8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): September 16, 2008 (September 12, 2008)

American Claims Evaluation, Inc.

(Exact name of registrant as specified in its charter)

New York	0-14807	11-2601199
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

One Jericho Plaza, Jericho, New York	11753
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (516) 938-8000

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

EX-10.10: STOCK PURCHASE AGREEMENT

EX-10.11: ESCROW AGREEMENT

EX-10.12: STOCK PURCHASE AGREEMENT

EX-99.1: PRESS RELEASE

Item 1.01 Entry into a Material Definitive Agreement.

See disclosure under Item 2.01 below.

Item 2.01 Completion of Acquisition or Disposition of Assets.

On September 12, 2008 (the “Closing Date”), American Claims Evaluation, Inc. (the “Company”) acquired all of the issued and outstanding shares of Interactive Therapy Group Consultants, Inc. (“ITG”), a New York corporation and provider of a comprehensive range of services to children with developmental delays and disabilities.

The Company had previously reported that this acquisition would be effected through the acquisition of substantially all of the assets and business of ITG. However, due to concerns over the timing of the assignment of contracts by ITG to the Company, it was deemed to be in the best interest of both parties to re-structure the deal in the form of a stock sale. The purchase price paid to the shareholders of ITG was adjusted accordingly.

Under the terms of the Stock Purchase Agreement (the “Stock Purchase Agreement”) by and among the Company, John Torrens, Kyle Palin Torrens and Carlena Palin Torrens (collectively, the “Sellers”), the Company paid a purchase price of $570,000 in cash to the Sellers. Following the Closing Date, the purchase price is subject to adjustment depending on the final determination of the tangible net worth of ITG as of the close of business on the Closing Date.

Pursuant to the Stock Purchase Agreement, $105,000 of the cash consideration was deposited into an escrow account in accordance with an Escrow Agreement (the “Escrow Agreement”) to assure that there are funds available to satisfy indemnification obligations in respect of any amounts payable by ITG pursuant to a claim by the New York State Insurance Fund for non-payment of workers’ compensation premiums and in respect of any outstanding accounts receivable that are not collected in full within 240 days of the Closing Date.

ITG also entered into a two-year Employment Agreement (the “Employment Agreement”) with John Torrens in connection with the Stock Purchase Agreement. Under this Employment Agreement, Mr. Torrens will be employed as President of ITG, is entitled to receive an annual base salary of $200,000 and is entitled to certain other benefits. The Employment Agreement contains non-competition, non-solicitation and confidentiality provisions.

Subsequent to the Closing Date, the Company paid off ITG’s line of credit and a term note payable totaling approximately $1,105,000, including interest. ITG will seek a new line of credit for working capital purposes, if deemed necessary.

The descriptions herein of the material terms of the Stock Purchase Agreement and Escrow Agreement are qualified in their entirety by reference to the respective agreements which have been attached hereto as Exhibits 10.10 and 10.11.

On September 12, 2008, the Company also completed the disposition of its wholly-owned subsidiary, RPM Rehabilitation & Associates, Inc. (“RPM”), pursuant to a Stock Purchase Agreement (the “Purchase Agreement”) whereby the Company sold all of the issued and outstanding shares of RPM to Stephen D. Renz, the President of RPM, for a purchase price of $150,000 in cash, plus an additional purchase price of up to $150,000 in cash contingent upon the future net earnings of RPM calculated over a period of five years from and after the closing of the transaction.

The foregoing description of the Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Purchase Agreement which is filed as Exhibit 10.12 hereto.

On September 16, 2008, the Company issued a press release announcing these transactions, a copy of which is attached to this report as Exhibit 99.1.

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Item 9.01 Financial Statements and Exhibits.

(a) Financial Statements of Business Acquired.

Any required financial statements for the acquisition reported in Item 2.01 above will be filed by amendment as soon as practicable, but not later than 71 days from the date that this Current Report on Form 8-K is required to be filed.

(b)	Pro-forma Financial Information.
	Any required pro forma financial information for the acquisition reported in Item 2.01 above will be filed by amendment as soon as practicable, but not later than 71 days from the date that this Current Report on Form 8-K is required to be filed.
(c)	Exhibits.

10.10	Stock Purchase Agreement by and among American Claims Evaluation, Inc., John Torrens, Kyle Palin Torrens and Carlena Palin Torrens, dated September 12, 2008.
10.11	Escrow Agreement by and among American Claims Evaluation, Inc., John Torrens, Kyle Palin Torrens, Carlena Palin Torrens and Siller Wilk LLP, dated September 12, 2008.
10.12	Stock Purchase Agreement by and between American Claims Evaluation, Inc. and Stephen D. Renz, dated September 12, 2008.
99.1	Press Release of American Claims Evaluation, Inc., dated September 16, 2008.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: September 16, 2008	AMERICAN CLAIMS EVALUATION, INC.
	By:	/s/ Gary Gelman
		Gary Gelman
		President and Chief Executive Officer

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EXHIBIT INDEX

Exhibit No.	Description
Exhibit 10.10	Stock Purchase Agreement by and among American Claims Evaluation, Inc., John Torrens, Kyle Palin Torrens and Carlena Palin Torrens, dated September 12, 2008.
Exhibit 10.11	Escrow Agreement by and among American Claims Evaluation, Inc., John Torrens, Kyle Palin Torrens, Carlena Palin Torrens and Siller Wilk LLP, dated September 12, 2008.
Exhibit 10.12	Stock Purchase Agreement by and between American Claims Evaluation, Inc. and Stephen D. Renz, dated September 12, 2008.
Exhibit 99.1	Press Release of American Claims Evaluation, Inc., dated September 16, 2008.

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EX-10.10

EXHIBIT 10.10

STOCK PURCHASE AGREEMENT

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

RECITALS

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

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

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

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

ARTICLE I
PURCHASE OF COMPANY SHARES AND PURCHASE PRICE

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

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

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

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

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

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

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

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

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

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

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

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

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ARTICLE II
CLOSING

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

ARTICLE III
REPRESENTATIONS AND WARRANTIES

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

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

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

          (c) No Breach or Conflict.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

          (q) Insurance.

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

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

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

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

          (s) Intellectual Property.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

ARTICLE IV
COVENANTS OF THE PARTIES

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

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

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

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

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

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

     4.6 Tax Provisions.

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

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

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

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

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

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

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

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

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

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

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

ARTICLE V
DELIVERIES AT CLOSING

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

ARTICLE VI
RESTRICTIVE COVENANTS

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

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

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

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

ARTICLE VII
SURVIVAL

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

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

ARTICLE VIII
INDEMNIFICATION

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

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

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

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

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

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

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

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

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

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

     8.3 Limitation of Liability.

          (a) Limitation of Liability of the Majority Shareholder.

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

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

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

          (b) Limitation of Liability of Purchaser.

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

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

     8.4 General Indemnification Provisions.

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

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

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

ARTICLE IX
GENERAL PROVISIONS

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

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

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

     9.4 Governing Law; Arbitration.

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

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

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

     If to Majority Shareholder to:

Mr. John Torrens
6368 East Seneca Turnpike
Jamesville, NY 13078

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     If to K. Torrens to:

Kyle Palin Torrens
c/o John Torrens
6368 East Seneca Turnpike
Jamesville, NY 13078

     If to C. Torrens to:

Carlena Palin Torrens
c/o John Torrens
6368 East Seneca Turnpike
Jamesville, NY 13078

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

Sherrard & Roe, PLC
424 Church Street, Suite 2000
Nashville, TN 37219
Attn: Elizabeth E. Moore, Esq.
Facsimile: (615) 742-4539

     If to Purchaser to:

American Claims Evaluation, Inc.
One Jericho Plaza
Jericho, NY 11753
Attn: Gary Gelman
Fax: (516) 938-0405

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

Siller Wilk LLP
675 Third Avenue
New York, NY 10017
Attn: Joel I. Frank, Esq.
Facsimile: (212) 752-6380

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

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

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

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

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

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

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

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

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

     9.13 Construction and References.

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

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

[signature page to follow]

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

PURCHASER: AMERICAN CLAIMS EVALUATION, INC.
By:	/s/ Gary Gelman
Name:		Gary Gelman
Title:		President and Chief Executive Officer
MAJORITY SHAREHOLDER:
/s/ John Torrens
John Torrens
K. TORRENS
By:	/s/ John Torrens
John Torrens, as parent for a minor child
C. TORRENS
By:	/s/ John Torrens
John Torrens, as parent for a minor child

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EX-10.11

EXHIBIT 10.11

ESCROW AGREEMENT

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

RECITALS

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

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

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

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

     2. Purpose.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

     12. Waiver of Conflict; Reimbursement of Expenses.

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

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

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

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

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

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

          15.2 Resignation of Escrow Agent in accordance with Paragraph 13.

          15.3 Removal of Escrow Agent in accordance with Paragraph 14.

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

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

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

If to Torrens to:
	Mr. John Torrens
	6368 East Seneca Turnpike
	Jamesville, NY 13078
If to K. Torrens to:
	Kyle Palin Torrens
	c/o John Torrens
	6368 East Seneca Turnpike
	Jamesville, NY 13078
If to C. Torrens to:
	Carlena Palin Torrens
	c/o John Torrens
	6368 East Seneca Turnpike
	Jamesville, NY 13078
In each case with a copy (which shall not constitute notice) to:
	Sherrard & Roe, PLC
	424 Church Street, Suite 2000
	Nashville, Tennessee 37219-3304
	Attn: Elizabeth E. Moore, Esq.
	Facsimile: (615) 742-4539
If to Purchaser to:
	American Claims Evaluation, Inc.
	One Jericho Plaza
	Jericho, NY 11753
	Attn: Gary Gelman
	Facsimile: (516) 938-0405
with a copy (which shall not constitute notice) to:
	Siller Wilk LLP
	675 Third Avenue
	New York, NY 10017
	Attn: Joel I. Frank, Esq.
	Facsimile: (212) 752-6380
If to Escrow Agent to:
	Siller Wilk LLP
	675 Third Avenue
	New York, NY 10017
	Attn: Joel I. Frank, Esq.
	Facsimile: (212) 752-6380

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

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

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

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

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

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

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

SILLER WILK LLP
By:	/s/ Joel I. Frank
Title:	Partner

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EX-10.12

EXHIBIT 10.12

STOCK PURCHASE AGREEMENT

     This Stock Purchase Agreement (this “Agreement”) is entered into as of September 12, 2008 by and between American Claims Evaluation, Inc., a New York corporation (“Seller”), and Stephen D. Renz (“Buyer”). Seller and Buyer are referred to herein individually as a “Party” and collectively as the “Parties.”

RECITALS:

     WHEREAS, Seller owns eight hundred forty-six (846) shares of common stock, par value $1.00 per share, of RPM Rehabilitation & Associates, Inc., a Washington corporation (the “Company”), which represents all of the issued and outstanding shares of capital stock of the Company (the “Company Shares”); and

     WHEREAS, Buyer desires to purchase from Seller, and Seller desires to sell to Buyer, all of the outstanding Company Shares on the terms and subject to the conditions set forth in this Agreement.

     NOW, THEREFORE, in consideration of the premises and the mutual promises herein made, and in consideration of the representations, warranties, and covenants herein contained, the Parties agree as follows:

     Section 1. Definitions.

     “AAA” has the meaning set forth in Section 8(h)(ii).

     “Accounting Firm” means an independent accounting firm that is mutually agreed upon by the Parties; provided, however, that, in the event that the Parties are unable to agree upon such accounting firm, then each of Seller and Buyer shall designate a regionally recognized independent accounting firm and the two regionally recognized independent accounting firms shall agree upon and select a third nationally recognized accounting firm, which shall be the “Accounting Firm” for the purposes of this definition.

     “Additional Purchase Price” has the meaning set forth in Section 2(b).

     “Affiliate” has the meaning set forth in Rule 12b-2 of the regulations promulgated under the Exchange Act.

     “Agreement” has the meaning set forth in the first paragraph of this Agreement.

     “Business” means the provision of vocational rehabilitation and disability management services.

     “Business Day” means a day, other than a Saturday or Sunday, on which commercial banks in New York City are open for the general transaction of business.

     “Buyer” has the meaning set forth in the first paragraph of this Agreement.

     “Calculation Period” has the meaning set forth in Section 2(b).

     “Cap” has the meaning set forth in Section 7(b)(ii).

     “Closing” has the meaning set forth in Section 2(c).

     “Closing Date” has the meaning set forth in Section 2(c).

     “Code” means the Internal Revenue Code of 1986, as amended, and the United States Treasury Regulations thereunder.

     “Commitments” means all written and oral contracts, agreements, leases, arrangements, employee benefits plans and agreements with employees, understandings and commitments of any nature whatsoever, and including all amendments thereof and supplements thereto.

     “Company” has the meaning set forth in the first Whereas clause in the recitals to this Agreement.

     “Company Shares” has the meaning set forth in the first Whereas clause in the recitals to this Agreement.

     “Deductible” has the meaning set forth in Section 7(b)(ii).

     “Exchange Act” means the Securities Exchange Act of 1934, as amended.

     “Governmental Entity” means any foreign or domestic (federal, state or local) government, governmental instrumentality or governmental or other regulatory or administrative authority, agency or commission or court, having jurisdiction in the particular matter.

     “Income Tax” or “Income Taxes” means any Company federal, state, local or foreign Tax or Taxes (a) based upon, measured by, or calculated with respect to, net income or net receipts, proceeds or profits, or (b) based upon, measured by, or calculated with respect to multiple bases (including, but not limited to, corporate franchise or occupation Taxes) if such Tax may be based upon, measured by, or calculated with respect to one or more bases described in (a) above.

     “Indemnified Party” has the meaning set forth in Section 7(d)(i).

     “Indemnifying Party” has the meaning set forth in Section 7(d)(i).

     “IRS” means the Internal Revenue Service.

     “Knowledge” or “aware” means actual knowledge or awareness, without investigation.

     “Laws” means any federal, state, local or foreign law, constitution, treaty, statute or ordinance, common law, or any rule, regulation, standard, judgment, Order, writ, injunction or decree of any Governmental Entity.

     “Liability” means any debt, liability or obligation, whether known or unknown, asserted or unasserted, accrued, absolute, contingent or otherwise, whether due or to become due.

     “Lien” means any mortgage, pledge, lien, encumbrance, charge or other security interest, other than (a) liens for Taxes not yet due and payable, (b) purchase money liens and liens securing rental payments under capital lease arrangements, and (c) other liens arising in the Ordinary Course of Business and not incurred in connection with the borrowing of money.

     “Losses” means all actions, suits, proceedings, hearings, investigations, charges, complaints, claims, demands, injunctions, judgments, orders, decrees, rulings, damages, dues, penalties, fines, costs, reasonable amounts paid in settlement, liabilities, obligations, Taxes, Liens, losses, expenses, and fees, including court costs and reasonable attorneys’ fees and expenses; provided, however, that Losses shall not include any indirect, special, consequential, diminution in value, incidental or punitive damages or losses of any kind, except to the extent paid by any Indemnified Party in a Third Party Claim.

     “Material Adverse Effect” means any effect or change that, individually or in the aggregate, would be or would reasonably be expected to be materially adverse to the business of the Company, taken as a whole, or to the ability of any Party to perform its obligations under this Agreement or to consummate timely the transactions contemplated by this Agreement; provided that none of the following shall be deemed to constitute, and none of the following shall be taken into account in determining whether there has been, a Material Adverse Effect: any adverse change, event, development or effect arising from or relating to (i) general business or economic conditions, (ii) national or international political or social conditions, including the engagement by the United States in hostilities, whether or not pursuant to the declaration of a national emergency or war, or the occurrence of any military or terrorist attack upon the United States, or any of its territories, possessions, or diplomatic or consular offices or upon any military installation, equipment or personnel of the United States, (iii) financial, banking or securities markets (including any disruption thereof and any decline (whether or not material) in the price of any security or any market index), (iv) changes in United States generally accepted accounting principles, (v) changes in Laws or other binding

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directives issued by any Governmental Entity, or (vi) the taking of any action contemplated by this Agreement and the other agreements contemplated hereby.

     “Material Commitments” has the meaning set forth in Section 3(k).

     “Net Earnings” has the meaning set forth in Section 2(b).

     “Order” means any writ, judgment, decree, settlement, injunction or similar order of any Governmental Entity, in each case whether preliminary or final.

     “Ordinary Course of Business” means the ordinary course of business of the Company consistent with past custom and practice.

     “Party” and “Parties” have the meanings set forth in the first paragraph of this Agreement.

     “Permit” means any license, permit, consent, registration, certificate, franchise, approval, Order or other authorization of any Governmental Entity.

     “Person” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, any other business entity or Governmental Entity (or any department, agency or political subdivision thereof).

     “Pre-Closing Tax Periods” means all taxable periods, or portions of periods, of the Company ending on or before the Closing Date.

     “Purchase Price” has the meaning set forth in Section 2(a).

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

     “Securities Act” means the Securities Act of 1933, as amended.

     “Seller” has the meaning set forth in the first paragraph of this Agreement.

     “Subsidiary” means, with respect to any Person, any corporation, limited liability company, partnership, association, or other business entity of which (i) a majority of the total voting power of the ownership interests entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers, general partners, trustees thereof, or similar Persons is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof; or (ii) a majority of the ownership interests or economic interests thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more Subsidiaries of that Person or a combination thereof; or (iii) such Person shall be or directly or indirectly control any director, manager, general partner or similar Person of such business entity. The term “Subsidiary” shall include all Subsidiaries of such Subsidiary.

     “Tax” or “Taxes” means any federal, state, local or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental (including taxes under Code Section 59A), 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.

     “Tax Indemnified Parties” has the meaning set forth in Section 6(d)(ii).

     “Third Party Claim” has the meaning set forth in Section 7(d)(i).

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     Section 2. Purchase of Company Shares and Related Transactions.

     (a) Purchase. On and subject to the terms and conditions of this Agreement, Buyer agrees to, and does hereby, purchase from Seller, and Seller agrees to, and does hereby, sell to Buyer, all of its Company Shares. The purchase price for all of the Company Shares (the “Purchase Price”) shall be $150,000.00, payable by wire transfer of immediately available funds to a bank account designated in writing by Seller prior to the Closing. The Purchase Price is subject to adjustment in accordance with Section 2(b).

     (b) Adjustment to Purchase Price. In addition to the payment provided for in Section 2(a) above, Buyer shall pay Seller an additional purchase price of up to $150,000.00 in cash contingent upon the future net earnings of the Company (the “Additional Purchase Price”) calculated over a period of five years from and after the Closing (the “Calculation Period”) as follows: Beginning with the Closing Date and continuing until the completion of the Calculation Period, the Net Earnings before taxes and interest (“Net Earnings”) of the Company shall be determined by the Accounting Firm in accordance with generally accepted accounting principles prepared on an accrual basis. The calculation of the Additional Purchase Price shall be pro-rated for the initial period beginning with the Closing Date and ending on March 31, 2009, followed by calculations for the next four full years and concluding with a final pro-rated calculation for the period April 1, 2013 through September 11, 2013. If the Company’s fiscal year end is changed to a year ending other than its current year end of March 31^st, each calculation during the Calculation Period shall be pro-rated for any period less than twelve (12) months and the subsequent calculations shall be adjusted accordingly for the remainder of the Calculation Period. For purposes hereof, Net Earnings shall mean the gross revenue of the Company for each fiscal year or portion thereof during the Calculation Period less all expenses and other proper charges (except taxes and interest). For purposes of the calculation of Net Earnings, Mr. Renz’s annual salary (consisting of wages and bonuses) shall be capped at $115,000 and shall be increased each year by a five (5%) percent cost of living adjustment. In addition, Mr. Renz shall be allowed to be reimbursed for expenses incurred on behalf of the Company and for reasonable employee benefits in keeping with his position in the Company. The Additional Purchase Price shall then be calculated at 10% of Net Earnings.

The calculation and yearly payment of the Additional Purchase Price shall be made on an annual basis until the earlier of (i) the payment of $150,000.00 of Additional Purchase Price to Seller or (ii) the expiration of the Calculation Period. Buyer shall make its payments to Seller by wire transfer of immediately available funds in an amount equal to the applicable Additional Purchase Price to a bank account designated in writing by Seller within thirty (30) days of the annual calculation.

Until the completion of the Calculation Period, Buyer shall provide Seller with copies of the quarterly financial statements of the Company within forty five (45) days of the end of each quarter. Under the terms and conditions of Section 6(c), Seller shall have the right to inspect the books and records of the Company to determine the accuracy of the calculation of the Additional Purchase Price.

     (c) Closing. The closing of the transactions contemplated by this Agreement (the “Closing”) shall take place at the offices of Seller’s counsel, Siller Wilk LLP, at 675 Third Avenue, New York, New York 10017, commencing at 10:00 a.m. local time on the date hereof (the “Closing Date”). The Closing shall be effective as of 11:59 p.m. on the Closing Date.

     (d) Deliveries at Closing. At the Closing, (i) Seller shall deliver or cause to be delivered to Buyer (A) a stock certificate representing all of its Company Shares, endorsed in blank or accompanied by a duly executed stock power, (B) resignations of the Company’s directors and officers (other than Buyer) and (C) complete stock register, Articles of Incorporation and Bylaws, and amendments thereto, minute books, financial records and any other books and records of the Company not already in the possession of Buyer and (ii) Buyer shall deliver to Seller (A) the payment specified in Section 2(a) and (B) payment by wire transfer of immediately available funds of $4,871.49 representing the cost of computer equipment purchased by the Company on Buyer’s behalf.

     Section 3. Seller’s Representations and Warranties.

     Seller represents and warrants to Buyer as follows:

     (a) Authorization. Seller has the full and absolute legal right, capacity and power to (i) execute and deliver this Agreement and all other agreements contemplated hereby to which Seller is a party and (ii) to perform its obligations hereunder and thereunder. This Agreement constitutes the valid and legally binding obligation of

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Seller, enforceable against Seller in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, and similar laws affecting creditors’ rights and remedies generally, and, as to enforceability, to general principles of equity regardless of whether enforcement is sought in a proceeding at law or in equity.

     (b) Non-Contravention Regarding the Seller. Neither the execution and delivery of this Agreement, nor the consummation of the transactions contemplated hereby, by Seller will (i) violate any statute, regulation, rule, injunction, judgment, order, decree, ruling, charge or other restriction of any Governmental Entity to which Seller is subject, (ii) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify or cancel, or require any notice under, any Material Commitment to which Seller is a party or by which it is bound or to which any of its assets is subject, (iii) result in the imposition or creation of a Lien upon or with respect to any Company Shares or (iv) result in the suspension, revocation, impairment, withdrawal, forfeiture (for dormancy or otherwise) or non-renewal of any material Permit. Seller need not give any notice to, make any filing with, or obtain any authorization, consent or approval of any Governmental Entity or other third party in order to consummate the transactions contemplated by this Agreement.

     (c) Capitalization. The entire authorized capital stock of the Company consists of fifty thousand (50,000) Company Shares, of which eight hundred forty-six (846) Company Shares are issued and outstanding. All of the issued and outstanding Company Shares are held of record by the Seller as set forth in the first Whereas clause in the recitals to this Agreement. There are no outstanding or authorized options, warrants, purchase rights, subscription rights, conversion rights, exchange rights, or other Commitments that could require the Company to issue, sell or otherwise cause to become outstanding any of its capital stock. There are no outstanding or authorized stock appreciation, phantom stock, profit participation, deferred compensation or similar rights with respect to the Company.

     (d) Company Shares. Seller holds of record and owns beneficially the number of Company Shares set forth in the first Whereas clause in the recitals to this Agreement, free and clear of any restrictions on transfer (other than restrictions under the Securities Act and state securities laws), Taxes, Liens, options, warrants, purchase rights, Commitments, equities, claims, and demands. Seller is not a party to any option, warrant, purchase right, or other Commitment (other than this Agreement) that could require it to sell, transfer or otherwise dispose of any capital stock of the Company. Seller is not a party to any voting trust, proxy or other agreement or understanding with respect to the voting of any capital stock of the Company.

     (e) Organization, Qualification and Corporate Power of the Company. The Company is a corporation validly existing and in good standing under the laws of the State of Washington. The Company does not have, and has never had, any Subsidiaries. The Company is duly authorized to conduct business and is in good standing under the laws of each other jurisdiction where such qualification is required, except where the lack of such qualification would not have a Material Adverse Effect. The Company has full corporate power and authority to carry on the business in which it is engaged and to own and use the properties owned and used by it. The Company has true and correct copies of its Articles of Incorporation and Bylaws, including all amendments thereto, and true copies of the minutes of all shareholder’s and directors’ meetings, and have provided the same to Buyer.

     (f) Powers of Attorney. There are no outstanding powers of attorney executed on behalf of the Company.

     (g) Brokers’ Fees. Neither Seller nor the Company has any liability or obligation to pay any fees or commissions to any broker, finder or agent with respect to the transactions contemplated by this Agreement.

     (h) Non-Contravention Regarding the Company. Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will (i) violate any statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, material Permit or other restriction of any Governmental Entity to which the Company is subject or any provision of the charter or bylaws of the Company, (ii) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify or cancel, or require any notice, filing, approval or consent under any Commitment to which the Company is a party or by which it is bound or to which any of its assets is subject or (iii) result in the imposition of any Lien upon any of its assets, except (x) for such notices, filings, approvals or consents which are given, made or obtained prior to the Closing or (y) where the violation, conflict, breach, default, acceleration,

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termination, modification, cancellation, failure to give notice, make a filing or obtain an approval or consent, or Lien would not have a Material Adverse Effect, or (iv) result in the suspension, revocation, impairment, withdrawal, forfeiture (for dormancy or otherwise) or non-renewal of any material Permit. The Company need not give any notice to, make any filing with, or obtain any authorization, consent or approval of any Governmental Entity or other third party in order to consummate the transactions contemplated by this Agreement.

     (i) Title to Tangible Assets. The Company has good title to, or a valid leasehold interest in, the material tangible assets used regularly in the conduct of its business.

     (j) Real Property.

          (i) The Company owns no real property.

          (ii) The Company leases real property at 1010 N. Normandie, Spokane, WA 99201 under a lease which expires on July 31, 2013. .

     (k) Material Commitments. Seller has provided Buyer with a correct and complete copy of all of the material Commitments to which (i) the Company is a party and/or (ii) the Seller or any of their respective Affiliates is a party in connection with the Business of the Company, or, in either case, by or to which the Company or its assets may be bound or subject (“Material Commitments”). Each Material Commitment is (and immediately after the Closing will be) in full force and effect and valid, binding and enforceable in accordance with its terms against the Company, the Seller or any other parties thereto, (ii) neither the Company nor Seller nor, to the Knowledge of Seller, any other party thereto, is in material default under any Material Commitment (beyond any applicable notice and cure period), and (iii) to the Knowledge of Seller, no condition exists which, with the passage of time or the giving of notice, or both, will become a material default under any Material Commitment.

     (l) Litigation. (i) To the Knowledge of Seller, there is no investigation by any Governmental Entity against the Company or its business or assets, (ii) there is no audit or proceeding by any Governmental Entity or any action, suit, proceeding or claim (including any employee-related claims (other than routine claims for benefits)) pending or, to the Knowledge of Seller, threatened within the last six months against the Company or its business or assets and (iii) there are no existing orders, writs, injunctions or decrees of any court or other Governmental Entity against the Company or its business or assets.

     (m) Taxes.

          (i) The Company has (a) timely filed in accordance with all applicable Laws (taking into account valid extensions) all Returns required to be filed by it, (b) paid all Taxes shown to have become due pursuant to such Returns, and (c) paid all Taxes for which a notice of, or assessment or demand for, payment has been received or which are or may become otherwise due or payable. All Returns filed by the Company with respect to Taxes were true and complete in all material respects as of the date on which they were filed or as subsequently amended as of the date of amendment. Prior to the date hereof, the Company has provided to Buyer copies of all revenue agent’s reports and other written assertions of deficiencies or other Liabilities for Taxes of the Company with respect to past periods. All amounts required to be collected or withheld by the Company with respect to Taxes have been duly collected or withheld and any such amounts that are required to be remitted to any taxing authority have been duly remitted. There are no waivers or extensions of any applicable statute of limitations for the assessment or collection of Taxes with respect to any Return that relates to the Company which remain in effect. There are no Tax rulings, requests for rulings, closing agreements or similar agreements relating to the Company. There are no pending examinations of the Company’s Tax Returns and there have been no such examinations. The Company is not a party to, nor is it bound by, any Tax allocation or Tax sharing agreement or arrangement and has no current contractual or legal obligation (actual or potential) to indemnify any other Person with respect to Taxes (including as a result of being part of the same consolidated, combined or affiliated group). No taxing authority in a jurisdiction where the Company or any shareholder of the Company does not file Returns has made a claim, assertion or threat that the Company is or may be subject to taxation by such jurisdiction. The Company has filed income, excise, sales and use Tax Returns only with the IRS and the State of Washington.

     (n) Absence of Undisclosed Liabilities. To the Knowledge of Seller, the Company is not subject to any Liabilities other than (i) Liabilities reflected, reserved against or otherwise disclosed in its financial statements

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as of March 31, 2008 and (ii) Liabilities arising since March 31, 2008 in the ordinary course of business consistent (in amount and kind) with past practice except, with respect to clauses (i) and (ii), as would not, individually or in the aggregate, have a Material Adverse Effect. The Company does not have any outstanding accrued dividends.

     (o) Insurance. The Company has not received either a written notice or, to the Knowledge of Seller, oral notice that would reasonably be expected to be followed by a written notice of cancellation or non-renewal of any current insurance policy, and, to the Knowledge of Seller, no basis exists for early termination thereof on the part of the insurer.

     (p) Compliance with Laws; Permits.

     (i) To the Knowledge of Seller, (A) the Company currently has all Permits which are required for the operation of the Business as currently conducted, (B) such Permits are in full force and effect, and (C) the Company has made all appropriate filings for issuance or renewal of such Permits, except where the failure to have any such Permit would not have a Material Adverse Effect. To the Knowledge of Seller, the Company is not in default or violation (and no event has occurred which, with notice or the lapse of time or both, would constitute a default or violation) of any term, condition or provision of any such Permit, and no condition exists or event has occurred which, in itself or with the giving of notice or lapse of time or both, would result in suspension, revocation, impairment, withdrawal, forfeiture (for dormancy or otherwise) or non-renewal of any such Permit, except where such default, violation, suspension, revocation, impairment, withdrawal, forfeiture (for dormancy or otherwise) or non-renewal would not have a Material Adverse Effect.

     (ii) To the Knowledge of Seller, the Company is, and for the past three (3) years has been, in compliance in all material respects with all applicable Laws. To the Knowledge of Seller, there are no outstanding Orders issued by, and the Company has not received written notice alleging any defaults under or violations of, Law from any Governmental Entity.

     (iii) To the Knowledge of Seller, no action, suit, consent order, proceeding (including, without limitation, any proposed certificate action, warning notice, letter of correction, administrative action, enforcement action, emergency action, order of compliance, proposed cease and desist order, proposed order of denial, requests for re-examination, and/or notice of proposed civil penalty) or review by any Governmental Entity with respect to the Company is pending or, to the Knowledge of the Seller, threatened within the last six months against the Company.

     (q) Operation of Business. Since April 1, 2008, the Company has conducted the Business in the Ordinary Course of Business in all material respects, including, without limitation, with regard to (i) the collection of the Company’s accounts receivable, and (ii) the payment of the Company’s accounts payable.

     (r) Outstanding Indebtedness. Immediately prior to the Closing, the Company has no indebtedness for borrowed money.

     (s) Seller’s Claims. Seller has no claims against either Buyer or the Company, and neither Buyer nor the Company are obligated in any way or for any amounts, except for claims or obligations which may arise under this Agreement. Seller hereby releases any and all claims which it may have against Buyer and/or the Company through the Closing Date, except for claims arising under this Agreement, or claims for which Seller may be entitled to indemnification in accordance with the provisions of the Company’s Articles of Incorporation or Bylaws.

     (t) Disclosure. To the Knowledge of Seller, nothing in this Agreement contains any untrue statement of any material fact or omits to state any material fact required to be stated herein, or necessary in order to make the statements contained herein not misleading. To the Knowledge of Seller, there is no fact which could have a Material Adverse Affect on Buyer or the Company, or which in the future may (so far as Seller can now reasonably foresee) have a Material Adverse Affect on Buyer or the Company or any of its assets, which fact has not been disclosed in writing to Buyer prior to the date hereof or set forth herein.

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     Section 4. Disclaimer of Other Representations and Warranties by Seller.

     Except as expressly set forth in Section 3 and except in the case of intentional fraud, Seller make no representation or warranty, express or implied, at law or in equity, with respect to Seller, the Company, or any of their respective assets, Liabilities, operations, rights and obligations, financial conditions or prospects, including with respect to merchantability or fitness for any particular purpose, and any such other representations or warranties are hereby expressly disclaimed. Buyer hereby acknowledges and agrees that, except to the extent specifically set forth in Section 3 and except in the case of intentional fraud, Seller make no representations or warranties, and, insofar as the Company’s tangible assets, Buyer is effectively acquiring the Company with its assets on an “as is, where is” basis. Buyer further acknowledges that he has had an opportunity to complete a due diligence review of the Company and has made his own evaluation and reached his own conclusions regarding the results of that review without relying on any statements made by Seller other than as set forth in Section 3 and except in the case of intentional fraud by Seller.

     Section 5. Buyer’s Representations and Warranties.

     Buyer represents and warrants to Seller as follows:

     (a) Authorization. Buyer has full power and authority to execute and deliver this Agreement and each of the other agreements contemplated hereby to which he is a party and to perform his obligations hereunder and thereunder. This Agreement constitutes the valid and legally binding obligation of Buyer, enforceable in accordance with its terms and conditions, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, and similar laws affecting creditors’ rights and remedies generally, and, as to enforceability, to general principles of equity regardless of whether enforcement is sought in a proceeding at law or in equity.

     (b) Non-Contravention. Neither the execution and delivery of this Agreement, nor the consummation of the transactions contemplated hereby, by Buyer will (i) violate any Laws to which Buyer is subject or (ii) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any Commitment to which Buyer is a party or by which he is bound or to which any of his assets is subject. Buyer need not give any notice to, make any filing with, or obtain any authorization, consent or approval of any Governmental Entity or other third party in order to consummate the transactions contemplated by this Agreement.

     (c) Brokers’ Fees. Buyer has no liability or obligation to pay any fees or commissions to any broker, finder or agent with respect to the transactions contemplated by this Agreement.

     (d) Investment. Buyer is purchasing the Company Shares for his own account for investment only and not with a view towards the sale or distribution thereof. Buyer is an “accredited investor” as that term is defined in Rule 501 under the Securities Act.

     Section 6. Certain Covenants.

     (a) Further Actions. If at any time after the Closing any further action not provided for herein is necessary to carry out the purposes of this Agreement, each of the Parties will take such further action (including the execution and delivery of such further instruments and documents) as any other Party reasonably may request, all at the sole cost and expense of the requesting Party (unless the requesting Party is entitled to indemnification therefor under Section 7).

     (b) Seller as Additional Insured. Until the expiration of five (5) years after the Closing, the Company shall cause Seller to be named as additional insured on the Company’s (and any successors) liability insurance policies to the extent that the Company (or any successors) can do so without the payment of any additional costs or fees to the Company (or any successors); provided that if there are any additional costs or fees, the Company (or its successor, as applicable) shall so notify Seller, and if Seller pays such costs or fees to the Company, or directly to the appropriate insurers, the Company shall cause Seller to be so named as additional insured.

     (c) Access to Records. Until the expiration of five (5) years after the Closing Date, Buyer and the Company shall upon reasonable request from Seller (a) make available and permit Seller and its representatives and

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agents to inspect and copy books and records which relate to the Company; provided, however, that (i) all such inspection, copying and assistance shall be at the Company’s place of business at reasonable times and after reasonable notice, (ii) all such inspection, copying and assistance shall be at the sole cost and expense of Seller, and (iii) Seller shall treat all such records and information as confidential and not disclose such records or information to any other person or entity except (A) to Seller’s lawyers, accountants and other advisors, representatives, and agents, (B) as required by applicable Law or legal process, or (C) in connection with Seller’s Tax Returns, or any claims, actions or proceedings in which Seller may be or become involved. Subject to Section 6(d)(v), Buyer shall cause the Company to preserve such books and records for at least four (4) years after the Closing Date. Subject to Section 6(d)(v), until the expiration of four (4) years after the Closing Date, Buyer shall ensure that the Company does not, and the Company agrees that it will not, dispose of such books and records unless Buyer or the Company shall have notified Seller at least sixty (60) days before such disposition and given Seller the opportunity (at Seller’s expense) to remove and retain the books and records.

     (d) Tax Provisions.

     (i) Seller shall be responsible for the preparation of the Company’s federal and state Income Tax Returns for the taxable years which end on or prior to the Closing Date and such Income Tax Returns shall be prepared in a manner consistent with the prior practice of the Company. Seller shall provide Buyer with an opportunity to review and comment on such Income Tax Returns at least ten (10) Business Days prior to the date that such Returns are due to be filed (taking into account extensions of the due date thereof). Any Company Tax due with respect to such Income Tax Returns or, in the case of any Income Tax Returns for taxable years which include the Closing Date, the portions of such Tax relating to Pre-Closing Tax Periods (including in each case payments of estimated Tax) shall be paid by Seller to the Company on the later of two (2) days before the first date on which such Tax becomes due and payable without interest or penalties or two (2) days after Buyer’s request for such payment, and upon receipt by the Company shall be promptly paid over by the Company to the relevant taxing authority. If the amount due pursuant to the immediately preceding sentence is not paid by Seller by the due date specified therein, the same shall carry interest, without duplication of interest included in the definition of Taxes, from (and including) such due date to (but not including) the date of payment at an annual rate of interest equal to the reference or “prime” rate from time to time of the JPMorgan Chase Bank.

     (ii) Seller shall indemnify and hold harmless, without duplication, Buyer and the Company (collectively, the “Tax Indemnified Parties”) from and against any and all Liabilities and Losses of the Company or Buyer based upon, resulting from or arising out of (A) Company Taxes arising (or deemed to arise) with respect to Pre-Closing Tax Periods. In the case of any Tax relating to a taxable period of the Company that includes but does not end on the Closing Date, the portion of such Tax relating to the portion of such taxable period which ends on the Closing Date shall be computed for purposes of clause (ii) of this Section 6(d) in a manner which is consistent with the same computation undertaken for purposes of the preparation of Seller’s financial statements.

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

     (iv) As between Buyer and Seller, Buyer shall to the maximum extent possible pay, and file all necessary Returns and other documentation with respect to, all transfer (excluding transfer gains), documentary, sales, use, stamp, registration and other such Taxes (including any penalties, interest, additions to tax, and costs and expenses relating to such Taxes) incurred in connection with the consummation of the transactions contemplated by this Agreement. If Seller is required by applicable Law

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to pay such Taxes and/or file such Returns, Buyer shall prepare such Returns and/or pay Seller at Closing or promptly thereafter any amounts Seller is obligated to pay (as applicable). Seller shall cooperate with Buyer in the preparation of all such Returns.

     (v)

     A. Subject to the provisions of this subsection (d)(v) of this Section 6, Seller shall have the right, at its own expense, to control, manage and be responsible for any audit, contest, claim, proceeding or inquiry with respect to Taxes of the Company for any Tax period ending on or before the Closing Date and shall have the right to settle or contest in its discretion any such audit, contest, claim, proceeding or inquiry; provided, however, that (i) Seller shall not have the right to control, settle or contest any such proceeding unless it first acknowledges in writing its obligation to fully indemnify the Tax Indemnified Parties for the Taxes payable by the Company at issue in the proceeding; (ii) no settlement or disposition of any such proceeding shall be made without Buyer’s prior written consent, which shall not be unreasonably withheld, if such settlement or disposition reasonably could be expected to affect the Company’s liability for Tax in any taxable period or portion of a taxable period ending after the Closing Date and (iii) Buyer shall have the right to attend and participate in, at his own expense, any such proceeding controlled by Seller pursuant to this Section 6(d)(v) only if such proceedings reasonably could be expected to affect the Company’s liability for Taxes (it being understood that Buyer shall not unreasonably withhold his consent if Seller requests that certain limited meetings with agents of a taxing authority be held without Buyer’s representative in attendance, provided that Buyer is kept fully informed with respect to any such meeting).

     B. The Company shall, at its own expense, control, manage and solely be responsible for any audit, contest, claim, proceeding or inquiry with respect to Taxes for any taxable period ending after the Closing Date (including a taxable period that straddles the Closing Date), and shall have the exclusive right to settle or contest any such audit, contest, claim, proceeding or inquiry without the consent of any other Party.

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

     (vii) Notwithstanding anything that may be to the contrary in this Agreement, Buyer shall not have the right to receive or obtain any information relating to the Taxes of Seller, other than information relating solely to the Company.

     (e) Acquisition or Sale of the Company. If there is “an acquisition or sale of the Company” to or by “a third party” during the Calculation Period, Buyer shall pay Seller to cause to be paid to Seller twenty percent (20%) of the remaining unpaid Additional Purchase Price as a condition to the closing of such “acquisition or sale of the Company.” Upon payment of this amount to Seller, neither Buyer nor the Company shall have any further obligation to Seller for payment of the Additional Purchase Price. For purposes hereof, “an acquisition or sale of the Company” to or by “a third party” shall mean the occurrence of any transaction or series of transactions during the Calculation Period which result in (i) greater than fifty percent (50%) of the then outstanding Company Shares (for cash, property including, without limitation, stock in any corporation or other third party legal entity, indebtedness or any combination thereof) have been redeemed by the Company or purchased by a third party not previously affiliated with the Company, or exchanged for shares in any other corporation or other third party legal entity not previously affiliated with the Company, or any combination of such redemption, purchase or exchange, (ii) greater than fifty percent (50%) in book value of the Company’s gross assets are acquired by a third party not previously affiliated with the Company (for cash, property including, without limitation, stock in any corporation whether or not unaffiliated with the Company, indebtedness of any person or any combination thereof), or (iii) the Company is merged or consolidated with another private or public corporation or other third party legal entity and the former holders of Company Shares own less than twenty-five percent (25%) of the voting power of the acquiring, resulting or surviving corporation or other third party legal entity. For the purposes hereof, a director of officer of the Company shall be considered “affiliated with the Company.”

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     (f) Covenant Not to Compete. For a period of five (5) years following the Closing, Seller agrees that neither it, nor any of its shareholders, directors, or officers, will, without the advance written consent of Buyer, directly or indirectly, whether or not for compensation: (1) engage in any business or activity similar to the Business of the Company, whether alone, or as a partner, officer, director, employee, consultant or holder of any beneficial interest in any such business or activity or in any person or entity engaged in such business or activity in the geographic area consisting of the States of Washington, Oregon or Idaho, (2) divert or attempt to divert from the Company any business of any kind in which the Company is engaged on the Closing Date, or (3) induce or attempt to induce any person who is an employee of the Company on the date hereof to leave the employ of the Company. The Parties agree that any violation of this Section 6(f) will cause the Buyer and the Company to suffer irreparable harm. As such, in the event of the violation of this Section 6(f), the Buyer and the Company shall be entitled, in addition to all legal remedies, to equitable relief, including temporary restraining orders, preliminary injunctions, and permanent injunctions. The Parties agree that the time and territorial restrictions of this Section 6(f) are reasonable. Should any court of competent jurisdiction determine that either the time period or the territorial scope of this Section 6(f) are unreasonably lengthy or broad, the other provisions shall stand, and the offending provisions shall be revised to provide for the longest period of time and greatest territorial scope permissible by law.

     Section 7. Remedies for Breaches of this Agreement.

     (a) Survival. The representations and warranties of the Parties contained in Section 3(a) through Section 3(n), Section 3(p) through Section 3(t) and Section 5 shall survive the Closing (unless, as to any particular representation or warranty, the damaged Party knew of any misrepresentation or breach of warranty at the time of the Closing) and continue in full force and effect after the Closing, with the period of such survival to be subject to any applicable statutes of limitations. The covenants and agreements of the Parties contained in this Agreement shall survive the Closing until the satisfaction or performance thereof. The representation and warranty contained in Section 3(o) shall not survive the Closing hereunder.

     (b) Indemnification Provisions for Buyer’s Benefit.

     (i) Subject to the limitations set forth in this Section 7, in the event Seller breaches any of its covenants or agreements contained in this Agreement, or any of its representations and warranties in Section 3, and provided that Buyer makes a written claim for indemnification against Seller within the survival period (if there is an applicable survival period pursuant to Section 7(a)), and that Buyer did not have actual knowledge of the breach prior to the Closing, then Seller shall indemnify Buyer from and against any Losses Buyer shall suffer through and after the date of the claim for indemnification caused proximately by Seller’s breach.

     (ii) Seller’s indemnification obligations under this Section 7 shall be subject to the following limitations: (A) Seller shall not be required to indemnify Buyer for Losses under Section 7(b)(i) until the aggregate amount of all such Losses exceeds $25,000 (the “Deductible”), in which event Seller shall be responsible only for Losses in excess of the Deductible, (B) the aggregate amount of Losses for which Seller shall be required to indemnify Buyer from time to time pursuant to Section 7(b)(i) shall not exceed $100,000 (the “Cap”); provided, that notwithstanding the foregoing, indemnification for breaches of the (x) representations and warranties contained in Sections 3(a), (c) and (d), the last sentence of Section 3(e), and Section 3(m) and (y) covenants and agreements of the Seller contained in this Agreement shall not be subject to the Deductible or the Cap, and (C) amounts indemnified under Section 6(d) shall not also be indemnified under this Section 7, and the limitations under this Section 7 shall not apply to indemnification under Section 6(d).

     (c) Indemnification Provisions for Seller’s Benefit. In the event Buyer breaches any of his covenants or agreements contained in this Agreement or any of his representations and warranties in Section 5, and provided, that Seller makes a written claim for indemnification against Buyer or the Company within the survival period, and that Seller did not have actual knowledge of the breach prior to the Closing, then Buyer and the Company shall jointly and severally indemnify Seller from and against any Losses suffered caused proximately by Buyer’s or the Company’s breach.

     (d) Matters Involving Third Parties.

     (i) If any third party shall notify any Party (the “Indemnified Party”) with respect to any matter (a “Third Party Claim”) which may give rise to a claim for indemnification against any other Party

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(the “Indemnifying Party”) under this Section 7, then the Indemnified Party shall promptly notify each Indemnifying Party thereof in writing (and shall include a copy of the notification from the third party), provided that the failure to promptly deliver such notification shall relieve the Indemnifying Party of his or its indemnification obligations hereunder only to the extent that the indemnifying party is materially prejudiced thereby.

     (ii) Any Indemnifying Party will have the right at any time to assume and thereafter conduct the defense of the Third Party Claim with counsel of his or its choice reasonably satisfactory to the Indemnified Party; provided, however, that the Indemnifying Party will not consent to the entry of any judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of the Indemnified Party (not to be unreasonably withheld) unless the judgment or proposed settlement involves only the payment of money damages and does not impose an injunction or other equitable relief upon the Indemnified Party.

     (iii) Unless and until an Indemnifying Party assumes the defense of the Third Party Claim as provided in Section 7(d)(ii), the Indemnified Party may defend against the Third Party Claim in any manner he or it may reasonably deem appropriate.

     (iv) In no event will the Indemnified Party consent to the entry of any judgment on or enter into any settlement with respect to the Third Party Claim without the prior written consent of each of the Indemnifying Parties (not to be unreasonably withheld).

     (e) Determination of Losses. All indemnification payments under this Section 7 and Section 6(d) shall be paid by the Indemnifying Party net of any insurance benefits (net of premiums, fees or other costs of such insurance coverage) paid to or recovered by the Indemnified Party pursuant to any insurance policy, title insurance policy, indemnity, reimbursement arrangement or contract. All indemnification payments under this Agreement shall be treated by the Parties as adjustments to the Purchase Price.

     (f) Exclusive Remedy. The Parties acknowledge and agree that, except with respect to Section 6(d) and Section 6(f), the foregoing indemnification provisions in this Section 7 shall be the exclusive remedy of the Parties with respect to this Agreement (including any breach or alleged breach hereof) and the transactions contemplated by this Agreement, except in the case of intentional fraud. In no event may any Party seek indemnification hereunder for damages or losses which are excluded from the definition of “Losses” in Section 1.

     Section 8. Miscellaneous.

     (a) Press Releases and Public Announcements. After the Closing, if any of the Parties wishes to issue a press release announcing the Closing, the Parties agree to jointly issue a press release, agreed to in advance by the Parties. Buyer acknowledges and agrees that Seller may need to publicly disclose the existence of this Agreement pursuant to its obligations as a public company under the Exchange Act.

     (b) No Third Party Beneficiaries. This Agreement shall not confer any rights or remedies upon any Person other than the Parties and their respective successors, heirs, personal representatives and permitted assigns, and is not for the benefit of any third party.

     (c) Entire Agreement. This Agreement (including the documents referred to herein) constitutes the entire agreement among the Parties and supersedes and merges into itself any and all prior understandings, agreements or representations by or among the Parties, written or oral, to the extent they relate in any way to the subject matter hereof, including, without limitation, the Letter of Intent between Seller and Buyer dated May 19, 2008.

     (d) Succession and Assignment. This Agreement shall be binding upon and inure to the benefit of the Parties named herein and their respective successors, heirs, personal representatives and permitted assigns. Neither Party may assign its rights hereunder without the prior written consent of the other Party.

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     (e) Counterparts. This Agreement may be executed and delivered in one or more counterparts (including by means of facsimile or electronic transmission), each of which shall be deemed an original but all of which together will constitute one and the same instrument.

     (f) Headings. The section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning, interpretation or construction of this Agreement.

     (g) Notices. All notices, requests, demands, claims and other communications hereunder shall be in writing. Any notice, request, demand, claim or other communication hereunder shall be deemed duly given (i) when delivered personally to the recipient, (ii) one (1) Business Day after being sent to the recipient by reputable overnight courier service (charges prepaid), (iii) one (1) Business Day after being sent to the recipient by facsimile transmission or electronic mail, or (iv) five (5) Business Days after being mailed to the recipient by express, certified or registered mail, return receipt requested and postage prepaid, and addressed to the intended recipient as set forth below:

If to Seller:

American Claims Evaluation, Inc.
One Jericho Plaza
Jericho, NY 11753
Fax: 516-938-0405
Attn: Gary Gelman

with a copy to:

Siller Wilk LLP
675 Third Avenue
New York, NY 10017
Fax: (212) 752-6380
Attn: Joel I. Frank, Esq.

If to Buyer or (after the Closing) the Company:

RPM Rehabilitation & Associates, Inc.
1010 N. Normandie, Suite 302
Spokane, WA 99201
Fax: (509)536-7713
Attn: Stephen D. Renz

with a copy to:

Douglas, Eden, Phillips, DeRuyter & Stanyer, P.S.
422 W. Riverside Avenue, Suite 909
Spokane, WA 99223
Fax: (509) 455-5348
Attn: Brent T. Stanyer, Esq.

Any Party may change the address to which notices, requests, demands, claims and other communications hereunder are to be delivered by giving the other Party notice in the manner herein set forth.

     (h) Governing Law; Arbitration.

     (i) This Agreement shall be governed by and construed in accordance with the domestic laws of the State of New York without giving effect to any choice or conflict of law provision or rule (whether of the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New York.

     (ii) Any dispute or controversy arising under or in connection with this Agreement and the transactions contemplated thereby shall be resolved by confidential binding arbitration which shall be

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

     (i) Amendments and Waivers. No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by each of the Parties. No waiver by any Party of any provision of this Agreement or any default, misrepresentation or breach of warranty or covenant hereunder, whether intentional or not, shall be valid unless the same shall be in writing and signed by the Party making such waiver, nor shall such waiver be deemed to extend to any prior or subsequent default, misrepresentation or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence. No delay on the part of any Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof.

     (j) Severability. Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. If any provision of this Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only so broad as is enforceable.

     (k) Expenses. Except as otherwise specifically provided herein, all costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be borne by the Party incurring such expense.

     (l) Construction. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement. Any reference to any federal, state, local or foreign statute or Law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. The word “including” shall mean including without limitation. The use herein of the masculine, feminine or neuter forms also shall denote the other forms, as in each case the context may require. Definitions shall apply equally to both the singular and plural forms of the terms defined. The use of the “$” symbol herein means United States Dollars. References herein to any notice received by the Company shall be deemed to mean only notices of which Seller has Knowledge.

* * *

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

SELLER:
AMERICAN CLAIMS EVALUATION, INC.
By:	/s/ Gary Gelman
Name:	Gary Gelman
Title:	Chairman, President and Chief Executive Officer
BUYER:
/s/ Stephen D. Renz
Stephen D. Renz

THE PROVISIONS OF SECTIONS 6 AND 7(c)
ARE HEREBY AGREED TO:

RPM REHABILITATION & ASSOCIATES, INC.

By:	/s/ Stephen D. Renz
Name:	Stephen D. Renz
Title:	President

15

EX-99.1

EXHIBIT 99.1

AMERICAN CLAIMS EVALUATION, INC. ANNOUNCES
ACQUISITION OF INTERACTIVE THERAPY GROUP CONSULTANTS, INC.

JERICHO, NY, September 16, 2008: American Claims Evaluation, Inc. (Nasdaq: AMCE) (the “Company”) announced today that on September 12, 2008 (the “Closing Date”), the Company acquired Interactive Therapy Group Consultants, Inc. (“ITG”) pursuant to a Stock Purchase Agreement (“Stock Purchase Agreement”) entered into by and among the Company, John Torrens, Kyle Palin Torrens and Carlena Palin Torrens. ITG is in the business of providing a comprehensive range of services to children with developmental delays and disabilities.

The Company had previously reported that this acquisition would be effected through the acquisition of substantially all of the assets and business of ITG. However, due to concerns over the timing of the assignment of contracts by ITG to the Company, it was deemed to be in the best interest of both parties to re-structure the deal in the form of a stock sale. The purchase price paid to the shareholders of ITG was adjusted accordingly.

Under the terms of the Stock Purchase Agreement, the Company paid a purchase price of $570,000 in cash to the Sellers. Following the Closing Date, the purchase price is subject to adjustment depending on the final determination of the tangible net worth of ITG as of the close of business on the Closing Date. Pursuant to the Stock Purchase Agreement, $105,000 of the cash consideration was deposited into an escrow account in accordance with an Escrow Agreement to assure that there are funds available to satisfy certain indemnification obligations.

ITG also entered into a two-year Employment Agreement (the “Employment Agreement”) with John Torrens in connection with the Stock Purchase Agreement. Under this Employment Agreement, Mr. Torrens will be employed as President of ITG, is entitled to receive an annual base salary of $200,000 and is entitled to certain other benefits. The Employment Agreement contains non-competition, non-solicitation and confidentiality provisions.

Subsequent to the Closing Date, the Company paid off ITG’s line of credit and a term note payable totaling approximately $1,105,000, including interest. ITG will seek a new line of credit for working capital purposes, if deemed necessary.

On September 12, 2008, the Company also completed the disposition of its wholly-owned subsidiary, RPM Rehabilitation & Associates, Inc. (“RPM”), pursuant to a Stock Purchase Agreement (the “Purchase Agreement”) whereby the Company sold all of the issued and outstanding shares of RPM to Stephen D. Renz, the President of RPM, for a purchase price of $150,000 in cash, plus an additional purchase price of up to $150,000 in cash contingent upon the future net earnings of RPM calculated over a period of five years from and after the closing of the transaction.

Regarding the acquisition of ITG, Gary Gelman, the Company’s Chairman of the Board, announced plans to seek additional acquisition opportunities in this highly-fragmented industry in addition to the current opportunities for organic growth available to ITG.

For further information contact: Gary J. Knauer, Chief Financial Officer, American Claims Evaluation, Inc., One Jericho Plaza, Jericho, NY 11753; telephone number (516) 938-8000.