SECURITIES AND EXCHANGE COMMISSION

Washington, D.C., 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No. 5)*

(Name of Issuer)

(Title of Class of Securities)

(CUSIP Number)

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box  ¨.

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Exchange Act”) or otherwise subject to the liabilities of that section of the Exchange Act but shall be subject to all other provisions of the Exchange Act (however, see the Notes).

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This Amendment No. 5 amends and supplements the Schedule 13D filed with the Securities and Exchange Commission (the “SEC”) on October 24, 2008 (as amended and supplemented, the “Statement”), relating to the common stock, $.0001 par value per share (“Common Stock”), of the Company.

In connection with the previously disclosed Financing Letter dated May 12, 2011 between James H. Desnick, M.D. (“Desnick”) and Levine Leichtman Capital Partners, Inc. (“LLCP”), the Reporting Persons (as defined below) and LLCP may be deemed to be a “group” within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934 (the “Exchange Act”). In addition, in connection with the Agreement and Plan of Merger, dated July 11, 2011 (the “Merger Agreement”), among the Company, Ayelet Investments LLC, a Delaware limited liability company (“Parent”), and Ayelet Merger Subsidiary, Inc., a Delaware corporation (“Merger Sub”), Parent entered into Voting Agreements (as defined below) with each of Desnick, Edward Heil (“Heil”), and John Pappajohn, (“Pappajohn”). Additionally, India Investment Company, Delaware corporation (“Holdco”), and Parent entered into an Investor Commitment Letter (as defined below) with Heil. As a result of these transactions described in the preceding two sentences, the Reporting Persons, Heil and Pappajohn may be deemed to constitute a “group” within the meaning of Section 13(d)(3) of the Exchange Act with the Voting Parties (as defined below). The Reporting Persons are filing this Statement solely on their own behalf.

Neither the filing of this Statement (as defined below) nor any of its contents shall be deemed to constitute an admission by (i) the Reporting Persons that they are the beneficial owners of any of the Common Stock owned by Heil or Pappajohn referred to herein or (ii) Holdco or Parent that they are the beneficial owners of any of the Common Stock owned by Desnick for purposes of Section 13(d) of the Exchange Act or for any other purpose, and, in each case, such beneficial ownership is expressly disclaimed.

Item 2 of the Statement is amended and supplemented as follows:

(a) - (c) This Statement is being filed on behalf of Desnick, Holdco, and Parent (collectively, the “Reporting Persons”), pursuant to Section 13(d) of the Exchange Act.

The principal business address of the Reporting Persons is c/o Medical Equity Dynamics, LLC, 370 Ravine Drive, Highland Park, Illinois 60035. The principal business of Holdco and Parent is to effect the transactions contemplated by the Merger Agreement. The principal occupation or employment of Desnick is as Chief Executive Officer of Medical Equity Dynamics, LLC. Desnick is (i) the sole stockholder and sole director of Holdco and (ii) the Chief Executive Officer, President and Secretary of Holdco and Parent. Holco and Parent have no other officers. Holdco is the sole member of Parent, and Parent is the sole stockholder of Merger Sub.

(d) - (e) During the last five years, none of the persons or entities referred to in this Item 2 (i) has been convicted in any criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) was a party to a civil proceeding of a judicial or administrative body of competent jurisdiction resulting in his being subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

(f) Desnick is a citizen of the United States of America.

Item 3 of the Statement is amended and supplemented as follows:

On July 11, 2011, the Company entered into the Merger Agreement with Parent and Merger Sub, providing for the merger of Merger Sub with and into the Company, with the Company continuing as the surviving corporation (the “Merger”). Aggregate consideration to be paid pursuant to the Merger Agreement will be approximately $57.2 million in cash, which will be financed as described below. In addition to the arrangements described below, certain costs of the Merger and related transactions will be satisfied by the Company’s cash on hand.

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Desnick Commitment Letter

In connection with the Merger Agreement, Desnick and Holdco entered into an Equity Commitment Letter, dated July 11, 2011 (the “Desnick Commitment Letter”), pursuant to which Desnick agreed, subject to certain conditions, to (i) purchase equity interests of Holdco for an aggregate amount equal to $21.75 million in cash and (ii) contribute $5.51 million of equity, comprised of 1,430,778 shares of Common Stock of the Company, to Holdco, solely for the purpose of funding a portion of the aggregate Merger Consideration (as defined below). Desnick’s equity commitment may be reduced by Holdco, but only to the extent that Parent is able to consummate the Merger Agreement with Desnick contributing less than the full amount of his commitment. Desnick may allocate a portion of his commitment to co-investors or affiliates and may syndicate his rights and obligations to co-investors or affiliates, provided that Desnick remains liable as the primary obligor for the obligations under the Desnick Commitment Letter. Desnick’s obligation to satisfy this commitment is subject to (a) the execution and delivery of the Merger Agreement, (b) the satisfaction or waiver by Parent at the closing of each of the conditions to Parent’s and Merger Sub’s obligations to consummate the transactions contemplated by the Merger Agreement, (c) the substantially concurrent funding of the financing transactions contemplated under the Debt Commitment Letter (as defined below) and (d) the contemporaneous consummation of the closing of the transactions contemplated by the Merger Agreement. This summary of the Desnick Commitment Letter does not purport to be complete and is qualified in its entirety by reference to the Desnick Commitment Letter, which is attached as Exhibit 7 and incorporated by reference into this Item 3.

Holdco Commitment Letter

Additionally, Holdco and Parent entered into a Commitment Letter, dated July 11, 2011 (the “Holdco Commitment Letter”), pursuant to which Holdco agreed, subject to certain conditions, to (i) purchase equity interests of Parent for an aggregate amount equal to $17.75 million, (ii) make a $4.0 million unsecured, subordinate loan to Parent, and (iii) contribute to Parent $5.51 million of equity, comprised of 1,430,778 shares of Common Stock of the Company, solely for the purpose of funding a portion of the aggregate Merger Consideration. Holdco’s commitment under the Holdco Commitment Letter may be reduced by Parent, but only to the extent that Parent is able to consummate the Merger Agreement with Holdco contributing less than the full amount of its commitment. Holdco may allocate a portion of its commitment to co-investors or affiliates and may syndicate its rights and obligations to co-investors or affiliates, provided that Holdco remains liable as the primary obligor for the obligations under the Holdco Commitment Letter. Holdco’s obligation to satisfy this commitment is subject to (a) the execution and delivery of the Merger Agreement, (b) the satisfaction or waiver by Parent at the closing of each of the conditions to Parent’s and Merger Sub’s obligations to consummate the transactions contemplated by the Merger Agreement, (c) the substantially concurrent funding of the financing transactions contemplated under the Debt Commitment Letter and (d) the contemporaneous consummation of the closing of the transactions contemplated by the Merger Agreement. This summary of the Holdco Commitment Letter does not purport to be complete and is qualified in its entirety by reference to the Holdco Commitment Letter, which is attached as Exhibit 8 and incorporated by reference into this Item 3.

Investor Commitment Letters

Holdco and Parent have also entered into Commitment Letters with Heil, George Anthony (“Anthony”) and Donald Sanders (“Sanders” and together with Heil and Anthony, the “Investors”), dated July 11, 2011 (the “Investor Commitment Letters”), pursuant to which (i) Heil agreed to (a) purchase equity interests of Holdco for an aggregate amount equal to $3.25 million in cash, (b) purchase 12.5% unsecured subordinated notes of Parent for an aggregate amount equal to $1.88 million and (c) contribute $839,800 of equity, comprised of 218,130 shares of Common Stock of the Company; (ii) Anthony agreed to purchase (a) equity interests of Holdco for an aggregate amount equal to $250,000 in cash and (b) 12.5% unsecured subordinated notes of Parent for an aggregate amount equal to $250,000; and (iii) Sanders agreed to purchase (a) equity interests of Holdco for an aggregate amount equal to $3.5 million in cash and (b) 12.5% unsecured subordinated notes of Parent for an aggregate amount equal to $1.88 million. The Investor Commitment Letters were entered into for the purpose of funding a portion of the Merger Consideration. The commitments under the Investor Commitment Letters may be reduced by Holdco, but only to the extent that Parent is able to consummate the Merger Agreement with the Investors contributing less than the full amount of their respective commitments. The Investors obligations to satisfy their respective commitments are subject to (a) the execution and delivery of the Merger Agreement, (b) the satisfaction or waiver by Parent at the closing of each of the conditions to Parent’s and Merger Sub’s obligations to consummate the transactions contemplated by the Merger Agreement, (c) the substantially concurrent funding of the financing transactions contemplated under the Debt Commitment Letter and (d) the contemporaneous consummation of the closing of the transactions contemplated by the Merger Agreement. This summary of the Investor Commitment Letters does not purport to be complete and is qualified in its entirety by reference to the Investor Commitment Letters, which are attached as Exhibit 9, Exhibit 10 and Exhibit 11 and incorporated by reference into this Item 3.

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Debt Commitment Letter

Desnick and Levine Leichtman Capital Partners, Inc. (“LLCP”) have entered into a Debt Commitment Letter, dated July 11, 2011 (the “Debt Commitment Letter”), pursuant to which LLCP agreed to purchase (i) a Senior Secured Note in the face amount of $20 million for a purchase price of $18.5 million from Merger Sub and (ii) a Convertible Note in the principal amount of $5.5 million from Parent, the proceeds of such notes will be used to fund a portion of the Merger Consideration and pay related fees and expenses. LLCP’s obligations to satisfy its commitment under the Debt Commitment Letter are subject to the execution and delivery of definitive agreements effectuating the commitment and certain other conditions described in the Debt Commitment Letter. This summary of the Debt Commitment Letter does not purport to be complete and is qualified in its entirety by reference to the Debt Commitment Letter, which is attached as Exhibit 12 and incorporated by reference into this Item 3.

Limited Guarantee

Desnick has, pursuant to a Limited Guarantee, dated as of July 11, 2011 (the “Limited Guarantee”), unconditionally and irrevocably guaranteed the payment obligations of Parent under the Merger Agreement with respect to a termination fee of approximately $2.3 million (the “Parent Termination Fee”). The Parent Termination Fee would be payable by Parent in the event that the Company terminates the Merger Agreement upon (i) Parent’s or Merger Sub’s breach of their covenants, agreements, representations or warranties under certain circumstances described more fully therein and (ii) Parent’s or Merger Sub’s failure to consummate the Merger following the satisfaction of all closing conditions. The guarantee provided by Desnick under the Limited Guarantee is the Company’s sole remedy against Desnick, Parent, Merger Sub and their representatives and affiliates, except in the event of fraud or willful misconduct. This summary of the Limited Guarantee does not purport to be complete and is qualified in its entirety by reference to the Limited Guarantee, which is attached as Exhibit 13 and is incorporated by reference into this Item 3.

Voting Agreements

As described in response to Item 4, the Voting Agreement Shares (as defined below) beneficially owned by Heil and Pappajohn have not been purchased by any of the Reporting Persons, and thus no funds were used for such purpose. As an inducement for Parent and Merger Subsidiary to enter into the Merger Agreement described in Item 4, Desnick, Pappajohn and Heil (collectively, the “Voting Parties”) each entered into a voting agreement with Parent dated as of July 11, 2011 (each, a “Voting Agreement”) with respect to the Voting Agreement Shares. Parent did not pay additional consideration to the Voting Parties in connection with the execution and delivery of the Voting Agreements. For a description of the Voting Agreements, see Item 4 below, which description is incorporated herein by reference in response to this Item 3.

Item 4 of the Statement is amended and supplemented as follows:

Merger Agreement

On July 11, 2011, the Company entered into the Merger Agreement with Parent and Merger Sub, providing for the Merger. At the effective time of the Merger, each outstanding share of Common Stock of the Company (other than shares held by the Company, Parent and Merger Sub) will be cancelled and converted into the right to receive $3.85 per share in cash (the “Merger Consideration”). At the effective time of the Merger, each outstanding option to acquire shares of Common Stock of the Company, whether vested or unvested, will be cancelled and converted into the right to receive an amount in cash equal to the excess, if any, of the Merger Consideration over the exercise price per share for each share subject to the applicable option (the “Option Consideration”). At the effective time of the Merger, each outstanding warrant to purchase shares of Common Stock of the Company (other than warrants held by Holdco and Parent), whether vested or unvested, will be cancelled and converted into the right to receive an amount in cash equal to the excess, if any, of the Merger Consideration over the exercise price per share for each share subject to the applicable warrant (the “Warrant Consideration”). The completion of the Merger is subject to various customary conditions, including, among other things, (i) obtaining the approval of the Company’s stockholders, (ii) the accuracy of the representations and warranties made by the parties to the Merger Agreement and (iii) the compliance by the parties to the Merger Agreement with their respective covenants and agreements under the Merger Agreement. This summary of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, which is attached hereto as Exhibit 14 and is incorporated by reference into this Item 4. On February 22, 2011, in connection with the review of a possible transaction between the Company and the Reporting Persons, Desnick entered into a confidentiality agreement with the Company that provides that for a period of two years, Desnick is subject to customary “standstill” restrictions, pursuant to which Desnick will not be permitted to acquire additional shares of the company’s capital stock or make certain proposals with respect to a merger, combination or acquisition (or take similar actions) with respect to the Company without the Company’s prior written consent.

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If the Merger is consummated, the Company will become a wholly-owned subsidiary of Parent. All of the equity interests of Parent will continue to be owned by Holdco following the Merger, and a majority of the shares of Holdco will be owned by Desnick and his affiliates. The co-investors described above will also own equity interests of Holdco following the completion of the transactions contemplated by the Investor Commitment Letters. Following the consummation of the Merger, the Company’s Common Stock will be delisted from the NYSE Amex, and the Company will cease to be registered under Section 12 of Act.

Voting Agreements

Concurrently with the execution of, and as an inducement for Parent and Merger Sub to enter into, the Merger Agreement, on July 11, 2011, the Voting Parties entered into the Voting Agreements relating to all shares of Common Stock of the Company beneficially owned by each of the Voting Parties as of July 11, 2011 (the “Voting Agreement Shares”). The Voting Agreement Shares constituted 30.5% of the total issued and outstanding shares of Common Stock as of July 11, 2011 (including Common Stock that the Voting Parties may acquire pursuant to the exercise of warrants or stock options that are exercisable within 60 days). The purpose of the Voting Agreements is to facilitate the transactions contemplated by the Merger Agreement. Pursuant to the Voting Agreements, the Voting Parties agreed, among other things, to vote the Voting Shares (i) in favor of (a) the Merger Agreement and the transactions contemplated thereby and (b) any related matter that must be approved by the Company’s stockholders in order for the transactions contemplated by the Merger Agreement to be consummated, and (ii) against and not consent to any (a) alternative business combination transactions transaction involving the Company, (b) reorganization, recapitalization, liquidation or winding-up of the Company or any other extraordinary transaction involving the Company, (c) corporate action, the consummation of which would materially frustrate the purposes, prevent or delay the consummation, of the transactions contemplated by the Merger Agreement or otherwise agreed to by Parent, (d) any change in the board of directors of the Company, except as contemplated by the Merger Agreement and (e) any material change in the Company’s corporate structure, certificate of incorporation, charter or bylaws, except as contemplated by the Merger Agreement or otherwise agreed to by Parent.

The Voting Parties have agreed not to cause or permit, subject to certain exceptions, (i) the sale, pledge, encumbrance, assignment, grant of an option with respect to, transfer or disposal of any Voting Agreement Shares or any interest therein, (ii) the grant of any proxies or power of attorney with respect to the Voting Agreement Shares or (iii) entrance into an agreement or commitment, whether or not in writing, providing for the sale of, pledge of, encumbrance of, assignment of, grant of an option with respect to, transfer of or disposition of any Voting Agreement Shares or any interest therein.

Under the Voting Agreements, the Voting Parties also granted to Parent an irrevocable proxy with respect to the Voting Agreement Shares. The irrevocable proxy allows Parent to vote the Voting Agreement Shares in the manner set forth above. The proxy granted to Parent will be revoked automatically upon termination of the Voting Agreement. The Voting Agreements will terminate automatically upon the earliest to occur of (i) the effective time of the Merger, (ii) termination of the Merger Agreement in accordance with its terms, (iii) at any time upon the written agreement of Parent and a Voting Party, and (iv) upon the amendment or modification of the Merger Agreement to reduce the Merger consideration or otherwise change the terms and conditions, taken as a whole, of the Merger Agreement in a way that is materially adverse to the holders of Common Stock. This summary of the Voting Agreements does not purport to be complete and is qualified in its entirety by reference to the form of Voting Agreement, which is attached hereto as Exhibit 15 and is incorporated by reference in its entirety into this Item 4.

The descriptions of the Desnick Commitment Letter, the Holdco Commitment Letter, the Investor Commitment Letters, the Debt Commitment Letters and the Limited Guarantee described in Item 3 of this Statement are incorporated by reference into this Item 4.

Except as set forth in this Statement and the corresponding exhibits hereto, the Reporting Persons do not have any plans or proposals which relate to or which would result in or relate to any of the acts specified in subparagraphs (a) through (j) of Item 4 of Schedule 13D (although the Reporting Persons reserve the right to develop such plans).

Item 5 of the Statement is hereby amended and supplement as follows:

(a) Each of the Reporting Persons’ current beneficial ownership in the Company and the Company’s Common Stock is set forth on the cover pages to this Statement and is incorporated by reference into this Item 5. The ownership percentage appearing on such pages has been calculated based on a total of 13,208,297 shares outstanding as of July 8, 2011 (including Common Stock that may be issued pursuant to warrants owned by Desnick and Heil and options owned by Pappajohn), as set forth in the Merger Agreement.

Desnick beneficially owns 1,209,870 shares of Common Stock of the Company, including warrants to purchase up to 91,570 shares of Common Stock, representing approximately 9.2% of the outstanding shares of Common Stock of the Company.

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Pursuant to the Voting Agreements, the Desnick Reporting Parties may be deemed to have beneficial ownership of an aggregate of 4,026,342 shares of Common Stock of the Company outstanding on the record date of any vote at a stockholder meeting or through written consent for certain events as set forth in the Voting Agreements (including Common Stock that the Voting Parties may acquire pursuant to the exercise of warrants or stock options, as applicable, that are exercisable within 60 days) consisting of (i) 1,209,870 shares of Common Stock of the Company that may be deemed to be beneficially owned by Desnick, including warrants to purchase up to 91,570 shares of Common Stock, (ii) 2,598,342 shares of Common Stock of the Company that may be deemed to be beneficially owned by Pappajohn, including 40,000 shares of Common Stock of the Company issuable upon exercise of stock options, and (iii) 218,130 shares of Common Stock that may be deemed to be beneficially owned by Heil. Such shares represent approximately 30.5% of the outstanding shares of Common Stock of the Company. The Reporting Persons disclaim beneficial ownership of such shares held by Heil and Pappajohn.

Pursuant to the Investor Commitment Letter with Heil, the Reporting Persons may be deemed to have beneficial ownership of 218,130 shares of Common Stock of the Company beneficially owned by Heil. Such shares represent approximately 1.7% of the outstanding shares of Common Stock of the Company. The Reporting Persons disclaim beneficial ownership of such shares.

Neither the filing of this Statement (as defined below) nor any of its contents shall be deemed to constitute an admission by (i) the Reporting Persons that they are the beneficial owners of any of the Common Stock owned by Heil or Pappajohn referred to herein or (ii) Holdco or Parent that they are the beneficial owners of any of the Common Stock owned by Desnick for purposes of Section 13(d) of the Exchange Act or for any other purpose, and, in each case, such beneficial ownership is expressly disclaimed.

(b) In connection with the previously disclosed Financing Letter dated May 12, 2011 between Desnick and LLCP, the Reporting Persons and LLCP may be deemed to be a “group” within the meaning of Section 13(d)(3) of the Exchange Act. The Reporting Persons and LLCP have elected to make a separate filing with regard to the matters described below.

As a result of the matters discussed in Item 4 above with respect to the Voting Agreements, the Reporting Persons may be deemed to constitute a “group” within the meaning of Section 13(d)(3) of the Exchange Act with the Voting Parties. The Reporting Persons are filing this Statement solely on their own behalf.

As a result of the matters discussed in Item 4 above with respect to the Investor Commitment Letter with Heil, the Reporting Persons may be deemed to constitute a “group” within the meaning of Section 13(d)(3) of the Exchange Act with Heil. The Reporting Persons and Heil have elected to make their own separate filings with respect to the matters discussed herein.

The Reporting Persons may be deemed to have shared voting power over an aggregate of 4,026,342 shares of Common Stock as a result of the matters disclosed in Item 4 above with respect to the Voting Agreements. The Reporting Persons expressly disclaim beneficial ownership of such shares owned by each of Heil and Pappajohn.

The Reporting Persons may be deemed to have shared dispositive power over an aggregate of 1,428,000 shares of Common Stock as a result of the matters disclosed in Item 4 above with respect to the Investor Commitment letter with Heil. The Reporting Persons expressly disclaim beneficial ownership of such shares owned by Heil.

(c) Other than as described in Items 3 and 4 above, there have been no transactions in the Company’s Common Stock that were effected during the past 60 days by any of the Reporting Persons or their respective affiliates.

(d) Other than as described in Items 3, 4 and 5 above, to the knowledge of the Reporting Persons, no person has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the shares of Common Stock described in this Statement.

(e) Not applicable.

Item 6 of the Statement is hereby amended and supplemented as follows:

The information provided in Items 3, 4 and 5 above is incorporated by reference into this Item 6.

The following are filed herewith as exhibits to this Schedule 13D/A:

Exhibit 6 – Joint Filing Agreement, dated July 13, 2011, by and amount Desnick, Parent and Holdco

Exhibit 7 – Desnick Commitment Letter, dated July 11, 2011, by and between Desnick and Parent

Exhibit 8 – Holdco Commitment Letter, dated July 11, 2011, by and between Parent and Holdco

Exhibit 9 – Investor Commitment Letter, dated July 11, 2011, by and between Heil, Parent and Holdco

Exhibit 10 – Investor Commitment Letter, dated July 11, 2011, by and between Anthony, Parent and Holdco

Exhibit 11 – Investor Commitment Letter, dated July 11, 2011, by and between Sanders, Parent and Holdco

Exhibit 12 – Debt Commitment Letter, dated July 11, 2011, by and between LLCP and Desnick

Exhibit 13 – Limited Guarantee, dated July 11, 2011, by and between Desnick and the Company

Exhibit 14 – Merger Agreement, dated July 11, 2011, by and between Holdco, Merger Sub and the Company

Exhibit 15 – Form of Voting Agreement, dated July 11, 2011, by and between Parent and the Voting Parties

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SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

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Exhibit 6

JOINT FILING AGREEMENT

Each of the undersigned hereby agrees to file jointly the statement on Schedule 13D to which this Agreement is attached, and any amendments to the statement on Schedule 13D (the “Statement”), with respect to the Common Stock of Conmed Healthcare Management, Inc. which may be deemed necessary, pursuant to Regulation 13D under the Securities Exchange Act of 1934.

It is understood and agreed that each of the parties hereto is responsible for the timely filing of such statement and any future amendments to the Statement, and for the completeness and accuracy of the information concerning such party contained therein, but such party is not responsible for the completeness or accuracy of information concerning any other party unless such party knows or has reason to believe that such information is inaccurate.

It is understood and agreed that a copy of this Agreement shall be attached as an exhibit to the Statement, and any future amendments to the Statement, filed on behalf of each of the parties hereto.

Exhibit 7

Execution Version

EQUITY COMMITMENT LETTER

July 11, 2011

India Investment Company

c/o Medical Equity Dynamics, LLC

370 Ravine Drive

Highland Park, Illinois 60035

Gentlemen:

This letter agreement sets forth the commitment of James H. Desnick, M.D. (“Investor”), subject to the terms and conditions contained herein, to purchase or to cause the purchase of certain equity interests of India Investment Company, a Delaware corporation (the “Issuer”). It is contemplated that, pursuant to an Agreement and Plan of Merger (as amended, restated, supplemented or otherwise modified from time to time, the “Merger Agreement”) to be entered into among Conmed Healthcare Management, Inc., a Delaware corporation (the “Company”), Ayelet Investments LLC, a Delaware limited liability company (“Parent”), and Ayelet Merger Subsidiary, a Delaware corporation and a wholly-owned subsidiary of Parent (“Merger Sub”), Merger Sub will merge with and into the Company (the “Merger”), with the Company surviving the Merger as a wholly-owned subsidiary of Parent. Capitalized terms used but not defined herein shall have the meaning ascribed to them in the Merger Agreement.

1.        Commitment.    Investor hereby commits, subject to the terms and conditions set forth herein, that, simultaneous with the Closing, it shall (i) purchase, or shall cause the purchase of, equity interests of the Issuer for an aggregate amount equal to at least $21.75 million (the “Cash Portion”) and (ii) contribute, or cause the contribution of, to Issuer $5.51 million of equity, comprised of 1,430,778 shares of common stock in the Company (the “Rollover Portion”, and together with the Cash Portion, collectively, the “Commitment”), solely for the purpose of funding a portion of the aggregate Merger Consideration pursuant to and in accordance with the Merger Agreement, together with related expenses. Investor may effect the purchase of the equity interests of the Issuer and contribution of the Rollover Shares, directly or indirectly through one or more affiliated entities. The amount of the Commitment to be funded under this letter agreement simultaneous with the Closing may be reduced in an amount specified by the Issuer but only to the extent that Parent has consummated the transactions contemplated by the Merger Agreement with Investor contributing less than the full amount of its Commitment. Investor may allocate a portion of its Commitment to co-investors, including its affiliates. Notwithstanding any provision in the preceding sentence to the contrary, Investor shall remain personally liable, as primary obligor and not surety, for its obligations hereunder, including, but not limited to, its obligations to satisfy the Commitment in full.

2.        Conditions.    Investor’s obligation to satisfy the Commitment shall be subject to (a) the execution and delivery of the Merger Agreement by the Company and there being no amendment to the Merger Agreement that has not been approved in writing in accordance with the terms of the Merger Agreement, (b) the satisfaction (or waiver by Parent) at the Closing of each of the conditions to Parent’s and Merger Sub’s obligations to consummate the transactions contemplated by the Merger Agreement, (c) the substantially concurrent funding of the financing transactions contemplated under the Debt Commitment Letter (as may be amended or replaced in accordance with Section 7.06 of the Merger Agreement) and (d) the contemporaneous consummation of the Closing.

3.        Limited Guarantee.    Concurrently with the execution and delivery of this letter agreement, Investor is executing and delivering to the Company a limited guarantee, dated as of the date hereof, related to Parent’s and Merger Sub’s payment obligations of the Parent Termination Fee pursuant to the terms and conditions of, and subject to the limitations of, Section 11.04(b)(iii) of the Merger Agreement (the “Limited Guarantee”). The Company’s remedies against Investor under the Limited Guarantee shall be, and are intended to be, the sole and exclusive direct or indirect remedies available to the Company and its stockholders and affiliates against (a) Investor, the Issuer, Parent or Merger Sub and (b) any former, current and future equity holders, controlling persons, directors, officers, employees, agents, affiliates, members, managers, general or limited partners or assignees of Investor, the Issuer, Parent or Merger Sub or any former, current or future equity holder, controlling person, director, officer, employee, general or limited partner, member, manager, affiliate, agent or assignee of any of the foregoing (other than Parent and Merger Sub to the extent provided in the Merger Agreement) (those Persons described in clause (b) including the Issuer, Parent and Merger Sub, each being referred to as a “Non-Recourse Party”) in respect of any liabilities or obligations arising under, or in connection with, this letter agreement or the Merger Agreement and the transactions contemplated thereby, including in the event Parent or Merger Sub breaches its obligations under the Merger Agreement, whether or not Parent’s or Merger Sub’s breach is caused by Investor’s breach of its obligations under this letter agreement.

4.        Enforceability.    This letter agreement may only be enforced by the Issuer at the direction of Investor. The Issuer’s creditors shall have no right to enforce this letter agreement or to cause the Issuer to enforce this letter agreement.

5.        No Modification; Entire Agreement.    This letter agreement may not be amended or otherwise modified without the prior written consent of the Issuer and Investor. Together with the Limited Guarantee, this letter agreement constitutes the sole agreement, and supersedes all prior agreements, representations, warranties, understandings and statements, written or oral, between Investor or any of its affiliates, on the one hand, and the Issuer or any of its affiliates, on the other, with respect to the transactions contemplated hereby. No transfer or assignment of any rights or obligations hereunder shall be permitted without the written consent of the Issuer and Investor. Any transfer or assignment in violation of the preceding sentence shall be null and void.

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6.        Governing Law; Jurisdiction; Waiver of Jury Trial.

          (a)        This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to the conflicts of law rules of such state.

          (b)        Each of the parties hereto (i) agrees that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby (whether brought by any party or any of its Affiliates or against any party or any of its Affiliates) shall be brought in the Delaware Chancery Court or, if such court shall not have jurisdiction, any federal court located in the State of Delaware or other Delaware state court, (ii) irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum, (iii) agrees that it will not bring any action relating to this Agreement or any of the transactions contemplated by this Agreement in any court other than the courts of the State of Delaware, as described above, and (iv) agrees that service of process on such party as provided in Section 12 of the Limited Guarantee shall be deemed effective service of process on such party.

          (c)        WAIVER OF JURY TRIAL.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

7.        Counterparts.    This letter agreement may be executed in multiple counterparts (including by facsimile or PDF), all of which shall be considered one and the same agreement and shall become effective when one or more such counterparts have been signed by each of the parties and delivered to the other parties.

8.        No Third Party Beneficiaries.    This letter agreement shall inure to the benefit of and be binding upon the Issuer and Investor. Nothing in this letter agreement, express or implied, is intended to confer upon any Person other than the Issuer and Investor any rights or remedies under, or by reason of, or any rights to enforce or cause the Issuer to enforce, the Commitment or any provisions of this letter agreement or to confer upon any Person any rights or remedies against any Person other than Investor (but only at the direction of Investor as contemplated hereby) under or by reason of this letter agreement. Without limiting the foregoing, the Issuer’s creditors shall have no right to specifically enforce this letter agreement or to cause the Issuer to enforce this letter agreement.

9.        Termination.    The obligation of Investor to fund the Commitment will terminate automatically and immediately upon the earliest to occur of (a) the termination of the Merger Agreement in accordance with its terms, or (b) the Closing, at which time the obligation will be fulfilled.

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10.      No Recourse.    Notwithstanding anything that may be expressed or implied in this letter agreement or any document or instrument delivered in connection herewith, by its acceptance of the benefits of this letter agreement, the Issuer acknowledges and agrees that no Person other than Investor has any obligations hereunder and that no recourse shall be had hereunder, or for any claim based on, in respect of, or by reason of, such obligations or their creation, against, and no personal liability shall attach to, any Non-Recourse Party, through the Issuer, Parent, Merger Sub or otherwise, whether by or through attempted piercing of the corporate veil, by or through a claim by or on behalf of the Issuer or Parent against any Non-Recourse Party, by the enforcement of any assessment or by any legal or equitable proceeding, by virtue of any applicable Law, or otherwise.

11.      Expenses.    In consideration of the commitments contained in this letter agreement, whether or not the Merger is consummated, the Issuer agrees to promptly pay, or cause to be paid (but solely to the extent any such payment does not affect Parent’s or Merger Sub’s ability to perform their obligations under the Merger Agreement), upon receipt of any request therefore, all reasonable out-of-pocket expenses incurred by Investor in connection with its evaluation of, negotiations regarding and documentation for the transactions referenced herein, including, without limitation, expenses of counsel, accountants and other advisors.

*  *  *  *  *

(signature page follows)

4

[Signature Page to Equity Commitment Letter]

[Signature Page to Equity Commitment Letter]

Exhibit 8

Execution Version

COMMITMENT LETTER

July 11, 2011

Ayelet Investments LLC

c/o Medical Equity Dynamics, LLC

370 Ravine Drive

Highland Park, Illinois 60035

Gentlemen:

This letter agreement sets forth the commitment of India Investment Company, a Delaware corporation (“Investor”), subject to the terms and conditions contained herein, to purchase or to cause the purchase of certain equity and debt securities of Ayelet Investments LLC, a Delaware limited liability company (“Parent”). It is contemplated that, pursuant to an Agreement and Plan of Merger (as amended, restated, supplemented or otherwise modified from time to time, the “Merger Agreement”) to be entered into among Conmed Healthcare Management, Inc., a Delaware corporation (the “Company”), Parent and Ayelet Merger Subsidiary, a Delaware corporation and a wholly-owned subsidiary of Parent (“Merger Sub”), Merger Sub will merge with and into the Company (the “Merger”), with the Company surviving the Merger as a wholly-owned subsidiary of Parent. Capitalized terms used but not defined herein shall have the meaning ascribed to them in the Merger Agreement.

1.        Commitment.    Investor hereby commits, subject to the terms and conditions set forth herein, that, simultaneous with the Closing, it shall (i) purchase, or shall cause the purchase of, equity interests of Parent for an aggregate amount equal to $17.75 million (the “Cash Portion”), (ii) make, or cause to be made, a $4.0 million unsecured, subordinate loan (the “Debt Portion”) to Parent, and (iii) contribute, or cause the contribution of, to Parent $5.51 million of equity, comprised of 1,430,778 shares of common stock in the Company (the “Rollover Portion”, and together with the Cash Portion and the Debt Portion, collectively, the “Commitment”), solely for the purpose of funding a portion of the aggregate Merger Consideration pursuant to and in accordance with the Merger Agreement, together with related expenses. Investor may effect the purchase of the equity interests of Parent, issuance of the Debt Portion and contribution of the Rollover Shares, directly or indirectly through one or more affiliated entities. The amount of the Commitment to be funded under this letter agreement simultaneous with the Closing may be reduced in an amount specified by Parent but only to the extent that Parent has consummated the transactions contemplated by the Merger Agreement with Investor contributing less than the full amount of its Commitment. Investor may allocate a portion of its Commitment to co-investors, including its affiliates. Notwithstanding any provision in the preceding sentence to the contrary, Investor shall remain personally liable, as primary obligor and not surety, for its obligations hereunder, including, but not limited to, its obligations to satisfy the Commitment in full.

2.        Conditions.    Investor’s obligation to satisfy the Commitment shall be subject to (a) the execution and delivery of the Merger Agreement by the Company and there being no amendment to the Merger Agreement that has not been approved in writing in accordance with the terms of the Merger Agreement, (b) the satisfaction (or waiver by Parent) at the Closing of each of the conditions to Parent’s and Merger Sub’s obligations to consummate the transactions contemplated by the Merger Agreement, (c) the substantially concurrent funding of the financing transactions contemplated under the Debt Commitment Letter (as may be amended or replaced in accordance with Section 7.06 of the Merger Agreement) and (d) the contemporaneous consummation of the Closing.

3.        Limited Guarantee.    Concurrently with the execution and delivery of this letter agreement, James H. Desnick, M.D. (“Desnick”) is executing and delivering to the Company a limited guarantee, dated as of the date hereof, related to Parent’s and Merger Sub’s payment obligations of the Parent Termination Fee pursuant to the terms and conditions of, and subject to the limitations of, Section 11.04(b)(iii) of the Merger Agreement (the “Limited Guarantee”). The Company’s remedies against Desnick under the Limited Guarantee shall be, and are intended to be, the sole and exclusive direct or indirect remedies available to the Company and its stockholders and affiliates against (a) Desnick, Investor, Parent or Merger Sub and (b) any former, current and future equity holders, controlling persons, directors, officers, employees, agents, affiliates, members, managers, general or limited partners or assignees of Desnick, Investor, Parent or Merger Sub or any former, current or future equity holder, controlling person, director, officer, employee, general or limited partner, member, manager, affiliate, agent or assignee of any of the foregoing (other than Parent and Merger Sub to the extent provided in the Merger Agreement) (those Persons described in clause (b) including Parent and Merger Sub, each being referred to as a “Non-Recourse Party”) in respect of any liabilities or obligations arising under, or in connection with, this letter agreement or the Merger Agreement and the transactions contemplated thereby, including in the event Parent or Merger Sub breaches its obligations under the Merger Agreement, whether or not Parent’s or Merger Sub’s breach is caused by Investor’s breach of its obligations under this letter agreement.

4.        Enforceability.    This letter agreement may only be enforced by Parent at the direction of Investor. Parent’s creditors shall have no right to enforce this letter agreement or to cause Parent to enforce this letter agreement.

5.        No Modification; Entire Agreement.    This letter agreement may not be amended or otherwise modified without the prior written consent of Parent and Investor. Together with the Limited Guarantee, this letter agreement constitutes the sole agreement, and supersedes all prior agreements, representations, warranties, understandings and statements, written or oral, between Investor or any of its affiliates, on the one hand, and Parent or any of its affiliates, on the other, with respect to the transactions contemplated hereby. No transfer or assignment of any rights or obligations hereunder shall be permitted without the written consent of Parent and Investor. Any transfer or assignment in violation of the preceding sentence shall be null and void.

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6.        Governing Law; Jurisdiction; Waiver of Jury Trial.

(a)        This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to the conflicts of law rules of such state.

(b)        Each of the parties hereto (i) agrees that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby (whether brought by any party or any of its Affiliates or against any party or any of its Affiliates) shall be brought in the Delaware Chancery Court or, if such court shall not have jurisdiction, any federal court located in the State of Delaware or other Delaware state court, (ii) irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum, (iii) agrees that it will not bring any action relating to this Agreement or any of the transactions contemplated by this Agreement in any court other than the courts of the State of Delaware, as described above, and (iv) agrees that service of process on such party as provided in Section 12 of the Limited Guarantee shall be deemed effective service of process on such party.

(c)        WAIVER OF JURY TRIAL.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

7.        Counterparts.    This letter agreement may be executed in multiple counterparts (including by facsimile or PDF), all of which shall be considered one and the same agreement and shall become effective when one or more such counterparts have been signed by each of the parties and delivered to the other parties.

8.        No Third Party Beneficiaries.    This letter agreement shall inure to the benefit of and be binding upon Parent and Investor. Nothing in this letter agreement, express or implied, is intended to confer upon any Person other than Parent and Investor any rights or remedies under, or by reason of, or any rights to enforce or cause Parent to enforce, the Commitment or any provisions of this letter agreement or to confer upon any Person any rights or remedies against any Person other than Investor (but only at the direction of Investor as contemplated hereby) under or by reason of this letter agreement.

9.        Termination.    The obligation of Investor to fund the Commitment will terminate automatically and immediately upon the earliest to occur of (a) the termination of the Merger Agreement in accordance with its terms and (b) the Closing, at which time the obligation will be fulfilled.

10.      No Recourse.    Notwithstanding anything that may be expressed or implied in this letter agreement or any document or instrument delivered in connection herewith, by its acceptance of the benefits of this letter agreement, Parent acknowledges and agrees that no

3

Person other than Investor has any obligations hereunder and that no recourse shall be had hereunder, or for any claim based on, in respect of, or by reason of, such obligations or their creation, against, and no personal liability shall attach to, any Non-Recourse Party, through Parent, Merger Sub or otherwise, whether by or through attempted piercing of the corporate veil, by or through a claim by or on behalf of Parent against any Non-Recourse Party, by the enforcement of any assessment or by any legal or equitable proceeding, by virtue of any applicable Law, or otherwise.

11.      Expenses.    In consideration of the commitments contained in this letter agreement, whether or not the Merger is consummated, Parent agrees to promptly pay, or cause to be paid (but solely to the extent any such payment does not affect Parent’s or Merger Sub’s ability to perform their obligations under the Merger Agreement), upon receipt of any request therefore, all reasonable out-of-pocket expenses incurred by Investor in connection with its evaluation of, negotiations regarding and documentation for the transactions referenced herein, including, without limitation, expenses of counsel, accountants and other advisors.

*  *  *  *  *

(signature page follows)

4

Sincerely,

[Signature Page to Equity Commitment Letter]

Agreed to and accepted:

[Signature Page to Equity Commitment Letter]

Exhibit 9

COMMITMENT LETTER

Mr. Edward Heil

202 St. Michael Court

Oak Brook, Illinois 60523

Via fax 630-323-4778

July 11, 2011

India Investments Company

c/o Medical Equity Dynamics, LLC

370 Ravine Drive

Highland Park, Illinois 60035

Dear Ed:

This letter agreement sets forth the commitment of Edward Heil (“Investor”), subject to the terms and conditions contained herein, to purchase certain equity interests of India Investment Company, a Delaware corporation (“Investment Co.”) and debt securities of Ayelet Investments LLC, a Delaware limited liability company (“Parent”). It is contemplated that, pursuant to an Agreement and Plan of Merger (as amended, restated, supplemented or otherwise modified from time to time, the “Merger Agreement”) to be entered into among Conmed Healthcare Management, Inc., a Delaware corporation (the “Company”), Parent and Ayelet Merger Subsidiary, a Delaware corporation and a wholly-owned subsidiary of Parent (“Merger Sub”), Merger Sub will merge with and into the Company (the “Merger”), with the Company surviving the Merger as a wholly-owned subsidiary of Parent. Capitalized terms used but not defined herein shall have the meaning ascribed to them in the Merger Agreement.

1.        Commitment.    Investor hereby commits, subject to the terms and conditions set forth herein, that, simultaneous with the Closing, he shall (i) purchase, or cause the purchase of, equity interests of Investment Co. for an aggregate amount equal to $3,250,000.00 million (the “Cash Portion”), (ii) purchase, or cause the purchase of, 12.5% unsecured subordinated notes of Parent for an aggregate amount equal to $1,880,000.00 (the “Debt Portion”) and (iii) contribute, or cause the contribution of, to Parent $839,800 of equity, comprised of 218,130 shares of common stock in the Company beneficially owned by Investor as of the date hereof (the “Rollover Portion”, and together with the Cash Portion and the Debt Portion, collectively, the “Commitment”), solely for the purpose of funding a portion of the aggregate Merger Consideration pursuant to and in accordance with the Merger Agreement, together with related expenses. The amount of the Commitment to be funded under this letter agreement may be reduced in an amount specified by Investment Co. but only to the extent that thereafter Parent shall consummate the transactions contemplated by the Merger Agreement with Investor contributing less than the full amount of its Commitment.

2.        Conditions.    Investor’s obligation to satisfy the Commitment shall be subject to (a) the execution and delivery of the Merger Agreement by the Company and there being no amendment to the Merger Agreement that has not been approved in writing in accordance with the terms of the Merger Agreement, (b) the satisfaction or waiver by Parent at the Closing of each of the conditions to Parent’s and Merger Sub’s obligations to consummate the transactions contemplated by the Merger Agreement, (c) the substantially concurrent funding of the financing transactions contemplated under the Debt Financing Commitment (as may be amended or replaced in accordance with Section 7.06 of the Merger Agreement) and (d) the contemporaneous consummation of the Closing.

3.        No Modification; Entire Agreement.    This letter agreement may not be amended or otherwise modified without the prior written consent of Investment Co., Parent and Investor. This letter agreement constitutes the sole agreement, and supersedes all prior agreements, representations, warranties, understandings and statements, written or oral, between Investor or any of its affiliates, on the one hand, and Investment Co. and Parent or any of their affiliates, on the other hand, with respect to the transactions contemplated hereby. No transfer or assignment of any rights or obligations hereunder shall be permitted without the written consent of Investment Co., Parent and Investor. Any transfer or assignment in violation of the preceding sentence shall be null and void.

4.        Governing Law; Jurisdiction; Venue.    This letter agreement, and all claims and causes of action arising out of, based upon, or related to this letter agreement or the negotiation, execution or performance hereof, shall be governed by, and construed, interpreted and enforced in accordance with, the Laws of the State of Delaware, without regard to choice or conflict of law principles that would result in the application of any Laws other than the Laws of the State of Delaware. Any legal action, suit or proceeding arising out of, based upon or relating to this letter agreement or the transactions contemplated hereby shall be brought solely in any state or federal court within the State of Delaware and any direct appellate court therefrom. Each of the parties hereto hereby irrevocably submits to the exclusive jurisdiction of such courts in respect of any legal action, suit or proceeding arising out of, based upon or relating to this letter agreement and the rights and obligations arising hereunder and agrees that it will not bring any action arising out of, based upon or related to this letter agreement in any other court. Each of the parties hereto hereby irrevocably waives, and agrees not to assert as a defense, counterclaim or otherwise, in any legal action, suit or proceeding arising out of, based upon or relating to this letter agreement, (a) any claim that it is not personally subject to the jurisdiction of the above named courts for any reason other than the failure to serve process as set forth below, (b) any claim that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (c) to the fullest extent permitted by applicable Law, any claim that (i) the suit, action or proceeding in such court is brought in an inconvenient forum or (ii) the venue of such suit, action or proceeding is improper. Each of the parties hereto agrees that notice or the service of process in any action, suit or proceeding arising out of, based upon or relating to this letter agreement or the rights and obligations arising hereunder shall be properly served or delivered if delivered by U.S. registered or certified mail to the party at the address specified on the signature page hereto.

2

5.        Waiver of Jury Trial.    EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY AND ALL RIGHT SUCH PARTY MAY HAVE TO TRIAL BY JURY IN ANY LEGAL ACTION, SUIT OR PROCEEDING BETWEEN THE PARTIES HERETO ARISING OUT OF, BASED UPON OR RELATING TO THIS LETTER AGREEMENT OR THE NEGOTIATION, EXECUTION OR PERFORMANCE HEREOF.

6.        Counterparts.    This letter agreement may be executed in multiple counterparts (including by facsimile or PDF), all of which shall be considered one and the same agreement and shall become effective when one or more such counterparts have been signed by each of the parties and delivered to the other parties.

7.        No Third Party Beneficiaries.    This letter agreement shall inure to the benefit of and be binding upon Investment Co., Parent and Investor. Nothing in this letter agreement, express or implied, is intended to confer upon any Person other than Investment Co., Parent, James H. Desnick, M.D. and Investor any rights or remedies under, or by reason of, or any rights to enforce or cause Investment Co. to enforce, the Commitment or any provisions of this letter agreement or to confer upon any Person any rights or remedies against any Person other than Investor under or by reason of this letter agreement.

8.        Termination.    The obligation of Investor to fund the Commitment will terminate automatically and immediately upon the earliest to occur of (a) the termination of the Merger Agreement in accordance with its terms and (b) the Closing, at which time the obligation will be fulfilled.

*  *  *  *  *

(signature page follows)

3

Sincerely,

/s/ Edward F. Heil

EDWARD HEIL

Address:  202 St. Michael Court

Oak Brook, IL 60523

[Signature Page to Commitment Letter]

[Signature Page to Commitment Letter]

Exhibit 10

MEDICAL EQUITY DYNAMICS, LLC

June 13, 2011

India Investments Company

c/o Medical Equity Dynamics. LLC

370 Ravine Drive

Highland Park, Illinois 60035

Dear George:

This letter agreement sets forth the commitment of $500,000.00 (“Investor”), subject to the terms and conditions contained herein, to purchase certain equity interests of India Investment Company, a Delaware corporation (“Investment Co.”) and debt securities of Ayelet Investments LLC, a Delaware limited liability company (“Parent”). It is contemplated that, pursuant to an Agreement and Plan of Merger (as amended, restated, supplemented or otherwise modified from time to time. the “Merger Agreement”) to be entered into among Conmed Healthcare Management, Inc., a Delaware corporation (the “Company”), Parent and Ayelet Merger Subsidiary, a Delaware corporation and a wholly-owned subsidiary of Parent (“Merger Sub”), Merger Sub will merge with and into the Company (the “Merger”), with the Company surviving the Merger as a wholly-owned subsidiary of Parent. Capitalized terms used but not defined herein shall have the meaning ascribed to them in the Merger Agreement.

1. Commitment. Investor hereby commits, subject to the terms and conditions set forth herein, that, simultaneous with the Closing, it shall purchase, or shall cause the purchase of, equity interests of Investment Co. for an aggregate amount equal to $250,000.00 and 12.5% unsecured subordinated notes of Parent for an aggregate amount equal to $250,000.00 (the “Commitment”), solely for the purpose of funding a portion of the aggregate Merger Consideration pursuant to and in accordance with the Merger Agreement, together with related expenses. The amount of the Commitment to be funded under this letter agreement may be reduced in an amount specified by Investment Co. but only to the extent that thereafter Parent shall consummate the transactions contemplated by the Merger Agreement with Investor contributing less than the full amount of its Commitment.

2. Conditions. Investor’s obligation to satisfy the Commitment shall be subject to (a) the execution and delivery of the Merger Agreement by the Company and there being no amendment to the Merger Agreement that has not been approved in writing in accordance with the terms of the Merger Agreement, (b) the satisfaction or waiver by Parent at the Closing of each of the conditions to Parent’s and Merger Sub’s obligations to consummate the transactions contemplated by the Merger Agreement, (c) the substantially concurrent funding of the financing transactions contemplated under the Debt Financing Commitment (as may be amended or replaced in accordance with Section 7.06 of the Merger Agreement) and (d) the contemporaneous consummation of the Closing.

3. No Modification: Entire Agreement. This letter agreement may not be amended or otherwise modified without the prior written consent of Investment Co., Parent and Investor. This letter agreement constitutes the sole agreement, and supersedes all, prior agreements, representations, warranties, understandings and statements, written or oral, between Investor or any of its affiliates, on the one hand, and Investment Co. and Parent or any of their affiliates, on the other hand, with respect to the transactions contemplated hereby. No transfer or assignment of any rights or obligations hereunder shall be permitted without the written consent of Investment Co., Parent and Investor. Any transfer or assignment in violation of the preceding sentence shall be null and void.

4. Governing Law; Jurisdiction; Venue. This letter agreement, and all claims and causes of action arising out of, based upon, or related to this letter agreement or the negotiation, execution or performance hereof, shall be governed by, and construed, interpreted and enforced in accordance with, the Laws of the State of Delaware, without regard to choice or conflict of law principles that would result in the application of any Laws other than the Laws of the State of Delaware. Any legal action, suit or proceeding arising out of, based upon or relating to this letter agreement or the transactions contemplated hereby shall be brought solely in any state or federal court within the State of Delaware and any direct appellate court therefrom. Each of the parties hereto hereby irrevocably submits to the exclusive jurisdiction of such courts in respect of any legal action, suit or proceeding arising out of based upon or relating to this letter agreement and the rights and obligations arising hereunder and agrees that it will not bring any action arising out of, based upon or related to this letter agreement in any other court. Each of the parties hereto hereby irrevocably waives, and agrees not to assert as a defense, counterclaim or otherwise, in any legal action, suit or proceeding arising out of, based upon or relating to this letter agreement, (a) any claim that it is not personally subject to the jurisdiction of the above named courts for any reason other than the failure to serve process as set forth below, (b) any claim that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (c) to the fullest extent permitted by applicable Law, any claim that (i) the suit, action or proceeding in such court is brought in an inconvenient forum or (ii) the venue of such suit, action or proceeding is improper. Each of the parties hereto agrees that notice or the service of process in any action, suit or proceeding arising out of, based upon or relating to this letter agreement or the rights and obligations arising hereunder shall be properly served or delivered if delivered by U.S. registered or certified mail to the party at the address specified on the signature page hereto.

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5. Waiver of Jury Trial. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY AND ALL RIGHT SUCH PARTY MAY HAVE TO TRIAL BY JURY IN ANY LEGAL ACTION, SUIT OR PROCEEDING BETWEEN THE PARTIES HERETO ARISING OUT OF, BASED UPON OR RELATING TO THIS LETTER AGREEMENT OR THE NEGOTIATION, EXECUTION OR PERFORMANCE HEREOF.

6. Counterparts. This letter agreement may be executed in multiple counterparts (including by facsimile or PDF), all of which shall be considered one and the same agreement and shall become effective when one or more such counterparts have been signed by each of the parties and delivered to the other parties.

7. No Third Party Beneficiaries. This letter agreement shall inure to the benefit of and be binding upon Investment Co., Parent and Investor. Nothing in this letter agreement, express or implied, is intended to confer upon any Person other than Investment Co., Parent, James H. Desnick, M.D. and Investor’ any rights or remedies under, or by reason of, or any rights to enforce or cause Investment Co. to enforce, the Commitment or any provisions of this letter agreement or to confer upon any Person any rights or remedies against any Person other than Investor under or by reason of this letter agreement.

8. Termination. The Obligation of Investor to fund the Commitment will terminate automatically and immediately upon the earliest to occur of (a) the termination of the Merger Agreement in accordance with its terms and (b) the Closing, at which time the obligation will be fulfilled.

*  *  *  *  *

(signature page follows)

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[Signature Page to Commitment Letter]

[Signature Page to Commitment Letter]

Exhibit 11

MEDICAL EQUITY DYNAMICS, LLC

James H. Desnick, MD

Chairman of the Board

COMMITMENT LETTER

Mr. Donald Sanders

600 Travis Street, Suite 5800

Houston, Texas 77002

Via email: don.sanders@smhgroup.com

June 13, 2011

India Investments Company

c/o Medical Equity Dynamics, LLC

370 Ravine Drive

Highland Park, Illinois 60035

Dear Don:

This letter agreement sets forth the commitment of $5,300,000.00 (“Investor”), subject to the terms and conditions contained herein, to purchase certain equity interests of India Investment Company, a Delaware corporation (“Investment Co.”) and debt securities of Ayelet Investments LLC, a Delaware limited liability company (“Parent”). It is contemplated that, pursuant to an Agreement and Plan of Merger (as amended, restated, supplemented or otherwise modified from time to time, the “Merger Agreement”) to be entered into among Conmed Healthcare Management, Inc., a Delaware corporation (the “Company”), Parent and Ayelet Merger Subsidiary, a Delaware corporation and a wholly-owned subsidiary of Parent (“Merger Sub”), Merger Sub will merge with and into the Company (the “Merger”), with the Company surviving the Merger as a wholly-owned subsidiary of Parent. Capitalized terms used but not defined herein shall have the meaning ascribed to them in the Merger Agreement.

1. Commitment. Investor hereby commits, subject to the terms and conditions set forth herein, that, simultaneous with the Closing, it shall purchase, or shall cause the purchase of, equity interests of Investment Co. for an aggregate amount equal to $3,500,000.00 and 12.5% unsecured subordinated notes of Parent for an aggregate amount equal to $1,800,000.00 (the “Commitment”), solely for the purpose of funding a portion of the aggregate Merger Consideration pursuant to and in accordance with the Merger Agreement, together with related expenses. The amount of the Commitment to be funded under this letter agreement may be reduced in an amount specified by Investment Co. but only to the extent that thereafter Parent shall consummate the transactions contemplated by the Merger Agreement with Investor contributing less than the full amount of its Commitment.

2. Conditions. Investor’s obligation to satisfy the Commitment shall be subject to (a) the execution and delivery of the Merger Agreement by the Company and there being no amendment to the Merger Agreement that has not been approved in writing in accordance with the terms of the Merger Agreement, (b) the satisfaction or waiver by Parent at the Closing of each of the conditions to Parent’s and Merger Sub’s obligations to consummate the transactions contemplated by the Merger Agreement, (c) the substantially concurrent funding of the financing transactions contemplated under the Debt Financing Commitment (as may be amended or replaced in accordance with Section 7.06 of the Merger Agreement) and (d) the contemporaneous consummation of the Closing.

3. No Modification; Entire Agreement. This letter agreement may not be amended or otherwise modified without the prior written consent of Investment Co., Parent and Investor. This letter agreement constitutes the sole agreement, and supersedes all. prior agreements, representations, warranties, understandings and statements, written or oral, between Investor or any of its affiliates, on the one hand, and Investment Co. and Parent or any of their affiliates, on the other hand, with respect to the transactions contemplated hereby. No transfer or assignment of any rights or obligations hereunder shall be permitted without the written consent of Investment Co., Parent and Investor. Any transfer or assignment in violation of the preceding sentence shall be null and void.

4. Governing Law; Jurisdiction; Venue. This letter agreement, and all claims and causes of action arising out of, based upon, or related to this letter agreement or the negotiation, execution or performance hereof, shall be governed by, and construed, interpreted and enforced in accordance with, the Laws of the State of Delaware, without regard to choice or conflict of law principles that would result in the application of any Laws other than the Laws of the State of Delaware. Any legal action, suit or proceeding arising out of, based upon or relating to this letter agreement or the transactions contemplated hereby shall be brought solely in any state or federal court within the State of Delaware and any direct appellate court therefrom. Each of the parties hereto hereby irrevocably submits to the exclusive jurisdiction of such courts in respect of any legal action, suit or proceeding arising out of, based upon or relating to this letter agreement and the rights and obligations arising hereunder and agrees that it will not bring any action arising out of, based upon or related to this letter agreement in any other court. Each of the parties hereto hereby irrevocably waives, and agrees not to assert as a defense, counterclaim or otherwise, in any legal action, suit or proceeding arising out of, based upon or relating to this letter agreement, (a) any claim that it is not personally subject to the jurisdiction of the above named courts for any reason other than the failure to serve process as set forth below, (b) any claim that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through Service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (c) to the fullest extent permitted by applicable Law, any claim that (i) the suit, action or proceeding in such court is brought in an inconvenient forum or (ii) the venue of such suit, action or proceeding is improper. Each of the parties hereto agrees that notice or the service of process in any action, suit or proceeding arising out of, based upon or relating to this letter agreement or the rights and obligations arising hereunder shall be properly served or delivered if delivered by U.S. registered or certified mail to the party at the address specified on the signature page hereto.

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5. Waiver of Jury Trial. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY AND ALL RIGHT SUCH PARTY MAY HAVE TO TRIAL BY JURY IN ANY LEGAL ACTION, SUIT OR PROCEEDING BETWEEN THE PARTIES HERETO ARISING OUT OF, BASED UPON OR RELATING TO THIS LETTER AGREEMENT OR THE NEGOTIATION, EXECUTION OR PERFORMANCE HEREOF.

6. Counterparts. This letter agreement may be executed in multiple counterparts (including by facsimile or PDF), all of which shall be considered one and the same agreement and shall become effective when one or more such counterparts have been signed by each of the parties and delivered to the other parties.

7. No Third Party Beneficiaries. This letter agreement shall inure to the benefit of and be binding upon Investment Co., Parent and Investor. Nothing in this letter agreement, express or implied, is intended to confer upon any Person other than Investment Co., Parent, James H. Desnick, M.D. and Investor any rights or remedies under, or by reason of, or any rights to enforce or cause Investment Co. to enforce, the Commitment or any provisions of this letter agreement or to confer upon any Person any rights or remedies against any Person other than Investor under or by reason of this letter agreement.

8. Termination. The obligation of Investor to fund the Commitment will terminate automatically and immediately upon the earliest to occur of (a) the termination of the Merger Agreement in accordance with its terms and (b) the Closing, at which time the obligation will be fulfilled.

*    *    *    *    *

(signature page follows)

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[Signature Page to Commitment Letter]

[Signature Page to Commitment Letter]

Exhibit 12

Execution Copy

July 11, 2011

James H. Desnick, M.D.

Medical Equity Dynamics, LLC

370 Ravine Drive

Highland Park, IL 60035

Dear Jim:

You have advised Levine Leichtman Capital Partners, Inc. or an affiliate thereof (the “Sponsor”) that you and Medical Equity Dynamics, LLC (collectively, the “Desnick Parties”) wish to acquire all of the issued and outstanding common stock of Conmed Healthcare Management, Inc., a Delaware corporation (the “Target”) (excluding the shares to be contributed by the Desnick Parties) for a purchase price of $3.85 per share (the “Acquisition”). To accomplish the Acquisition, the Desnick Parties will form a new corporation (the “S-Corp”) which will own all of the interests of Ayelet Investments LLC, a newly-formed Delaware limited liability company (“Parent”) which will in turn own all of the interests of Ayelet Merger Subsidiary, Inc., a newly-formed Delaware corporate acquisition subsidiary (“Merger Sub”). Merger Sub will merge with the Target, with the Target continuing as the surviving entity of such merger (the resulting entity being the “Surviving Corporation”). The foregoing steps, including the Acquisition, are referred to collectively as the “Transaction”.

In order to finance the Acquisition, the Desnick Parties have asked the Sponsor to (i) purchase a Senior Secured Note in the face amount of $20,000,000 for a purchase price of $18,500,000 (the “Senior Note”) from the Merger Sub (subsequently the Surviving Corporation), and (ii) purchase a Convertible Note in the principal amount of $5,500,000 (the “Convertible Note”) from Parent, each in accordance with the Term Sheet (as defined below). The Senior Note and the Convertible Note are referred to herein collectively as the “Securities”. This letter and the summary of proposed terms and conditions attached hereto as Exhibit A (the “Term Sheet”) are collectively referred to as the “Debt Financing Commitment Letter”.

You have advised the Sponsor that the Desnick Parties intend to use the proceeds of the Securities to fund a portion of the Transaction, pursuant to the terms of an Agreement and Plan of Merger (the “Merger Agreement”) to be entered into by and among the Parent, the Merger Sub and the Target. To finance the balance of the costs of the Transaction, the Desnick Parties have advised the Sponsor that the Desnick Parties will (A)(i) make a cash equity investment of at least $17.75 million to S-Corp (which will in turn contribute such amount to Parent), (ii) contribute to S-Corp (which will in turn contribute such amount to Parent) $5.51 million of rollover equity, comprised of 1,430,778 shares of common stock in the Target (the investments set forth in (A)(i) and (A)(ii) collectively the “Primary Investment”), and (iii) make a $4.0 million unsecured, subordinated loan to Parent (which loan must be subject to a subordination agreement in form and substance satisfactory to the Sponsor in its sole discretion) ((i), (ii) and

(iii) above are collectively referred to as the “Desnick Investment”), and (B) use certain cash on hand at the Target (the amount of such unrestricted cash shall meet or exceed the condition precedent set forth in Section 9.02(g) (Cash on Hand) of the Merger Agreement as a condition of the commitment provided for hereunder). The Desnick Parties hereby commit to fund the Desnick Investment in accordance with the terms of this Debt Financing Commitment Letter and the Desnick Commitment Letter (as defined in the following paragraph).

Sponsor’s willingness to deliver this Debt Financing Commitment Letter is dependent on the Desnick Parties delivering to S-Corp, Merger Sub and Parent, as applicable, debt and equity commitment letters in respect of all of the Desnick Investment to be provided by the Desnick Parties jointly and severally to complete the Acquisition (collectively, the “Desnick Commitment Letter”).

The documents and agreements related to or governing the terms of the Desnick Investment, including without limitation the forms of limited liability company agreements, members agreement or bylaws, as applicable, for Parent and the Surviving Corporation to be effective at the closing of the Transaction and upon the conversion by the Sponsor of the Convertible Note, all equity purchase agreements, lock-up agreements governing the Parent and its equity holders, a subordination agreement and any members’ rights agreements, are collectively referred to as the “Desnick Investment Documents”.

(a) Based upon and subject to the terms and conditions set forth in this Debt Financing Commitment Letter, Sponsor is pleased to advise you of its commitment to purchase the Securities.

(b) The commitments of the Sponsor to purchase the Securities are based upon the financial and other information regarding the Desnick Parties and the Target and its subsidiaries previously provided to us. Accordingly, the commitments hereunder are subject to the satisfaction of each of the following conditions precedent in a manner reasonably acceptable to us, as well as those set forth in subsection (c) below:

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(c) The commitments hereunder are additionally subject to the negotiation, execution and delivery of the definitive documentation for the issuance and purchase of the Securities (including without limitation note purchase agreements, the subordination agreement, security agreements, guaranties and other collateral documents required by the Sponsor) in each case in form and substance satisfactory to the Sponsor in its reasonable discretion (collectively, the “Sponsor Financing Documents”). The Desnick Parties acknowledge and agree that the Term Sheet includes only a brief description of the principal terms and conditions to be documented, which terms and

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conditions will necessarily be further developed, expanded and supplemented during the course of preparing and negotiating the Sponsor Financing Documents. If any other material business or legal issues arise during the course of documentation, they must be resolved to the mutual satisfaction of the Desnick Parties and the Sponsor. Because not all terms can be set forth in the Term Sheet, if the Desnick Parties and the Sponsor cannot agree on the definitive terms of the Sponsor Financing Documents, such failure will not be a breach of this Debt Financing Commitment Letter by the Sponsor or the Desnick Parties.

Each of the Desnick Parties hereby represents and covenants that (i) all information, other than financial projections (“Projections”) and any other information of a general economic or general nature, which has been or is hereafter made available to the Sponsor by the Desnick Parties or the Target or their representatives in connection with the Transaction and the other actions contemplated hereby, whether related to the Desnick Parties or the Target (“Information”) is or, when furnished, will be complete and correct in all material respects and does not and will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein not misleading in light of the circumstances under which such statements are made, and (ii) the Projections that have been or will be made available to the Sponsor have been and will be prepared in good faith based upon assumptions that are believed to be reasonable at the time made and at the time made available to the Sponsor. Each of the Desnick Parties hereby agrees to supplement the Information and the Projections from time to time and to promptly advise the Sponsor of all developments materially affecting any of the Desnick Parties, the Target or any of their respective subsidiaries or affiliates or the transactions contemplated hereby until the closing date of the Securities so that the representation and warranty in the preceding sentence is correct on the closing date of the Securities. In structuring and entering into the Sponsor Financing Documents, the Sponsor will be using and relying on the Information and the Projections without independent verification thereof, and the Desnick Parties confirm that the Sponsor will not be required to make such independent verification.

Each of the Desnick Parties, Parent and Merger Sub, jointly and severally, agrees (a) to indemnify and hold harmless the Sponsor and its respective affiliates and controlling persons and the respective officers, directors, employees, agents, attorneys, members, managers, partners (limited and general), subsidiaries, affiliates and successors and assigns of each of the foregoing (each, an “Indemnified Person”) from and against any and all losses, claims, damages, liabilities and expenses (subject to the provisions of Section 4 solely in the case of the reimbursement of Sponsor Expenses which are not related to a claim for indemnification), joint or several, to which any such Indemnified Person may become subject arising out of or in connection with this Debt Financing Commitment Letter (including the Term Sheet), the Transaction, the Sponsor Financing Documents, the Desnick Investment or any related transaction or any claim, litigation, investigation or proceeding relating to any of the foregoing, regardless of whether any such Indemnified Person is a party thereto, and to reimburse each such Indemnified Person upon demand for any reasonable legal or other expenses incurred in connection with investigating or defending any of the foregoing; provided that the foregoing indemnity will not, as to any

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Indemnified Person, apply to losses, claims, damages, liabilities or related expenses to the extent they are found in a final, non-appealable judgment of a court of competent jurisdiction to have resulted from the willful misconduct, bad faith or gross negligence of such Indemnified Person, its employees or agents, and (b) to reimburse each Indemnified Person from time to time, upon presentation of a summary statement, for all reasonable out-of-pocket expenses (including but not limited to expenses of the Sponsor’s due diligence investigation, travel expenses, legal fees, out-of-pocket fees, disbursements and other charges of counsel to the Sponsor), in each case incurred in connection with the purchase of the Securities and the preparation of this Debt Financing Commitment Letter, the Transaction, the Sponsor Financing Documents and any security arrangements in connection therewith and the administration, enforcement, amendment, modification or waiver thereof (or any proposed amendment, modification or waiver thereof), in accordance with the terms of the letter of intent dated May 12, 2011 between the Sponsor and the Desnick Signatories (as defined therein) (the “Letter of Intent”) and this Debt Financing Commitment Letter. Notwithstanding any other provision of this Debt Financing Commitment Letter, no Indemnified Person shall be liable for (i) any damages arising from the use by others of information or other materials obtained through electronic, telecommunications or other information transmission systems, except to the extent such damages are found in a final, non-appealable judgment of a court of competent jurisdiction to have resulted from the willful misconduct, bad faith or gross negligence of such Indemnified Person or (ii) any indirect, special, punitive or consequential damages in connection with its activities related to the purchase of the Securities.

Section 11.04(b)(i) and (ii) of the Merger Agreement provides that Target has obligations to pay (A) certain termination fees to Parent (“Target Termination Fees”) and (B) reimburse certain expenses (“Target Expense Reimbursements”) of Parent if the Merger Agreement is terminated under certain circumstances. Each of (i) Parent, (ii) Merger Sub and (iii) in accordance with the terms of the Letter of Intent, the Desnick Signatories (as defined in the Letter of Intent), jointly and severally, are obligated to reimburse the Sponsor for fees and expenses that it may incur in connection with the Transaction, the Sponsor Financing Documents, the Desnick Investment Documents, this Debt Financing Commitment Letter or otherwise related thereto (including without limitation all of the “LLCP Expenses” (as defined in the Letter of Intent), collectively, the “Sponsor Expenses”) in an amount not to exceed $500,000 in the event the Transaction does not close. In recognition of the efforts, expenses and other opportunities foregone by the Sponsor while structuring and pursuing the transactions contemplated by this Debt Financing Commitment Letter and otherwise, each of the parties hereto agree that (A) in the event that Sponsor has any Sponsor Expenses in excess of $500,000 and has not been fully reimbursed for all such Sponsor Expenses, then Sponsor shall be entitled to 50% of any Target Expense Reimbursements until Sponsor has been reimbursed for all Sponsor Expenses in full (and once Sponsor has been reimbursed for all Sponsor Expenses in full the Desnick Parties may retain any excess Target Expense Reimbursements for their own account), and (B) any Target Termination Fees paid under the Merger Agreement will be shared equally by the Desnick Parties, on the one hand, and the Sponsor, on the other hand, with 50% of such Target Termination Fees paid to the Desnick Parties to be allocated among them as they may determine and 50% paid to the Sponsor. Nothing stated above shall limit or modify the Desnick Signatories’ direct obligation to reimburse Sponsor for Sponsor Expenses up to $500,000 pursuant to the terms of the Letter of Intent.

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The Desnick Parties, jointly and severally, represent and warrant that they have sufficient cash on hand or other sources of immediately available funds to enable them to make payment of the entire Desnick Investment and to consummate the transactions contemplated by the Desnick Commitment Letter and the Merger Agreement. The Desnick Parties shall cause the Desnick Investment to be funded at the closing of the Merger Agreement in accordance with the Desnick Commitment Letter and this Debt Financing Commitment Letter. The Desnick Parties agree that they will not syndicate more than $8.0 million of the Primary Investment and they at all times will directly hold at least $15.26 million of the Primary Investment. In furtherance of the representations, warranties, covenants and other agreements set forth herein, and in further recognition of the efforts, expenses and other opportunities foregone by the Sponsor while structuring and pursuing the transactions contemplated by this Debt Financing Commitment Letter and the fact that the Sponsor’s actual damages would be difficult or impossible to determine, in the event that each of the conditions set forth in Sections 9.01 and 9.02 of the Merger Agreement are either satisfied or waived by the applicable parties (although any such waiver of a condition by Parent or Merger Sub shall only be permitted with the prior written consent of the Sponsor) and the Sponsor has indicated its intention to fund its commitments to acquire the Securities hereunder subject to the funding of the Desnick Investment, and the Desnick Parties, Merger Sub and/or Parent fail to close or complete the transactions contemplated by the Merger Agreement or the Desnick Commitment Letter or to fully fund the Desnick Investment, the Desnick Parties, Parent and Merger Sub jointly and severally, agree to pay to the Sponsor liquidated damages in the amount of $750,000 (the “Liquidated Damages”) plus all Sponsor Expenses without regard to any cap. The obligation of the Desnick Parties, Parent and Merger Sub to pay the Liquidated Damages is in addition to, and not in replacement of, the obligations of the Desnick Parties, Parent and Merger Sub to indemnify the Indemnified Parties in accordance with Section 3 of this Debt Financing Commitment Letter and Section 4 of the Letter of Intent. The Desnick Parties, Parent and Merger Sub shall not consent to any amendment of, or terminate, the Merger Agreement or the Desnick Commitment Letter without the prior written consent of the Sponsor.

The Desnick Parties acknowledge that the Sponsor and its affiliates may be providing debt financing, equity capital or other services (including financial advisory services) to other persons in respect of which the Desnick Parties may have conflicting interests regarding the transactions described herein and otherwise. Neither the Sponsor nor any of its affiliates will use confidential information obtained from the Desnick Parties or the Target or their representatives by virtue of the transactions contemplated by this Debt Financing Commitment Letter or its other relationships with the Desnick Parties in connection with the performance by them of services for other persons, and neither the Sponsor nor any of its affiliates will furnish any such information to other persons. The Desnick Parties also acknowledge that neither the Sponsor nor any of its affiliates have any obligation to use in connection with the transactions contemplated by this Debt Financing Commitment Letter, or to furnish to the Desnick Parties, confidential information obtained by them from other persons.

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This Debt Financing Commitment Letter is delivered to you on the understanding that none of this Debt Financing Commitment Letter, the Term Sheet nor any of their terms or substance shall be disclosed by the Desnick Parties, directly or indirectly, to any other person except (a) to the Target and its and your respective officers, employees, attorneys, accountants and advisors on a confidential and need-to-know basis, (b) to the extent required by any regulatory authority having jurisdiction over it, or (c) as required by applicable law or compulsory legal process (in which case the Desnick Parties agree to inform us promptly thereof to the extent not prohibited by law); provided, however, that such disclosure shall be made only on the condition that such matters may not, except as required by law, be further disclosed. None of this Debt Financing Commitment Letter, Term Sheet nor any of their terms or substance shall be disclosed by the Desnick Parties to any other potential source of financing (other than, following notice to Sponsor, to co-investors that may be participating in the Desnick Investment). No person (including the Target), other than the parties hereto, is entitled to rely upon this Debt Financing Commitment Letter or any of its contents or have any beneficial or legal right, remedy, or claim hereunder. No person (including without limitation Target) shall, except as required by law, use the name of, or refer to, the Sponsor or any of its affiliates in any correspondence, discussions, press release, advertisement or disclosure made in connection with the purchase of the Securities without the prior written consent of the Sponsor, and the Sponsor shall have the right to review and approve all public announcements and filings related to the Transaction and the Sponsor Financing Documents which refer to the Sponsor before they are made.

All compensation, reimbursement, expense, indemnification, confidentiality, governing law, forum and waiver of jury trial provisions contained herein and the provisions of the Letter of Intent (in accordance with the last paragraph of Section 9 below) shall remain in full force and effect regardless of whether definitive financing documentation shall be executed and delivered and notwithstanding the termination of this Debt Financing Commitment Letter or the commitments hereunder; provided, however, that upon a closing of the purchase of the Securities, the compensation, reimbursement, expense, indemnification, confidentiality, governing law, forum and waiver of jury trial provisions contained herein shall merge with the corresponding provisions in the Sponsor Financing Documents.

This Debt Financing Commitment Letter shall not be assignable by the Desnick Parties without the prior written consent of the Sponsor. This Debt Financing Commitment Letter is intended to be solely for the benefit of the parties hereto and is not intended to confer any benefits upon, or to create any rights in favor of, any person other than the parties hereto (and Indemnified Persons), and the Desnick Parties agree that it does not create a fiduciary relationship among the parties hereto. The Sponsor may assign its commitment hereunder to any of its affiliates, co-investors, limited partners or managed vehicles without the consent of the Desnick Parties,

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Parent or Merger Sub. The Sponsor may assign less than 50% of its commitment hereunder to any third party without the consent of the Desnick Parties, Parent or Merger Sub (so long as the Sponsor retains control (directly or indirectly) of the Transaction). The Sponsor may not assign more than 50% of its commitment hereunder to any third party without the prior consent of the Desnick Parties, Parent and Merger Sub (such consent not to be unreasonably withheld, conditioned or delayed). Any such assignment to an affiliate will not relieve the Sponsor from any of its obligations hereunder unless and until such affiliate shall have funded the portion of the commitment so assigned. Any assignment by the Sponsor to a third party shall release the Sponsor from the portion of its commitment hereunder so assigned; provided that such assignee agrees in writing to be bound by the terms of this Debt Financing Commitment Letter and the attached Term Sheet. Any and all obligations of, and services to be provided by, the Sponsor hereunder may be performed and any and all rights of the Sponsor hereunder may be exercised by or through any of their affiliates or branches. THIS DEBT FINANCING COMMITMENT LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY OR ON BEHALF OF ANY PARTY RELATED TO OR ARISING OUT OF THIS DEBT FINANCING COMMITMENT LETTER OR THE PERFORMANCE OF SERVICES OR TAKING OF ACTIONS HEREUNDER.

Each of the parties hereto hereby irrevocably and unconditionally (a) submits, for itself and its property, to the non-exclusive jurisdiction of any California State court or Federal court of the United States of America sitting in Los Angeles County, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Debt Financing Commitment Letter or the transactions contemplated hereby, or for recognition or enforcement of any judgment, and agrees that all claims in respect of any such action or proceeding may be heard and determined in California or, to the extent permitted by law, in such Federal court, (b) waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Debt Financing Commitment Letter or the transactions contemplated hereby in California or in any such Federal court and (c) waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

This Debt Financing Commitment Letter, together with the Term Sheet and the Letter of Intent (other than Sections 2 and 3 of the Letter of Intent, which Sections shall be superseded by the terms hereof), embodies the entire understanding among the parties hereto relating to the matters discussed herein and therein and supersedes all prior discussions, negotiations, proposals, agreements and understandings, whether oral or written, relating to the subject matter hereof and thereof. No course of prior conduct or dealings between the parties hereto, no usage of trade, and no parol or extrinsic evidence of any nature, shall be used or be relevant to supplement, explain or modify any term used herein. Any modification or waiver of this Debt Financing Commitment Letter must be in writing, must be stated to be such and must be signed by an authorized representative of each party hereto. For clarity, the Letter of Intent, and all of the respective rights and obligations of the Sponsor and the Desnick Parties thereunder (other than Sections 2

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and 3 of the Letter of Intent, which Sections shall be superseded by the terms hereof), shall remain in full force and effect notwithstanding the execution of this Debt Financing Commitment Letter and, unless such definitive documents expressly provide that this Debt Financing Commitment Letter or the Letter of Intent are superseded thereby, regardless of whether definitive financing documentation shall be executed and delivered.

If you wish to accept this Debt Financing Commitment Letter, please return executed counterparts of this Debt Financing Commitment Letter to the Sponsor, on or before 2:00 p.m., central time, on July 12, 2011; otherwise, the offer set forth herein shall automatically terminate on such date and time and be of no further force or effect. In the event that the closing of the purchase of the Securities does not occur on or before December 31, 2011, then this Debt Financing Commitment Letter and the commitments and undertakings of the Sponsor hereunder shall automatically terminate unless the Sponsor shall, in its discretion, agree to an extension.

This Debt Financing Commitment Letter may be executed in any number of counterparts, each of which, when so executed, shall be deemed to be an original, but all such counterparts shall together constitute but one and the same agreement. Delivery of an executed counterpart of a signature page of this Debt Financing Commitment Letter by facsimile or electronic transmission shall be effective as a delivery of a manually executed counterpart of this Debt Financing Commitment Letter.

(Signature Page Follows)

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Exhibit A

Term Sheet and Form of Desnick Commitment Letter

ANNEX A

Senior Note

A-1

A-2

A-3

ANNEX B

Convertible Note

B-1

B-2

B-3

ANNEX C

LLC Interests

C-1

C-2

ANNEX D

Securities Purchase Agreement (the “Purchase Agreement”)

The parties shall enter into a Purchase Agreement with respect to the purchase of the Securities containing customary terms and conditions, including, among others, the following:

D-1

D-2

D-3

ANNEX E

Unsecured Subordinated Note

E-1

E-2

FORM OF

EQUITY COMMITMENT LETTER

July 11, 2011

India Investment Company

c/o Medical Equity Dynamics, LLC

370 Ravine Drive

Highland Park, Illinois 60035

Gentlemen:

This letter agreement sets forth the commitment of James H. Desnick, M.D. (“Investor”), subject to the terms and conditions contained herein, to purchase or to cause the purchase of certain equity interests of India Investment Company, a Delaware corporation (the “Issuer”). It is contemplated that, pursuant to an Agreement and Plan of Merger (as amended, restated, supplemented or otherwise modified from time to time, the “Merger Agreement”) to be entered into among Conmed Healthcare Management, Inc., a Delaware corporation (the “Company”), Ayelet Investments LLC, a Delaware limited liability company (“Parent”), and Ayelet Merger Subsidiary, a Delaware corporation and a wholly-owned subsidiary of Parent (“Merger Sub”), Merger Sub will merge with and into the Company (the “Merger”), with the Company surviving the Merger as a wholly-owned subsidiary of Parent. Capitalized terms used but not defined herein shall have the meaning ascribed to them in the Merger Agreement.

1. Commitment. Investor hereby commits, subject to the terms and conditions set forth herein, that, simultaneous with the Closing, it shall (i) purchase, or shall cause the purchase of, equity interests of the Issuer for an aggregate amount equal to at least $21.75 million (the “Cash Portion”) and (ii) contribute, or cause the contribution of, to Issuer $5.51 million of equity, comprised of 1,430,778 shares of common stock in the Company (the “Rollover Portion”, and together with the Cash Portion, collectively, the “Commitment”), solely for the purpose of funding a portion of the aggregate Merger Consideration pursuant to and in accordance with the Merger Agreement, together with related expenses. Investor may effect the purchase of the equity interests of the Issuer and contribution of the Rollover Shares, directly or indirectly through one or more affiliated entities. The amount of the Commitment to be funded under this letter agreement simultaneous with the Closing may be reduced in an amount specified by the Issuer but only to the extent that Parent has consummated the transactions contemplated by the Merger Agreement with Investor contributing less than the full amount of its Commitment. Investor may allocate a portion of its Commitment to co-investors, including its affiliates. Notwithstanding any provision in the preceding sentence to the contrary, Investor shall remain personally liable, as primary obligor and not surety, for its obligations hereunder, including, but not limited to, its obligations to satisfy the Commitment in full.

2. Conditions. Investor’s obligation to satisfy the Commitment shall be subject to (a) the execution and delivery of the Merger Agreement by the Company and there being no amendment to the Merger Agreement that has not been approved in writing in accordance with the terms of the Merger Agreement, (b) the satisfaction (or waiver by Parent) at the Closing of each of the conditions to Parent’s and Merger Sub’s obligations to consummate the transactions contemplated by the Merger Agreement, (c) the substantially concurrent funding of the financing transactions contemplated under the Debt Commitment Letter (as may be amended or replaced in accordance with Section 7.06 of the Merger Agreement) and (d) the contemporaneous consummation of the Closing.

3. Limited Guarantee. Concurrently with the execution and delivery of this letter agreement, Investor is executing and delivering to the Company a limited guarantee, dated as of the date hereof, related to Parent’s and Merger Sub’s payment obligations of the Parent Termination Fee pursuant to the terms and conditions of, and subject to the limitations of, Section 11.04(b)(iii) of the Merger Agreement (the “Limited Guarantee”). The Company’s remedies against Investor under the Limited Guarantee shall be, and are intended to be, the sole and exclusive direct or indirect remedies available to the Company and its stockholders and affiliates against (a) Investor, the Issuer, Parent or Merger Sub and (b) any former, current and future equity holders, controlling persons, directors, officers, employees, agents, affiliates, members, managers, general or limited partners or assignees of Investor, the Issuer, Parent or Merger Sub or any former, current or future equity holder, controlling person, director, officer, employee, general or limited partner, member, manager, affiliate, agent or assignee of any of the foregoing (other than Parent and Merger Sub to the extent provided in the Merger Agreement) (those Persons described in clause (b) including the Issuer, Parent and Merger Sub, each being referred to as a “Non-Recourse Party”) in respect of any liabilities or obligations arising under, or in connection with, this letter agreement or the Merger Agreement and the transactions contemplated thereby, including in the event Parent or Merger Sub breaches its obligations under the Merger Agreement, whether or not Parent’s or Merger Sub’s breach is caused by Investor’s breach of its obligations under this letter agreement.

4. Enforceability. This letter agreement may only be enforced by the Issuer at the direction of Investor. The Issuer’s creditors shall have no right to enforce this letter agreement or to cause the Issuer to enforce this letter agreement.

5. No Modification; Entire Agreement. This letter agreement may not be amended or otherwise modified without the prior written consent of the Issuer and Investor. Together with the Limited Guarantee, this letter agreement constitutes the sole agreement, and supersedes all prior agreements, representations, warranties, understandings and statements, written or oral, between Investor or any of its affiliates, on the one hand, and the Issuer or any of its affiliates, on the other, with respect to the transactions contemplated hereby. No transfer or assignment of any rights or obligations hereunder shall be permitted without the written consent of the Issuer and Investor. Any transfer or assignment in violation of the preceding sentence shall be null and void.

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6. Governing Law; Jurisdiction; Waiver of Jury Trial.

(a) This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to the conflicts of law rules of such state.

(b) Each of the parties hereto (i) agrees that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby (whether brought by any party or any of its Affiliates or against any party or any of its Affiliates) shall be brought in the Delaware Chancery Court or, if such court shall not have jurisdiction, any federal court located in the State of Delaware or other Delaware state court, (ii) irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum, (iii) agrees that it will not bring any action relating to this Agreement or any of the transactions contemplated by this Agreement in any court other than the courts of the State of Delaware, as described above, and (iv) agrees that service of process on such party as provided in Section 12 of the Limited Guarantee shall be deemed effective service of process on such party.

(c) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

7. Counterparts. This letter agreement may be executed in multiple counterparts (including by facsimile or PDF), all of which shall be considered one and the same agreement and shall become effective when one or more such counterparts have been signed by each of the parties and delivered to the other parties.

8. No Third Party Beneficiaries. This letter agreement shall inure to the benefit of and be binding upon the Issuer and Investor. Nothing in this letter agreement, express or implied, is intended to confer upon any Person other than the Issuer and Investor any rights or remedies under, or by reason of, or any rights to enforce or cause the Issuer to enforce, the Commitment or any provisions of this letter agreement or to confer upon any Person any rights or remedies against any Person other than Investor (but only at the direction of Investor as contemplated hereby) under or by reason of this letter agreement. Without limiting the foregoing, the Issuer’s creditors shall have no right to specifically enforce this letter agreement or to cause the Issuer to enforce this letter agreement.

9. Termination. The obligation of Investor to fund the Commitment will terminate automatically and immediately upon the earliest to occur of (a) the termination of the Merger Agreement in accordance with its terms, or (b) the Closing, at which time the obligation will be fulfilled.

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10. No Recourse. Notwithstanding anything that may be expressed or implied in this letter agreement or any document or instrument delivered in connection herewith, by its acceptance of the benefits of this letter agreement, the Issuer acknowledges and agrees that no Person other than Investor has any obligations hereunder and that no recourse shall be had hereunder, or for any claim based on, in respect of, or by reason of, such obligations or their creation, against, and no personal liability shall attach to, any Non-Recourse Party, through the Issuer, Parent, Merger Sub or otherwise, whether by or through attempted piercing of the corporate veil, by or through a claim by or on behalf of the Issuer or Parent against any Non-Recourse Party, by the enforcement of any assessment or by any legal or equitable proceeding, by virtue of any applicable Law, or otherwise.

11. Expenses. In consideration of the commitments contained in this letter agreement, whether or not the Merger is consummated, the Issuer agrees to promptly pay, or cause to be paid (but solely to the extent any such payment does not affect Parent’s or Merger Sub’s ability to perform their obligations under the Merger Agreement), upon receipt of any request therefore, all reasonable out-of-pocket expenses incurred by Investor in connection with its evaluation of, negotiations regarding and documentation for the transactions referenced herein, including, without limitation, expenses of counsel, accountants and other advisors.

*  *  *  *  *

(signature page follows)

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[Signature Page to Equity Commitment Letter]

9263858.2

[Signature Page to Equity Commitment Letter]

Exhibit 13

Execution Version

LIMITED GUARANTEE

Limited Guarantee, dated as of July 11, 2011 (this “Limited Guarantee”), by James H. Desnick, M.D. (the “Guarantor”) in favor of Conmed Healthcare Management, Inc., a Delaware corporation (the “Company”). Reference is hereby made to that certain Agreement and Plan of Merger, dated as of the date hereof (as amended, supplemented or otherwise modified, the “Merger Agreement”), among the Company, Ayelet Investments LLC, a Delaware limited liability company (“Parent”), and Ayelet Merger Subsidiary a Delaware corporation and a wholly-owned subsidiary of Parent (“Merger Subsidiary”). Capitalized terms used herein but not otherwise defined shall have the meanings ascribed to them in the Merger Agreement.

1.        Limited Guarantee.

(a)      To induce the Company to enter into the Merger Agreement, the Guarantor, intending to be legally bound, hereby absolutely, irrevocably and unconditionally guarantees to the Company on the terms and conditions set forth herein, the due and punctual performance, as and when due, of Parent’s and Merger Subsidiary’s obligations to pay the Parent Termination Fee pursuant to the terms and conditions of Section 11.04 of the Merger Agreement (the “Guaranteed Obligation”). All payments hereunder shall be made in lawful money of the United States, in immediately available funds.

(b)      If Parent or Merger Subsidiary fails to pay the Guaranteed Obligations when due, then all of the Guarantor’s liabilities to the Company hereunder in respect of such Guaranteed Obligations shall, at the Company’s option, become immediately due and payable and the Company may at any time and from time to time, at the Company’s option, take any and all actions available hereunder or under Applicable Law to collect the Guaranteed Obligations from the Guarantor.

(c)      The Guarantor agrees to pay on demand all documented out-of-pocket expenses (including fees and expenses of counsel) incurred by the Company in connection with the enforcement of its rights hereunder if the Guarantor fails or refuses to make any payment to the Company hereunder when due and payable and it is judicially determined that the Guarantor is required to make such payment hereunder. For the avoidance of doubt, the amounts payable by the Guarantor pursuant to this paragraph shall be in addition to any amounts required to be paid by Guarantor pursuant to Section 1.

2.       Limit on Obligations.

(a)      The Company hereby agrees that in no event shall the Guarantor, Parent, Merger Subsidiary or their respective Affiliates be required to pay, in the aggregate, to any Person or Persons, including the Company, under this Limited Guarantee or the Merger Agreement or in respect thereof, an amount in excess of the Parent Termination Fee if payment is required pursuant to Section 1 other than as expressly set forth herein or therein. For the avoidance of doubt, the parties hereto acknowledge and agree that in no event shall Parent or Merger Subsidiary be required to pay the Parent Termination Fee on more than one occasion or to more than one Person.

(b)       The Company acknowledges that in the event that it has any unsatisfied Guaranteed Obligation, payment in full in cash of such Guaranteed Obligation by the Guarantor (or by any other Person, including Parent or Merger Subsidiary, on behalf of the Guarantor) shall constitute satisfaction of the Guarantor’s obligations with respect thereto (subject to Section 3 hereof), and Parent and Merger Subsidiary shall be relieved of all liability under the Merger Agreement except in the event of fraud or willful misconduct.

3.        Terms of this Limited Guarantee.

(a)       This Limited Guarantee is an unconditional guarantee of payment, not of collection or performance, and a separate action or actions may be brought and prosecuted against the Guarantor to enforce this Limited Guarantee, irrespective of whether any action is brought against Parent, Merger Subsidiary or any other Person or whether Parent or Merger Subsidiary or any other Person is joined in any such action or actions; provided, however, that in the event that multiple actions are brought, the aggregate recovery in respect of all such actions shall not exceed the Parent Termination Fee except as otherwise set forth herein.

(b)       The Guarantor agrees that the Company may at any time and from time to time, without notice to or further consent of the Guarantor, extend the time of payment of the Guaranteed Obligation, and may also make any agreement with Parent and Merger Subsidiary or with any other party to, or Person liable for any of, the Guaranteed Obligation, for the extension, renewal, payment, compromise, discharge or release thereof, in whole or in part, or for any modification of the terms thereof or of any agreement between the Company, on the one hand, and Parent and Merger Subsidiary, on the other hand, or any such other Person without in any way impairing or affecting this Limited Guarantee.

(c)       The liability of the Guarantor under this Limited Guarantee shall, to the fullest extent permitted under Applicable Law, be absolute, irrevocable and unconditional irrespective of:

(i)        any modification, amendment or waiver of or any consent to departure from the Merger Agreement that may be agreed to by Parent or Merger Subsidiary;

(ii)       any change in the time, place or manner of payment of any of the Guaranteed Obligations, or any rescission, waiver, compromise, consolidation, or other amendment or modification of any of the terms or provisions of the Merger Agreement made in accordance with the terms thereof;

(iii)      the failure of the Company to assert any claim or demand or enforce any right or remedy against Parent or Merger Subsidiary or any other Person primarily or secondarily liable with respect to the Guaranteed Obligation;

(iv)      the addition or substitution of any Person primarily or secondarily liable for the Guaranteed Obligation;

(v)       the existence of any claim, set-off or other right which the Guarantor may have at any time against the Parent, Merger Subsidiary or the Company or any of their respective Affiliates, whether in connection with the Guaranteed Obligations or otherwise except as provided herein;

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(vi)        any discharge of the Guarantor as a matter of Applicable Law (other than as a result of, and to the extent of, payment of the Guaranteed Obligations in accordance with the terms of the Merger Agreement);

(vii)       any change in the corporate existence, structure or ownership of Parent or Merger Subsidiary or any other Person primarily or secondarily liable with respect to the Guaranteed Obligation, or any insolvency, bankruptcy, reorganization or other similar proceeding affecting Parent or Merger Subsidiary or any other Person primarily or secondarily liable with respect to the Guaranteed Obligation or any of their respective assets; or

(viii)      the adequacy of any other means the Company may have of obtaining repayment of any of the Guaranteed Obligation.

Notwithstanding the foregoing or anything to the contrary in this Limited Guarantee, the Guarantor shall be fully released and discharged with respect to the Guaranteed Obligation if the Parent Termination Fee is paid in full in cash by Parent or Merger Subsidiary (or any other Person) in accordance with the Merger Agreement.

(d)        To the fullest extent permitted by Applicable Law, the Guarantor hereby irrevocably and expressly waives any and all rights or defenses arising by reason of any Applicable Law which would otherwise require any election of remedies by the Company. The Guarantor hereby waives any and all notice of the creation, renewal, extension or accrual of the Parent Termination Fee (other than notices to Parent and Merger Subsidiary pursuant to the Merger Agreement) and notice of or proof of reliance by the Company upon this Limited Guarantee or acceptance of this Limited Guarantee. The Guaranteed Obligation shall conclusively be deemed to have been created, contracted or incurred in reliance upon this Limited Guarantee, and all dealings between Parent, Merger Subsidiary or the Guarantor, on the one hand, and the Company, on the other, shall likewise be conclusively presumed to have been had or consummated in reliance upon this Limited Guarantee. When pursuing its rights and remedies hereunder against the Guarantor, the Company shall be under no obligation to pursue such rights and remedies it may have against Parent and Merger Subsidiary or any other Person for the Guaranteed Obligation or any right of offset with respect thereto, and any failure by the Company to pursue such other rights or remedies or to collect any payments from Parent and Merger Subsidiary or any such other Person or to realize upon or to exercise any such right of offset, and any release by the Company of Parent and Merger Subsidiary or any such other Person or any right of offset, shall not relieve the Guarantor of any liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of the Company.

(e)        The Company shall not be obligated to file any claim relating to the Guaranteed Obligation in the event that Parent or Merger Subsidiary becomes subject to a bankruptcy, reorganization or similar proceeding, and the failure of the Company to so file shall not affect the Guarantor’s obligations hereunder. In the event that any payment to the Company in respect of the Guaranteed Obligation is rescinded or must otherwise be returned for any reason whatsoever, the Guarantor shall remain liable hereunder as if such payment had not been made.

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(f)        Except as otherwise set forth in the Merger Agreement or in this Limited Guarantee, the Company hereby covenants and agrees that it shall not institute, directly or indirectly, and shall cause its Affiliates not to institute, (x) any proceeding or bring any other claim (whether in tort, contract or otherwise) against the Guarantor or a Non-Recourse Party (as defined below) arising under, or in connection with, the Merger Agreement, the Equity Commitment Letter or the transactions contemplated thereby, except for claims against the Guarantor under this Limited Guarantee and claims under the Confidentiality Agreement, or (y) any such claims against the Guarantor under this Limited Guarantee, except in the case of a claim in respect of the Guaranteed Obligation, following the termination of the Merger Agreement in accordance with Section 10.01(d)(ii) or Section 10.01(d)(iii) included therein.

(g)        The Guarantor hereby covenants and agrees that it shall not assert, directly or indirectly, in any proceeding that this Limited Guarantee is illegal, invalid or unenforceable in accordance with its terms.

Notwithstanding anything to the contrary contained in this Limited Guarantee, the Company hereby agrees that to the extent Parent and Merger Subsidiary are relieved (other than by operation of any bankruptcy, insolvency or similar Applicable Law) of any of the Guaranteed Obligation under the Merger Agreement, the Guarantor shall be similarly relieved of his Guaranteed Obligation under this Limited Guarantee.

4.        Certain Additional Waivers.    The Guarantor irrevocably waives acceptance of this Limited Guarantee and of the Guaranteed Obligation, presentment, demand, promptness, diligence, protest, notice of non-performance, default, dishonor, notice of the Guaranteed Obligation incurred and any and all other notices not provided for herein (other than notices to Parent and Merger Subsidiary pursuant to the Merger Agreement), all defenses which may be available by virtue of any valuation, stay, moratorium law or similar law now or hereafter in effect, any right to require the marshalling of assets of Parent and Merger Subsidiary or any other Person primarily or secondarily liable with respect to any of the Guaranteed Obligation, and all suretyship defenses generally (other than fraud or willful misconduct by any of the Company).

5.        No Subrogation.    The Guarantor hereby unconditionally and irrevocably agrees not to exercise any rights that it may now have or hereafter acquire against Parent, Merger Subsidiary or any other Person liable with respect to any of the Guaranteed Obligations that arise from the existence, payment, performance or enforcement of the Guarantor’s obligations under or in respect of this Limited Guarantee or any other agreement in connection therewith, including, without limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy of the Company against Parent, Merger Subsidiary or such other Person, whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including, without limitation, the right to take or receive from Parent, Merger Subsidiary or such other Person, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security on account of such claim, remedy or right, unless and until the Guaranteed

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Obligations and any other amounts that may be payable under this Limited Guarantee shall have been paid in full in cash. If any amount shall be paid to the Guarantor in violation of the immediately preceding sentence at any time prior to the satisfaction in full of the Guaranteed Obligations and any other amounts that may be payable under this Limited Guarantee, such amount shall be received and held in trust for the benefit of the Company, shall be segregated from other property and funds of the Guarantor and shall forthwith be paid or delivered to the Company in the same form as so received (with any necessary endorsement or assignment) to be credited and applied to the Guaranteed Obligations and any other amounts that may be payable under this Limited Guarantee, in accordance with the terms of the Merger Agreement and herewith, whether matured or unmatured, or to be held as collateral for the Guaranteed Obligations or other amounts payable under this Limited Guarantee thereafter arising.

6.        Sole Remedy.    The Company acknowledges and agrees that the sole cash asset of Parent and Merger Subsidiary is cash in a de minimis amount and that no additional funds are expected to be contributed to Parent or Merger Subsidiary unless the Closing occurs. Notwithstanding anything that may be expressed or implied in this Limited Guarantee, the Company further agrees that no Person will have any right of recovery against, and no personal liability will attach (for any reason) to, any of the Guarantor’s, Parent’s or Merger Subsidiary’s former, current or future stockholders, Affiliates, controlling persons, members, managers, employees, agents, officers or directors or any former, current or future stockholders, Affiliates, general or limited partners, controlling persons, members, managers, employees, agents, officers or directors of the foregoing (collectively (but not including Parent and Merger Subsidiary), the “Non-Recourse Parties”), through Parent and Merger Subsidiary or otherwise, whether by or through attempted piercing of the corporate veil, whether by or through a claim (whether in tort, contract or otherwise) by or on behalf of Parent or Merger Subsidiary against the Non-Recourse Parties, whether in respect of any oral representations made or alleged to be made in connection herewith, or otherwise (including any claim to enforce the Equity Commitment Letter), except for its rights under this Limited Guarantee, under the Merger Agreement and under the Confidentiality Agreement. Notwithstanding anything to the contrary contained herein and other than with respect to a claim brought under the Confidentiality Agreement, recourse against the Guarantor under this Limited Guarantee shall be the sole and exclusive remedy of the Company and all of their respective Affiliates against the Guarantor and any of its respective Affiliates in respect of any liabilities arising under, in connection with, or in respect of, the Merger Agreement, the Equity Commitment Letter, this Limited Guarantee or the transactions contemplated hereby or thereby, except for fraud or willful misconduct.

7.        Reservation of Rights of Guarantor.    Notwithstanding anything to the contrary in this Limited Guarantee, the Guarantor shall be entitled to assert as a defense hereunder any defense that is or would be available to Parent and Merger Subsidiary under the Merger Agreement.

8.        Termination.    This Limited Guarantee shall terminate (other than Section 6, Section 8, Sections 11 through 14, Section 18 and Section 19 hereof, all of which shall survive any termination of this Limited Guarantee), upon the earlier of (a) the Effective Time, (b) the payment in full to the Company of the Parent Termination Fee and such other amounts as may be specifically provided for herein, (c) the valid termination of the Merger Agreement in accordance with its terms under circumstances in which, in accordance with the terms of the Merger

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Agreement, Parent and Merger Subsidiary would not be obligated to pay the Parent Termination Fee or (d) the twelve (12) month anniversary following any termination of the Merger Agreement in accordance with its terms under circumstances in which Parent or Merger Subsidiary would be obligated to pay the Parent Termination Fee, except as to a claim for payment of any Guaranteed Obligation or such other amounts as may be specifically provided for herein presented by the Company to Parent, Merger Subsidiary or Guarantor on or prior to such twelve (12) month anniversary; provided, that such claim shall set forth in reasonable detail the basis for such claim, in which case such claim shall survive until the earlier of (A) the payment or satisfaction in full of the full amount of the Guaranteed Obligations (as the same may be finally determined by a court of competent jurisdiction or mutually agreed by the parties) and such other amounts as may be specifically provided for herein and (B) the determination by a court of competent jurisdiction that no amounts are payable hereunder. If any payment or payments made by Parent or Merger Subsidiary or any part thereof, are subsequently invalidated, declared to be fraudulent or preferential, set aside or are required to be repaid to a trustee, receiver, or any other person under any bankruptcy act, state or federal law, common law or equitable cause, then to the extent of such payment or payments, the obligations or part thereof hereunder intended to be satisfied shall be revived and continued in full force and effect as if said payment or payments had not been made. Notwithstanding the foregoing, in the event that the Company or any of its Affiliates asserts in any litigation or other proceeding relating to this Limited Guarantee that the provisions of Section 2 hereof limiting the Guarantor’s maximum aggregate liability or that any other provisions of this Limited Guarantee are illegal, invalid or unenforceable in whole or in part, or asserts any theory of liability against the Guarantor or any Non-Recourse Party with respect to the Merger Agreement, the Equity Commitment Letter or the transactions contemplated by the Merger Agreement other than liability of the Guarantor under this Limited Guarantee (as limited by the provisions hereof, including Section 2) or under the Confidentiality Agreement, then (i) the obligations of the Guarantor under this Limited Guarantee shall, immediately upon such assertion, automatically terminate ab initio and shall thereupon be null and void, (ii) if the Guarantor has previously made any payments under this Limited Guarantee, it shall be entitled to recover such payments from the Company and (iii) neither the Guarantor nor any Non-Recourse Party shall have any liability to Company or any of its Affiliates with respect to the Merger Agreement, the Equity Commitment Letter, the transactions contemplated thereby or under this Limited Guarantee; provided that if the Guarantor asserts in any litigation or other proceeding that this Limited Guarantee is illegal, invalid or unenforceable in whole or in part, or asserts any theory of liability against the Company, then, to the extent the Company prevails in such litigation or proceeding, the Guarantor shall promptly pay on demand all fees and documented out-of-pocket expenses (including fees and expenses of counsel) of the Company in connection with such litigation or proceeding.

9.        Continuing Limited Guarantee.    Unless terminated pursuant to the provisions of Section 8 hereof, this Limited Guarantee is a continuing one and shall remain in full force and effect until the indefeasible payment and satisfaction in full of the Guaranteed Obligation and such other amounts as may be specifically provided for herein, shall be binding upon the Guarantor, its successors and assigns, and shall inure to the benefit of, and be enforceable by, the Company and its respective successors. All obligations to which this Limited Guarantee applies or may apply under the terms hereof shall be conclusively presumed to have been created in reliance hereon.

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10.      Entire Agreement.    This Limited Guarantee constitutes the entire agreement with respect to the subject matter hereof and supersedes any and all prior discussions, negotiations, proposals, undertakings, understandings and agreements, whether written or oral, among Parent, Merger Subsidiary and the Guarantor or any of their Affiliates on the one hand, and any of the Company or any of its Affiliates on the other hand, except for the Merger Agreement and the Confidentiality Agreement.

11.      Amendments and Waivers; Remedies Cumulative.    No amendment or waiver of any provision of this Limited Guarantee will be valid and binding unless it is in writing and signed, in the case of an amendment, by the Guarantor and the Company, or in the case of waiver, by the party against whom the waiver is to be effective. No waiver by any party of any breach or violation of, or default under, this Limited Guarantee, whether intentional or not, will be deemed to extend to any prior or subsequent breach, violation or default hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence. No delay or omission on the part of any party in exercising any right, power or remedy under this Limited Guarantee will operate as a waiver thereof.

12.      Counterparts.    This Limited Guarantee may be executed (including by facsimile transmission or via email as a portable document format (.pdf)) in any number of counterparts, each of which will be deemed an original instrument, but all of which together will constitute one and the same instrument. This Limited Guarantee will become effective when executed by each party hereto.

13.      Notices.    Any notice, request, instruction or other document to be given hereunder by any party to the others shall be in writing and delivered personally or sent by registered or certified mail, postage prepaid, or by facsimile, or by overnight courier:

if to the Guarantor:

James H. Desnick, M.D.

c/o Medical Equity Dynamics, LLC

370 Ravine Drive

Highland Park, Illinois 60035

Facsimile No.:                         

E-mail: jimd@mma40.com

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

Winston & Strawn LLP

35 West Wacker Drive

Chicago, Illinois 60601

Attention:  Robert F. Wall

                  Brian M. Schafer

Facsimile No.:  (312) 558-5700

E-mail:  rwall@winston.com

              bschafer@winston.com

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if to the Company:

Conmed Healthcare Management, Inc.

7250 Parkway Drive, Suite 400

Hanover, Maryland 21076

Attention: Chief Executive Officer

Facsimile No.:  (410) 712-4760

with copies (which shall not constitute notice) to:

Kramer Levin Naftalis & Frankel LLP

1177 Avenue of the Americas

New York, New York 10036

Attention: James A. Grayer, Esq.

Facsimile No.:  (212) 715-8000

E-mail:  jgrayer@kramerlevin.com

or to such other address or facsimile number as such party may hereafter specify for the purpose by notice to the other parties hereto. All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m. on a Business Day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed to have been received on the next succeeding Business Day in the place of receipt.

14.      GOVERNING LAW; JURISDICTION; WAIVER OF JURY TRIAL.

(a)      THIS LIMITED GUARANTEE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO THE CONFLICTS OF LAW RULES OF SUCH STATE.

(b)      EACH OF THE PARTIES HERETO (I) AGREES THAT ANY SUIT, ACTION OR PROCEEDING SEEKING TO ENFORCE ANY PROVISION OF, OR BASED ON ANY MATTER ARISING OUT OF OR IN CONNECTION WITH, THIS LIMITED GUARANTEE OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BROUGHT BY ANY PARTY OR ANY OF ITS AFFILIATES OR AGAINST ANY PARTY OR ANY OF ITS AFFILIATES) SHALL BE BROUGHT IN THE DELAWARE CHANCERY COURT OR, IF SUCH COURT SHALL NOT HAVE JURISDICTION, ANY FEDERAL COURT LOCATED IN THE STATE OF DELAWARE OR OTHER DELAWARE STATE COURT, (II) IRREVOCABLY CONSENTS TO THE JURISDICTION OF SUCH COURTS (AND OF THE APPROPRIATE APPELLATE COURTS THEREFROM) IN ANY SUCH SUIT, ACTION OR PROCEEDING AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM, (III) AGREES THAT IT WILL NOT BRING ANY ACTION

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RELATING TO THIS LIMITED GUARANTEE OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY IN ANY COURT OTHER THAN THE COURTS OF THE STATE OF DELAWARE, AS DESCRIBED ABOVE, AND (IV) AGREES THAT SERVICE OF PROCESS ON SUCH PARTY AS PROVIDED IN SECTION 13 SHALL BE DEEMED EFFECTIVE SERVICE OF PROCESS ON SUCH PARTY.

(c)        EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS LIMITED GUARANTEE OR THE TRANSACTIONS CONTEMPLATED HEREBY.

15.        Representations and Warranties.    The Guarantor hereby represents and warrants to the Company that (a) the Guarantor has all power and authority to execute, deliver and perform this Limited Guarantee; (b) this Limited Guarantee has been duly and validly executed and delivered by the Guarantor and constitutes a valid and legally binding obligation of it, enforceable against the Guarantor in accordance with its terms, except as may be limited by any bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar laws affecting the enforcement of creditors’ rights generally or by general principles of equity; (c) the execution, delivery and performance by the Guarantor of this Limited Guarantee do not and will not, except as would not reasonably be expected to materially impair the Guarantor’s ability to perform its obligations hereunder, violate any Applicable Law; and (d) the Guarantor has the cash sufficient to pay and perform his obligations under this Limited Guarantee, and all funds necessary for the Guarantor to fulfill the Guaranteed Obligation under this Limited Guarantee shall be available to the Guarantor (or its permitted assignee pursuant to Section 16 hereof) for so long as this Limited Guarantee shall remain in effect in accordance with Section 8 hereof.

16.        Assignment.    This Limited Guarantee shall not be assignable by the Company or the Guarantor by operation of law or otherwise without the prior written consent of the other party; provided, however, that, without the prior written consent of the Company, (a) the Guarantor may assign its rights, interests and obligations hereunder to any Affiliate and (b) if a portion of the Guarantor’s commitment under the Equity Commitment Letter is assigned in accordance with the terms thereof, then a corresponding portion of its obligations hereunder may be assigned to the same assignee; provided, further, that no such assignment of any of the Guarantor’s rights, interests or obligations hereunder will relieve the Guarantor of any of its obligations hereunder. Any purported assignment in violation of this Limited Guarantee is void.

17.        Severability.    The provisions of this Limited Guarantee shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof; provided, however, that this Limited Guarantee may not be enforced without giving effect to the provisions of Sections 2, 6 and 8 hereof. If any provision of this Limited Guarantee, or the application thereof to any Person or any circumstance, is invalid or unenforceable (other than Sections 2, 6 and 8), (a) a suitable and equitable provision shall be substituted therefore in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and (b) the remainder of this Limited Guarantee and the application of such provision to other Persons or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of such provision, or the application thereof, in any other jurisdiction.

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18.        Interpretation; Construction.    The headings contained in this Limited Guarantee are for convenience of reference only, do not constitute part of this Limited Guarantee and shall not be deemed to limit or otherwise affect any of the provisions hereof. Where a reference in this Limited Guarantee is made to a Section, such reference shall be to a Section of this Limited Guarantee unless otherwise indicated. The words “herein,” “hereof” or “hereunder,” and similar terms are to be deemed to refer to this Limited Guarantee as a whole and not to any specific Section. Whenever the words “include,” “includes” or “including” are used in this Limited Guarantee, they shall be deemed to be followed by the words “without limitation.” The parties have participated jointly in negotiating and drafting this Limited Guarantee. In the event that an ambiguity or a question of intent or interpretation arises, this Limited Guarantee 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 provision of this Limited Guarantee.

19.        No Third Party Beneficiaries.    Except as provided in Section 3(f) and Section 6 with respect to the Non-Recourse Parties, the parties hereby agree that their respective representations, warranties and covenants set forth herein are solely for the benefit of the other party hereto and its successors and permitted assigns, in accordance with and subject to the terms of this Limited Guarantee, and this Limited Guarantee is not intended to, and does not, confer upon any Person other than the parties hereto and their respective successors and permitted assigns any rights or remedies hereunder, including the right to rely upon the representations, warranties and covenants set forth herein.

[Signature Page Follows]

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IN WITNESS WHEREOF, the undersigned have executed and delivered this Limited Guarantee as of the date first written above.

ACCEPTED AND AGREED

AS OF THE DATE FIRST

WRITTEN ABOVE:

CONMED HEALTHCARE MANAGEMENT, INC.

[Signature Page to Limited Guarantee]

Exhibit 14

AGREEMENT AND PLAN OF MERGER

dated as of

July 11, 2011

among

CONMED HEALTHCARE MANAGEMENT, INC.,

AYELET INVESTMENTS LLC

and

AYELET MERGER SUBSIDIARY, INC.

TABLE OF CONTENTS

i

TABLE OF CONTENTS

ii

TABLE OF CONTENTS

iii

AGREEMENT AND PLAN OF MERGER

This AGREEMENT AND PLAN OF MERGER (this “Agreement”) is made as of July 11, 2011 by and among Conmed Healthcare Management, Inc., a Delaware corporation (the “Company”), Ayelet Investments LLC, a Delaware limited liability company (“Parent”), and Ayelet Merger Subsidiary, Inc., a Delaware corporation and a wholly-owned subsidiary of Parent (“Merger Subsidiary”).

W I T N E S S E T H :

WHEREAS, the respective Boards of Directors of the Company, Parent and Merger Subsidiary have approved and deemed advisable the transactions contemplated by this Agreement, pursuant to which, among other things, Parent would acquire the Company by means of a merger of Merger Subsidiary with and into the Company on the terms and subject to the conditions set forth in this Agreement;

WHEREAS, the Company, Parent and Merger Subsidiary desire to make certain representations, warranties, covenants and other agreements in connection with the transactions contemplated by this Agreement and to prescribe certain conditions with respect to the consummation of the transactions contemplated by this Agreement; and

WHEREAS, concurrently with the execution and delivery of this Agreement, and as a condition and inducement to Parent’s willingness to enter into this Agreement, each of the Persons set forth on Schedule A are entering into a Voting Agreement with Parent substantially in the form attached as Exhibit A (the “Voting Agreement”).

WHEREAS, contemporaneously with the execution and delivery of this Agreement, and as a condition to the willingness of the Company to enter into this Agreement, James H. Desnick M.D. (“Desnick”) is entering into a limited guarantee in favor of the Company (the “Limited Guarantee”) pursuant to which Desnick is guaranteeing certain obligations of each of Parent and Merger Subsidiary set forth in this Agreement.

NOW, THEREFORE, in consideration of the foregoing and the representations, warranties, covenants and agreements contained herein, the parties hereto agree as follows:

ARTICLE 1

DEFINITIONS

Section 1.01.  Definitions.  (a) As used herein, the following terms have the following meanings:

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

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

“2007 Stock Option Plan” means the 2007 Stock Option Plan of the Company.

“Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with such Person. For purposes of the immediately preceding sentence, the term “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through ownership of voting securities, by contract or otherwise.

“Affiliated Physician Groups” means any physician practice groups, individual physicians or other licensed providers of medical services that, in each case, provide medical services and with which the Company or any Subsidiary is affiliated through a management services agreement, independent contractor agreement or other arrangement with the Company or any Subsidiary.

“Applicable Law” means, with respect to any Person, any federal, state or local law (statutory, common or otherwise), constitution, treaty, convention, ordinance, code, rule, regulation, statute, order, injunction, standards, judgment, decree, ruling or other similar requirement enacted, adopted, promulgated or applied by a Governmental Authority that is binding upon or applicable to such Person, as amended unless expressly specified otherwise, including, without limitation, Healthcare Laws.

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

“Code” means the Internal Revenue Code of 1986, as amended and any successor statute thereto.

“Company Acquisition Proposal” means, other than the transactions contemplated by this Agreement, any bona fide, written offer, proposal or inquiry relating to, or any Third Party indication of interest in, (i) any acquisition or purchase, direct or indirect, of 15% or more of the consolidated assets of the Company and its Subsidiaries or 15% or more of any class of equity or voting securities of the Company or any of its Subsidiaries whose assets, individually or in the aggregate, constitute 15% or more of the consolidated assets of the Company, (ii) any tender offer (including a self-tender offer) or exchange offer that, if consummated, would result in such Third Party’s beneficially owning 15% or more of any class of equity or voting securities of the Company or any of its Subsidiaries whose assets, individually or in the aggregate, constitute 15% or more of the consolidated assets of the Company, (iii) a merger, consolidation, share exchange, business combination, sale of substantially all the assets, reorganization, recapitalization, liquidation, dissolution or other similar transaction involving the Company or any of its Subsidiaries whose assets, individually or in the aggregate, constitute 15% or more of the consolidated assets of the Company, or (iv) any other transaction the consummation of which would reasonably be expected to impede, interfere with, prevent or materially delay the Merger, or (v) any combination of the foregoing.

“Company Balance Sheet” means the consolidated balance sheet of the Company as of December 31, 2010 and the footnotes thereto set forth in the Company 10-K.

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“Company Balance Sheet Date” means December 31, 2010.

“Company Disclosure Schedule” means the disclosure schedule dated the date hereof regarding this Agreement that has been provided by the Company to Parent and Merger Subsidiary.

“Company Scheduled Contract” means each contract or agreement filed or incorporated by reference as an exhibit to the Company 10-K, the Company’s quarterly report on Form 10-Q for the quarter ended March 31, 2011 and the Company’s current reports on Form 8-K filed with the SEC since January 1, 2011, in each case, pursuant to Item 601(b)(10) of Regulation S-K under the 1933 Act.

“Company Stock” means the common stock, $0.0001 par value, of the Company.

“Company 10-K” means the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2010.

“Delaware Law” means the General Corporation Law of the State of Delaware.

“Environmental Laws” means any Applicable Laws or any agreement with any Person relating to human health and safety, the environment or Hazardous Substances.

“Environmental Permits” means all permits, licenses, franchises, certificates, consents, approvals and other similar authorizations of Governmental Authorities relating to or required by Environmental Laws and relating to the business of the Company or any of its Subsidiaries as currently conducted.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended or any successor statute thereto.

“ERISA Affiliate” of any entity means any other entity that, together with such entity, would be treated as a single employer under Section 414 of the Code.

“Financing Sources” means the Persons that have entered into agreements in connection with the Debt Financing, the Equity Financing or other financings in connection with the transactions contemplated hereby, including the parties to the Debt Commitment Letter, the Equity Financing Commitments and any joinder agreements or credit agreements relating thereto.

“GAAP” means generally accepted accounting principles in the United States.

“Governmental Authority” means any transnational, domestic or foreign federal, state or local governmental, regulatory or administrative authority, quasi-governmental authority, department, court, agency or official, including any commission, organization, division or political subdivision thereof.

“Government Contract” means any agreement with a Government Authority pursuant to which the Company or any Subsidiary provides services to a correctional facility.

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“Hazardous Substance” means any pollutant, contaminant, waste or chemical or any toxic, radioactive, ignitable, corrosive, reactive or otherwise hazardous substance, waste or material, or any substance, waste or material having any constituent elements displaying any of the foregoing characteristics, including any substance, waste or material regulated under any Environmental Law.

“Healthcare Laws” means all Applicable Laws with respect to regulatory matters relating to the provision or administration of, or payment for, healthcare products or services, including, without limitation: (i) rules and regulations governing the operation and administration of Medicare, Medicaid or other federal or state healthcare programs; (ii) the Health Insurance Portability and Accountability Act of 1996, as amended (42 U.S.C. §§ 1320d through d-8), the Health Information Technology for Economic and Clinical Health Act enacted as part of the American Recovery and Reinvestment Act of 2009, Pub. L. No. 111-5 (2009), and the rules and regulations thereunder; (iii) 42 U.S.C. § 1320a-7(b), commonly referred to as the “Federal Anti-Kickback Statute,” and the rules and regulations thereunder; (iv) 42 U.S.C. §1395nn, commonly referred to as the “Stark Law,” and the rules and regulations thereunder; (v) 31 U.S.C. §§ 3729-33, commonly referred to as the “False Claims Act,” and the rules and regulations thereunder; (vi) 42 U.S.C. § 1320a-7(a), commonly referred to as the “Civil Monetary Penalties Law,” and the rules and regulations thereunder; (vii) 10 U.S.C. §§ 2306 and 2306a, commonly referred to as the “Truth in Negotiations Act,” and the rules and regulations thereunder; and (viii) state anti-kickback, self-referral, false claims, privacy, licensure, certificate of need, and corporate practice of medicine laws.

“Intellectual Property Rights” means (i) trademarks, service marks, brand names, certification marks, trade dress, domain names and other indications of origin, the goodwill associated with the foregoing, (ii) inventions and discoveries, whether patentable or not, in any jurisdiction, patents, applications for patents (including divisions, continuations, continuations in part and renewal applications), and any renewals, extensions or reissues thereof, in any jurisdiction, (iii) Trade Secrets, (iv) writings and other works, whether copyrightable or not, in any jurisdiction, and any and all copyright rights, whether registered or not, (v) all data, databases and data collections; (vi) computer software (whether in source code or object code form); (vii) moral rights, design rights, industrial property rights, publicity rights and privacy rights, (viii) any similar intellectual property or proprietary rights and (ix) any and all registrations and applications for registration of any of the foregoing in any jurisdiction and any renewals or extensions thereof; provided, however, that “Intellectual Property Rights” does not include any techniques, general ideas, concepts, information, technologies, algorithms or know-how relating to methods or processes of general application which can be recalled only from the memories of the Company’s personnel.

“knowledge” means, (i) with respect to the Company, the knowledge of Richard W. Turner, Thomas W. Fry, Stephen G. Goldberg, Larry F. Doll, Lawrence E. Delbridge and Ronald Grubman after reasonable inquiry, where reasonable inquiry shall solely mean reasonable inquiry of senior management of the Company, and (ii) with respect to Parent, the knowledge of the individuals set forth on Schedule B hereto after reasonable inquiry.

“Leased Real Property” means the parcels of land more fully described in Section 4.14(a) of the Company Disclosure Schedule under the heading “Leased Real Property”, together with

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all plants, buildings, structures, installations, fixtures, fittings, improvements, betterments and additions situated thereon, all privileges and appurtenances thereto, all easements and rights-of-way used or useful in connection therewith, and all rights and privileges under the Real Property Leases relating thereto.

“Licensed Intellectual Property Rights” means all Intellectual Property Rights owned by a third party and licensed or sublicensed to either the Company or any of its Subsidiaries.

“Lien” means, with respect to any property or asset, any mortgage, lien, pledge, charge, security interest, encumbrance or other adverse claim of any kind in respect of such property or asset.

“Material Adverse Effect” means any effect, circumstance, change, event or development, individually or in the aggregate, that has or have a material adverse effect on (i) the condition (financial or otherwise), business, assets, liabilities or results of operations of the Company and its Subsidiaries, taken as a whole, or (ii) the Company’s ability to perform its obligations under or consummate the transaction contemplated by this Agreement, provided, however, that in no event shall any of the following, alone or in combination, be deemed to constitute in and of itself a Material Adverse Effect, nor shall any of the following be taken into account in determining whether a Material Adverse Effect has occurred or would result: (A) changes in the financial or securities markets or general economic or political conditions in the United States or any other market in which the Company or its Subsidiaries operate (including changes in interest rates or the availability of credit financing, and any suspension of trading in securities (whether equity, debt, derivative or hybrid securities) generally on any securities exchange or over-the-counter-market operating in the United States or any other market in which the Company or its Subsidiaries operate), (B) changes required by GAAP or changes required by the regulatory accounting requirements (or the interpretation thereof) applicable to any industry in which the Company and its Subsidiaries operate, or that result from any action taken for the purpose of complying with any such changes, (C) changes (including changes of Applicable Law) or conditions generally affecting the industries or markets in which the Company and its Subsidiaries operate, (D) changes in national or international political conditions, including any engagement in hostilities, whether or not pursuant to the declaration of a national emergency or war, or the occurrence of any acts of war, sabotage or terrorism or natural disasters (including acts of God, hurricanes, earthquakes or other weather conditions) involving the United States occurring prior to, on or after the date of this Agreement, (E) the entry into or announcement of the transactions contemplated by this Agreement or the consummation of the transactions contemplated hereby (including the termination or potential termination of (or the failure or potential failure to renew or enter into) any contracts with suppliers, distributors and other business partners (excluding customers), and any impact on customers or employees, to the extent caused by the pendency or the announcement of the transactions contemplated hereby), (F) any failure in and of itself by the Company and its Subsidiaries to meet any internal or published budgets, projections, forecasts or predictions of financial performance for any period, (G) a change in the trading prices or volume of the Company Stock, (H) actions taken or omitted to be taken at the request of Parent, or any change that the Company can demonstrate resulted from Parent unreasonably withholding, conditioning or delaying its consent in violation of Section 6.01 with respect to any action requiring Parent’s consent thereunder, or (I) such other matters as set forth in Section 4.11 of the Company Disclosure Schedule, but solely to the extent

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set forth therein; except that in the case of each of clauses (A), (B), (C) and (D) to the extent such changes have a disproportionate effect on the Company and its Subsidiaries, taken as a whole, relative to other similarly situated companies in the industry in which the Company and its Subsidiaries operate; and provided that in the case of clauses (F) and (G), such clauses shall not prevent a party from asserting that any fact, circumstance, change, event, occurrence or effect that may have contributed to any such changes independently constitutes or contributed to a Material Adverse Effect.

“Owned Intellectual Property Rights” means all Intellectual Property Rights owned by either the Company or any of its Subsidiaries including, without limitation, all registrations and applications for registrations for any Intellectual Property Rights which have been registered or applied for, or are otherwise recorded in the name of, the Company or any of its Subsidiaries.

“Permitted Liens” means (i) statutory, common or civil law Liens in favor of carriers, warehousemen, mechanics and materialmen to secure claims for labor, materials or supplies arising or incurred in the ordinary course of business not yet due and payable or being contested in good faith by appropriate proceedings and for which adequate accruals or reserves have been established on the Company Balance Sheet, (ii) statutory Liens for Taxes not yet due and payable or Taxes being contested in good faith by appropriate proceedings and for which adequate accruals or reserves have been established on the Company Balance Sheet, and (iii) Liens arising under sales contracts and equipment leases with third parties entered into in the ordinary course of business which do not exceed $50,000 individually or $100,000 in the aggregate.

“Person” means an individual, corporation, partnership, limited partnership, limited liability company, association, joint venture, trust, Governmental Authority or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

“Real Property Leases” means all leases, lease guaranties, subleases, licenses, easements, and agreements, whether written or oral, for the leasing, use or occupancy of, or otherwise granting a right in or relating to the Leased Real Property, including all amendments, terminations and modifications thereof and all subordination, non-disturbance and attornment agreements and estoppel certificates with respect thereto.

“Sarbanes-Oxley Act” means the Sarbanes-Oxley Act of 2002, as amended.

“SEC” means the U.S. Securities and Exchange Commission.

“Subsidiary” means, with respect to any Person, any entity of which securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions are at any time directly or indirectly owned by such Person.

“Third Party” means any Person, including as defined in Section 13(d) of the 1934 Act, other than, in the case of the Company, Parent or any of its Affiliates and, in the case of Parent, the Company or any of its Affiliates.

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“Trade Secrets” means trade secrets and confidential information and rights in any jurisdiction to limit the use or disclosure thereof by any Person.

“WARN Act” means the Worker Adjustment and Retraining Notification Act of 1988, as amended.

(b)        Each of the following terms is defined in the Section set forth opposite such term:

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