[Confidential Treatment Requested.
Confidential portions of this document have been redacted

      and have been separately filed with
the Securities and Exchange Commission]

       

    

    REVOLVING
CREDIT AND SECURITY AGREEMENT

    


    between

    


    NeoGenomics,
Inc., a Florida Corporation, as Borrower

     

    and

     

    NeoGenomics,
Inc., a Nevada corporation, as Guarantor


     

    and

    


    CAPITALSOURCE
FINANCE LLC

    


    Dated
as of

    February
1, 2008

    


    
      

      

    

    
      
         


      

      
        
        

        
          

        

      

      
         


      

    

    
       

      EXECUTION
COPY

    

     

    REVOLVING
CREDIT AND SECURITY AGREEMENT

    


    TABLE
OF CONTENTS

    


    
      
        
          
            
              	 
      	 
      	 
      	
                      Page

                    
	 
      	 
      	 
      	 
      
	
                      I.

                    	
                      DEFINITIONS

                    	
                      4

                    
	 
      	 
      	 
      	 
      
	 
      	
                      1.1

                    	
                      General
      Terms

                    	
                      4

                    
	 
      	
                      1.2

                    	
                      Definitions

                    	
                      5

                    
	 
      	 
      	 
      	 
      
	
                      II.

                    	
                      ADVANCES,
      PAYMENT AND INTEREST

                    	
                      19

                    
	 
      	 
      	 
      	 
      
	 
      	
                      2.1

                    	
                      The
      Revolving Facility

                    	
                      19

                    
	 
      	
                      2.2

                    	
                      The
      Revolving Loans; Maturity

                    	
                      20

                    
	 
      	
                      2.3

                    	
                      Revolving
      Facility Disbursements; Requirement to Deliver Borrowing
      Certificate

                    	
                      20

                    
	 
      	
                      2.4

                    	
                      Promise
      to Pay; Manner of Payment

                    	
                      20

                    
	 
      	
                      2.5

                    	
                      Repayment
      of Excess Advances

                    	
                      21

                    
	 
      	
                      2.6

                    	
                      Payments
      by Lender

                    	
                      21

                    
	 
      	
                      2.7

                    	
                      Evidence
      of Loans

                    	
                      21

                    
	 
      	 
      	 
      	 
      
	
                      III.

                    	
                      INTEREST
      AND FEES

                    	
                      22

                    
	 
      	 
      	 
      	 
      
	 
      	
                      3.1

                    	
                      Interest
      on the Revolving Facility

                    	
                      22

                    
	 
      	
                      3.2

                    	
                      Commitment
      Fee

                    	
                      22

                    
	 
      	
                      3.3

                    	
                      Unused
      Line Fee

                    	
                      22

                    
	 
      	
                      3.4

                    	
                      Collateral
      Management Fee

                    	
                      22

                    
	 
      	
                      3.5

                    	
                      Computation
      of Fees; Lawful Limits

                    	
                      23

                    
	 
      	
                      3.6

                    	
                      Default
      Rate of Interest

                    	
                      23

                    
	 
      	 
      	 
      	 
      
	
                      IV.

                    	
                      GRANT
      OF SECURITY INTERESTS

                    	
                      23

                    
	 
      	 
      	 
      	 
      
	 
      	
                      4.1

                    	
                      Security
      Interest; Collateral

                    	
                      23

                    
	 
      	
                      4.2

                    	
                      Power
      of Attorney

                    	
                      23

                    
	 
      	
                      4.3

                    	
                      Further
      Assurances

                    	
                      24

                    
	 
      	 
      	 
      	 
      
	
                      V.

                    	
                      ADMINISTRATION
      AND MAINTENANCE OF COLLATERAL

                    	
                      25

                    
	 
      	 
      	 
      	 
      
	 
      	
                      5.1

                    	
                      Revolving
      Facility Collections; Repayment; Borrowing Availability and
      Lockbox

                    	
                      25

                    
	 
      	
                      5.2

                    	
                      Accounts

                    	
                      25

                    
	 
      	
                      5.3

                    	
                      Healthcare

                    	
                      26

                    
	 
      	
                      5.4

                    	
                      Medicare
      and Medicaid Account Debtors and Third-Party Payor
    Information

                    	
                      27

                    
	 
      	
                      5.5

                    	
                      Collateral
      Administration

                    	
                      27

                    
	 
      	 
      	 
      	 
      
	
                      VI.

                    	
                      CONDITIONS
      PRECEDENT

                    	
                      28

                    
	 
      	 
      	 
      	 
      
	 
      	
                      6.1

                    	
                      Conditions
      to Initial Advance and Closing

                    	
                      28

                    
	 
      	
                      6.2

                    	
                      Conditions
      to Each Advance

                    	
                      30

                    
	 
      	 
      	 
      	 
      
	
                      VII.

                    	
                      REPRESENTATIONS
      AND WARRANTIES

                    	
                      30

                    
	 
      	 
      	 
      	 
      
	 
      	
                      7.1

                    	
                      Organization
      and Authority

                    	
                      31

                    
	 
      	
                      7.2

                    	
                      Loan
      Documents

                    	
                      31

                    
	 
      	
                      7.3

                    	
                      Subsidiaries,
      Capitalization and Ownership Interests

                    	
                      31

                    
	 
      	
                      7.4

                    	
                      Properties

                    	
                      31

                    
	 
      	
                      7.5

                    	
                      Other
      Agreements

                    	
                      32

                    
	 
      	
                      7.6

                    	
                      Litigation

                    	
                      32

                    
	 
      	
                      7.7

                    	
                      Environmental
      Matters

                    	
                      32

                    
	 
      	
                      7.8

                    	
                      Potential
      Tax Liability; Tax Returns; Governmental Reports

                    	
                      33

                    
	 
      	
                      7.9

                    	
                      Financial
      Statements and Reports

                    	
                      34

                    


            

          

        

      

    

     

    
      
         


      

      
        
        

        
          

        

      

      
         


      

    

    


    
      
        
          
            	 
      	
                    7.10

                  	
                    Compliance
      with Law

                  	
                    34

                  
	 
      	
                    7.11

                  	
                    Intellectual
      Property

                  	
                    35

                  
	 
      	
                    7.12

                  	
                    Licenses
      and Permits; Labor

                  	
                    35

                  
	 
      	
                    7.13

                  	
                    No
      Default

                  	
                    35

                  
	 
      	
                    7.14

                  	
                    Disclosure

                  	
                    35

                  
	 
      	
                    7.15

                  	
                    Existing
      Indebtedness; Investments, Guarantees and Certain
Contracts

                  	
                    35

                  
	 
      	
                    7.16

                  	
                    Other
      Agreements

                  	
                    36

                  
	 
      	
                    7.17

                  	
                    Insurance

                  	
                    36

                  
	 
      	
                    7.18

                  	
                    Names;
      Location of Offices, Records and Collateral

                  	
                    36

                  
	 
      	
                    7.19

                  	
                    Lien
      Perfection and Priority

                  	
                    37

                  
	 
      	
                    7.20

                  	
                    Investment
      Company Act

                  	
                    37

                  
	 
      	
                    7.21

                  	
                    Regulations
      T, U and X

                  	
                    37

                  
	 
      	
                    7.22

                  	
                    Survival

                  	
                    37

                  
	 
      	 
      	 
      	 
      
	
                    VIII.

                  	
                    AFFIRMATIVE
      COVENANTS

                  	
                    37

                  
	 
      	 
      	 
      	 
      
	 
      	
                    8.1

                  	
                    Financial
      Statements, Borrowing Certificate, Financial Reports and Other
      Information

                  	
                    38

                  
	 
      	
                    8.2

                  	
                    [Reserved]

                  	
                    40

                  
	 
      	
                    8.3

                  	
                    Conduct
      of Business and Maintenance of Existence and Assets

                  	
                    40

                  
	 
      	
                    8.4

                  	
                    Compliance
      with Legal and Other Obligations

                  	
                    40

                  
	 
      	
                    8.5

                  	
                    Insurance

                  	
                    41

                  
	 
      	
                    8.6

                  	
                    Books
      and Records

                  	
                    41

                  
	 
      	
                    8.7

                  	
                    Inspections;
      Periodic Audits and Reappraisals

                  	
                    41

                  
	 
      	
                    8.8

                  	
                    Further
      Assurances; Post-Closing

                  	
                    42

                  
	 
      	
                    8.9

                  	
                    Use
      of Proceeds

                  	
                    42

                  
	 
      	
                    8.10

                  	
                    [Reserved]

                  	
                    42

                  
	 
      	
                    8.11

                  	
                    [Reserved]

                  	
                    42

                  
	 
      	
                    8.12

                  	
                    Taxes
      and Other Charges

                  	
                    42

                  
	 
      	
                    8.13

                  	
                    Payroll
      Taxes

                  	
                    43

                  
	 
      	
                    8.14

                  	
                    New
      Subsidiaries

                  	
                    43

                  
	 
      	
                    8.15

                  	
                    [Reserved]

                  	
                    43

                  
	 
      	 
      	 
      	 
      
	
                    IX.

                  	
                    NEGATIVE
      COVENANTS

                  	
                    43

                  
	 
      	 
      	 
      	 
      
	 
      	
                    9.1

                  	
                    Financial
      Covenants

                  	
                    43

                  
	 
      	
                    9.2

                  	
                    Permitted
      Indebtedness

                  	
                    44

                  
	 
      	
                    9.3

                  	
                    Permitted
      Liens

                  	
                    44

                  
	 
      	
                    9.4

                  	
                    Investments;
      New Facilities or Collateral; Subsidiaries

                  	
                    44

                  
	 
      	
                    9.5

                  	
                    Dividends;
      Redemptions

                  	
                    44

                  
	 
      	
                    9.6

                  	
                    Transactions
      with Affiliates

                  	
                    45

                  
	 
      	
                    9.7

                  	
                    Charter
      Documents; Fiscal Year; Dissolution; Use of Proceeds

                  	
                    45

                  
	 
      	
                    9.8

                  	
                    Truth
      of Statements

                  	
                    45

                  
	 
      	
                    9.9

                  	
                    IRS
      Form 8821

                  	
                    46

                  
	 
      	
                    9.10

                  	
                    Transfer
      of Assets

                  	
                    46

                  
	 
      	
                    9.11

                  	
                    OFAC

                  	
                    46

                  
	 
      	
                    9.12

                  	
                    Payroll
      Accounts

                  	
                    46

                  
	 
      	
                    9.13

                  	
                    US
      Lab Litigation

                  	
                    46

                  
	 
      	 
      	 
      	 
      
	
                    X.

                  	
                    EVENTS
      OF DEFAULT

                  	
                    47

                  
	 
      	 
      	 
      	 
      
	
                    XI.

                  	
                    RIGHTS
      AND REMEDIES AFTER DEFAULT

                  	
                    49

                  
	 
      	 
      	 
      	 
      
	 
      	
                    11.1

                  	
                    Rights
      and Remedies

                  	
                    49

                  
	 
      	
                    11.2

                  	
                    Application
      of Proceeds

                  	
                    50

                  
	 
      	
                    11.3

                  	
                    Rights
      of Lender to Appoint Receiver

                  	
                    50

                  


          

        

      

    

     

    
      
         


      

      
        2

        
          

        

      

      
         


      

    

    
 

    
      
        
          
            	 
      	
                    11.4

                  	
                    Rights
      and Remedies not Exclusive

                  	
                    50

                  
	 
      	
                    11.5

                  	
                    Standards
      for Exercising Remedies

                  	
                    51

                  
	 
      	 
      	 
      	 
      
	
                    XII.

                  	
                    WAIVERS
      AND JUDICIAL PROCEEDINGS

                  	
                    51

                  
	 
      	 
      	 
      	 
      
	 
      	
                    12.1

                  	
                    Waivers

                  	
                    51

                  
	 
      	
                    12.2

                  	
                    Delay;
      No Waiver of Defaults

                  	
                    52

                  
	 
      	
                    12.3

                  	
                    Jury
      Waiver

                  	
                    52

                  
	 
      	
                    12.4

                  	
                    Cooperation
      in Discovery and Litigation

                  	
                    52

                  
	 
      	 
      	 
      	 
      
	
                    XIII.

                  	
                    EFFECTIVE
      DATE AND TERMINATION

                  	
                    53

                  
	 
      	 
      	 
      	 
      
	 
      	
                    13.1

                  	
                    Termination
      and Effective Date Thereof

                  	
                    53

                  
	 
      	
                    13.2

                  	
                    Survival

                  	
                    53

                  
	 
      	 
      	 
      	 
      
	
                    XIV.

                  	
                    GUARANTY

                  	
                    53

                  
	 
      	 
      	 
      	 
      
	 
      	
                    14.1

                  	
                    Guaranty

                  	
                    53

                  
	 
      	
                    14.2

                  	
                    Guaranty
      Absolute

                  	
                    54

                  
	 
      	
                    14.3

                  	
                    Subrogation

                  	
                    55

                  
	 
      	 
      	 
      	 
      
	
                    XV.

                  	
                    MISCELLANEOUS

                  	
                    55

                  
	 
      	 
      	 
      	 
      
	 
      	
                    15.1

                  	
                    Governing
      Law; Jurisdiction; Service of Process; Venue

                  	
                    55

                  
	 
      	
                    15.2

                  	
                    Successors
      and Assigns; Participations; New Lenders

                  	
                    56

                  
	 
      	
                    15.3

                  	
                    Application
      of Payments

                  	
                    56

                  
	 
      	
                    15.4

                  	
                    Indemnity

                  	
                    56

                  
	 
      	
                    15.5

                  	
                    Notice

                  	
                    57

                  
	 
      	
                    15.6

                  	
                    Severability;
      Captions; Counterparts; Facsimile Signatures

                  	
                    57

                  
	 
      	
                    15.7

                  	
                    Expenses

                  	
                    57

                  
	 
      	
                    15.8

                  	
                    Entire
      Agreement

                  	
                    58

                  
	 
      	
                    15.9

                  	
                    Lender
      Approvals

                  	
                    58

                  
	 
      	
                    15.10

                  	
                    Confidentiality
      and Publicity

                  	
                    58

                  
	 
      	
                    15.11

                  	
                    Release
      of Lender

                  	
                    59

                  
	 
      	
                    15.12

                  	
                    Agent

                  	
                    59

                  
	 
      	
                    15.13

                  	
                    Reserved

                  	
                    59

                  
	 
      	
                    15.14  

                  	
                    Agreement
      Controls

                  	
                    60

                  


          

        

      

    

     

    
      
         


      

      
        3

        
          

        

      

      
         


      

    


    REVOLVING
CREDIT AND SECURITY AGREEMENT

    


    THIS REVOLVING CREDIT AND SECURITY
AGREEMENT (the “Agreement”) dated as of
February 1, 2008 is entered into between NeoGenomics, Inc., a Florida
corporation (“Borrower”), NeoGenomics, Inc., a Nevada
corporation (“Guarantor”, together with
Borrower, individually a “Credit Party” and
collectively, the “Credit
Parties”) and CAPITALSOURCE FINANCE LLC, a
Delaware limited liability company (the “Lender”).

     

    WHEREAS,
the Credit Parties have requested that Lender make available to Borrower a
revolving credit facility (the “Revolving Facility”) in a
maximum principal amount at any time outstanding of up to Three Million Dollars ($3,000,000)
(the “Facility Cap”),
the proceeds of which shall be used by Borrower as a provider of healthcare
services and for the generation of receivables and for any other lawful
purpose permitted under this Agreement and for payments to Lender hereunder;
and

     

    WHEREAS,
Lender is willing to make the Revolving Facility available to Borrower upon the
terms and subject to the conditions set forth herein.

     

    NOW,
THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt and adequacy of which hereby are acknowledged, and
intending to be legally bound, Credit Parties and Lender hereby agree as
follows:

     

    
      	
              I.

            	
              DEFINITIONS

            


    

     

    1.1         General
Terms

     

    In
addition to the definitions above and elsewhere in this Agreement, the terms
listed in Annex
I hereto shall have the meanings given such terms in Annex I, which are
incorporated herein and made a part hereof.  All capitalized terms
used which are not specifically defined herein shall have meanings provided in
Article 9 of the UCC to the extent the same are used or defined
therein.  Unless otherwise specified herein or in Annex I, any
agreement, contract or instrument referred to herein or in Annex I shall mean
such agreement, contract or instrument as modified, amended, restated or
supplemented from time to time.  Unless otherwise specified, as used
in the Loan Documents or in any certificate, report, instrument or other
document made or delivered pursuant to any of the Loan Documents, all accounting
terms not defined in Annex I or elsewhere
in this Agreement shall have the meanings given to such terms in and shall be
interpreted in accordance with GAAP.  References herein to “Eastern Time” shall
mean eastern standard time or eastern daylight savings time as in effect on any
date of determination in the eastern United States of America.  The
terms “herein”,
“hereof” and
similar terms refer to this Agreement as a whole.  In the computation
of periods of time from a specified date to a later specified date in any Loan
Document, the terms “from” means “from and
including” and the words “to” and “until” each mean “to
but excluding” and the word “through” means “to
and including.”  In any other case, the term “including” when used
in any Loan Document means “including without limitation.”  The term
“documents” means all
writings, however evidenced and whether in physical or electronic form,
including all documents, instruments, agreements, notices, demands,
certificates, forms, financial statements, opinions and reports.  The
term “incur”
means incur, create, make, issue, assume or otherwise become directly or
indirectly liable in respect of or responsible for, in each case whether
directly or indirectly, and the terms "incurrence" and "incurred" and similar
derivatives shall have correlative meanings.  Unless otherwise
expressly indicated, the meaning of any term defined (including by reference) in
any Loan Document shall be equally applicable to both the singular and plural
forms of such term.

     

    
      
         


      

      
        4

        
          

        

      

      
         


      

    


    In the
event that any Accounting Change (as defined below) shall occur and such change
results in a change in the method of calculation of financial covenants,
standards or terms in this Agreement, then Borrower and Lender agree to
enter into good faith negotiations in order to amend such provisions of this
Agreement so as to equitably reflect such Accounting Change with the
desired result that the criteria for evaluating Borrower’s financial
condition shall be the same after such Accounting Change as if such
Accounting Change had not been made.  Until such time as such an
amendment shall have been executed and delivered by Borrower and Lender, all
financial covenants, standards and terms in this Agreement shall continue to be
calculated or construed as if such Accounting Change had not
occurred.

     

    1.2         Definitions

     

    “Acceptance Notice”
shall have the meaning given such term in Section
8.11.

     

    “Accounting Change”
refers to changes in accounting principles required by the promulgation of any
rule, regulation, pronouncement or opinion by the Financial Accounting Standards
Board of the American Institute of Certified Public Accountants or, if
applicable, the U.S. Securities and Exchange Commission.

     

    “Accounts” shall mean
“accounts” as defined in Section 9-102 of the UCC (including Health Care
Insurance Receivables).

     

    “Account Debtor” shall
mean “account debtor” as defined in Section 9-102 of the UCC.

     

    “Accumulated
Distribution” shall have the meaning given to it in the definition of
“Permitted
Distribution”.

     

    “Accumulated Distribution
Fiscal Quarter” shall have the meaning given to it in the definition of
“Permitted
Distribution”.

     

    “Advance” shall mean a
borrowing under the Revolving Facility.  Any amounts paid by Lender on
behalf of Borrower or Guarantor under any Loan Document shall be an Advance for
purposes of the Agreement.

     

    “Affiliate” shall
mean, as to any Person (a) any other Person that, directly or indirectly through
one or more intermediaries, controls, is controlled by, or is under common
control with, such Person, (b) any other Person who is a director or officer (i)
of such Person, (ii) of any Subsidiary of such Person, or (iii) of any Person
described in clause (a) above with respect to such Person, (c) any other Person
which, directly or indirectly through one or more intermediaries, is the
beneficial or record owner (as defined in Rule 13d-3 of the Securities Exchange
Act of 1934, as amended, as the same is in effect on the date hereof) of five
percent (5%) or more of any class of the outstanding voting stock, securities or
other equity or ownership interests of such Person and (d) in the case such
Person is an individual, any other Person who is an immediate family member,
spouse or lineal descendant of individuals of such Person or any Affiliate of
such Person.  For purposes of this definition, the term “control” (and
the correlative terms, “controlled by” and “under common control with”) shall
mean the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies, whether through ownership of securities
or other interests, by contract or otherwise.  “Affiliate” shall
include any Subsidiary.  Notwithstanding anything herein to the
contrary, in no event shall Lender be considered as “Affiliate” of Borrower or
Guarantor.

     

    “Applicable Rate”
shall mean the interest rate applicable from time to time to Loans under the
Agreement.

     

    
      
         


      

      
        5

        
          

        

      

      
         


      

    


    “Availability” shall
mean the value, in U.S. Dollars of eighty-five percent (85%) of the Borrowing
Base minus, if applicable amounts reserved pursuant to this
Agreement.

     

    “Borrowing Base” shall
mean, as of any date of determination, the net collectible Dollar value of
Eligible Accounts, as determined with reference to the most recent Borrowing
Certificate and otherwise in accordance with the Agreement; provided, however, that if as
of such date the most recent Borrowing Certificate is of a date more than four
Business Days before or after such date, the Borrowing Base shall be determined
by Lender in its Permitted Discretion. For purposes hereof, the net collectible
Dollar value of Eligible Accounts is the amount due to Borrower as a result of a
contractual right of payment from third-party payors less deductible obligations
and contractual allowances as determined and approved by Lender in its Permitted
Discretion.

     

    “Borrowing
Certificate” shall mean a Borrowing Certificate substantially in the form
of Exhibit A
attached hereto.

     

    “Borrowing Date” shall
the mean the date requested for an Advance by Borrower pursuant to Section
2.3.

     

     “Business Day” shall
mean any day other than a Saturday, Sunday or other day on which the Federal
Reserve or Lender is closed.

     

    “Capital Expenditures”
shall mean, for any Test Period, the sum (without duplication) of all
expenditures (whether paid in cash or accrued as liabilities) during the Test
Period that are or should be treated as capital expenditures under
GAAP.

     

    “Capital Lease” shall
mean, as to any Person, a lease of any interest in any kind of property or asset
by that Person as lessee that is, should be or should have been recorded as a
“capital lease” in accordance with GAAP.

     

    “Capital Stock” shall
mean any and all shares, interests, participations or other equivalents (however
designated) of capital stock of a corporation, any and all equivalent ownership
interests in a Person (other than a corporation) and any and all warrants,
rights or options to purchase any of the foregoing.

     

    “Capitalized Lease
Obligations” shall mean all obligations of any Person under Capital
Leases, in each case, taken at the amount thereof accounted for as a liability
in accordance with GAAP.

     

     “Change of Control”
shall mean, with respect to Borrower or Guarantor, the occurrence of any of the
following:  (i) a merger, consolidation, reorganization,
recapitalization or share or interest exchange, sale or transfer or any other
transaction or series of transactions in which its stockholders, managers,
partners or interest holders immediately prior to such transaction or series of
transactions receive, in exchange for the stock or interests owned by them,
cash, property or securities of the resulting or surviving entity or any
Affiliate thereof, and, as a result thereof, Persons who, individually or in the
aggregate, were holders of fifty percent (50%) or more of its voting stock,
securities or equity, partnership or ownership interests immediately prior to
such transaction or series of transactions hold less than fifty percent (50%) of
the voting stock, securities or other equity, partnership or ownership interests
of the resulting or surviving entity or such Affiliate thereof, calculated on a
fully diluted basis, (ii) a direct or indirect sale, transfer or other
conveyance or disposition, in any single transaction or series of transactions,
of all or substantially all of its assets, (iii) the initial public offering of
its securities, (iv) any “change in/of control” or “sale” or “disposition” or
similar event as defined in any document governing indebtedness of such Person
which gives the holder of such indebtedness the right to accelerate or otherwise
require payment of such indebtedness prior to the maturity date thereof, or (v)
the replacement of a majority of the board of directors of Borrower over a
one-year period from the directors who constituted the board of directors of
such Borrower at the beginning of such period and such replacement shall not
have been approved by a vote of at least a majority of the board of directors of
such Borrower then still in office who either are members of such board of
directors at the beginning of such period or whose election as a member of such
board of directors was previously so approved.

     

    
      
         


      

      
        6

        
          

        

      

      
         


      

    


    “Chattel Paper”
shall mean “chattel paper” as defined in Section 9-102 of the UCC, whether
tangible or electronic.

     

    “Closing” shall mean
the satisfaction, or written waiver by Lender, of all of the conditions
precedent set forth in the Agreement required to be satisfied prior to the
consummation of the transactions contemplated hereby.

     

    “Closing Date” shall
mean the date upon which the Closing occurs.

     

    “Collateral” shall
mean all of the property described below in, to, or under which a Borrower now
has or hereafter acquires any right, title or interest, whether present, future,
or contingent, including any such property acquired by assignment:

     

    (a)           All
of Borrower’s now-owned and hereafter acquired or arising Accounts, accounts
receivable and rights to payment of every kind and description related to
Accounts, and all of Borrower’s contract rights, chattel paper, documents and
instruments with respect to such Accounts and accounts receivable, and all of
Borrower’s rights, remedies, security and liens, in, to and in respect of the
Accounts, including, without limitation, rights of stoppage in transit,
replevin, repossession and reclamation and other rights and remedies of an
unpaid vendor, lienor or secured party, guaranties or other contracts of
suretyship with respect to the Accounts, deposits, Letters of Credit, Supporting
Obligations or other security for the obligation of any Account Debtor, and
credit and other insurance relating to such Accounts and accounts
receivable;

     

    (b)           All
of Borrower’s right, title and interest in, to and in respect of all goods
relating to, or which by sale have resulted in, Accounts, including, without
limitation, all goods described in invoices or other documents or instruments
with respect to, or otherwise representing or evidencing, any Account, and all
returned, reclaimed or repossessed goods;

     

    (c)           All
of Borrower’s now owned or hereafter acquired (i) Lockbox Accounts (and the
funds contained therein) and (ii) any deposit accounts (and the funds contained
therein), other than the Lockbox Accounts, into which Accounts are deposited, to
the extent Accounts are contained therein;

     

    (d)           All
of Borrower’s now owned and hereafter acquired or arising general intangibles
and other property of every kind and description with respect to, evidencing or
relating to its Accounts and other rights to payment, including, but not limited
to, all existing books and records, as the same relate to the
Accounts;

     

    (e)           The
proceeds of all of the foregoing (including, without limitation, insurance
proceeds) related to losses with respect to Collateral such as business
interruption insurance or other insurance proceeds related specifically to
losses from the Collateral.

     

    
      
         


      

      
        7

        
          

        

      

      
         


      

    


    “Collateral Management
Fee” shall mean a monthly fee to be paid by Borrower to Lender in an
amount equal to 0.025% per month calculated on the basis of the daily average
amount of the balances under the Revolving Facility outstanding during the
preceding month.

     

    “Commercial Tort
Claims” shall mean “Commercial Tort Claims” as defined in Section 9-102
of the UCC.

     

    “Compliance
Certificate” shall mean a compliance certificate substantially in the
form of Exhibit
B attached hereto.

     

    “Concentration
Account” shall mean a depository account maintained by Lender or an
affiliate of Lender at such bank as Lender may communicate to Borrower from time
to time.

     

    “Credit Party” shall
have the meaning set forth in the first paragraph of this
Agreement.

     

    “Debtor Relief Law”
shall mean, collectively, the Bankruptcy Code of the United States of America
and all other applicable federal and state liquidation, conservatorship,
bankruptcy, moratorium, rearrangement, receivership, insolvency, reorganization
or similar debtor relief laws from time to time in effect affecting the rights
of creditors generally, as amended and in effect from time to time.

     

    “Default” shall mean
any event, fact, circumstance or condition that, with the giving of applicable
notice or passage of time or both, would constitute or be or result in an Event
of Default.

     

    “Default Rate” shall
mean at any time the Applicable Rate in effect at such time plus three percent
(3%) per annum.

     

    “Denial Disclosure”
shall have the meaning given to it in Section 7.18.

     

    “Deposit Accounts”
shall mean “deposit accounts” as defined in Section 9-102 of the
UCC.

     

    “Distribution” shall
mean any direct or indirect dividend, distribution or other payment of any kind
or character (whether in cash, securities or other property) in respect of any
equity interests.

     

    “Dollars” and the sign
“$” each mean
the lawful money of the United States of America.

     

    “Documents” shall mean
“documents” as defined in Section 9-102 of the UCC.

     

     “Eligible Accounts”
shall mean each Account arising in the ordinary course of Borrower’s business
from the sale or lease of goods or rendering of Services which Lender, in its
Permitted Discretion, deems an Eligible Account unless:

     

    (a)           such
Account is not subject to a valid perfected first priority security interest in
favor of Lender, subject to no other Lien;

     

    (b)           such
Account is not evidenced by an invoice, statement or other documentary evidence
satisfactory to Lender;

     

    (c)           such
Account or any portion thereof (in which case only such portion shall not be an
Eligible Account) is payable by a beneficiary, recipient or subscriber
individually and not directly by a Medicaid/Medicare Account Debtor or
commercial medical insurance carrier, or client acceptable to Lender in its
Permitted Discretion;

     

    
      
         


      

      
        8

        
          

        

      

      
         


      

    


    (d)           such
Account arises out of Services rendered or a sale or lease made to, or out of
any other transaction between Borrower or any of its Subsidiaries and, one or
more Affiliates of Borrower;

     

    (e)           such
Account remains unpaid for longer than (i) one hundred fifty (150) calendar days after the
applicable Services were rendered with respect to Accounts payable by a
Medicaid/Medicare Account Debtor or commercial medical insurance carrier
acceptable to Lender and (ii) one hundred twenty (120) calendar days after the
applicable Services were rendered with respect to all other Account
Debtors;

     

    (f)           with
respect to all Accounts owed by any particular Account Debtor (other than
Accounts from Medicaid/Medicare Account Debtors) or its Affiliates, if more than
twenty five percent (25%) of the aggregate balance of all such Accounts owing
from such Account Debtor and its Affiliates are ineligible due to the
requirements of clause (e) of this Section or such higher threshold which may be
agreed in writing by Lender for any specific Account Debtor;

     

    (g)           with
respect to all Accounts owed by any particular Account Debtor or its Affiliates,
twenty-five percent (25%) or more of all such Accounts are deemed not to be
Eligible Accounts for any reason hereunder (which percentage may, in Lender’s
Permitted Discretion, be increased or decreased);

     

    (h)           with
respect to all Accounts owed by any particular Account Debtor or its Affiliates
(other than Medicaid/Medicare Account Debtors) if such Accounts exceed twenty
percent (20%) of the net collectible Dollar value of all Eligible Accounts at
any one time (including Accounts from Medicaid/Medicare Account Debtors), then
the amount by which such Accounts for that particular Account Debtor or its
Affiliates exceed twenty percent (20%) of the net collectible Dollar value of
all Eligible Accounts shall not be included as Eligible Accounts;

     

    (i)           any
covenant, agreement, representation or warranty contained in any Loan Document
with respect to such Account has been breached and remains uncured;

     

    (j)           the
Account Debtor for such Account has commenced a voluntary case under any Debtor
Relief Law or has made an assignment for the benefit of creditors, or a decree
or order for relief has been entered by a court having jurisdiction in respect
of such Account Debtor in an involuntary case under any Debtor Relief Law, or
any other petition or application for relief under any Debtor Relief Law has
been filed against such Account Debtor, or such Account Debtor has failed,
suspended business, ceased to be solvent, called a meeting of its creditors, or
has consented to or suffered a receiver, trustee, liquidator or custodian to be
appointed for it or for all or a significant portion of its assets or
affairs;

     

    (k)           such
Account arises from the sale or lease of property or Services rendered to one or
more Account Debtors outside the United States (including any territory or
possession of the United States that has adopted Article 9 of the UCC) or that
have their principal place of business or chief executive offices outside the
United States (including any territory or possession of the United States that
has adopted Article 9 of the UCC);

     

    
      
         


      

      
        9

        
          

        

      

      
         


      

    


    (l)         
  such Account represents the sale or lease of goods or rendering of
Services to an Account Debtor on a bill-and-hold, guaranteed sale,
sale-and-return, sale on approval, consignment or any other repurchase or return
basis or is evidenced by Chattel Paper or an Instrument of any kind or has been
reduced to judgment;

     

    (m)           the
applicable Account Debtor for such Account is any Governmental Authority
(excluding Medicaid/Medicare Account Debtors), unless rights to payment of such
Account have been assigned to Lender pursuant to the Assignment of Claims Act of
1940, as amended (31 U.S.C. Section 3727, et seq. and 41 U.S.C.
Section 15, et seq.), or otherwise only if all applicable statutes or
regulations respecting the assignment of Government Accounts have been complied
with as determined by Lender in its Permitted Discretion;

     

    (n)           such
Account is subject to any offset, credit (including any resource or other income
credit or offset) deduction, defense, discount, chargeback, freight claim,
allowance, adjustment, dispute or counterclaim (each an “Adjustment”), or is
contingent in any respect or for any reason; provided, that, the discounted
amount of such Account after giving effect to such Adjustment will be considered
an Eligible Account;

     

    (o)           there
is any agreement with an Account Debtor for any deduction from such Account;
provided, that, the discounted
amount of such Account after giving effect to such discounts and allowances
shall be considered an Eligible Account;

     

    (p)           any
return, rejection or repossession of goods or Services related to it has
occurred;

     

    (q)           such
Account is not payable to Borrower;

     

    (r)           a
Borrower has agreed to accept or has accepted any non-cash payment for such
Account;

     

    (s)           with
respect to any Account arising from the sale of goods, the goods have not been
shipped to the Account Debtor or its designee;

     

    (t)           with
respect to any Account arising from the performance of Services, the Services
have not been actually performed or the Services were undertaken in violation of
any law; or

     

    (u)           such
Account fails to meet such other specifications and requirements which may from
time to time be established by Lender or is not otherwise satisfactory to
Lender, as determined in Lender’s Permitted Discretion.

     

    “EMTALA” shall mean
the Emergency Medical Treatment and Active Labor Act, as amended, and the
regulations thereunder.

     

    “Environmental Laws”
shall mean any and all laws, rules, orders, regulations, statutes, ordinances,
guidelines, codes, decrees, or other legally enforceable requirements
(including, without limitation, common law) of any international authority,
foreign government, the United States, or any state, local, municipal or other
governmental authority, regulating, relating to or imposing liability or
standards of conduct concerning protection of the environment, or protection of
human health or employee health and safety (as affected by the environment or by
any substance the exposure to which is reasonably suspected of causing harm to
human health), as has been, is now, or may at any time hereafter be, in effect
to which the Borrower is subject.

     

    
      
         


      

      
        10

        
          

        

      

      
         


      

    


     “Equipment” shall mean
“equipment” as defined in Section 9-102 of the UCC.

     

     “ERISA” shall mean the
Employee Retirement Income Security Act of 1974, as amended, and the regulations
thereunder.

     

    “Event of Default”
shall mean the occurrence of any event set forth in Article X.

     

    “Excess Cash Flow”
shall mean, for any fiscal year (or for such other period as may be specifically
provided for herein), as calculated for Borrowers and their Subsidiaries on a
consolidated basis, without duplication, an amount equal to the sum of (a) Net
Income (as defined in Annex I) for such period, plus (b) an amount equal to the
amount of depreciation expenses, amortization expense (including the
amortization of goodwill), accrued non-cash interest expense and all other
non-cash charges deducted in arriving at such Net Income, plus (c) an amount
equal to the aggregate Net Cash Proceeds of the sale, lease, transfer or other
disposition of assets by Borrowers during such period to the
extent  not required to be applied to mandatory prepayments or
payments on the Loans,  plus (d) an amount equal to the net loss on
the sale, lease, transfer or other disposition of assets by Borrowers during
such period to the extent deducted in arriving at such Net Income, plus (e) an
amount equal to any tax refunds or credits received by Borrowers during such
period, plus (f) other extraordinary or non-recurring charges that would not
have otherwise been incurred in the ordinary course of business, less (g) an
amount equal to the unfinanced permitted Capital Expenditures of Borrowers for
such period, less (h) an amount equal to the sum of all regularly scheduled
payments (to the extent such payments have not already been deducted in arriving
at Net Income) and optional and mandatory prepayments of principal on
Indebtedness for money borrowed actually made during such period to the extent
permitted hereunder, less (i) an amount equal to the net gain on the sale,
lease, transfer or other disposition of assets by Borrowers during such period
to the extent included in arriving at such Net Income, less (j) other
extraordinary or non-recurring gains that would not have otherwise been incurred
in the ordinary course of business.

     

    “Facility Cap” shall
have the meaning given the term in the Recitals of this Agreement.

     

    “Federal Reserve”
shall mean the Federal Reserve Bank of the United States.

     

    “Fixtures” shall mean
“fixtures” as defined in Section 9-102 of the UCC.

     

    “GAAP” shall mean
generally accepted accounting principles in the United States as in effect on
the Closing Date.

     

    “General Intangibles”
shall mean “general intangibles” as defined in Section 9-102 of the
UCC.

     

    “Goods” shall mean
“goods” as defined in Section 9-102 of the UCC.

     

     “Government Account”
shall mean all Accounts arising out of or with respect to any Government
Contract.

     

    “Government Contract”
shall mean all contracts with any Governmental Authority.

     

     “Governmental
Authority” shall mean any federal, state, municipal, national, local or
other governmental department, court, commission, board, bureau, agency or
instrumentality or political subdivision thereof, or any entity or officer
exercising executive, legislative or judicial, regulatory or administrative
functions of or pertaining to any government or any court, in each case, whether
of the United States or a state, territory or possession thereof, a foreign
sovereign entity or country or jurisdiction or the District of
Columbia.

     

    
      
         


      

      
        11

        
          

        

      

      
         


      

    


    “Guaranteed
Obligations” shall have the meaning given such term in Section 14.1
hereof.

     

    “Guarantor” shall have
the meaning set forth in the first paragraph of this Agreement.

     

    “Guaranty” shall mean,
collectively and each individually, all guaranties executed by
Guarantor.

     

    “Hazardous Substances”
shall mean, without limitation, any flammable explosives, radon, radioactive
materials, asbestos, urea formaldehyde foam insulation, polychlorinated
biphenyls, petroleum and petroleum products, methane, hazardous materials,
hazardous wastes, hazardous or toxic substances or related materials as defined
in or subject to any applicable Environmental Law.

     

    “Healthcare Laws”
shall mean all applicable statutes, laws, ordinances, rules and regulations of
any Governmental Authority with respect to regulatory matters primarily relating
to patient healthcare, healthcare providers and healthcare services (including
without limitation Section 1128B(b) of the Social Security Act, as amended,
42 U.S.C. Section 1320a-7(b) (Criminal Penalties Involving Medicare or
State Health Care Programs), commonly referred to as the “Federal Anti-Kickback
Statute,” and the Social Security Act, as amended, Section 1877, 42 U.S.C.
Section 1395nn (Prohibition Against Certain Referrals), commonly referred to as
“Stark Statute”), and 31 U.S.C. Section 3279 et seq. (the False
Claims Act) to which Borrower is subject.

     

    “HIPAA” shall mean the
Health Insurance Portability and Accountability Act of 1996 (Pub. L. No.
104-191) and the regulations promulgated thereunder.

     

    “HUD Application”
shall have the meaning given such term in Section
8.11.

     

    “Indebtedness” of any
Person shall mean, without duplication, (a) all obligations for borrowed
money, (b) all obligations evidenced by bonds, debentures, notes, or other
similar instruments and all reimbursement or other obligations in respect of
letters of credit or bankers acceptances, (c) all Capitalized Lease
Obligations, (d) all obligations or liabilities of others secured by a Lien
on any asset of such Person or its Subsidiaries, irrespective of whether such
obligation or liability is assumed, (e) all obligations to pay the deferred
purchase price of assets (other than trade payables incurred in the ordinary
course of business and not outstanding more than one hundred twenty (120)
calendar days after the date such payable was created) or such longer period as
shall be agreed in writing by Lender and Borrower, (f) all net obligations
owing to counterparties under Hedging Agreements, (g) all obligations with
respect to redeemable Capital Stock or repurchase obligations under any Capital
Stock issued by such Person, (h) the present value of future rental payments
under all synthetic leases (excluding specifically any operating leases or real
estate leases) and (i) any obligation guaranteeing or intended to guarantee
(whether directly or indirectly guaranteed, endorsed, co-made, discounted, or
sold with recourse) any obligation of any other Person that constitutes
Indebtedness under any of clauses (a) through (h) above.

    


    “Indemnified Person”
shall have the meaning given such term in Section
15.4.

    


    “Initial Advance”
shall mean the initial Advance.

    


    “Instrument” shall
mean “instrument” as defined in Section 9-102 of the UCC.

    


    “Insured Event” shall
have the meaning given such term in Section
15.4.

     

    
      
         


      

      
        12

        
          

        

      

      
         


      

    


    “Insurer” shall mean a
Person that insures another Person against any costs incurred in the receipt by
such other Person of Services, or that has an agreement with Borrower to
compensate it for providing Services to such Person.

    


    “Intellectual
Property” shall mean all patents, patent applications, trademarks,
trademark applications, service marks, registered copyrights, copyright
applications, copyrights, trade names, trade secrets and software and all rights
in the foregoing.

    


    “Inventory” shall mean
“inventory” as defined in Section 9-102 of the UCC.

     

    “Investment Property”
shall mean “investment property” as defined in Section 9-102 of the
UCC.

     

     “Landlord Waiver and
Consent” shall mean a waiver/consent from the owner/lessor/mortgagee of
any premises either owned or occupied by Borrower at which any of the Collateral
is now or hereafter located for the purpose of providing Lender access to such
Collateral, in each case as such may be modified, amended or supplemented from
time to time.

     

    “Letter of Credit
Rights” shall mean “letter of credit rights” as defined in Section 9-102
of the UCC, whether or not the letter of credit is evidenced by a
writing.

     

    “Liability Event”
shall mean any event, fact, condition or circumstance (i) in or for which
Borrower becomes liable or otherwise responsible for any amount over $50,000
owed or owing to any Medicaid,  Medicare or CHAMPUS/TRICARE program by
a provider under common ownership with such Borrower or any provider owned by
such Borrower pursuant to any applicable law, ordinance, rule, decree, order or
regulation of any Governmental Authority after the failure of any such provider
to pay any such amount when owed or owing, (ii) in which Medicaid, Medicare or
CHAMPUS/TRICARE payments to Borrower are lawfully set-off against payments to
such Borrower to satisfy any liability of or for any amounts over $50,000 owed
or owing to any Medicaid, Medicare or CHAMPUS/TRICARE program by a provider
under common ownership with such Borrower or any provider owned by such Borrower
pursuant to any applicable law, ordinance, rule, decree, order or regulation of
any Governmental Authority, or (iii) any of the foregoing under clauses
(i) or (ii) in each case pursuant to statutory or regulatory provisions
that are similar to any applicable law, ordinance, rule, decree, order or
regulation of any Governmental Authority referenced in clauses (i) and (ii)
above or successor provisions thereto.

     

    “LIBOR” shall mean a
rate of interest equal to the rate per annum (rounded upwards to the nearest
1/100th of 1%) at which Dollar deposits for a period of one month are offered in
the London interbank eurodollar market as displayed in the Bloomberg Financial
Markets system (or as otherwise determined by Lender in its sole discretion) as
of 11:00 A.M. (London time) on the applicable date of
determination.

     

    “Lien” shall mean any
mortgage, pledge, security interest, encumbrance, restriction, lien or charge of
any kind (including any agreement to give any of the foregoing, any conditional
sale or other title retention agreement or any lease in the nature thereof), or
any other arrangement pursuant to which title to the property is retained by or
vested in some other Person for security purposes.

     

    “Liquidity Factors”
shall mean percentages which Lender, in its credit judgment, may apply to
Eligible Accounts by payor class based upon Borrower’s actual recent collection
history for each such payor class (i.e. Medicare, Medicaid, commercial
insurance, etc.) in a manner consistent with Lender’s underwriting practices and
procedures, including, without limitation, Lender’s review and analysis of,
among other things, Borrower’s historical returns, rebates, discounts, credits
and allowances, to adjust the Availability.

     

    
      
         


      

      
        13

        
          

        

      

      
         


      

    


    “Loan” or “Loans” shall mean,
individually and collectively, all Advances.

     

    “Loan Documents” shall
mean, collectively and each individually, this Agreement and all other
agreements, documents, instruments and certificates heretofore or hereafter
executed or delivered to, or on behalf of, Lender in connection with this
Agreement or the Loans, as the same may be amended, modified or supplemented
from time to time.

     

    Lockbox Accounts”
shall mean, collectively and each individually, the Deposit Accounts maintained
by Borrower at the Lockbox Banks into which all collections or payments on
Borrower’s Accounts and other Collateral are paid and which Accounts and other
Collateral are subject to Lender’s security interest granted by a
Borrower.

     

    “Lockbox Agreement”
shall mean an agreement among Lender, Borrower who has granted a security
interest in a Deposit Account and any of the Lockbox Banks governing the Lockbox
Accounts, in form and substance satisfactory to Lender.

     

    “Lockbox Banks”
shall  mean, collectively and each individually, the federally insured
banks acceptable to Lender where Borrower who have granted security interests in
a Lockbox Account shall maintain the Lockbox Accounts.

     

    “Management or Service
Fee” shall mean any management, service or related or similar fee paid by
Borrower to any Person with respect to any facility owned, operated or leased by
Borrower.

     

    “Material Adverse
Change” shall mean any event, condition or circumstance or set of events,
conditions or circumstances or any change(s) which (i) has, had or would
reasonably be likely to have any material adverse effect upon or change in the
validity or enforceability of any Loan Document, (ii) has been or would
reasonably be expected to be adverse to the value of any material portion of the
Collateral, or to the priority of Lender’s security interest in any portion of
the Collateral, (iii) has been or would reasonably be expected to be materially
adverse to the business, operations, prospects, properties, assets, liabilities
or financial condition of any Credit Party, either individually or taken as a
whole, or (iv) has materially impaired or would reasonably be likely to
materially impair the ability of any Borrower to pay any portion of the
Obligations or otherwise perform the Obligations or to consummate the
transactions under the Loan Documents executed by such Person.

     

    “Materials of Environmental
Concern” shall mean  any gasoline or petroleum (including crude
oil or any fraction thereof) or petroleum products, polychlorinated biphenyls,
urea-formaldehyde insulation, asbestos, pollutants, contaminants, radioactivity,
and any other substances or forces of any kind, whether or not any such
substance or force is defined as hazardous or toxic under any Environmental Law,
that is regulated pursuant to or would reasonably be expected to give rise to
liability under any Environmental Law.

     

    “Medicaid/Medicare Account
Debtor” shall mean any Account Debtor which is (i) the United States of
America acting under the Medicaid or Medicare program established pursuant to
the Social Security Act or any other federal healthcare program, including,
without limitation, TRICARE (f/k/a CHAMPUS), (ii) any state or the District of
Columbia acting pursuant to a health plan adopted pursuant to Title XIX of the
Social Security Act or any other state health care program, or (iii) any agent,
carrier, administrator or intermediary for any of the foregoing.

     

    
      
         


      

      
        14

        
          

        

      

      
         


      

    


    “Minimum Termination
Fee” shall mean (for the time period indicated) the amount equal to (i)
7.5% of the Facility Cap, if the Revolver Termination is at any time before the
first anniversary of the Closing Date; (ii) 1% of the Facility Cap, if the
Revolver Termination is after the first anniversary of the Closing Date but
before the second anniversary of the
Closing Date; and (iii) 0.5% of the Facility Cap, if the Revolver Termination is
on or after the second anniversary of the
Closing Date but before the third anniversary of the Closing
Date.  There shall be no Minimum Termination Fee if the Revolver
Termination occurs within five (5) days of the end of the Term.

    


    “Net Cash Proceeds”
shall mean, with respect to any sale, lease, transfer or other disposition of
assets by any Person, the amount of cash received (directly or indirectly) from
time to time (whether as initial consideration or through the payment or
disposition of deferred consideration) by or on behalf of such Person in
connection therewith after deducting therefrom (A) the amount of any Permitted
Indebtedness secured by any Permitted Lien on such property which is required to
be, and is, repaid in connection with such disposition, (B) reasonable expenses
related thereto incurred by such Person in connection therewith, (C) transfer
taxes paid to any taxing authorities by such Person in connection therewith, (D)
net income taxes to be paid in connection with such disposition and (E) with
respect to any lease, the cost of any tenant improvements paid by Borrower in
connection therewith.

    


    “Note” or “Notes” shall mean any
promissory note or notes issued pursuant to Section
2.7.

     

    “Obligations” shall
mean all present and future obligations, Indebtedness and liabilities of
Borrower or Guarantor to Lender at any time and from time to time of every kind,
nature and description, direct or indirect, secured or unsecured, joint and
several, absolute or contingent, due or to become due, matured or unmatured, now
existing or hereafter arising, contractual or tortious, liquidated or
unliquidated, (whether or not evidenced by a Note), including, without
limitation, all principal, interest, applicable fees, charges and expenses and
all amounts paid or advanced by Lender on behalf of or for the benefit of
Borrower or Guarantor for any reason at any time, including in each case
obligations of performance as well as obligations of payment and interest that
accrue after the commencement of any proceeding under any Debtor Relief Law by
or against any such Person.

     

    “OFAC” shall mean the
U.S. Department of Treasury’s Office of Foreign Asset Control.

     

    “Organizational and Good
Standing Documents” shall mean, for any Person (i) a copy of the
certificate of incorporation or formation (or other like organizational
document) certified as of a date satisfactory to Lender before the Closing Date
by the applicable Governmental Authority of the jurisdiction of incorporation or
organization of such Person, (ii) a copy of the bylaws or similar organizational
documents of certified as of a date satisfactory to Lender before the Closing
Date by the corporate secretary or assistant secretary of such Person,
(iii) an original certificate of good standing as of a date acceptable to
Lender issued by the applicable Governmental Authority of the jurisdiction of
incorporation or organization of such Person and of every other jurisdiction in
which such Person has an office or conducts business or is otherwise required to
be in good standing, and (iv) copies of the resolutions of the board of
directors or managers (or other applicable governing body) and, if required,
stockholders, members or other equity owners authorizing the execution, delivery
and performance of the Loan Documents to which such Person is a party, certified
by an authorized officer of such Person as of the Closing Date.

     

    “Paid in Full” and
“Payment in
Full” mean, with respect to the Obligations, all amounts owing with
respect thereto (including any interest accruing thereon after the commencement
of any proceeding under any Debtor Relief Law by or against Borrower, whether or
not allowed as a claim against such Borrower in such proceeding, but excluding
as yet unasserted contingent obligations), have been fully, finally and
completely paid in cash.

     

    
      
         


      

      
        15

        
          

        

      

      
         


      

    


    “Parent Indebtedness”
shall mean Indebtedness incurred by Borrower from Guarantor, provided, that, such
Indebtedness shall be (i) up to $2,000,000 outstanding in the aggregate at any
time, (ii) on an unsecured basis, (iii) subordinated in remedies to all of the
Obligations and to all of Lender’s rights in form and substance satisfactory to
Lender and (iv) be subordinate in right of payment to the Obligations and shall
only be repaid pursuant to a Permitted Distribution until the Obligations are
Paid in Full; provided, that, at the request
of Lender, the terms of the provisions of (iii) and (iv) shall be contained in a
written subordination agreement between Lender and Parent acknowledged and
agreed by Borrower, in form and substance satisfactory to Lender.

     

    “Patriot Act” shall
mean the Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act of 2001, P.L. 107-56, as
amended.

    


    “Payment Intangible”
shall mean “payment intangible” as defined in Section 9-102 of the
UCC.

     

    “Payment Office” shall
mean initially the address set forth beneath Lender’s name on the signature page
of the Agreement, and thereafter, such other office of Lender, if any, which it
may designate by notice to Borrower to be the Payment Office.

     

    “Permit” shall mean
collectively all licenses, leases, powers, permits, franchises, certificates,
authorizations, approvals, certificates of need, provider numbers and other
rights.

     

    “Permitted
Acquisition” shall mean any acquisition by Borrower, whether through a
purchase of stock, membership interests or otherwise or the purchase of assets
or through a merger, consolidation or amalgamation, of another Person, or the
assets constituting an entire or any portion of any business or operating
business unit or division of another Person or securities of such other Person
that satisfies the requirements set forth in Sections 8.14 and
9.4
hereof.

     

    “Permitted
Discretion” shall mean a
determination or judgment made by Lender in good faith in the exercise of
reasonable (from the perspective of a secured lender) business
judgment.

     

    “Permitted
Distributions” shall mean Distributions to Guarantor for the purpose of
making principal payments on the Parent Indebtedness and/or as periodic cash
distributions to Guarantor as a shareholder of Borrower, provided, that (i) such
Permitted Distributions are made no more than once per fiscal quarter thereafter
and (ii) all of the following conditions are satisfied with respect to each such
Distribution: (a) no Default or Event of Default has occurred and is continuing
or would arise as a result of such Distribution, (b) after giving effect to such
Distribution, Borrower is in compliance on a pro forma basis with the financial
covenants set forth in Annex 1 (recomputed for the most recent three month
period for which monthly financial statements have been delivered in accordance
with the terms hereof after giving effect thereto); provided, however, that in
situations where there is an Accumulated Distribution (as defined below) being
made with respect to any Accumulated Distribution Fiscal Quarters, only that
portion of the Distribution that is not related to the Accumulated Distributions
shall be included in Fixed Charges for the purpose of calculating the pro forma
Fixed Charge Coverage Ratio in Annex I for the most recent three-month period),
(c) the aggregate amount of such Distributions shall not exceed fifty percent
(50%) of undistributed Excess Cash Flow for the three month period immediately
preceding such distribution, as determined pursuant to the Distribution Notice,
(d) Lender shall have received written notice (the “Distribution Notice”) from
Borrower, of Borrower’s intention to make such Distribution at least five (5)
Business Days prior to the date of such proposed Distribution, which such notice
shall include a detailed calculation satisfactory to Lender in its Permitted
Discretion evidencing Excess Cash Flow for such three month period (except that
for any amounts included in such Distribution that are a result of Accumulated
Distributions, in which case, the Excess Cash Flow so measured shall be
applicable to the appropriate Accumulated Distribution Fiscal Quarters to which
they relate), as applicable, (e) Lender shall have consented in writing to such
Distribution Notice prior to the making of such proposed Distribution, such
consent not to be unreasonably withheld, and (g) until such time as the Parent
Indebtedness is paid in full in cash, any such Distribution payable to Guarantor
shall be utilized by Guarantor solely to repay the Parent Indebtedness; provided, that, if Borrower
chooses not to make a Permitted Distribution (the “Accumulated
Distribution”) in any fiscal quarter (the “Accumulated Distribution
Fiscal Quarter”) Borrower may make such Accumulated Distribution in any
of the subsequent three consecutive fiscal quarters following the Accumulated
Distribution Fiscal Quarter; provided, that, Borrower
provides Lender with Evidence of Compliance with the criteria set forth in the
definition of Permitted Distribution for the Accumulated Distribution as of the
end of the Accumulated Distribution Fiscal Quarter, except, that, the
Distribution Notice shall not have been made in the Accumulated Distribution
Fiscal Quarter but rather shall be made (5) Business Days prior to the date the
Accumulated Distribution is to be distributed.

     

    
      
         


      

      
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    “Permitted
Indebtedness” shall mean any of the following: (i) Indebtedness under the
Loan Documents, (ii) any Indebtedness set forth on Schedule 9.2,
(iii) Capitalized Lease Obligations incurred after the Closing Date and
Indebtedness incurred to purchase Goods and secured by purchase money Liens
constituting Permitted Liens: (A) in aggregate amount outstanding at any time
not to exceed $2,000,000,
provided, that,  (1) the debt service
for such Indebtedness shall not exceed $600,000 for any twelve (12) month period
and (2) upon the incurrence of such Indebtedness and after giving effect thereto
no Default or Event of Default shall exist and be continuing and (B) in an
aggregate amount in excess of $2,000,000, provided, that, (1) ten (10)
Business Days prior to the incurrence of such Indebtedness Borrower shall have
provided pro forma financial statements along with any other supporting
documentation required by Lender evidencing that Borrower would have been in
compliance with the financial covenants set forth on Annex 1 hereto for the
immediately preceding Test Period (as defined on Annex 1 hereto), if such
Indebtedness had been incurred on the first day of such Test Period, (2) prior
to the incurrence of such Indebtedness Borrower shall have received Lender’s
written confirmation of its agreement with such pro forma financial statements;
and (3) upon the incurrence of such Indebtedness and after giving effect thereto
no Default or Event of Default shall exist and be continuing, (iv) the
accounts payable set forth on Schedule 1.2 and accounts payable to trade
creditors and current operating expenses (other than for borrowed money) which
are not aged more than one hundred twenty calendar days from the date such
payable was created or such longer period as shall be agreed in writing by
Lender, except, in each case incurred in the ordinary course of business and
paid within such time period, unless the same are being contested in good faith
and by appropriate and lawful proceedings and such reserves, if any, with
respect thereto as are required by GAAP shall have been reserved, (v) borrowings
incurred in the ordinary course of business and not exceeding $1,000,000
individually or in the aggregate outstanding at any one time; provided, however, that such
Indebtedness (A) shall not be secured by Collateral, any cash, money, Investment
Property or Deposit Accounts; (B) the debt service for such Indebtedness shall
not exceed $200,000 for any twelve (12) month period; (C)  ten (10)
Calendar Days prior to the incurrence of such Indebtedness Borrower shall have
provided pro forma financial statements along with any other supporting
documentation required by Lender evidencing that Borrower would have been in
compliance with the financial covenants set forth on Annex 1 hereto for the
immediately preceding Test Period (as defined on Annex 1 hereto), if such
Indebtedness had been incurred on the first day of such Test Period, (D) prior
to the incurrence of such Indebtedness Borrower shall have received Lender’s
written confirmation of its agreement with such pro forma financial statements
(which confirmation or denial shall be promptly provided by Lender to Borrower
within ten (10) calendar days of Lender’s receipt of such financial statements);
(E) upon the incurrence of such Indebtedness and after giving effect thereto no
Default or Event of Default shall exist and be continuing, (F) such Indebtedness
shall be subordinated in right of repayment and remedies to all of the
Obligations and to all of Lender’s rights pursuant to a written agreement among
Lender, Borrower and the lender with respect to such Indebtedness, in form and
substance satisfactory to Lender and (vi) Parent Indebtedness.

     

    
      
         


      

      
        17

        
          

        

      

      
         


      

    


    “Permitted Liens”
shall mean with respect to the Borrower any of the following: (i) Liens under
the Loan Documents or otherwise arising in favor of Lender, (ii) Liens imposed
by law for taxes (other than payroll taxes), assessments or charges of any
Governmental Authority for claims not yet due or which are being contested in
good faith by appropriate proceedings and with respect to which adequate
reserves or other appropriate provisions are being maintained by such Person in
accordance with GAAP to the satisfaction of Lender in its Permitted Discretion,
(iii) (A) statutory Liens of landlords (provided, that, with respect to
Required Locations any such landlord has executed a Landlord Waiver and Consent
in form and substance satisfactory to Lender) and of carriers, warehousemen,
mechanics, materialmen, and (B) other Liens imposed by law or that arise by
operation of law in the ordinary course of business from the date of creation
thereof, in each case only for amounts not yet due or which are being contested
in good faith by appropriate proceedings and with respect to which adequate
reserves or other appropriate provisions are being maintained by such Person in
accordance with GAAP to the satisfaction of Lender in its Permitted Discretion,
(iv) Liens (A) incurred or deposits made in the ordinary course of business
(including, without limitation, surety bonds and appeal bonds) in connection
with workers’ compensation, unemployment insurance and other types of social
security benefits or to secure the performance of tenders, bids, leases,
contracts (other than for the repayment of Indebtedness), statutory obligations
and other similar obligations, or (B) arising as a result of progress
payments under government contracts, (v) purchase money Liens (A) securing
the type of Permitted Indebtedness set forth under clause (iii) of the
definition of “Permitted Indebtedness”, or (B) in connection with the
purchase by such Person of equipment in the normal course of business, provided, that, such payables
shall not exceed any limits on Indebtedness provided for herein and shall
otherwise be Permitted Indebtedness hereunder; (iv) liens securing the
Indebtedness set forth in clause (v) of Permitted Indebtedness on assets other
than: (A) the Collateral, (B) cash or other money of Borrower, (C) Deposit
Accounts of Borrower and (D) Investment Property of Borrower; and (vii) Liens
disclosed on Schedule
7.4B and Schedule
9.3.

     

     “Person” shall mean an
individual, a partnership, a corporation, a limited liability company, a
business trust, a joint stock company, a trust, an unincorporated association, a
joint venture, a Governmental Authority or any other entity of whatever
nature.

     

    “Pledge Agreement”
shall mean that certain negative Pledge Agreement by and between Guarantor and
Lender executed in connection herewith, as such may be modified, amended,
restated or supplemented from time to time.

     

     “Receipt” shall have
the meaning given such term in Section
15.5.

     

    “Required Locations”
shall mean collectively: (a) the leased premises located at 12701 Commonwealth
Drive, Suite 9, Fort Myers, Florida 33913, and (b) any location leased by
Borrowers at which books and records relating to Accounts are kept of which
duplicates are not kept at the location identified in (a) above.

     

    “Released Parties”
shall have the meaning given such term in Section
15.11.

     

    “Releasing Parties”
shall have the meaning given such term in Section
15.11.

     

    “Revolver Termination”
shall mean the termination of the Revolving Facility for any reason
whatsoever.

     

    “Revolving Loan
Obligations” shall mean all of the Obligations related to the Revolving
Facility.

     

    
      
         


      

      
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    “Services” shall mean
medical and health care services provided to a Person, including, but not
limited to, medical and health care services (including diagnostic testing and
other testing services) which are covered by a policy of insurance issued by an
Insurer, physician services, nurse and therapist services, dental services,
hospital services, skilled nursing facility services, comprehensive outpatient
rehabilitation services, home health care services, residential and out-patient
behavioral healthcare services.

     

    “Software” shall mean
“software” as defined in Section 9-102 of the UCC.

     

    “Solvency Certificate”
shall mean a Solvency Certificate substantially in the form of Exhibit C attached
hereto.

     

    “Subsidiary” shall
mean, (i) as to Borrower, any Person in which more than fifty percent (50%) of
all equity, membership, partnership or other ownership interests is owned
directly or indirectly by such Borrower or one or more of its Subsidiaries, and
(ii) as to any other Person, any Person in which more than fifty percent (50%)
of all equity, membership, partnership or other ownership interests is owned
directly or indirectly by such Person or by one or more of such Person’s
Subsidiaries.

     

    “Supporting
Obligations” shall mean “supporting obligations” as defined in Section
9-102 of the UCC.

     

    “Term” shall mean the
period commencing on the Closing Date and ending on the third anniversary of the
Closing Date.

     

    “Termination Date”
shall mean the date of termination of this Agreement set forth in any notice of
termination delivered by Borrower in accordance with Section
13.1(a).

     

    “Transaction” shall
have the meaning given such term in Section
8.11.

     

    “Transferee” shall
have the meaning given such term in Section
15.2.

     

    “UCC” shall mean the
Uniform Commercial Code as in effect in the State of Maryland from time to
time.

     

    “Unused Line Fee”
shall mean a fee to be paid by Borrower to Lender on a monthly basis in an
amount equal to  0.025% (per month) of the difference derived by
subtracting (i) the daily average amount of the balances under the Revolving
Facility outstanding during the preceding month, from (ii) the Facility
Cap.

     

    “US Labs Award” shall
mean any award in connection with the litigation between Borrower and Accupath
Diagnostic Laboratories, Inc. described on Schedule
7.6.

     

    
      	
              II.

            	
              ADVANCES,
      PAYMENT AND INTEREST

            


    

     

    2.1         The
Revolving Facility

     

    (a)           Subject
to the provisions of this Agreement, Lender shall make Advances to Borrower
under the Revolving Facility from time to time during the Term, unless this Agreement is
terminated earlier, provided that,
notwithstanding any other provision of this Agreement to the contrary, the
aggregate amount of all Advances at any one time outstanding under the Revolving
Facility shall not exceed the lesser of (a) the Facility Cap, and (b) the
Availability.  The Revolving Facility is a revolving credit facility,
which may be drawn, repaid and redrawn, from time to time as permitted under
this Agreement.  Any determination as to whether there is Availability
for Advances shall be made by Lender in its Permitted Discretion and is final
and binding upon Borrower.  Unless otherwise permitted by Lender, each
Advance shall be in an amount of at least $1,000.  Subject to the
provisions of this Agreement, Borrower may request Advances under the Revolving
Facility up to and including the value, in Dollars, of the
Availability.  Advances under the Revolving Facility shall
automatically be made for the payment of interest on the Loans and other
Obligations on the date when due to the extent available and as provided for
herein.

     

    
      
         


      

      
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    (b)           Lender
in its Permitted Discretion may further adjust the Availability and the advance
rate by applying Liquidity Factors.  The Liquidity Factors and the
advance rate for Availability may be adjusted by Lender throughout the Term as
warranted by Lender’s underwriting practices and procedures in its credit
judgment.  Also, Lender shall have the right to establish from time to
time, in its Permitted Discretion, reserves against the Borrowing Base, which
reserves shall have the effect of reducing the amounts otherwise eligible to be
advanced to Borrower under the Revolving Facility pursuant to this
Agreement.  Borrower hereby acknowledges and agrees that as of the
Closing Date, Lender shall establish a $250,000 reserve against the Borrowing
Base, of Annex
I, which reserve shall be eliminated upon the satisfaction by Borrower of
the conditions set forth in Section 3 of Annex I for the
elimination of the testing of the Minimum Liquidity Covenant set forth in
Section 3 of Annex
I.

     

    2.2         The
Revolving Loans; Maturity

     

    All of
the Revolving Loan Obligations shall be due and payable in full in cash, if not
earlier in accordance with this Agreement, on the last day of the
Term.

     

    2.3         Revolving
Facility Disbursements; Requirement to Deliver Borrowing
Certificate

     

    So long
as no Default or Event of Default shall have occurred and be continuing,
Borrower may give Lender irrevocable written notice requesting an Advance under
the Revolving Facility by delivering to Lender not later than 12:00 p.m.
(Eastern Time) at least one but not more than four Business Days before the
proposed Borrowing Date of such requested Advance, a completed Borrowing
Certificate and relevant supporting documentation satisfactory to
Lender.  Each time a request for an Advance is made, and, in any event
and regardless of whether an Advance is being requested, on Tuesday of each week
during the Term
(and more frequently if Lender shall so request) until the Obligations are
Paid in Full and fully performed and this Agreement is terminated,
Borrower shall deliver to Lender a Borrowing Certificate accompanied by a
separate detailed aging and categorizing of Borrower’s accounts receivable and
such other supporting documentation as Lender shall reasonably request from time
to time.  On each Borrowing Date, Borrower irrevocably authorizes
Lender to disburse the proceeds of the requested Advance to the appropriate
Borrower’s account(s) as set forth on Schedule 2.3, in all
cases for credit to the appropriate Borrower (or to such other account as to
which the appropriate Borrower shall instruct Lender in writing) via Federal
funds wire transfer no later than 4:00 p.m. (Eastern Time).

     

    2.4         Promise
to Pay; Manner of Payment

     

    The
Borrower absolutely and unconditionally promises to pay principal, interest and
all other Obligations payable hereunder, or under any other Loan Document,
without any defense, right of rescission and without any deduction whatsoever,
including any deduction for any setoff, counterclaim or recoupment, and
notwithstanding any damage to, defects in or destruction of the Collateral or
any other event, including obsolescence of any property or
improvements.  All payments made by the Borrower (other than payments
automatically paid through Advances under the Revolving Facility as provided
herein), shall be made only by wire transfer on the date when due in Dollars, in
immediately available funds to such account as may be indicated in writing by
Lender to the Borrower from time to time.  Any such payments received
after 4:00 p.m. (Eastern Time) on the date when due shall be deemed received on
the following Business Day.  Whenever any payment hereunder shall be
stated to be due or shall become due and payable on a day other than a Business
Day, the due date thereof shall be extended to, and such payment shall be made
on, the next succeeding Business Day, and such extension of time in such case
shall be included in the computation of payment of any interest (at the interest
rate then in effect during such extension) and fees, as the case may
be.

     

    
      
         


      

      
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    2.5         Repayment
of Excess Advances

     

    Any
balance of Advances under the Revolving Facility outstanding at any time in
excess of either the Facility Cap or the Availability shall be immediately due
and payable by Borrower without the necessity of any demand, at the Payment
Office.

     

    2.6         Payments
by Lender

     

    If the Borrower fails to make any
payment required under any Loan Document as and when due and within any
applicable grace period, Lender may make such payment, which payment shall be an
Advance as of the date such payment is due notwithstanding the Availability, and
the Borrower irrevocably authorizes disbursement of any such funds to Lender by
way of direct payment of the relevant amount.   No payment or
prepayment of any amount by Lender or any other Person shall entitle any Person
to be subrogated to the rights of Lender under any Loan Document unless and
until all of the Obligations have been fully performed Paid in Full and this
Agreement has been terminated.  Any sums expended by Lender in its
Permitted Discretion as a result of Borrower’s or Guarantor’s failure to pay,
perform or comply with any Loan Document or any of the Obligations may be
charged to Borrower’s account as an Advance under the Revolving
Facility.

     

    2.7         Evidence
of Loans

     

    (a)           Lender
shall maintain, in accordance with its usual practice, electronic or written
records evidencing the Indebtedness and Obligations to Lender resulting from
each Loan made by Lender from time to time, including without limitation, the
amounts of principal and interest payable and paid to Lender from time to time
under this Agreement.

     

    (b)           The
entries made in the electronic or written records maintained pursuant to
subsection (a) of this Section 2.7 (the
“Register”) shall be
prima facie evidence of the existence and amounts of the Obligations and
Indebtedness therein recorded; provided, however, that the
failure of Lender to maintain such records or any error therein shall not in any
manner affect obligations of the Borrower to repay the Loans or Obligations in
accordance with their terms.

     

    (c)           Lender
will account to Borrower monthly with a statement of Advances under the
Revolving Facility, and any charges and payments made pursuant to this
Agreement, and in the absence of manifest error, such accounting rendered by
Lender shall be deemed final, binding and conclusive unless Lender is notified
by Borrower in writing to the contrary within fifteen calendar days of Receipt
of such accounting, which notice shall be deemed an objection only to items
specifically objected to therein.

     

    (d)           Borrower
agrees that:

     

    (i)           upon
written notice by Lender to Borrower that a Note or other evidence of
Indebtedness is requested by Lender to evidence the Loans and other Obligations
owing or payable to, or to be made by, Lender, Borrower shall promptly (and in
any event within three (3) Business Days of any such request) execute and
deliver to Lender an appropriate Note or Notes in form and substance reasonably
acceptable to Lender and Borrower;

     

    
      
         


      

      
        21

        
          

        

      

      
         


      

    


    (ii)           all
references to Notes in the Loan Documents shall mean Notes, if any, to the
extent issued (and not returned to the Borrower for cancellation) hereunder, as
the same may be amended, modified, divided, supplemented or restated from time
to time; and

     

    (iii)           upon
Lender’s written request, and in any event within three (3) Business Days of any
such request, Borrower shall execute and deliver to Lender new Notes and divide
the Notes in exchange for then existing Notes in such smaller amounts or
denominations as Lender shall specify in its sole and absolute discretion; provided, that, the aggregate
principal amount of such new Notes shall not exceed the aggregate principal
amount of the Notes outstanding at the time such request is made; and provided, further, that such
Notes that are to be replaced shall then be deemed no longer outstanding
hereunder and replaced by such new Notes and returned to Borrower within a
reasonable period of time after Lender’s receipt of the replacement
Notes.

     

    
      	
              III.

            	
              INTEREST
      AND FEES

            


    

     

    3.1         Interest
on the Revolving Facility

     

    Commencing January 1, 2008, and
continuing until the later of the expiration of the Term and the Payment in Full
and full performance of all of the Obligations and termination of this
Agreement, interest on outstanding Advances under the Revolving Facility shall
be payable monthly in arrears on the first day of each calendar month at an
annual rate of LIBOR plus 3.25% in accordance with the procedures provided for
in Section 2.4
and Section
5.1; provided, however, that,
notwithstanding any provision of any Loan Document, for the purpose of
calculating interest at any time hereunder, the LIBOR shall be not less than
3.14%, in each case calculated on the basis of a 360-day year and for the actual
number of calendar days elapsed in each interest calculation
period.  

     

    3.2         Commitment
Fee

     

    On or before the Closing Date, Borrower
shall pay to Lender $30,000 as a nonrefundable commitment fee which shall be
fully earned on the date paid.  Lender hereby acknowledges receipt of
$15,000 of such commitment fee on November 19, 2007.

     

    3.3         Unused
Line Fee

     

    Borrower shall pay Lender the Unused
Line Fee monthly in arrears on the first day of each calendar month (starting
with the calendar month immediately following the calendar month in which the
Closing Date occurs).

     

    3.4         Collateral
Management Fee

     

    Borrower shall pay Lender as additional
interest the Collateral Management Fee.  The Collateral Management Fee
shall be payable monthly in arrears on the first day of each calendar month
(starting with the calendar month immediately following the calendar month in
which the Closing Date occurs).

     

    
      
         


      

      
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    3.5         Computation
of Fees; Lawful Limits

     

    All fees hereunder shall be computed on
the basis of a year of three hundred and sixty days and for the actual number of
days elapsed in each calculation period, as applicable.  In no
contingency or event whatsoever, whether by reason of acceleration or otherwise,
shall the interest and other charges paid or agreed to be paid to Lender for the
use, forbearance or detention of money hereunder exceed the maximum rate
permissible under applicable law which a court of competent jurisdiction shall,
in a final determination, deem applicable hereto.  If, due to any
circumstance whatsoever, fulfillment of any provision hereof, at the time
performance of such provision shall be due, shall exceed any such limit, then,
the obligation to be so fulfilled shall be reduced to such lawful limit, and, if
Lender shall have received interest or any other charges of any kind which might
be deemed to be interest under applicable law in excess of the maximum lawful
rate, then such excess shall be applied first to any unpaid fees and charges
hereunder, then to unpaid principal balance owed by Credit Parties hereunder,
and if the then remaining excess interest is greater than the previously unpaid
principal balance, Lender shall promptly refund such excess amount to Borrower
and the provisions hereof shall be deemed amended to provide for such
permissible rate.  The terms and provisions of this Section 3.6 shall
control to the extent any other provision of any Loan Document is inconsistent
herewith.  All fees hereunder shall be non-refundable and deemed fully
earned when due and payable.

     

    3.6         Default
Rate of Interest

     

    Upon the occurrence and during the
continuation of an Event of Default, Lender may increase the Applicable Rate of
interest in effect at such time with respect to the Obligations, without notice,
to the Default Rate which Default Rate shall continue post-judgment and
subsequent to the date that the provisions of any applicable Debtor Relief Law
are exercised by or against a Borrower unless the statutory post-judgment rate
of interest is higher in which case such statutory rate shall
apply.

     

    
      	
              IV.

            	
              GRANT
      OF SECURITY INTERESTS

            


    

     

    4.1         Security
Interest; Collateral

     

    (a)           To
secure the payment and performance in full of the Obligations, Borrower (or if
referring to another Person, such Person) hereby grants to Lender a continuing
security interest in and Lien upon, and pledges and assigns to Lender, all of
its right, title and interest in and to the Collateral, wherever located,
whether now owned or hereafter acquired or arising;

     

    (b)           Borrower
hereby ratifies its authorization for Lender to have filed in any UCC
jurisdiction any initial financing statements or amendments thereto indicating
that those assets described in the definition of “Collateral” hereunder are
pledged to the Lender.

     

    (c)           If
Borrower shall at any time hold or acquire a Commercial Tort Claim that arises
out of Borrower’s Accounts or account receivable or would otherwise become part
of the collateral under the definition of Collateral, Borrower shall immediately
notify Lender in a writing signed by Borrower of the particulars thereof and
grant to Lender in such a writing a security interest therein and in the
proceeds thereof, all upon the terms of this Agreement, with such writing to be
in form and substance satisfactory to Lender.

     

    4.2         Power
of Attorney

     

    (a)           Borrower
hereby irrevocably constitutes and appoints Lender and any officer or agent
thereof, with full power of substitution, as its true and lawful
attorneys-in-fact with full irrevocable power and authority in the place and
stead of such Borrower or in Lender’s own name, for the purpose of carrying out
the terms of this Agreement and the grant of the security interests hereunder
and under the other Loan Documents, and without limiting the generality of the
foregoing, hereby gives said attorneys the power and right, on behalf of such
Borrower (without requiring Lender to act as such, and without notice to or
assent by such Borrower) to do the following: (i) upon the occurrence and during
the continuance of an Event of Default, to receive, open and dispose of all mail
addressed to any such Person and to endorse the name of any such Person upon any
and all checks, drafts, money orders, and other instruments for the payment of
money that are payable to such Person and constitute collections on its or their
Accounts; (ii) execute in the name of such Person any financing statements,
schedules, assignments, instruments, documents, and statements that it is or
they or are obligated to give Lender under any of the Loan Documents; and (iii)
do such other and further acts and deeds in the name of such Person that Lender
may deem necessary or desirable to enforce any Account or other Collateral or to
perfect Lender’s security interest or Lien in any Collateral.  In
addition, if any such Person breaches its obligation hereunder to direct
payments of Accounts or the proceeds of any other Collateral to the appropriate
Lockbox Account, Lender, as the irrevocably made, constituted and appointed true
and lawful attorney for such Person pursuant to this paragraph, may, by the
signature or other act of any of Lender’s officers or authorized signatories
(without requiring any of them to do so), direct any federal, state or private
payor or fiscal intermediary to pay proceeds of Accounts or any other Collateral
to the appropriate Lockbox Account.

     

    
      
         


      

      
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    (b)           To
the extent permitted by law, each Credit Party hereby ratifies all that said
attorneys shall lawfully do or cause to be done by virtue
hereof.  This power of attorney is a power coupled with an interest
and is irrevocable.

     

    (c)           The
powers conferred on Lender pursuant to this Section 4.2 are
solely to protect its interests in the Collateral and shall not impose any duty
upon it to exercise any such powers.  Lender shall be accountable only
for the amounts that it actually receives as a result of the exercise of such
powers, and neither it nor any of its officers, directors, employees or agents
shall be responsible to Credit Party for any act or failure to act, except for
Lender’s own gross negligence or willful misconduct.

     

    4.3         Further
Assurances

     

    Borrower
agrees, upon request of Lender, to take any and all other actions as Lender may
determine to be necessary or appropriate for the attachment, perfection
maintaining of the first priority security interest of, and for the ability of
Lender to enforce, Lender’s security interest in any and all of the Collateral,
including, without limitation, (i) executing, obtaining, delivering, filing,
registering and recording any and all financing statements, continuation
statements, stock powers, instruments and other documents, or causing the
execution, filing, registration, recording or delivery of any and all of the
foregoing, that are necessary or required under law or otherwise or reasonably
requested by Lender to be executed, filed, registered, obtained, delivered or
recorded to create, maintain, perfect, preserve, validate or otherwise protect
the pledge of the Collateral to Lender and Lender’s perfected first priority
Lien on the Collateral (and Borrower irrevocably grants Lender the right, at
Lender's option, to file any or all of the foregoing), (ii) immediately upon
learning thereof, report to Lender any reclamation, return or repossession of
goods in excess of $25,000.00 that are part of the Collateral (individually or
in the aggregate), (iii) defend the Collateral and Lender’s perfected first
priority Lien thereon against all claims and demands of all Persons at any time
claiming the same or any interest therein adverse to Lender, and pay all
reasonable costs and expenses (including, without limitation, allocable costs of
staff counsel, and diligence fees and reasonable attorneys’ fees and expenses,
provided, that, the payment of
staff counsel and reasonable attorneys’ fees shall be subject to the provisions
of Section 15.7(b)) in connection with such defense, which may at Lender’s
discretion be added to the Obligations, (iv) comply with any provision of any
statute, regulation or treaty of any Governmental Authority as to any Collateral
if compliance with such provision is a condition to attachment, perfection or
priority of, or ability of Lender to enforce, Lender’s security interest in such
Collateral and (v) obtain governmental and other third party waivers, consents
and approvals in form and substance satisfactory to Lender, including any
consent of any licensor, lessor or other Person obligated on Collateral and any
party or parties whose consent is required for the security interest of Lender
to attach under Section 4.1.

     

    
      
         


      

      
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              V.

            	
              ADMINISTRATION
      AND MAINTENANCE OF COLLATERAL

            


    

     

    5.1         Revolving
Facility Collections; Repayment; Borrowing Availability and Lockbox

     

    Borrower shall maintain one or more
Lockbox Accounts with the Lockbox Banks, and shall execute with each of the
Lockbox Banks a Lockbox Agreement, and such other agreements related thereto as
Lender may require.  Borrower shall ensure that all collections of
their respective Accounts and all other cash payments received by Borrower are
paid and delivered directly from Account Debtors and other Persons into the
appropriate Lockbox Account.  The Lockbox Agreements shall provide
that the Lockbox Banks immediately will transfer all funds paid into the Lockbox
Accounts into the Concentration Account.  Notwithstanding and without
limiting any other provision of any Loan Document, Lender shall apply, on a
daily basis, all funds transferred into the Concentration Account pursuant to
the Lockbox Agreement and this Section 5.1 in
such order and manner as determined by Lender.  To the extent that any
Accounts are collected by Borrower or any other cash payments received by
Borrower are not sent directly to the appropriate Lockbox Account but are
received by Borrower or any of their Affiliates, such collections and proceeds
shall be held in trust for the benefit of Lender and immediately remitted (and
in any event within three (3) Business Days from receipt thereof), in the form
received, to the appropriate Lockbox Account for immediate transfer to the
Concentration Account.  Borrower acknowledges and agrees that
compliance with the terms of this Section 5.1 is an
essential term of this Agreement.  All funds transferred to the
Concentration Account for application to the Obligations under the Revolving
Facility shall be applied to reduce the Obligations under the Revolving
Facility, but, for purposes of calculating interest hereunder, shall be subject
to a three Business Day clearance period.  If as the result of
collections of Accounts and any other cash payments received by Borrower
pursuant to this Section 5.1 a credit
balance exists with respect to the Concentration Account, such credit balance
shall not accrue interest in favor of a Borrower.  If at any time
there is a credit balance in excess of $100,000, in the Concentration Account,
Lender agrees to automatically wire transfer (without Borrower’s written
request) all of such credit balance to the Borrower’s operating account
specified on Schedule 2.3 within one Business Day of such credit balance
reaching $100,000, provided, however, Lender shall
not be required to make such “no-notice” transfer more frequently than once per
week. Notwithstanding the foregoing, upon the written request of Borrower,
Lender shall wire transfer any credit balance in the Concentration Account to
Borrower’s operating account specified in Schedule 2.3., provided, that if Lender
receives the written request of Borrower no later than 12:00 p.m. (Eastern
Time), then Lender shall make such transfer the following Business Day and if
Lender receives the written request of Borrower after 12:00 p.m. (Eastern time),
then Lender shall make such transfer within two (2) Business Days from the date
of receipt of such written notice.   If applicable, at any time
prior to the execution of all or any of the Lockbox Agreements and operation of
all or any of the Lockbox Accounts, Borrower and their Affiliates shall direct
all collections or proceeds it receives on Accounts or from other Collateral to
the Concentration Account.

     

    5.2         Accounts

     

    In
determining which Accounts are Eligible Accounts, Lender may rely on all
statements and representations made by Borrower with respect to any
Account.  Unless otherwise indicated in writing to Lender, each
Account of Borrower (i) is genuine and in all respects what it purports to be
and is not evidenced by a judgment, (ii) arises out of a completed, bona fide
sale and delivery of goods or rendering of Services by a Borrower in the
ordinary course of business and in accordance with the terms and conditions of
all purchase orders, contracts, certifications, participations, certificates of
need and other documents relating thereto or forming a part of the contract
between a Borrower and the Account Debtor, (iii) is for a liquidated amount
(less any contractual allowances) maturing as stated in a claim or invoice
covering such sale of goods or rendering of Services, a copy of which has been
furnished or is available to Lender, (iv) together with Lender’s security
interest therein, is not and will not be in the future (by willful act or
omission by Borrower), subject to any offset, lien, deduction, defense, dispute,
counterclaim or other adverse condition, is absolutely owing to Borrower and is
not contingent in any respect or for any reason (except Accounts owed or owing
by Medicaid/Medicare Account Debtors that may be subject to offset or deduction
under applicable law), and (v) has been billed and forwarded to the Account
Debtor for payment in accordance with applicable laws and is in compliance and
conformance with any requisite procedures, requirements and regulations
governing payment by such Account Debtor with respect to such Account, and, if
due from a Medicaid/Medicare Account Debtor, is properly payable directly to a
Borrower.  

     

    
      
         


      

      
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    5.3         Healthcare

     

    (a)           Borrower
has obtained from (i) the Medicare program, approval to receive the provider
numbers which will permit Borrower to bill the Medicare program with respect to
covered services rendered to patients insured under the Medicare program, (ii)
the applicable Medicaid programs, approval to receive the provider
numbers/in-patient service contracts which will permit Borrower to bill the
Medicaid program with respect to covered services rendered to patients insured
under the Medicaid programs, and (iii) the CHAMPUS/TRICARE program, approval to
receive the provider numbers which will permit Borrower to bill the
CHAMPUS/TRICARE program with respect to covered services rendered to patients
insured under the CHAMPUS/TRICARE program.  Borrower is in compliance
with the conditions of participation in the Medicare, Medicaid and
CHAMPUS/TRICARE programs.

     

    (b)           There
is no pending nor to the knowledge of Borrower, threatened, proceeding or
investigation of Borrower relative to EMTALA nor are there any investigations or
proceedings pending, or to the knowledge of Borrower, threatened by any
Governmental Authority with respect to the Medicare, Medicaid or CHAMPUS/TRICARE
programs with respect to the operations of Borrower, except as set forth on
Schedule 5.3A
hereto.  Without limiting or being limited by any other provision of
any Loan Document, Borrower has timely filed or caused to be filed all cost and
other reports of every kind required by law, agreement or
otherwise.  Subject to the last sentence of Section 7.18, there
are no claims, actions or appeals pending (and Borrower has not filed any claims
or reports which could reasonably result in any such claims, actions or appeals)
before any commission, board or agency or other Governmental Authority,
including, without limitation, any intermediary or carrier, the Provider
Reimbursement Review Board or the Administrator of the Centers of Medicare and
Medicaid Services, with respect to any state or federal Medicare or Medicaid or
CHAMPUS/TRICARE cost reports or claims filed by Borrower, or any disallowance by
any commission, board or agency or other Governmental Authority in connection
with any audit of such cost reports or claims.  No validation review
or program integrity review related to Borrower or the consummation of the
transactions contemplated herein or to the Collateral have been conducted by any
commission, board or agency or other Governmental Authority in connection with
the Medicare or Medicaid programs, and to the knowledge of Borrower, no such
reviews are scheduled, pending or threatened against or affecting any of the
providers, any of the Collateral or the consummation of the transactions
contemplated hereby.  Neither Credit Parties nor any of their
respective officers, directors, or managing employees, employees or agents are,
or while this Agreement shall remain in effect shall be, excluded from
participation in, or sanctioned or convicted of a crime under or with respect to
the Medicare, Medicaid or CHAMPUS/TRICARE programs, nor to the best of Credit
Parties’ knowledge, is any such exclusion threatened.  Borrower has
not received any notice from any of the Medicare, Medicaid or CHAMPUS/TRICARE
programs, or any other third party payor programs, of any pending or threatened
investigations, reviews or surveys of Borrower, its directors, officers or
managing employees, and Borrower has no actual knowledge that any such
investigation, reviews or surveys are pending or threatened.

     

    (c)           As
of the Closing Date, Borrower has third party contracts with each of the
third-party payors listed on Schedule 5.3B (unless
noted otherwise), which constitutes (as indicated) each of the payors
representing at least five percent (5%) of Borrower’s historic third-party payor
cash receipts for the twelve month period ended December 31, 2007.

     

    
      
         


      

      
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    5.4         Medicare
and Medicaid Account Debtors and Third-Party Payor Information

     

    Borrower
(a) shall maintain applicable Medicare and Medicaid provider numbers, (b) shall
maintain applicable CHAMPUS/TRICARE provider numbers, if applicable, and (d) to
the extent Borrower shall enter into any other arrangements with
non-governmental third-party payors, Borrower shall use commercially reasonable
efforts to enter into agreements with such third-party payors in form and
substance satisfactory to Lender.

     

    5.5         Collateral
Administration

     

    (a)           All
Collateral (except proceeds of Accounts which shall be deposited with the
Lockbox Banks) and records supporting the Collateral will at all times be kept
by Borrower at the locations set forth on Schedule 7.18B
hereto and shall not, without thirty calendar days prior written notice to
Lender, be moved therefrom, and in any case shall not be moved outside the
continental United States.

     

    (b)           Borrower
shall keep accurate and complete records of its Accounts and all payments and
collections thereon and shall submit such records to Lender on such periodic
bases as Lender may request.  In addition, if Accounts of Borrower in
an aggregate face amount in excess of $25,000.00 become ineligible because they
fall within one of the specified categories of ineligibility set forth in the
definition of Eligible Accounts, Borrower shall notify Lender of such occurrence
within two Business Days following the discovery of such occurrence or upon any
submission to Lender of a Borrowing Certificate and the Borrowing Base shall
thereupon be adjusted to reflect such occurrence.

     

    (c)           Whether
or not an Event of Default has occurred, any of Lender’s officers, employees,
representatives or agents shall have the right, at any time during normal
business hours upon reasonable notice, in the name of Lender, any designee of
Lender or Borrower, to verify the validity, amount or any other matter relating
to any Collateral.  Notwithstanding the foregoing, so long as no
Default or Event of Default has occurred and is continuing, Lender agrees to
give Borrower at least seven (7) business days’ written notice of such visit to
Borrower’s offices.  Borrower shall cooperate fully with Lender in an
effort to facilitate and promptly conclude such verification
process.

     

    (d)           Borrower
shall endeavor in the first instance to make collection of its Accounts for
Lender.  Lender shall have the right at all times after the occurrence
and during the continuance of an Event of Default to notify (i) Account
Debtors owing Accounts to Borrower other than Medicaid/Medicare Account Debtors
that their Accounts have been assigned to Lender and to collect such Accounts
directly in its own name and to charge collection costs and expenses, including
reasonable attorney’s fees, to Borrower, and (ii) Medicaid/Medicare Account
Debtors that Borrower has waived any and all defenses and counterclaims they may
have or could interpose in any such action or procedure brought by Lender to
obtain a court order recognizing the collateral assignment or security interest
and Lien of Lender in and to any Account or other Collateral and that Lender is
seeking or may seek to obtain a court order recognizing the collateral
assignment or security interest and Lien of Lender in and to all Accounts and
other Collateral payable by Medicaid/Medicare Account Debtors.

     

    (e)           As
and when determined by Lender in its Permitted Discretion, Lender will perform
the searches described in clauses (i), (ii) and (iii) below against Borrower and
Guarantor (the results of which are to be consistent with Borrower’s
representations and warranties under this Agreement), all at Borrower’s expense:
(i) UCC searches with the Secretary of State of the jurisdiction of organization
of Borrower and Guarantor and, if deemed necessary by Lender, the Secretary of
State and local filing offices of each jurisdiction where Borrower or Guarantor
maintain their respective executive offices, a place of business or assets;
(ii) Lien searches with the United States Patent and Trademark Office and
the United States Copyright Office; and (iii) judgment, federal, state and local
tax lien searches, in each jurisdiction searched under clause (i)
above.

     

    
      
         


      

      
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    (f)           Borrower
(i) shall provide prompt written notice to its current bank to transfer all
items, collections and remittances to the Concentration Account, (ii) shall
direct each Account Debtor to make payments to the appropriate Lockbox Account,
and Borrower hereby authorizes Lender, upon any failure to send such notices and
directions within ten calendar days after the Closing Date (or ten calendar days
after the Person becomes an Account Debtor), to send any and all similar notices
and directions to such Account Debtors, and (iii) shall do anything further that
may be lawfully required by Lender to create and perfect Lender’s Lien on any
Collateral and effectuate the intentions of the Loan Documents.  At
Lender’s request, Borrower shall immediately deliver to Lender all Collateral
for which Lender must receive possession to obtain a perfected security
interest.

     

    
      	
              VI.

            	
              CONDITIONS
      PRECEDENT

            


    

     

    6.1         Conditions
to Initial Advance and Closing

     

    The obligations of Lender to consummate
the transactions contemplated herein and to make the Initial Advance are subject
to the satisfaction, in the sole judgment of Lender, of the
following:

     

    (a)           Lender
shall have received information and responses to its due diligence requests, and
completed examinations related to the Collateral, the financial statements and
the books, records, business, obligations, financial condition and operational
state of each Credit Party and any other information reasonably requested by
Lender, and all such information and responses as well as the results of such
examinations and each Credit Party shall demonstrate to Lender’s satisfaction
that  (i) its operations comply, in all respects deemed material
by Lender, in its sole judgment, with all applicable federal, state, foreign and
local laws, statutes and regulations, (ii) its operations are not the
subject of any governmental investigation, evaluation or any remedial action
which could result in any expenditure or liability deemed material by Lender, in
its sole judgment, and (iii) it has no liability (whether contingent or
otherwise) that is deemed material by Lender, in its sole judgment;

     

    (b)           (i)
Borrower shall have delivered to Lender (A) the Loan Documents to which Borrower
is a party, each duly executed by an authorized officer of such Borrower and the
other parties thereto, (B) a Borrowing Certificate for the Initial Advance under
the Revolving Facility executed by an authorized officer of Borrower and (C) (1)
audited annual consolidated and consolidating financial statements of Borrower
for Borrower’s most recently ended fiscal year, including notes thereto,
consisting of a balance sheet at the end of such completed fiscal year and the
related statements of income, retained earnings, cash flows and owner's equity
for such completed fiscal year, which financial statements shall be prepared and
certified without qualification by an independent certified public accounting
firm reasonably satisfactory to Lender/in accordance with GAAP consistently
applied with prior periods (except for changes in accounting methodology
specified in such financial statements); and (2) unaudited consolidated and
consolidating financial statements of Borrower consisting of a balance sheet
and statements of income, retained earnings, cash flows and owner's equity
for the period from the beginning of the current fiscal year through the end of
the most recently ended calendar month, which financial statements shall be
prepared in accordance with GAAP consistently applied with prior periods (except
for changes in accounting methodology which have been enacted since such prior
periods), (ii) Borrower shall have established and maintained the Lockbox
Accounts and have entered into Lockbox Agreements, all as contemplated in Section 5.1; and
(iii) Guarantor shall have delivered to Lender the Loan Documents to which such
Guarantor is a party, each duly executed and delivered by such Guarantor or an
authorized officer of such Guarantor, as applicable, and the other parties
thereto;

     

    
      
         


      

      
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    (c)           all
in form and substance satisfactory to Lender in its Permitted Discretion, Lender
shall have received (i) a report of Uniform Commercial Code financing statement,
tax and judgment lien searches performed with respect to Borrower and Guarantor
in each jurisdiction determined by Lender in its sole discretion, and such
report shall show no Liens on the Collateral (other than Permitted Liens), (ii)
each document (including, without limitation, any Uniform Commercial Code
financing statement) required by any Loan Document or under law or requested by
Lender to be filed, registered or recorded to create in favor of Lender, a
perfected first priority security interest upon the Collateral, and
(iii) evidence of each such filing, registration or recordation and of the
payment by Borrower of any necessary fee, tax or expense relating
thereto;

     

    (d)           Lender
shall have received (i) the Organizational and Good Standing Documents of each
Credit Party, all in form and substance acceptable to Lender, (ii) a certificate
of the corporate secretary or assistant secretary of each Credit Party dated the
Closing Date, as to the incumbency and signature of the Persons executing the
Loan Documents, in form and substance acceptable to Lender, and (iii) the
written legal opinion of counsel for Credit Parties, in form and substance
satisfactory to Lender;

     

    (e)       
    Lender shall have received (i) a Solvency Certificate
executed by the chief financial officer (or, in the absence of a chief financial
officer, the chief executive officer) of Borrower and Guarantor, in form and
substance satisfactory to Lender and (ii) an officer’s certificate in the form
attached hereto as Exhibit D, executed
by the chief executive officer or President of Borrower;

     

    (f)      
     Lender shall have completed examinations, the
results of which shall be satisfactory in form and substance to Lender, of the
Collateral, the financial statements and the books, records, business,
obligations, financial condition and operational state of Borrower and
Guarantor, and each such Person shall have demonstrated to Lender’s satisfaction
that (i) its operations comply, in all respects deemed material by Lender,
in its sole judgment, with all applicable federal, state, foreign and local
laws, statutes and regulations, (ii) its operations are not the subject of
any governmental investigation, evaluation or any remedial action which could
result in any expenditure or liability deemed material by Lender, in its sole
judgment, and (iii) it has no liability (whether contingent or otherwise)
that is deemed material by Lender, in its sole judgment;

     

    (g)           Lender
shall have received all fees, charges and expenses payable to Lender on or prior
to the Closing Date pursuant to the Loan Documents;

     

    (h)           all
in form and substance satisfactory to Lender in its Permitted Discretion, Lender
shall have received such consents, approvals and agreements, including, without
limitation, any applicable Landlord Waivers and Consents with respect to any and
all leases set forth on Schedule 7.4A, from
such third parties as Lender shall determine are necessary or desirable with
respect to (i) the Loan Documents and the transactions contemplated thereby, and
(ii) claims against Borrower or Guarantor or the Collateral;

     

    (i)          
 Borrower shall be in compliance with Section 8.5, and
Lender shall have received copies of all insurance policies or binders, original
certificates of all insurance policies of Borrower confirming that they are in
effect and that the premiums due and owing with respect thereto have been paid
in full and endorsements of such policies issued by the applicable Insurers and
naming Lender as loss payee or additional insured on those policies specified in
Section
8.5;

     

    (j)           all
corporate and other proceedings, documents, instruments and other legal matters
in connection with the transactions contemplated by the Loan Documents
(including, but not limited to, those relating to corporate and capital
structures of Borrower) shall be satisfactory to Lender;

     

    
      
         


      

      
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    (k)           Lender
shall have received, in form and substance satisfactory to Lender, release and
termination of any and all Liens, security interest and Uniform Commercial Code
financing statements in, on, against or with respect to any of the Collateral
(other than Permitted Liens);

     

    (l)     
      Borrower shall have executed and delivered
to Lender an IRS Form 8821;

     

    (m)           Lender
shall be satisfied that there are no material defaults in any of Borrower’s
obligations under any contract required for the operation of its
business;

     

    (n)           Lender
shall have received the Pledge Agreement, in form and substance satisfactory to
Lender, as duly authorized, executed and delivered by the parties thereto;
and

     

    (o)           Lender
shall have received such other documents, certificates, information or legal
opinions as Lender may reasonably request, all in form and substance reasonably
satisfactory to Lender.

     

    6.2         Conditions
to Each Advance

     

    The obligations of Lender to make any
Advance, including, without limitation, the Initial Advance, (or otherwise
extend credit hereunder) are subject to the satisfaction, in the sole judgment
of Lender, of the following additional conditions precedent:

     

    (a)           Borrower
shall have delivered to Lender a Borrowing Certificate for the Advance executed
by an authorized officer of Borrower, which shall constitute a representation
and warranty by Borrower as of the Borrowing Date of such Advance that the
conditions contained in this Section 6.2 have been
satisfied; provided however, that any
determination as to whether to fund Advances or extensions of credit shall be
made by Lender in its Permitted Discretion;

     

    (b)           each
of the representation and warranties made by Credit Parties in or pursuant to
this Agreement, or under the other Loan Documents or which are contained in any
certificate, document or financial or other statement furnished in connection
herewith, shall be true and correct, before and after giving effect to such
Advance;

     

    (c)           no
Default or Event of Default shall have occurred or be continuing or would exist
after giving effect to the Advance on such date;

     

    (d)           immediately
after giving effect to the requested Advance, the aggregate outstanding
principal amount of Advances shall not exceed the lesser of the Availability and
the Facility Cap;

     

    (e)           at
the time of making such requested Advance, no Material Adverse Change has
occurred or is continuing; and

     

    (f)           Lender
shall have received all fees, charges and expenses payable to Lender on or prior
to such date pursuant to the Loan Documents.

     

    
      	
              VII.

            	
              REPRESENTATIONS
      AND WARRANTIES

            


    

     

    Credit
Parties, jointly and severally, represent and warrant as of the date hereof, the
Closing Date, each Borrowing Date:

     

    
      
         


      

      
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    7.1         Organization
and Authority

     

    Each Credit Party is a corporation duly organized, validly
existing and in good standing under the laws of its state of
formation.  Each Credit Party (i) has all requisite corporate or
entity power and authority to own its properties and assets and to carry on its
business as now being conducted and as contemplated in the Loan Documents,
(ii) is duly qualified to conduct business in every jurisdiction in which
failure so to qualify would reasonably be likely to result in a Material Adverse
Change, and (iii) has all requisite power and authority (A) to execute,
deliver and perform the Loan Documents to which it is a party, (B) to borrow
hereunder, (C) to consummate the transactions contemplated under the Loan
Documents, and (D) to grant the Liens with regard to the Collateral pursuant to
the Loan Documents to which it is a party.

     

    7.2         Loan
Documents

     

    The execution, delivery and performance
by each Credit Party of the Loan Documents to which it is a party, and the
consummation of the transactions contemplated thereby, (i) have been duly
authorized by all requisite action of each such Person and have been duly
executed and delivered by or on behalf of each such Person; (ii) do not violate
any provisions of (A) applicable law, statute, rule, regulation, ordinance
or tariff, (B) any order of any Governmental Authority binding on any such
Person or any of their respective properties, or (C) the certificate of
incorporation or bylaws (or any other equivalent governing agreement or
document) of any such Person, or any agreement between any such Person and its
respective stockholders, members, partners or equity owners or among any such
stockholders, members, partners or equity owners; (iii) are not in conflict
with, and do not result in a breach or default of or constitute an event of
default, or an event, fact, condition or circumstance which, with notice or
passage of time, or both, would constitute or result in a conflict, breach,
default or event of default under, any indenture, agreement or other instrument
to which any such Person is a party, or by which the properties or assets of
such Person are bound; (iv) except as set forth therein, will not result in
the creation or imposition of any Lien of any nature upon any of the properties
or assets of any such Person, and (v) except as set forth on Schedule 7.2, do not
require the consent, approval or authorization of, or filing, registration or
qualification with, any Governmental Authority or any other
Person.  When executed and delivered, each of the Loan Documents to
which any Credit Party is a party will constitute the legal, valid and binding
obligation of Credit Party, enforceable against such Credit Party in accordance
with its terms.

     

    7.3         Subsidiaries,
Capitalization and Ownership Interests

     

    Except as listed on Schedule 7.3, no
Credit Party has any Subsidiaries.  Schedule 7.3
states the authorized and issued capitalization of each Credit Party, the number
and class of equity securities and/or ownership, voting or partnership interests
issued and outstanding of each Credit Party and the record and beneficial owners
thereof (including options, warrants and other rights to
acquire any of the foregoing).  The ownership or partnership interests
of each Credit Party that is a limited partnership or a limited liability
company are not certificated, the documents relating to such interests do not
expressly state that the interests are governed by Article 8 of the Uniform
Commercial Code, and the interests are not held in a securities
account.  Schedule 7.3
sets forth a complete and accurate list of the directors, members, managers
and/or partners of each Credit Party.  Except as listed on Schedule 7.3, no
Credit Party owns an interest in, participates in or engages in any joint
venture, partnership or similar arrangements with any Person.

     

    7.4         Properties

     

    Each Credit Party (i) is the sole owner
and has good, valid and marketable title to, or a valid leasehold interest in,
all of its properties and assets, including the Collateral, whether personal or
real, subject to no transfer restrictions or Liens of any kind except for
Permitted Liens, and (ii) is in compliance in all material respects with each
lease to which it is a party or otherwise bound.  Schedule 7.4A
lists all real properties (and their locations) owned or leased by or to, and
all other material assets or property that are leased or licensed by, any Credit
Party and all warehouses, fulfillment houses or other locations at which any of
any Credit Party’s Inventory is located.  Each Credit Party enjoys
peaceful and undisturbed possession under all such leases and such leases are
all the leases necessary for the operation of such properties and assets, are
valid and subsisting and are in full force and effect.  Schedule 7.4B lists
all Deposit Accounts and investment accounts (and their locations) owned by any
Credit Party, and all such Deposit Accounts and investment accounts are subject
to no Liens of any kind except as expressly set forth on Schedule 7.4B, all of
which Liens constitute Permitted Liens.

     

    
      
         


      

      
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    7.5         Other
Agreements

     

    No Credit Party is (i) a party to any
judgment, order or decree or any agreement, document or instrument, or subject
to any restriction, which would affect its ability to execute and deliver, or
perform under, any Loan Document or to pay the Obligations, (ii) in default in
the performance, observance or fulfillment of any obligation, covenant or
condition contained in any agreement, document or instrument to which it is a
party or to which any of its properties or assets are subject, which default, if
not remedied within any applicable grace or cure period would reasonably be
likely to result in a Material Adverse Change, nor is there any event, fact,
condition or circumstance which, with notice or passage of time or both, would
constitute or result in a conflict, breach, default or event of default under,
any of the foregoing which, if not remedied within any applicable grace or cure
period would reasonably be likely to result in a Material Adverse Change; (iii)
a party or subject to any agreement, document or instrument with respect to, or
obligation to pay any, Management or Service Fee with respect to, the ownership,
operation, leasing or performance of any of its business or any facility, nor is
there any manager with respect to any such facility; or (iv) a party to any
contract with any Affiliate other than as set forth on Schedule
7.5.

     

    7.6         Litigation

     

    There is
no action, suit, proceeding or investigation pending or, to the knowledge of any
Credit Party, threatened against any Credit Party (i) that challenges the
validity of any of the Loan Documents, or to enjoin the right of any Credit
Party to enter into any Loan Document or to consummate the transactions
contemplated thereby, (ii) that would reasonably be likely to be or have, either
individually or in the aggregate, any Material Adverse Change, or
(iii) that would reasonably be likely to result in any Change of
Control.  Except as set forth on Schedule 7.6, no Credit Party is a
party or subject to any order, writ, injunction, judgment or decree of any
Governmental Authority.  Except as set forth on Schedule 7.6, there
is no action, suit, proceeding or investigation initiated by any Credit Party
currently pending.

     

    7.7         Environmental
Matters

     

    Other than exceptions to any of the
following that could not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Change:

     

    (a)           Each
Credit Party
and its Subsidiaries:  (i) are, and within the period of all
applicable statutes of limitation have been, in compliance with all applicable
Environmental Laws; (ii) hold all environmental Permits (each of which is in
full force and effect) required for any of their current or intended operations
or for any property owned, leased, or otherwise operated by any of them; (iii)
are, and within the period of all applicable statutes of limitation have been,
in compliance with all of their environmental Permits; and (iv) reasonably
believe that:  each of their environmental Permits will be timely
renewed and complied with, without material expense; any additional
environmental Permits that may be required of any of them will be timely
obtained and complied with, without material expense; and compliance with any
Environmental Law that is or is expected to become applicable to any of them
will be timely attained and maintained, without material expense.

     

    
      
         


      

      
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    (b)           To
the knowledge of each Credit Party and
its Subsidiaries, no Materials of Environmental Concern (i) are present at, on,
under, in, or about any real property now owned, leased or operated by such
Credit Party
or any of its Subsidiaries, or (ii) were present at any formerly owned, leased
or operated property during the period of such ownership, lease or operation by
such Credit
Party or its Subsidiaries or (iii) are present at any other location
(including, without limitation, any location to which Materials of Environmental
Concern have been sent for re-use or recycling or for treatment, storage, or
disposal) which, in the case of any of clauses (i), (ii) or (iii), would
reasonably be expected to (A) give rise to liability of such Credit Party or any
of its Subsidiaries under any applicable Environmental Law or otherwise result
in costs to such Credit Party or any
of its Subsidiaries, (B) interfere with the continued operations of such Credit Party or any
of its Subsidiaries, or (C) impair the fair saleable value of any real property
owned or leased by such Credit Party or any
of its Subsidiaries.

     

    (c)           There
is no judicial, administrative, or arbitral proceeding (including any notice of
violation or alleged violation) under or relating to any Environmental Law to
which any Credit
Party or any of such Credit Party’s
Subsidiaries is, or to the knowledge of such Credit Party or any
of its Subsidiaries will be, named as a party that is pending or, to the
knowledge of such Credit Party or any
of its Subsidiaries, threatened.

     

    (d)           No
Credit Party,
nor any of Credit
Parties’ Subsidiaries, has received any written request for information,
or been notified that it is a potentially responsible party under or relating to
the federal Comprehensive Environmental Response, Compensation, and Liability
Act or any similar Environmental Law, or with respect to any Materials of
Environmental Concern.

     

    (e)           No
Credit Party,
nor any of Credit
Parties’ Subsidiaries, has entered into or agreed to any consent decree,
order, or settlement or other agreement, or is subject to any judgment, decree,
or order or other agreement, in any judicial, administrative, arbitral, or other
forum for dispute resolution, relating to compliance with or liability under any
Environmental Law.

     

    (f)           No
Credit Party,
nor any of Credit
Parties’ Subsidiaries, has assumed or retained, by contract or operation
of law, any liabilities of any kind, fixed or contingent, known or unknown,
under any Environmental Law or with respect to any Material of Environmental
Concern.

     

    7.8         Potential
Tax Liability; Tax Returns; Governmental Reports

     

    (a)           Except
as disclosed in Schedule 7.8, no
Credit Party (i) has received any oral or written communication from any taxing
authority with respect to any investigation or assessment relating to such
Credit Party directly, or relating to any consolidated tax return which was
filed on behalf of such Credit Party, (ii) is aware of any year which remains
open pending tax examination or audit by any taxing authority, and (iii) is
aware of any information that could give rise to any  tax liability or
assessment.

     

    (b)           Each
Credit Party (i) has filed all federal, state, foreign (if applicable) and local
tax returns and other reports which are required by law to be filed by such
Credit Party, and (ii) has paid all taxes, assessments, fees and other
governmental charges, including, without limitation, payroll and other
employment related taxes, in each case that are due and payable, except only for
items that such Credit Party is currently contesting in good faith with adequate
reserves under GAAP, which contested items are described on Schedule
7.8.

     

    
      
         


      

      
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    7.9         Financial
Statements and Reports

     

    All financial statements and financial
information relating to Credit Parties that have been or may hereafter be
delivered to Lender by Credit Parties are accurate and complete (as of the date
they were prepared) and all financial statements have been prepared in
accordance with GAAP consistently applied with prior periods except for any
normal quarter and year-end adjustments which may be applied in future periods
and for any changes in accounting methodology that may have been applied since
any prior period.  Credit Parties have no material obligations or
liabilities of any kind not disclosed in such financial information or
statements, and since the date of the most recent financial statements submitted
to Lender, there has not occurred any Material Adverse Change or Liability Event
or, to Credit Parties’ knowledge, any other event or condition that could
reasonably be expected to have a Material Adverse Change or Liability
Event.

     

    7.10       Compliance
with Law

     

    (a)           Each
Credit Party has been and is currently in compliance, and is presently taking
and will continue to take all actions necessary to assure that it shall, on or
before each applicable compliance date and continuously thereafter, comply with
HIPAA.  Borrower has not received any notice from any Governmental
Authority that such Governmental Authority has imposed or intends to impose any
enforcement actions, fines or penalties for any failure or alleged failure to
comply with HIPAA or its implementing regulations. Each Credit Party (i) is in
compliance with all laws, statutes, rules, regulations, ordinances and tariffs
of any Governmental Authority applicable to such Credit Party and such Credit
Party’s business, assets or operations, including, without limitation, ERISA and
Healthcare Laws, and (ii) is not in violation of any order of any Governmental
Authority or other board or tribunal, except where noncompliance or violation
could not reasonably be expected to result in a Material Adverse
Change.  There is no event, fact, condition or circumstance which,
with notice or passage of time, or both, would constitute or result in any
noncompliance with, or any violation of, any of the foregoing, in each case
except where noncompliance or violation could not reasonably be expected to
result in a Material Adverse Change.  No Credit Party has received any
notice that such Credit Party is not in compliance in any respect with any of
the requirements of any of the foregoing.  No Credit Party has (a)
engaged in any Prohibited Transactions as defined in Section 406 of ERISA
and Section 4975 of the Internal Revenue Code of 1986, as amended, and the
rules and regulations promulgated thereunder, (b) failed to meet any applicable
minimum funding requirements under Section 302 of ERISA in respect of its
plans and no funding requirements have been postponed or delayed, (c) any
knowledge of any event or occurrence which would cause the Pension Benefit
Guaranty Corporation to institute proceedings under Title IV of ERISA to
terminate any of the employee benefit plans, (d) any fiduciary responsibility
under ERISA for investments with respect to any plan existing for the benefit of
Persons other than its employees or former employees, or (e) withdrawn,
completely or partially, from any multi-employer pension plans so as to incur
liability under the MultiEmployer Pension Plan Amendments of
1980.  With respect to each Credit Party, there exists no event
described in Section 4043 of ERISA, excluding Subsections 4043(b)(2)
and 4043(b)(3) thereof, for which the required thirty (30) day notice period has
not been waived.  Each Credit Party has maintained in all material
respects all records required to be maintained by the Joint Commission on
Accreditation of Healthcare Organizations, the Food and Drug Administration,
Drug Enforcement Agency and State Boards of Pharmacy and the federal and state
Medicare and Medicaid programs as required by the Healthcare Laws and, to the
best knowledge of each Credit Party, there are no presently existing
circumstances which likely would result in material violations of the Healthcare
Laws.

     

    (b)           No
Credit Party (i)  is a Person whose property or interest in property is
blocked or subject to blocking pursuant to Section  1 of Executive Order
13224 of September 23, 2001 Blocking Property and Prohibiting Transactions With
Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079
(2001)), (ii) engages in any dealings or transactions prohibited by Section 2 of
such executive order, or is otherwise associated with any such Person in any
manner violative of such Section 2, or (iii) is a Person on the list of
Specially Designated Nationals and Blocked Persons or subject to the limitations
or prohibitions under any other OFAC regulation or executive order.

     

    
      
         


      

      
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    (c)           Each
Credit Party is in compliance, in all material respects, with the Patriot
Act.

     

    7.11       Intellectual
Property

     

    Schedule 7.11 lists,
as of the Closing Date, all (a) registered Intellectual Property (including
applications for registration) owned by Borrower and (b) licenses of rights in
Intellectual Property (other than non-customized mass market licenses of rights
in Intellectual Property) pursuant to which Borrower licenses rights in
Intellectual Property either from or to another Person, whether on an exclusive
or non-exclusive basis.

     

    7.12       Licenses
and Permits; Labor

     

    Each Credit Party is in
compliance with and has all Permits and Intellectual Property necessary or
required by applicable law or Governmental Authority for the operation of its
businesses as currently conducted.  All of the foregoing is in full
force and effect and not in known conflict with the rights of
others.  No Credit Party is (i) in breach of or default under the
provisions of any of the foregoing, nor is there any event, fact, condition or
circumstance which, with notice or passage of time or both, would constitute or
result in a conflict, breach, default or event of default under, any of the
foregoing which, if not remedied within any applicable grace or cure period
could reasonably be expected to result in a Material Adverse Change, (ii) a
party to or subject to any agreement, instrument or restriction that is so
unusual or burdensome that it might have a Material Adverse Change, and/or (iii)
and has not been, involved in any labor dispute, strike, walkout or union
organization which could reasonably be expected to result in a Material Adverse
Change.  Borrower has obtained, and currently has, all Permits
necessary in the generation of each Account.

     

    7.13       No
Default

     

    There does not exist any Default or
Event of Default.

     

    7.14       Disclosure

     

    No Loan
Document nor any other agreement, document, certificate, or statement furnished
to Lender by or on behalf of any Credit Party in connection with the
transactions contemplated by the Loan Documents, nor any representation or
warranty made any by Credit Party in any Loan Document, contains any untrue
statement of material fact or omits to state any fact necessary to make the
statements therein not materially misleading as of the date such statements were
delivered.  There is no fact known to any Credit Party which has not
been disclosed to Lender in writing which could reasonably be expected to result
in a Material Adverse Change.

     

    7.15       Existing
Indebtedness; Investments, Guarantees and Certain Contracts

     

    Except as contemplated by the Loan
Documents or as otherwise set forth on Schedule 7.15A,
no Credit Party (i) has any outstanding Indebtedness other than Permitted
Indebtedness, (ii) is not subject or party to any mortgage, note, indenture,
indemnity or guarantee of, with respect to or evidencing any Indebtedness of any
other Person, or (iii) owns or holds any equity or long-term debt investments
in, and has any outstanding advances to or any outstanding guarantees for the
obligations of, or any outstanding borrowings from, any Person.  Each
Credit Party has performed all material obligations required to be performed by
such Credit Party pursuant to or in connection with any items listed on Schedule 7.15A
and there has occurred no breach, default or event of default under any document
evidencing any such items or any fact, circumstance, condition or event which,
with the giving of notice or passage of time or both, would constitute or result
in a breach, default or event of default thereunder.  Schedule 7.15B sets
forth all Indebtedness with a maturity date during the Term, and identifies such
maturity date. No Credit Party has any existing accrued and unpaid Indebtedness
owing to any Governmental Authority or any other governmental
payor.

     

    
      
         


      

      
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    7.16       Other
Agreements

     

    Except as set forth on Schedule 7.16, (i)
there are no existing or proposed agreements,  arrangements,
understandings or transactions between any Credit Party and any of such Credit
Party’s officers, members, managers, directors, stockholders, partners, other
interest holders, employees or Affiliates or any members of their respective
immediate families, (ii) none of the foregoing Persons are directly or
indirectly, indebted to or have any direct or indirect ownership, partnership or
voting interest in, to such  Credit Party’s knowledge, any Affiliate
of such Credit Party or any Person that competes with such Credit Party (except
that any such Persons may own stock in, but not exceeding two percent (2%) of
the outstanding capital stock of, any publicly traded company that may compete
with such Credit Party (iii) no director or officer of any Credit Party has
received any compensation of any kind in consideration or otherwise of such
Credit Party entering into this Agreement, and (iv) neither Lender nor any of
its Affiliates has paid or offered to pay any compensation to any director or
officer of any Credit Party in consideration of such Credit Party’s entering
into the Loan Documents.

     

    7.17       Insurance

     

    Credit Parties have in full force and
effect such insurance policies as are customary in its industry and as may be
required pursuant to Section 8.5
hereof.  All such insurance policies are listed and described on Schedule
7.17.

     

    7.18       Names;
Location of Offices, Records and Collateral

     

    During
the preceding five years, Borrower has not conducted business under, filed any
tax return under, or used any name (whether corporate, partnership or assumed)
other than as shown on Schedule
7.18A.  Borrower is the sole owner of all of its names listed
on Schedule
7.18A, and any and all business done and invoices issued in such names
are Borrower’s sales, business and invoices.  Each trade name of
Borrower represents a division or trading style of Borrower.  Borrower
maintains its places of business and chief executive offices only at the
locations set forth on Schedule 7.18B, and
all Accounts of Borrower arise, originate and are located, and all of the
Collateral and all books and records in connection therewith or in any way
relating thereto or evidence the Collateral are located and shall be only, in
and at such locations.  All of the Collateral is located only in the
continental United States.  There are no facts, events or occurrences
which in any way impair the validity or enforceability thereof or tend to reduce
the amount payable thereunder from the face amount of the claim or invoice and
statements delivered to Lender with respect thereto.  To the best of
Credit Parties’ knowledge, (A) the Account Debtor thereunder had the capacity to
contract at the time any contract or other document giving rise thereto was
executed, (B) such Account Debtor is solvent, and, (C) subject to the final
sentence of this Section 7.18, there
are no proceedings or actions which are threatened or pending against any
Account Debtor thereunder which might result in any Material Adverse Change in
such Account Debtor’s financial condition or the collectability
thereof.  Borrower has obtained and currently has all Permits
necessary in the generation of each Account of Borrower and Borrower has
disclosed to Lender on each Borrowing Certificate (a “Denial
Disclosure”) the amount of all Accounts of Borrower for which Medicare is
the Account Debtor and for which payment has been denied and subsequently
appealed pursuant to the procedure described in the definition of Eligible
Accounts hereof, and Borrower is pursuing all available appeals in respect of
such Accounts, provided, that, Borrower shall
not be required to make a Denial Disclosure for up to $50,000 in the aggregate
that remain uncorrected at any time for claims denied due to coding and clerical
errors for the period covered by such Borrowing Certificate.

     

    
      
         


      

      
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    7.19       Lien
Perfection and Priority

     

    Upon the execution and delivery of this
Agreement, and upon the proper filing of the necessary financing statements
without any further action, Lender will have a good, valid and perfected first
priority Lien and security interest in the Collateral, subject to no transfer or
other restrictions or Liens of any kind in favor of any other Person except for
Permitted Liens.  No financing statement relating to any of the
Collateral is on file in any public office except those (i) on behalf of Lender,
and (ii) in connection with Permitted Liens.

     

    7.20       Investment
Company Act

     

    No Credit Party is required to register
as an “investment company” within the meaning of the Investment Company Act of
1940, as amended.

     

    7.21       Regulations
T, U and X

     

    No Credit
Party is engaged in the business of extending credit for the purpose of
purchasing or carrying any “margin stock” or “margin security” (within the
meaning of Regulations T, U or X issued by the Board of Governors of the Federal
Reserve System), and no proceeds of the Loans will be used to purchase or carry
any margin stock or margin security or to extend credit to others for the
purpose of purchasing or carrying any margin stock or margin
security.

     

    7.22       Survival

     

    Each Credit Party makes the
representations and warranties contained herein with the knowledge and intention
that Lender is relying and will rely thereon.  All such
representations and warranties will survive the execution and delivery of this
Agreement and the making of the Advances under the Revolving
Facility.

     

    
      	
              VIII.

            	
              AFFIRMATIVE
      COVENANTS

            


    

     

    Each Credit Party, jointly and
severally, covenants and agrees that, until all of the Obligations have been
fully performed and Paid in Full, and this Agreement has
terminated:

     

    
      
         


      

      
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              8.1

            	
              Financial
      Statements, Borrowing Certificate, Financial Reports and Other
      Information

            


    

     

    (a)           Financial
Reports.  Credit Parties shall furnish to Lender (i) as soon as
available and in any event when submitted to the Securities and Exchange
Commission but no later than one hundred and five (105) calendar days after the
end of each fiscal year of Credit Parties, audited annual consolidated and
consolidating financial statements of Credit Parties, including the notes
thereto, consisting of a consolidated and consolidating balance sheet at the end
of such completed fiscal year and the related consolidated and consolidating
statements of income, retained earnings, cash flows and owners’ equity for such
completed fiscal year, which financial statements shall be prepared by an
independent certified public accounting firm satisfactory to Lender and
accompanied by related management letters, if available; provided that beginning
with the financial statements for the fiscal year ending December 31, 2008, no
going concern opinion shall be issued in connection with such financial
statements, (ii) as soon as available and in any event within thirty calendar
days after the end of each calendar month (fifty calendar days after the end of
any month which coincides with the end of a fiscal quarter and sixty days after
the end of any month which coincides with the end of a fiscal year), unaudited
financial statements of Credit Parties consisting of a balance sheet and
statements of income and cash flows as of  the end of the immediately
preceding calendar month. Monthly financial statements provided to the Lender
which have been internally prepared by Borrower for any month which corresponds
with the end of a fiscal quarter or fiscal year will be subject to further
adjustments by the Credit Parties’ outside auditors before being
finalized.  All such financial statements shall be prepared in
accordance with GAAP consistently applied with prior periods except for any
normal quarter and year-end adjustments which may be applied in future periods
and for any changes in accounting methodology that may have been applied since
any prior period.  With each such financial statement, Credit Parties
shall also deliver a certificate of its chief financial officer or principal
accounting officer in substantially the form of Exhibit B hereto (a
“Compliance
Certificate”) stating that (A) such person has reviewed the relevant
terms of the Loan Documents and the condition of Credit Parties, (B) no Default
or Event of Default has occurred or is continuing, or, if any of the foregoing
has occurred or is continuing, specifying the nature and status and period of
existence thereof and the steps taken or proposed to be taken with respect
thereto, and (C) Credit Parties are in compliance with all financial covenants
attached as Annex I hereto.  Such certificate shall be accompanied by
the calculations necessary to show compliance with the financial covenants in a
form satisfactory to Lender and (iii) simultaneously with the delivery of
monthly financial statements for any given month, an accounts payable aging
schedule showing a reconciliation to the amounts reported in the monthly
financial statements.

     

    (b)           Other
Materials.  Credit Parties shall furnish to Lender as soon as
available, and in any event within ten calendar days after the preparation or
issuance thereof or at such other time as set forth below:  (i) copies
of such financial statements (other than those required to be delivered pursuant
to Section 8.1(a))
prepared by, for or on behalf of Credit Parties and any other notes, reports and
other materials related thereto, including, without limitation, any pro forma
financial statements, (ii) any reports, returns, information, notices and other
materials that any Credit Party shall send to its stockholders, members,
partners or other equity owners at any time unless such materials are publicly
available at www.sec.gov, (iii) all Medicare and Medicaid cost reports and other
documents and materials filed by Borrower and any other reports, materials or
other information regarding or otherwise relating to Medicaid or Medicare
prepared by, for or on behalf of Borrower other than internal working analyses,
(iv) simultaneously with the provision of any monthly financial statements
provided pursuant to Section 8(a) above to the extent such information has not
been already reflected in a Borrowing Certificate submitted to Lender: (A) a
report of the status of all payments, denials and appeals of all Medicare and
Medicaid Accounts (unless such denials were due to clerical errors in an amount
which does not require a Denial Disclosure, and (B) a sales and collection
report and accounts receivable aging schedule, including a report of sales,
credits issued and collections received, all such reports showing a
reconciliation to the amounts reported in the monthly financial statements, (v)
promptly upon receipt thereof, copies of any reports submitted to a Borrower by
its independent accountants in connection with any interim audit of the books of
such Person or any of its Affiliates and copies of each management control
letter provided by such independent accountants, (vi) within thirty (30)
calendar days after the execution thereof, a copy of any contracts with the
federal government or with a Governmental Authority in the State of New York,
Vermont or Washington and (vii) such
additional information, documents, statements, reports and other materials as
Lender may reasonably request from a credit or security perspective or otherwise
from time to time.

     

    
      
         


      

      
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    (c)           Notices.  Credit
Parties shall promptly, and in any event within four calendar days after
Borrower or any authorized officer of Borrower obtains knowledge thereof, notify
Lender in writing of (i) any pending or threatened litigation, suit,
investigation, arbitration, dispute resolution proceeding or administrative
proceeding brought or initiated by Borrower or otherwise affecting or involving
or relating to Borrower or any of its property or assets to the extent (A) the
amount in controversy exceeds $50,000.00, or (B) to the extent any of the
foregoing seeks injunctive relief, (ii) any Default or Event of Default, which
notice shall specify the nature and status thereof, the period of existence
thereof and what action is proposed to be taken with respect thereto,
(iii) any other development, event, fact, circumstance or condition that
would reasonably be expected to result in a Material Adverse Change, in each
case describing the nature and status thereof and the action proposed to be
taken with respect thereto, (iv) any notice received by a Borrower from any
payor of a claim, suit or other action such payor has, claims or has filed
against such Borrower, (v) any matter(s) affecting the value, enforceability or
collectability of any of the Collateral, including, without limitation, claims
or disputes in the amount of $50,000.00 or more, singly or in the aggregate, in
existence at any one time, (vi) any notice given by Borrower to any other lender
of such Borrower and shall furnish to Lender a copy of such notice, (vii)
receipt of any notice or request from any Governmental Authority or governmental
payor regarding any liability or claim of liability in excess of $50,000.00
singly or in the aggregate, (viii) receipt of any notice by Borrower regarding
termination of any manager of any facility owned, operated or leased by such
Borrower, (ix) if any Account becomes evidenced or secured by an Instrument or
Chattel Paper and (x) any pending, threatened or actual investigation or survey
of Borrower, its directors, officers or managing employees by any of the
Medicare, Medicaid or CHAMPUS/TRICARE programs, or any other third party payor
programs, (xi) Borrower becoming a party to a Corporate Integrity Agreement with
the Office of Inspector General of the Department of Health and Human Services,
(xii) Borrower becoming subject to reporting obligations pursuant to any
settlement agreement entered into with any Governmental Authority, (xiii)
Borrower becoming the subject of any government payor program investigation
conducted by any federal or state enforcement agency, (xiv) Borrower becoming a
defendant in any qui tam/False Claims Act litigation, (xv) Borrower being served
with or received any search warrant, subpoena, civil investigative demand or
contact letter by or from any federal or state enforcement agency relating to an
investigation or (xvi) Borrower becoming subject to any written complaint filed
with or submitted to any Governmental Authority having jurisdiction over such
Borrower or filed with or submitted to such Borrower pursuant to such Borrower’s
policies relating to the filing or submissions of such types of complaints, from
employees, independent contractors, vendors, physicians, or any other person
that would indicate that such Borrower has violated any law, regulation or
law.

     

    (d)           Consents.  Credit
Parties shall use their best efforts to obtain and deliver from time to time all
required consents, approvals and agreements from such third parties as Lender
shall determine are necessary or desirable in its Permitted Discretion, each of
which must be satisfactory to Lender in its Permitted Discretion and acceptable
to such third party, with respect to (i) the Loan Documents and the transactions
contemplated thereby, (ii) claims against a Borrower or the Collateral, and/or
(iii) any agreements, consents, documents or instruments to which Borrower is a
party or by which any properties or assets of Borrower or any of the Collateral
is or are bound or subject, including, without limitation, Landlord Waivers and
Consents with respect to leases.

     

    (e)           Operating
Budget.  Credit Parties shall furnish to Lender on or prior to
the Closing Date and for each fiscal year of Credit Parties prior to the
commencement of such fiscal year, a draft of consolidated and consolidating
month by month projected operating budgets, annual projections, profit and loss
statements, balance sheets and cash flow reports of and for Credit Parties for
such upcoming fiscal year (including an income statement for each month and a
balance sheet as at the end of the last month in each fiscal quarter), in each
case prepared in accordance with GAAP consistently applied with prior periods,
provided, that, (A) such Budget as submitted to the Board of Directors of
Borrower for approval shall be provided to Lender by Borrower not less than
sixty (60) days after commencement of such fiscal year and (B) a final version
of the budget as approved by the Board of Directors of Borrower for each fiscal
year shall be provided to Lender by Borrower not less than ten (10) calendar
days after the approval of such budget or any revision thereof by the Board of
Directors.

     

    
      
         


      

      
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    (f)           Ancillary Materials to be
Furnished Upon Request.  Upon written request by Lender, Credit
Parties shall use its best efforts to furnish to Lender within ten (10) calendar
days after the request therefore the following kinds of information: (1) any
other reports, materials or other information regarding or otherwise relating to
Medicaid or Medicare prepared by, for, or on behalf of, Borrower or any of its
Subsidiaries, including, without limitation, (A) copies of licenses and permits
required by any applicable federal, state, foreign or local law, statute,
ordinance or regulation or Governmental Authority for the operation of its
business (B) Medicare and Medicaid provider numbers and agreements, (C) state
surveys pertaining to any healthcare facility operated or owned or leased by
Borrower or any of its Affiliates or Subsidiaries, (D) participating agreements
relating to medical plans (ii) copies of material licenses and permits required
by applicable federal, state, foreign or local law, statute, ordinance or
regulation or Governmental Authority for the Operation of Borrower’s
business.

     

    8.2     
   [Reserved]

     

    8.3      
  Conduct of Business and Maintenance of Existence and
Assets

     

    Borrower
shall (i) conduct its business in accordance with good business practices
customary to the industry, (ii) engage principally in the same or similar lines
of business substantially as heretofore conducted, (iii) collect its Accounts in
the ordinary course of business, (iv) maintain all of its material properties,
assets and equipment used or useful in its business in good repair, working
order and condition (normal wear and tear excepted and except as may be disposed
of in the ordinary course of business and in accordance with the terms of the
Loan Documents and otherwise as determined by such Borrower using commercially
reasonable business judgment), (v) from time to time to make all necessary or
desirable repairs, renewals and replacements thereof, as determined
by such Borrower using commercially reasonable business judgment, (vi) maintain
and keep in full force and effect its existence and all material Permits and
qualifications to do business and good standing in each jurisdiction in which
the ownership or lease of property or the nature of its business makes such
Permits or qualification necessary and in which failure to maintain such Permits
or qualification could reasonably be expected to result in a Material Adverse
Change; and (vii) remain in good standing and maintain operations in all
jurisdictions in which currently located.

     

    8.4        
Compliance with Legal and Other Obligations

     

    Each
Credit Party shall (i) comply with all laws, statutes, rules, regulations,
ordinances and tariffs of all Governmental Authorities applicable to it or its
business, assets or operations, including applicable requirements which where
promulgated pursuant to HIPAA (ii) pay all taxes, assessments, fees,
governmental charges, claims for labor, supplies, rent and all other obligations
or liabilities of any kind, except liabilities being contested in good faith and
against which adequate reserves have been established, (iii) perform in
accordance with its terms each contract, agreement or other
arrangement  to which it is a party or by which it or any of the
Collateral is bound, except where the failure to comply, pay or perform could
not reasonably be expected to result in a Material Adverse Change, (iv) maintain
and comply with all Permits necessary to conduct its business and comply with
any new or additional requirements that may be imposed on it or its business,
and (v) properly file all Medicaid, Medicare and CHAMPUS/TRICARE cost
reports.  Without limiting the foregoing, Borrower is, and while this
Agreement shall remain in effect shall remain, qualified for participation in
the Medicare, Medicaid and CHAMPUS/TRICARE programs; Borrower has, and while
this Agreement shall remain in effect shall maintain, a current and valid
provider contract with such programs; Borrower is, and while this Agreement
shall remain in effect shall remain, in compliance with the conditions of
participation in such programs; and Borrower has, and while this Agreement shall
remain in effect shall maintain, all approvals or qualification necessary for
capital reimbursement for any facility operated by Borrower.  While
this Agreement shall remain in effect, all billing practices of Borrower with
respect to any facility operated by Borrower and all third party payors,
including the Medicare, Medicaid and CHAMPUS/TRICARE programs and private
insurance companies, shall remain in compliance with all applicable laws,
regulations and policies of such third party payors and the Medicare, Medicaid
and CHAMPUS/TRICARE programs. 

     

    
      
         


      

      
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    8.5     
   Insurance

     

    Borrower
shall keep (i) all of its insurable properties and assets adequately insured in
all material respects against losses, damages and hazards as are customarily
insured against by businesses engaging in similar activities or owning similar
assets or properties and at least the minimum amount required by applicable law,
including, without limitation, medical malpractice and professional liability
insurance, as applicable; (ii) maintain general public liability insurance at
all times against liability on account of damage to persons and property having
such limits, deductibles, exclusions and co-insurance and other provisions as
are customary for a business engaged in activities similar to those of Credit
Parties; and (iii) maintain insurance under all applicable workers’ compensation
laws; all of the foregoing insurance policies to (A) be satisfactory in
form and substance to Lender, (B) expressly provide that they cannot be amended
to reduce coverage or canceled without thirty (30) calendar days prior
written notice to Lender and that they inure to the benefit of Lender
notwithstanding any action or omission or negligence of or by such Credit Party
or any insured thereunder.  With respect to property insurance
covering business interruption, accounts receivable and the books and records in
connection therewith, Lender shall be named as loss payee and additional insured
and with respect to general liability insurance Lender shall be named as
additional insured.

     

    8.6      
  Books and Records

     

    Each Credit Party shall (i) keep
complete and accurate books of record and account in accordance with
commercially reasonable business practices in which true and correct entries are
made of all of its and their dealings and transactions in all material respects;
and (ii) set up and maintain on its books such reserves as may be required by
GAAP with respect to doubtful accounts and all taxes, assessments, charges,
levies and claims and with respect to its business, and include such reserves in
its quarterly as well as year end financial statements.

     

    8.7       
 Inspections; Periodic Audits and Reappraisals

     

    Each
Credit Party shall permit the representatives of Lender, at the expense of
Credit Parties, from time to time during normal business hours, but no more
frequently than three times per year so long as no Default or Event of Default
occurs and is continuing upon reasonable notice, to (i) visit and inspect any of
its offices or properties or any other place where Collateral is located to
inspect the Collateral and/or to examine or audit all of its books of account,
records, reports and other papers, (ii) make copies and extracts therefrom, and
(iii) discuss its business, operations, prospects, properties, assets,
liabilities, condition and/or Accounts with its officers and independent public
accountants (and by this provision such officers and accountants are authorized
to discuss the foregoing) upon seven (7) Business Days prior written notice;
provided, however, that (A) Borrower shall not be obligated to reimburse Lender
for more than three (3) visits, inspections, examinations and audits under the
foregoing clause (i) conducted during any fiscal year while no Default or Event
of Default exists at a cost of $850 per auditor per day plus all out-of-pocket
expenses of Lender (it being agreed and understood that the Borrower shall be
Obligated to reimburse Lender for all such visits, inspections, examinations and
audits conducted while any Default or Event of Default exists); and (B) no
notice shall be required to do any of the foregoing if any Event of Default has
occurred and is continuing.

     

    
      
         


      

      
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    8.8  
      Further Assurances;
Post-Closing

     

    At Credit Parties’ cost and expense,
each Credit Party shall (i) within five Business Days after Lender’s
request, take such further actions, obtain such consents and approvals and duly
execute and deliver such further agreements, assignments, instructions or
documents as Lender may deem necessary in its Permitted Discretion with respect
to furtherance of the purposes, terms and conditions of the Loan Documents and
the consummation of the transactions contemplated thereby, whether before, at or
after the performance or consummation of the transactions contemplated hereby or
the occurrence of a Default or Event of Default, (ii) without limiting and
notwithstanding any other provision of any Loan Document, execute and deliver,
or cause to be executed and delivered, such agreements and documents, and take
or cause to be taken such actions, and otherwise perform, observe and comply
with such obligations, as are set forth on Schedule 8.8, and (iii) upon the
exercise by Lender or any of its Affiliates of any power, right, privilege or
remedy pursuant to any Loan Document or under applicable law or at equity which
requires any consent, approval, registration, qualification or authorization of
any Governmental Authority, execute and deliver, or cause the execution and
delivery of, all applications, certificates, instruments and other documents
requested by Lender in its Permitted Discretion that may be so required for such
consent, approval, registration, qualification or
authorization.  Without limiting the foregoing, upon the exercise by
Lender or any of its Affiliates of any right or remedy under any Loan Document
which requires any consent, approval or registration with, consent,
qualification or authorization by, any Person, Credit Parties shall execute and
deliver, or cause the execution and delivery of, all applications, certificates,
instruments and other documents that Lender or its Affiliate may be required to
obtain for such consent, approval, registration, qualification or
authorization.

     

    8.9   
     Use of Proceeds

     

    Borrower
shall use the proceeds from the Revolving Facility only for the purposes set
forth in the first “WHEREAS” clause of this Agreement.

     

    8.10  
    [Reserved]

     

    8.11   
   [Reserved]

     

    8.12    
  Taxes and Other Charges

     

    (a)  All
payments and reimbursements to Lender made under any Loan Document shall be free
and clear of and without deduction for all taxes, levies, imposts, deductions,
assessments, charges or withholdings, and all liabilities with respect thereto
of any nature whatsoever, excluding taxes to the extent imposed on Lender’s net
income.  If any Credit Party shall be required by law to deduct any
such amounts from or in respect of any sum payable under any Loan Document to
Lender, then the sum payable to Lender shall be increased as may be necessary so
that, after making all required deductions, Lender receives an amount equal to
the sum it would have received had no such deductions been
made.  Notwithstanding any other provision of any Loan Document, if at
any time after the Closing (i) any change in any existing law, regulation,
treaty or directive or in the interpretation or application thereof, (ii) any
new law, regulation, treaty or directive enacted or any interpretation or
application thereof, or (iii) compliance by Lender with any new request or
new directive (whether or not having the force of law) from any Governmental
Authority after the date of Closing:  (A) subjects Lender to any tax,
levy, impost, deduction, assessment, charge or withholding of any kind
whatsoever directly arising from any Loan Document or from payments directly
received by the Lender from any Credit Party pursuant to the Loan Documents
(except for net income taxes, franchise taxes imposed in lieu of net income
taxes, and any other taxes on the general affairs of the Lender which may be
imposed generally by federal, state or local taxing authorities with respect to
interest or commitment fees or other fees payable hereunder or changes in the
rate of tax on the overall net income of Lender), or (B) imposes on Lender any
other condition or increased cost directly in connection with the transactions
contemplated thereby or participations therein (specifically excluding any
general costs imposed on Lender by any government entity that are not directly
related to the obligations hereunder); and the result of any of the foregoing is
to directly increase the cost to Lender of making or continuing any Loan
hereunder or to reduce any amount receivable hereunder, then, in any such case,
Credit Parties shall promptly, and in any event within ten (10) Business days of
Credit Party’s receipt of notice from Lender, pay to Lender any additional
amounts necessary to compensate Lender, on an after-tax basis, for such
additional cost or reduced amount as determined by Lender.  If Lender
becomes entitled to claim any additional amounts pursuant to this Section 8.12 it shall
promptly notify Credit Parties of the event by reason of which Lender has become
so entitled and contain a calculation of such additional amounts that are
proposed to be due and payable and shall answer any questions and provide any
explanation reasonably requested by Borrower in good faith to understand the
nature and purported reason for such additional amounts.

     

    
      
         


      

      
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      (b)  Credit
Parties shall promptly, and in any event within five Business Days after any
Credit Party or any authorized officer of any Credit Party obtains knowledge
thereof, notify Lender in writing of any oral or written communication from any
taxing authority or otherwise with respect to any (i) tax investigations,
relating to such Credit Party directly, or relating to any consolidated tax
return which was filed on behalf of such Credit Party, (ii) notices of tax
assessment or possible tax assessment, (iii) years that are designated open
pending tax examination or audit, and (iv) information that could give rise to
any tax liability or assessment.

       

      
        	
              	
                8.13

              	
                Payroll
      Taxes

              


      

       

      Without
limiting or being limited by any other provision of any Loan Document, each
Credit Party at all times shall retain and use a Person acceptable to Lender to
process, manage and pay its payroll taxes and shall cause to be delivered to
Lender within ten calendar days after the end of each calendar month a report of
its payroll taxes for the immediately preceding calendar month and evidence of
payment thereof.  Notwithstanding the foregoing, being copied on
Borrower’s payroll reports within the period specified in the preceding sentence
shall satisfy this requirement; provided that such payroll report sets forth the
status of payroll taxes.

       

      
        	
                 
      

              	
                8.14

              	
                New
      Subsidiaries

              


      

       

      If at any time after the Closing Date
Borrower shall form or acquire any new Subsidiary, Borrower shall promptly, and
in any event not later than fifteen calendar days after the creation or
acquisition of such Subsidiary or such longer period as Lender may determine in
writing, execute, and cause such new Subsidiary to execute, and deliver to
Lender such joinder agreements and amendments to this Agreement and the other
Loan Documents, including executing and delivering allonges to any Notes to the
extent issued hereunder in form and substance satisfactory to Lender and
providing such other documentation as Lender may reasonably request, including,
without limitation, UCC searches, as applicable, and filings, legal opinions and
corporate authorization documentation, and to take such other actions in each
case as Lender deems necessary or advisable to (a) join and make such new
Subsidiary a co-Borrower hereunder and thereunder, subject to all the rights and
benefits and obligations and burdens of a Borrower hereunder, (b) grant to
Lender a perfected first priority security interest in the Collateral of such
new Subsidiary subject to no Liens other than the Permitted Liens.

       

      
        	
                 
      

              	
                8.15

              	
                [Reserved]

              


      

       

      
        	
                IX.

              	
                NEGATIVE
      COVENANTS

              


      

       

      Each Credit Party, jointly and
severally, covenants and agrees that, until the indefeasible payment in full in
cash, and the full performance of all, of the Obligations and termination of
this Agreement:

       

      
        	
                 
      

              	
                9.1

              	
                Financial
      Covenants

              


      

       

      Borrower
shall not violate the financial covenants set forth on Annex I to this
Agreement, which is incorporated herein and made a part hereof.

       

      
        
           


        

        
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                9.2

              	
                Permitted
      Indebtedness

              


      

       

      Borrower
shall not create, incur, assume or suffer to exist any Indebtedness, other than
Permitted Indebtedness.  Borrower shall not make prepayments on any
existing or future Indebtedness to any Person other than to Lender or to the
extent specifically permitted by this Agreement or any subsequent agreement
between Borrower and Lender.

       

      
        	
                 
      

              	
                9.3

              	
                Permitted
      Liens

              


      

       

      Borrower shall not create, incur,
assume or suffer to exist any Lien upon, in or against, or pledge of, any of the
Collateral or any of its other properties or assets of Borrower including but
not limited to Deposit Accounts, cash or other money and Investment Property,
whether now owned or hereafter acquired, except Permitted Liens.

       

      
        	
                 
      

              	
                9.4

              	
                Investments;
      New Facilities or Collateral;
Subsidiaries

              


      

       

      Except as set forth on Schedule 9.4,
Borrower shall not, directly or indirectly, enter into any agreement to,
(i) purchase, own, hold, invest in or otherwise acquire obligations or
stock or securities of, or any other interest in, or all or substantially all of
the assets of, any Person or any joint venture, or (ii) make or permit to
exist any loans, advances or guarantees to or for the benefit of any Person or
assume, guarantee, endorse, contingently agree to purchase or otherwise become
liable for or upon or incur any obligation of any Person (other than those
created by the Loan Documents and Permitted Indebtedness and other than
(A) trade credit extended in the ordinary course of business, (B) advances
for business travel and similar temporary advances made in the ordinary course
of business to officers, directors and employees, (C) investments in Cash
Equivalents and (D) the endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of
business).  Borrower shall not, directly or indirectly, purchase, own,
operate, hold, invest in or otherwise acquire any facility, property or assets
or any Collateral that is not located at the locations set forth on Schedule 7.18B unless
Borrower shall provide to Lender at least ten (10) Business Days prior written
notice.  Borrower shall not have any Subsidiaries other than those
Subsidiaries, if any, existing at Closing and set forth on Schedule 7.3., unless
Borrower and new Subsidiary fully complies with Section 8.14
hereof.

       

      Notwithstanding the foregoing, Borrower
shall be permitted to make Permitted Acquisitions with Lender’s prior written
consent; provided, however, that the
consent of Lender shall not be required if the cash consideration paid in
respect of the Permitted Acquisition does not exceed $500,000 and Borrower fully
complies with Section
8.14 hereof.

       

      
        	
                 
      

              	
                9.5

              	
                Dividends;
      Redemptions

              


      

       

      Borrower shall not (i) declare, pay or
make any Distribution, (ii) apply any of its funds, property or assets to the
acquisition, redemption or other retirement of any Capital Stock, (iii)
otherwise make any payments or Distributions to any stockholder, member, partner
or other equity owner in such Person’s capacity as such, or (iv) make any
payment of any Management or Service Fee; provided however, that absent
the occurrence and continuation of a Default or Event of Default, and if a
Default or Event of Default would not arise therefrom, Borrower may: (x) make
Permitted Distributions, (y) declare, pay or make Distributions payable in its
stock, or split-ups or reclassifications of its stock; and (z) redeem its
capital stock from terminated employees pursuant to, but only to the extent
required under, the terms of the related employment agreements.

       

      
        
           


        

        
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                9.6

              	
                Transactions
      with Affiliates

              


      

       

      Except as
set forth on Schedule 9.6, Borrower shall not enter into or consummate any
transaction of any kind with any of its Affiliates or Guarantor or any of their
respective Affiliates other than: (i) salary, bonus, severance, employee stock
option and other compensation, consulting and employment arrangements with
directors or officers in the ordinary course of business, provided, that, no payment of
any cash bonus or severance shall be permitted if a Default or Event of Default
has occurred and remains in effect or would be caused by or result from such
payment, and no payment of any severance shall be made, individually or in the
aggregate, in excess of $250,000 in any twelve (12) month period, (ii)
Distributions permitted pursuant to Section 9.5, and
(iii) the making of payments permitted under and pursuant to a written agreement
entered into by and between Borrower and one or more of its Affiliates that both
(A) reflects and constitutes a transaction on overall terms at least as
favorable to Borrower as would be the case in an arm’s-length transaction
between unrelated parties of equal bargaining power; provided, that, notwithstanding
the foregoing Borrower shall not (Y) enter into or consummate any transaction or
agreement pursuant to which it becomes a party to any mortgage, note, indenture
or guarantee evidencing any Indebtedness of any of its Affiliates or otherwise
to become responsible or liable, as a guarantor, surety or otherwise, pursuant
to agreement for any Indebtedness of any such Affiliate, or (Z) make any
payments to any of its Affiliates in excess of $50,000 in the aggregate during
any consecutive twelve calendar month period without the prior written consent
of Lender (other than payments permitted pursuant to clause (i) or (ii)
above).

       

      
        	
                 
      

              	
                9.7

              	
                Charter
      Documents; Fiscal Year; Dissolution; Use of
  Proceeds

              


      

       

      No Credit Party shall (i) amend,
modify, restate or change its certificate of incorporation or formation or
bylaws or similar charter documents without the prior written consent of the
Lender, which consent shall not be unreasonably withheld, (ii) change its
fiscal year unless such Credit Party demonstrates to Lender’s satisfaction
compliance with the covenants contained herein for both the fiscal year in
effect prior to any change and the new fiscal year period by delivery to Lender
of appropriate interim and annual pro forma, historical and current compliance
certificates for such periods and such other information as Lender may
reasonably request, (iii) amend, alter or suspend or terminate or make
provisional in any material way, any material Permit without the prior written
consent of Lender, which consent shall not be unreasonably
withheld.  Notwithstanding the foregoing, the Lender acknowledges that
the following will not be deemed to be a violation of this covenant: (A) any
suspension of any license or Permit in any state caused by the departure of any
scientific or medical personnel, and (B) any amendment of a license or permit in
the ordinary course of business to enable Borrower to pursue additional
opportunities; provided that neither (A) nor (B) shall result in the impairment
of Borrower’s ability to collect any Account or account receivable,
(iv) wind up, liquidate or dissolve (voluntarily or involuntarily) or
commence or suffer any proceedings seeking or that would result in any of the
foregoing, (v) use any proceeds of any Advance for “purchasing” or “carrying”
“margin stock” as defined in Regulations U, T or X of the Board of Governors of
the Federal Reserve System, or (vi) without providing at least thirty calendar
days prior written notice to Lender, change its name or organizational
identification number, if it has one.

       

      
        	
                 
      

              	
                9.8

              	
                Truth
      of Statements

              


      

       

      No Credit
Party shall (a) furnish to Lender any certificate or other document created or
produced by Borrower that contains any untrue statement of a material fact or
that omits to state a material fact necessary to make it not misleading in light
of the circumstances under which it was furnished as of the date it was provided
to Lender; and (b) furnish any document created or produced by a third party
that Borrower knows (A) contains any untrue statement of a material fact or (B)
omits to state a material fact necessary to make it not misleading in light of
the circumstances under which it was furnished.

       

      
        
           


        

        
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                9.9

              	
                IRS
      Form 8821

              


      

       

      No Credit
Party shall alter, amend, restate, or otherwise modify, or withdraw, terminate
or re-file the IRS Form 8821 required to be delivered pursuant to the Conditions
Precedent in Section
6.1 hereof.

       

      
        	
                 
      

              	
                9.10

              	
                Transfer
      of Assets

              


      

       

      Notwithstanding any other provision of
this Agreement or any other Loan Document, Borrower shall not, nor shall it
permit any of its Subsidiaries to, sell, lease, transfer, assign or otherwise
dispose of any interest in any properties or assets (other than obsolete fixed
assets or excess fixed assets no longer needed in the conduct of the business in
the ordinary course of business and sales of Inventory in the ordinary course of
business), or agree to do any of the foregoing at any future time, except
that:

       

      (a)           Borrower
may lease or sublease (as lessor or sub-lessor) real or personal
property  pursuant to a true lease not constituting Indebtedness and
not entered into as part of a sale and leaseback transaction, in each case in
the ordinary course of business and which could not reasonably be expected to
result in a Material Adverse Effect.

       

      (b)           Borrower
may arrange for warehousing, fulfillment or storage of Inventory at locations
not owned or leased by Borrower, in each case in the ordinary course of
business;

       

      (c)           Borrower
may license or sublicense Intellectual Property to third parties in the ordinary
course of business; provided, that, such licenses
or sublicenses shall not interfere with the business or other operations of
Borrower; and

       

      (d)           Borrower
may consummate such other sales or dispositions of property or assets in excess
of $50,000 (including any sale or transfer or disposition of all or any part of
its assets and thereupon and within one year thereafter rent or lease the assets
so sold or transferred) only to the extent prior written notice has been given
to Lender and to the extent Lender has given its prior written consent thereto,
subject in each case to such conditions as may be set forth in such
consent.

       

      
        	
              	
                9.11

              	
                OFAC

              


      

       

      No Credit
Party nor any Subsidiary of any Credit Party (i) will be or become a Person
whose Property or interests in Property are blocked or subject to blocking
pursuant to Section  1 of Executive Order 13224 of September 23, 2001
Blocking property and Prohibiting Transactions With Persons Who Commit, Threaten
to Commit or Support Terrorism (66 Fed. Reg. 49079(2001), (ii) will engage in
any dealings or transactions prohibited by Section 2 of such executive order, or
otherwise be associated with any such Person in any manner violative of Section
2 of such executive order, or (iii) otherwise will become a Person on the list
of Specially Designated Nationals and Blocked Persons or subject to the
limitations or prohibitions under any other OFAC regulation or executive
order.

       

      
        	
                 
      

              	
                9.12

              	
                Payroll
      Accounts

              


      

       

      Borrower shall not maintain a greater
balance in any payroll account than is necessary to support Borrower’s current
payroll and payroll for one additional payroll cycle (bi-monthly or weekly as
applicable).

       

      
        	
              	
                9.13

              	
                US
      Lab Litigation

              


      

       

      Borrower shall not pay more than
$100,000 in the aggregate with respect to any award or settlement in connection
with the litigation with US Labs described in Schedule
7.6.  Notwithstanding the foregoing, Borrower may pay amounts
in excess of the $100,000 set forth in the preceding sentence (the “Excess
Award”); provided, that, Borrower shall,
simultaneously with the payment of such Excess Award, have received proceeds at
least in the amount of such Excess Award from: (a) a capital contribution, (b)
Parent Indebtedness or (c) Indebtedness permitted under clause (v) of the
definition of Permitted Indebtedness.

       

      
        
           


        

        
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                X.

              	
                EVENTS
      OF DEFAULT

              


      

       

      The
occurrence of any one or more of the following shall constitute an “Event of
Default:”

       

      (a)           any
Credit Party shall fail to pay any amount on the Obligations when due (whether
on any payment date, at maturity, by reason of acceleration, by notice of
intention to prepay, by required prepayment or otherwise);

       

      (b)           any
representation, statement or warranty made or deemed made by any Credit Party in
any Loan Document or in any other certificate, document or report delivered in
conjunction with any Loan Document, shall not be true and correct in all
material respects or shall have been false or misleading in any material respect
on the date when made or deemed to have been made;

       

      (c)           any
Credit Party or other party thereto other than Lender shall be in violation,
breach or default of, or shall fail to perform, observe or comply with any
covenant, obligation or agreement set forth in, any Loan Document and such
violation, breach, default or failure shall not be cured within the applicable
period set forth in the applicable Loan Document; provided that, with respect to
the affirmative covenants set forth in Article VIII (other
than Sections 8.1(c),
8.3, 8.8, 8.9,
for which there shall be no cure period and Section 8.5 for which there
shall be a five (5) Business Day cure period), there shall be a thirty calendar
day cure period commencing from the earlier of (i) Receipt by such Person
of written notice of such breach, default, violation or failure, and
(ii) the time at which such Person or any authorized officer thereof knew
or became aware, or should have known or been aware, of such failure, violation,
breach or default, but no Advances will be made during the cure
period;

       

      (d)           (i)
any of the Loan Documents ceases to be in full force and effect, or (ii) any
Lien created thereunder ceases to constitute a valid perfected first priority
Lien on the Collateral in accordance with the terms thereof, or Lender ceases to
have a valid perfected first priority security interest in any of the Collateral
pledged to Lender pursuant to the Loan Documents; provided, that, with respect to
non-material breaches or violations that constitute Events of Default under
clause (ii) of this Section 10(d), there
shall be a five (5) Business Day cure period commencing from the earlier of
(A) Receipt by the applicable Person of written notice of such breach or
violation or of any event, fact or circumstance constituting or resulting in any
of the foregoing, and (B) the time at which such Person or any authorized
officer thereof knew or became aware, or should have known or been aware, of
such breach or violation and resulting Event of Default or of any event, fact or
circumstance constituting or resulting in any of the foregoing;

       

      (e)           one
or more tax judgments, decrees, arbitrations or other binding award is rendered
against any Credit Party in an amount in excess of $25,000 individually or
$75,000 in the aggregate in any consecutive 12-month period, which is/are not
satisfied, stayed, vacated or discharged of record within thirty calendar days
of being rendered but no Advances will be made before the judgment is stayed,
vacated or discharged unless otherwise agreed to in writing by Lender except for
the US Lab Award;

       

      
        
           


        

        
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      (f)           (i) any
default occurs, which is not cured or waived, (x) in the payment when due
of any amount with respect to any Indebtedness (other than the Obligations) of
any Credit Party having an aggregate principal balance of at least $50,000,
(y) in the performance, observance or fulfillment of any provision
contained in any agreement, contract, document or instrument to which any Credit
Party is a party or to which any of their properties or assets are subject or
bound under or pursuant to which any Indebtedness having an aggregate principal
balance of at least $50,000 was issued, created, assumed, guaranteed or secured
and such default continues for more than any applicable grace period or permits
the holder of any Indebtedness to accelerate the maturity thereof, or (ii) any
Indebtedness of any Credit Party is declared to be due and payable or is
required to be prepaid (other than by a regularly scheduled payment) prior to
the stated maturity thereof, or any obligation of such Person for the payment of
Indebtedness (other than the Obligations) is not paid when due or within any
applicable grace period, or any such obligation becomes or is declared to be due
and payable before the expressed maturity thereof, or there occurs an event
which, with the giving of notice or lapse of time, or both, would cause any such
obligation to become, or allow any such obligation to be declared to be, due and
payable;

       

      (g)           any
Credit Party shall (i) be unable to pay its debts generally as they become due,
(ii) make a general assignment for the benefit of its creditors, (iii)
commence, or consent to, a proceeding for the appointment of a receiver,
trustee, liquidator or conservator of itself or of the whole or any substantial
part of its property, or (iv) file a petition seeking reorganization or
liquidation or similar relief under any Debtor Relief Law;

       

      (h)           a
court of competent jurisdiction shall (A) enter an order, judgment or decree
appointing a custodian, receiver, trustee, liquidator or conservator of any
Credit Party or the whole or any substantial part of any such Person’s
properties, which shall continue unstayed and in effect for a period of sixty
calendar days, (B) shall approve a petition filed against any Credit Party
seeking reorganization, liquidation or similar relief under the any Debtor
Relief Law, which is not dismissed within sixty calendar days or, (C) under
the provisions of any Debtor Relief Law, assume custody or control of any Credit
Party or of the whole or any substantial part of any such Person’s properties,
which is not irrevocably relinquished within sixty calendar days, or
(ii) there is commenced against any Credit Party any proceeding or petition
seeking reorganization, liquidation or similar relief under any Debtor Relief
Law and either (A) any such proceeding or petition is not unconditionally
dismissed within sixty calendar days after the date of commencement, or (B) any
Credit Party takes any action to indicate its approval of or consent to any such
proceeding or petition, but no Advances will be made before any such order,
judgment or decree described above is stayed, vacated or discharged, any such
petition described above is dismissed, or any such custody or control described
above is relinquished;

       

      (i)     
      (i) any Change of Control occurs or any
binding agreement (that does not require Lender’s consent as a condition to
closing) to cause or that may result in any such Change of Control is entered
into, (ii) any Material Adverse Change occurs or is reasonably expected to
occur, (iii) any Liability Event occurs or is reasonably expected to occur, or
(iv) any Credit Party ceases any material portion of its business operations as
currently conducted;

       

      (j)           Lender
receives any indication or evidence that (i) any Credit Party may have directly
or indirectly been engaged in any type of activity, which, in Lender’s Permitted
Discretion, might result in forfeiture of any property with a value in excess of
$25,000 to any Governmental Authority which shall have continued unremedied for
a period of ten calendar days after written notice from Lender (but no Advances
will be made before any such activity ceases) or (ii) any Credit Party or any of
their respective directors or senior officers is criminally indicted or
convicted under any law that could lead to a forfeiture of any
Collateral;

       

      (k)           uninsured
damage to, or loss, theft or destruction of, any portion of the Collateral
occurs that exceeds $10,000 in the aggregate;

       

      (l)       
    the issuance of any process for levy, attachment or
garnishment or execution upon or prior to any judgment against any Credit Party
or any of their property or assets in excess of $50,000.

       

      
        
           


        

        
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      Upon the occurrence of an Event of
Default, notwithstanding any other provision of any Loan Document, Lender may,
without notice or demand, do any of the following: (i) terminate its obligations
to make Advances hereunder and (ii) all or any of the Loans and/or Notes, all
interest thereon and all other Obligations shall automatically, without any
further action by Lender, be due and payable immediately (except in the case of
an Event of Default under Section 10(d), (g), or (h), in which event
all of the foregoing shall automatically and without further act by Lender be
due and payable), and (ii) prohibit any action permitted to be taken under
Article IX hereof, in each case without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived by Credit
Parties.

       

      
        	
                XI.

              	
                RIGHTS
      AND REMEDIES AFTER DEFAULT

              


      

       

      
        	
                 
      

              	
                11.1

              	
                Rights
      and Remedies

              


      

       

      (a)           In
addition to the acceleration provisions set forth in Article X above, upon
the occurrence and continuation of an Event of Default, Lender shall have the
right to exercise any and all rights, options and remedies provided for in any
Loan Document, under the UCC or at law or in equity, including, without
limitation, the right to (i) at Credit Parties’ expense, require that all or any
part of the Collateral be assembled and made available to Lender at any place
designated by Lender, (ii) reduce or otherwise change the Facility Cap, and/or
(iii) relinquish or abandon any Collateral or any Lien
thereon.  Notwithstanding any provision of any Loan Document, Lender,
in its sole discretion, shall have the right, at any time that Credit Parties
fail to do so, and from time to time, without prior notice, to: (i) obtain
insurance covering any of the Collateral to the extent required hereunder; (ii)
pay for the performance of any of Obligations; (iii) discharge taxes or Liens on
any of the Collateral that are in violation of any Loan document unless Credit
Parties are in good faith with due diligence by appropriate proceedings
contesting those items; and (iv) pay for the maintenance and preservation of the
Collateral.  Such expenses and advances shall be added to the
Obligations until reimbursed to Lender and shall be secured by the Collateral,
and such payments by Lender shall not be construed as a waiver by Lender of any
Event of Default or any other rights or remedies of Lender.  Credit
Parties hereby waive any and all rights that they may have to a judicial hearing
in advance of the enforcement of any of Lender’s rights and remedies hereunder,
including, without limitation, its right following the occurrence of an Event of
Default  to take immediate possession of the Collateral and to
exercise its rights and remedies with respect thereto.

       

      (b)           Credit
Parties agrees that notice received by it at least fifteen calendar days before
the time of any intended public sale, or the time after which any private sale
or other disposition of Collateral is to be made, shall be deemed to be
reasonable notice of such sale or other disposition.  If permitted by
applicable law, any perishable Collateral which threatens to speedily decline in
value or which is sold on a recognized market may be sold immediately by Lender
without prior notice to Credit Parties.  At any sale or disposition of
Collateral, Lender may (to the extent permitted by applicable law) purchase all
or any part thereof free from any right of redemption by any Credit Party which
right is hereby waived and released.  Credit Parties covenant and
agree not to, and not to permit or cause any of their Subsidiaries to, interfere
with or impose any obstacle to Lender’s exercise of its rights and remedies with
respect to the Collateral.  Lender, in dealing with or disposing of
the Collateral or any part thereof, shall not be required to give priority or
preference to any item of Collateral or otherwise to marshal assets or to take
possession or sell any Collateral with judicial process.

       

      
        
           


        

        
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                11.2

              	
                Application
      of Proceeds

              


      

       

      In addition to any other rights,
options and remedies Lender has under the Loan Documents, the UCC, at law or in
equity, all dividends, interest, rents, issues, profits, fees, revenues, income
and other proceeds collected or received from collecting, holding, managing,
renting, selling, or otherwise disposing of all or any part of the Collateral or
any proceeds thereof upon exercise of its remedies hereunder shall be applied in
the following order of priority:  (i) first, to the payment
of all costs and expenses of such collection, storage, lease, holding,
operation, management, sale, disposition or delivery and of conducting Credit
Parties’ business and of maintenance, repairs, replacements, alterations,
additions and improvements of or to the Collateral, and to the payment of all
sums which Lender may be required or may elect to pay, if any, for taxes,
assessments, insurance and other charges upon the Collateral or any part
thereof, and all other payments that Lender may be required or authorized to
make under any provision of this Agreement (including, without limitation, in
each such case, in-house documentation and diligence fees and legal expenses,
search, audit, recording, professional and filing fees and expenses and
reasonable attorneys' fees and all expenses, liabilities and advances made or
incurred in connection therewith); (ii) second, to the
payment of all other Obligations in such order or preference as Lender may
determine; and (iii) third, to the payment
of any surplus then remaining to Credit Parties, unless otherwise provided by
law or directed by a court of competent jurisdiction; provided, that, Credit Parties
shall be liable for any deficiency if such proceeds are insufficient to satisfy
the Obligations or any of the other items referred to in this
section.

       

      
        	
                 
      

              	
                11.3

              	
                Rights
      of Lender to Appoint Receiver

              


      

       

      Without limiting and in addition to any
other rights, options and remedies Lender has under the Loan Documents, the UCC,
at law or in equity, upon the occurrence and continuation of an Event of
Default, Lender shall have the right to apply for and have a receiver appointed
by a court of competent jurisdiction in any action taken by Lender to enforce
its rights and remedies in order to manage, protect, preserve, sell or dispose
the Collateral and continue the operation of the business of Credit Parties and
to collect all revenues and profits thereof and apply the same to the payment of
all expenses and other charges of such receivership including the compensation
of the receiver and to the payments as aforesaid until a sale or other
disposition of such Collateral shall be finally made and
consummated.  To the extent not prohibited by applicable law, each
Credit Party hereby irrevocably consents to and waives any right to object to or
otherwise contest the appointment of a receiver as provided
above.  Each Credit Party (i) grants such waiver and consent knowingly
after having discussed the implications thereof with counsel, (ii) acknowledges
that (A) the uncontested right to have a receiver appointed for the foregoing
purposes is considered essential by Lender in connection with the enforcement of
its rights and remedies hereunder and under the other Loan Documents and (B) the
availability of such appointment as a remedy under the foregoing circumstances
was a material factor in inducing Lender to make the Loans to such Credit Party
and (iii) to the extent not prohibited by applicable law, agrees to enter into
any and all stipulations in any legal actions, or agreements or other
instruments required or reasonably appropriate in connection with the foregoing,
and to cooperate fully with Lender in connection with the assumption and
exercise of control by any receiver over all or any portion of the
Collateral.

       

      
        	
                 
      

              	
                11.4

              	
                Rights
      and Remedies not Exclusive

              


      

       

      Lender shall have the right in its sole
discretion to determine which rights, Liens and remedies Lender may at any time
pursue, relinquish, subordinate or modify, and such determination will not in
any way modify or affect any of Lender’s rights, Liens or remedies under any
Loan Document, applicable law or equity.  The enumeration of any
rights and remedies in any Loan Document is not intended to be exhaustive, and
all rights and remedies of Lender described in any Loan Document are cumulative
and are not alternative to or exclusive of any other rights or remedies which
Lender otherwise may have.  The partial or complete exercise of any
right or remedy shall not preclude any other further exercise of such or any
other right or remedy.

       

      
        
           


        

        
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                11.5

              	
                Standards
      for Exercising Remedies

              


      

       

      To the
extent that applicable law imposes duties on Lender to exercise remedies in a
commercially reasonably manner, Credit Parties hereby acknowledge and agree that
it is not commercially unreasonable for Lender (a) to fail to incur expenses
reasonably deemed significant by Lender to prepare Collateral for disposition or
otherwise to complete raw material or work in process into finished goods or
other finished products for disposition, (b) to fail to obtain third-party
consents for access to Collateral to be disposed of, or to obtain or, if not
required by other law, to fail to obtain governmental or third party consents
for the collection or disposition of Collateral to be collected or disposed of,
(c) to fail to exercise collection remedies against account debtors or other
persons obligated on Collateral or to remove Liens against Collateral, (d) to
exercise collection remedies against account debtors and other persons obligated
on Collateral directly or through the use of collection agencies and other
collection specialists, (e) to advertise dispositions of Collateral through
publications or media of general circulation, whether or not the Collateral is
of a specialized nature, (f) to contact other persons, whether or not in the
same business as Credit Parties, for expressions of interest in acquiring all or
any portion of the Collateral, (g) to hire one or more professional auctioneers
to assist in the disposition of Collateral, whether or not the Collateral is of
a specialized nature, (h) to dispose of Collateral by utilizing Internet sites
that provide for the auction of assets of the types included in the Collateral
or that have the reasonable capability of doing so, or that match buyers and
sellers of assets, (i) to dispose of assets in wholesale rather than retail
markets, (j) to disclaim disposition warranties, (k) to purchase insurance or
credit enhancements to insure Lender against risks of loss, collection or
disposition of Collateral or to provide to Lender a guaranteed return from the
collection or disposition of Collateral or (l) to the extent deemed appropriate
by Lender, to obtain the services of brokers, investment bankers, consultants or
other professionals to assist Lender in the collection or disposition of any of
the Collateral.  Credit Parties further acknowledge that the purpose
of this Section
11.5 is to provide non-exhaustive indications of what acts or omissions
by Lender would not be commercially unreasonable in Lender’s exercise of
remedies against the Collateral and that other acts or omissions by Lender shall
not be deemed commercially unreasonable solely on account of not being indicated
in this Section
11.5.  Without limitation upon the foregoing, nothing contained
in this Section
11.5 shall be construed to grant any rights to Credit Parties or to
impose any duties upon Lender that would not have been granted or imposed by
this Agreement or by applicable law in the absence of this Section
11.5.

       

      
        	
                XII.

              	
                WAIVERS
      AND JUDICIAL PROCEEDINGS

              


      

       

      
        	
                 
      

              	
                12.1

              	
                Waivers

              


      

       

      Except as
expressly provided for herein, Credit Parties hereby waive setoff, counterclaim,
demand, presentment, protest, all defenses with respect to any and all
instruments and all notices and demands of any description, and the pleading of
any statute of limitations as a defense to any demand under any Loan
Document.  Credit Parties hereby waive any and all defenses and
counterclaims they may have or could interpose in any action or procedure
brought by Lender to obtain an order of court recognizing the assignment of, or
Lien of Lender in and to, any Collateral, whether or not payable by a
Medicaid/Medicare Account Debtor.   With respect to any action
hereunder, Lender conclusively may rely upon, and shall incur no
liability to Credit Parties in acting upon, any request or other communication
that Lender reasonably believes to have been given or made by a person
authorized on Credit Parties’ behalf, whether or not such person is listed on
the incumbency certificate delivered pursuant to Section 6.1
hereof.  In each such case, Credit Parties hereby waive the right to
dispute Lender's action based upon such request or other communication, absent
manifest error.  Without limiting the generality of the foregoing,
Borrower expressly waives all rights, benefits and defenses, if any, applicable
or available to Borrower under either California Code of Civil Procedure
Sections 580a or 726, which provide, among other things, that the amount of any
deficiency judgment which may be recovered following either a judicial or
nonjudicial foreclosure sale is limited to the difference between the amount of
any indebtedness owed and the greater of the fair value of the security or the
amount for which the security was actually sold.  Without limiting the
generality of the foregoing, Borrower further expressly waives all rights,
benefits and defenses, if any, applicable or available to Borrower under either
California Code of Civil Procedure Sections 580b, providing, generally, that no
deficiency may be recovered on a real property purchase money obligation, or
580d, providing, generally, that no deficiency may be recovered on a note
secured by a deed of trust on real property if the real property is sold under a
power of sale contained in the deed of trust.

       

      
        
           


        

        
          51

          
            

          

        

        
           


        

      

       

      
        	
                 
      

              	
                12.2

              	
                Delay;
      No Waiver of Defaults

              


      

       

      No course of action or dealing,
renewal, release or extension of any provision of any Loan Document, or single
or partial exercise of any such provision, or delay, failure or omission on
Lender’s part in enforcing any such provision shall affect the liability of any
Credit Party or operate as a waiver of such provision or affect the liability of
any Credit Party or preclude any other or further exercise of such
provision.  No waiver by any party to any Loan Document of any one or
more defaults by any other party in the performance of any of the provisions of
any Loan Document shall operate or be construed as a waiver of any future
default, whether of a like or different nature, and each such waiver shall be
limited solely to the express terms and provisions of such
waiver.  Notwithstanding any other provision of any Loan Document, by
completing the Closing under this Agreement and/or by making Advances, Lender
does not waive any breach of any representation or warranty under any Loan
Document, and all of Lender’s claims and rights resulting from any such breach
or misrepresentation are specifically reserved.

       

      
        	
                 
      

              	
                12.3

              	
                Jury
      Waiver

              


      

       

      EACH PARTY TO THIS AGREEMENT HEREBY
KNOWINGLY AND VOLUNTARILY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM OR
CAUSE OF ACTION ARISING UNDER THE LOAN DOCUMENTS OR IN ANY WAY CONNECTED WITH OR
INCIDENTAL TO THE DEALINGS OF THE PARTIES WITH RESPECT TO THE LOAN DOCUMENTS OR
THE TRANSACTIONS CONTEMPLATED THEREBY, WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE.  EACH
PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE
DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY
FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENTS OF THE PARTIES TO THE WAIVER OF THEIR RESPECTIVE RIGHTS
TO TRIAL BY JURY.

       

      
        	
                 
      

              	
                12.4

              	
                Cooperation
      in Discovery and Litigation

              


      

       

      In any litigation, arbitration or other
dispute resolution proceeding relating to any Loan Document, Borrower waives any
and all defenses, objections and counterclaims it may have or could interpose
with respect to (i) any of its directors, officers, employees or agents being
deemed to be employees or managing agents of Borrower for purposes of all
applicable law or court rules regarding the production of witnesses by notice
for testimony (whether in a deposition, at trial or otherwise), (ii) Lender’s
counsel examining any such individuals as if under cross-examination and using
any discovery deposition of any of them as if it were an evidence deposition,
and (iii) using commercially reasonable efforts to produce in any such dispute
resolution proceeding,  all Persons, documents (whether in tangible,
electronic or other form) and other things under its control that properly
relate to any matters in dispute.  Notwithstanding the foregoing,
Credit Parties (A) do not waive any rights of any directors, officers, employees
or agents that such Persons may have individually, (B) do not agree that any
alternative dispute resolution procedures other than a court trial will be
automatically applicable to the situation at hand in the event of a dispute and
will only agree to such alternative dispute resolution procedures at such time
after the facts and circumstances are known, and (C) with respect to item (iii)
do not agree to engage in any electronic discovery procedures unless agreed to
at such time in the future and at the expense of someone other than the
Borrower.

       

      
        
           


        

        
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                XIII.

              	
                EFFECTIVE
      DATE AND TERMINATION

              


      

       

      
        	
                 
      

              	
                13.1

              	
                Termination
      and Effective Date Thereof

              


      

       

      (a)           Subject to Lender’s right to
cease making Advances pursuant to Section 2.1 or upon or after any Event of
Default, this Agreement shall continue in full force and effect until the
Obligations are Paid in Full, unless terminated sooner as provided in this
Section 13.1(a).  Borrower may terminate this Agreement at any
time upon not less than thirty calendar days’ prior written notice to Lender and
upon full performance and indefeasible Payment in Full of all Obligations after
Receipt by Lender of such written notice.  All of the Obligations
shall be immediately due and payable upon any termination by Borrower pursuant
to this Section 13.1(a) on the Termination Date which shall be the first
Business Day after the thirty (30) day notice period has elapsed, on which the
Obligations have fully performed and indefeasibly Paid in Full.  Upon such full performance
and Payment in full of the Obligations Lender shall not unreasonably delay the
filing of a release of its liens.  Notwithstanding any other
provision of any Loan Document, no termination of this Agreement shall affect
Lender’s rights or any of the Obligations existing as of the effective date of
such termination, and the provisions of the Loan Documents shall continue to be
fully operative until the Obligations have been fully performed and Paid in Full.  The Liens
granted to Lender under the Loan Documents and the financing statements filed
pursuant thereto and the rights and powers of Lender shall continue in full
force and effect notwithstanding the fact that Borrower’s borrowings hereunder
may from time to time be in a zero or credit position until all of the
Obligations have been fully performed and indefeasibly Paid in Full.

       

      (b)           Upon the occurrence of a
Revolver Termination, Credit Parties shall immediately pay Lender (in addition
to the then outstanding principal, accrued interest and other Obligations
relating to the Revolving Facility pursuant to the terms of this Agreement and
any other Loan Document), as yield maintenance for the loss of bargain and not
as a penalty, an amount equal to the applicable Minimum Termination
Fee.

       

      
        	
                 
      

              	
                13.2

              	
                Survival

              


      

       

      All obligations, covenants, agreements,
representations, warranties, waivers and indemnities made by Credit Parties in
any Loan Document shall survive the execution and delivery of the Loan
Documents, the Closing, the making of the Advances and any termination of this
Agreement until all Obligations are fully performed and indefeasibly paid in
full in cash.  The obligations and provisions of Sections 3.6, 12.1, 12.3,
12.4, 13.1, 13.2, 15.4, 15.7 and 15.10 shall survive termination of the
Loan Documents and any payment, in full or in part, of the
Obligations.

       

      
        	
                XIV.

              	
                GUARANTY

              


      

       

      
        	
              	
                14.1

              	
                Guaranty

              


      

       

      Guarantor hereby unconditionally and
irrevocably guarantees the punctual payment when due, whether at stated
maturity, by acceleration or otherwise, of all Obligations of each Credit Party,
including, without limitation, Credit Parties, now or hereafter existing under
any Loan Document, whether for principal, interest (including, without
limitation, all interest that accrues after the commencement of any proceeding
of Borrower or any other Credit Party under any Debtor Relief Laws), fees,
commissions, expense reimbursements, indemnifications or otherwise (such
obligations, to the extent not paid by Borrower, the “Guaranteed Obligations”), and
agrees to pay any and all costs, fees and expenses (including reasonable counsel
fees and expenses) incurred by Lender in enforcing any rights under the guaranty
set forth in this Article XIV.  Without
limiting the generality of the foregoing, Guarantor’s liability shall extend to
all amounts that constitute part of the Guaranteed Obligations and would be owed
by Borrower or any other Credit Party to Lender under any Loan Document, but for
the fact that they are unenforceable or not allowable due to the existence of
any proceeding under any Debtor Relief Laws involving Borrower or any other
Credit Party.

       

      
        
           


        

        
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                14.2

              	
                Guaranty
      Absolute

              


      

       

      Guarantor guarantees that the
Guaranteed Obligations will be paid strictly in accordance with the terms of the
Loan Documents, regardless of any law regulation or order now or hereafter in
effect in any jurisdiction affecting any such terms or the rights of Lender with
respect thereto.  The obligations of Guarantor under this Article XIV are
independent of the Guaranteed Obligations, and a separate action or actions may
be brought and prosecuted against any other guarantor to enforce such
obligations, irrespective of whether any action is brought against any Credit
Party or whether any Credit Party is joined in any such action or
actions.  The liability of Guarantor under this Article XIV
shall be irrevocable, absolute and unconditional irrespective of, and, in
consideration of the direct and indirect benefits from the financing
arrangements contemplated herein enjoyed by such Guarantor. Guarantor hereby
irrevocably waives any defenses it may now or hereafter have in any way relating
to, any or all of the following: (a) any lack of validity or enforceability of
any Loan Document or any agreement or instrument relating thereto; (b) any
change in the time, manner or place of payment of, or in any other term of, all
or any of the Guaranteed Obligations, or any other amendment or waiver of or any
consent to departure from any Loan Document, including, without limitation, any
increase in the Guaranteed Obligations resulting from the extension of
additional credit to any Credit Party or otherwise; (c) any taking, exchange,
release or non-perfection of any Collateral, or any taking, release or amendment
or waiver of or consent to departure from any other guaranty, for all or any of
the Guaranteed Obligations; (d) any change, restructuring or termination of the
corporate, limited liability company or partnership structure or existence of
any Credit Party; (e) promptness, diligence, notice of acceptance and any other
notice with respect to any of the Guaranteed Obligations and this Article XIV and
any requirement that Lender exhaust any right or take any action against any
other Credit Party or any other Person or any Collateral; or (f) any other
circumstance (including, without limitation, any statute of limitations) or any
existence of or reliance on any representation by Lender that might otherwise
constitute a defense available to, or a discharge of, any Credit Party or any
other guarantor or surety, other than the defense of payment.

       

      This Article XIV is a
continuing guaranty and shall (a) remain in full force and effect until the
indefeasible cash payment in full of the Guaranteed Obligations and all other
amounts payable under this Article XIV and
irrevocable termination of the Loan Agreement in accordance with its terms, (b)
be binding upon Guarantor, its successors and assigns and (c) inure to the
benefit of, and be enforceable by, Lender and its successors, assigns, pledgees,
transferees.  This Article XIV
shall continue to be effective or be reinstated, as the case may be, if at any
time any payment of any of the Guaranteed Obligations is rescinded or must
otherwise be returned to Lender or any other Person upon the insolvency,
bankruptcy or reorganization of Borrower or any other Credit Party or otherwise,
all as though such payment had not been made.  Guarantor hereby waives
any right to revoke this Article XIV, and
acknowledges that this Article XIV is
continuing in nature and applies to all Guaranteed Obligations, whether existing
now or in the future.

       


      
        
           


        

        
          54

          
            

          

        

        
           


        

      

       

      
        	
                 
      

              	
                14.3

              	
                Subrogation

              


      

       

      Guarantor will not exercise any rights
that it may now or hereafter acquire against any other Credit Party or any other
guarantor or that arise from the existence, payment, performance or enforcement
of its respective obligations under this Article XIV,
including, without limitation, any right of subrogation, reimbursement,
exoneration, contribution or indemnification and any right to participate in any
claim or remedy of Lender against any other Credit Party or any other guarantor
or any Collateral, 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 any other Credit Party or any other guarantor,
directly or indirectly, in cash or other property or by set-off or in any other
manner, payment or security solely on account of such claim, remedy or right,
unless and until all of the Guaranteed Obligations and all other amounts payable
under this Article XIV
shall have been indefeasibly paid in full in cash and all commitments to lend
hereunder shall have terminated.  Guarantor agrees that any payment of
any Indebtedness of Borrower now or hereafter held by such Guarantor is hereby
subordinated in right of payment to the irrevocable and indefeasible payment in
full in cash of the Guaranteed Obligations unless otherwise agreed to in writing
by Lender or provided for in this agreement. If any amount shall be
paid to a Guarantor in violation of the immediately preceding sentences, such
amount shall be held in trust for the benefit of Lender and shall forthwith be
paid to Lender to be credited and applied to the Guaranteed Obligations and all
other amounts payable under this Article XIV,
whether matured or unmatured, in accordance with the terms of this Agreement, or
to be held as Collateral for any Guaranteed Obligations or other amounts payable
under this Article XIV
thereafter arising.  If (i) a Guarantor shall make payment to Lender
of all or any part of the Guaranteed Obligations, (ii) all of the Guaranteed
Obligations and all other amounts payable under this Article XIV
shall be indefeasibly paid in full in cash and (iii) Lender’s commitment to lend
hereunder shall have been terminated, Lender will, at such Guarantor’s request
and expense, execute and deliver to such Guarantor appropriate documents,
without recourse and without representation or warranty, necessary to evidence
the transfer by subrogation to such Guarantor of an interest in the Guaranteed
Obligations resulting from such payment by such Guarantor

       

      
        	
                XV.

              	
                MISCELLANEOUS

              


      

       

      
        	
                 
      

              	
                15.1

              	
                Governing
      Law; Jurisdiction; Service of Process;
Venue

              


      

       

      The Loan Documents shall be governed by
and construed in accordance with the internal laws of the State of Maryland
without giving effect to its choice of law provisions.  Any judicial
proceeding against Credit Parties with respect to the Obligations, any Loan
Document or any related agreement may be brought in any federal or state court
of competent jurisdiction located in the State of Maryland.  By
execution and delivery of each Loan Document to which it is a party, each Credit
Party (i) accepts the non-exclusive jurisdiction of the aforesaid courts and
irrevocably agrees to be bound by any judgment rendered thereby, (ii) waives
personal service of process, (iii) agrees that service of process upon it may be
made by certified or registered mail, return receipt requested, pursuant to
Section 15.5
hereof, (iv) waives any objection to personal jurisdiction and venue of any
action instituted hereunder and agrees not to assert any defense based on lack
of jurisdiction, venue or convenience, and (v) agrees that this loan was made in
Maryland, that Lender has accepted in Maryland Loan Documents executed by such
Credit Party and has disbursed Advances under the Loan Documents in
Maryland.  Nothing shall affect the right of Lender to serve process
in any manner permitted by law or shall limit the right of Lender to bring
proceedings against such Credit Party in the courts of any other jurisdiction
having jurisdiction, including any jurisdiction in which Collateral is located
for purposes of exercising rights and remedies with respect to such
Collateral.  Any judicial proceedings against Lender involving,
directly or indirectly, the Obligations, any Loan Document or any related
agreement shall be brought only in a federal or state court located in the State
of Maryland.  All parties acknowledge that they participated in the
negotiation and drafting of this Agreement, that the parties were represented by
counsel of their choice in connection with the negotiation and drafting of this
Agreement, that the parties to this Agreement are sophisticated parties entering
into a commercial transaction, and that, accordingly, no party shall move or
petition a court construing this Agreement to construe it more stringently
against one party than against any other.

       

      
        
           


        

        
          55

          
            

          

        

        
           


        

      

       

      
        	
                 
      

              	
                15.2

              	
                Successors
      and Assigns; Participations; New
Lenders

              


      

       

      The Loan Documents shall inure to the
benefit of Lender, Transferees and all future holders of the Loan, any Note, the
Obligations and/or any of the Collateral, and each of their respective
successors and assigns.  Each Loan Document shall be binding upon the
Persons’ other than Lender that are parties thereto and their respective
successors and assigns, and no such Person may assign, delegate or transfer any
Loan Document or any of its rights or obligations thereunder without the prior
written consent of Lender.  No rights are intended to be created under
any Loan Document for the benefit of any third party donee, creditor or
incidental beneficiary of any Credit Party.  Nothing contained in any
Loan Document shall be construed as a delegation to Lender of any other Person’s
duty of performance.  CREDIT PARTIES ACKNOWLEDGE AND AGREE THAT LENDER
AT ANY TIME AND FROM TIME TO TIME MAY (I) DIVIDE AND RESTATE ANY NOTE, AND/OR
(II) SELL, ASSIGN OR GRANT PARTICIPATING INTERESTS IN OR TRANSFER ALL OR ANY
PART OF ITS RIGHTS OR OBLIGATIONS UNDER ANY LOAN DOCUMENT, LOANS, ANY NOTE, THE
OBLIGATIONS AND/OR THE COLLATERAL TO OTHER PERSONS (EACH SUCH TRANSFEREE,
ASSIGNEE OR PURCHASER, A “TRANSFEREE”).  Each
Transferee shall have all of the rights and benefits with respect to the Loans,
Obligations, any Notes, Collateral and/or Loan Documents held by it as fully as
if the original holder thereof, and either Lender or any Transferee may be
designated as the sole agent to manage the transactions and obligations
contemplated therein.  Notwithstanding any other provision of any Loan
Document, Lender may disclose to any Transferee all information, reports,
financial statements, certificates and documents obtained under any provision of
any Loan Document.  In the event of any transfer of any portion of
Lender’s right and interest in the Obligations of this Agreement, Lender agrees
to so notify the Borrower of such transfer and include such transferee’s name
and contact information, except if such transfer is to an Affiliate of Lender or
any of Lender’s financing sources.

       

      
        	
                 
      

              	
                15.3

              	
                Application
      of Payments

              


      

       

      To the
extent that any payment made or received with respect to the Obligations is
subsequently invalidated, determined to be fraudulent or preferential, set aside
or required to be repaid to a trustee, debtor in possession, receiver, custodian
or any other Person under any Debtor Relief Law, common law or equitable cause
or any other law, then the Obligations intended to be satisfied by such payment
shall be revived and shall continue as if such payment had not been received by
Lender.  Any payments with respect to the Obligations received shall
be credited and applied in such manner and order as Lender shall decide in its
sole discretion.

       

      
        	
                 
      

              	
                15.4

              	
                Indemnity

              


      

       

      Each Credit Party jointly and
severally shall indemnify Lender, its Affiliates and its and their respective
managers, members, officers, employees, Affiliates, agents, representatives,
successors, assigns, accountants and attorneys (collectively, the “Indemnified
Persons”) from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses and disbursements of any kind or
nature whatsoever (including, without limitation, reasonable fees and
disbursements of counsel, allocable costs of in-house counsel, and in-house
diligence fees and expenses, subject to the provisions
governing payment of in-house counsel and outside counsel fees set forth in
Section 15.7(b))
which may be imposed on, incurred by or asserted against any Indemnified Person
with respect to or arising out of, or in any litigation, proceeding or
investigation instituted or conducted by any Person with respect to any aspect
of, or any transaction contemplated by or referred to in, or any matter related
to, any Loan Document or any agreement, document or transaction contemplated
thereby, whether or not such Indemnified Person is a party thereto, except to
the extent that any of the foregoing results directly from the gross negligence
or willful misconduct of such Indemnified Person as determined by a final
non-appealable judgment entered by a court of competent jurisdiction, in which case, any
previously made reimbursements made pursuant to this indemnification clause for
claims which were due to such gross negligence or willful misconduct shall be
immediately recoverable from such Indemnified Person.  If any
Indemnified Person uses in-house counsel for any purpose for which any Credit
Party is responsible to pay or indemnify, each Credit Party expressly agrees
that its indemnification obligations include reasonable charges for the costs
allocable for such work of such in-house counsel, subject to the provisions
governing payment of in-house counsel and outside counsel fees set forth in
Section 15.7(b).  Lender agrees to
give Credit Parties reasonable notice of any event of which Lender becomes aware
for which indemnification may be required under this Section 15.4, and Lender
may elect (but is not obligated) to direct the defense thereof, provided that
the selection of counsel shall be subject to Credit Parties’ consent, which
consent shall not be unreasonably withheld or delayed.  Any
Indemnified Person may, in its reasonable discretion, take such actions as it
deems necessary and appropriate to investigate or defend any event or take
other remedial or corrective actions with respect thereto as may be necessary
for the protection of such Indemnified Person or the Collateral.  Notwithstanding the
foregoing, if any insurer agrees to undertake the defense of an event (an
“Insured
Event”), Lender
agrees not to exercise its right to select counsel to defend the event if that
would cause any Credit Party’s insurer to deny coverage; provided, however, that
Lender reserves the right to retain counsel to represent any Indemnified Person
with respect to an Insured Event at its sole cost and expense.  To the
extent that Lender obtains recovery from a third party other than an Indemnified
Person of any of the amounts that any Credit Party has paid to Lender pursuant
to the indemnity set forth in this Section 15.4, then Lender shall promptly pay
to such Credit Party the amount of such recovery.

       

      
        
           


        

        
          56

          
            

          

        

        
           


        

      

       

      
        	
              	
                15.5

              	
                Notice  

              


      

       

      Any
notice or request under any Loan Document shall be given to any party to this
Agreement at such party’s address set forth beneath its signature on the
signature page to this Agreement, or at such other address as such party may
hereafter specify in a notice given in the manner required under this Section
15.5.  Any notice or request hereunder shall be given only by,
and shall be deemed to have been received upon (each, a “Receipt”):  (i) registered
or certified mail, return receipt requested, on the date on which received as
indicated in such return receipt, (ii) delivery by a nationally recognized
overnight courier, one Business Day after deposit with such courier, or (iii)
facsimile transmission upon sender’s receipt of confirmation of proper
transmission, as applicable.

       

      
        	
                 
      

              	
                15.6

              	
                Severability;
      Captions; Counterparts; Facsimile
Signatures

              


      

       

      If any provision of any Loan Document
is adjudicated to be invalid under applicable laws or regulations, such
provision shall be inapplicable to the extent of such invalidity without
affecting the validity or enforceability of the remainder of the Loan Documents
which shall be given effect so far as possible.  The captions in the
Loan Documents are intended for convenience and reference only and shall not
affect the meaning or interpretation of the Loan Documents.  The Loan
Documents may be executed in one or more counterparts (which taken together, as
applicable, shall constitute one and the same instrument) and by facsimile
transmission, which facsimile signatures shall be considered original executed
counterparts.  Each party to this Agreement agrees that it will be
bound by its own facsimile signature and that it accepts the facsimile signature
of each other party.

       

      
        	
                 
      

              	
                15.7

              	
                Expenses

              


      

       

      (a)           Credit
Parties shall pay, whether or not the Closing occurs, all costs and expenses
incurred by Lender and/or its Affiliates, including, without limitation,
documentation and diligence fees and expenses, all search, audit, appraisal,
recording, professional and filing fees and expenses and all other out-of-pocket
charges and expenses (including, without limitation, UCC and judgment and tax
lien searches and UCC filings and fees for post-Closing UCC and judgment and tax
lien searches and wire transfer fees and audit expenses), and reasonable
attorneys’ fees and expenses, (i) in any effort to enforce, protect or collect
payment of any Obligation or to enforce any Loan Document or any related
agreement, document or instrument, (ii) in connection with entering into,
negotiating, preparing, reviewing and executing the Loan Documents and/or any
related agreements, documents or instruments, (iii) arising in any way out of
administration of the Obligations, (iv) in connection with instituting,
maintaining, preserving, enforcing and/or foreclosing on Lender’s Liens in any
of the Collateral or securities pledged under the Loan Documents, whether
through judicial proceedings or otherwise, (v) in defending or prosecuting any
actions, claims or proceedings arising out of or relating to Lender’s
transactions with Credit Parties, (vi) in seeking, obtaining or receiving any
advice with respect to its rights and obligations under any Loan Document and
any related agreement, document or instrument, and/or (vii) in connection with
any modification, restatement, supplement, amendment, waiver or extension of any
Loan Document and/or any related agreement, document or
instrument.  All of the foregoing shall be charged to Credit Parties’
account and shall be part of the Obligations, and each such amount so charged
shall be deemed an Advance under the Revolving Facility and added to the
Obligations, regardless of whether a Revolver Termination has
occurred.  Lender acknowledges that it has agreed to a cap of $15,000
solely with respect to fees and expenses associated with the business due
diligence of originating and closing this Agreement which has been paid as a
deposit to Lender.  Lender agrees that, upon written request of
Borrower, it will provide a summary description of any legal matters which were
charged to the account of the Borrower.

       

      
        
           


        

        
          57

          
            

          

        

        
           


        

      

       

      (b)           If
Lender or any of its Affiliates uses in-house counsel for any purpose under any
Loan Document for which Credit Parties are responsible to pay or indemnify,
Credit Parties expressly agree that their Obligations include reasonable charges
for such work commensurate with the allocable costs of such in-house
counsel.  Notwithstanding anything to the contrary contained in this
Agreement, so long as no Default or Event of Default has occurred and is
continuing, Borrower shall not be required to pay or indemnify Lender for the
allocable cost of the work of staff counsel if Lender has engaged outside
counsel for the same work.

       

      
        	
                 
      

              	
                15.8

              	
                Entire
      Agreement

              


      

       

      This
Agreement and the other Loan Documents to which Credit Parties are a party
constitute the entire agreement between Credit Parties and Lender with respect
to the subject matter hereof and thereof, and supersede all prior agreements and
understandings, if any, relating to the subject matter hereof or
thereof.  Any promises, representations, warranties or guarantees not
herein contained and hereinafter made shall have no force and effect unless in
writing signed by Credit Parties and Lender.  No provision of this
Agreement may be changed, modified, amended, restated, waived, supplemented,
discharged, canceled or terminated orally or by any course of dealing or in any
other manner other than by an agreement in writing signed by Lender and Credit
Parties.  Each party hereto acknowledges that it has been advised by
counsel in connection with the negotiation and execution of this Agreement and
is not relying upon oral representations or statements inconsistent with the
terms and provisions hereof.

       

      
        	
                 
      

              	
                15.9

              	
                Lender
      Approvals

              


      

       

      Unless expressly provided herein to the
contrary, any approval, consent, waiver or satisfaction of Lender with respect
to any matter that is subject of any Loan Document may be granted or withheld by
Lender in its sole and absolute discretion.

       

      
        	
              	
                15.10

              	
                Confidentiality
      and Publicity

              


      

       

      (a)           Lender
understands and acknowledges that this Agreement is a material obligation of the
Credit Parties, and as such, must be filed with the Securities and Exchange
Commission (“SEC”) and
through such action will become publicly available.  Credit Parties
agree to submit to Lender and Lender reserves the right to review and approve
all materials that Credit Parties or any of their Affiliates prepares that
contain Lender’s name or describe or refer to any Loan Document, any of the
terms thereof or any of the transactions contemplated
thereby.  Notwithstanding the foregoing, Lender acknowledges and
agrees that that a description of the principle terms of this Agreement will be
required to be stated in the Guarantor’s quarterly and annual reports filed with
the SEC, and Guarantor and its counsel shall have the final authority in any
wording so disclosed; provided, however, that Guarantor will attempt to clear
such language with the Lender prior to any filing.  Lender further
acknowledges and agrees that once such language in any SEC filings has been
finalized, it can continue to appear in subsequent SEC filings without any
further review by Lender.  Credit Parties shall not, and shall not
permit any of their Affiliates to, use Lender’s name (or the name of any of
Lender’s Affiliates) in connection with any of its business operations,
including without limitation, advertising, marketing or press releases or such
other similar purposes, without Lender’s prior written
consent.  Lender similarly agrees that it shall not, and shall not
permit any of its Affiliates to, use Credit Parties names or logos (or the names
of any Credit Parties’ Affiliates) in any advertising, marketing or press
releases or such similar purposes, without Credit Parties prior written
consent.  Nothing contained in any Loan Document is intended to permit
or authorize Credit Parties or any of their Affiliates to contract on behalf of
Lender.

       

      
        
           


        

        
          58

          
            

          

        

        
           


        

      


      (b)           Credit
Parties hereby agree that Lender or any Affiliate of Lender may disclose any and
all information concerning the Loan Documents, as well as any information
regarding Credit Party and its operations, received by Lender in connection with
the Loan Documents to its lenders or funding or financing sources.

       

      
        	
              	
                15.11

              	
                Release
      of Lender

              


      

       

      Notwithstanding any other provision of
any Loan Document, each Credit Party voluntarily, knowingly, unconditionally and
irrevocably, with specific and express intent, for and on behalf of
itself,  its managers, members, directors, officers, employees,
stockholders, Affiliates, agents, representatives, accountants, attorneys,
successors and assigns and their respective Affiliates (collectively, the “Releasing Parties”), hereby
fully and completely releases and forever discharges the Indemnified Parties and
any other Person or Insurer which may be responsible or liable for the acts or
omissions of any of the Indemnified Parties, or who may be liable for the injury
or damage resulting therefrom (collectively, with the Indemnified Parties, the
“Released Parties”), of
and from any and all actions, causes of action, damages, claims, obligations,
liabilities, costs, expenses and demands of any kind whatsoever, at law or in
equity, matured or unmatured, vested or contingent, that any of the Releasing
Parties has against any of the Released Parties as of the date of the
Closing.  Each Credit Party acknowledges that the foregoing release is
a material inducement to Lender’s decision to extend to such Credit Party the
financial accommodations hereunder and has been relied upon by Lender in
agreeing to make the Loans.

       

      
        	
              	
                15.12

              	
                Agent

              


      

       

      Lender
and its successors and assigns hereby (i) designate and appoint CapitalSource
Finance LLC, a Delaware limited liability company, and its successors and
assigns ("CapitalSource"), to act as
agent for Lender and its successors and assigns under this Agreement and all
other Loan Documents, (ii) irrevocably authorize CapitalSource to take all
actions on its behalf under the provision of this Loan Agreement and all other
Loan Documents, and (iii) to exercise all such powers and rights, and to perform
all such duties and obligations hereunder and thereunder.  CapitalSource,
on behalf of Lender, shall hold all Collateral, payments of principal and
interest, fees, charges and collections received pursuant to this Agreement and
all other Loan Documents.  Each Credit Party acknowledges that Lender and
its successors and assigns transfer and assign to CapitalSource the right to act
as Lender's agent to enforce all rights and perform all obligations of Lender
contained herein and in all of the other Loan Documents.  Credit Parties
shall within ten Business Days after Lender's reasonable request, take such
further actions, obtain such consents and approvals and duly execute and deliver
such further agreements, amendments, assignments, instructions or documents as
Lender may request to evidence the appointment and designation of CapitalSource
as agent for Lender and other financial institutions from time to time party
hereto and to the other Loan Documents.

       

      
        
          	
                	
                  15.13

                	
                  Reserved  

                


        

      

       

      
        
           


        

        
          59

          
            

          

        

        
           


        

      

          

        	
              	
                15.14

              	
                Agreement
      Controls

              


      

       

      In the event of any inconsistency
between this Agreement and any other Loan Documents, the terms of this Agreement
shall control.

       

      [SIGNATURES
APPEAR ON THE FOLLOWING PAGE]

       

      
        
           


        

        
          60

          
            

          

        

        
           


        

      

       

      IN WITNESS WHEREOF, each of the parties
has duly executed this Revolving Credit and Security Agreement as of the date
first written above.

      


      
        
          
            
              
                
                  
                    	
                            BORROWER:

                          
	 
      
	
                            NEOGENOMICS, INC., a
      Florida corporation

                          
	 
      	 
      
	
                            By:

                          	
                            /s/Steven C. Jones

                          
	
                            Name:

                          	
                            Steven C. Jones

                          
	
                            Its:

                          	
                            Chief Financial Officer

                          
	 
      	 
      
	
                            GUARANTOR:

                          
	 
      
	
                            NEOGENOMICS, INC., a
      Nevada corporation

                          
	 
      	 
      
	
                            By:

                          	
                            /s/Steven C. Jones

                          
	
                            Name:

                          	
                            Steven C. Jones

                          
	
                            Its:

                          	
                            Chief Financial Officer

                          
	 
      	 
      
	
                            NeoGenomics, Inc.

                          
	
                            12701 Commonwealth Drive, Suite
      9

                          
	
                            Fort Myers, Florida
33913

                          
	
                            Attention:

                          	
                            Steven C. Jones

                          
	
                            Telephone:  

                          	
                            (239) 768-0600

                          
	
                            Facsimile:

                          	
                            (239) 768-1672

                          
	
                            E-Mail:

                          	 
        
	 
      	 
      
	
                            CAPITALSOURCE
      FINANCE LLC

                          
	 
      	 
      
	
                            By:

                          	
                            /s/David Martin

                          
	
                            Name:

                          	
                            David Martin

                          
	
                            Its:

                          	
                            General Counsel Commercial
      Lending

                          
	
                            CapitalSource
      Finance LLC

                          
	
                            4445
      Willard Avenue, 12th
      Floor

                          
	
                            Chevy
      Chase, MD  20815

                          
	
                            Attention:  Healthcare
      Finance Group, Portfolio Manager

                          
	
                            Telephone:  (301)
      841-2700

                          
	
                            Facsimile:  (301)
      841-2340

                          
	
                            E-Mail:

                          	
                             
      

                          


                  

                

              

            

          

        

      

       

      
        
           


        

        
          61

          
            

          

        

        
           


        

      

       

      EXHIBITS

       

      
        
          
            	
                    Exhibit
      A

                  	
                    Form
      of Borrowing Certificate

                  
	 
      	 
      
	
                    Exhibit
      B

                  	
                    Form
      of Compliance Certificate

                  
	 
      	 
      
	
                    Exhibit
      C

                  	
                    Form
      of Solvency Certificate

                  
	 
      	 
      
	
                    Exhibit
      D

                  	
                    Form
      of Officer’s
Certificate

                  


          

        

      

       

      
        
           


        

        
          
          

          
            

          

        

        
           


        

      

       

      SCHEDULES

       

      
        
          
            
              	
                      Schedule
      2.3

                    	
                      Borrower’s
      Accounts

                    
	 
      	 
      
	
                      Schedule
      5.3A

                    	
                      Proceedings
      or Investigations

                    
	 
      	 
      
	
                      Schedule
      5.3B

                    	
                      Third-Party
      Contracts

                    
	 
      	 
      
	
                      Schedule
      7.11

                    	
                      Intellectual
      Property

                    
	 
      	 
      
	
                      Schedule
      7.15A

                    	
                      Existing
      Indebtedness, Investments, Guarantees and Certain
  Contracts

                    
	 
      	 
      
	
                      Schedule
      7.15B

                    	
                      Indebtedness
      with a Maturity Date During the Term

                    
	 
      	 
      
	
                      Schedule
      7.16

                    	
                      Other
      Agreements

                    
	 
      	 
      
	
                      Schedule
      7.17

                    	
                      Insurance

                    
	 
      	 
      
	
                      Schedule
      7.18A  

                    	
                      Borrower’s
      Names

                    
	 
      	 
      
	
                      Schedule
      7.18B

                    	
                      Places
      of Business and Chief Executive Offices

                    
	 
      	 
      
	
                      Schedule
      7.18B

                    	
                      Borrower’s
      Locations

                    
	 
      	 
      
	
                      Schedule
      7.2

                    	
                      Consents,
      Approvals or Authorizations

                    
	 
      	 
      
	
                      Schedule
      7.3

                    	
                      Capitalization;
      List of Subsidiaries

                    
	 
      	 
      
	
                      Schedule
      7.4A

                    	
                      Leases

                    
	 
      	 
      
	
                      Schedule
      7.4B

                    	
                      Deposit
      Accounts and Investment Accounts

                    
	 
      	 
      
	
                      Schedule
      7.5

                    	
                      Affiliate
      Contracts/Agreements

                    
	 
      	 
      
	
                      Schedule
      7.6

                    	
                      Litigation

                    
	 
      	 
      
	
                      Schedule
      7.8

                    	
                      Tax
      Matters

                    
	 
      	 
      
	
                      Schedule
      8.8

                    	
                      Post-Closing
      Matters

                    
	 
      	 
      
	
                      Schedule
      9.2

                    	
                      Indebtedness

                    
	 
      	 
      
	
                      Schedule
      9.3

                    	
                      Liens

                    


            

          

        

      

       

      
        
           


        

        
          
          

          
            

          

        

        
           


        

      

       

      ANNEX
I

       

      FINANCIAL
COVENANTS

       

      
        	
                1.

              	
                Minimum
      Fixed Charge Coverage Ratio (Adjusted EBITDA/Fixed
  Charges)

              


      

       

      For the Test Period ending April 30,
2008, the Fixed Charge Coverage Ratio shall not be less than 0.0 to 1.0; for the
Test Period ending May 31, 2008, the Fixed Charge Coverage Ratio shall not be
less than 0.25 to 1.0; for the Test Period ending June 30, 2008, the Fixed
Charge Coverage Ratio shall not be less than 0.75 to 1.0; and for the Test
Period ending July 31, 2008, and each Test Period ending on the last day of each
calendar month thereafter the Fixed Charge Coverage Ratio shall not be less than
1.25 to 1.0.

       

      
        	
                2.

              	
                Minimum
      Cash Velocity

              


      

       

      For each
calendar month, the collections of Accounts of Borrower collectively shall not
be less than an amount equal to the product of (x) 0.80 multiplied by (y) the
average revenues of Borrower for the immediately preceding three months;
provided that, upon any violation of or failure to comply with this covenant,
Lender shall have the right, in its sole discretion, to consider for all
purposes under the Agreement as though Borrower actually collected Accounts
equal to such minimum required amount.

       

      
        	
                3.

              	
                Minimum
      Liquidity

              


      

       

      As of
Closing and at all times thereafter Minimum Liquidity shall not be less than
$750,000; provided, however, (i) such
Minimum Liquidity amount will be reduced to $500,000 after Borrower has
demonstrated that Borrower has achieved a Fixed Charge Coverage Ratio of 1.0 to
1.0 for any Test Period and (ii) Lender agrees that it shall eliminate testing
of this covenant in the event that Borrower is in compliance with this Agreement
(including all financial covenants set forth herein) for six consecutive
calendar months; provided, further, that, such
consecutive six-month calendar period shall not begin before April 1,
2008.

       

      For
purposes of the covenants set forth in this Annex I, the terms listed below
shall have the following meanings:

      


      “Adjusted EBITDA”
shall mean, for any period, the sum, without duplication, of the following for
Borrower collectively on a consolidated basis:  Net Income, plus, (a) Interest
Expense, (b) taxes on income, whether paid, payable or accrued, (c) depreciation
expense, (d) amortization expense, (e) all other non-cash, recurring charges and
expenses, excluding accruals for cash expenses made in the ordinary course of
business, (f) loss from any sale of assets, other than sales in the ordinary
course of business, (g) non-cash stock option and warrant based compensation
expense  and (h) other extraordinary or non-recurring charges that
would not have otherwise been incurred in ordinary course of business as
determined in accordance to GAAP, including but not limited to, severance
payments up to the amounts permitted in Section 9.6, minus (a) gains from
any sale of assets, other than sales in the ordinary course of business and (b)
other extraordinary or non-recurring gains, in each case determined in
accordance with GAAP.

       

      
        
           


        

        
          
          

          
            

          

        

        
           


        

      

       

      “Cash Equivalents”
shall mean, as of any date of determination, (a) securities issued, or directly
and fully guaranteed or insured, by the United States or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States is pledged in support thereof) having maturities of not more than six
months from the date of acquisition, (b) U.S. dollar denominated time deposits,
certificates of deposit and bankers’ acceptances of (i) any domestic commercial
bank of recognized standing having capital and surplus in excess of
$500,000,000, or (ii) any bank (or the parent company of such bank) whose
short-term commercial paper rating from Standard & Poor’s Ratings Services
(“S&P”) is at least
A-2 or the equivalent thereof or from Moody’s Investors Service, Inc. (“Moody’s”) is at least P-2 or
the equivalent thereof in each case with maturities of not more than six months
from the date of acquisition (any bank meeting the qualifications specified in
clauses (b)(i) or (ii), an “Approved Bank”),
(c) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clause (a), above, entered into
with any Approved Bank, (d) commercial paper issued by any Approved Bank or by
the parent company of any Approved Bank and commercial paper issued by, or
guaranteed by, any industrial or financial company with a short-term commercial
paper rating of at least A-2 or the equivalent thereof by S&P or at least
P-2 or the equivalent thereof by Moody’s, or guaranteed by any industrial
company with a long term unsecured debt rating of at least A or A2, or the
equivalent of each thereof, from S&P or Moody’s, as the case may be, and in
each case maturing within six months after the date of acquisition and (e)
investments in money market funds substantially all of whose assets are
comprised of securities of the type described in clauses (a) through (d)
above.

       

      “Fixed Charge Coverage
Ratio” shall mean, as of any date of determination, for Borrower
collectively on a consolidated basis, the ratio of (a) Adjusted EBITDA for
the Test Period ended of as of such date, to (b) Fixed Charges for the Test
Period ended as of such date.

       

      “Fixed Charges” shall
mean, for any period, the sum of the following for Borrower collectively on a
consolidated basis for such period: (a) Total Debt Service, (b) un-financed
Capital Expenditures paid in cash, (c) income taxes paid in cash or accrued, and
(d) dividends and Distributions paid or accrued or declared (except for
Accumulated Distributions from previous Accumulated Distribution Fiscal
Quarters).

       

      “Interest Expense”
shall mean, for any period, for Borrower collectively on a consolidated basis
for such period: (a) total interest expense (including without limitation
attributable to Capital Leases in accordance with GAAP), (b) financing fees with
respect to all outstanding Indebtedness excluding amortization of capitalized
financing fees associated with the initial closing of this Agreement to interest
expense in accordance with GAAP, and commissions, discounts and other fees owed
with respect to letters of credit and bankers’ acceptance financing and net
costs under Interest Rate Agreements.   Notwithstanding the
foregoing Interest Expense shall not include any amortization of non-cash
warrant compensation that may be a result of warrants attached to any debt
instrument.

       

      “Interest Rate
Agreement” shall mean any interest rate swap, cap or collar agreement or
other similar agreement or arrangement designed to hedge the position with
respect to interest rates.

       

      “Minimum Liquidity”
shall mean, as of any date of determination, the sum of the following for
Borrower collectively on a consolidated basis as of such date: (a) unrestricted
cash on hand, plus (b) unrestricted
Cash Equivalents, plus (c) unused
Availability.


      
        
           


        

        
          2

          
            

          

        

        
           


        

      

       

      “Net Income” shall
mean, for any period, the net income (or loss) of Borrower collectively on a
consolidated basis determined in accordance with GAAP; provided, however, that there
shall be excluded (i) the income (or loss) of any Person in which any other
Person (other than Borrower) has a joint interest, except to the extent of the
amount of dividends or other distributions actually paid to a Borrower by such
Person, (ii) the income (or loss) of any Person accrued prior to the date it
becomes a Borrower or is merged into or consolidated with a Borrower or that
Person’s assets are acquired by a Borrower, (iii) the income of any Subsidiary
of Borrower to the extent that the declaration or payment of dividends or
similar distributions of that income by that Subsidiary is not at the time
permitted by operation of the terms of the charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation applicable to
that Subsidiary, (iv) compensation expense resulting from the issuance of
capital stock, warrants, stock options or stock appreciation rights issued to
former or current employees or consultants, including officers, of a Borrower,
or the exercise of such options or rights, in each case to the extent the
obligation (if any) associated therewith is not expected to be settled by the
payment of cash by a Borrower or any affiliate thereof, and
(v) compensation expense resulting from the repurchase of capital stock,
options and rights described in clause (iv) of this definition of Net
Income.

       

      “Test Period” shall
mean the three most recent calendar months then ended (taken as one accounting
period), or such other period as specified in the Agreement or any Annex
thereto, provided, that, for the Test
Period ending April 30, 2008, Test Period shall mean the two most recent
calendar months then ended (taken as one accounting period).

       

      “Total
Debt Service” shall mean, for any period, the sum of the following for
Borrower collectively on a consolidated basis: (i) payments of principal on
Indebtedness for such period, plus
(ii) Interest Expense for such period.

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      
      

      EXHIBIT
A

      TO

      REVOLVING
CREDIT AND SECURITY AGREEMENT

      


      BORROWING
CERTIFICATE

      dated as
of                                    ,
                 

      


      NEOGENOMICS, INC., a Florida
corporation, (the “Borrower”), by the undersigned
duly authorized officer, hereby certifies to Lender in accordance with the
Revolving Credit and Security Agreement dated as of ___________________, 200__,
between Borrower, NeoGenomics, Inc., a Nevada corporation, and CapitalSource
Finance LLC (“Lender”)
(as amended, supplemented or modified from time to time, the "Loan Agreement;" all
capitalized terms not defined herein have the meanings given them in the Loan
Agreement) and other Loan Documents that:

      


      
        	
                 
      

              	
                A.

              	
                Borrowing Base and
      Compliance

              


      

      


      Pursuant
to the Loan Documents, Lender has been granted a lien on all Accounts of
Borrower.  The amounts, calculations and representations set forth
below and on Schedule
1 are true and correct in all respects and were determined in accordance
with the Loan Agreement and GAAP.  All of the Accounts referred to
(other than those entered as ineligible on Schedule 1) are
Eligible Accounts.  Attached are reports with detailed aging and
categorizing of Borrower’s accounts receivable and payables and supporting
documentation with respect to the amounts, calculation and representations set
forth on Schedule
1, all as reasonably requested by Lender pursuant to the Loan
Agreement.

      


      
        	
                 
      

              	
                B.

              	
                Borrowing
      Notice (to be
      completed and effective only if Borrower is requesting an
      Advance)

              


      

      


      (1)           In
accordance with Sections 2.3 and
6.2(a) of the Loan Agreement, Borrower hereby irrevocably requests from
Lender an Advance under the Revolving Facility pursuant to the Loan Agreement in
the aggregate principal amount of $_________ (“Requested Advance”) to be
made on _________________, _________ (the “Borrowing Date”), which day
is a Business Day.

      


      (2)           Immediately
after giving effect to the Requested Advance, the aggregate outstanding
principal amount of Advances will not exceed the lesser of (i) the Availability
and (ii) the Facility Cap.

      


      (3)           Borrower
certifies to Lender as of the applicable Borrowing Date (I) to the solvency of
Borrower after giving effect to the Requested Advance and the transactions
contemplated by the Loan Agreement and the other Loan Documents, and (II) as to
Borrower’s financial resources and ability to meet its respective obligations
and liabilities as they become due, to the effect that as of the applicable
Borrowing Date and after giving effect to the Requested Advance and the
transactions contemplated by the Loan Agreement and the other Loan
Documents:

      


      
        	
                 
      

              	
                (a)

              	
                the
      assets of Borrower, at a fair valuation, exceed the total liabilities
      (including contingent, subordinated, unmatured and unliquidated
      liabilities) of such Person; and

              


      

      


      
        (b)
        no
unreasonably small capital base with which to engage in its anticipated business
exists with respect to Borrower.

      

        

        
          
             


          

          
            4

            
              

            

          

          
             


          

        

      

       

      (4)           Attached
hereto are all consents, approvals and agreements from third parties necessary
or desirable with respect to the requested Advance.

      


      
        	
                 
      

              	
                C.

              	
                General
      Certifications

              


      

      


      Borrower further certifies to Lender
that:  (a) the certifications, representations, calculations and
statements herein will be true and correct as of the date hereof and on the
Borrowing Date (if applicable); (b) all conditions and provisions of Section 6.2 and, if
applicable, Section
6.1 of the Loan Agreement are as of the date hereof, and will be as of
the Borrowing Date (if applicable), fully satisfied, including, without
limitation, receipt by Lender of all fees, charges and expenses payable to
Lender on or prior to such Borrowing Date pursuant to the Loan Documents; [(c) Borrower has paid all payroll
taxes through the payroll period ended _________; (d) Borrower is in substantial
compliance with all material regulatory provisions; (e) no Medicare or Medicaid
recoupments and/or recoupments of any third-party payor in excess of the limits
specified in the Loan Agreement are being sought, requested or claimed, or, to
Borrower’s knowledge, threatened against Borrower or Borrower’s affiliates
except the following amounts: Medicare _______; Medicaid _______; Third-Party
Payor _______.

      


      IN
WITNESS WHEREOF, the undersigned has caused this certificate to be executed as
of the day first written above.

       

      
        
          
            
              	
                      NEOGENOMICS,
      INC.

                    
	 
      	 
      	 
      	 
      
	
                      Prepared
      by:

                    	 
      	 
      	
                      Approved
      by:

                    
	 	 	 	 
	
                        

                    	
                        

                    	 
      	
                        

                    
	 
      	 
      	 
      	 
      
	
                      Name:

                    	
                        

                    	 
      	
                      Name:

                    	
                        

                    
	
                      Title:

                    	
                        

                    	 
      	
                      Title:

                    	
                        

                    


            

          

        

      

      
      

      
        
           


        

        
          5

          
            

          

        

        
           


        

      

       

      EXHIBIT
B

      TO

      REVOLVING
CREDIT AND SECURITY AGREEMENT

      


      FORM
OF COMPLIANCE CERTIFICATE

      


      Date:
[___________________]

      


      This
certificate (the “Compliance
Certificate”) is given by NEOGENOMICS, INC., a Florida
corporation (the
“Borrower”) pursuant to
Section 8.1(a) of that certain Revolving Credit, Term Loan and Security
Agreement, dated as of ____________ ___, 2008 (the “Loan Agreement”) by and among
Borrower, NeoGenomics, Inc., a Nevada corporation, and CAPITALSOURCE FINANCE LLC, a
Delaware limited liability company (“Lender”). Capitalized terms
used herein without definition shall have the meanings set forth in the Loan
Agreement.

      


      The
officer executing this Compliance Certificate is the chief financial officer of
Borrower and as such is duly authorized to execute and deliver this Compliance
Certificate on behalf of Borrower.  By so executing this Compliance
Certificate, Borrower hereby certifies to the Lender that:

      


                 (a)           the
financial statements delivered with this Compliance Certificate in accordance
with Section 8.1(a) of the Loan Agreement fairly present the consolidated
results of operations and financial condition of the Borrower and its respective
subsidiaries on a consolidated basis for the period(s) ending on and as of the
dates of such financial statements;

      


                 (b)           the
Borrower has reviewed the relevant terms of the Loan Documents and the condition
of the Borrower;

      


                 (c)           no
Default or Event of Default has occurred or is continuing, except as set forth
in Schedule 2
hereto, which includes a description of the nature, status and period of
existence of such Default or Event of Default, if any, and what action the
Borrower has taken, is undertaking and proposes to take with respect thereto;
and

      
           (d)           the
Borrower is in compliance with all financial covenants set forth in the Loan
Agreement and then applicable, as demonstrated, with respect to Annex I of the Loan
Agreement by the calculations of such covenants in Schedule 1 hereto,
except as set forth in Schedule
2.

      


      [Signature
page follows.]

       

      
        
           


        

        
          6

          
            

          

        

        
           


        

      

       

      IN
WITNESS WHEREOF, the Borrower has caused this Compliance Certificate to be
executed by its duly authorized officer on behalf of the Borrower this ____ day
of _________ 200__.

      


      
        
          
            
              
                	
                        NEOGENOMICS,
      INC.

                      
	 
      	 
      
	
                        By:

                      	
                          

                      
	
                        Name:

                      	
                          

                      
	
                        Title:

                      	 
      


              

            

          

        

      

       

      
        
           


        

        
          7

          
            

          

        

        
           


        

      

       

      SCHEDULE
1 TO COMPLIANCE CERTIFICATE

      


      Date:  _______________
__, 20__

      


      For
calendar month and Test Period ended ____________

       

      
        
          
            
              
                
                  	
                          I.

                        	
                          MINIMUM
      FIXED CHARGE COVERAGE

                        
	 
      	 
      
	 
      	
                          ADJUSTED
      EBITDA

                        
	 
      	 
      
	 
      	
                          A.

                        	
                          Net
      Income

                        
	 
      	 
      	 
      
	 
      	 
      	
                          1.

                        	
                          Net
      income (or loss)

                        	 
      	
                          $___________

                        
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
                          2.

                        	
                          Income
      (or loss) of any Person in which any other Person (other than any
      Borrower) has a joint interest, except to the extent of the amount of
      dividends or other distributions actually paid to a Borrower by such
      Person

                        	 
      	
                          $___________

                        
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
                          3.

                        	
                          Income
      (or loss) of any Person accrued prior to the date it becomes a Borrower or
      is merged into or consolidated with a Borrower or that Person’s assets are
      acquired by any Borrower

                        	 
      	
                          $___________

                        
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
                          4.

                        	
                          Income
      of any Subsidiary of Borrower to the extent that the declaration or
      payment of dividends or similar distributions of that income by that
      Subsidiary is not at the time permitted by operation of the terms of the
      charter or any agreement, instrument, judgment, decree, order, statute,
      rule or governmental regulation applicable to that
    Subsidiary

                        	 
      	
                          $___________

                        
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
                          5.

                        	
                          Compensation
      expense resulting from the issuance of capital stock, warrant, stock
      options or stock appreciation rights issued to former or current
      employees, including officers, consultants and Board Members of a
      Borrower, or the exercise of such options or rights, in each case to the
      extent the obligation (if any) associated therewith is not expected to be
      settled by the payment of cash by a Borrower or any affiliate
      thereof

                        	 
      	
                          $___________

                        
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
                          6.

                        	
                          Compensation
      expense resulting from the repurchase of capital stock, options and rights
      described in clause (iv) of the definition of Net
    Income

                        	 
      	
                          $___________

                        
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
                          7.

                        	
                          Net
      Income:  (A.1) minus (A.2
      through A.6)

                        	 
      	
                          $___________

                        
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	
                          B.

                        	
                          Interest
      Expense

                        	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
                          1.

                        	
                          Total
      interest expense (including attributable to Capital Leases in accordance
      with GAAP) and fees with respect to all outstanding
      Indebtedness

                        	 
      	
                          $___________

                        
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
                          2.

                        	
                          Commissions,
      discounts and other fees owed with respect to letters of credit and
      bankers' acceptance financing and net costs under Interest Rate
      Agreements

                        	 
      	
                          $___________

                        
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
                          3.

                        	
                          Non-cash
      amortization of warrant expense (that has been categorized as interest
      expense) that may arise as a result of warrants being attached to
      outstanding Indebtedness

                        	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
                          4.

                        	
                          Non-cash
      amortization of capitalized financing fees arising out of the initial
      closing of the Agreement which have been previously paid and have been
      categorized as interest expense in accordance to GAAP.

                        	 
      	 
      


                

              

            

          

        

        


        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        


        
          
            
              
                
                  
                    
                      
                        	 
      	 
      	
                                5.

                              	
                                Interest
      Expense:  (B.1) minus (B.2
      through B.4)

                              	 
      	
                                $___________

                              
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	
                                C.

                              	
                                Taxes
      on income, whether paid, payable or accrued

                              	 
      	
                                $___________

                              
	 
      	 
      	 
      	 
      	 
      
	 
      	
                                D.

                              	
                                Depreciation
      expense

                              	 
      	
                                $___________

                              
	 
      	 
      	 
      	 
      	 
      
	 
      	
                                E.

                              	
                                Amortization
      expense

                              	 
      	
                                $___________

                              
	 
      	 
      	 
      	 
      	 
      
	 
      	
                                F.

                              	
                                All
      other non-cash, recurring charges and expenses, excluding accruals for
      cash expenses made in the ordinary course of business

                              	 
      	
                                $___________

                              
	 
      	 
      	 
      	 
      	 
      
	 
      	
                                G.

                              	
                                Loss
      from any sale of assets, other than sales in the ordinary course of
      business

                              	 
      	
                                $___________

                              
	 
      	 
      	 
      	 
      	 
      
	 
      	
                                H.

                              	
                                Non-cash
      stock option and warrant-based compensation expense

                              	 
      	
                                $___________

                              
	 
      	 
      	 
      	 
      	 
      
	 
      	
                                I.

                              	
                                Other
      extraordinary or non-recurring charges that would not have otherwise been
      incurred in the ordinary course of business as determined in accordance
      with GAAP, including, but not limited to, severance payments up to the
      amounts permitted in Section 9.6 of the Loan Agreement

                              	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                                J.

                              	
                                Gains
      from any sale of assets, other than sales in the ordinary course of
      business

                              	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                                K.

                              	
                                Other
      extraordinary or non-recurring gains

                              	 
      	
                                $___________

                              
	 
      	 
      	 
      	 
      	 
      
	 
      	
                                L.

                              	
                                ADJUSTED EBITDA: (A.7)
      plus
      ((B.5) and (C through I)) minus (J and
      K)

                              	 
      	
                                $___________

                              
	 
      	 
      	 
      	 
      	 
      
	
                                II.

                              	
                                FIXED
      CHARGE COVERAGE RATIO

                              
	 
      	 
      
	 
      	
                                A.

                              	
                                ADJUSTED EBITDA (See ADJUSTED EBITDA
      calculation, (I.K)

                              	 
      	
                                $___________

                              
	 
      	 
      	 
      	 
      	 
      
	 
      	
                                B.

                              	
                                Fixed
      Charges

                              
	 
      	 
      	 
      
	 
      	 
      	
                                1.

                              	
                                Total
      Debt Service

                              	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                                a.

                              	
                                Payments
      of principal on Indebtedness

                              	 
      	
                                $___________

                              
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                                b.

                              	
                                Interest
      Expense (I.B.3)

                              	 
      	
                                $___________

                              
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                                c.

                              	
                                Total Debt Service:
      (B.1.a) plus
      (B.1.b)

                              	 
      	
                                $___________

                              
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
                                2.

                              	
                                Unfinanced
      Capital Expenditures paid in cash

                              	 
      	
                                $___________

                              
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
                                3.

                              	
                                Income
      taxes paid in cash or accrued

                              	 
      	
                                $___________

                              
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
                                4.

                              	
                                Dividends
      and distributions paid or accrued or declared (except for Accumulated
      Distributions)

                              	 
      	
                                $___________

                              
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
                                5.

                              	
                                Fixed Charges: Sum of
      (B.1.c) through (B.4)

                              	 
      	
                                $___________

                              
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	
                                C.

                              	
                                FIXED CHARGE COVERAGE
      RATIO: (A)
      divided
      by
      (B.5)

                              	 
      	
                                ____________

                              


                      

                    

                  

                

              

            

          

        

        


        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        


        
          
            
              	 
      	
                      D.

                    	
                      MINIMUM
      RATIO REQUIRED:

                    	 
      	
                      ____________

                    
	 
      	 
      	 
      	 
      	 
      
	 
      	
                      E.

                    	
                      COMPLIANCE:

                    	 
      	
                      __Yes/__No

                    
	 
      	 
      	 
      	 
      	 
      
	
                      III.

                    	
                      CASH
      VELOCITY

                    	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
                      A.

                    	
                      Collections
      of Borrower’s Accounts

                    	 
      	
                      $___________

                    
	 
      	 
      	 
      	 
      	 
      
	 
      	
                      B.

                    	
                      Average
      Revenue of Borrower over the preceding three
    _________________

                    	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                      C.

                    	
                      MINIMUM
      REQUIRED (80% OF III.B.):

                    	 
      	
                      $___________

                    
	 
      	 
      	 
      	 
      	 
      
	 
      	
                      D.

                    	
                      COMPLIANCE:

                    	 
      	
                      __Yes/__No

                    
	 
      	 
      	 
      	 
      	 
      
	
                      IV.

                    	 
      	
                      MINIMUM
      LIQUIDITY

                    	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                      A.

                    	
                      Unrestricted
      cash on hand

                    	 
      	
                      $___________

                    
	 
      	 
      	 
      	 
      	 
      
	 
      	
                      B.

                    	
                      Unrestricted
      Cash Equivalents

                    	 
      	
                      $___________

                    
	 
      	 
      	 
      	 
      	 
      
	 
      	
                      C.

                    	
                      Unused
      Availability

                    	 
      	
                      $___________

                    
	 
      	 
      	 
      	 
      	 
      
	 
      	
                      D.

                    	
                      LIQUIDITY: Sum of (A)
      through (C)

                    	 
      	
                      $___________

                    
	 
      	 
      	 
      	 
      	 
      
	 
      	
                      E.

                    	
                      MINIMUM
      LIQUIDITY REQUIRED

                    	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                      F.

                    	
                      COMPLIANCE:

                    	 
      	
                      __Yes/__No

                    
	 
      	 
      	
                      (As
      evidenced by bank statements attached as detail)

                    	 
      	 
      


            

          

        

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
 

      SCHEDULE
2 TO COMPLIANCE CERTIFICATE

      


      Date:  ________________
__, 20__

      


      CONDITIONS OR EVENTS WHICH
CONSTITUTE

      A DEFAULT OR AN EVENT OF
DEFAULT

      


      If any
condition or event exists that constitutes a Default or an Event of Default,
specify nature and period of existence and what action the Borrower has taken,
is taking or proposes to take with respect thereto; if no such condition or
event exists, state “None.” 


      
        
           


        

        
          
          

          
            

          

        

        
           


        

      


      EXHIBIT
C

      TO

      REVOLVING CREDIT AND
SECURITY AGREEMENT

      


      OFFICER'S
CERTIFICATE

       

      The
undersigned, ROBERT P.
GASPARINI, certifies that he is the president of NEOGENOMICS, INC., a Florida
Corporation, ("Borrower"),
makes this certificate in connection with and pursuant to Section 6.1 of
the Loan Agreement dated as of the date hereof (the "Loan
Agreement") between Borrower, NeoGenomics, Inc., a Nevada corporation,
and CAPITALSOURCE FINANCE
LLC, a Delaware limited liability company ("Lender"),
and certifies to Lender as follows:

       

      All
conditions and provisions of Article VI of the Loan Agreement are fully
satisfied, including receipt by Lender of all fees, charges and expenses payable
to Lender on or prior to the date hereof pursuant to the Loan
Documents.  In furtherance of and without limiting the foregoing, as
of the date hereof, (A) the Loan Documents, other documents required pursuant
thereto and security interests and Liens created thereby are in full force and
effect, (B) each representation and warranty of the Borrower in the Loan
Documents is true and correct in all material respects as if made on and as of
the date hereof (except where such representation or warranty is otherwise
expressly made as of a particular date, in which case it is, was or will be true
and correct on and as of such other date), before and after giving effect to the
making of the Initial Advance and/or the consummation of the transactions to be
consummated on the date hereof, (C) the Borrower is in compliance with all,
and not in violation, breach or default of any, covenants, agreements and/or
other provisions of any of the Loan Documents, (D) no Default or Event of
Default under any Loan Document has occurred and is continuing or exists on the
date hereof or would exist after giving effect to the Initial Advance and/or the consummation
of the transactions to be consummated on the date hereof, (E) the Borrower
is in compliance with the provisions of Annex I of the
Loan Agreement, (F) no Material Adverse Change or Material Adverse Effect has
occurred and there are no liabilities or obligations with respect to the
Borrower of any nature whatsoever (whether absolute, accrued, contingent or
otherwise and whether or not due) which, individually or in the aggregate, could
constitute a Material Adverse Effect, (G) no material adverse deviation from the
financial projections of the Borrower previously furnished to Lender has
occurred, and (H) no event(s), fact(s), condition(s) or circumstance(s) has
occurred which, individually or in the aggregate, make it improbable that the
Borrower will be able to observe or perform in all material respects any of the
Obligations under the Loan Documents.

       

      Capitalized
terms used, but not defined herein, shall have the meanings given such terms in
the Loan Agreement.

       

      IN
WITNESS WHEREOF, the undersigned has caused this Officer's Certificate to be
executed as of February 1, 2008.

       

      
        
          	
                  NEOGENOMICS,
      INC.

                
	 
      	 
      
	
                  By:   

                	
                  /s/ Robert P. Gasparini

                
	 
      	
                  Robert
      P. Gasparini

                
	 
      	
                  President
      and Chief Scientific Officer

                


        

      

       

      
        
           


        

        
          
          

          
            

          

        

        
           


        

      


      EXHIBIT
D

      TO

      REVOLVING
CREDIT AND SECURITY AGREEMENT

      SOLVENCY
CERTIFICATE

      


      NEOGENOMICS,
INC.

      


      The
undersigned, Steven C.
Jones, hereby certifies that he is the Chief Financial Officer of NEOGENOMICS, INC., a Florida
corporation (the “Borrower”), and that he makes this certificate on behalf of
the Borrower pursuant to Section 6.1 of that certain Revolving Credit and
Security Agreement dated as of February 1, 2008 (the “Agreement”), by and
between the Borrower, NeoGenomics, Inc., a Nevada corporation (together with its
subsidiaries, the “Company”), and CapitalSource Finance LLC, a Delaware
limited liability company, and further certifies to the solvency of the Borrower
after giving effect to the transactions and the Indebtedness (as defined in the
Agreement) contemplated by the Agreement and the other Loan Documents (as
defined in the Agreement) and as to the Borrower’s financial resources and
ability to meet its obligations and liabilities as they become due, to the
effect that as of the Closing Date (as defined in the Agreement) and the
Borrowing Date for the Initial Advance and after giving effect to the
transactions and the Indebtedness contemplated by the Agreement and the other
Loan Documents:

      


      
        	
                 
      

              	
                (1)

              	
                the
      assets of the Borrower, at a fair valuation, exceed the total liabilities
      (including contingent, subordinated, unmatured and unliquidated
      liabilities) of the Borrower; and

              


      

      


      
        	
                 
      

              	
                (2)

              	
                no
      unreasonably small capital base with which to engage in the Borrower’s
      anticipated business exists with respect to the
  Borrower.

              


      

      


      IN
WITNESS WHEREOF, the undersigned has executed this Solvency Certificate as of
February 1, 2008.

      


      
        
          
            
              	 	
                      NEOGENOMICS,
      INC.

                    
	 	 
      
	 	
                      /S/ Steven C. Jones

                    
	 	
                      Name:  Steven
      C. Jones

                    
	 	
                      Title:  Chief
      Financial Officer

                    


            

          

        

      

      


      I, Jerome Dvonch, as
Secretary of the Company, do hereby certify that Steven C. Jones is
the duly elected, qualified and acting Chief Financial Officer of the Borrower,
and that the signature of Steven C. Jones set
forth above is his true and correct signature.

       

      IN
WITNESS WHEREOF, the undersigned has caused this Incumbency Certificate to be
duly executed this 1st day of February, 2008.

       

      
        
          	
                  /s/ Jerome Dvonch

                
	
                  Name:  Jerome
      Dvonch

                
	
                  Title:  Secretary

                


        

      

       

      
        
           


        

        
          
          

          
            

          

        

        
           


        

      


      SCHEDULES

       

      
        
          
            
              
                
                  
                    
                      
                        
                          	
                                  Schedule
      1.2

                                	 
      	
                                  Accounts
      Payable Over 120 Days That Are Permitted Indebtedness:

                                
	 	 	 
	 
      	 
      	
                                  Aspen
      Capital Advisors not to exceed $65,000

                                
	 
      	 
      	
                                  Kirkpatrick
      & Lockhart Preston Gates Ellis, LLP not to exceed
    $500,000

                                
	 
      	 
      	
                                  Path
      Labs of Fort Myers not to exceed $80,000

                                
	 
      	 
      	
                                  HCSS,
      LLC dba Bridge Labs not to exceed $40,000

                                
	 
      	 
      	 
      
	
                                  Schedule
      2.3

                                	 
      	
                                  Borrower’s
      Operating Account for Disbursements

                                
	 	 	 	 
	 
      	 
      	
                                  Bank
      Name:

                                	
                                  
                                    [***]

                                  

                                
	 
      	 
      	
                                  
                                    ABA
      #:

                                  

                                	
                                  
                                    [***]

                                  

                                
	 
      	 
      	
                                  
                                    City/State:

                                  

                                	
                                  
                                    [***]

                                  

                                
	 
      	 
      	
                                  
                                    Account
      #:

                                  

                                	
                                  
                                    [***]

                                  

                                
	 
      	 
      	
                                  
                                    Account
      Name:

                                  

                                	
                                  
                                    [***]

                                  

                                
	 
      	 
      	 
      
	
                                  Schedule
      5.3B

                                	 
      	
                                  Third-Party
      Contracts With Payor’s Representing at Least 5% of Cash
      Receipts

                                
	 
      	 
      	 
      
	 
      	 
      	
                                  Medicare

                                
	 
      	 
      	
                                  United
      Healthcare

                                
	 
      	 
      	 
      
	
                                  Schedule
      7.3

                                	 
      	
                                  Subsidiaries
      of NeoGenomics, Inc., a Nevada Corporation (Holding
    Company)

                                
	 	 	 
	 
      	 
      	
                                  NeoGenomics,
      Inc., dba NeoGenomics Laboratories, a Florida
  Corporation

                                
	 
      	 
      	 
      
	 
      	 
      	
                                  Subsidiaries
      of NeoGenomics, Inc., a Florida Corporation (Operating
      Company)

                                
	 	 	 
	 
      	 
      	
                                  None

                                
	 
      	 
      	 
      
	 
      	 
      	
                                  Capitalization
      of NeoGenomics, Inc, a Nevada Corporation as of
12/31/07

                                
	 
      	 
      	 
      	 
      
	 
      	 
      	
                                  Common
      Shares Authorized:

                                	
                                  100,000,000

                                
	 
      	 
      	
                                  Common
      Sock Outstanding:

                                	
                                  31,391,410

                                
	 
      	 
      	 
      	 
      
	 
      	 
      	
                                  Preferred
      Stock Authorized:

                                	
                                  10,000,000

                                
	 
      	 
      	
                                  Preferred
      Stock Outstanding:

                                	
                                  None

                                
	 
      	 
      	 
      	 
      
	 
      	 
      	
                                  Warrants
      Outstanding:

                                	
                                  3,085,083

                                
	 
      	 
      	
                                  Options
      Outstanding :

                                	
                                  5,805,363

                                
	 
      	 
      	 
      	 
      
	 
      	 
      	
                                  Capitalization
      of NeoGenomics, Inc, a Florida Corporation

                                
	 
      	 
      	 
      	 
      
	 
      	 
      	
                                  Common
      Shares Authorized:

                                	
                                  100

                                
	 
      	 
      	
                                  Common
      Sock Outstanding:

                                	
                                  100

                                
	 
      	 
      	 
      	 
      
	 
      	 
      	
                                  Board
      of Directors of NeoGenomics, Inc, a Nevada Corporation

                                
	 
      	 
      	 
      	 
      
	 
      	 
      	
                                  Michael
      T. Dent, M.D.

                                	
                                  George
      G. O’Leary

                                
	 
      	 
      	
                                  Robert
      P. Gasparini

                                	
                                  Peter
      M. Peterson

                                
	 
      	 
      	
                                  Marvin
      E. Jaffe, M.D.

                                	
                                  William
      J. Robison

                                
	 
      	 
      	
                                  Steven
      C. Jones

                                	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	
                                  Board
      of Directors of NeoGenomics, Inc, a Florida Corporation

                                
	 	 	 
	 
      	 
      	
                                  Michael
      T. Dent, M.D.

                                	 
      
	 
      	 
      	
                                  Robert
      P. Gasparini

                                	 
      


                        

                      

                    

                  

                

              

            

          

        

        
           

          [***]
Information redacted pursuant to a confidential treatment request. An unredacted
version of this Agreement has been filed separately with the Securities and
Exchange Commission.

        

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        
          
            
              
                
                  	
                          Schedule
      7.4A

                        	 
      	
                          Locations
      of Leased Properties

                        
	 
      	 
      	 
      
	 
      	 
      	
                          12701
      Commonwealth Drive, Suites 1-9

                        
	 
      	 
      	
                          Fort
      Myers, FL 33913

                        
	 
      	 
      	 
      
	 
      	 
      	
                          618
      Grassmere Park Drive, Suite 20

                        
	 
      	 
      	
                          Nashville,
      TN  37211

                        
	 
      	 
      	 
      
	 
      	 
      	
                          6
      Morgan Street, Suite 150

                        
	 
      	 
      	
                          Irvine,
      CA 92618

                        
	 
      	 
      	 
      
	
                          Schedule
      7.4B

                        	 
      	
                          Deposit
      Accounts of NeoGenomics, Inc., a Nevada Company (Holding
      Company)

                        


                

              

            

          

          


          
            
              
                	 
      	 
      	
                        Bank

                      	 
      	
                        Account #

                      	 
      	
                        Description

                      
	 
      	 
      	
                        [***]

                      	 
      	
                        [***]

                      	 
      	
                        [***]

                      
	 
      	 
      	
                        [***]

                      	 
      	
                        [***]

                      	 
      	
                        [***]

                      
	 
      	 
      	
                        [***]

                      	 
      	
                        [***]

                      	 
      	
                        [***]

                      


              

            

          

          


          
            
              
                	 
      	 
      	
                        There
      are no liens on any of these accounts

                      
	 
      	 
      	 
      
	 
      	 
      	
                        Deposit
      Accounts of NeoGenomics, Inc., a FL Company (Operating
      Subsidiary)

                      


              

            

          

          


          
            
              
                	 
      	 
      	
                        Bank

                      	 
      	
                        Account #

                      	 
      	
                        Description

                      
	 
      	 
      	
                        [***]

                      	 
      	
                        [***]

                      	 
      	
                        [***]

                      
	 
      	 
      	
                        [***]

                      	 
      	
                        [***]

                      	 
      	
                        [***]

                      
	 
      	 
      	
                        [***]

                      	 
      	
                        [***]

                      	 
      	
                        [***]

                      
	 
      	 
      	
                        [***]

                      	 
      	
                        [***]

                      	 
      	
                        [***]

                      
	 
      	 
      	
                        [***]

                      	 
      	
                        [***]

                      	 
      	
                        [***]

                      
	 
      	 
      	
                        [***]

                      	 
      	
                        [***]

                      	 
      	
                        [***]

                      
	 
      	 
      	
                        [***]

                      	 
      	
                        [***]

                      	 
      	
                        [***]

                      
	 
      	 
      	
                        [***]

                      	 
      	
                        [***]

                      	 
      	
                        [***]

                      


              

            

          

          


          
            
              
                	 
      	 
      	
                        There
      are no liens on any of these
accounts

                      


              

            

          

          


          
            
              
                	
                        Schedule
      7.5

                      	 
      	
                        Affiliate
      Contracts

                         

                        On
      March 11, 2005, NeoGenomics entered into an agreement with HCSS, LLC and
      eTelenext, Inc. to enable NeoGenomics to use eTelenext, Inc’s laboratory
      information system (LIS).  HCSS, LLC is a holding company
      created to build a small laboratory network for the 50 small commercial
      genetics laboratories in the United States.  HCSS, LLC is owned
      66.7% by Dr. Michael T. Dent, our Chairman.  By becoming the
      first customer of HCSS in the small laboratory network, the Company saved
      approximately $152,000 in up front licensing fees.  Under the
      terms of the agreement, the Company paid $22,500 over three months to
      customize this software and pays 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.  As of
      December, 2007, the Company was incurring approximately $8,000 -
      $10,000/month in fees.  The eTelenext system is an elaborate LIS
      that is in use at many larger labs.  By utilizing the eTelenext
      system, the Company has vastly increased the productivity of its
      technologists.

                      


              

            

          

        

         

        
          [***]
Information redacted pursuant to a confidential treatment request. An unredacted
version of this Agreement has been filed separately with the Securities and
Exchange Commission..

        

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        
          
            
              	 
      	 
      	
                      The Company has consulting
      arrangements with two members of its Board of Directors, Mr. Steven Jones
      and Mr. George O’Leary, to provide various consulting
      services.  Although there are no written agreements, per se,
      each of these arrangements has been approved by the Company’s Board of
      Directors.  Mr. Jones receives approximately $150/hour and is
      paid through Aspen Capital Advisors.  Mr. O’leary receives
      approximately $1,000/day and is paid through SKS
      Consulting.  The maximum amounts payable by the Company under
      the consulting agreements referenced in this paragraph will not exceed
      $500,000 per fiscal
year.

                    


            

          

        

        


        
          
            
              
                	
                        Schedule
      7.6

                      	 
      	
                        Litigation

                         

                        US Labs

                         

                        On October 26, 2006, Accupath
      Diagnostics Laboratories, Inc. d/b/a US Labs, a California corporation
      (“US Labs”) filed a complaint in the Superior Court of the State of
      California for the County of Los Angeles (the “Court”) against the Company
      and Robert Gasparini, as an individual, and certain other employees and
      non-employees of NeoGenomics with respect to claims arising from
      discussions with current and former employees of US Labs.  US
      Labs alleges, among other things, that NeoGenomics engaged in “unfair
      competition” by having access to certain salary information of four
      recently hired sales personnel prior to the time we hired such
      individuals.  We believe that US Labs’ claims against
      NeoGenomics lack any merit and that there are well-established laws that
      affirm the rights of employees to seek employment with any company they
      desire and employers to offer such employment to anyone they
      desire.  US Labs seeks unspecified monetary
      relief.  As part of the complaint, US Labs also sought
      preliminary injunctive relief against NeoGenomics and requested that the
      Court bar NeoGenomics from, among other things:  a) inducing any
      further US Labs’ employees to resign employment with US Labs, b)
      soliciting, interviewing or employing US Labs’ employees for employment,
      c) directly or indirectly soliciting US Labs’ customers with whom four new
      employees of NeoGenomics did business while employed at US Labs; and d)
      soliciting, initiating and/or maintaining economic relationships with US
      Labs’ customers that are under contract with US Labs.

                         

                        On November 15, 2006, the Court
      heard arguments on US Labs request for a preliminary injunction and denied
      the majority of US Labs’ requests for such injunction on the grounds that
      US Labs was not likely to prevail at trial.  The Court did,
      however, issue a much narrower preliminary injunction which prevents
      NeoGenomics from “soliciting” the US Labs’ customers of such new sales
      personnel until such time as a full trial could be held.  This
      preliminary injunction is limited only to the “solicitation” of the US
      Labs’ customers of the sales personnel in question and does not in any way
      prohibit NeoGenomics from doing business with any such customers to the
      extent they have sought or seek a business relationship with NeoGenomics
      on their own initiative.  Furthermore, NeoGenomics is not in any
      way prohibited from recruiting any additional personnel from US Labs
      through any lawful
means.

                      


              

            

          

        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        
          
            
              
                	 
      	 
      	
                        US Labs has commenced contempt
      proceedings against NeoGenomics with respect to certain contacts the new
      salespeople have had with some of their former customers.  In
      April 2007, the court determined that two contacts the salespeople had
      made in the early days of the injunction were impermissible (out of
      approximately 9 contacts that were challenged), and levied a fine of
      $2,000.  An attorneys’ fees motion related to that proceeding
      was heard in July 2007 and NeoGenomics was ordered to reimburse US Labs
      for $34,000 of attorney’s fees with respect to the proceedings involving
      the two customer contacts in question.  US Labs has commenced
      additional contempt proceedings, and arguments were begun for
      approximately six more contacts in early November.  These
      arguments were concluded in early December, and the court determined that
      three contacts were impermissible and NeoGenomics was ordered to pay a
      fine of $3,000.  In two of such cases, NeoGenomics believes that
      the customers approached NeoGenomics first, and plans to appeal such
      rulings.  While US Labs has not yet filed a motion for the
      recovery of attorney’s fees, we expect them to do so.  One of
      the issues presented in this case is that the Court has never ordered US
      Labs to disclose the identities of the customers that NeoGenomics should
      be enjoined from soliciting.  Instead US Labs has used the
      strategy of challenging every single customer contact, whether or not it
      was appropriate under the injunction.

                         

                        The contempt applications do not
      relate to any underlying allegations against NeoGenomics, and do not
      affect the ultimate outcome of the case.  We believe that none
      of US Labs’ claims will be affirmed at trial; however, even if they were,
      NeoGenomics does not believe such claims would result in a material impact
      to our business.  NeoGenomics further believes that this lawsuit
      is nothing more than a blatant attempt by a large corporation to impede
      the progress of a smaller and more nimble competitor, and we intend to
      vigorously defend ourselves.  In early January 2008, we received
      word from our D&O Insurance Carrier, Navigators, that they would begin
      reimbursing 50% of the reasonable attorneys fees incurred since the time
      we tendered our claim in early July 2007.  We expect such
      reimbursements to begin shortly.   NeoGenomics has also
      tendered a claim to FCCI Commercial Insurance Company under its General
      Liability Insurance Policy seeking reimbursement of attorney’s
      fees.  On December 28, 2007, the Company was served with a
      complaint by FCCI, the Company’s general liability insurer, seeking a
      declaratory judgment that FCCI has no duty to defend Bob Gasparini and the
      Company.  No damages were sought in the suit by
      FCCI.  NeoGenomics believes that the FCCI suit is an improper
      attempt to persuade NeoGenomics relinquish coverage.  However,
      based on conversations with Counsel, NeoGenomics believes that it has a
      good chance of getting coverage under this policy, and is in the process
      of preparing a motion for summary judgment.

                         

                        Discovery commenced on the main
      action in December 2006 and is ongoing.  Trial is set for April
      15, 2008.  While the Company did receive unsolicited and
      inaccurate salary information for three individuals that were ultimately
      hired, no evidence of misappropriation of trade secrets has been
      discovered by either side.  Under California law, salary
      information is not subject to trade secret protection.  As such,
      the Company filed a motion for Summary Judgment in early November seeking
      to end the case before it is tried.  Arguments for the Motion
      for Summary Judgment are scheduled for March 2008.  In the event
      the Motion for Summary Judgment fails for any reason and this case does go
      to trial, NeoGenomics expects ultimately to
  prevail.

                      


              

            

          

        

        
 

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        


        
          
            
              
                	 
      	 
      	
                        Dr. Peter Kohn

                         

                        In
      October 2004, Dr. Peter Kohn resigned as Lab Director of NeoGenomics. His
      employment contract with the Company ended September 30, 2004 and was not
      renewed. There was communication between Mr. Thomas White, former CEO and
      Dr. Kohn in October regarding health coverage and unused vacation time. In
      November 2004, the company received correspondence from Terry and Frazier,
      LLP, Dr. Kohn’s attorney relating to health care coverage, unused vacation
      time and business expenses related to November 2004. Mr. White responded
      that the Company would use the unpaid vacation time to cover Dr. Kohn’s
      health insurance until the issue is resolved and that the business
      expenses fell outside the contract terms and therefore would not be
      reimbursed. Dr. Kohn’s contract stipulated that this agreement superseded
      all prior agreements and therefore prior claims related to prior
      agreements were resolved with the signing of the most recent agreement.
      The Company believes that it has a strong documented case relating to its
      position regarding Dr. Kohn’s claims which would hold up in any court
      proceeding.  However, in the event that the Company is found to
      be liable for some or all of Dr. Kohn’s claims, the amounts in question
      would not be material to the ongoing operations of the
      Company.  The Company booked accrued severance expense of
      $12,352 to cover Dr. Kohn’s unused vacation pay up to the date of his
      termination and paid approximately $400/month to cover his health
      insurance against this accrual until June of 2007 when the Company was
      notified that Dr. Kohn had gotten insurance elsewhere.

                         

                        On January 12, 2005, the Company
      received a complaint filed in the Circuit Court for Seminole County,
      Florida by its former Laboratory Director, Dr. Peter Kohn.  The
      complaint alleged that the Company owed Dr. Kohn approximately $22,000 in
      back vacation pay and other unspecified damages.  The Company
      believes that it owes Dr. Kohn no more than approximately $12,352, of
      which it has already paid substantially all of this by virtue of the
      Company continuing to pay Dr. Kohn’s health insurance
      premiums.

                         

                        On
      March 5, 2007, the Company received an amended complaint filed in the
      Circuit Court for Seminole County, Florida by Dr. Kohn.  The
      complaint alleges the following (a) that Dr. Kohn is owed $12,600 for 22
      unused vacation days and 4 unused sick days resulting from his first
      contract from Oct 2002 to Sept 2003; (b) that Dr. Kohn is owed $14,054 for
      25 unused vacation days and four unused sick days (at a rate of
      $484.64/day), (c) that Dr. Kohn is owed $10,664 for thirty days of notice
      time from Oct 7, 2004 to Nov 5, 2004 and $917 for rent reimbursement and
      $442 for meal and auto expense, and (d) that Dr. Kohn is entitled to
      recoup legal fees.

                         

                        The
      Company believes that all of Dr. Kohn’s claims related to the first
      contract (see (a) above) are unenforceable since the second contract
      clearly stated that it superseded all prior claims.  With
      respect to Dr. Kohn’s claims in paragraph (b) above, the Company has
      acknowledged that it owed Dr. Kohn $12,352 as of the date of termination
      for 25 days of unused vacation time and has been using this money to pay
      his insurance premiums.  The Company further believes that Dr.
      Kohn’s claims from (c) above are without merit, since the contract had
      already lapsed on Sept 30, 2004 and the Company received an email message
      from Dr. Kohn saying that he had resigned.  Thus, either of the
      above reasons would have obviated the need for 30 days
      notice.   Similarly, the Company does not believe that Dr.
      Kohn is entitled to attorneys fees.

                         

                        In
      March 2007, the Company filed a motion to dismiss most of the third
      amended complaint, except for the count dealing with the unused vacation
      pay from the second contract (count b above), which the Company has
      acknowledged that it owed to Dr. Kohn.  On May 1, 2007, the
      judged dismissed two of the four counts that the Company had requested be
      dismissed.  On June 13, 2007, the Company filed its answer to
      Dr. Kohn’s remaining claims and the both sides are currently engaged in
      discovery.  No trial has been set for the remaining
      matters.  Should Dr. Kohn continue to pursue this action, the
      Company intends to vigorously pursue its defense of this matter, and even
      if the Company were found liable for Dr. Kohn’s claims, the Company does
      not believe the amounts in question would be material to the ongoing
      operations of the
Company.

                      


              

            

          

        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        
          
            
              
                	
                        Schedule
      7.11

                      	 
      	
                        Intellectual
      Property

                         

                        The
      Company has received a registered trademark for the name “NeoGenomics” for
      use in the business in which it currently operates and related
      businesses.

                      
	 	 	 
	
                        Schedule
      7.15A

                      	 
      	
                        Existing
      Indebtedness, Investments, Guarantees and Certain Contracts

                         

                        Existing
      Indebtedness of Guarantor

                         

                        None

                         

                        Existing
      Indebtedness and Contracts for Indebtedness by
  Borrower

                      


              

            

          

        

      

         

        
          
            
              
                
                  
                    
                      
                        
                          	 
      	 	
                                  Lessor (Capitalized
      Leases)

                                	 	
                                  Asset Description

                                	 	
                                  Amount of

                                  lease

                                	 	
                                  Start

                                  Date

                                	 	
                                  Term

                                	 	
                                  Term

                                  Date

                                	 	
                                  Payment

                                	 
	 
      	 	 
      	 	 
      	 	 	 	 
      	 	 	 	 
      	 	 	 
	
                                  1

                                	 	
                                  US
      Express Lease

                                	 	
                                  Computer
      Equipment

                                	 	$	11,204	 	
                                  Mar-07

                                	 	 	36	 	
                                  Mar-10

                                	 	$	413	 
	
                                  2

                                	 	
                                  Balboa
      Capital

                                	 	
                                  Furniture
      & fixtures

                                	 	 	19,820	 	
                                  Apr-07

                                	 	 	60	 	
                                  Mar-12

                                	 	 	441	 
	
                                  3

                                	 	
                                  VAR
      222707 - PC Connections

                                	 	
                                  Computer
      Equipment

                                	 	 	6,245	 	
                                  Feb-07

                                	 	 	36	 	
                                  Jan-10

                                	 	 	372	 
	
                                  4

                                	 	
                                  VAR
      res 13107 - PC Connections

                                	 	
                                  Computer
      Equipment

                                	 	 	3,554	 	
                                  Feb-07

                                	 	 	36	 	
                                  Jan-10

                                	 	 	299	 
	
                                  5

                                	 	
                                  California
      Beckman

                                	 	
                                  Cytomics
      PC 500

                                	 	 	136,118	 	
                                  Mar-07

                                	 	 	60	 	
                                  Feb-12

                                	 	 	2,792	 
	
                                  6

                                	 	
                                  Baytree

                                	 	
                                  BMC
      Software/customer svc

                                	 	 	15,783	 	
                                  Mar-07

                                	 	 	36	 	
                                  Mar-10

                                	 	 	552	 
	
                                  7

                                	 	
                                  Royal
      bank of america

                                	 	
                                  Abbott
      molecular Thermobrite

                                	 	 	80,936	 	
                                  Feb-07

                                	 	 	48	 	
                                  Jan-11

                                	 	 	2,289	 
	
                                  8

                                	 	
                                  Beckman
      Coulter Lease

                                	 	
                                  Flow
      Cytometer

                                	 	 	125,064	 	
                                  Apr-06

                                	 	 	60	 	
                                  Mar-11

                                	 	 	2,691	 
	
                                  9

                                	 	
                                  Marlin
      Lease

                                	 	
                                  Ikonisys
      comupter support equip

                                	 	 	48,230	 	
                                  Sep-06

                                	 	 	60	 	
                                  Aug-11

                                	 	 	1,201	 
	
                                  10

                                	 	
                                  B of
      A Lease

                                	 	
                                  Computer
      hardware & servers

                                	 	 	98,405	 	
                                  Sep-06

                                	 	 	60	 	
                                  Aug-11

                                	 	 	2,366	 
	
                                  11

                                	 	
                                  AEL
      Lease

                                	 	
                                  IkoniScope

                                	 	 	100,170	 	
                                  Sep-06

                                	 	 	60	 	
                                  Aug-11

                                	 	 	2,316	 
	
                                  12

                                	 	
                                  GE
      Capital Corp

                                	 	
                                  IkoniScope

                                	 	 	100,170	 	
                                  Sep-06

                                	 	 	60	 	
                                  Aug-11

                                	 	 	2,105	 
	
                                  13

                                	 	
                                  Beckman
      Coulter

                                	 	
                                  Coulter
      Hematology Analyzer

                                	 	 	18,375	 	
                                  Nov-06

                                	 	 	60	 	
                                  Oct-11

                                	 	 	761	 
	
                                  14

                                	 	
                                  Bank
      of America

                                	 	
                                  Computer
      hardware & servers

                                	 	 	8,954	 	
                                  Nov-06

                                	 	 	60	 	
                                  Oct-11

                                	 	 	228	 
	
                                  15

                                	 	
                                  Royal
      Bank (BMT) 24K Lease

                                	 	
                                  Computer
      hardware & servers

                                	 	 	23,494	 	
                                  Dec-06

                                	 	 	48	 	
                                  Nov-10

                                	 	 	718	 
	
                                  16

                                	 	
                                  Royal
      Bank (BMT) 18K Lease

                                	 	
                                  Computer
      hardware & servers

                                	 	 	17,661	 	
                                  Dec-06

                                	 	 	48	 	
                                  Nov-10

                                	 	 	549	 
	
                                  17

                                	 	
                                  Toshiba
      Lease

                                	 	
                                  Phone
      system

                                	 	 	42,784	 	
                                  Jan-07

                                	 	 	60	 	
                                  Dec-11

                                	 	 	998	 
	
                                  18

                                	 	
                                  Key
      Equipment

                                	 	
                                  Genetic
      imaging system

                                	 	 	124,820	 	
                                  Aug-07

                                	 	 	60	 	
                                  Jul-12

                                	 	 	3,090	 
	
                                  19

                                	 	
                                  Great
      America

                                	 	
                                  Genetic
      imaging system

                                	 	 	55,920	 	
                                  Aug-07

                                	 	 	60	 	
                                  Jul-12

                                	 	 	1,392	 
	
                                  20

                                	 	
                                  Bank
      of America

                                	 	
                                  Seacoast
      billing software

                                	 	 	74,788	 	
                                  Sep-07

                                	 	 	36	 	
                                  Aug-10

                                	 	 	3,125	 
	
                                  21

                                	 	
                                  Think
      Leasing/H&IT Capital

                                	 	
                                  Ikoniscope,
      Great Plains s/w, etc.

                                	 	 	292,993	 	
                                  Jan-08

                                	 	 	60	 	
                                  Jan-13

                                	 	 	6,534	 
	 
      	 	 
      	 	 
      	 	$	1,405,489	 	 
      	 	 	 	 	 
      	 	$	35,234	 


                        

                      

                    

                  

                

              

            

          

        

      

      


      
        
          
            
              
                	 
      	
                        Investments
      Held by Guarantor

                         

                        $200,000
      Convertible Note Receivable from Power3 Medical Products,
Inc.

                         

                        Investments
      Held by Subsidiary

                         

                        None

                      
	 	 
	
                        Schedule
      7.15B

                      	
                        Indebtedness with a Maturity
      Date During the Term – See Schedule 7.15A

                      
	 	 
	
                        Schedule
      7.16

                      	
                        Other Agreements - See
      Schedule
7.5

                      


              

            

          

        

      

       

      
        
           


        

        
          
          

          
            

          

        

        
           


        

      

      
 

      
        
          	
                  Schedule
      7.17

                	
                  Insurance

                


        

      

       

      
        Commercial
Insurance Schedule

        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        	  	 
      	
                                                                Broker
      / Agent

                                                              	 
      	
                                                                Carrier
      (Ins. Co)

                                                              	 
      	
                                                                Type

                                                              	 
      	
                                                                Policy
      Number

                                                              	 
      	
                                                                Limit

                                                              	 
      	
                                                                Effective

                                                                Date

                                                              	 
      	
                                                                Expiration

                                                                Date

                                                              	 
      	
                                                                Note:

                                                              
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                                                1

                                                              	 
      	
                                                                Gulfshore
      Insurance

                                                              	 
      	
                                                                Admiral
      Insurance Co.

                                                              	 
      	
                                                                Professional
      Liability

                                                              	 
      	
                                                                E000000559302

                                                              	 
      	
                                                                $1
      mil / $3 mil

                                                              	 
      	
                                                                10/9/2007

                                                              	 
      	
                                                                10/9/2008

                                                              	 
      	
                                                                All
      Locations

                                                              
	
                                                                2

                                                              	 
      	
                                                                Gulfshore
      Insurance

                                                              	 
      	
                                                                Travelers
      Indemnity Co. of CT

                                                              	 
      	
                                                                Workers'
      Comp

                                                              	 
      	
                                                                IACRUB-4649C88-4-07

                                                              	 
      	
                                                                EL-$500,000

                                                              	 
      	
                                                                5/4/2007

                                                              	 
      	
                                                                5/4/2008

                                                              	 
      	
                                                                All
      Locations

                                                              
	
                                                                3

                                                              	 
      	
                                                                N/A

                                                              	 
      	
                                                                Brickstreet
      Mutual Ins. Co

                                                              	 
      	
                                                                WV
      Workers Comp

                                                              	 
      	
                                                                WC10203816-01

                                                              	 
      	
                                                                EL-$500,000

                                                              	 
      	
                                                                2/19/2007

                                                              	 
      	
                                                                2/19/2008

                                                              	 
      	
                                                                WV
      Stae Ins. Co.

                                                              
	
                                                                4

                                                              	 
      	
                                                                Lott
      & Gaylor

                                                              	 
      	
                                                                FCCI
      - FL

                                                              	 
      	
                                                                Commercial
      Property

                                                              	 
      	
                                                                CP0003390-1

                                                              	 
      	
                                                                $1.7
      mil

                                                              	 
      	
                                                                4/15/2007

                                                              	 
      	
                                                                4/15/2008

                                                              	 
      	
                                                                FL
      only

                                                              
	
                                                                5

                                                              	 
      	
                                                                Lott
      & Gaylor

                                                              	 
      	
                                                                FCCI
      - FL

                                                              	 
      	
                                                                General
      Liability

                                                              	 
      	
                                                                GL00052821-1

                                                              	 
      	
                                                                $1
      mil / $2 mil

                                                              	 
      	
                                                                4/15/2007

                                                              	 
      	
                                                                4/15/2008

                                                              	 
      	
                                                                FL
      only

                                                              
	
                                                                6

                                                              	 
      	
                                                                Lott
      & Gaylor

                                                              	 
      	
                                                                FCCI
      - FL

                                                              	 
      	
                                                                Crime

                                                              	 
      	
                                                                CR0000676-1

                                                              	 
      	
                                                                $50,000

                                                              	 
      	
                                                                4/15/2007

                                                              	 
      	
                                                                4/15/2008

                                                              	 
      	
                                                                FL
      Admin only

                                                              
	
                                                                7

                                                              	 
      	
                                                                Lott
      & Gaylor

                                                              	 
      	
                                                                FCCI
      - TN

                                                              	 
      	
                                                                commercial
      Property

                                                              	 
      	
                                                                CPP0006352-2

                                                              	 
      	
                                                                $225,841

                                                              	 
      	
                                                                5/31/2007

                                                              	 
      	
                                                                5/31/2008

                                                              	 
      	
                                                                TN
      Only

                                                              
	
                                                                8

                                                              	 
      	
                                                                Lott
      & Gaylor

                                                              	 
      	
                                                                FCCI
      - TN

                                                              	 
      	
                                                                commercial
      liability

                                                              	 
      	
                                                                CPP0006352-2

                                                              	 
      	
                                                                $1
      mil / $2 mil

                                                              	 
      	
                                                                5/31/2007

                                                              	 
      	
                                                                5/31/2008

                                                              	 
      	
                                                                TN
      Only

                                                              
	
                                                                9

                                                              	 
      	
                                                                Gulfshore
      Insurance

                                                              	 
      	
                                                                Mount
      Vernon Ins.

                                                              	 
      	
                                                                commercial
      Property

                                                              	 
      	
                                                                CF2166377

                                                              	 
      	
                                                                $593,000

                                                              	 
      	
                                                                9/21/2007

                                                              	 
      	
                                                                9/21/2008

                                                              	 
      	
                                                                CA
      Only

                                                              
	
                                                                10

                                                              	 
      	
                                                                Gulfshore
      Insurance

                                                              	 
      	
                                                                Admiral
      Insurance Co.

                                                              	 
      	
                                                                commercial
      liability

                                                              	 
      	
                                                                CA00001186101

                                                              	 
      	
                                                                $1
      mil / $2 mil

                                                              	 
      	
                                                                9/21/2007

                                                              	 
      	
                                                                9/21/2008

                                                              	 
      	
                                                                CA
      Only

                                                              
	
                                                                11

                                                              	 
      	
                                                                Lott
      & Gaylor

                                                              	 
      	
                                                                FCCI
      - Ins. Co.

                                                              	 
      	
                                                                Umbrella

                                                              	 
      	
                                                                UMB0005093-1

                                                              	 
      	
                                                                $1
      mil in excess of primary

                                                              	 
      	
                                                                4/15/2007

                                                              	 
      	
                                                                4/15/2008

                                                              	 
      	
                                                                FL/TN

                                                              
	
                                                                12

                                                              	 
      	
                                                                Gulfshore
      Insurance

                                                              	 
      	
                                                                Mt.
      Hawley Ins. Co.

                                                              	 
      	
                                                                Umbrella

                                                              	 
      	
                                                                MXL0365587

                                                              	 
      	
                                                                $3
      mil excess of underlying

                                                              	 
      	
                                                                8/10/2007

                                                              	 
      	
                                                                4/15/2008

                                                              	 
      	
                                                                All
      States

                                                              
	
                                                                13

                                                              	 
      	
                                                                Gulfshore
      Insurance

                                                              	 
      	
                                                                Travelers
      Indemnity Co.

                                                              	 
      	
                                                                Auto

                                                              	 
      	
                                                                BA4547L23A

                                                              	 
      	
                                                                $1,000,000

                                                              	 
      	
                                                                6/28/2007

                                                              	 
      	
                                                                6/28/2008

                                                              	 
      	
                                                                All
      States/Any Auto

                                                              
	
                                                                14

                                                              	 
      	
                                                                Lott
      & Gaylor

                                                              	 
      	
                                                                American
      Home Assurance Co.

                                                              	 
      	
                                                                Executive
      D&O

                                                              	 
      	
                                                                108-55-03

                                                              	 
      	
                                                                $2
      mil single limit

                                                              	 
      	
                                                                6/15/2007

                                                              	 
      	
                                                                6/15/2008

                                                              	 
      	
                                                                All
      States

                                                              


                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

       

      
        
          
            
              	
                      Schedule
      7.18A

                    	
                      Borrower’s
      Names

                       

                      NeoGenomics, Inc.

                      NeoGenomics
      Laboratories

                       

                    
	
                      Schedule
      7.18B

                    	
                      Chief
      Executive Offices and Other Places of Business

                       

                      Chief Executive Offices

                      12701
      Commonwealth Drive, Suites 1-9

                      Fort
      Myers, FL 33913

                       

                      Other Places of Business

                      618
      Grassmere Park Drive, Suite 20

                      Nashville,
      TN  37211

                      6
      Morgan Street, Suite 150

                      Irvine,
      CA 92618

                    


            

          

        

      

       

      
        
           


        

        
          
          

          
            

          

        

        
           


        

      

       

      
        
          
            
              
                
                  	
                          Schedule
      8.8

                        	
                          Post-Closing
      Matters

                        
	 	 
	
                          Schedule
      9.2

                        	
                          Permitted
      Indebtedness

                           

                          All Capital Leases listed in
      Schedule 7.15A

                        
	 	 
	
                          Schedule
      9.3

                        	
                          Permitted
      Liens

                           

                          Purchase Money on all Equipment
      financed through the Capital Leases listed on Schedule
    7.15A

                        
	 	 
	
                          Schedule
      9.4

                        	
                          New
      Facilities

                           

                          As
      of the closing, the Company intends to open up satellite offices at the
      following locations in the same general vicinity:

                           

                          [***]

                          [***]

                          [***]

                        


                

              

            

          

        

      

       

      
        [***]
Information redacted pursuant to a confidential treatment request. An unredacted
version of this Agreement has been filed separately with the Securities and
Exchange Commission.