ASSET PURCHASE AGREEMENT



                  THIS ASSET PURCHASE AGREEMENT (the "Agreement") is effective

as of 12:01 a.m. on September 1, 2000, by and among Doctors Katz and DiGrado,

Inc. (a professional medical corporation) ("Buyer"), the shareholders of Buyer

who are signatories hereto (collectively, the "Shareholders"), IOI Management

Services of Louisiana, Inc., a Louisiana corporation ("Seller"), and Integrated

Orthopaedics, Inc., a Texas corporation and parent of Seller ("Parent").



                                    RECITALS



                  WHEREAS, Seller and Westside Orthopaedic Clinic (a

professional corporation) ("Clinic"), an affiliate of Buyer, entered into a

Management Services Agreement ("Management Agreement") on November 12, 1997,

concurrently with the purchase by Parent of the stock of the Clinic pursuant to

a Stock Purchase Agreement dated November 12, 1997, by and among Parent, the

Shareholders and certain other individuals.



                  WHEREAS, Seller and Clinic desire to terminate the Management

Agreement pursuant to an Agreement to Terminate Management Agreement dated of

even date herewith and, concurrently therewith, Seller desires to sell certain

of its assets to Buyer pursuant to this Agreement.



                  WHEREAS, Seller is the owner of certain assets as identified

in Section 1.1 of this Agreement, which do not constitute substantially all of

the assets of Seller.



                  WHEREAS, Buyer desires to purchase such assets from Seller,

and Seller is willing to sell such assets to Buyer, in each case on the terms

and subject to the conditions contained in this Agreement.



                  WHEREAS, Parent is the owner of all the issued and outstanding

shares of capital stock of Seller, and is entering into this Agreement, strictly

with respect to Sections 5.2 and 5.4, as a condition to the willingness of Buyer

to enter into this Agreement.



                  WHEREAS, the Shareholders are the owners, in the aggregate, of

all the issued and outstanding shares of capital stock of Buyer, and are

entering into this Agreement, strictly for the purposes described in Sections

4.2 and 4.3 hereof, as a condition to the willingness of Seller to enter into

this Agreement.



                  NOW, THEREFORE, for and in consideration of the premises and

promises herein contained, and for other good and valuable consideration, the

adequacy of which is hereby acknowledged, the parties, intending to be legally

bound hereby, agree as follows:



                                   ARTICLE I

                                 THE TRANSACTION



                  1.1. Purchase and Sale of Assets. Subject to the terms and

conditions contained herein, Seller hereby sells, transfers, assigns and

delivers to Buyer, and Buyer hereby purchases from Seller, all right, title and

interest in and to the following assets (collectively, the "Assets") free and

clear of all liens except as otherwise provided for herein:



<PAGE>   2



                           (a) the furniture, fixtures and equipment and

supplies of Seller located at 4500 Tenth Street, Marrero, Louisiana;



                           (b) all outstanding accounts receivable of Seller

relating to the Clinic; and



                           (c) all rights and obligations of Seller or Parent,

as the case may be, arising on or after September 1, 2000, under the contracts

listed on Schedule 1.1(c) hereto (collectively, the "Leases").



                  1.2. Consideration. As consideration in full for all the

Assets, Buyer shall, upon execution of this Agreement, (i) deliver to Seller, by

wire transfer or certified check the sum of One Hundred Five Thousand Nine

Hundred Thirty-Three and no/100 Dollars ($105,933.00); and (ii) cause Jack L.

Winters, Jr., Joseph J. Frensilli and Robert A. Fleming, Jr. (collectively the

"Retired Physicians") to deliver to Buyer, and Buyer shall simultaneously

deliver to Parent and Seller, cancelled original Non-Negotiable Subordinated

Convertible Promissory Notes, marked "PAID IN FULL", made by Parent in favor of

the Retired Physicians ("IOI Notes") in the following respective original

principal amounts: $142,932, $142,932, $250,500. Buyer shall cause the

Testamentary Executrix of the Succession of Arthur George Kleinschmidt, Jr.

("Estate") to deliver to Parent the original Non-Negotiable Subordinated

Convertible Promissory Note, marked "PAID IN FULL", made by Parent in favor of

A.G. Kleinschmidt, M.D. in the original principal amount of $67,500

("Kleinschmidt Note"), in accordance with the Compromise and Settlement

Agreement entered into by Parent and the Executrix dated the Effective Date

hereof. Buyer shall reimburse Seller or Parent for any amount Seller or Parent

pays the Estate in order to induce the Estate to deliver the Kleinschmidt Note

to Seller.



                  1.3. Assumption of Liabilities. Except for the obligations

arising under the Leases on or after September 1, 2000, Buyer is not assuming,

and shall not be liable for, any obligations, liabilities or debts of Seller or

Parent, known or unknown, absolute or contingent. Buyer acknowledges that

effective September 1, 2000, Buyer is responsible for the lease between Winters,

Frensilli, & Fleming, MDs, Ltd. d/b/a Westside Orthopaedic Clinic and VGM

Financial Services dated July 26, 1999, that lease having never been assigned to

Seller or Parent.



                                   ARTICLE II

                     SELLER'S REPRESENTATIONS AND WARRANTIES



                  Seller hereby warrants and represents to Buyer, as of the date

of this Agreement, as follows:



                  2.1. Legal Authority. Seller is a business corporation duly

organized, validly existing and in good standing under the laws of the State of

Louisiana. Seller has all necessary corporate power and authority to enter into

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