any and all of the consents referred to above, in its sole and absolute discretion, without any liability whatsoever to Seller.

     3.2. Excluded Liabilities. Other than the Assumed Liabilities, Purchaser shall not assume and shall not be liable for any debts, liabilities or obligations of Seller, regardless of the type or nature of such debts, liabilities and obligations (collectively, the “Excluded Liabilities”). Such Excluded Liabilities shall include, without limitation: (i) any liabilities relating to any of Seller’s accounts payable, or accruals for payroll (including personal, sick and vacation day accruals) and bonuses; (ii) any liability or obligation of Seller under the Environmental Laws with respect to solid waste or Hazardous Materials which have been transported by or on behalf of Seller for offsite disposal; (iii) any liability or obligation relating to any investigation, remediation or monitoring of Hazardous Materials which were present, as of the Closing Date, in the ground water, surface water or surface or subsurface soil of any real property owned or leased by Seller or its predecessors in interest on or at anytime before the Closing Date; (iv) any liability or obligation of Seller for any violation of the Environmental Laws, including, without limitation, any fine or penalty arising from any permit violations; (v) any liability or obligation relating, in any way, to any action, suit, investigation or proceeding pending or threatened against Seller, the Business or the Assets, at law or in equity, before any federal, state, municipal or other governmental department, commission, board, agency, court or instrumentality; (vi) any liability or obligation relating, in any way, to the Employee Benefit Plans (defined in Section

5.11) other than Assumed Liabilities; (vii) any liability or obligation under the Licenses (as defined in Section 5.4); (viii) any liability or obligation arising from Seller’s participation in the Title XVIII (Medicare), Title XIX (Medicaid) and/or Blue Cross and Blue Shield programs; (ix) any third party payer program penalties, sanctions, overpayments or other liabilities generated as a result of prior or future filing of any claim by Seller for payment or reimbursement or with respect to any alleged fraud or abuse, criminal activity, fee splitting or with respect to any document filed or to be filed by Seller under any third party payer program; (x) any accrued bonuses payable by Seller; (xi) any Tax (as defined in Section 5.14 (c) below) liability (or adjustments thereto); (xii) any liability or obligation with respect to claims for bodily injury or property damage of any kind, type or description which arises out of any act or occurrence or treatment rendered on or before the Closing Date; (xiii) any and all oral contracts, agreements or understandings; (xiv) any General Contracts other than the Assumed General Contracts; and (xv) any and all fees, commissions or other amounts due Beringea, LLC.

4. PURCHASE PRICE

     4.1. Purchase Price. For and in consideration of the Assets, Purchaser shall assume the Assumed Liabilities and shall pay Seller the Purchase Price.

     4.2. Payments At Closing. The Purchase Price shall be paid at Closing as follows: (a) $35,767,000.00 by wire transfer of immediately available funds to an account designated by Seller; and (b) a $8,516,000.00 promissory note (the “Note”) issued by Purchaser and delivered to Seller at Closing in the form attached hereto as Exhibit A. The Note shall be guaranteed by Tandem Health Care, Inc., pursuant to a Guaranty (the “Guaranty”) to be delivered to Seller at Closing in the form attached hereto as Exhibit B.

     4.3 Allocation of Purchase Price. For all tax and other reporting purposes, the Purchase Price shall be allocated among the Assets in the manner set forth on the attached Schedule 4.3 and Internal Revenue Service Form 8594 (which Form shall be prepared and filed in accordance with this Section 4.3). Seller and Purchaser hereby affirm that such allocation is fair and equitable. The Parties shall make all Tax reports, returns and claims and other statements consistent with the allocation set forth in Schedule 4.3 and shall not make any inconsistent written statement on any returns or during the course of any Internal Revenue Service or other tax audit, except to the extent required by law.

5. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller hereby represents, warrants and covenants the following to Purchaser:

     5.1. Good Standing and Authority. Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of Michigan. Seller is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction in which it is required to be so qualified, except where the failure to be so qualified would not have a material adverse effect on the Business, the Assets or the Assignable Items. All such jurisdictions are identified on the attached Schedule 5.1. Seller has the power and authority to enter into this Agreement, to enter into any and all documents contemplated in this Agreement (the “Attendant Documents”) to which it is a party and to consummate the transactions contemplated in this

Agreement and the Attendant Documents. This Agreement and all of the Attendant Documents to which Seller is a party, and the consummation of the transactions contemplated in this Agreement and the Attendant Documents, have been (or will be by November 29, 2004) duly authorized and approved by all necessary and proper action on the part of Seller. Contemporaneously with the execution and delivery of this Agreement, Seller has provided Purchaser with a true, correct and complete copy of the resolutions unanimously adopted by its Board of Directors authorizing the execution and delivery of, and consummation of the transactions contemplated in, this Agreement, along with a letter, signed by all of Seller’s directors, agreeing to vote the shares of Seller’s capital stock owned by them in favor of the transactions contemplated in this Agreement. Seller acknowledges that Purchaser has relied on such resolutions and letter in entering into this Agreement. On or before November 29, 2004, Seller shall provide Purchaser with a true, correct and complete copy of the resolutions adopted by its shareholders authorizing the execution and delivery of, and consummation of the transactions contemplated in, this Agreement. This Agreement, and all of the Attendant Documents to which Seller is a party, when executed and delivered, will constitute legal, valid and binding obligations of Seller, enforceable against Seller in accordance with their respective terms. Schedule 5.1 lists all of Seller’s shareholders (the “Shareholders”), and the number and class of the shares of Seller’s capital stock held by each. Except for the Shareholders and as set forth on Schedule 5.1, Seller does not own or control, is not owned or controlled by and is not under common ownership or control with any other entity or person and does not have any investments in any other entity.

     5.2. Intellectual Property. There are no patents, patent applications, registered trademarks, applications for registered trademarks, registered service marks, applications for registered service marks, logos, registered copyrights or applications for registered copyrights used in connection with or related to the Business. There are not any proceedings which are pending, and, to the Knowledge of Seller, there are not any claims or demands pertaining to, or any unasserted claims or threatened proceedings, which challenge the right of Seller in respect of any of Seller’s Intellectual Property. To the Knowledge of Seller, no third-party has infringed upon or appropriated any of Seller’s Intellectual Property. Seller has not infringed upon or appropriated any Intellectual Property of any third-party. The Third-Party Confidential Information is not material to the operation of the Business.

     5.3. Seller’s Contracts. The attached Schedule 1.1 (d) identifies all General Contracts, which require more than sixty days prior notice for cancellation without penalty and/or payments by or to Seller in excess of $10,000.00 annually, true and complete copies of all of which have been delivered to Purchaser. Except as set forth on the attached Schedule 5.3, all of the General Contracts were entered into in the ordinary course of business. Except as set forth on the attached Schedule 5.3, each General Contract is in full force and effect, each General Contract is binding and enforceable against each of the parties thereto in accordance with their respective terms, Seller has complied in all material respects with the provisions of each General Contract, Seller is not in default under any such General Contract, and, to the Knowledge of Seller, no party to any General Contract has failed to comply in any material respect with, or is in default under, the provisions of such General Contract. No party to any General Contract has advised the other party that it has repudiated or intends to cancel, terminate or amend (other than Facility Contracts that are cancelled, terminated or amended in the ordinary course of the

Business) any of the General Contract’s provisions, and Seller has not assigned, transferred or encumbered any interest in any General Contract. There are not more than 20 General Contracts not listed on Schedule 1.1 (d), which both (A) require less than sixty days prior notice for cancellation by Seller without penalty, and (B) provide for annual payments, either by or to Seller, of less than $10,000.00.

     5.4. Permits and Licenses. The attached Schedule 5.4 lists all governmental franchises, permits, licenses, certifications (including portable x-ray certifications), accreditations or other authorizations held by Seller in connection with the Business (the “Licenses”), true and complete copies of all of which have been delivered to Purchaser. Except as set forth on the attached Schedule 5.4, all of the Licenses are in full force and effect and Seller has performed all of the obligations arising under the Licenses prior to the Closing Date. Except as set forth on the attached Schedule 5.4, Seller has obtained all permits, licenses, franchises, certifications, accreditations and other authorizations required for Seller to lawfully engage in the Business. Except as set forth on the attached Schedule 5.4, no action or proceeding looking to or contemplating the revocation or suspension of any License is pending or, to the Knowledge of Seller, threatened.

     5.5. Leases. Seller holds a valid and enforceable leasehold interest in the leased Real Property. Other than the Leased Real Property, Seller does not have any right, title or interest in or to any real property, whether owned or leased. Other than the Leased Personal Property, Seller does not have any leasehold interest in or to any personal property. Seller has previously delivered true and complete copies of all Leases to Purchaser. The Leases are in full force and effect, are binding and enforceable against each of the parties thereto in accordance with their respective terms. Except as set forth on the attached Schedule 5.5, Seller has complied in all material respects with the provisions of each Lease, Seller is not in default under any such Lease, and no party to any such Lease has failed to comply in any material respect with, or is in default under, the provisions of such Lease. No party to any Lease has advised the other party that it has repudiated any of the Lease’s provisions; Seller has not assigned, transferred, conveyed, mortgaged, deeded in trust or encumbered any interest in any Lease; and all facilities leased or subleased under any Real Property Lease are supplied with utilities and other services necessary for the operation of such facilities. No property insurer or similar body has made any recommendations to Seller regarding facilities leased or subleased under any Real Property Lease which has not been complied with. Seller has received no notice that the Business is in violation, which violation has not been cured, of local building codes, ordinances or zoning laws, and Seller has not received any notice which currently remains uncured that indicates that Seller has failed to obtain any license, permit, approval, certificate or other authorizations required by applicable statutes, laws, ordinances or regulations for the use and occupancy of the Leased Real Property.

     5.6. Liens. Except as set forth on the attached Schedule 5.6, Seller owns the Assets, free and clear of any and all security interests, liens, mortgages, easements, restrictions, reservations, tenancies, or other encumbrances of any nature whatsoever (collectively, the “Liens”). Seller has not assigned, as collateral security or otherwise, all or any portion of its interest in any Assignable Item or any Non-Assignable Item to any third-party. Except for the

Liens identified on the attached Schedule 5.6 as “Permitted Liens” (the “Permitted Liens”), all of the Liens identified on the attached Schedule 5.6 will be released at the Closing.

     5.7. Litigation. Except as set forth on the attached Schedule 5.7, Seller has not been notified of any actions, suits, audits, surveys, investigations, proceedings or inquiries pending against, or threatened against, Seller, the Business, the Assets or the Assignable Items, at law or in equity, before any federal, state, municipal or other governmental department, commission, board, agency, court or instrumentality or third party payor. Except as set forth on the attached Schedule 5.7, there are no outstanding orders, rulings, decrees, judgments, or stipulations to which Seller, the Business, the Assets or the Assignable Items are subject or in default with respect to, nor is Seller, the Business or the Assets subject to or in violation of any order, writ, injunction or decree of any court, or other governmental department, commission, board, agency or instrumentality.

     5.8. Compliance with Applicable Laws. Except as set forth on the attached Schedule 5.8, Seller is in substantial compliance with all laws, regulations, rules, orders, judgments, decrees and other requirements imposed by any governmental authority applicable to them in connection with the operation of the Business, including, without limitation, the violation of which could have a material adverse effect on the Assets, the Assignable Items or the Business, including, without limitation, the Safety Laws, 42 USC 1320a-7b, 42 USC 1395nn and any applicable conditions of participation, and Public Law 104-191 of August 21, 1996, known as the Health Insurance Portability and Accountability Act of 1996 (“HIPAA) and its implementing regulations, including without limitation, the Standards for Electronic Transaction and Code Set (45 CFR Parts 160 and 162), the Standards for Privacy of Individually Identifiable Health Information (45 CFR Parts 160 and 164), the Security Standards for the Protection of Electronic Protected Health Information (45 CFR Parts 160 and 164) and such other regulations promulgated thereunder.

     5.9. Employees. The attached Schedule 5.9 contains a complete and accurate list, as of September 1, 2004, of Seller’s current employees (“Seller’s Employees”) and, with respect to each of Seller’s Employees: the name of the employee, and such employee’s title or position, salary or rate of pay (including bonuses and incentive compensation, if any), and whether such employee is exempt or non-exempt, hourly or salaried. Schedule 5.9 also identifies each of Seller’s Employees, officers and directors who, in calendar year 2003, received a bonus or incentive compensation that exceeded $10,000 or 10% of his or her base pay, whichever is the lesser. Except as set forth on the attached Schedule 5.9, as of September 1, 2004, all of Seller’s Employees are actively at work, and none of Seller’s Employees are currently on leave of absence, layoff, military leave, suspension, sick leave, workers’ compensation, salary continuance or short or long term disability or otherwise not actively performing his or her work during all normally scheduled business hours. Except as set forth on the attached Schedule 5.9, as of September 1, 2004, there are no former employees of Seller (or their dependents) who are receiving, or who have the right to elect to receive, coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”). Each such individual receiving or entitled to receive COBRA coverage is hereinafter referred to as a “COBRA Qualified Beneficiary”. Schedule 5.9 sets forth the nature of each COBRA Qualified Beneficiary’s qualifying event, the date each COBRA Qualified Beneficiary’s COBRA coverage commenced,

and the date such COBRA coverage will end based on the nature of the qualifying event and assuming the maximum COBRA period for such event. There is no other individual, including, without limitation, any employee or former employee of any current or former Controlled Group Member (as defined in Section 5.11 (a)) or any spouse or dependent of such an employee or former employee, who is receiving or entitled to receive coverage under any Seller health or welfare benefit plan pursuant to COBRA, any contract or agreement or otherwise.

     5.10. Employee Relations. Except as set forth on the attached Schedule 5.10, there are no written or oral collective bargaining agreements or other employment agreements or understandings with or affecting any of Seller’s Employees, and Seller is not a party to any written or oral independent contractor agreement. Seller has provided Purchaser with true and complete copies of all written agreements with or affecting any of Seller’s Employees. Hours worked by, and payments made to, all of Seller Employees have been in compliance with the Fair Labor Standards Act and other applicable federal, state and local laws. All payments due from Seller on account of any of Seller’s Employees’ work, health, welfare or other insurance, under any agreement, whether oral or written, will have been paid as of the Closing Date, except for such obligations that are expressly assumed by Purchaser in Article 8. Except as set forth on the attached Schedule 5.10, (a) to the Knowledge of Seller, there is no unfair labor practice charge or complaint concerning the Business or any of Seller’s Employees pending before any governmental agency; (b) to the Knowledge of Seller, there is no labor strike or material slowdown, work stoppage, lockout or other collective labor action pending or threatened against or affecting the Business; (c) Seller has not experienced any strike or material slowdown, work stoppage, lockout or other collective labor action in connection with the Business; (d) to the Knowledge of Seller, there is no representation claim or petition concerning the Business or any of Seller’s Employees pending or threatened before any governmental agency; (e) to the Knowledge of Seller, there are no charges with respect to or relating to the Business pending or threatened before the Equal Employment Opportunity Commission or any agency responsible for the prevention of unlawful employment practices; (f) Seller has not received formal notice from any governmental agency responsible for the enforcement of labor or employment laws of an intention to conduct an investigation of the Business and no such investigation is currently in progress; and (g) to the Knowledge of Seller, no member of Seller’s management and no group of Seller’s Employees has any plans to terminate employment with Seller prior to Closing or to refuse employment with Purchaser after Closing.

     5.11. Employee Benefits.

          (a) Except for the employee benefit plans listed in the attached Schedule 5.11 (the “Employee Benefit Plans”), Seller is not a party to, is not bound by or, to the Knowledge of Seller, does not have any liability or potential liability with respect to any profit sharing, stock option, pension, severance, retirement, stock purchase, hospitalization, group or individual life, disability or health insurance, or employee welfare benefit or other employee benefit plan, program, policy or agreement (whether or not terminated, whether or not funded, whether or not subject to ERISA, and whether or not providing benefits to the current or former employees or agents of Seller or to the current or former employees or agents of any current or former Controlled Group Member). For purposes of this Section 5.11, the term “Controlled Group Member” shall mean each corporation, partnership, trade or business (whether or not

incorporated) which is or at any time was, together with Seller, treated or required to be treated with Seller as a single employer in accordance with Section 414 of the Internal Revenue Code of 1986, as amended (the “Code”).

          (b) Seller does not, nor will it prior to the Closing Date, participate in, contribute to, employ any persons covered by or have any liability or reasonable expectation of liability (including withdrawal liability within the meaning of Title IV of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)) with respect to any multiemployer plan, as defined in Section 3(37) of ERISA. Seller does not, nor will it prior to the Closing Date, maintain, contribute to or have any liability whatsoever with respect to (1) any pension plan (as defined in Section 3(3) of ERISA) subject to Section 412 of the Code, Section 302 of ERISA or Title IV of ERISA, (ii) any multiple employer plan within the meaning of Section 413(c) of the Code, or (iii) any plan that provides post-retirement or post-termination health, life, disability or welfare-type benefits to current or future former employees of Seller other than in accordance with Section 4980B of the Code, Part 6 of Subtitle B of Title I of ERISA or applicable state continuation coverage law. All amounts due under or with respect to the Employee Benefit Plans for services rendered by Seller’s Employees prior to the Closing Date shall be fully paid as of the Closing. All amounts accrued under or with respect to the Employee Benefit Plans, payment of which is not due prior to or on the Closing Date, and all amounts accrued under or with respect to each Employee Benefit Plan that is unfunded, are Excluded Liabilities (except personal, sick and vacation day accruals).

          (c) Each Employee Benefit Plan has been, and through the Closing Date will be, maintained, administered and funded in all material respects in accordance with all applicable laws and regulations, including, without limitation, ERISA and the Code. None of Seller or any trustee, administrator, fiduciary, service-provider or other party dealing with any Employee Benefit Plan has engaged in a non-exempt prohibited transaction (within the meaning of Section 4975 of the Code or Section 406 of ERISA) with respect to such Employee Benefit Plan or has engaged in any action or omitted any action with respect to any Employee Benefit Plan which action or omission could reasonably be expected to subject Purchaser to any material liability.

          (d) None of the Employee Benefit Plans will obligate Purchaser to pay separation, severance, termination or similar-type benefits to any of Seller’s Employees (or to any other individual) solely as a result of any transaction contemplated by this Agreement or solely as a result of a change of control as such term is contemplated by Section 280G of the Code.

          (e) Each Employee Benefit Plan that is intended to be qualified under Section 401 (a) of the Code, and each trust (if any) forming a part thereof, has received a favorable determination letter from the Internal Revenue Service as to the qualification under the Code of such plan and the tax-exempt status of such related trust, and nothing has occurred since the date of such determination letter that could adversely affect the qualification of such Employee Benefit Plan or the tax-exempt status of such related trust.

     5.12. Financial Information.

          (a) The attached Schedule 5.12 consists of (i) the audited balance sheet of Seller as of December 31, 2003, and the related, audited statements of income and cash flows for the twelve-month period then ended (the “Audited December 31 Financial Statements”), (ii) the audited balance sheet of Seller as of February 29, 2004 (the “Audited February 29 Balance Sheet”), and the related, audited statements of income and cash flows for the two-month period then ended (together with the Audited February 29 Balance Sheet, the “Audited February 29 Financial Statements”, and all together with the Audited December 31 Financial Statements, the “Audited Financial Statements”), and (iii) the unaudited balance sheet of Seller as of the June 30, 2004 (the “Unaudited June 30 Balance Sheet”), and the related, unaudited statements of income and cash flows for the twelve-month period then ended (together with the Unaudited June 30 Balance Sheet, the “Unaudited June 30 Financial Statements”). Except as set forth on Schedule 5.12, the Audited Financial Statements and the Unaudited June 30 Financial Statements will be true, accurate and complete in all material respects, will have been prepared in accordance with generally accepted accounting principles applied consistently with past practices, and will fairly present the financial condition, results of operations and cash flows of Seller as of the dates and for the periods indicated.

          (b) As soon as practical after issuance (and in any event no later than forty- five (45) days after the end of any month), Seller shall deliver to Purchaser drafts of the unaudited balance sheet of Seller as of the last day of each of the months from (and including) August, 2004, through the month immediately preceding the Closing Date, and the related statements of income and expenses, retained earnings and cash flow for the months then ended (collectively, the “Remaining Financial Statements”). Seller shall deliver final copies of such Remaining Financial Statements no later than sixty (60) days after the end of each month. Except as set forth on Schedule 5.12, the Remaining Financial Statements will be true, accurate and complete in all material respects, will have been prepared in accordance with generally accepted accounting principles applied consistently with past practices, and will fairly present the financial condition, results of operations and cash flows of Seller as of the dates and for the periods indicated. Seller is solvent and no bankruptcy, insolvency or similar proceeding is pending against Seller.

     5.13. No Undisclosed Liabilities. Except as and to the extent set forth on the attached Schedule 5.13 or reflected in the Unaudited June 30 Balance Sheet, and except for current liabilities incurred by Seller in connection with or with respect to the Business in the ordinary course since the date of the Unaudited June 30 Balance Sheet, Seller has no debts, liabilities or obligations of any nature or kind (whether absolute, accrued, contingent, unliquidated or otherwise, whether or not known to Seller, whether due or to become due and regardless of when asserted) arising out of transactions entered into, at or prior to the Closing which could materially adversely affect the Assets, the Assignable Items or the Business.

     5.14. Tax Matters.

          (a) Except as set forth on the attached Schedule 5.14:

               (i) Seller has filed all Tax Returns which it is required to file under applicable laws and regulations, and all such Tax Returns are complete and correct and have been prepared in compliance with all applicable laws and regulations;

               (ii) Seller has paid all Taxes due and owing by it (whether or not such Taxes are required to be shown on a Tax Return) and have withheld and paid over to the appropriate taxing authority all Taxes which it is required to withhold from amounts paid or owing to any employee, stockholder, creditor or other third party;

               (iii) Seller has not waived any statute of limitations with respect to any Taxes or agreed to any extension of time with respect to any Tax assessment or deficiency;

               (iv) Since February 29, 2004, Seller has not incurred any liability for Taxes with respect to the Business other than in the ordinary course;

               (v) No foreign, federal, state or local tax audits or administrative or judicial proceedings are pending or being conducted with respect to Seller;

               (vi) Seller has not received from any foreign, federal, state or local taxing authority any (a) written notice indicating an intent to open an audit or other review or (b) request for information related to Tax matters; and

               (vii) There are no material unresolved questions or claims concerning any Tax liability of Seller.

          (b) Except as set forth on the attached Schedule 5.14, Seller (a) has not made an election under Section 341 (f) of the Code, (b) is not liable for the Taxes of another person (1) under Treasury Regulation Section 1.1502-6 (or comparable provisions of state, local or foreign law), (2) as a transferee or successor, (3) by contract or indemnity or (4) otherwise, (c) is not a party to any tax sharing agreement or (d) has not made any payments, is not obligated to make any payments or is not a party to an agreement that could obligate it to make any payments that would not be deductible under Section 280G of the Code.

          (c) For purposes of this Agreement, the term “Tax” means any federal, state, province, local, or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, capital stock, franchise, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated, or other tax of any kind whatsoever, including any interest, penalty, or addition thereto, whether disputed or not. For purposes of this Agreement, the term “Tax Return” means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

     5.15. Environmental, Health and Safety Matters.

          (a) Except as set forth on the attached Schedule 5.15, Seller has not received any written notice, and Seller has no information which indicates that Seller will be receiving notice, of proceedings, claims or losses relating to alleged violations by Seller of any Environmental Laws or Safety Laws relating to the Business or relating to the presence, discharge, release or disposal of Hazardous Materials on the Leased Real Property, any Former Property (defined below), or any property adjoining the Leased Real Property or any Former Property. For purposes of this Agreement, the term “Former Property” means any and all real property ever owned or leased by Seller or any of its predecessors in interest.

          (b) Seller has not received written notice of, and to the Knowledge of Seller, there are no pending or threatened claims, actions, suits, or proceedings identifying Seller as a potentially responsible party for any facility, site or location pursuant to CERCLA or other similar Environmental Law relating to the Business.

          (c) Seller is and has continually been in compliance with all applicable limitations, restrictions, conditions, standards, prohibitions, requirements and obligations established under the requirements of Environmental Laws relating to the Business, except where such noncompliance would not have any reasonable likelihood, singly or in the aggregate, of materially adversely affecting the financial condition, operations, assets, business or properties of the Business, taken as a whole.

          (d) Seller has timely filed all applications, registrations, notices, reports and other submissions required under all Environmental Laws, except for such notices, reports or other submissions with respect to which the failure to so file would not have any reasonable likelihood, singly or in the aggregate, of materially adversely affecting the financial condition, operations, assets, business or properties of the Business, taken as a whole.

          (e) The Leased Real Property has been (and the Former Property was) operated by Seller in compliance with all Environmental Laws, in each case except for such violations, which would not have any reasonable likelihood, singly or in the aggregate, of materially adversely affecting the financial condition, operations, assets, business or properties of the Business, taken as a whole.

          (f) Seller has been issued all permits, certificates, approvals, licenses and other authorizations, or if appropriate granted variances therefrom or filed for exemptions, as required under all Environmental Laws to operate the Business (collectively the “Environmental Permits”), has timely applied therefore and is and continues to be in compliance therewith and Seller has had all such required Environmental Permits, and has been in compliance therewith, in each case except for such Environmental Permits with respect to which the failure to obtain or to comply with which would not have any reasonable likelihood, singly or in the aggregate, of materially adversely affecting the financial condition, operations, assets, business or properties of the Business, taken as a whole.

          (g) Seller has not ever caused or suffered any Hazardous Materials to be disposed, discharged, spilled or released onto or into soils, sediments, underground pipes or conveyances or containers, surface water or groundwater of the Leased Real Property or the

Former Property, which would have any reasonable likelihood, singly or in the aggregate, of materially adversely affecting the financial condition, operations, assets, business or properties of the Business, taken as a whole.

          (h) Seller has not arranged for the transportation, treatment or disposal of any Hazardous Materials that was disposed of, treated or otherwise managed at any site listed on any federal CERCLA or state list or other lists of Hazardous Materials sites.

          (i) There are no Liens under Environmental Laws on any of the Assets or the Assignable Items, and no government actions have been taken or are in process, which could subject any of such properties or assets to such Liens.

     5.16. Consents, Approvals and Authorizations. Except as set forth on the attached Schedule 5.16 (the “Section 5.16 Authorizations”), and any consents of a party (other than Seller) required in connection with the assignment of the Assumed General Contracts, the Personal Property Leases, and the Real Property Leases, no consent, approval or authorization of, or designation, declaration or filing with, or notice to, any governmental authority, third party payor, lender, lessor, creditor, shareholder or other third party, is required on the part of Seller in connection with the valid execution and delivery of this Agreement and the Attendant Documents to which Seller is a party or the consummation of the transactions contemplated in this Agreement without breach or violation of any agreement, lease, indenture or other instrument, or any judgment, decree, order, award, law, rule or regulation applicable to or affecting Seller, the Business, or the Assets.

     5.17. Insurance. Except as set forth on the attached Schedule 5.17, Seller has maintained and now maintains insurance with respect to the Assets, the Assignable Items and the Business, covering property damage by fire or other casualty, and against such liabilities, claims and risks and in such amounts as is customary or appropriate in the industry. All such insurance policies will be in full force and effect through the Closing Date. Except as set forth on the attached Schedule 5.17, there is no state of facts and no event has occurred forming the basis for any present property, casualty or fidelity claim against Seller which is not fully covered by insurance, and to the Knowledge of Seller, there is no occurrence, circumstance, or event which could reasonably be expected to result in any such claim. Seller has provided Purchaser with true, correct and complete copies of all insurance policies currently maintained by Seller and maintained by Seller for the preceding three (3) years. Except as disclosed in Schedule 5.17, no such policy of insurance is or was subject to any deductible, self-insured retention, retrospective rating agreement, indemnification agreement, or any other method or device by which the insured person is or was subject to all or any part of the liability for any or all claims.

     5.18. Assets. Other than the Excluded Assets, there are no assets material to the operation of the Business, which are not included in the Assets, the Assignable Items, or the Non-Assignable Items to be transferred to Purchaser on the Closing Date. Except for the Subsidiaries, Seller does not have any direct or indirect subsidiaries, wholly-owned or otherwise, or any interest whatsoever in any other entity.

     5.19. Accounts. All Accounts arose out of (or will arise out of) the sales of inventory or services in the ordinary course of business.

     5.20 Recent Conduct of Business. Since the date of the Unaudited June 30 Balance Sheet, (a) there has not been any material adverse change in the Business or in the operations or condition (financial or otherwise) of the Business; and (b) the Business has been conducted only in the ordinary course. Without limiting the generality of clause (b) above, since the date of the Unaudited June 30 Balance Sheet, Seller has not, except in the ordinary course of the Business and in regard to subsection (ii) below only, consistent with past practice:

               (i) made or incurred any capital expenditures in excess of $10,000 in any one transaction or any series of similar transactions;

               (ii) made any change in the rate of compensation, commission, bonus or other direct or indirect remuneration payable or to become payable to any of Seller’s employees or agents, or agreed or orally promised to pay, conditionally or otherwise, any bonus, extra compensation, pension or severance or vacation pay, to any of Seller’s employees or agents, except as set forth on Schedule 5.20 (ii);

               (iii) sold or transferred any of its assets;

               (iv) terminated or amended any General Contract to the detriment of the Business;

               (v) incurred or guaranteed any loan or other obligation (in connection with or related to the Business, the Assets or the Assignable Items);

               (vi) subjected any of the Assets or t