Exhibit 10.36
 
Execution Copy
 
COMMON STOCK PURCHASE AGREEMENT
 
This Common Stock Purchase Agreement (this “Agreement”) is made as of July 24,
2009, by and between NeoGenomics, Inc., a Nevada corporation (the “Company”),
and Abbott Laboratories, an Illinois corporation (“Abbott”).
 
WITNESSETH
 
WHEREAS, subject to the terms and conditions set forth in this Agreement, the
Company desires to issue and sell to Abbott, and Abbott desires to purchase from
the Company, 3,500,000 shares (the “Shares”) of common stock of the Company,
$0.001 par value per share (the “Common Stock”).
 
NOW, THEREFORE, in consideration of the mutual covenants contained in this
Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and Abbott agree as
follows:
 
Section 1.             Definitions
 
In addition to the terms defined elsewhere in this Agreement, for all purposes
of this Agreement, the following terms have the meanings indicated in this
Section 1:
 
 “Commission” means the Securities and Exchange Commission.
 
“Common Stock” shall have the meaning set forth in the Recital hereto.
 
 “Disclosure Schedules” means the disclosure schedules of the Company delivered
concurrently herewith.
 
“Environmental Laws” shall have the meaning set forth in Section 4.11 of this
Agreement.
 
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
 
“Indemnified Liabilities” shall have the meaning set forth in Section 7 of this
Agreement.
 
“Indemnitees” shall have the meaning set forth in Section 7 of this Agreement.
 
“Person” means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity
of any kind.
 
“Registration Rights Agreement” means the Registration Rights Agreement of even
date herewith between the Company and Abbott.
 
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“SEC” means the United States Securities and Exchange Commission.
 
“SEC Reports” shall have the meaning set forth in Section 4.6 hereto.
 
“Securities Act” means the Securities Act of 1933, as amended.
 
 “Subsidiary” means any corporation, partnership, limited liability company,
joint venture or other legal entity of which the Company owns, directly or
indirectly, 50% or more of the stock or other equity interests.
 
“Transaction Documents” means this Agreement and the Registration Rights
Agreement.
 
Section 2.             Sale and Purchase of Stock
 
Subject to the terms and conditions of this Agreement, Abbott agrees to purchase
and the Company agrees to sell and issue to Abbott the Shares for an aggregate
purchase price of $4,767,000 (the “Purchase Price”).
 
Section 3.             Closing
 
3.1.        Closing.  The purchase, sale and issuance of the Shares shall take
place at a closing (the “Closing”) to be held at the offices of K&L Gates, LLP,
200 S. Biscayne Blvd., Suite 3900, Miami, Florida, 33131 at 10:00 a.m., Eastern
time, on the date hereof, or at such other place, time and/or date as may be
jointly designated by the Company and Abbott (the “Closing Date”).
 
3.2.        Deliveries.
 
The Purchase Price for the Shares shall be paid by Abbott to the Company at the
Closing by wire transfer of immediately available funds to an account or
accounts to be designated by the Company.  Within three (3) business days
following the Closing, the Company will deliver to Abbott a certificate
registered in Abbott’s name representing the Shares.
 
Section 4.             Representations and Warranties of the Company
 
Except as set forth under the corresponding section of the Disclosure Schedules,
which Disclosure Schedules shall be deemed a part hereof, the Company hereby
makes the representations and warranties set forth below to Abbott:
 
4.1.        Organization and Qualification.  The Company and each of its
Subsidiaries is an entity duly incorporated or otherwise organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization (as applicable), with the requisite power and
authority to own and use its properties and assets and to carry on its business
as currently conducted.   Each of the Company and its Subsidiaries is duly
qualified to conduct business and is in good standing as a foreign corporation
or other entity in each jurisdiction in which the nature of the business
conducted or property owned by it makes such qualification necessary, except
where the failure to be so qualified or in good standing, as the case may be,
could not reasonably be expected to result in (i) a material adverse effect on
the legality, validity or enforceability of any Transaction Document or the
authority or ability of the Company to perform its obligations under any
Transaction Document, or (ii) a material adverse effect on the operations,
results of operations, assets, business, properties or financial condition of
the Company and its Subsidiaries, taken as a whole (any of (i) or (ii), a
“Material Adverse Effect”).  The Company has no Subsidiaries other than as set
forth on Schedule 4.1 of the Disclosure Schedule.
 
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4.2.        Authorization; Enforcement.  The Company has the requisite corporate
power and authority to enter into and to consummate the transactions
contemplated by each of the Transaction Documents and otherwise to carry out its
obligations thereunder.  The execution and delivery of each of the Transaction
Documents by the Company and the consummation by it of the transactions
contemplated thereby have been duly authorized by all necessary action on the
part of the Company.  Each Transaction Document has been (or upon delivery will
have been) duly executed by the Company and, when delivered in accordance with
the terms hereof, will constitute the valid and binding obligation of the
Company enforceable against the Company in accordance with its terms except (i)
as limited by general equitable principles and applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as limited by laws
relating to the availability of specific performance, injunctive relief or other
equitable remedies and (iii) insofar as indemnification and contribution
provisions may be limited by applicable law.
 
4.3.        Capitalization.  As of July 16, 2009, the authorized capital stock
of the Company consists of (i) 100,000,000 shares of Common Stock, of which
33,077,424 shares were issued and outstanding and (ii) 10,000,000 shares of
Preferred Stock, $0.001 par value, of which no shares were issued and
outstanding.  All such outstanding shares have been, or upon issuance will be,
validly issued and are fully paid and nonassessable.  Except as disclosed on
Schedule 4.3 of the Disclosure Schedule, (i) no shares of the Company’s capital
stock are subject to preemptive rights or any other similar rights or any liens
or encumbrances suffered or permitted by the Company, (ii) there are no
outstanding debt securities, (iii) there are no outstanding options, warrants,
scrip, rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into, any shares of capital
stock of the Company or any of its Subsidiaries, or contracts, commitments,
understandings or arrangements by which the Company or any of its Subsidiaries
is or may become bound to issue additional shares of capital stock of the
Company or any of its Subsidiaries or options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, any shares of capital stock of the
Company or any of its Subsidiaries, (iv) there are no agreements or arrangements
under which the Company or any of its Subsidiaries is obligated to register the
sale of any of their securities under the Securities Act (except the
Registration Rights Agreement, the Registration Rights Agreement dated November
5, 2008 between the Company and Fusion Capital Fund II, LLC, the Amended and
Restated Registration Rights Agreement dated March 23, 2005 among the Company,
Aspen Select Healthcare, LP, John Elliot, Steven Jones, Larry Kunert and Michael
T. Dent, M.D., and the Registration Rights Agreement dated March 30, 2006 among
the Company, Aspen Select Healthcare, LP and Steven C. Jones), (v) there are no
outstanding securities or instruments of the Company or any of its Subsidiaries
which contain any redemption or similar provisions, and there are no contracts,
commitments, understandings or arrangements by which the Company or any of its
Subsidiaries is or may become bound to redeem a security of the Company or any
of its Subsidiaries, (vi) there are no securities or instruments containing
anti-dilution or similar provisions that will be triggered by the issuance of
the Securities as described in this Agreement and (vii) the Company does not
have any stock appreciation rights or "phantom stock" plans or agreements or any
similar plan or agreement.  The Company has furnished or otherwise made
available to Abbott true and correct copies of the Company's articles of
incorporation, as amended and as in effect on the date hereof, and the Company's
by-laws, as amended and as in effect on the date hereof, and copies of any
documents containing the material rights of the holders of securities
convertible into or exercisable for Common Stock (or forms of such
documents).  Upon issuance and payment therefor in accordance with the terms and
conditions of this Agreement, the Shares shall be validly issued, fully paid and
nonassessable and free from all taxes, liens and charges with respect to the
issue thereof.
 
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4.4.        No Conflicts.  The execution, delivery and performance of the
Transaction Documents by the Company and the consummation by the Company of the
transactions contemplated thereby do not and will not (i) conflict with or
violate any material provision of the Company’s or any Subsidiary’s certificate
or articles of incorporation, bylaws or other organizational or charter
documents, (ii) conflict with, or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of any
agreement, indenture or instrument to which the Company or any of its
Subsidiaries is a party, or (iii) conflict with or result in a violation of any
law, rule, regulation, order, judgment, injunction, decree or other restriction
of any court or governmental authority to which the Company or a Subsidiary is
subject, or by which any property or asset of the Company or a Subsidiary is
bound or affected, except in the case of clause (ii) or (iii), such as could not
reasonably be expected to result in a Material Adverse Effect.
 
4.5.        Brokers’ Fees.  The Company has no liability or obligation to pay
any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement.
 
4.6.        SEC Reports.  The Company has made available to Abbott, including
through the SEC EDGAR system, complete and accurate copies of each report and
registration statement filed by the Company with the SEC between January 1, 2007
and the date of this Agreement (the “SEC Reports”).  At the time it was filed
with the SEC (or, if amended or superseded by a filing prior to the date of this
Agreement, then on the date of such filing) each of the SEC Reports complied in
all material respects with the applicable requirements of the Exchange Act or
the Securities Act, as applicable.
 
4.7.        No Material Changes.  Since June 30, 2009, except as specifically
disclosed in the SEC Reports, there has been no event, occurrence or development
that has had or that would reasonably be expected to result in a Material
Adverse Effect, except as has been reasonably cured by the Company.
 
4.8.        Litigation.  Except as disclosed on Schedule 4.8 of the Disclosure
Schedule, there is no action, suit or proceeding pending or, to the knowledge of
the Company, threatened against or affecting the Company, any Subsidiary or any
of their respective properties before or by any court, arbitrator, governmental
or administrative agency or regulatory authority which (i) adversely affects or
challenges the legality, validity or enforceability of any of the Transaction
Documents or the Shares or (ii) could reasonably be expected to result in a
Material Adverse Effect.  
 
 
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4.9        Tax Status.  The Company and each of its Subsidiaries has made or
filed all federal and state income and all other material tax returns, reports
and declarations required by any jurisdiction to which it is subject (unless and
only to the extent that the Company and each of its Subsidiaries has set aside
on its books provisions reasonably adequate for the payment of all unpaid and
unreported taxes) and has paid all taxes and other governmental assessments and
charges that are material in amount, shown or determined to be due on such
returns, reports and declarations, except those being contested in good faith
and has set aside on its books provision reasonably adequate for the payment of
all taxes for periods subsequent to the periods to which such returns, reports
or declarations apply.  There are no unpaid taxes in any material amount claimed
to be due by the taxing authority of any jurisdiction, and the officers of the
Company know of no basis for any such claim.
 
4.10.      Intellectual Property Rights. The Company and its Subsidiaries own or
possess adequate rights or licenses to use all material trademarks, trade names,
service marks, service mark registrations, service names, patents, patent
rights, copyrights, inventions, licenses, approvals, governmental
authorizations, trade secrets and other similar rights necessary to conduct
their respective businesses as now conducted.  None of the Company's material
trademarks, trade names, service marks, service mark registrations, service
names, patents, patent rights, copyrights, inventions, licenses, approvals,
government authorizations, trade secrets or other intellectual property rights
have expired or terminated, or, by the terms and conditions thereof, will expire
or terminate within two (2) years from the date of this Agreement. The Company
and its Subsidiaries do not have any knowledge of any infringement by the
Company or its Subsidiaries of any material trademark, trade name rights,
patents, patent rights, copyrights, inventions, licenses, service names, service
marks, service mark registrations, trade secret or other similar rights of
others, or of any such development of similar or identical trade secrets or
technical information by others and, except as set forth on Schedule 4.10 of the
Disclosure Schedule or in the SEC Reports, there is no claim, action or
proceeding being made or brought against, or to the Company's knowledge, being
threatened against, the Company or its Subsidiaries regarding trademark, trade
name, patents, patent rights, invention, copyright, license, service names,
service marks, service mark registrations, trade secret or other similar rights,
which could reasonably be expected to have a Material Adverse Effect.

4.11.      Environmental Laws. The Company and its Subsidiaries (i) are in
compliance with any and all applicable foreign, federal, state and local laws
and regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants (“Environmental Laws”), (ii) have received all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where, in each of the
three foregoing clauses, the failure to so comply could not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
 
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4.12.      Title. The Company and its Subsidiaries have good and marketable
title in fee simple to all real property and good and marketable title to all
personal property owned by them which is material to the business of the Company
and its Subsidiaries, in each case free and clear of all liens, encumbrances and
defects except such as are described in Schedule 4.12 of the Disclosure Schedule
or liens on equipment securing purchase money-indebtedness of the Company or
such as do not materially affect the value of such property and do not interfere
with the use made and proposed to be made of such property by the Company and
any of its Subsidiaries. Any real property and facilities held under lease by
the Company and any of its Subsidiaries are held by them under valid, subsisting
and enforceable leases with such exceptions as are not material and do not
interfere with the use made and proposed to be made of such property and
buildings by the Company and its Subsidiaries.

4.13.      Insurance. The Company and each of its Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as management of the Company believes to be prudent and
customary in the businesses in which the Company and its Subsidiaries are
engaged. Neither the Company nor any such Subsidiary has been refused any
insurance coverage sought or applied for and neither the Company nor any such
Subsidiary has any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not materially and adversely affect the condition,
financial or otherwise, or the earnings, business or operations of the Company
and its Subsidiaries, taken as a whole.

4.14.      Regulatory Permits. The Company and its Subsidiaries possess all
material certificates, authorizations and permits issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct their
respective businesses, and neither the Company nor any such Subsidiary has
received any notice of proceedings relating to the revocation or modification of
any such certificate, authorization or permit.

4.15       Foreign Corrupt Practices. Neither the Company, nor any of its
Subsidiaries, nor any director, officer, agent, employee or other person acting
on behalf of the Company or any of its Subsidiaries has, in the course of its
actions for, or on behalf of, the Company, used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expenses relating
to political activity; made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate funds;
violated or is in violation of any provision of the U.S. Foreign Corrupt
Practices Act of 1977, as amended; or made any unlawful bribe, rebate, payoff,
influence payment, kickback or other unlawful payment to any foreign or domestic
government official or employee.

4.16.      Transactions With Affiliates. Except as set forth on Schedule 4.16 of
the Disclosure Schedule and other than the grant or exercise of stock options
disclosed on Schedule 4.3 of the Disclosure Schedule, none of the officers,
directors, or employees of the Company is presently a party to any transaction
with the Company or any of its Subsidiaries (other than for services as
employees, officers and directors), including any contract, agreement or other
arrangement providing for the furnishing of services to or by, providing for
rental of real or personal property to or from, or otherwise requiring payments
to or from any officer, director or such employee or, to the knowledge of the
Company, any corporation, partnership, trust or other entity in which any
officer, director, or any such employee has an interest or is an officer,
director, trustee or partner.
 
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4.17.      Compliance with Laws. The Company and each Subsidiary are in
compliance with all laws applicable to their respective businesses, operations
or assets except where the failure to be in compliance could not, individually
or in the aggregate, reasonably be expected to result in a Material Adverse
Effect.  Neither the Company nor any Subsidiary is in default under or violation
of any applicable law, and neither has received any notice of or been charged
with the violation of any laws, which default or violation could, individually
or in the aggregate, reasonably be expected to result in a Material Adverse
Effect.  To the knowledge of the Company, neither the Company nor any Subsidiary
is under investigation with respect to the violation of any laws, other than
those the outcome of which, individually or in the aggregate, would not
reasonably be expected to result in a Material Adverse Effect.

Section 5.             Representations and Warranties of Abbott
 
Abbott hereby represents and warrants to the Company as follows:
 
5.1.        Authorization; Enforcement.  Abbott has the requisite corporate
power and authority to enter into and to consummate the transactions
contemplated by each of the Transaction Documents and otherwise to carry out its
obligations thereunder.  The execution and delivery of each of the Transaction
Documents by Abbott and the consummation by it of the transactions contemplated
thereby have been duly authorized by all necessary action on the part of
Abbott.  Each Transaction Document has been (or upon delivery will have been)
duly executed by Abbott and, when delivered in accordance with the terms hereof,
will constitute the valid and binding obligation of Abbott enforceable against
Abbott in accordance with its terms except (i) as limited by general equitable
principles and applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors’ rights
generally, (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable law.
 
5.2.        No Registration.  Abbott understands that the Shares are being
offered and sold to it in reliance on specific exemptions from the registration
requirements of United States federal and state securities laws and that the
Company is relying in part upon the truth and accuracy of, and Abbott's
compliance with, the representations, warranties, agreements, acknowledgments
and understandings of Abbott set forth herein in order to determine the
availability of such exemptions and the eligibility of Abbott to acquire the
Shares.
 
5.3.        Investment Intent.  Abbott is acquiring the Shares for investment
for its own account, not as a nominee or agent, and not with the view to, or for
resale in connection with, any distribution thereof, and Abbott has no present
intention of selling, granting any participation in, or otherwise distributing
the same.  Abbott further represents that it does not have any contract,
undertaking, agreement or arrangement with any person or entity to sell,
transfer or grant participation to such person or entity or to any third person
or entity with respect to any of the Shares.
 
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5.4.        Investment Experience.  Abbott has sufficient experience in
evaluating and investing in private placement transactions of securities in
companies similar to the Company and acknowledges that Abbott can protect its
own interests.  Abbott has such knowledge and experience in financial and
business matters so that Abbott is capable of evaluating the merits and risks of
its investment in the Company.
 
5.5.        Speculative Nature of Investment.  Abbott can bear the economic risk
of its investment and is able, without impairing its financial condition, to
hold the Shares for an indefinite period of time and to suffer a complete loss
of its investment.  Abbott acknowledges that the Shares must be held
indefinitely unless subsequently registered under the Securities Act or an
exemption from such registration is available.
 
5.6.        Access to Data.  Abbott has had an opportunity to review the SEC
Reports and to ask questions of, and receive answers from, the officers of the
Company concerning the Company’s business, management and financial affairs,
which questions were answered to its satisfaction.  Abbott believes that it has
received all the information it considers necessary or appropriate for deciding
whether to purchase the Shares.  Abbott acknowledges that it is relying solely
on its own counsel and not on any statements or representations of the Company
or its agents for legal advice with respect to this investment or the
transactions contemplated by the Transaction Documents.
 
5.7.        Accredited Investor.  Abbott is an “accredited investor” within the
meaning of Regulation D, Rule 501(a), promulgated by the SEC under the
Securities Act.
 
5.8.        No Governmental Review.  Abbott understands that no United States
federal or state agency or any other government or governmental agency has
passed on or made any recommendation or endorsement of the Shares or the
fairness or suitability of the investment in the Shares nor have such
authorities passed upon or endorsed the merits of the offering of the Shares.
 
5.9.        Brokers’ Fees.  Abbott has no liability or obligation to pay any
fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement.
 
5.10.      Tax Advisors.  Abbott has reviewed with its own tax advisors the U.S.
federal, state, local and foreign tax consequences of this investment and the
transactions contemplated by the Transaction Documents.  With respect to such
matters, Abbott relies solely on such advisors and not on any statements or
representations of the Company or any of its agents, written or oral.  Abbott
understands that it (and not the Company) shall be responsible for its own tax
liability that may arise as a result of this investment or the transactions
contemplated by the Transaction Documents.
 
5.11.      No Prior Short Selling.  At no time prior to the date of this
Agreement has any of Abbott, its agents, representatives or affiliates engaged
in or effected, in any manner whatsoever, directly or indirectly, any (i) "short
sale" (as such term is defined in Section 242.200 of Regulation SHO of the
Exchange Act) of the Common Stock or (ii) hedging transaction, which establishes
a net short position with respect to the Common Stock.
 
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5.12.      Legend.  Abbott understands and agrees that the certificates
evidencing the Shares or any other securities issued in respect of the Shares
upon any stock split, stock dividend, recapitalization, merger, consolidation or
similar event, shall bear the following legends (in addition to any legend
required under applicable state securities laws):
 
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE, AND MAY
NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL
REGISTERED UNDER SUCH ACT AND/OR APPLICABLE STATE SECURITIES LAWS, OR UNLESS THE
COMPANY HAS RECEIVED AN OPINION OF COUNSEL OR OTHER EVIDENCE, REASONABLY
SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT
REQUIRED.
 
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE DUE TO A LOCK-UP PERIOD UNTIL JANUARY 20, 2010.
 
Section 6.             Lock-Up
 
Abbott hereby agrees that Abbott shall not sell or otherwise transfer, make any
short sale of, grant any option for the purchase of, or enter into any hedging
or similar transaction with the same economic effect as a sale, of any of the
Shares on the Closing Date or during the one hundred eighty (180) day period
following the Closing Date.  The Company may impose stop-transfer instructions
and may stamp each certificate evidencing any of the Shares with the second
legend set forth in Section 5.12 hereof until the end of such one hundred eighty
(180) day period.
 
Section 7.             Indemnification
 
In consideration of Abbott’s execution and delivery of the Transaction Documents
and acquiring the Shares hereunder and in addition to all of the Company's other
obligations under the Transaction Documents, the Company shall defend, protect,
indemnify and hold harmless Abbott and all of its affiliates, shareholders,
officers, directors, employees and direct or indirect investors and any of the
foregoing person's agents or other representatives (including, without
limitation, those retained in connection with the transactions contemplated by
this Agreement) (collectively, the "Indemnitees") from and against any and all
actions, causes of action, suits, claims, losses, costs, penalties, fees,
liabilities and damages, and expenses in connection therewith (irrespective of
whether any such Indemnitee is a party to the action for which indemnification
hereunder is sought), and including reasonable attorneys' fees and disbursements
(the "Indemnified Liabilities"), incurred by any Indemnitee as a result of, or
arising out of, or relating to (a) any misrepresentation or breach of any
representation or warranty made by the Company in the Transaction Documents or
any other certificate, instrument or document contemplated hereby or thereby,
(b) any breach of any covenant, agreement or obligation of the Company contained
in the Transaction Documents or any other certificate, instrument or document
contemplated hereby or thereby, or (c) any cause of action, suit or claim
brought or made against such Indemnitee and arising out of or resulting from the
execution, delivery, performance or enforcement of the Transaction Documents or
any other certificate, instrument or document contemplated hereby or thereby,
other than with respect to Indemnified Liabilities which directly and primarily
result from the gross negligence or willful misconduct of the Indemnitee. To the
extent that the foregoing undertaking by the Company may be unenforceable for
any reason, the Company shall make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities which is permissible under
applicable law.
 
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Section 8.             Miscellaneous.
 
8.1.        Assignment.  This Agreement shall inure to the benefit of and be
binding upon and enforceable by the parties and their successors and permitted
assigns. However, neither party may assign or delegate any of its rights or
obligations under this Agreement without the prior written consent of the other
party.
 
8.2.        Severability.  If any part of this Agreement is declared invalid or
unenforceable by any court of competent jurisdiction, such declaration shall not
affect the remainder of the Agreement and the invalidated provision shall be
revised in a manner that will render such provision valid while preserving the
parties’ original intent to the maximum extent possible.
 
8.3.        Entire Agreement.  This Agreement and the Registration Rights
Agreement constitute the entire agreement between the parties relating to the
subject matter hereof and all previous agreements or arrangements between the
parties, written or oral, relating to the subject matter hereof are superseded.
 
8.4.        No Amendment.  No amendment, alteration or modification of any of
the provisions of this Agreement will be binding unless made in writing and
signed by each of the parties hereto.
 
8.5.        Compliance with Laws.  In performing this Agreement, each party
shall comply with all applicable laws, rules and regulations and shall not be
required to perform or omit to perform any act required or permitted under this
Agreement if such performance or omission would violate the provisions of any
such law, rule or regulation.
 
8.6.        Counterparts.  This Agreement may be executed in two counterparts,
each of which shall be deemed an original but both of which together shall
constitute one and the same instrument.
 
8.7.        Governing Law.  This Agreement shall be governed by and construed in
accordance with the laws of the State of Nevada, without regard to its conflicts
of laws principles.
 
8.8.        Notices.  All notices required or permitted under this Agreement
must be in writing and sent to the address or facsimile number identified below.
Notices must be given: (a) by personal delivery, with receipt acknowledged; (b)
by facsimile followed by hard copy delivered by the methods under (c) or (d);
(c) by prepaid certified or registered mail, return receipt requested; or (d) by
prepaid reputable overnight delivery service. Notices will be effective upon
receipt. Either party may change its notice address by providing the other party
written notice of such change. Notices shall be delivered as follows:
 
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If to Abbott:
Abbott Molecular Inc.

Attention: Senior Director, Business Development & Licensing
1300 East Touhy Avenue
Des Plaines, Illinois 60018-3315
Fax: (224) 361-7054

  
with a copy to:
Abbott Laboratories

Attention: VP, Associate Gen. Counsel, Corporate Transactions
100 Abbott Park Road
Dept. 322, Bldg. AP6A-2
Abbott Park, Illinois 60064-6049
Fax: (847) 938-1206

 
If to the Company:
NeoGenomics, Inc.

Attention: Robert Gasparini, President
12707 Commonwealth Drive, Suite 9
Fort Myers, Florida 33913
Fax: (239) 768-0711

  
copy to:
K&L Gates LLP

Attention: Clayton E. Parker, Esq.
200 South Biscayne Boulevard, Suite 3900
Miami, Florida 33131-2399
Fax: (305) 358-7095

8.9.        Expenses.  All costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
which shall have incurred the same, and the other party shall have no liability
thereto.
 
8.10.      Headings.  The titles of the Articles and Sections contained in this
Agreement are for convenience only and shall not be considered in construing
this Agreement.
 
8.11.      Parties in Interest.  Nothing in this Agreement is intended to
provide any rights or remedies to any Person other than the parties hereto.
 
8.12.      Waiver.  No failure on the part of either party hereto to exercise
any power, right, privilege or remedy under this Agreement, and no delay on the
part of either party hereto in exercising any power, right, privilege or remedy
under this Agreement, shall operate as a waiver thereof; and no single or
partial exercise of any such power, right, privilege or remedy shall preclude
any other or further exercise thereof or of any other power, right, privilege or
remedy.
 
8.13.      Survival.  The representations, warranties, covenants and agreements
made in this Agreement shall survive any investigation made by any party hereto
and the closing of the transactions contemplated hereby for one (1) year from
the Closing Date.
 
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8.14.      Interpretation of Agreement.
 
(a)           Each party hereto acknowledges that it has participated in the
drafting of this Agreement, and any applicable rule of construction to the
effect that ambiguities are to be resolved against the drafting party shall not
be applied in connection with the construction or interpretation of this
Agreement.
 
(b)           Whenever required by the context hereof, the singular number shall
include the plural, and vice versa; the masculine gender shall include the
feminine and neuter genders; and the neuter gender shall include the masculine
and feminine genders.
 
(c)           As used in this Agreement, the words “include” and “including,”
and variations thereof, shall not be deemed to be terms of limitation, and shall
be deemed to be followed by the words “without limitation.”
 
(d)           References herein to “Sections” are intended to refer to Sections
of this Agreement.
 
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IN WITNESS WHEREOF, the parties hereto have caused this Common Stock Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
 

Abbott Laboratories   NeoGenomics, Inc.                          
By:
/s/ Thomas C. Freyman
 
By:
/s/ Douglas VanOort
 
Name: Thomas C. Freyman
 
Name: Douglas VanOort
 
Title: Executive Vice President, Finance and Chief Financial Officer
 
Title: Chairman and Chief Executive Officer
 

 
 
 
 
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DISCLOSURE SCHEDULES

These Disclosure Schedules are furnished by NeoGenomics, Inc., a Nevada
corporation (the “Company”), pursuant to Section 4 of the Common Stock Purchase
Agreement dated as of July 24, 2009 (the “Agreement”) by and between the
Company, and Abbott Laboratories, an Illinois corporation (“Abbott”).  All
capitalized terms used but not defined herein shall have the meanings given to
them in the Agreement, unless otherwise provided.  The section numbers below
correspond to the section numbers of the representations and warranties in the
Agreement.

Nothing in these Disclosure Schedules is intended to broaden the scope of any
representation or warranty contained in the Agreement or to create any
covenant.  Inclusion of any item in these Disclosure Schedules (1) does not
represent a determination that such item is material or establish a standard of
materiality, (2) does not represent a determination that such item did not arise
in the ordinary course of business, (3) does not represent a determination that
the transactions contemplated by the Agreement require the consent of third
parties, and (4) shall not constitute, or be deemed to be, an admission to any
third party concerning such item.  These Disclosure Schedules include brief
descriptions or summaries of certain agreements and instruments, copies of which
are available upon reasonable request.  Such descriptions do not purport to be
comprehensive, and are qualified in their entirety by reference to the text of
the documents described.

Section 4.1–Organization and Qualification.
 
Subsidiaries
 
NeoGenomics Laboratories, Inc., a Florida corporation (the “Florida Subsidiary”)
 
NeoGenomics California Laboratories, LLC, a California limited liability company
 
Section 4.3–Capitalization.
 
Debt Securities
 
Credit Facility with CapitalSource Finance, LLC
 
The Company, the Florida Subsidiary and CapitalSource Finance LLC (as agent for
CapitalSource Bank) (the “Lender”) are parties to that certain Revolving Credit
and Security Agreement dated February 1, 2008, as amended (the “Credit
Agreement”), which allows the Florida Subsidiary to borrow up to $3,000,000
based on a formula which is tied to its eligible accounts receivable that are
aged less than 150 days.  As of June 30, 2009, the Florida Subsidiary had
approximately $1,858,000 outstanding on this credit facility.  Such credit
facility is secured by all of the Florida Subsidiary’s accounts receivable and
related collateral as more fully described in the Credit Agreement.
 
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Leases
 
The Company enters into capital and operating leases in the ordinary course of
business.  As of June 30, 2009, the Company had approximately $2.4 million of
outstanding balances under such leases.
 
Options and Warrants
 
As of July 16 2009, warrants to purchase 6,512,755 shares of common stock of the
Company, $0.001 par value per share (“Common Stock”), were outstanding.  
 
As of July 16, 2009, options to purchase 5,034,666 shares of Common Stock were
outstanding.
 
Fusion Capital
 
On November 5, 2008, the Company and Fusion Capital Fund II, LLC, an Illinois
limited liability company (“Fusion Capital”), entered into a Common Stock
Purchase Agreement (the “Purchase Agreement”), and a Registration Rights
Agreement.  Under the Purchase Agreement, Fusion Capital is obligated, under
certain conditions, to purchase shares of Common Stock from the Company in an
aggregate amount of $8.0 million from time to time over a thirty (30) month
period.  

Employee Stock Purchase Plan
Up to 1.0% of the Company’s Adjusted Diluted Shares Outstanding (as defined
below) may be sold pursuant to rights granted under the Company’s Employee Stock
Purchase Plan, dated October 31, 2006 (the “ESPP”).  For purposes of the ESPP,
“Adjusted Diluted Shares Outstanding” means on any given measurement date, the
basic common shares outstanding plus that number of shares that would be issued
if all convertible debt, convertible preferred equity securities and warrants
were assumed to be converted into Common Stock on the measurement date.
  
Amended and Restated Equity Incentive Plan

On March 3, 2009, the Company’s Board of Directors approved the Amended and
Restated Equity Incentive Plan (the “Amended Plan”), which amends and restates
the NeoGenomics, Inc. Equity Incentive Plan, originally effective as of October
14, 2003, and amended and restated effective as of October 31, 2006.  The
Amended Plan allows for the award of equity incentives, including stock options,
stock appreciation rights, restricted stock awards, stock bonus awards, deferred
stock awards, and other stock-based awards to certain employees, directors, or
officers of, or key advisers or consultants to, the Company or its
subsidiaries.   The maximum aggregate number of shares of Common Stock reserved
and available for issuance under the Amended Plan is 6,500,000 shares.
 
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 Registration Rights
 
The Company is a party to certain Investor Registration Rights Agreements (the
“Investor Registration Rights Agreement”) in the form filed as an exhibit to the
Company’s Registration Statement on Form SB-2 filed with the SEC on July 6,
2007.  The shares subject to such Investor Registration Rights Agreement were
registered pursuant to the Company’s Registration Statement on Form SB-2 on Form
S-1/A which was declared effective by the SEC on July 1, 2008.  The Company has
a continuing obligation to maintain the effectiveness of such registration
statement until all of the Registrable Securities (as defined in the Investor
Registration Rights Agreement) have been sold; provided, however, that in no
event will the Company be required to maintain the effectiveness of such
registration statement for longer than two years from the date of the Investor
Registration Rights Agreement.
The Company issued Warrants dated August 16, 2007 to each of 1837 Partners,
Ltd., 1837 Partners QP, LP, 1837 Partners, LP, A. Scott Logan Revocable Living
Trust, u/t/d 12/15/98, Mark Egan Rollover IRA, William J. Robison, Leonard
Samuels, Leviticus Partners, LP, Lewis Opportunity Fund, LP, LAM Opportunity
Fund, Ltd, Mosaic Partners Fund, Mosaic Partners Fund (US), LP, James R. Rehak
and Joann M. Rehak, Ridgecrest Ltd., Ridgecrest Partners QP, LP and Ridgecrest,
LP to purchase an aggregate of 533,334 shares of the Company’s Common Stock (the
“August Warrants”).  The exercise price of the August Warrants is $1.50 per
share.  Each of the August Warrants include the following provisions:
“Piggy-Back Registration.  Subject to the terms and conditions of this Warrant,
the Company shall notify the holder of Registrable Securities (as defined below)
in writing at least ten (10) days prior to the filing of any registration
statement under the Securities Act for purposes of a public offering of
securities of the Company (including, but not limited to, registration
statements relating to secondary offerings of securities of the Company, but
excluding any registration statement relating to any employee benefit plan or
with respect to any corporate reorganization or other transaction under Rule 145
of the Securities Act ) and will afford each such holder an opportunity to
include in such registration statement all or part of such Registrable
Securities held by such holder.  Each holder of Registrable Securities desiring
to include in any such registration statement, all or part of the Registrable
Securities held by it shall, within ten (10) days after the above-described
notice from the Company, so notify the Company in writing.  Such notice shall
state the intended method of disposition of the Registrable Securities held by
such holder.  In the event the Company determines in its sole discretion, that
market factors require a limitation of the number of securities to be included
in such registration statement (including the Registrable Securities), then the
Company shall so advise the Warrant Holder and the number of shares that may be
included in such registration statement shall be allocated among holders of
warrants on a pro rata basis (including the Registrable Securities).  If a
holder decides not to include all of its Registrable Securities in the
registration statement thereafter filed by the Company or any Registrable
Securities were excluded by the Company pursuant to the immediately preceding
sentence, such holder shall nevertheless continue to have the right to include
any Registrable Securities in any subsequent registration statement or
registration statements as may be filed by the Company with respect to offerings
of its securities, all upon the terms and conditions set forth
herein.  “Registrable Securities” means the Shares of Common Stock issuable to
the Warrant Holder pursuant to the terms of this Warrant.
 
 
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Demand Registration.  In the event that the Company has not offered to the
holder of the Warrant an opportunity to include its Registrable Securities in a
registration statement pursuant to the terms of Section 10.1 herein with twelve
(12) months from the issuance date of the Warrant, the holder of the Warrant
shall have the ability, on a one-time basis, to demand that the Company file a
registration statement for the resale of the Registrable Securities.  Subject to
the terms and conditions of this Warrant, the Company shall prepare and file, no
later than ninety (90) days from the date of such demand by the holder of the
Warrant with the United States Securities and Exchange Commission (the “SEC”), a
registration statement under the Securities Act for the resale of the
Registrable Securities.  The Company shall use its best efforts to cause the
registration statement to remain effective until all of the Registrable
Securities have been sold; provided, however, that in no event will the Company
be required to maintain the effectiveness of the registration statement for
longer than two (2) years from the date of its being declared effective by the
SEC.”
Following the transfer of certain of the August Warrants, the Company issued
Re-Issue Warrants (the “Transfer Warrants”) to each of 1837 Partners QP, LP,
1837 Partners, LP, 1837 Partners Ltd., Blair R. Haarlow Trust and Frances E.
Tuite, IRA to purchase an aggregate of 50,000 shares of the Company’s Common
Stock.  The terms of the Transfer Warrants are substantially similar to the
August Warrants.
On August, 16, 2007, Aspen Select Healthcare, LP (“Aspen”) issued warrants to
purchase an aggregate of 400,000 shares of Common Stock owned by Aspen to each
of 1837 Partners, Ltd., 1837 Partners QP, LP, 1837 Partners, LP, LAM Opportunity
Fund, LP, Lewis Opportunity Fund, LP and Mark G. Egan (the “Aspen
Warrants”).  The exercise price of the Aspen Warrants is $1.50 per share.  The
Company is a party to the Aspen Warrants solely with respect to Section 10
thereof, which reads as follows:
“Piggy-Back Registration.  Subject to the terms and conditions of this Warrant,
NeoGenomics shall notify the holder of Registrable Securities (as defined below)
in writing at least ten (10) days prior to the filing of any registration
statement under the Securities Act for purposes of a public offering of
securities of NeoGenomics (including, but not limited to, registration
statements relating to secondary offerings of securities of NeoGenomics, but
excluding any registration statement relating to any employee benefit plan or
with respect to any corporate reorganization or other transaction under Rule 145
of the Securities Act ) and will afford each such holder an opportunity to
include in such registration statement all or part of such Registrable
Securities held by such holder.  Each holder of Registrable Securities desiring
to include in any such registration statement, all of part of the Registrable
Securities held by it shall, within ten (10) days after the above-described
notice from NeoGenomics, so notify NeoGenomics in writing.  Such notice shall
state the intended method of disposition of the Registrable Securities held by
such holder.  In the event NeoGenomics determines, in its sole discretion, that
market factors require a limitation of the number of securities to be included
in such registration statement (including the Registrable Securities), then
NeoGenomics shall so advise the Warrant Holder and the number of shares that may
be included in such registration statement shall be allocated among holders of
warrants on a pro rata basis (including the Registrable Securities).  If a
holder decides not to include all of its Registrable Securities in the
registration statement thereafter filed by NeoGenomics or any Registrable
Securities were excluded by NeoGenomics pursuant to the immediately preceding
sentence, such holder shall nevertheless continue to have the right to include
any Registrable Securities in any subsequent registration statement or
registration statements as may be filed by NeoGenomics with respect to offerings
of its securities, all upon the terms and conditions set forth
herein.  “Registrable Securities” means the Shares of Common Stock issuable to
the Warrant Holder pursuant to the terms of this Warrant.”
 
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           On March 16, 2009, the Company and the Douglas M. VanOort Living
Trust entered into a Subscription Agreement (the “VanOort Subscription
Agreement”) pursuant to which the Douglas M. VanOort Living Trust purchased
625,000 shares of the Company’s Common Stock at a purchase price of $0.80 per
share (the “VanOort Subscription Shares”).   The VanOort Subscription Agreement
provides for certain piggyback registration rights with respect to the VanOort
Subscription Shares.

On January 21, 2006, the Company entered into a subscription agreement (the
“Subscription”) with SKL Limited Family Partnership, LP (“SKL”), whereby SKL
purchased 2,000,000 shares (the “SKL Subscription Shares”) of Common Stock at a
purchase price of $0.20 per share for $400,000. Under the terms of the
Subscription, the SKL Subscription Shares are restricted for a period of 24
months and then carry piggyback registration rights to the extent that
exemptions under Rule 144 are not available to SKL.

Section 4.8–Litigation.
 
FCCI Litigation

A civil lawsuit is currently pending between the Company and its liability
insurer, FCCI Commercial Insurance Company ("FCCI") in the 20th Judicial Circuit
Court in and for Lee County, Florida (Case No. 07-CA-017150).  FCCI filed the
suit on December 12, 2007 in response to the Company's demands for insurance
benefits with respect to an underlying action involving US Labs (a settlement
agreement has since been reached in the underlying action, and thus that case
has now concluded).  Specifically, the Company maintains that the underlying
plaintiff's allegations triggered the subject insurance policy's personal and
advertising injury coverage.  In the lawsuit, FCCI seeks a court judgment that
it owes no obligation to the Company regarding the underlying action (FCCI does
not seek monetary damages).  The Company has counterclaimed against FCCI for
breach of the subject insurance policy, and seeks recovery of defense costs
incurred in the underlying matter, amounts paid in settlement thereof, and fees
and expenses incurred in litigating with FCCI.  The court previously denied a
motion by FCCI for judgment on the pleadings, rejecting FCCI's contention that
the underlying complaint did not trigger the insurer's duty to defend as a
matter of law.  A motion for summary judgment is currently pending. 

 

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Threatened Trademark Infringement Litigation
 
In March 2003, the Company received a certified letter from the law firm of
McLeod, Moyne & Reilly, P.C., dated March 18, 2003, which stated that they
represented NeoGen Corporation, a Lansing, Michigan manufacturer of products
dedicated to food and animal safety, on intellectual property matters.  This
letter claimed that the Company’s use of the name NeoGenomics, Inc. infringed
upon their client’s rights in its trademark name, “Neogen” and demanded that the
Company cease using the name, “NeoGenomics”.  The Company did not comply with
the demands of this letter.
 
In February 2008, the Company received a letter from the law firm of Frasier,
Trebilcock, Davis & Dunlap, P.C., dated February 18, 2008, which stated that
they represented NeoGen Corporation.  Similar to the 2003 letter, this letter
claimed that the Company’s use of the name NeoGenomics, Inc. infringed upon
their client’s rights in its trademark name, “Neogen” and demanded that the
Company cease using the name, “NeoGenomics”.  The Company was awarded a
registered trademark for the name “NeoGenomics” in 2007 and NeoGen Corporation
undertook no actions to oppose such award.  As of the date hereof, the Company
has not heard anything further on this matter from NeoGen Corporation.
 
Section 4.10–Intellectual Property Rights.
 
See the description of threatened trademark infringement litigation in Section
4.8 of these Disclosure Schedules.
 
Section 4.12–Title.
 
See the description of the Credit Agreement set forth under Section 4.3 of these
Disclosure Schedules.
 
Section 4.16–Transactions with Affiliates.
 
On March 11, 2005, the Company entered into an agreement with Healthcare
Computer Systems and Support, LLC d/b/a Bridge Labs (“HCSS”) and eTelenext, Inc.
(“eTelenext”) to enable the Company to use eTelenext’s Accessioning Application,
AP Anywhere Application and CMQ Application.  HCSS is a holding company created
to build a small laboratory network for the 50 small commercial genetics
laboratories in the United States.  HCSS is owned 66.7% by Dr. Michael T. Dent,
a member of the Company’s Board of Directors.  Under the terms of the agreement,
the Company paid $22,500 over three months to customize this software and will
pay an annual membership fee of $6,000 per year and monthly transaction fees of
between $2.50 - $10.00 per completed test, depending on the volume of tests
performed.  The eTelenext system is an elaborate laboratory information system
(LIS) that is in use at many larger laboratories.  

On June 17, 2009, the Company entered into a revised license agreement with HCSS
and eTelenext to migrate the Company’s existing AP Anywhere application to a new
APvX application with substantially improved features.  Under the terms of this
new licensing agreement, the Company will pay HCSS and eTelenext approximately
$75,000 to migrate the existing application to the new APvX platform and then
monthly licensing fees that start at $8,000/month and increase to $12,000/month
over the five year term of the license.
 
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The Company, Michael Dent, Aspen, John Elliot, Steven Jones and Larry Kuhnert
are parties to the Amended and Restated Shareholders’ Agreement dated March 21,
2005, as amended (the “Shareholders Agreement”), that, among other provisions,
gives Aspen the right to elect three out of the eight directors authorized for
the Company’s Board of Directors, and to nominate one mutually acceptable
independent director.  In addition, Michael Dent and the executive management of
the Company has the right to elect one director for the Company’s Board of
Directors, until the earlier of (i) Dr. Dent’s resignation as an officer or
director of the Company  or (ii) the sale by Dr. Dent of 50% or more of the
number of shares of Common Stock that he held on March 21, 2005.

On January 18, 2006, the Company and Aspen entered into a letter agreement that,
among other things, (i) granted Aspen five year warrants to purchase 150,000
shares of Common Stock at an exercise price of $0.26 per share in exchange for
the waiver of certain preemptive rights, (ii) granted Aspen the right (which was
subsequently exercised) to purchase 1,000,000 shares of Common Stock for $0.20
per share and to receive a five year warrant to purchase 450,000 shares of
Common Stock at an exercise price of $0.26 per share, (iii) granted Aspen a five
year warrant to purchase up to 450,000 shares of Common Stock with an exercise
price of $0.26 per share, and  (iv) provided that existing warrants held by
Aspen to purchase 2,500,000 shares of common stock were fully vested and the
exercise price per share was reset to $0.31 per share.

During the period from January 18 through January 21, 2006, the Company entered
into agreements with four shareholders who are parties to the Shareholders
Agreement, to exchange five year warrants to purchase an aggregate of 150,000
shares of stock at a purchase price of $0.26 per share for such stockholders’
waiver of their pre-emptive rights under the Shareholders Agreement.  Such
pre-emptive rights subsequently expired on March 23, 2007.

On May 14, 2007, the Board of Directors approved the grant of 100,000 warrants
to each non-employee director.  There has not been any definitive agreement as
to the terms but 25% will vest immediately and the remaining warrants will vest
an additional 25% over each of the next three years.  The Board of Directors
also approved an increase in its per board meeting fees for non-employee
director’s from $600 to $1,000 for each meeting.

In consideration for its services and assistance with the sale in a private
placement of 2,666,667 shares of Common Stock during the period from May 31,
2007 through June 6, 2007, Aspen Capital Advisors, LLC received: (i) warrants to
purchase 250,000 shares of Common Stock, and (ii) a cash fee equal to
$52,375.  The warrants have a five-year term, an exercise price equal to $1.50
per share, cashless exercise provisions, customary anti-dilution provisions and
the same other terms, conditions, rights and preferences as those shares sold to
the investors in the private placement.  Mr. Steven Jones, a director of the
Company, is a Managing Director of Aspen Capital Advisors.
 
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On September 30, 2008, the Company entered into a master lease agreement (the
“Master Lease”) with Gulf Pointe Capital, LLC (“Gulf Pointe”) after it was
determined that the Company’s other lessors would not lease finance certain used
and other equipment and software.  Such Master Leases allows the Company to
obtain lease capital from time to time up to an aggregate of $130,000 of lease
financing.  Three members of the Company’s Board of Directors: Steven Jones,
Peter Petersen and Marvin Jaffe, are affiliated with Gulf Pointe and recused
themselves from both sides of all negotiations concerning this transaction.  In
consideration for entering into the Master Lease with Gulf Pointe, the Company
issued 32,475 warrants to Gulf Pointe with an exercise price of $1.08 and a five
year term.  Such warrants vest 25% on issuance and then on a pro rata basis as
amounts are drawn under the Master Lease.   On February 9, 2009, the Company
amended its Master Lease with GulfPointe to increase the maximum size of the
facility to $250,000.  As part of this amendment, the Company terminated the
original warrant agreement, dated September 30, 2008, and replaced it with a new
warrant to purchase 83,333 shares of Common Stock.  Such new warrants have a
five-year term, an exercise price of $0.75 per share and the same vesting
schedule as the original warrant.   
 
 Steven C. Jones, a director of the Company, performs paid consulting work for
the Company in connection with his duties as the Company’s Acting Principal
Financial Officer.
 
George O’Leary, a director of the Company, performs paid consulting work for the
Company from time to time.
 
On March 16, 2009, the Company and the Douglas M. VanOort Living Trust entered
into the VanOort Subscription Agreement pursuant to which the Douglas M. VanOort
Living Trust purchased the VanOort Subscription Shares.  Douglas M. VanOort is
Chairman of the Company Board of Directors and Executive Chairman and interim
Chief Executive Officer of the Company.  The VanOort Subscription Shares are
subject to a two-year lock-up that restricts the transfer of the VanOort
Subscription Shares; provided, however, that such lock-up shall expire in the
event that the Company terminates Mr. VanOort’s employment.  The VanOort
Subscription Agreement also provides for certain piggyback registration rights
with respect to the VanOort Subscription Shares.

On March 16, 2009, the Company and Mr. VanOort entered into a Warrant Agreement
(the “Warrant Agreement”) pursuant to which Mr. VanOort, subject to the vesting
schedule described below, may purchase up to 625,000 shares of Common Stock at
an exercise price of $1.05 per share (the “Warrant Shares”).  The Warrant Shares
vest based on the following vesting schedule:  

 
(i)
20% of the Warrant Shares vest immediately,
 
(ii)
20% of the Warrant Shares will be deemed to be vested on the first day on which
the closing price per share of the Common Stock has reached or exceeded $3.00
per share for 20 consecutive trading days,
 
(iii)
20% of the Warrant Shares will be deemed to be vested on the first day on which
the closing price per share of the Common Stock has reached or exceeded $4.00
per share for 20 consecutive trading days,
 
(iv)
20% of the Warrant Shares will be deemed to be vested on the first day on which
the closing price per share of the Common Stock has reached or exceeded $5.00
per share for 20 consecutive trading days and
 
(v)
20% of the Warrant Shares will be deemed to be vested on the first day on which
the closing price per share of the Common Stock has reached or exceeded $6.00
per share for 20 consecutive trading days.  

 
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In the event of a change of control of the Company in which the consideration
payable to each common stockholder of the Company in connection with such change
of control has a deemed value of at least $4.00 per share, then the Warrant
Shares shall immediately vest in full.  In the event that Mr. VanOort resigns
his employment with the Company or the Company terminates Mr. VanOort’s
employment for “cause” at any time prior to the time when all Warrant Shares
have vested, then the rights under the Warrant Agreement with respect to the
unvested portion of the Warrant Shares as of the date of termination will
immediately terminate.

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