(a)                                   All fixed assets owned by Seller, including but not limited to those items of furniture, fixtures, computer and other equipment and other tangible assets listed on Schedule 1.1(a);

(b)                                  Those customer and vendor agreements, insurance and other third party payor contracts and other contracts, licenses (including software licenses), leases and agreements, whether oral or written, as listed or described on Schedule 1.1(b) hereto (all such agreements and contracts being referred to herein as the “Contracts”), to which Seller is a party and which Buyer has agreed to assume pursuant to Section 1.3 below, and any rights, advances or benefits associated therewith or deposits or other prepayments made by Seller thereunder;

(c)                                   All rights in and to the patents, patent applications, trademarks, trade names, copyrights, and other proprietary intellectual property listed or described on Schedule 1.1(c) hereto, as well all other trade secrets and know-how used in or related to the Acquired Business (hereinafter the “Intellectual Property”);

(d)                                  All inventories of products and supplies, whether located at Seller’s facility, at locations of healthcare providers or at any other location, and any inventories of work in progress and raw materials, including but not limited to those items listed or described on Schedule 1.1(d) hereto to the extent that they exist on the Closing Date (collectively, the “Inventory”);

(e)                                   All accounts receivable, notes receivable and unbilled rights to payment in favor of SME (other than sales commissions due SME), including but not limited to those accounts receivable listed on Schedule 1.1(e) hereto to the extent that they exist on the Closing Date, but excluding accounts receivable due from Federal health care programs, and all rights to bill Federal health care program payors for sales completed prior to the Closing Date (the “Excluded Medicare Receivables”), (hereinafter, the “Accounts Receivable”);

(f)                                     All claims, causes of action, choses in action, rights of recovery and rights of set-off of any kind against any person, including without limitation any liens, security interests, pledges or other rights to payment or to enforce payment in connection with products delivered by SME on or prior to the Closing Date, except with respect to the Excluded Medicare Receivables;

(g)                                  All customer lists, supplier lists, sales files, business development information, databases, price lists and pricing records and schedules, accounting records, sales literature and general intangibles relating to the Acquired Business, licenses to conduct the Acquired Business (to the extent transferable), and any other books, documents, instruments and records used by the Seller to conduct the Acquired Business (collectively, the “Other Assets”); and

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(h)                                  All goodwill and other intangible personal property of Seller associated with the Acquired Business, including the name “Superior Medical Equipment”.

1.2                                  Consideration .  In consideration for the sale, assignment, transfer and delivery of the Purchased Assets, Buyer shall do the following, subject to possible adjustment as provided in Section 1.6 below:

(a)                                   Pay SME in readily available funds at the Closing pursuant to wire transfer instructions provided by Seller to Buyer prior to the Closing Date the sum of $3,150,000, less the aggregate amount of the Excluded Medicare Receivables;

(b)                                  Assume the Assumed Liabilities (defined below in Section 1.3);

(c)                                   Pay SME an additional sum of $500,000, plus interest at the annual rate of 4%, in readily available funds on the date that is twelve months after the Closing Date, provided that such sum shall be subject to downward adjustment as follows:  (i) there shall be deducted from such sum the amount, if any, required to cover any claims or losses coming within Seller’s indemnification obligations pursuant to Section 6.2 hereof; and (ii) there shall be deducted from such sum the amount, if any, required to satisfy Seller’s guarantee of the collection of the Accounts Receivable provided in Section 1.5 below; and

(d)                                  Pay SME an additional sum of up to $500,000 in readily available funds, less any deductions described in clause (i) or (ii) in Section 1.2(c) above that could not be satisfied out of the payment described in Section 1.2(c), (hereinafter the “Earn-out”), based on the following performance objectives applied to the Acquired Business:  (i) if the “gross billings” (as hereinafter defined) of the “Credited New Business” (as hereinafter defined) for Buyer’s twelve fiscal months commencing on March 6, 2005 (the “ New Billings”) exceed the gross billings of the “Credited Base Business” (as hereinafter defined) for the one-year period ending March 5, 2005 (the “Base Billings”) by 10% or more, then SME shall be paid the entire Earn-out; (ii) if the New Billings exceed the Base Billings by more than zero but less than 10%, the amount paid as the Earn-out shall be the same proportion of the full Earn-out as the percentage excess of New Billings over Base Billings bears to 10%; and (iii) if the New Billings do not exceed the Base Billings, no part of the Earn-out will be paid.  For purposes of calculating the Earn-out, the term “gross billings” shall mean the average selling price per product charged by SME in the year ending on the Closing Date, before contractual allowances and adjustments, and for those products sold by Buyer after the Closing but not by SME before the Closing, ‘gross billings” shall mean the average selling price per product, before contractual allowances and adjustments, charged by Buyer.  “Credited Base Business” shall mean total gross billings of $3,437,226.  “Credited New Business” shall mean the total gross billings for products sold by Buyer through all stock and bill customers in Connecticut and the one stock and bill customer shown on Schedule 2.13 located in Rhode Island plus the gross billings on insurance billing business of Buyer with physicians in Connecticut and

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physicians associated with the Rhode Island stock and bill customer on Schedule 2.13.  Billings associated with bone growth stimulation products shall not be included in Credited Base Business or Credited New Business.  An example of the calculation of the Earn-out is attached as Exhibit A hereto.  Buyer shall maintain separate records of Credited New Business, and Buyer will determine the Earn-out from those records and the records of Seller for the period before Closing, all on a consistent basis.  The Earn-out will be calculated and paid, if applicable, within 30 days following the end of the twelve fiscal month period following the Closing Date.  Buyer shall also pay Seller interest on the Earn-out at the annual rate of 4% if Buyer does not pay the Earn-out within 10 business days of the agreement of Buyer and Seller on the amount of the Earn-out.  If the parties are unable to agree on the calculation of the Earn-out in whole or in part, they shall submit such disagreement to arbitration pursuant to Section 6.5(b) hereof; provided that if such disagreement pertains to a portion but not all of such Earn-out, the portion that the parties agree has been earned shall be paid and only the disputed portion shall be submitted to arbitration.

(e)                                   Pay SME the additional amount of $50,000 in readily available funds if the New Billings exceed the Base Billings (each as defined above in clause (d)) by 5% or more.  This amount shall be paid, if earned, at the same time and in the same manner as the amount in clause (d) above is paid.

(f)                                     Pay SME the additional amount of $35,000 in readily available funds if, by the date that is six months after the Closing Date, 65% of the inventory then stocked at the facilities of the customers of SME identified on Schedule 2.13 hereof are products of Buyer.  This amount shall be paid, if earned, within 30 days of the close of said six-month period.

1.3                                  Assumption of Liabilities .  Buyer agrees to assume all obligations to be performed after the Closing under the Contracts set forth on Schedule 1.1(b) hereto, and except for said obligations under the Contracts, Buyer expressly does not, and shall not, assume or be deemed to assume, under this Agreement or otherwise by reason of the transactions contemplated hereby, any of the liabilities, obligations or commitments of Seller of any nature whatsoever, whenever arising and whether relating to the Acquired Business or otherwise.

1.4                                  Consents of Third Parties .  Notwithstanding anything to the contrary in this Agreement, this Agreement shall not constitute an assignment or attempted assignment of any agreement (including without limitation any third party payor contracts), license, instrument or other asset or property (“Consent Matters”) if the attempted assignment thereof, without the consent, approval or waiver of a third party or entity (including an agency or operation of the Federal or a State government), would constitute a breach thereof or a violation of any law or regulation, unless and until such consent, approval or waiver has been granted.  Seller covenants and agrees that in any such case the beneficial interests of Seller in and to any Consent Matter shall in any event pass at the Closing to Buyer, and Seller and Buyer covenant and agree that, from and after the Closing, (a) Seller will hold any and all such Consent Matters in trust for the

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benefit of Buyer, its successors and assigns, (b) Seller and Buyer will use their respective reasonable efforts, in cooperation with one another, to obtain and secure all consents that may be necessary to effect a full and valid transfer of the same as soon as reasonably possible, and (c) Seller will cooperate with Buyer in any assignment, subcontract or other reasonable arrangement designed to provide for Buyer the benefits of and under any Consent Matter.  Buyer agrees to make all payments required to be made with respect to such Consent Matter and to assume all liabilities or other obligations arising from and after the Closing Date with respect thereto except as a result of Seller’s negligence or willful misconduct, regardless of whether any such consent, approval or waiver has been obtained.

1.5                                  Accounts Receivable .  The parties agree to cooperate in the collection of the Accounts Receivable assigned to Buyer hereunder and in the billing and collection of the Excluded Medicare Receivables retained by Seller.  Seller shall promptly remit to Buyer any payments received on such Accounts Receivable after the Closing Date.  Buyer agrees to provide reasonable assistance to Seller in the processing and collecting of the Excluded Medicare Receivables.  Seller agrees to guarantee the payment in full of the “net” Accounts Receivable (which shall equal 75% of the gross amount of such receivables at Closing) over an initial, aggregate threshold of $25,000.  If any portion of such net Accounts Receivable remains unpaid twelve months after the Closing Date, Seller shall pay Buyer (or suffer the reduction in the additional payments described in Section 1.2 (c) and (d), at Seller’s election) at such time the total amount remaining unpaid on such net Accounts Receivable in excess of $25,000.  Buyer agrees to provide notice to Seller of such unpaid amount and copies of its records showing the unpaid balance on such Accounts Receivable.

1.6                                  Purchase Price Adjustment .  Both parties recognize that each has relied on the financial statements described in Section 2.9 in agreeing to the purchase price for the Purchased Assets, in particular the total current asset figure (less cash) of $627,140.28 shown in SME’s balance sheet at December 31, 2004 (“December 31 Assets”).  Accordingly, the parties agree that the purchase price set forth in Section 1.2 hereof shall be increased by the amount by which the total current assets of SME (less cash) as of the Closing Date are more than $50,000 in excess of the December 31 Assets, and said purchase price shall be decreased by the amount by which the total current assets of SME (less cash) as of the Closing Date are more than $50,000 less than the December 31 Assets.  If SME’s total current assets (less cash) on the Closing Date are no more than $50,000 higher or lower than the December 31 Assets, no adjustment will be made to the purchase price hereunder.  Seller shall calculate said assets of SME on the Closing Date and shall provide Buyer with such calculation within 20 days following the Closing.  Buyer shall accept such calculation or provide Seller with requested changes within 20 days of Seller’s delivery of such calculation.  If Buyer requests changes, the parties will promptly meet to seek agreement on the calculation.  If such calculation shows that the purchase price is increased, Buyer shall pay Seller such increase within 10 days of agreement on said calculation, and if such calculation shows that the purchase price is decreased, Seller shall pay Buyer such decrease within 10 days of agreement on said calculation.  If the parties are unable to agree on such calculation, the disagreement will be resolved through the dispute resolution procedure described in Section 6.5(b) hereof.

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1.7                                  Allocation of Purchase Price .  Schedule 1.7 hereto sets forth the parties’ agreement on the allocation of the purchase price under this Agreement among the Purchased Assets.  Each party agrees to follow such allocation in all reports and returns filed with applicable taxing authorities.

ARTICLE 2

REPRESENTATIONS AND WARRANTIES
OF THE SELLER

The Seller represents and warrants to the Buyer as follows:

2.1                                  Organization and Good Standing .  SME is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Connecticut.  SME is duly qualified to transact business and is in good standing in every jurisdiction in which the character of its business makes such qualification necessary, except for where the failure to be so qualified would not have a material adverse effect on SME or its business, assets, properties, prospects, financial condition or results of operations (a “Material Adverse Effect”), all of which jurisdictions are listed on Schedule 2.1 attached hereto.  SME has all necessary power and authority, including all necessary licenses and permits, to carry on its business as it is now being conducted, and to own or lease and operate its properties and assets.

2.2                                  Authorization and Approvals .  SME has all requisite power and authority to enter into this Agreement and to perform its obligations hereunder.  This Agreement has been duly executed and delivered by the Seller and constitutes the legal, valid and binding obligation of Seller, enforceable in accordance with its terms, except as may be limited by bankruptcy, reorganization, insolvency, moratorium or other laws relating to or affecting the enforcement of creditors’ rights and remedies generally; and except as enforcement may be limited by general principles of equity.  This Agreement has been, or will be prior to the Closing Date, duly and validly authorized by and approved by all requisite action on the part of SME and its members.  Owner is the sole member of SME and no other person or entity has any equity interest in SME of any nature whatsoever or any option, warrant or other right to acquire any such equity interest or any right or power to direct the voting of any outstanding equity interest.  No further approvals or consents by, or filings with, any federal, state, municipal, foreign or other court or governmental or administrative body, agency or other third party is required in connection with the execution and delivery by the Seller of this Agreement, or the consummation by the Seller of the transactions contemplated hereby, except for those which, if not obtained, would not have a material adverse impact on the ability of Buyer to carry on the Acquired Business as currently conducted or the ability of the Seller to execute and deliver this Agreement or to consummate the transactions contemplated hereby.

2.3                                  No Conflicts .  Except as set forth on Schedule 2.3 attached hereto, neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will (a) violate any provision of the charter, operating agreement, Bylaws or similar corporate organization agreement of SME, (b) violate, or be in conflict with, or constitute a

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default (or other event which, with the giving of notice or lapse of time or both, would constitute a default) under, or give rise to any right of termination, cancellation or acceleration under any of the terms, conditions or provisions of any material lease, license, promissory note, contract, agreement, mortgage, deed of trust or other instrument or document to which the Seller is a party or by which the Seller or any of SME’s properties or assets may be bound, (c) to the knowledge of the Seller, violate any order, writ, injunction, decree, law, statute, rule or regulation of any court or governmental authority applicable to SME or any of its properties or assets or (d) to the knowledge of the Seller, give rise to a declaration or imposition of any claim, lien, charge, security interest or encumbrance of any nature whatsoever upon any of the assets of SME.

2.4                                  Taxes .  SME has paid or caused to be paid within the time and in the manner prescribed by law all Federal, state and local taxes of any type, including without limitation, income, franchise, gross receipts, sales or property taxes, payable or due from and owed by SME for all periods ending on or prior to the date hereof except for taxes which are accrued but not yet due and payable.  SME has collected all sales, use and value added taxes required to be collected, and has remitted, or will remit on a timely basis, such amounts to the appropriate governmental authorities and has furnished properly completed exemption certificates for all exempt transactions.  SME has properly withheld income and social security or other similar taxes and paid payroll taxes with respect to all persons properly characterized as employees for federal, state or local tax purposes.  None of the assets of SME are subject to any liens in respect of taxes (other than for current taxes not yet due and payable).

2.5                                  Fixed Assets .  The fixed assets set forth on Schedule 1.1(a) hereto are in good operating condition and repair, normal wear and tear excepted, and are adequate for the uses to which they are being put.  None of such fixed assets is in need of maintenance or repairs, except for ordinary, routine maintenance and repairs.

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2.6                                  Contracts .  Schedule 1.1(b) hereto contains a complete, current and correct list of all material contracts, commitments, obligations or agreements of SME, whether written or oral, formal or informal, relating to the Acquired Business.  Except as noted on Schedule 1.1(b), no consent or approval of a party to any Contract or, to the knowledge of the Seller, any third party, including without limitation, any state or Federal government or agency thereof, is required in connection with the consummation of the transactions contemplated in this Agreement.  To the knowledge of the Seller, no event has occurred which would constitute a default (or any event which, with the giving of notice or lapse of time or both, would constitute a default) under any term or provision of any of the Contracts and thereby allow a party thereto to terminate or claim damages therefor.  Each of the Contracts is in full force and effect and is the legal, valid and binding obligation of SME and, to the knowledge of the Seller, of the other parties thereto, enforceable in accordance with its terms, except as may be limited by bankruptcy, reorganization, insolvency, moratorium or other laws relating to or affecting the enforcement of creditors’ rights and remedies generally and except as enforcement may be limited by general principles of equity.  The Seller is not a party to any Contract that restricts Seller, or after the Closing Date Buyer, from carrying on the Acquired Business or any part thereof, or from competing in any line of business with any person, corporation or entity, except for the non-compete agreements provided in section 4.3(i).

2.7                                  Inventory .  All inventory of the Acquired Business, as of a date within fivedays of the Closing Date, whether constituting finished goods, work in progress or raw material is shown on Schedule 1.1(d).  All of such inventory is usable and saleable in the ordinary course of business within a reasonable period of time, unless shown on Schedule 1.1(d) as subject to a reserve for inventory reasonably anticipated to be or become excess or obsolete.

2.8                                  Asset