Exhibit 10.1  





LOAN AGREEMENT 



         
        This
Loan Agreement (“Agreement”) is made and entered into as of December 19, 2007,
by and between WACHOVIA BANK, NATIONAL ASSOCIATION (“Bank”) and MTS
MEDICATION TECHNOLOGIES, INC., a Delaware corporation (“Borrower”). 



         
        Borrower
requested Bank to provide Borrower with a reducing revolving line of credit facility in
the original principal amount of $14,000,000.00, with availability being permanently
reduced by in accordance with the terms of the Note (hereinafter defined), and Bank agreed
to provide the Loan provided that Bank and Borrower enter into this Agreement. 



         
        Relying
upon the representations, warranties, agreements, and covenants herein contained, Bank is
willing to make the Loan upon the terms and subject to the conditions hereinbefore and
hereinafter set forth: 



	 	1. 	Representations
and Warranties: Borrower represents and warrants that:  





	 	a. 	Financial
Condition:   All financial statements and all other information heretofore
furnished to Bank are true and correct in all material respects, and fairly
reflect the financial condition of Borrower as of the dates thereof, subject,
in the case of unaudited financial statements, to year-end audit adjustments
and the absence of footnotes. The financial statements disclose all contingent
liabilities of each and every type and nature of Borrower. The financial
condition as stated in the most recent financial statements has not changed
materially or adversely since the date of such financial statements.  





	 	b. 	Capacity
and Standing:   The execution of this Agreement and any and all other Loan
Documents, as that term is defined in the Promissory Note dated as of even date
herewith from Borrower in favor of Bank in the stated principal amount of
$14,000,000.00 (the “Note”) evidencing the Loan when executed, shall
constitute the valid and binding obligations of Borrower. Borrower is a duly
organized and existing corporation under the laws of the State of Delaware, is
duly qualified and in good standing in every other state in which the nature of
its business shall require such qualification (other than any state in which
the failure to be so qualified could not reasonably be expected to have a
material adverse effect on Borrower), and is duly authorized to make and
perform its obligations under the Loan Documents.  





	 	c. 	Violation
of Other Agreements:   The execution of the Loan Documents and the performance by
Borrower of its obligations thereunder, do not and will not violate any
provision of law, or any agreement, indenture, note or other instrument binding
upon Borrower or give cause for the acceleration of any obligations of
Borrower.  














	 	d. 	Asset
Ownership:   Borrower has good title to all of the assets reflected on its
financial statements. All such assets are free and clear of mortgages, security
deeds, pledges, liens, charges, and all other encumbrances, except Permitted
Liens. “Permitted Liens” shall mean (a) security interests required
by the Loan Documents, (b) liens for taxes, assessments, and other governmental
charges or levies (other than liens imposed pursuant to the provisions of ERISA
(hereinafter defined) or any federal, state, or local statute, law, ordinance,
code, rule, regulation, order or decree relating to or imposing liability or
standards of conduct concerning any hazardous, toxic, or dangerous waste,
substance or material as now or at any time hereinafter in effect) not yet due
and payable or which are being appropriately contested in good faith or an
adequate reserve for the payment thereof is being maintained, (c) the claims of
materialmen, mechanics, carriers, warehousemen, processors, or landlords
arising out of the operation of law so long as the obligations secured thereby
are not past due or are being appropriately contested in good faith or an
adequate reserve for the payment thereof is being maintained, (d) liens
consisting of deposits or pledges made in the ordinary course of business in
connection with workers’ compensation, unemployment insurance, social
security and similar laws, (e) judgment and other similar non-tax liens arising
in connection with court proceedings but only if and for so long as (i) the
execution or enforcement of such liens is and continues to be effectively
stayed and bonded on appeal, (ii) the validity and for amount of the claims
secured thereby are being appropriately contested in good faith or an adequate
reserve for the payment thereof is being maintained, and (iii) such liens do
not in the aggregate exceed $100,000.00, and (f) liens securing indebtedness
incurred solely for the purpose of purchase money financing for the acquisition
of equipment; provided, that such lien does not secure more than the purchase
price of such equipment and does not encumber property other than the purchased
equipment.  





	 	e. 	Discharge
of Liens and Taxes:   Borrower has duly filed all tax returns required to be
filed by it and has paid and discharged all taxes and assessments payable which
have become due except to the extent that: (i) such items are being
appropriately contested in good faith and an adequate reserve for the payment
thereof is being maintained; and (ii) such items are not yet delinquent.  





	 	f. 	Regulation
U:   None of the proceeds of the Loan shall be used directly or indirectly for
the purpose of purchasing or carrying any stock in violation of any of the
provisions of Regulation U of the Board of Governors of the Federal Reserve
System.  





	 	g. 	ERISA:  
Each employee benefit plan, as defined in the Employee Retirement Income
Security Act of 1974 (“ERISA”), maintained by Borrower, if any,
meets, as of the date hereof, the minimum funding standards of Section 302 of
ERISA, all applicable material requirements of ERISA and of the Internal
Revenue Code of 1986, as amended, and no “Reportable Event” (as
defined by ERISA) has occurred with respect to any such plan.  





	 	2. 	Affirmative
Covenants:  Unless Bank shall otherwise consent in writing, Borrower covenants
and agrees that from the date hereof and until satisfaction in full of each and
every one of its obligations under the Loan Documents, that it shall:  





	 	a. 	Deposit
Relationship:   Establish and maintain its primary depository and cash management
deposit account with Bank.  





	 	b. 	Business
Continuity:   Conduct its business in substantially the same manner and in
substantially the same lines of business as such business is now and has
heretofore been carried on and conducted.  






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	 	c. 	Regulations
and Properties:   Materially comply with all applicable statutes, laws and
regulations, maintain its existence in good standing and maintain, preserve and
keep its properties and assets in good repair, working order and condition.  





	 	d. 	Access
to Books and Records:   After reasonable notice by Bank, allow Bank, or its
agents, during normal business hours, to have access to books, records and such
other documents as Bank shall reasonably require, and allow Bank to make copies
thereof at Bank’s expense.  





	 	e. 	Compliance
with Other Agreements: Comply with all covenants, terms and conditions
contained in the Loan Documents (subject to applicable cure periods).  





	 	3.  	Negative
Covenants:   Unless Bank shall otherwise consent in writing, Borrower covenants
and agrees that from the date hereof and until satisfaction in full of each and
every one of its obligations under the Loan Documents, that it shall not:  





	 	a. 	Fiscal
Year End:   Change its fiscal year end.  





	 	b. 	Encumbrances:  
Create, assume, or permit to exist any mortgage, security deed, deed of trust,
pledge, lien, charge or other encumbrance on any of its assets other than
Permitted Liens.  





	 	4. 	Financial
Covenants:   Unless Bank shall otherwise consent in writing, Borrower covenants
and agrees that from the date hereof until satisfaction in full of each and
every one of its obligations under the Loan Documents, it shall at all times
comply with the following:  





	 	a. 	Annual
Financial Statements:   Deliver to Bank annual audited financial statements
within 90 days after the close of each fiscal year, reflecting its operations
during such fiscal year, including, without limitation, a balance sheet, profit
and loss statement and statement of cash flows, with supporting schedules and
in reasonable detail, prepared in conformity with generally accepted accounting
principles, applied on a basis consistent with that of the preceding year. All
such statements shall be audited by an independent certified public accountant
reasonably acceptable to Bank. The opinion of such independent certified public
accountant shall not be acceptable to Bank if qualified due to any limitations
in scope imposed by Borrower or any other person or entity. Any other
qualification of the opinion by the accountant shall render the acceptability
of the financial statements subject to Bank’s approval. Said statements
shall also be accompanied by a copy of the accountant’s letter to the
management of Borrower if available at such time or, if not, such letter shall
be delivered to Bank promptly after receipt thereof.  





	 	b. 	Quarterly
Financial Statements:   Deliver to Bank financial statements within 45 days after
the close of each fiscal quarter, reflecting its operations during such fiscal
quarter, including, without limitation, a balance sheet, profit and loss
statement and statement of cash flows, with supporting schedules and in
reasonable detail, prepared substantially in conformity with generally accepted
accounting principles, applied on a basis consistent with that of the preceding
year, and subject to year-end audit adjustments and the absence of footnotes.
Together with said quarterly financial statements, Borrower shall deliver to
Bank an update statement as to any customer locations where any Collateral, as
that term is defined in the Security Agreement between Bank and Borrower dated
as of even date herewith (the “Security Agreement”), subject to the
terms and conditions of the Security Agreement is located.  






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	 	c. 	Debt
Service Coverage Ratio:   Maintain a Debt Service Coverage Ratio of not less than
2.25 to 1.0, measured at the end of each fiscal year. “Debt Service
Coverage Ratio” shall mean (a) the sum of earnings before interest, taxes,
depreciation and amortization divided by (b) the sum of current maturities of
long-term debt and capital lease obligations plus interest expenses.  





	 	d. 	Funded
Debt to EBITDA:   Maintain a Funded Debt to EBITDA Ratio of not more than 2.00 to
1.00. This covenant shall be calculated quarterly, on a rolling four quarters
basis beginning December 31, 2007. “Funded Debt to EBITDA Ratio” shall
mean the sum of all Funded Debt divided by the sum of earning before interest,
taxes, depreciation and amortization. “Funded Debt” shall mean, as
applied to any person or entity, the sum of all indebtedness for borrowed
money, (including, without limitation, capital lease and synthetic lease
obligations, subordinated debt (including debt subordinated to the Bank), and
unreimbursed drawing under letters of credit), or any other monetary obligation
evidenced by a note, bond, debenture or other agreement or similar instrument
of that person or entity.  





	 	e. 	Total
Liabilities to Tangible Net Worth:   Maintain a ratio of Total Liabilities to
Tangible Net Worth of not more that 2.90 to 1.00 from the date of closing to
March 30, 2009; beginning March 31, 2009 to March 30, 2010, said ratio shall
not exceed 2.50 to 1.00; and beginning March 31, 2010 and at all times
thereafter, said ratio shall not exceed 2.00 to 1.00. “Total Liabilities” shall
mean all liabilities of Borrower, including capitalized leases and all reserves
for deferred taxes and other deferred sums appearing on the liabilities side of
a balance sheet of Borrower, in accordance with generally accepted account
principals applied on a consistent basis. “Tangible Net Worth” shall
mean total assets minus Total Liabilities. For purposes of this computation,
the aggregate amount of any intangible assets of Borrower including without
limitation, goodwill, franchises, licenses, patents, trademarks, trade names
and brand names shall be subtracted from total assets. This covenant shall be
calculated quarterly beginning December 31, 2007.  





	 	5. 	Conditions
Precedent:   The obligations of Bank to make the Loan and advances pursuant to
the Note are subject to the following conditions precedent:  





	 	a.  	Resolution:  
Certified copies of resolutions of Borrowerauthorizing the execution,
delivery and performance of the Loan Documents.  





	 	b. 	Charter
Documents:   Receipt of a copy of the organizational documents of Borrower.  





	 	c. 	Additional
Documents:   Receipt by Bank of such additional supporting documents as Bank or
its counsel may reasonably request.  






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	 	d. 	Non-Default:  
Borrower shall be in compliance with the Loan Documents, and no event of
default as specified in the Loan Documents or any event which upon notice or
lapse of time or both would constitute such an event of default shall have
occurred and be continuing at the time of such borrowing.  





	 	6. 	Security:  
The obligations of Borrower pursuant to the Loan Documents are secured by the
assets described in the Security Agreement dated as of even date herewith.  





	 	7. 	Events
of Default: The occurrence of any Default (as defined in the Note or the
Security Agreement dated as of the date hereof between Borrower and Bank) shall
constitute an event of default hereunder.  





	 	 	Notwithstanding anything
contained herein or in any of the other Loan Documents to the contrary, Borrower shall be
entitled to a thirty day period from the date of written notice from Bank to Borrower to
cure any “Non-Monetary Default” as that term is defined provided that such
Non-Monetary Default is not the result of the intentional action or inaction or gross
negligence of Borrower (in which event no notice is required from Bank and no cure period
is applicable).  





	 	  	“Non-Monetary
Default” shall mean a failure by Borrower to duly keep, perform and observe, any
covenant, condition or agreement set forth in any of the Loan Documents other than an
obligation to pay a sum of money.  





	 	8. 	Remedies
Upon Default: In the event of the occurrence of any Events of Default, then
Bank may at any time thereafter, at its option, shall have all the remedies
afforded to it pursuant to the Note and all of the other Loan Documents.  





	 	9. 	Miscellaneous
Provisions:  





	 	a. 	Indirect
Means:   Any act which Borrower is prohibited from doing shall not be done
indirectly through a subsidiary or by any other indirect means.  





	 	b. 	Non-Impairment:  
If any one or more provisions contained in the Loan Documents shall be held
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained in the Loan Documents,
shall not in any way be affected or impaired thereby and the Loan Documents
shall otherwise remain in full force and effect.  





	 	c. 	Applicable
Law: The Loan Documents shall be construed in accordance with and governed by
the laws of the State of Florida.  





	 	d. 	Waiver:
Neither the failure nor any delay on the part of Bank in exercising any right,
power, or privilege granted pursuant to the Loan Documents, shall operate as a
waiver thereof, nor shall a single or partial exercise thereof preclude any
other or further exercise or the exercise of any other right, power or
privilege.  






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	 	e. 	Modification:  
No modification, amendment, or waiver of any provision of the Loan Documents
shall be effective unless in writing and signed by Bank, it being acknowledged
by the parties hereto that all terms, conditions and covenants therein and
herein contained are deemed to be material and relied upon by Bank.  





	 	f. 	Stamps
and Fees: Borrower shall pay all federal or state stamps or taxes, or other
fees and charges, if any, payable or determined to be payable by reason of the
execution, delivery or issuance of the Loan Documents; whether they be payable
upon execution or recurring from time to time, and Borrower agrees to indemnify
and hold Bank harmless against any and all liability in respect therefor.  





	 	g. 	Attorney’s
Fees: In connection with any litigation or arbitration pertaining to this
Agreement the prevailing party shall be entitled to recover from the
non-prevailing party all of the prevailing party’s reasonable fees and
costs, including without limitation, reasonable arbitration, paralegals’,
attorneys’ and experts’ fees and expenses actually incurred, whether
incurred without the commencement of a suit, in any suit, arbitration, or
administrative proceeding, or in any appellate or bankruptcy proceeding.  





	 	h. 	Interest:
Notwithstanding anything contained in the Loan Documents to the contrary, if
for any reason the effective rate of interest on any advances shall exceed the
maximum lawful rate of interest, the effective rate of interest shall be deemed
reduced to and shall be such maximum lawful rate, and any sums of interest
which have been collected in excess of such maximum lawful rate shall be
applied by Bank as a credit against the unpaid principal amount due thereunder.  





	 	i. 	Assignment:
This Agreement shall be binding upon the parties and their respective
successors and assigns however, nothing contained herein shall be construed as
allowing Borrower the right to assign its obligations under the Loan Documents.
Bank’s interest in the Loan Documents, the Loan, and its rights hereunder
are freely assignable, in whole or in part.  





	 	j. 	 Notices.
Any notices or other communications required or permitted to be given hereunder
must be given as set forth in the Note.  





        
        BORROWER
AND BANK HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR
IN CONNECTION WITH THIS AGREEMENT AND ANY AGREEMENT TO BE EXECUTED IN CONJUNCTION HEREWITH
OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN) OR
ACTION OF EITHER PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR BANK’S ACCEPTANCE
OF THIS AGREEMENT FROM Borrower. 




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        Borrower and Bank agree that they shall not have a remedy of
punitive or exemplary damages against the other and hereby waive any right or claim to punitive or exemplary damages they have
now or which may arise in the future. 



        
        IN
WITNESS WHEREOF, the parties have caused this Agreement to be duly executed all as of the
day and year first above written. 




			
	WACHOVIA BANK, NATIONAL ASSOCIATION 	 	 MTS MEDICATION TECHNOLOGIES, INC.,
	 	 	 A Delaware Corporation
	 	 	  
	By:  ____________________________________	 	By:  _____________________________________ 
	        Mark Dawson,

               As a Senior Vice President	 	        Michael P. Conroy,
        
        As its Chief Financial Officer






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