Document:

DWANGO
      NORTH AMERICA CORP.

    

    2003
      EQUITY INCENTIVE PLAN

    

    

    1.
       Purpose.
      The
      purposes of this 2003 Equity Incentive Plan are (a) to enable the Company
      and its Subsidiaries and Affiliates to attract and retain highly qualified
      personnel who will contribute to the success of the Company and its Subsidiaries
      and Affiliates, and (b) to provide incentives to participants in this
      Plan
      that are linked directly to increases in stockholder value which will therefore
      inure to the benefit of all stockholders of the Company and its Subsidiaries
      and
      Affiliates.

    

    Capitalized
      terms not defined in the text are defined in Section 24.

    

    
      
        2.
          Administration.

      

    

    

    2.1.
       Administration
      in Accordance with the Code and Exchange Act.
      The
      Plan shall be administered in accordance with the requirements of Section 162(m)
      of the Code (but only to the extent necessary and desirable to maintain
      qualification of Awards under the Plan under Section 162(m) of the Code) and,
      to
      the extent applicable, Rule 16b-3 under the Exchange Act (“Rule 16b-3"), by the
      Board or, at the Board's sole discretion, by the Committee, which shall be
      appointed by the Board, and which shall serve at the pleasure of the
      Board.

    

    2.2. Administrator’s
      Powers.
      Subject
      to the general purposes, terms and conditions of this Plan, the Administrator
      will have full power to implement and carry out this Plan. The Administrator
      will have the authority to:

    

    (a)
       construe
      and interpret this Plan, any Award Agreement and any other agreement or document
      executed pursuant to this Plan;

    

    (b)
       prescribe,
      amend and rescind rules and regulations relating to this Plan or any
      Award;

    

    (c)
       select
      persons to receive Awards;

    

    (d)
       determine
      the form and terms of Awards;

    

    (e)
       determine
      the number of Shares or other consideration subject to Awards;

    

    (f)
       determine
      whether Awards will be granted singly, in combination with, in tandem with,
      in
      replacement of, or as alternatives to, other Awards under this Plan or any
      other
      incentive or compensation plan of the Company or any Parent, Subsidiary or
      Affiliate of the Company;

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (g)
       grant
      waivers of Plan or Award conditions;

    

    (h)
       determine
      the vesting, exercisability and payment of Awards;

    

    (i)
       correct
      any defect, supply any omission or reconcile any inconsistency in the Plan,
      any
      Award or any Award Agreement;

    

    (j)
       to
      make
      any adjustments necessary or desirable as a result of the granting of an Award
      to an Eligible Participant located outside the United States;

    

    (k)
       determine
      whether an Award has been earned; and

    

    (l)
       make
      all
      other determinations necessary or advisable for the administration of the
      Plan.

    

    2.3. Administrator’s
      Discretion Final.
      Any
      determination made by the Administrator with respect to any Award will be made
      in its sole discretion at the time of grant of the Award or, unless in
      contravention of any express term of the Plan or Award, at any later time,
      and
      such determination will be final and binding on the Company and on all persons
      having an interest in any Award under the Plan.

    

    2.4. Administrator’s
      Method of Acting; Liability.
      The
      Administrator may act only by a majority of its members then in office, except
      that the members thereof may authorize any one or more of their members or
      any
      officer of the Company to execute and deliver documents or to take any other
      ministerial action on behalf of the Administrator with respect to Awards made
      or
      to be made to Eligible Participants. No member of the Administrator and no
      officer of the Company shall be liable for anything done or omitted to be done
      by such member or officer, by any other member of the Administrator or by any
      officer of the Company in connection with the performance of duties under the
      Plan, except for such member’s or officer’s own willful misconduct or as
      expressly provided by law.

    

    3.
       Participation.
      Incentive Stock Options may be granted only to employees (including officers
      and
      directors who are also employees) of the Company, or any Parent, Subsidiary
      or
      Affiliate of the Company. All other Awards may be granted to employees,
      officers, directors, consultants, independent contractors and advisors of the
      Company or any Parent, Subsidiary or Affiliate of the Company; provided,
      that
      such consultants, contractors and advisors render bona fide services to the
      Company or such Parent, Subsidiary or Affiliate of the Company not in connection
      with the offer and sale of securities in a capital-raising transaction. An
      Eligible Participant may be granted more than one Award under the
      Plan.

    

    
      
        4.
          Awards
          Under the Plan.

      

    

    

    4.1. Types
      of Awards.
      Awards
      under the Plan may include, but need not be limited to, one or more of the
      following types, either alone or in any combination thereof:

    

    
      
        
        

      

      
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    (a)
      Options;

    

    (b)
      Restricted Stock;

    

    (c)
      Stock
      Bonuses; and

    

    (d)
      any
      other type of Award deemed by the Administrator to be consistent with the
      purposes of the Plan (including but not limited to, Awards of or options or
      similar rights granted with respect to unbundled stock units or components
      thereof, and Awards to be made to participants who are foreign nationals or
      are
      employed or performing services outside the United States).

    

    4.2. Number
      of Shares Available Under the Plan. Subject to Section 4.4, the total number
      of Shares reserved and available for grant and issuance pursuant to the Plan
      will be 6,500,000. Shares that are subject to (a) issuance upon exercise of
      an
      Option previously granted but cease to be subject to such Option for any reason
      other than exercise of such Option, (b) an Award previously granted but
      forfeited or repurchased by the Company at the original issue price, and (c)
      an
      Award previously granted that otherwise terminates without Shares being issued,
      shall be available for grant and issuance.

    

    Shares
      may consist, in whole or in part, of authorized and unissued shares or treasury
      shares.

    

    The
      number of Shares which are transferred to the Company by a Participant to pay
      the exercise or purchase price of an Award will be subtracted from the number
      of
      Shares issued with respect to such Award for the purpose of counting Shares
      used
      under the Plan. Shares withheld to pay withholding taxes in connection with
      the
      exercise or repayment of an Award will not be counted as used under the Plan.
      In
      addition, Shares covered by an Award granted under the Plan which is settled
      in
      cash will not be counted as used under the Plan.

    

    4.3. Reservation
      of Shares.
      At all
      times, the Company shall reserve and keep available a sufficient number of
      Shares as shall be required to satisfy the requirements of all outstanding
      Options granted under the Plan and all other outstanding but unexercised Awards
      granted under the Plan. 

    

    4.4.
       Adjustment
      in Number of Shares Available Under the Plan.
      In the
      event that the number of outstanding shares of Common Stock is changed by a
      stock dividend, recapitalization, stock split, reverse stock split, subdivision,
      combination, reclassification or similar change in the capital structure of
      the
      Company without consideration, then (a) the number of Shares reserved for
      issuance under the Plan, (b) the number of Shares that may be granted pursuant
      to the Plan, (c) the Exercise Prices of and number of Shares subject to
      outstanding Options and other Awards, and (d) the exercise prices of and number
      of Shares subject to other outstanding Awards, will be proportionately adjusted,
      subject to any required action by the Board or the stockholders of the Company
      and compliance with applicable securities laws; provided,
      however,
      that,
      upon occurrence of such an event, fractions of a Share will not be issued upon
      exercise of an Award but will, upon such exercise, either be replaced by a
      cash
      payment equal to the Fair Market Value of such fraction of a Share on the
      effective date of such an event or will be rounded up to the nearest whole
      Share, as determined by the Administrator.

    

    
      
        
        

      

      
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    4.5. Rights
      with Respect to Common Shares and Other Securities.

    

    (a) Unless
      otherwise determined by the Administrator, a Participant to whom an Award of
      Restricted Stock has been made (and any person succeeding to such Participant’s
      rights with respect to such Award pursuant to the Plan) shall have, after
      issuance of a certificate or copy thereof for the number of Shares so awarded
      and prior to the expiration of the Restricted Period or the earlier repurchase
      of such Shares as provided in the Plan or Award Agreement with respect to such
      Award of Restricted Stock, ownership of such Shares, including the right to
      vote
      the same and to receive dividends or other distributions made or paid with
      respect to such Shares (provided that such Shares, and any new, additional
      or
      different shares, or other securities or property of the Company, or other
      forms
      of consideration which the participant may be entitled to receive with respect
      to such Shares as a result of a stock split, stock dividend or any other change
      in the corporate or capital structure of the Company, shall be subject to the
      restrictions of the Plan as determined by the Administrator), subject, however,
      to the options, restrictions and limitations imposed thereon pursuant to the
      Plan. Notwithstanding the foregoing, unless otherwise determined by the
      Administrator, a Participant with whom an Award Agreement is made to issue
      Shares in the future shall have no rights as a stockholder with respect to
      Shares related to such Award Agreement until a stock certificate evidencing
      such
      Shares is issued to such Participant.

    

    (b) Unless
      otherwise determined by the Administrator, a Participant to whom a grant of
      Stock Options or any other Award is made (and any person succeeding to such
      Participant’s rights pursuant to the Plan) shall have no rights as a stockholder
      with respect to any Shares or as a holder with respect to other securities,
      if
      any, issuable pursuant to any such Award until the date a stock certificate
      evidencing such Shares or other instrument of ownership, if any, is issued
      to
      such Participant. Except as provided in Section 4.4, no adjustment shall be
      made
      for dividends, distributions or other rights (whether ordinary or extraordinary,
      and whether in cash, securities, other property or other forms of consideration,
      or any combination thereof) for which the record date is prior to the date
      such
      stock certificate or other instrument of ownership, if any, is
      issued.

    

    
      
        5.
          Stock
          Options.

      

    

    

    5.1. Grant;
      Determination of Type of Option.
      The
      Administrator may grant one or more Options to an Eligible Participant and
      will
      determine (a) whether each such Option will be an Incentive Stock Option or
      a
      Non-Qualified Stock Option, (b) the number of Shares subject to each such
      Option, (c) the Exercise Price of each such Option, (d) the period during which
      each such Option may be exercised, and (e) all other terms and conditions of
      each such Option, subject to the terms and conditions of this Section 5. The
      Administrator may grant an Option either alone or in conjunction with other
      Awards, either at the time of grant or by amendment thereafter.

    

    
      
        
        

      

      
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    5.2. Form
      of Option Award Agreement.
      Each
      Option granted under the Plan will be evidenced by an Award Agreement which
      will
      expressly identify the Option as an Incentive Stock Option or a Non-Qualified
      Stock Option, and will be in such form and contain such provisions (which need
      not be the same for each Participant or Option) as the Administrator may from
      time to time approve, and which will comply with and be subject to the terms
      and
      conditions of the Plan.

    

    5.3. Date
      of Grant.
      The
      date of grant of an Option will be the date on which the Administrator makes
      the
      determination to grant such Option, unless otherwise specified by the
      Administrator.

    

    5.4. Exercise
      Period.
      Each
      Option shall be exercisable within the times or upon the occurrence of one
      or
      more events determined by the Administrator and set forth in the Award Agreement
      governing such Option; provided,
      however,
      that no
      Option will be exercisable after the expiration of ten years from the date
      the
      Option is granted; and provided,
      further,
      however,
      that no
      Incentive Stock Option granted to a person who directly or by attribution owns
      more than 10% of the total combined voting power of all classes of stock of
      the
      Company or of any Parent, Subsidiary or Affiliate of the Company (each, a “Ten
      Percent Stockholder”) will be exercisable after the expiration of five years
      from the date such Incentive Stock Option is granted. The Administrator also
      may
      provide for an Option to become exercisable at one time or from time to time,
      periodically or otherwise, in such number of Shares or percentage of Shares
      as
      the Administrator determines.

    

    5.5. Exercise
      Price.
      The
      Exercise Price of an Option will be determined by the Administrator when the
      Option is granted and may be not less than 85% of the per share Fair Market
      Value of the Shares subject to such Option on the date of grant of such Option;
      provided,
      however,
      that:
      (a) the Exercise Price of an Incentive Stock Option will be not less than 100%
      of the per share Fair Market Value of such Shares on the date of such grant
      and
      (b) the Exercise Price of any Incentive Stock Option granted to a Ten Percent
      Stockholder will not be less than 110% of the per share Fair Market Value of
      such Shares on the date of such grant. Payment for the Shares purchased shall
      be
      made in accordance with Section 8 of the Plan.

    

    5.6. Method
      of Exercise.
      An
      Option may be exercised only by delivery to the Company of an irrevocable
      written exercise notice (a) identifying the Option being exercised, (b) stating
      the number of Shares being purchased, (c) providing any other matters required
      by the Award Agreement with respect to such Option, and (d) containing such
      representations and agreements regarding Participant's investment intent and
      access to information and other matters, if any, as may be required or desirable
      by the Company to comply with applicable securities laws. Such exercise notice
      shall be accompanied by payment in full of the Exercise Price for the number
      of
      Shares being purchased in accordance with Section 8 and the executed Award
      Agreement with respect to such Option.

    

    
      
        
        

      

      
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    5.7. Termination.
      Notwithstanding anything contained in Section 5.4 or in an Award Agreement,
      exercise of Options shall always be subject to the following:

    

    (a) If
      the
      Participant is Terminated for any reason except death or Disability, then the
      Participant may exercise each of such Participant's Options (i) only to the
      extent that such Options would have been exercisable on the Termination Date
      and
      (ii) no later than three months after the Termination Date (or such longer
      time
      period not exceeding five years as may be determined by the Administrator,
      with
      any exercise beyond three months after the Termination Date deemed to be an
      exercise of an Non-Qualified Stock Option), but in any event, no later than
      the
      original expiration date of such Option;

    

    (b) If
      the
      Participant is Terminated because of Participant's death or Disability (or
      the
      Participant dies within three months after a Termination other than for Cause
      or
      because of Participant's Disability), then each of such Participant's Options
      (i) may be exercised only to the extent that such Option would have been
      exercisable by Participant on the Termination Date and (ii) must be
      exercised by Participant (or Participant's legal representative or authorized
      assignee) no later than twelve months after the Termination Date (or such longer
      time period not exceeding five years as may be determined by the Administrator,
      with any such exercise beyond (A) three months after the Termination Date when
      the Termination is for any reason other than the Participant's death or
      Disability or (B) twelve months after the Termination Date when the
      Termination is because of Participant's death or Disability, deemed to be an
      exercise of a Non-Qualified Stock Option), but in any event no later than the
      original expiration date of such Option;

    

    (c) Notwithstanding
      the provisions in paragraphs 5.7(a) and 5.7(b), if a Participant is terminated
      for Cause, neither the Participant, the Participant's estate nor such other
      person who may then hold an Option shall be entitled to exercise such Option
      whatsoever, whether or not, after the Termination Date, the Participant may
      receive payment from the Company or any Parent, Subsidiary or Affiliate of
      the
      Company for vacation pay, for services rendered prior to the Termination Date,
      for services rendered for the day on which Termination occurs, for salary in
      lieu of notice, for severance or for any other benefits; provided,
      however,
      in
      making such a determination, the Administrator shall give the Participant an
      opportunity to present to the Administrator evidence on Participant’s behalf
      that the provisions of this paragraph 5.7(c) should not apply and, in the
      alternative, paragraph 5.7(a) or 5.7(b) shall apply; provided,
      further,
      however,
      that,
      for the purpose of this paragraph 5.7(c), Termination shall be deemed to occur
      on the date when the Company dispatches notice or advice to the Participant
      that
      such Participant is Terminated.

    

    5.8. Limitations
      on Exercise.
      The
      Administrator may specify a reasonable minimum number of Shares that may be
      purchased on any exercise of an Option, provided,
      that
      such minimum number will not prevent Participant from exercising the Option
      for
      the full number of Shares for which the Option is then exercisable.

    

    
      
        
        

      

      
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    5.9. Limitations
      on Incentive Stock Options.
      The
      aggregate Fair Market Value (as determined as of the date of grant) of Shares
      with respect to which an Incentive Stock Option are exercisable for the first
      time by a Participant during any calendar year (under the Plan or under any
      other incentive stock option plan of the Company, and any Parent, Subsidiary
      and
      Affiliate of the Company) will not exceed $100,000. If the Fair Market Value
      of
      Shares on the date of grant with respect to which Incentive Stock Option(s)
      are
      exercisable for the first time by a Participant during any calendar year exceeds
      $100,000, then the Option(s) for the first $100,000 worth of Shares to become
      exercisable in such calendar year will be deemed Incentive Stock Option(s)
      and
      the Option(s) that become exercisable in such calendar year for the number
      of
      Shares which have a Fair Market Value in excess of $100,000 will be deemed
      to be
      Non-Qualified Stock Option(s). In the event that the Code or the regulations
      promulgated thereunder are amended after the effective date of the Plan to
      provide for a different limit on the Fair Market Value of Shares permitted
      to be
      subject to Incentive Stock Options, such different limit will be automatically
      incorporated herein and will apply to any Options granted after the effective
      date of such amendment.

    

    5.10. Modification,
      Extension or Renewal.
      The
      Administrator may modify, extend or renew any outstanding Option and authorize
      the grant of one or more new Options in substitution therefor; provided
      that any
      such action may not, without the written consent of a Participant, impair any
      of
      such Participant's rights under any Option previously granted. Any outstanding
      Incentive Stock Option that is modified, extended, renewed or otherwise altered
      will be treated in accordance with Section 424(h) and other applicable
      provisions of the Code. The Administrator may reduce the Exercise Price of
      any
      outstanding Option of a Participant without the consent of the Participant
      affected by delivering a written notice to the Participant; provided,
      however,
      that
      the Exercise Price may not be reduced below the minimum Exercise Price that
      would be permitted under Section 5.5 for Options granted on the date the action
      is taken to reduce such Exercise Price.

    

    5.11. No
      Disqualification.
      Notwithstanding any other provision in the Plan, no term of the Plan relating
      to
      an Incentive Stock Option will be interpreted, amended or altered, nor will
      any
      discretion or authority granted under the Plan be exercised, so as to disqualify
      the Plan under Section 422 of the Code or, without the consent of the
      Participant affected, to disqualify any Incentive Stock Option under Section
      422
      of the Code.

    

    5.12. Prohibition
      Against Transfer.
      No
      Option may be sold, assigned, transferred, pledged, hypothecated or otherwise
      disposed of, except by will or the laws of descent and distribution or pursuant
      to a domestic relations order, and a Participant’s Option shall be exercisable
      during such Participant’s lifetime only by such Participant or such person
      receiving such Option pursuant to a domestic relations order. 

    

    
      
        
        

      

      
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        6.
          Restricted
          Stock.

      

    

    

    6.1. Grant.
      An
      Award of Restricted Stock is an offer by the Company to sell to an Eligible
      Participant Shares that are subject to restrictions. The Administrator will
      determine to whom an offer will be made, the number of Shares the person may
      purchase, the Exercise Price to be paid, the restrictions to which the Shares
      will be subject, and all other terms and conditions of the Restricted Stock
      Award, subject to the provisions of this Section 6.

    

    6.2 Form
      of Restricted Stock Award.
      All
      purchases under an Award of Restricted Stock will be evidenced by an Award
      Agreement that will be in such form (which need not be the same for each Award
      of Restricted Stock or Participant) as the Administrator will from time to
      time
      approve, and will comply with and be subject to the terms and conditions of
      the
      Plan. The offer of Restricted Stock will be accepted by the Participant's
      execution and delivery of the Award Agreement evidencing the offer to purchase
      the Restricted Stock and full payment for the Shares to the Company within
      30
      days from the date such Award Agreement is tendered to such Eligible
      Participant. If such Eligible Participant does not execute and deliver such
      Award Agreement along with full payment for the Shares to the Company within
      such 30 day period, then such offer will terminate, unless otherwise determined
      by the Administrator.

    

    6.3. Purchase
      Price.
      The
      Exercise Price of Shares sold pursuant to an Award of Restricted Stock will
      be
      determined by the Administrator on the date such Award is granted, except in
      the
      case of a sale to a Ten Percent Stockholder, in which case the Exercise Price
      will be 100% of the per share Fair Market Value on the date such Award is
      granted of the Shares subject to the Award. Payment of the Exercise Price may
      be
      made in accordance with Section 8.

    

    6.4. Terms
      of Restricted Stock Awards.
      Each
      Award of Restricted Stock shall be subject to such restrictions as the
      Administrator may impose. These restrictions may be based upon completion of
      a
      specified number of years of service with the Company or upon completion of
      the
      performance goals as set out in advance in the Participant's individual Award
      Agreement. Awards of Restricted Stock may vary from Participant to Participant
      and between groups of Participants. Prior to the grant of an Award of Restricted
      Stock, the Administrator shall:

    

    (a) determine
      the nature, length and starting date of any performance period for the
      Restricted Stock Award;

    

    (b) select
      from among the performance factors to be used to measure performance goals,
      if
      any; and

    

    (c) determine
      the number of Shares that may be awarded to the Participant.

    

    Prior
      to
      the payment of any Restricted Stock pursuant to an Award, the Administrator
      shall determine the extent to which such Restricted Stock Award has been earned.
      Performance periods may overlap and Participants may participate simultaneously
      with respect to Restricted Stock Awards that are subject to different
      performance periods and having different performance goals and other
      criteria.

    

    
      
        
        

      

      
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    6.5. Termination
      During Performance Period.
      If a
      Participant is Terminated during a performance period with respect to any Award
      of Restricted Stock for any reason, then such Participant will be entitled
      to
      payment (whether in Shares, cash or otherwise) with respect to the Restricted
      Stock Award only to the extent earned as of the date of Termination in
      accordance with the Award Agreement with respect to such Restricted Stock,
      unless the Administrator determines otherwise.

    

    
      
        7.
          Stock
          Bonuses.

      

    

    

    7.1. Awards
      of Stock Bonuses.
      A Stock
      Bonus is an Award of Shares (which may consist of Restricted Stock) for services
      rendered to the Company or any Parent, Subsidiary or Affiliate of the Company.
      A
      Stock Bonus may be awarded for past services already rendered to the Company,
      or
      any Parent, Subsidiary or Affiliate of the Company pursuant to an Award
      Agreement (the “Stock Bonus Agreement”) that will be in such form (which need
      not be the same for each Participant) as the Administrator will from time to
      time approve, and will comply with and be subject to the terms and conditions
      of
      the Plan. A Stock Bonus may be awarded upon satisfaction of such performance
      goals as are set out in advance in the Participant's individual Award Agreement
      that will be in such form (which need not be the same for each Participant)
      as
      the Administrator will from time to time approve, and will comply with and
      be
      subject to the terms and conditions of the Plan. Stock Bonuses may vary from
      Participant to Participant and between groups of Participants, and may be based
      upon the achievement of the Company, any Parent, Subsidiary or Affiliate of
      the
      Company and/or individual performance factors or upon such other criteria as
      the
      Administrator may determine.

    

    7.2 Terms
      of Stock Bonuses.
      The
      Administrator will determine the number of Shares to be awarded to the
      Participant. If the Stock Bonus is being earned upon the satisfaction of
      performance goals set forth in an Award Agreement, then the Administrator
      will:

    

    (a) determine
      the nature, length and starting date of any performance period for each Stock
      Bonus;

    

    (b) select
      from among the performance factors to be used to measure the performance, if
      any; and

    

    (c) determine
      the number of Shares that may be awarded to the Participant.

    

    Prior
      to
      the payment of any Stock Bonus, the Administrator shall determine the extent
      to
      which such Stock Bonuses have been earned. Performance periods may overlap
      and
      Participants may participate simultaneously with respect to Stock Bonuses that
      are subject to different performance periods and different performance goals
      and
      other criteria. The number of Shares may be fixed or may vary in accordance
      with
      such performance goals and criteria as may be determined by the Administrator.
      The Administrator may adjust the performance goals applicable to the Stock
      Bonuses to take into account changes in law and accounting or tax rules and
      to
      make such adjustments as the Administrator deems necessary or appropriate to
      reflect the impact of extraordinary or unusual items, events or circumstances
      to
      avoid windfalls or hardships.

    

    
      
        
        

      

      
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    7.3. Form
      of Payment.
      The
      earned portion of a Stock Bonus may be paid currently or on a deferred basis
      with such interest or dividend equivalent, if any, as the Administrator may
      determine. Payment may be made in the form of cash or whole Shares or a
      combination thereof, either in a lump sum payment or in installments, all as
      the
      Administrator will determine.

    

    
      
        8.
          Payment
          for Share Purchases.

      

    

    

    8.1. Payment.
      Payment
      for Shares purchased pursuant to this Plan may be made in cash (by check) or,
      where expressly approved for the Participant by the Administrator and where
      permitted by law:

    

    (a) by
      cancellation of indebtedness of the Company to the Participant;

    

    (b) by
      surrender of Shares that either (i) have been owned by the Participant for
      more
      than six months and have been paid for within the meaning of Rule 144
      promulgated under the Securities Act (and, if such shares were purchased from
      the Company by use of a promissory note, such note has been fully paid with
      respect to such shares) or (ii) were obtained by Participant in the public
      market;

    

    (c) by
      tender
      of a full recourse promissory note having such terms as may be approved by
      the
      Administrator and bearing interest at a rate sufficient to avoid imputation
      of
      income under Sections 483 and 1274 of the Code; provided,
      however,
      that
      Participants who are not employees or directors of the Company will not be
      entitled to purchase Shares with a promissory note unless the note is adequately
      secured by collateral other than the Shares;

    

    (d) by
      waiver
      of compensation due or accrued to the Participant for services
      rendered;

    

    (e) with
      respect only to purchases upon exercise of an Option, and provided that a public
      market for the Company's stock exists, (i) through a “same day sale” commitment
      from the Participant and a broker-dealer that is a member of the National
      Association of Securities Dealers (an “NASD Dealer”) whereby the Participant
      irrevocably elects to exercise the Option and to sell a portion of the Shares
      so
      purchased to pay for the Exercise Price, and whereby the NASD Dealer irrevocably
      commits upon receipt of such Shares to forward the Exercise Price directly
      to
      the Company, or (ii) through a “margin” commitment from the Participant and an
      NASD Dealer whereby the Participant irrevocably elects to exercise the Option
      and to pledge the Shares so purchased to the NASD Dealer in a margin account
      as
      security for a loan from the NASD Dealer in the amount of the Exercise Price,
      and whereby the NASD Dealer irrevocably commits upon receipt of such Shares
      to
      forward the Exercise Price directly to the Company; or

    

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    (f) by
      any
      combination of the foregoing.

    

    8.2. Loan
      Guarantees.
      The
      Company, in its sole discretion, may assist a Participant in paying for Shares
      purchased under the Plan by authorizing a guarantee by the Company of a
      third-party loan to the Participant.

    

    9.
       Amendment
      or Substitution of Awards Under the Plan.
      The
      terms of any outstanding Award under the Plan may be amended from time to time
      by the Administrator in any manner that the Administrator deems appropriate
      (including, but not limited to, acceleration of the date of exercise of any
      Award and/or payments thereunder, or reduction of the Exercise Price of an
      Award); provided,
      however,
      that no
      such amendment shall adversely affect in a material manner any right of a
      Participant under such Award without the Participant’s written consent. The
      Administrator may permit or require holders of Awards to surrender outstanding
      Awards as a condition precedent to the grant of new Awards under the
      Plan.

    

    10.
       Designation
      of Beneficiary by Participant.
      A
      Participant may designate one or more beneficiaries to receive any rights and
      payments to which such Participant may be entitled in respect of any Award
      in
      the event of such Participant’s death. Such designation shall be on a written
      form acceptable to and filed with the Administrator. The Administrator shall
      have the right to review and approve beneficiary designations. A Participant
      may
      change the Participant’s beneficiary(ies) from time to time in the same manner
      as the original designation, unless such Participant has made an irrevocable
      designation. Any designation of beneficiary under the Plan (to the extent it
      is
      valid and enforceable under applicable law) shall be controlling over any other
      disposition, testamentary or otherwise, as determined by the Administrator.
      If
      no designated beneficiary survives the Participant and is living on the date
      on
      which any right or amount becomes payable to such Participant’s
      beneficiary(ies), such payment will be made to the legal representatives of
      the
      Participant’s estate, and the term “beneficiary” as used in the Plan shall be
      deemed to include such person or persons. If there is any question as to the
      legal right of any beneficiary to receive a distribution under the Plan, the
      Administrator may determine that the amount in question be paid to the legal
      representatives of the estate of the Participant, in which event the Company,
      the Administrator, the Board and the Committee and the members thereof will
      have
      no further liability to any person or entity with respect to such
      amount.

    

    
      
        11.
          Corporate
          Transactions.

      

    

    

    11.1.
       Assumption
      or Replacement of Awards by Successor.
      If a
      Change-of-Control Event occurs: 

    

    (a)
       the
      successor company in any Change-of-Control Event may, if approved in writing
      by
      the Administrator prior to any Change-of-Control Event, (i) substitute
      equivalent Options or Awards or provide substantially similar consideration
      to
      Participants as was provided to stockholders (after taking into account the
      existing provisions of the Awards), or (ii) issue, in place of outstanding
      Shares of the Company held by the Participant, substantially similar shares
      or
      substantially similar other securities or substantially similar other property
      subject to repurchase restrictions no less favorable to the
      Participant.

    

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    (b)
       notwithstanding
      anything in this Plan to the contrary, the Administrator may, in its sole
      discretion, provide that the vesting of any or all Options and Awards granted
      pursuant to this Plan will accelerate immediately prior to the consummation
      of a
      Change-of-Control Event. If the Administrator exercises such discretion with
      respect to Options, such Options will become exercisable in full prior to the
      consummation of such event at such time and on such conditions as the
      Administrator determines, and if such Options are not exercised prior to the
      consummation of such event, they shall terminate at such time as determined
      by
      the Administrator.

    

    11.2.
       Other
      Treatment of Awards.
      Subject
      to any rights and limitations set forth in Section 11.1, if a Change-of-Control
      Event occurs or has occurred, any outstanding Awards will be treated as provided
      in the applicable agreement or plan of merger, consolidation, dissolution,
      liquidation, or sale of assets constituting the Change-of-Control
      Event.

    

    11.3
       Assumption
      of Awards by the Company.
      The
      Company, from time to time, also may substitute or assume outstanding awards
      granted by another company, whether in connection with an acquisition of such
      other company or otherwise, by either (a) granting an Award under this Plan
      in
      substitution of such other company’s award, or (b) assuming such award as if it
      had been granted under this Plan if the terms of such assumed award could be
      applied to an Award granted under this Plan. Such substitution or assumption
      will be permissible if the holder of the substituted or assumed award would
      have
      been eligible to be granted an Award under this Plan if the other company had
      applied the rules of this Plan to such grant. If the Company assumes an award
      granted by another company, the terms and conditions of such award will remain
      unchanged (except that the exercise price and the number and nature of Shares
      issuable upon exercise of any such option will be adjusted appropriately
      pursuant to Section 424(a) of the Code). If the Company elects to grant a new
      Option rather than assuming an existing option, such new Option may be granted
      with a similarly adjusted Exercise Price.

    

    12.
       Plan
      Amendment or Suspension.
      The Plan
      may be amended or suspended in whole or in part at any time and from time to
      time by the Board, but no amendment shall be effective unless and until the
      same
      is approved by stockholders of the Company where the failure to obtain such
      approval would adversely affect the compliance of the Plan with Sections 162
      and
      422 of the Code, Rule 16b-3 and with other applicable law. No amendment of
      the
      Plan shall adversely affect in a material manner any right of any Participant
      with respect to any Award theretofore granted without such Participant’s written
      consent.

    

    
      
        13.
          Plan
          Termination.

      

    

    

    13.1. Method
      of Plan Termination.
      The
      Plan shall terminate upon the earlier of the following dates or events to
      occur:

    

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    (a) upon
      the
      adoption of a resolution of the Board terminating the Plan; or

    

    (b) September
      17, 2013.

    

    13.2. Effect
      of Termination on Outstanding Awards.
      No
      termination of the Plan shall materially alter or impair any of the rights
      or
      obligations of any person, without such person’s consent, under any Award
      theretofore granted under the Plan, except that subsequent to termination of
      the
      Plan, the Administrator may make amendments permitted under Section
      9.

    

    
      
        14.
          Stockholder
          Adoption.

      

    

    

    14.1. Stockholder
      Approval.
      The
      Plan shall be submitted to the stockholders of the Company for their approval
      and adoption.

    

    14.2. Effectiveness
      of Plan Prior to Stockholder Approval.
      The
      Plan shall not be effective and no Award shall be made hereunder unless and
      until the Plan has been approved by the stockholders of the Company as provided
      in Section 14.1, consistent with applicable law.

    

    15.
       Transferability.
      Except
      as may be approved by the Administrator where such approval shall not adversely
      affect compliance of the Plan with Sections 162 and 422 of the Code and/or
      Rule
      16b-3, a Participant’s rights and interest under the Plan may not be assigned or
      transferred, hypothecated or encumbered in whole or in part either directly
      or
      by operation of law or otherwise (except in the event of a Participant’s death)
      including, but not by way of limitation, execution, levy, garnishment,
      attachment, pledge, bankruptcy or in any other manner; provided,
      however,
      that
      any Option or similar right offered pursuant to the Plan shall not be
      transferable other than by will or the laws of descent or pursuant to a domestic
      relations order and shall be exercisable during the Participant’s lifetime only
      by such Participant or such person receiving such option pursuant to a domestic
      relations order.

    

    16.
       Privileges
      of Stock Ownership; Restrictions on Shares. 

    

    16.1.
       Voting
      and Dividends.
      No
      Participant will have any of the rights of a stockholder with respect to any
      Shares subject to or issued pursuant to the Plan until such Shares are issued
      to
      the Participant. After Shares are issued to the Participant, the Participant
      will be a stockholder and have all the rights of a stockholder with respect
      to
      such Shares, including the right to vote and receive all dividends or other
      distributions made or paid with respect to such Shares; provided,
      however,
      that if
      such Shares are Restricted Stock, then any new, additional or different
      securities the Participant may become entitled to receive with respect to such
      Shares by virtue of a stock dividend, stock split or any other change in the
      corporate or capital structure of the Company will be subject to the same
      restrictions as the Restricted Stock; provided,
      further,
      that
      the Participant will have no right to retain such stock dividends or stock
      distributions with respect to Restricted Stock that is repurchased at the
      Participant’s Exercise Price in accordance with an Award Agreement with respect
      to such Restricted Stock.

    

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    16.2. Restrictions
      on Shares.
      At the
      discretion of the Administrator, the Company may reserve to itself and/or its
      assignee(s) in the Award Agreement a right to repurchase a portion of or all
      Shares issued pursuant to such Award Agreement and held by a Participant
      following such Participant’s Termination at any time within 90 days after the
      later of Participant’s Termination Date or the date Participant purchases Shares
      under the Plan, for cash and/or cancellation of purchase money indebtedness,
      at
      the Participant’s Exercise Price or such other price as the Administrator may
      determine at the time of the grant of the Award.

    

    17.
       Certificates.
      All
      Shares or other securities delivered under this Plan will be subject to such
      stock transfer orders, legends and other restrictions as the Administrator
      may
      deem necessary or advisable, including restrictions under any applicable
      federal, state or foreign securities law, or any rules, regulations and other
      requirements promulgated under such laws or any stock exchange or automated
      quotation system upon which the Shares may be listed or quoted and each stock
      certificate evidencing such Shares and other certificates shall be appropriately
      legended.

    

    18.
       Escrow;
      Pledge of Shares.
      To
      enforce any restrictions on a Participant’s Shares, the Administrator may
      require the Participant to deposit all stock certificates evidencing Shares,
      together with stock powers or other instruments of transfer approved by the
      Administrator, appropriately endorsed in blank, with the Company or an agent
      designated by the Company to hold in escrow until such restrictions have lapsed
      or terminated, and the Administrator may cause a legend or legends referencing
      such restrictions to be placed on the certificates. Any Participant who is
      permitted to execute a promissory note as partial or full consideration for
      the
      purchase of Shares under the Plan will be required to pledge and deposit with
      the Company all or part of the Shares so purchased as collateral to secure
      the
      payment of Participant’s obligation to the Company under the promissory note;
provided,
      however,
      that
      the Administrator may require or accept other or additional forms of collateral
      to secure the payment of such obligation and, in any event, the Company will
      have full recourse against the Participant under the promissory note
      notwithstanding any pledge of the Participant’s Shares or other collateral. In
      connection with any pledge of the Shares, Participant will be required to
      execute and deliver a written pledge agreement in such form as the Administrator
      will from time to time approve. The Shares purchased with the promissory note
      may be released from the pledge on a pro rata basis as the promissory note
      is
      paid.

    

    
      
        19.
          Exchange
          and Buyout of Awards.

      

    

    

    19.1. Exchange.
      The
      Administrator may, at any time or from time to time, authorize the Company,
      with
      the consent of the respective Participants, to issue new Awards in exchange
      for
      the surrender and cancellation of any or all outstanding Awards.

    

    19.2. Buyout
      of Awards.
      The
      Administrator may, at any time or from time to time, authorize the Company
      to
      buy from a Participant an Award previously granted with payment in cash, Shares
      (including Restricted Stock) or other consideration, based on such terms and
      conditions as the Administrator and the Participant may agree.

    

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

       

    

    
      
        20.
          Securities
          Law and Other Regulatory Compliance.

      

    

    

    20.1. Compliance
      with Applicable Laws.
      An
      Award will not be effective unless such Award is made in compliance with all
      applicable federal and state securities laws, rules and regulations of any
      governmental body, and the requirements of any stock exchange or automated
      quotation system upon which the Shares may then be listed or quoted, as they
      are
      in effect on the date of grant of the Award and also on the date of exercise
      or
      other issuance. Notwithstanding any other provision in this Plan, the Company
      will have no obligation to issue or deliver stock certificates for Shares under
      this Plan prior to:

    

    (a) obtaining
      any approvals from governmental agencies that the Administrator determines
      are
      necessary or advisable; and/or

    

    (b) completion
      of any registration or other qualification of such Shares under any state or
      federal law or ruling of any governmental body that the Administrator determines
      to be necessary or advisable.

    

    20.2. No
      Obligation to Register Shares or Awards.
      The
      Company will be under no obligation to register the Shares under the Securities
      Act or to effect compliance with the registration, qualification or listing
      requirements of any state securities laws, stock exchange or automated quotation
      system, and the Company will have no liability for any inability or failure
      to
      do so.

    

    21.
       No
      Obligation to Employ.
      Nothing
      in this Plan or any Award granted under the Plan will confer or be deemed to
      confer on any Participant any right to continue in the employ of, or to continue
      any other relationship with, the Company or any Parent, Subsidiary or Affiliate
      of the Company or limit in any way the right of the Company or any Parent,
      Subsidiary or Affiliate of the Company to terminate Participant’s employment or
      other relationship at any time, with or without cause.

    

    22.
       Nonexclusivity
      of the Plan.
      Neither
      the adoption of the Plan by the Board, the submission of the Plan to the
      stockholders of the Company for approval, nor any provision of this Plan will
      be
      construed as creating any limitations on the power of the Board or the Committee
      to adopt such additional compensation arrangements as the Board may deem
      desirable, including, without limitation, the granting of stock options and
      bonuses otherwise than under the Plan, and such arrangements may be either
      generally applicable or applicable only in specific cases.

    

    
      
        23.
          Miscellaneous
          Provisions.

      

    

    

    23.1. No
      Rights Unless Specifically Granted.
      Unless
      otherwise expressly agreed to in writing by the Company, no employee or other
      person shall have any claim or right to be granted an Award under the Plan
      under
      any contract, agreement or otherwise. Determinations made by the Administrator
      under the Plan need not be uniform and may be made selectively among Eligible
      Participants under the Plan, whether or not such Eligible Participants are
      similarly situated.

    

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    23.2. No
      Rights Until Written Evidence Delivered.
      No
      Participant or other person shall have any right with respect to the Plan,
      the
      Shares reserved for issuance under the Plan or in any Award, contingent or
      otherwise, until written evidence of the Award, in the form of an Award
      Agreement, shall have been delivered to the recipient and all the terms,
      conditions and provisions of the Plan and the Award applicable to such recipient
      (and each person claiming under or through such recipient) have been
      met.

    

    23.3. Compliance
      with Applicable Law.
      No
      Shares, other Company securities or property, other securities or property,
      or
      other forms of payment shall be issued hereunder with respect to any Award
      unless counsel for the Company shall be satisfied that such issuance will be
      in
      compliance with applicable federal, state, local and foreign legal, securities
      exchange and other applicable requirements.

    

    23.4. Compliance
      with Rule 16b-3.
      If and
      when the provisions of Section 16 become applicable with respect to the
      securities of the Company, it is the intent of the Company that the Plan comply
      in all respects with Rule 16b-3 under the Exchange Act, that any ambiguities
      or
      inconsistencies in construction of the Plan be interpreted to give effect to
      such intention and that if any provision of the Plan is found not to be in
      compliance with Rule 16b-3, such provision shall be deemed null and void to
      the
      extent required to permit the Plan to comply with Rule 16b-3.

    

    23.5. Right
      to Withhold Payments.
      The
      Company and any Parent, Subsidiary and Affiliate of the Company shall have
      the
      right to deduct from any payment made under the Plan, any federal, state, local
      or foreign income or other taxes required by law to be withheld with respect
      to
      such payment. It shall be a condition to the obligation of the Company to issue
      Shares, other securities or property of the Company, other securities or
      property, or other forms of payment, or any combination thereof, upon exercise,
      settlement or payment of any Award under the Plan, that the Participant (or
      any
      beneficiary or person entitled to act) pay to the Company, upon its demand,
      such
      amount as may be requested by the Company for the purpose of satisfying any
      liability to withhold federal, state, local or foreign income or other taxes.
      If
      the amount requested is not paid, the Company may refuse to issue Shares, other
      securities or property of the Company, other securities or property, or other
      forms of payment, or any combination thereof. Notwithstanding anything in the
      Plan to the contrary, the Administrator may permit an Eligible Participant
      (or
      any beneficiary or person entitled to act) to elect to pay a portion or all
      of
      the amount requested by the Company for such taxes with respect to such Award,
      at such time and in such manner as the Administrator shall deem to be
      appropriate, including, but not limited to, by authorizing the Company to
      withhold, or agreeing to surrender to the Company on or about the date such
      tax
      liability is determinable, Shares, other securities or property of the Company,
      other securities or property, or other forms of payment, or any combination
      thereof, owned by such person or a portion of such forms of payment that would
      otherwise be distributed, or have been distributed, as the case may be, pursuant
      to such Award to such person, having a fair market value equal to the amount
      of
      such taxes.

    

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    23.6. Expenses
      of Administration.
      The
      expenses of administering the Plan shall be borne by the Company and its
      Subsidiaries and Affiliates. 

    

    23.7. Unfunded
      Plan.
      The
      Plan shall be unfunded. The Company shall not be required to establish any
      special or separate fund or to make any other segregation of assets to assure
      the payment of any Award under the Plan, and rights to the payment of Awards
      shall be no greater than the rights of the Company’s general
      creditors.

    

    23.8. Acceptance
      of Award Deemed Consent.
      By
      accepting any Award or other benefit under the Plan, each Participant and each
      person claiming under or through such Participant shall be conclusively deemed
      to have indicated such Participant’s (or other person’s) acceptance and
      ratification of, and consent to, any action taken by the Company, Administrator,
      Board or Committee or their respective delegates under the Plan.

    

    23.9. Fair
      Market Value Determined By the Administrator.
      Fair
      market value in relation to other securities or property of the Company, other
      securities or property or other forms of payment of Awards under the Plan,
      or
      any combination thereof, as of any specific time, shall mean such value as
      determined by the Administrator in accordance with the Plan and applicable
      law.

    

    23.10. Use
      of
      Terms. For
      the
      purposes of the Plan, in the use of any term, the singular includes the plural
      and the plural includes the singular wherever appropriate.

    

    23.11. Validity;
      Construction; Interpretation.
      The
      validity, construction, interpretation, administration and effect of the Plan,
      and of its rules and regulations, and rights relating to the Plan and Award
      Agreements and to Awards granted under the Plan, shall be governed by the
      substantive laws, but not the choice of law rules, of the State of
      Texas.

    

    24.
       Definitions.
      As used
      in this Plan, except as otherwise defined, the following terms will have the
      following meanings:

    

    “Administrator”
      means the Board or, if and to the extent the Board elects to delegate the
      administration of the Plan or does not administer the Plan, the
      Committee.

    

    “Affiliate”
      means any entity or person that directly, or indirectly through one or more
      intermediaries, controls, is controlled by, or is under common control with,
      another entity, where “control” (including the terms “controlled by” and “under
      common control with”) means the possession, directly or indirectly, of the power
      to cause the direction of the management and policies of the entity, whether
      through the ownership of voting securities, by contract or
      otherwise.

    

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    “Award”
      means any award under the Plan. 

    

    “Award
      Agreement” means, with respect to each Award, the signed written agreement
      between the Company and the Participant setting forth the terms and conditions
      of the Award.

    

    “Board”
      means the Board of Directors of the Company.

    

    “Cause”
      means the commission of any act of a material theft, embezzlement or fraud
      involving the Company or any Parent, Subsidiary or Affiliate of the Company,
      the
      Participant having been convicted of a crime (other than minor traffic
      violations and other minor misdemeanors), or a breach of fiduciary duty to
      the
      Company or any Parent, Subsidiary or Affiliate of the Company.

    

    “Change-of-Control
      Event” means any one or more of the following: (i) a dissolution or liquidation
      of the Company, (ii) a merger or consolidation in which the Company is not
      the
      surviving corporation (other than a merger or consolidation with a wholly-owned
      subsidiary, a reincorporation of the Company in a different jurisdiction, or
      other transaction in which there is no substantial change in the stockholders
      of
      the Company or their relative stock holdings and the Awards granted under this
      Plan are assumed, converted or replaced by the successor corporation, which
      assumption will be binding on all Participants), (iii) a merger in which the
      Company is the surviving corporation but after which the stockholders of the
      Company immediately prior to such merger (other than any stockholder that
      merges, or which owns or controls another corporation that merges, with the
      Company in such merger) cease to own their Shares or other equity interest
      in
      the Company, (iv) the sale of substantially all of the assets of the Company,
      or
      (v) the acquisition, sale, or other transfer of more than 50% of the outstanding
      capital stock of the Company by tender offer or similar
      transaction.

    

    “Code”
      means the Internal Revenue Code of 1986, as amended from time to time, or any
      successor thereto.

    

    “Committee”
      means compensation or other any committee the Board may appoint to administer
      the Plan. To the extent necessary and desirable, the Committee shall be composed
      entirely of individuals who meet the qualifications referred to in Section
      162(m) of the Code and Rule 16b-3 under the Exchange Act. If at any time or
      to
      any extent the Board shall not administer the Plan, then the functions of the
      Board specified in the Plan shall be exercised by the Committee.

    

    “Common
      Stock” means the common stock, par value $.001 per share, of the
      Company.

    

    “Company”
      means Woodland Hatchery, Inc., a Nevada corporation, or any successor
      corporation.

    

    “Disability”
      means the inability of a Participant to perform substantially his or her duties
      and responsibilities to the Company or to any Parent, Subsidiary or Affiliate
      by
      reason of a physical or mental disability or infirmity for a continuous period
      of six months, as determined by the Administrator. The date of such Disability
      shall be the last day of such six-month period or the date on which the
      Participant submits such medical evidence, satisfactory to the Administrator,
      that the Participant has a physical or mental disability or infirmity that
      will
      likely prevent the Participant from performing the Participant's work duties
      for
      a continuous period of six months or longer, as the case may be.

    

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    “Eligible
      Participant” means an officer, director, employee, consultant or advisor of the
      Company or of any Parent, Subsidiary or Affiliate. For purposes of the Plan,
      the
      term “employee” shall include all those individuals whose service with or for
      the Company and/or any Parent, Subsidiary or Affiliate of the Company, is within
      the definition of “employee” in the Rule as to the Use of Form S-8 contained in
      the General Instructions for the registration statement on Form S-8 promulgated
      by the Securities and Exchange Commission.

    

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

    

    “Exercise
      Price” means the per share price at which a holder of an Award may purchase the
      Shares issuable upon exercise of such Award.

    

    “Fair
      Market Value” as of a particular date shall mean the fair market value of a
      share of Common Stock as determined by the Administrator; provided, however,
      that
      Fair Market Value shall mean (i) if the Common Stock is listed or admitted
      to
      trade on a national securities exchange, the closing price of the Common Stock
      on the Composite Tape, as published in The Wall Street Journal, of the principal
      national securities exchange on which the Common Stock is so listed or admitted
      to trade, on such date, or, if there is no trading of the Common Stock on such
      date, then the closing price of the Common Stock as quoted on such Composite
      Tape on the next preceding date on which there was trading in such shares;
      (ii)
      if the Common Stock is not listed or admitted to trade on a national securities
      exchange but is listed and quoted on The Nasdaq Stock Market (“Nasdaq”), the
      last sale price for the Common Stock on such date as reported by Nasdaq, or,
      if
      there is no reported trading of the Common Stock on such date, then the last
      sale price for the Common Stock on the next preceding date on which there was
      trading in the Common Stock; (iii) if the Common Stock is not listed or admitted
      to trade on a national securities exchange and is not listed and quoted on
      Nasdaq, the mean between the closing bid and asked price for the Common Stock
      on
      such date, as furnished by the National Association of Securities Dealers,
      Inc.
      (“NASD”); (iv) if the Common Stock is not listed or admitted to trade on a
      national securities exchange, not listed and quoted on Nasdaq and closing bid
      and asked prices are not furnished by the NASD, the mean between the closing
      bid
      and asked price for the Common Stock on such date, as furnished by the National
      Quotation Bureau (“NQB”) or similar organization; and (v) if the stock is not
      listed or admitted to trade on a national securities exchange, not listed and
      quoted on Nasdaq and if bid and asked prices for the Common Stock are not
      furnished by the NASD, NQB or a similar organization, the value established
      in
      good faith by the Administrator.

    

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    “Incentive
      Stock Option” means any Option intended to be designated as an “incentive stock
      option” within the meaning of Section 422 of the Code.

    

    “Non-Qualified
      Stock Option” means any Option that is not an Incentive Stock Option, including,
      but not limited to, any Option that provides (as of the time such Option is
      granted) that it will not be treated as an Incentive Stock Option.

    

    “Option”
      means an option to purchase Shares granted pursuant to Section 5.

    

    “Parent”
      means any corporation (other than the Company) in an unbroken chain of
      corporations ending with the Company, if each of the corporations in the chain
      (other than the Company) owns stock possessing 50% or more of the combined
      voting power of all classes of stock in one of the other corporations in the
      chain.

    

    “Participant”
      means any Eligible Recipient selected by the Administrator, pursuant to the
      Administrator's authority, to receive grants of Options, awards of Restricted
      Stock, Stock Bonuses or other types of awards, or any combination of the
      foregoing.

    

    “Plan”
      means this 2003 Equity Incentive Plan.

    

    “Restricted
      Stock” means Shares subject to certain restrictions granted pursuant to Section
      6.

    

    “Restricted
      Period” means the period of time Restricted Stock remains subject to
      restrictions imposed on the Award of such Restricted Stock.

    

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

    

    “Shares”
      means shares of Common Stock reserved for issuance under or issued pursuant
      to
      the Plan, as adjusted pursuant to Section 4, and any successor
      security.

    

    “Stock
      Bonus” means an Award granted pursuant to Section 7.

    

    “Subsidiary”
      means any corporation (other than the Company) in an unbroken chain of
      corporations beginning with the Company, if each of the corporations (other
      than
      the last corporation) in the unbroken chain owns stock possessing 50% or more
      of
      the total combined voting power of all classes of stock in one of the other
      corporations in the chain. 

    

    “Ten
      Percent Stockholder” shall have the meaning assigned to it in Section
      5.4.

    

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    “Termination”
      or “Terminated” means, for purposes of the Plan with respect to a Participant,
      that such Participant has for any reason ceased to provide services as an
      employee, officer, director, consultant, independent contractor, or advisor
      to
      the Company or any Parent, Subsidiary or Affiliate of the Company. A Participant
      will not be deemed to have ceased to provide services in the case of (i) sick
      leave, (ii) military leave, or (iii) any other leave of absence approved by
      the
      Administrator, provided,
      that
      such leave is for a period of not more than 90 days, unless re-employment or
      reinstatement upon the expiration of such leave is guaranteed by contract or
      statute or unless provided otherwise pursuant to formal policy adopted from
      time
      to time by the Company and issued and promulgated to employees and other
      participants in writing. In the case of any Participant on an approved leave
      of
      absence, the Administrator may make such provisions respecting suspension of
      vesting of any Award previously granted to such Participant while such
      Participant is on leave from the Company or any Parent, Subsidiary or Affiliate
      of the Company as the Administrator may deem appropriate, except that in no
      event may an Option be exercised after the expiration of the term set forth
      in
      the Award Agreement with respect to such Option. The Administrator will have
      sole discretion to determine whether a Participant has ceased to provide
      services and the applicable Termination Date.

    

    “Termination
      Date” means the effective date of Termination, as determined by the
      Administrator.

     

    
      
        
        

      

      
        21LOAN AND SECURITY AGREEMENT

      This LOAN AND SECURITY AGREEMENT is entered into as of the 1st day of
June, 2005, by and between PracticeXpert of Oklahoma, Inc. ("Client"), and
Meridian Commercial Healthcare Finance, LLC ("Meridian").

                                    RECITALS

      A. Client is in the business of providing billing, management, consulting
and administrative services to medical practitioners and hospitals specializing
in radiation and medical oncology, as well as services to other physicians.

      B. Client has requested that Meridian make loans to Client as more fully
set forth herein.

      C. This Agreement is entered into and will be performed in California.

      NOW, THEREFORE, in consideration of the premises, and intending to be
legally bound hereby, the Parties hereby agree as follows:

                                    AGREEMENT

1. Certain Definitions and Index to Definitions. All terms contained in this
Agreement that are not specifically defined herein shall have the meanings
provided in the UCC. All accounting terms used herein shall have the meaning set
forth in Generally Accepted Accounting Principles. As used herein, the following
terms shall have the following meanings:

      1.1 "Affiliates" - Entities or individuals which are affiliated with
Client.

      1.2 "Aged Receivable Fee" - The product of the Aged Receivable Fee Percent
and the unpaid Estimated Net Realizable Value of an Eligible Account.

      1.3 "Aged Receivable Fee Commencement Date" - Sixty-one days from the
Invoice Date of an Eligible Account.

      1.4 "Aged Receivable Fee Percent" - 0.125%.

      1.5 "Aged Receivable Fee Period" - Beginning on the Aged Receivable Fee
Commencement Date and recurring every 7 days thereafter until the Breach Date.

      1.6 "Agreement" - This Loan and Security Agreement, together with all
exhibits and schedules hereto, as the same now exists or may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced.

      1.7 "Allowable Amount" - The lesser of the Borrowing Base or the Credit
Limit.

                                       1
<PAGE>

      1.8 "Anniversary Date" - The date that is one year from the Closing Date,
and the same date of each year thereafter.

      1.9 "Assignment Date" - The date on which Client receives a statement from
Meridian listing Accounts which Meridian has determined to be Eligible Accounts.

      1.10 "Availability Reserves" - As of any date of determination, such
amounts as Meridian may from time to time establish or revise in good faith
reducing the amount of Advances which would otherwise be available to Client
hereunder:

            1.10.1 To reflect events, conditions, contingencies or risks which,
do or may affect either (i) the Collateral or any other property which is
security for the Obligations or its value, (ii) the assets, business or
prospects of Client, or (iii) the security interest and other rights of Meridian
in the Collateral (including the enforceability, perfection and priority
thereof);

            1.10.2 To reflect that any collateral report or financial
information furnished by or on behalf of Client or any Obligor to Meridian is or
may have been incomplete, inaccurate or misleading in any material respect; or

            1.10.3 In respect of any state of facts that constitutes an Event of
Default or may, with notice or passage of time or both, constitute an Event of
Default.

      1.11 "Average Collections" - Average weekly proceeds of Eligible Accounts
received by Meridian during the Collection Period preceding the date on which
the calculation of Average Collections is to be made multiplied by the Average
Collections Multiple.

      1.12 "Average Collections Multiple" - 1.7.

      1.13 "Avoidance Claim" - Any claim that any payment received by Meridian
from or for the account of an Account Debtor that is avoidable under the United
States Bankruptcy Code or any other debtor relief statute.

      1.14 "Borrowing Base" - Eighty percent of the unpaid Estimated Net
Receivable Value of Eligible Accounts.

      1.15 "Breach Date" - The date which is 91 days from the Service Date.

      1.16 "Business Day" - Any day which is not a Saturday, Sunday, or other
day on which national banks are authorized or required to be closed.

      1.17 "Clearance Days" - Five days.

      1.18 "Client" - See Preamble hereof.

      1.19 "Closed" - an Eligible Account is Closed when its Estimated Net
Receivable Value has been paid in full to Meridian (including payment by
Client).

      1.20 "Closing Date" - The date on which this Agreement is accepted by
Meridian.

                                       2
<PAGE>

      1.21 "Collateral" - All now owned and hereafter acquired personal property
and fixtures, and proceeds thereof, (including proceeds of proceeds) including
without limitation Accounts, Chattel Paper, Inventory, Equipment, Instruments,
Investment Property, Documents, and General Intangibles.

      1.22 "Collection Period" - Ten weeks.

      1.23 "Credit Accommodation" - Any advance or other extension of credit by
Meridian to or on behalf of Client hereunder.

      1.24 "Credit Limit" - $750,000.00.

      1.25 "Credit Limit Increase" - The amount of an increase in the Credit
Limit, as requested by Client and agreed to by Meridian.

      1.26 "Cross Aged Account Debtor" - An Account Debtor, other than a
governmental entity, which owes Accounts of which more than 50% are unpaid on
the Breach Date.

      1.27 "Current Ratio" - the ratio of (i) the current assets of Borrower as
of the last day of each month, to (ii) the current liabilities of Borrower as of
the last day of such month; provided, that any intercompany transfers shall be
excluded from the determination of current assets or current liabilities hereof.

      1.28 "Data Interface Set Up Fee" - $1,500.00.

      1.29 "Default Rate" - 0.05% per day.

      1.30 "Default Waiver Fee" - $1,000.00.

      1.31 "Early Termination Event" - The termination of this Agreement (i) by
Client as provided in Section 15 hereof or (ii) or as a matter of law.

      1.32 "Early Termination Fee" - 3% of the Credit Limit if an Early
Termination Event occurs prior to the first Anniversary Date, 2% of the Credit
Limit if it occurs on or after the first Anniversary Date but prior to the
second Anniversary Date, or 1% of the Credit Limit if it occurs on or after the
second Anniversary Date but prior to the third Anniversary Date.

      1.33 "EBITDA" - shall mean for any period the sum of (i) net income of
Client for such period, plus (ii) all interest expense of the Client for such
period, plus (iii) all federal, state and local taxes actually paid for such
period, plus (iv) depreciation expenses for such period, plus (v) amortization
expenses for such period.

      1.34 "Eligible Account" -

            1.34.1 An Eligible Account is an Account which is not an Ineligible
Account.

            1.34.2 An Account owed by a Payor which has not honored a
Redirection Notice (as defined below) for more than ninety days from the sending
thereof shall not be an Eligible Account. A "Redirection Notice" is a notice
sent by either Meridian or by the Client at the direction of Meridian
instructing the recipient to send payments to an address selected by Meridian.

                                       3
<PAGE>

      1.35 "Estimated Net Receivable Value" - The amount which Meridian has
determined in its reasonable discretion, based upon information acquired by
Meridian, (including information from Client) which will be paid on account of
Eligible Accounts.

      1.36 "Event of Default" - See Section 12.1 hereof.

      1.37 "Exposed Payments" - Payments received by Meridian from a Payor that
has become subject to a bankruptcy proceeding, to the extent such payments
cleared said Payor's deposit account within ninety days of the commencement of
said bankruptcy case.

      1.38 "Financing Fee" - The Financing Fee Percentage multiplied by the
unpaid Estimated Net Receivable Value of an Eligible Account computed from
Assignment Date to the date on which it has been Closed.

      1.39 "Financing Fee Percentage" - 0.03%.

      1.40 "Governmental Lock Box" - A lock box relationship between Client and
a Governmental Lock Box Bank.

      1.41 "Governmental Lock Box Bank" - A financial institution acceptable to
Meridian which has entered into a Lock Box Agreement.

      1.42 "Guarantor(s)" - All individuals or entities now or hereafter
guaranteeing the Obligations.

      1.43 "HIPAA" - Health Insurance Portability and Accountability Act of
1996, as amended.

      1.44 "HHS" - United States Department of Health and Human Services or any
other governmental agency in charge of enforcing HIPAA.

      1.45 "Increased Credit Limit Fee" - The product of the Increased Credit
Limit Fee Percent and the Credit Limit Increase.

      1.46 "Increased Credit Limit Fee Percent" - 1.75%.

      1.47 "Ineligible Account" - An Account which:

            1.47.1 Is disputed by the Payor or Account Debtor obligated thereon;

            1.47.2 Is owed by a Cross Aged Account Debtor;

            1.47.3 Is a portion of Accounts due from an Account Debtor which is
in excess of 25% percent of Client's aggregate dollar amount of all outstanding
Accounts;

                                       4
<PAGE>

            1.47.4 Is not acceptable to Meridian in the exercise of its
reasonable credit or business judgment;

            1.47.5 Is not bona fide obligation created by the sale and delivery
of goods or the rendition of services in the ordinary course of Client's
business; or

            1.47.6 Remains unpaid beyond the Breach Date.

      1.48 "Invoice" - The Record that evidences an Account. Where the context
so requires, reference to an Invoice shall be deemed to refer to the Account to
which it relates.

      1.49 "Invoice Date" - The date of an Invoice.

      1.50 "Lock Box Agreement" - An agreement among Client, Meridian and the
Governmental Lock Box Bank wherein (i) the Governmental Lock Box Bank agrees to
sweep all deposits to Lock Box Account (whether or not represented by collected
funds) into a deposit account identified in said Agreement which is owned by
Meridian, (ii) the Client is permitted to revoke such sweep instructions upon
written instructions from Client to the Governmental Lock Box Bank predicated on
Client notifying Meridian of Client's intent to revoke said instructions no
later than two weeks prior to sending instructions to Governmental Lock Box Bank
and (iii) the Governmental Lock Box Bank agrees to immediately notify Meridian
in writing upon receipt of such instructions.

      1.51 "Meridian" - See Preamble.

      1.52 "Minimum Current Ratio" - 0.9:1.0.

      1.53 "Minimum EBITDA" - $1.00.

      1.54 "Minimum Monthly Fee" - $5,500.00.

      1.55 "Minimum Overadvance Fee" - $500.00.

      1.56 "Misdirected Payment Fee" - 15% of the amount of any payment on an
Account where said payment has been received by Client and not delivered in kind
by Client to Meridian or the Governmental Lock Box, as the case may be, other
than through inadvertence, within three Business Days of receipt thereof, and
18% per annum thereafter on said amount, computed from the end of said three day
period to the date of payment by Client to Meridian.

      1.57 "Monitoring Fee" - The product of the Monitoring Fee Percentage and
the Credit Limit.

      1.58 "Monitoring Fee Percentage" - 0.06%.

      1.59 "Obligations" - All present and future obligations owing by Client to
Meridian whether or not for the payment of money, whether direct or indirect,
absolute or contingent, whether arising before, during or after the commencement
of any case under the United States Bankruptcy Code in which Client is a debtor.

                                       5
<PAGE>

      1.60 "Origination Fee" - The product of the Origination Fee Rate and the
Credit Limit.

      1.61 "Origination Fee Rate" - 1.75%.

      1.62 "Overadvance" - The amount, if any, by which the Obligations exceed
the Borrowing Base.

      1.63 "Overadvance Fee" - The Overadvance Fee Rate multiplied by the
Overadvance, plus the Minimum Overadvance Fee. The Overadvance Fee in any week
shall be no less than the Minimum Overadvance Fee.

      1.64 "Overadvance Fee Rate" - 1%.

      1.65 "Payor" - An Account Debtor or other obligor on an Account, or entity
making payment thereon for the account of such party.

      1.66 "Protected Health Information" - Has the meaning given to such term
in 45 CFR Section 164.501 including any information, whether oral or recorded in
any form or medium: (i) that relates to the past, present or future physical or
mental condition of an individual; the provision of health care to an
individual; or the past, present or future payment for the provision of health
care to an individual; and (ii) that identifies the individual or with respect
to which there is a reasonable basis to believe that the information can be used
to identify the individual.

      1.67 "Renewal Fee" - 1.75% of the Credit Limit.

      1.68 "Schedule of Accounts" - A form supplied by Meridian from time to
time wherein Client lists such of its Accounts as it requests that Meridian
accept as collateral under the terms of this Agreement.

      1.69 "Service Date" - The date on which services are rendered.

      1.70 "Submission" - See Section 2.1.

      1.71 "Stand-alone EBITDA" - the Client's EBITDA less any expenses incurred
by Client for services rendered in exchange for common stock/options.

      1.72 "Term" - Three years.

      1.73 "Termination Date" - the earlier of (i) the end of the next maturing
Term, unless this Agreement is extended in accordance with its terms, or (ii)
the date on which Meridian elects to terminate this Agreement pursuant to the
terms herein.

      1.74 "UCC" - The Uniform Commercial Code in effect in California at the
date on which a determination thereunder is to be made.

                                       6
<PAGE>

2. Credit Facilities.

      2.1 On the 1st Business Day of each week Client shall electronically
transmit to Meridian a record of all of its Accounts created and not previously
transmitted to Meridian (a "Submission").

      2.2 Meridian shall determine in its sole discretion, which of the Accounts
included in a Submission are Eligible Accounts.

      2.3 Meridian shall prepare and transmit to Client a Borrowing Base
Certificate in the form of Exhibit 2.3 hereto, reflecting the addition of the
new Eligible Accounts and all other transactions which affect the Borrowing
Base. At the request of Client in the form of Exhibit 2.3 hereto, and subject to
Client's availability under the Borrowing Base Certificate, Meridian shall, from
time to time, at the request of Client, make advances to Client, less any
Availability Reserves, so long as, before and after such advance, the
Obligations do not exceed the Allowable Amount.

      2.4 Meridian shall not make any advance to Client that would cause the
total of all advances made to Client in any week to exceed Average Collections.

      2.5 Notwithstanding anything to the contrary contained herein, Lender
shall not be obligated to make an advance hereunder to the extent that, before
or as a result thereof, the Obligations shall exceed the Allowable Amount.

3. Payments by Client.

      3.1 Place of Payments. Client hereunder shall make all payments to
Meridian at the address of Meridian set forth herein, or at such other place as
Meridian may designate in writing; provided, however, that Client may also send
payments to Meridian by wire transfers or ACH debits.

      3.2 ACH Debits. In order to satisfy any of the Obligations, Meridian is
hereby authorized by Client to initiate electronic debit entries through the ACH
or other electronic payment system to any account maintained by Client. At
Meridian's request, Client shall execute and deliver to Meridian an
authorization agreement for ACH debits.

4. Clearance Days. For all purposes under this Agreement, Clearance Days will be
added to the date on which Meridian receives any payment.

5. Fees. Client shall pay to Meridian:

      5.1 Aged Receivable Fee. The Aged Receivable Fee on the unpaid Estimated
Net Receivable Value of each Eligible Account at the end of each Aged Receivable
Fee Period until the earlier of (a) the date such Eligible Account is Closed, or
(b) the Breach Date, computed from the Aged Receivable Fee Commencement Date.

      5.2 Data Interface Set Up Fee. The unpaid portion of any Data Interface
Set Up Fee, immediately upon Client's receipt of the proceeds of the initial
Advance hereunder.

                                       7
<PAGE>

      5.3 Default Waiver Fee. The Default Waiver Fee to Meridian, immediately
upon the waiver by Meridian of any Event of Default hereunder, so long as the
waiver was done at the Client's request.

      5.4 Early Termination Fee. The Early Termination Fee, immediately upon the
occurrence of an Early Termination Event.

      5.5 Financing Fee. The Financing Fee every seven days commencing on the
Assignment Date, and on the day an Eligible Account is Closed.

      5.6 Increased Credit Limit Fee. The Increased Credit Limit Fee,
immediately upon granting by Meridian of Client's request for an increase in the
Credit Limit.

      5.7 Minimum Monthly Fee. Any amount by which the sum of the Monitoring Fee
and the Financing Fee earned in any month (prorated for partial months) is less
than the Minimum Monthly Fee, on the first day of the following month.

      5.8 Misdirected Payment Fee. The Misdirected Payment Fee immediately upon
its accrual.

      5.9 Missing Document Fee. $500.00 per day for every day that Client has
failed to deliver to Meridian the documents required in Section 8.10.

      5.10 Monitoring Fee. The Monitoring Fee, every seven days from the initial
Assignment Date to the last to occur of (a) the Termination Date or an Early
Termination Event, and (b) payment in full of the Obligations.

      5.11 Overadvance Fee. The Overadvance Fee, payable as to any week in which
an Overadvance occurs, and payable on the first Business Day of the following
week.

      5.12 Origination Fee. The Origination Fee, which shall be payable out of
any sums due from Meridian to Client hereunder.

      5.13 Out-of-pocket Expenses. The out-of-pocket expenses directly incurred
by Meridian in the administration of this Agreement such as wire transfer fees,
postage, audit fees, and lockbox fees, on demand.

6. Grant of Security Interest. To secure the payment and performance in full of
the Obligations, the Client grants to Meridian a security interest in the
Collateral, and all proceeds and products thereof.

7. Authorization to Meridian.

      7.1 Client irrevocably authorizes Meridian to exercise any the following
powers until the Obligations have been paid in full and this Agreement has been
terminated:

                                       8
<PAGE>

            7.1.1 Receive, take, endorse, assign, deliver, accept and deposit,
in the name of Meridian or Client, any and all cash, checks, commercial paper,
drafts, remittances and other instruments and documents relating to the
Collateral or the proceeds thereof;

            7.1.2 Take or bring, in the name of Meridian or Client, all steps,
actions, suits or proceedings deemed by Meridian necessary or desirable to
effect collection of or other realization upon the Accounts and other
Collateral;

            7.1.3 Pay any sums necessary to discharge any lien or encumbrance
which is senior to Meridian's security interest in the Collateral, which sums
shall be included as Obligations hereunder and due on demand;

            7.1.4 Except as prohibited by law, notify any Payor that the
underlying Account has been assigned to Meridian and that payment thereof is to
be made only to Meridian, in the form of Exhibit 7.1.4 or such other form as
Meridian may from time to time reasonably adopt as Meridian deems necessary to
insure that the recipient thereof will make payment to Meridian;

            7.1.5 Communicate directly with Payors to verify the amount and
validity of any Account created by Client;

            7.1.6 To file one or more financing statements and initial financing
statements describing the Collateral. Client irrevocably authorizes Meridian to
sign Client's name on any security agreement, mortgage, assignment, certificate
of title, affidavit, letter of authority, or notice or other similar document
necessary to perfect or continue the perfection of Meridian's security interest
in the Collateral. Client shall make appropriate entries in Client's books and
records disclosing Meridian's security interest in the Collateral.

            7.1.7 After an Event of Default:

                  (a) Change the address for delivery of mail to Meridian and to
receive and open mail addressed to Client, provided that Meridian shall mail to
Client, at Client's expense, all original documents and correspondence, other
than payments, that Meridian receives as a result of such change of address;

                  (b) Extend the time of payment of, compromise or settle for
cash, credit, return of merchandise, and upon any terms or conditions, any and
all Accounts or other Collateral that includes a monetary obligation and
discharge or release any Account Debtor or other obligor (including filing of
any public record releasing any lien granted to Client by such account debtor),
without affecting any of the Obligations;

      7.2 Client hereby releases and exculpates Meridian, its officers,
employees and designees, from any liability (other than liability for contract
damages, if any) arising from any acts under this Agreement or in furtherance
thereof whether of omission or commission, and whether based upon any error of
judgment or mistake of law or fact, except for willful misconduct or gross
negligence. In no event will Meridian have any liability to Client for lost
profits or other special or consequential damages.

                                       9
<PAGE>

      7.3 Meridian may accept, indorse and deposit any checks tendered by an
Account Debtor or other payor "in full payment" of its obligation to Client.
Client shall not assert against Meridian any claim arising therefrom,
irrespective of whether such action by Meridian causes an accord and
satisfaction of Client's claims, under ss.3-311 of the UCC or otherwise.

8. Covenants by Client.

      8.1 Client shall not (i) merge or consolidate with any other entity or
person, or (ii) purchase all or substantially all of the assets of any other
entity or person.

      8.2 After written notice by Meridian to Client, and automatically, without
notice, after an Event of Default, Client shall not (a) grant any extension of
time for payment of any of the Accounts, (b) compromise or settle any of the
Accounts for less than the full amount thereof, (c) release in whole or in part
any Payor or (d) grant any credits, discounts, allowances, deductions, return
authorizations or the like with respect to any of the Accounts.

      8.3 From time to time as requested by Meridian, at the sole expense of
Client, Meridian shall have access, during reasonable business hours if prior to
an Event of Default and at any time on or after an Event of Default, to all
premises where Collateral is located for the purposes of inspecting (and
removing, on or after ten days after the occurrence of an Event of Default) any
of the Collateral, including Client's books and records, and Client shall permit
Meridian or its designee to make copies of such books and records or extracts
therefrom as Meridian may request. Without expense to Meridian, Meridian may use
any of Client's personnel, equipment, including computer equipment, programs,
printed output and computer readable media, supplies and premises for the
collection of Accounts and realization on other Collateral as Meridian, in its
sole discretion, deems appropriate. Client hereby irrevocably authorizes all
accountants and third parties to disclose and deliver to Meridian at Client's
expense all financial information, books and records, work papers, management
reports and other information in their possession relating to Client.

      8.4 Before sending any Invoice to any Payor, Client shall instruct that
all payments on account thereof be made directly to:

            8.4.1 Meridian, if the Account is not the result of healthcare
services provided pursuant to a program of the United States Government which
requires that payments thereunder be made only to the Governmental Lock Box, in
all other cases,

            8.4.2 The Governmental Lock Box, by sending the form of Notice to
Payors of Governmental Receivables (or such other form as shall be selected by
Meridian) attached hereto as Exhibit 8.3.2.

      8.5 Client shall pay when due all payroll and other taxes, and shall
provide proof thereof to Meridian in such form as Meridian shall reasonably
require.

      8.6 Client shall not create, incur, assume or permit to exist any lien
upon or with respect to any Collateral now owned or hereafter acquired by
Client. At the request of Client, Meridian shall enter into an agreement in the
form of Exhibit 8.5 hereto consenting to the creation of a security interest in
any Collateral that is Equipment or Inventory, so long as Client is not in
default hereunder at the time of such request.

                                       10
<PAGE>

      8.7 Notwithstanding that Client has agreed to pay the Misdirected Payment
Fee to Meridian, Client shall deliver any proceeds of any Account received by
Client within three Business Days of receipt thereof.

      8.8 At all times during the term of this Agreement, Client shall comply
with all applicable provisions of HIPAA and the regulations promulgated
thereunder.

      8.9 In the event that the Client becomes subject to any debtor-relief
proceeding, the Client shall not take any position contrary to Meridian with
respect to a proposed plan of reorganization or liquidation submitted or agreed
upon by Meridian in connection therewith.

      8.10 Client will deliver to Meridian the following:

            8.10.1 Within thirty days after the end of each calendar month and
sixty days after the end of each fiscal year, Client's financial statements for
such period and for that portion of its fiscal year through the end of such
period including Client's statement of profit and loss, and balance sheet and
PracticeXpert, Inc.'s statement of operating cash flow, all in reasonable
detail, and within forty-five days after the end of Client's fiscal quarters,
Client's quarterly consolidated financial statements reviewed by a Certified
Public Accountant and Client's trial balance.

            8.10.2 Within four months after the end of Client's fiscal year,
PracticeXpert, Inc.'s annual audited consolidated financial statements for such
year.

            8.10.3 Within two Business Days following their submission or filing
to the appropriate Payor intermediary, a copy of all interim and annual cost
reports prepared by Client.

            8.10.4 Contemporaneously with the delivery of a Submission under
Section 2.1 hereof, a monthly aging based on Invoice Date, for all Accounts
together with reconciliations to the Client's balance sheet.

            8.10.5 Reconciliations of all collections received with respect to
all such Accounts within five days after the end of each month.

            8.10.6 A monthly aging of all accounts payable of Client aged by
date of invoice or such other date as may be acceptable to Meridian.

            8.10.7 Tax Returns. Copies of each of Client's:

                  (a) Federal income tax returns, and any amendments thereto,
within ten days of the filing thereof with the Internal Revenue Service; and

                  (b) Federal payroll tax returns within ten days of filing,
together with proof, satisfactory to Meridian, which all taxes have been paid.

                                       11
<PAGE>

            8.10.8 Such other information concerning the Client or the Client's
contract billing and collection company as Meridian may from time to time
reasonably request including Medicare cost reports and audits.

            8.10.9 Within twenty days after the end of each month, copies of all
bank statements of Client for the prior month.

            8.10.10 Any correspondence, which shall include, but not be limited
to, facsimiles, e-mail, overnight delivery (e.g. Federal Express) and mail
delivered by the U.S. Postal Service, received from Payors, immediately upon
receipt. After an Event of Default, any correspondence delivered to Client in a
closed envelope shall be delivered to Meridian unopened. Failure to comply shall
result in a fee of $20.00 for each item of correspondence.

            8.10.11 Written notification of the occurrence of any Event of
Default, promptly upon the occurrence thereof;

            8.10.12 Promptly upon receipt, copies of any letters, complaints or
other documents from HHS to Client regarding any allegations of HIPAA
violations.

      8.11 The proceeds received by Client from the Agreement will be used for
legal business and commercial purposes of the Client and the execution of the
Agreement is made in good faith by the Client and without actual intent to
hinder, delay, or defraud present or future creditors of the Client.

      8.12 Client shall deliver to Meridian any instrument necessary for
Meridian to obtain records from any service bureau maintaining records for
Client. Client shall not re-date any Eligible Account from the original date
thereof or make any claims for reimbursement beyond those customary in Client's
industry, or otherwise extend or modify the terms thereof.

      8.13 Client shall not make any payments to any entities which are its
Affiliates, other than payments to PracticeXpert, Inc.

      8.14 Client will cooperate with Meridian in obtaining control with respect
Collateral consisting of: (a) deposit accounts; (b) investment property; (c)
letter-of-credit rights; and (d) electronic chattel paper. Client will not
create any chattel paper without placing a legend on the chattel paper
acceptable to Meridian indicating that Meridian has a security interest in the
chattel paper.

      8.15 Client will, when requested by Meridian, execute any document or
instrument or do any other thing necessary to effectuate more fully the purposes
and provisions of this Agreement.

      8.16 On the earlier of (a) thirty (30) calendar days after a request by
Meridian or (b) seven (7) calendar days after an Event of Default, Client shall
appoint a healthcare management consultant satisfactory to Meridian at Client's
expense, to assist in the operation of the Client's facilities.

                                       12
<PAGE>

      8.17 Financial Covenants.

            8.17.1 Client's Current Ratio shall not be less than the Minimum
Current Ratio as of the end of and as a result of the operations during any
month.

            8.17.2 Client's EBITDA shall be at least the Minimum EBITDA as of
the end of and as a result of the operations during any quarter.

            8.17.3 Client's average monthly Stand-alone EBITDA shall be at least
$60,000 per month during the three month period immediately preceding the date
of measurement.

            8.17.4 Client shall have an excess of gross profit over the sum of
selling and marketing expenses, general and administrative expenses and interest
from continuing operations, excluding any nonrecurring charges.

            8.17.5 Client shall give Meridian the same notice of any meetings of
the client's Board of Directors or similar governing body as it gives to any
other attendees, and shall permit Meridian to attend such meetings as an
observer.

9. Account Disputes. Client shall notify Meridian promptly of and, if requested
by Meridian, will settle all disputes concerning any Eligible Account, or the
return of any goods to the Payor for any reason, at Client's sole cost and
expense. Meridian may, but is not required to, attempt to settle, compromise, or
litigate (any such action, to "Resolve") the dispute upon such terms as Meridian
in its sole discretion deems advisable, for Client's account and risk and at
Client's sole expense.

10. Representations and Warranties. Client represents and warrants that:

      10.1 Corporation. If the Client is a corporation, it is duly organized,
validly existing, and in good standing under the laws of the state of its
incorporation, is qualified to do business as a foreign corporation, is in good
standing under the laws of each state where the Client is doing business, has
all requisite power and authority necessary to carry on its business as now
being conducted, and to enter into and perform under the terms of the Agreement,
all exhibits thereto, and all related documents.

      10.2 Validity of Documents. The execution, delivery, and performance by
the Client of this Agreement and any related documents and any additional
documents required by Meridian have been duly authorized by all appropriate
action on behalf of the Client. When executed and delivered by the Client, this
Agreement and such related documents will be the legal, valid and binding
obligations of the Client, enforceable against the Client in accordance with
their respective terms, except for the effect thereon of any applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
the rights of creditors generally, and general principles of equity. Upon the
filing of the applicable financing statement(s) and/or any release or
termination of any financing statement(s) in the appropriate jurisdiction(s) in
connection with the Agreement, all right, title and interest in the Collateral
that may be perfected by filing will be perfected.

                                       13
<PAGE>

      10.3 Authenticity of Documents. All information, receivable data,
documents, and data interface including, without limitation, all information
included in documents and data interface pertaining to its Accounts which has
been provided by Client to Meridian and all information in any application for
this Agreement is authentic and accurate in all material respects. Subject to
compliance with any HIPAA requirements, the Client further warrants and
represents that Client or its agents may disclose information concerning medical
services rendered to the patient who is the subject of any Eligible Account.

      10.4 Authority to Execute Documents. The execution and delivery by the
Client of this Agreement and any related documents do not, and the performance
by the Client of this Agreement will not, violate or conflict with:

            10.4.1 Any agreement to which Client is a party;

            10.4.2 The Articles or Certificate of Incorporation and By-laws of
the Client;

            10.4.3 Any law, regulation, order, writ, judgment or decree of any
court or governmental agency to which the Client, which violation, conflict,
breach or default would have a materially adverse effect on the Client.

      10.5 Client Has Legal Authority to Conduct Business. The Client has all
material permits, licenses, accreditation, certifications, authorizations,
approvals, consents, and agreements of all Payors, governmental agencies,
instrumentalities, accreditation agencies and any other person(s), necessary or
required for the Client (where the failure to have one or more of any such items
would materially impair the Client's ability) to own the assets that it now
owns, to carry on its business as now conducted, to execute, deliver and perform
its obligations hereunder, and to receive payments on Eligible Accounts from the
applicable obligors thereon. The Client has not been notified by any such
obligor, governmental agency, instrumentality, accreditation agency or any other
person during the twenty-four month period immediately preceding the date of
this Agreement, that such person has rescinded or not renewed, or intends to
rescind or not renew, any such material permit, license, accreditation,
certification, authorization, approval, consent or agreement granted by it to
the Client or to which it and the Client are parties.

      10.6 No Special Authority Required. No authorization, approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery, and performance by
the Client of this Agreement or any other document or instrument to be
delivered.

      10.7 No Lawsuits Pending. There are no actions, suits, investigations, or
proceedings pending or threatened against the Client before any court,
government agency, or other tribunal, which, if determined adversely to the
Client, could materially and adversely affect the Client's ability to perform
its obligations pertaining to this Agreement, and the Client is not currently
subject to, and has no intention of commencing, any bankruptcy or insolvency
proceeding.

      10.8 Disclosure of Protected Health Information. Client shall disclose
Protected Health Information in accordance with the HIPAA Business Associate
Addendum in the form attached hereto as Exhibit 10.8.

                                       14
<PAGE>

      10.9 Compliance with Laws. The Client is in compliance with all laws,
rules, regulations, orders, decrees, and directions of any governmental
authority applicable to the Eligible Accounts or any contracts relating thereto,
a violation of which would or could materially and adversely affect Client's
ability to carry out its obligations hereunder. Such laws include but are not
limited to HIPAA and the regulations promulgated thereunder.

      10.10 Pension and Profit Sharing Plans. The pension and profit sharing
plans, if any, of the Client (and its subsidiaries, if any) are in full
compliance with all applicable state and federal laws and regulations and fully
funded in accordance with the obligations of the Client (and its subsidiaries,
if any) thereunder.

      10.11 No Existing Disputes. There is no event that materially and
adversely affects Client's operations including its ability to perform its
obligations hereunder and the transactions contemplated by the Agreement. There
is no default in the performance or observance of any contract, indenture,
mortgage, loan agreement, lease, or other material instrument, to which the
Client is a party or by which it or any of its properties is bound, involving an
amount in controversy in excess of $5,000; however, the Client shall not be
considered in default hereunder if the validity of any claim in controversy, or
the amount thereof, is being contested in good faith by appropriate actions or
proceedings and there is no material interference with the business of the
Client or collection of its Accounts caused by the continuation of such actions
or proceedings.

      10.12 No Injunctions, Restraining Orders or Disputes. There is no
injunction, writ, restraining order, or other order of any nature materially and
adversely affecting the Client's performance of its obligations hereunder and
the transactions contemplated by the Agreement.

      10.13 Accuracy of Client Name. The true and complete name of the Client is
set forth at the beginning of the Agreement and on the signature pages hereof
and is the same name registered with the Secretary of the State of incorporation
or organization. Such name has not been changed in the last four months, and
during such period the Client did not use, nor does the Client now use, any
trade names, fictitious names, assumed names or "doing business as" names except
as disclosed in a separate schedule to the Agreement.

      10.14 Valid Provider Identifications. The Client holds current and valid
Provider Numbers authorizing it to render Medicare and Medicaid services and
will advise Meridian, in writing as to all such existing and future numbers
promptly upon their issuance. The Client has exclusive use of such numbers, and
the licenses necessary to receive payment from the applicable obligors on
Eligible Accounts. The Client has not allowed, permitted, authorized or caused
any person, other than the Client, to use such numbers.

      10.15 Client is Solvent. The Client is solvent and, after giving effect to
the transactions contemplated by the Agreement, will not become insolvent. The
Client is able to pay its debts as they become due and payable, and, after
giving effect to the transactions contemplated by this Agreement, will have
adequate capital to conduct its business.

      10.16 With respect to Eligible Accounts:

            10.16.1 They will be at the time of submission to Meridian:

                                       15
<PAGE>

                  (a) Bona fide existing obligations created by the sale and
delivery of goods or the rendition of services in the ordinary course of
Client's business;

                  (b) Unconditionally owed and will be paid to Meridian (except
as prohibited by law) without defenses, disputes, offsets, counterclaims, or
rights of return or cancellation.

                  (c) Not sales to any entity that is affiliated with Client or
in any way not an "arms length" transaction.

            10.16.2 Fees for services which are subject to limitations imposed
by workers' compensation regulations or by contracts for reimbursement do not
exceed the limitations imposed there under, and each for which the fees are so
restricted has been clearly identified to Meridian as being subject to such
restriction.

            10.16.3 Upon Meridian's request, Client shall deliver to Meridian
any instrument necessary for Meridian to obtain records from any service bureau
maintaining records for Client.

            10.16.4 Client shall not change the date from the original date
thereof or make any claims for reimbursement beyond those customary in Client's
industry, or otherwise extend or otherwise modify the terms thereof.

            10.16.5 Client has not received notice or otherwise learned of
actual or imminent bankruptcy, insolvency, or material impairment of the
financial condition of any Account Debtor regarding Eligible Accounts.

      10.17 Tax Returns. The Client has filed (or has obtained extensions for
filing) all returns for all federal, state and local taxes, including income and
payroll taxes, on a timely basis or has an agreement of settlement with an
approved payment plan with the relevant agency.

      10.18 Appropriate Collection of Accounts. All documents and agreements
relating to an Account and any pre-audit worksheets relating to such Account
have been delivered to Meridian and such documents are true and correct in all
material respects. The Client has timely and properly billed the applicable
Payor and the Client has delivered or caused to be delivered to such Payor all
required supporting claim documents with respect thereto including all
documentation required by the applicable Payor(s) for payment on the Account,
and the statutory period for issuing an explanation of benefits in connection
therewith has not expired. All information set forth in the bill and supporting
claim documents submitted to a Payor with respect to an Account is true,
complete, and correct in all material respects, and, if additional information
is requested by such Payor in connection therewith, the Client will promptly
provide the same and will rebill such Account, if necessary.

      10.19 Financial Information is Accurate. The representations, warranties
and statements made by the Client in the Agreement and in any financial
information with respect to the Client delivered to Meridian including, without
limitation, any description of the Accounts, remain true and correct and do not
contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made therein not misleading.

                                       16
<PAGE>

      10.20 Capitalization. The capitalization of the Client is as set forth in
Exhibit 10.20.

      10.21 Invoice Date. No Invoice Date will be more than thirty days from the
date on which the services reflected in the Invoice were rendered.

11. Avoidance Claims.

      11.1 Client shall indemnify Meridian from any loss arising out of the
assertion of any Avoidance Claim and shall pay to Meridian on demand the amount
thereof.

      11.2 Client shall notify Meridian within two Business Days of it becoming
aware of the assertion of an Avoidance Claim.

      11.3 This provision shall survive termination of this Agreement.

12. Default.

      12.1 Events of Default. Each of the following events will constitute an
Event of Default hereunder:

            12.1.1 Client defaults in the payment of any Obligations or in the
performance of provision hereof or of any other agreement now or hereafter
entered into with Meridian;

            12.1.2 Any warranty or representation made by Client herein proves
to be false in any way, howsoever minor;

            12.1.3 The Obligations are in excess of the Allowable Amount;

            12.1.4 Client or any Guarantor becomes insolvent or the subject of
any debtor-relief proceedings;

      t 12 12.1.5 Any Guarantor fails to perform or observe any obligations to
Meridian or shall notify Meridian of its intention to rescind, modify, terminate
or revoke any guaranty of the Obligations, or any such guaranty shall cease to
be in full force and effect for any reason whatever;

            12.1.6 Meridian for any reason, in good faith, deems itself insecure
with respect to the prospect of repayment or performance of the Obligations,
which reason shall be provided to Client in writing;

            12.1.7 Any levy of attachment, execution, tax lien or similar
process shall be issued against Client with respect to the Collateral and shall
not have been released or stayed within five days thereof; and

            12.1.8 Failure to timely comply with any Notice of Required Action
issued by HHS to Client.

                                       17
<PAGE>

      12.2 Waiver of Notice. MERIDIAN'S FAILURE TO CHARGE OR ACCRUE INTEREST OR
FEES AT ANY "DEFAULT" OR "PAST DUE" RATE SHALL NOT BE DEEMED A WAIVER BY
MERIDIAN OF ITS CLAIM THERETO.

      12.3 Effect of Default. Ten days after the occurrence of any Event of
Default and Meridian sending notice thereof to Client, in addition to any rights
Meridian has under this Agreement or applicable law:

            12.3.1 Meridian may immediately terminate this Agreement, at which
time all Obligations shall become immediately due and payable without notice.

            12.3.2 All Obligations shall accrue interest at the Default Rate
commencing from the date of first occurrence of such Event of Default.

            12.3.3 Meridian shall have the option to engage a consulting,
turnaround or similar firm (a) to conduct an operational assessment of Client,
in form and substance satisfactory to Meridian in its sole discretion and/or (b)
to take day-to-day operational and administrative control of the business of the
Client. If Meridian exercises its option to engage a consulting, turnaround or
similar firm, Meridian shall submit the names of at least two (2) such firms to
the board of directors of Client for approval. The board of directors of Client
shall approve the engagement of at least one (1) of the firms proposed by
Meridian within five (5) Business Days of Meridian providing the names of such
firms to Client. Client shall (a) bear all fees, costs and other expenses
associated with such services and (b) cooperate with such firm in carrying out
such services.

13. Account Stated. Meridian shall render to Client a statement setting forth
the transactions arising hereunder. Each statement shall be considered correct
and binding upon Client as an account stated, except to the extent that Meridian
receives, within sixty days after the mailing of such statement, written notice
from Client of any specific exceptions by Client to that statement, and then it
shall be binding against Client as to any items to which it has not objected.

14. Waiver. No failure to exercise and no delay in exercising any right, power,
or remedy hereunder shall impair any right, power, or remedy which Meridian may
have, nor shall any such delay be construed to be a waiver of any of such
rights, powers, or remedies, or any acquiescence in any breach or default
hereunder; nor shall any waiver by Meridian of any breach or default by Client
hereunder be deemed a waiver of any default or breach subsequently occurring.
All rights and remedies granted to Meridian hereunder shall remain in full force
and effect notwithstanding any single or partial exercise of, or any
discontinuance of action begun to enforce, any such right or remedy. The rights
and remedies specified herein are cumulative and not exclusive of each other or
of any rights or remedies that Meridian would otherwise have. Any waiver,
permit, consent or approval by Meridian of any breach or default hereunder must
be in writing and shall be effective only to the extent set forth in such
writing and only as to that specific instance.

15. Termination; Effective Date.

      15.1 This Agreement shall become effective upon the execution and delivery
hereof by Client and Meridian and shall continue in full force and effect for
the Term.

                                       18
<PAGE>

      15.2 Upon the Termination Date, the unpaid balance of the Obligations
shall be due and payable without demand or notice.

      15.3 Exposed Payments.

            15.3.1 Upon termination of this Agreement Client shall pay to
Meridian (or Meridian may retain), to hold in a non-segregated non-interest
bearing account the amount of all Exposed Payments (the "Preference Reserve").

            15.3.2 Meridian may charge the Preference Reserve with the amount of
any Exposed Payments that Meridian pays to the bankruptcy estate of the Account
Debtor or Payor that made the Exposed Payment, on account of a claim asserted
under Section 547 of the Bankruptcy Code.

            15.3.3 Meridian shall refund to Client from time to time that
balance of the Preference Reserve for which a claim under Section 547 of the
Bankruptcy Code can no longer be asserted due to the passage of the statute of
limitations, settlement with the bankruptcy estate of the Payor or otherwise.

16. Amendment. Neither this Agreement nor any provisions hereof may be changed,
waived, discharged or terminated, nor may any consent to the departure from the
terms hereof be given, orally (even if supported by new consideration), but only
by an instrument in writing signed by all parties to this Agreement. Any waiver
or consent so given shall be effective only in the specific instance and for the
specific purpose for which given.

17. No Lien Termination Without Release. In recognition of Meridian's right to
have its attorneys' fees and other expenses incurred in connection with this
Agreement secured by the Collateral, notwithstanding payment in full of all
Obligations by Client, Meridian shall not be required to record any terminations
or satisfactions of any of Meridian's liens on the Collateral unless and until
Client and all Guarantors have executed and delivered to Meridian a general
release in the form of Exhibit 17A hereto, and Meridian has executed and
delivered to Client and all Guarantors a general release in the form of Exhibit
17B hereto. Client understands that this provision constitutes a waiver of its
rights under ss. 9513 of the UCC.

18. Conflict. Unless otherwise expressly stated in any other agreement between
Meridian and Client, if a conflict exists between the provisions of this
Agreement and the provisions of such other agreement, the provisions of this
Agreement shall control.

19. Survival. All representations, warranties and agreements herein contained
shall be effective so long as any portion of this Agreement remains executory.

20. Severability. In the event any one or more of the provisions contained in
this Agreement is held to be invalid, illegal or unenforceable in any respect,
then such provision shall be ineffective only to the extent of such prohibition
or invalidity, and the validity, legality, and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired
thereby.

                                       19
<PAGE>

21. Attorneys' Fees. Client shall pay Meridian its reasonable attorneys fees and
expenses incurred in the administration or enforcement of this Agreement
(whether or not the result of litigation). It shall be presumed (subject to
rebuttal only by the introduction of competent evidence to the contrary) that
the amount recoverable is the amount billed to Meridian by its counsel and that
such amount will be reasonable if based on its counsel's customary billing rates
charged to Meridian by its counsel in similar matters. For the purposes of
Section 1717 of the California Civil Code, Meridian shall be the "prevailing
party" if it recovers any funds whatsoever from Client, whether by settlement,
judgment or otherwise.

22. Entire Agreement. This Agreement supersedes all other agreements and
understandings between the parties, verbal or written, express or implied,
relating to the subject matter hereof. No promises of any kind have been made by
Meridian or any third party to induce Client to execute this Agreement. No
course of dealing, course of performance or trade usage, and no parole evidence
of any nature, shall be used to supplement or modify any terms of this
Agreement.

23. Choice of Law. This Agreement and all transactions contemplated hereunder
and/or evidenced hereby shall be governed by, construed under, and enforced in
accordance with the internal laws of the State of California without regard to
its conflict of laws principles thereof.

24. Jury Trial Waiver. IN RECOGNITION OF THE HIGHER COSTS AND DELAY WHICH MAY
RESULT FROM A JURY TRIAL, THE PARTIES HERETO WAIVE ANY RIGHT TO TRIAL BY JURY OF
ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (A) ARISING HEREUNDER, OR (B) IN
ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES
HERETO OR ANY OF THEM WITH RESPECT HERETO, IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND
EACH PARTY FURTHER WAIVES ANY RIGHT TO CONSOLIDATE ANY SUCH ACTION IN WHICH A
JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE
OR HAS NOT BEEN WAIVED; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF
THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES
HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

25. Venue; Jurisdiction. The parties agree that any suit, action or proceeding
arising out of the subject matter hereof, or the interpretation, performance or
breach of this Agreement, shall, if Meridian so elects, be instituted in the
United States District Court for the Southern District of California or any
court of the State of California located in San Diego (each an "Acceptable
Forum"), each party agrees that the Acceptable Forums are convenient to it, and
each party irrevocably submits to the jurisdiction of the Acceptable Forums,
irrevocably agrees to be bound by any judgment rendered thereby in connection
with this Agreement, and waives any and all objections to personal jurisdiction
or venue that it may have under the laws of the State of California or otherwise
in those courts in any such suit, action or proceeding. Should such proceeding
be initiated in any other forum, Client waives any right to oppose any motion or
application made by Meridian as a consequence of such proceeding having been
commenced in a forum other than an Acceptable Forum.

                                       20
<PAGE>

26. Notice.

      26.1 All notices required to be given to any party shall be in writing and
deemed given upon the first to occur of (i) deposit thereof in a receptacle
under the control of the United States Postal Service, (ii) transmittal by
electronic means to a receiver under the control of such party; or (iii) actual
receipt by such party or an officer or legal counsel of such party.

      26.2 All notices to Meridian shall be deemed given upon actual receipt by
a responsible officer of Meridian.

      26.3 For the purposes hereof, notices hereunder shall be sent to the
following addresses, or to such other addresses as each such party may in
writing hereafter indicate:

                                          Client

Address:          10833 Washington Boulevard
                  Culver City, CA 90232
Officer:          Michael Manahan, Chief Financial Officer
Fax number:       310-815-3507

                                    Meridian

Address:          4320 La Jolla Village Drive, Suite 250
                  San Diego, CA 92122
Officer:          Ronald R. Pituch
Fax number:       858-200-2051

                                       21
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first above written.

CLIENT:                             PRACTICEXPERT OF OKLAHOMA, INC.

                                    By:
                                        --------------------------------
                                    Name: Michael Manahan
                                    Title:   Chief Financial Officer

MERIDIAN:                           MERIDIAN COMMERCIAL HEALTHCARE FINANCE, LLC

                                    By:
                                        --------------------------------
                                    Name: Ronald R. Pituch
                                    Title:   Senior Vice President

                                       22
<PAGE>

                                  EXHIBIT 2.3

                           Borrowing Base Certificate

                                       23
<PAGE>

                                  EXHIBIT 2.11

                                 FUNDING REQUEST

                  [Letterhead of PracticeXpert of Oklahoma, Inc.]

Via Facsimile to 858-200-2051

Meridian Commercial Healthcare Finance, LLC
4320 La Jolla Village Drive, Suite 250
San Diego, California  92122
Attn:  Ronald R. Pituch

      Re:   Funding Request Under Loan and Security Agreement

Ladies and Gentlemen:

      Please wire $________ to PracticeXpert of Oklahoma, Inc. in accordance
with the wire transfer instructions set forth below:

      This request is supported by the attached Borrowing Base Certificate and
is made under Section 2.3 ("Credit Facilities") of that certain Loan and
Security Agreement between PracticeXpert of Oklahoma, Inc. and Meridian
Commercial Healthcare Finance, LLC, dated _____________ (the "Loan and Security
Agreement").

      All representations and warranties of Client set forth in the Loan and
Security Agreement are true, correct and complete in all material respects as of
the date hereof; provided that those representations and warranties expressly
referring to another date shall be true, correct and complete in all materials
respect as of such date.

      Thank you.

                                   Sincerely,

                                    PracticeXpert of Oklahoma, Inc.

                                    By: _________________________
                                    Name:_______________________
                                    Title:________________________

                                       24
<PAGE>

                                  EXHIBIT 7.1.4

                           [Notice to Account Debtors]

                                      Date:

[name and address of account debtor]

      Re: PracticeXpert of Oklahoma, Inc. (the "Client")

Ladies and Gentlemen:

      We are pleased to advise that, to enable the Client to better service its
customers, the Client has assigned its present and future accounts to us.

      To the extent that you are now indebted or may in the future become
indebted to the Client on an account or a general intangible, payment thereof is
to be made payable to us and not to the Client or any other entity. Payment in
any other way will not discharge this obligation.

      The payments should be mailed to us at the following address:

      [Meridian Address where payments are to be sent]

      This letter may only be revoked by a writing signed by one of our officers
and acknowledged before a notary public.

      To assist us in applying payments please fax a copy of this letter to us
indicating your Federal Tax I.D. Number in this space: .

      Thank you.

                                Very truly yours,

                                    Meridian Commercial Healthcare Finance, LLC

                                    By:
                                        --------------------------------
                                    Name:
                                          ------------------------------------
                                    Title:
                                           -----------------------------------

                                       25
<PAGE>

                                  EXHIBIT 8.4.2

              FORM OF NOTICE TO PAYORS OF GOVERNMENTAL RECEIVABLES

                 [Letterhead of PracticeXpert of Oklahoma, Inc.]

                                      Date

[Name of individual at Government Payor Intermediary Office]
[Name and address of Government Payor Intermediary Office]

      Re:   Notice Of Change Of Address For Remittances
            PracticeXpert of Oklahoma, Inc.
            PROVIDER FEDERAL TAX ID NO.
            PROVIDER NO.]

Ladies and Gentlemen:

      Please be advised that in order to facilitate our cash management needs we
have opened a new bank account at *** and a post office box with respect to such
bank account. Accordingly, until further notice, we hereby request that:

      1. All wire transfers be made directly into our account at:

         PracticeXpert of Oklahoma, Inc.
         [name of lock box bank]
         [address of lock box bank]
         ABA Number:
                     ---------------
         Account Number:
                         -----------------
         Telephone Number:
                           ---------

      2. All Explanations of Benefits, remittance advises and other forms of
payment, including checks, are to be made to our post office box located at:

         PracticeXpert of Oklahoma, Inc.
         [lock box bank address]
         [account number]

      Please continue to direct any questions you may have concerning your
contracts and accounts with us to the undersigned.

      This change of address is intended to remain in effect until thirty days
after you acknowledge receipt of a written notice of change of address. In order
to avoid any erroneous communication any such change of address notice must be
executed by the President and countersigned by the Treasurer of our organization
along with a copy of a resolution adopted by a vote of our Board of Directors
and certified as true and correct by our corporate Secretary. Upon receipt of
any such change of address request notice please forward a copy of it along with
your acknowledgment copy to our address set forth in paragraph 1 above for
confirmation by us of such direction.

                                       26
<PAGE>

      Please acknowledge and return a copy of this letter to us at our new
mailing address in the enclosed envelope that has been provided to you for your
convenience. Thank you for your cooperation in the matter.

                                Very truly yours,

                                    PracticeXpert of Oklahoma, Inc.

                                    By:
                                        --------------------------
                                    Name: Michael Manahan
                                    Title:
                                           -----------------------------

ACKNOWLEDGED BY PAYOR

By:
   ---------------------------
Name:
      ------------------------------
Title:
       -----------------------------
Date:
      ------------------------------

                                       27
<PAGE>

                                  EXHIBIT 8.6

                          CONSENT TO SECURITY INTEREST

      This AGREEMENT, dated as of among PracticeXpert of Oklahoma, Inc., (the
"Debtor"), (the "Junior Creditor"), and Meridian Commercial Healthcare Finance,
LLC (the "Senior Creditor").

                                    RECITALS

      A. The Debtor is or may become indebted to the Junior Creditor (the
"Junior Creditor Obligations").

      B. The Senior Creditor has a security interest in the Senior Creditor
Collateral securing the Debtor's present and future obligations to the Senior
Creditor (the "Senior Creditor Obligations").

      C. The Debtor has agreed with Senior Creditor that it will not encumber
the Senior Creditor Collateral.

      D. The Junior Creditor has requested that the Debtor grant it a security
interest in all or a portion of the Senior Creditor Collateral (the "Junior
Creditor Security Interest").

      E. The Senior Creditor has asserted that the above request, if not
consented to by the Senior Creditor would constitute interference with the
Senior Creditor's contractual relationships with the Debtor.

      F. The Parties are executing this Agreement to set forth the consent of
Senior Creditor to the Junior Creditor Security Interest and the conditions
thereto.

      NOW, THEREFORE, in consideration of the premises, and intending to be
legally bound hereby, the Parties hereby agree as follows:

                                    AGREEMENT

1. Certain Definitions and Index to Definitions.

      1.1 Definitions. The following terms shall have the following respective
meanings:

            1.1.1 "Controlling State" - California.

            1.1.2 "Debtor" - see Preamble.

            1.1.3 "Junior Creditor" - see Preamble.

            1.1.4 "Junior Creditor Obligations" - see Recital A.

            1.1.5 "Junior Creditor Security Interest" - see Recital D.

                                       28
<PAGE>

            1.1.6 "Parties" - the Junior Creditor and the Senior Creditor.

            1.1.7 "Senior Creditor" - see Preamble.

            1.1.8 "Senior Creditor Collateral" - all Debtor's now owned and
hereafter acquired personal property and fixtures, and proceeds thereof,
including without limitation Accounts, Chattel Paper, Goods, Inventory,
Equipment, Instruments, Investment Property, Documents, and General Intangibles.

            1.1.9 "Senior Creditor Obligations" - see Recital B.

      1.2 Other Defined Terms. All terms used herein which are defined in the
Uniform Commercial Code shall have the meanings given therein unless otherwise
defined in this Agreement.

2. Consent. The Senior Creditor consents to the Junior Creditor Security
Interest.

3. Covenants of Junior Creditor. Junior Creditor covenants and agrees as
follows:

      3.1 Any security interest in the Senior Creditor Collateral granted to the
Senior Creditor by the Debtor, whether or not perfected, and the obligations
secured thereby, are and shall remain senior to the Junior Creditor Obligations
and any security interest in the Senior Creditor Collateral now or hereafter
granted by the Debtor to the Junior Creditor.

      3.2 It will, at the request of Senior Creditor, release any lien and
security interest it has on the Senior Creditor Collateral to facilitate its
transfer or sale so long as the proceeds thereof are applied against the Senior
Creditor Obligations and any excess is paid to the Junior Creditor to be applied
against the Junior Creditor Obligations.

      3.3 Standstill by Junior Creditor. The Junior Creditor shall have no right
to take any action with respect to the Senior Creditor Collateral, whether by
judicial or non-judicial foreclosure, notification to the Debtor's account
debtors, or otherwise, unless and until all Senior Creditor Obligations have
been fully and indefensibly paid.

      3.4 Any proceeds of the Senior Creditor Collateral, or proceeds thereof
(whether or not identifiable), received by the Junior Creditor shall be paid to
the Senior Creditor on demand.

4. Effect of Bankruptcy. This Agreement shall remain in full force and effect
notwithstanding the filing of a petition for relief by or against the Debtor
under the Bankruptcy Code and shall apply with full force and effect with
respect to all Senior Creditor Collateral acquired by the Debtor, or obligations
incurred by the Debtor to the Junior Creditor, subsequent to the date of said
Petition.

5. Waivers by Junior Creditor. The Junior Creditor irrevocably waives:

      5.1 Any right to compel the Senior Creditor to marshal assets of the
Debtor, whether such rights arise under California Civil Code ss.ss.2899 and
3433 or otherwise; and

                                       29
<PAGE>

      5.2 All rights under Uniform Commercial Code ss.ss.9-501 et. seq.,
including rights to notice, rights to surplus funds and rights relating to the
commercially reasonable disposition of collateral.

6. Choice of Law. This Agreement and all transactions contemplated hereunder
and/or evidenced hereby shall be governed by, construed under, and enforced in
accordance with the internal laws of the Controlling State.

7. Amendment. Neither this Agreement nor any provisions hereof may be changed,
waived, discharged or terminated, nor may any consent to the departure from the
terms hereof be given, orally (even if supported by new consideration), but only
by an instrument in writing signed by all parties to this Agreement. Any waiver
or consent so given shall be effective only in the specific instance and for the
specific purpose for which given.

8. Term. This Agreement shall continue so long as both Parties have a security
interest in the Senior Creditor Collateral.

9. Attorneys Fees.

      9.1 In the event that either Party retains counsel to enforce its rights
hereunder, the prevailing party shall recover its attorneys' fees and expenses.

      9.2 Debtor agrees to pay the attorneys fees and expenses of counsel to
Senior Creditor incurred in the preparation and negotiation of this agreement,
which Senior Creditor estimates to be $__________. Debtor consents that Senior
Creditor may request that Junior Creditor disburse such fees and expenses to
counsel for Senior Creditor, upon their demand, and debit Debtor's loan account
with Junior Creditor therefore. Junior Creditor agrees that such demand will be
honored within thirty days of receipt.

10. Waiver.

      10.1 No delay or failure of either Party in exercising any right, power or
remedy under this Agreement shall affect or operate as a waiver or such right,
power or remedy, nor shall any single or partial exercise of any such right,
power or remedy preclude, waive or otherwise affect any other or further
exercise thereof or the exercise of any other right, power or remedy.

      10.2 Any waiver, permit, consent or approval of any kind by either Party
or any breach or of default under this Agreement is ineffective unless in
writing and shall be effective only to the extent set forth in such writing.

11. Counterparts. This Agreement may be executed in any number of counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement.

      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first above written.

                                       30
<PAGE>

Debtor:                             PracticeXpert of Oklahoma, Inc.

                                    By:
                                        --------------------------------
                                    Name:
                                          ------------------------------------
                                    Title:
                                           -----------------------------------

Junior Creditor:
                                    ------------------------------------

                                    By:
                                        --------------------------------
                                    Name:
                                          ------------------------------------
                                    Title:
                                           -----------------------------------

Senior Creditor:                    Meridian Commercial Healthcare Finance, LLC

                                    By:
                                        --------------------------------
                                    Name:
                                          ------------------------------------
                                    Title:
                                           -----------------------------------

                                       31
<PAGE>

                                  EXHIBIT 10.8

                        HIPAA BUSINESS ASSOCIATE ADDENDUM

      This HIPAA Business Associate Addendum ("Addendum") supplements and is
made a part of the Loan and Security Agreement dated as of _______________, 2005
("Agreement") by and between PracticeXpert of Oklahoma, Inc. ("Covered Entity")
and Meridian Commercial Healthcare Finance, LLC ("Meridian" or "Business
Associate"). This Addendum is effective as of _______________, 2005 (the
"Addendum Effective Date").

                                    RECITALS

      A. Covered Entity wishes to disclose certain information to Business
Associate pursuant to the terms of the Agreement, some of which information may
constitute Protected Health Information ("PHI") as defined below.

      B. Covered Entity and Business Associate intend to protect the privacy and
provide for the security of Protected Information disclosed to Business
Associate pursuant to the Agreement in compliance with the Health Insurance
Portability and Accountability Act of 1996, Public Law 104-191 ("HIPAA") and
regulations promulgated there under by the U.S. Department of Health and Human
Services (the "HIPAA Regulations") and other applicable laws.

      C. As part of the HIPAA Regulations, the Privacy Rule (defined below)
requires that, prior to the disclosure of Protected Information on and after the
Addendum Effective Date, Covered Entity enter into a contract with Business
Associate, containing specific requirements as set forth in, but not limited to,
Title 45, Sections 164.502(e) and 164.504(e) of the Code of Federal Regulations
("CFR") and as contained in this Addendum.

      In consideration of the mutual premises and the covenants and agreements
contained in this Addendum, the parties agree as follows:

                                    ADDENDUM

1. Definitions.

      1.1 "Business Associate" shall have the meaning given to such term under
the Privacy Rule, including, but not limited to, 45 CFR ss. 160.103, and shall
refer to Meridian.

      1.2 "Covered Entity" shall have the meaning given to such term under the
Privacy Rule, including, but not limited to, 45 CFR ss. 160.103 and shall refer
to the entity or organization named as "Covered Entity" in the first paragraph
of this Addendum.

      1.3 "Individual" shall have the same meaning as the term "individual" in
45 CFR ss. 164.501 and shall include a person who qualifies as a personal
representative in accordance with 45 CFR ss. 164.502(g).

                                       32
<PAGE>

      1.4 "Designated Record Set" shall have the meaning given to such term
under the Privacy Rule, including, but not limited to, 45 CFR ss. 164.501.

      1.5 "Privacy Rule" shall mean the Standards of Privacy of Individually
Identifiable Health Information codified at 45 CFR Parts 160 and 164, Subparts A
and E.

      1.6 "Protected Health Information" or "PHI" shall have the meaning given
to such term in 45 CFR ss. 164.501 including any information, whether oral or
recorded in any form or medium: (i) that relates to the past, present or future
physical or mental condition of an individual; the provision of health care to
an individual; or the past, present or future payment for the provision of
health care to an individual; and (ii) that identifies the individual or with
respect to which there is a reasonable basis to believe that the information can
be used to identify the individual.

      1.7 "Protected Information" shall mean PHI provided by Covered Entity to
Business Associate or created or received by Business Associate on Covered
Entity's behalf.

      1.8 "Required by Law" shall have the same meaning given to such term in 45
CFR Section 164.501.

2. Obligations of Business Associate.

      2.1 Permitted Uses. Business Associate shall not use Protected Information
except for the purpose of performing Business Associate's obligations under the
Agreement and as permitted under the Agreement and Addendum. Further, Business
Associate shall not use Protected Information in any manner that would
constitute a violation of the Privacy Rule if so used by Covered Entity, except
that Business Associate may use Protected Information for Business Associate's
proper management and administration or to carry out the legal responsibilities
of Business Associate.

      2.2 Permitted Disclosures. Business Associate shall not disclose Protected
Information in any manner that would constitute a violation of the Privacy Rule
if disclosed by Covered Entity, except that Business Associate may disclose
Protected Information (i) for the proper management and administration of
Business Associate, (ii) in a manner permitted pursuant to the Agreement and
Addendum, or (ii) as Required by Law. To the extent that Business Associate
discloses Protected Information to a third party and such disclosure is not
Required by Law, Business Associate must obtain, prior to making any such
disclosure, (i) reasonable assurances from such third party that such Protected
Information will remain confidential as provided pursuant to this Addendum and
only disclosed as Required by Law or for the specific purposes for which it was
disclosed to such third party, and (ii) agreement from such third party to
immediately notify Business Associate of any breach of confidentiality of the
Protected Information, to the extent it has obtained knowledge of such breach.
Except as otherwise limited in this Addendum, Business Associate may use
Protected Information to provide data aggregation services to Covered Entity as
permitted under 45 C.F.R. ss. 164.504(e)(2)(i)(B) and to report violations of
law to appropriate federal and state authorities, consistent with 45 C.F.R. ss.
164.502(j)(1).

                                       33
<PAGE>

      2.3 Appropriate Safeguards. Business Associate shall implement appropriate
safeguards as are necessary to prevent the use or disclosure of Protected
Information otherwise than as permitted by this Addendum and the Agreement.

      2.4 Reporting of Improper Use or Disclosure. Business Associate shall
report to Covered Entity any use or disclosure of Protected Information other
than as provided for by the Agreement and this Addendum within ten (10) business
days of Business Associate becoming aware of such use or disclosure.

      2.5 Business Associate's Agents. Business Associate shall ensure that any
agents, including subcontractors, to whom it provides Protected Information
agree to the same restrictions and conditions that apply through this Addendum
to Business Associate with respect to such information.

      2.6 Mitigation. Business Associate agrees to mitigate, to the extent
practicable, any harmful effect that is known to Business Associate of a use or
disclosure of Protected Information by Business Associate in violation of the
requirements of this Addendum.

      2.7 Access to Protected Information. Business Associate shall make
Protected Information maintained by Business Associate (or its agents or
subcontractors on behalf of Business Associate) in Designated Record Sets
available to Covered Entity for inspection and copying within ten (10) calendar
days of a written request by Covered Entity to enable Covered Entity to fulfill
its disclosure obligations under the Privacy Rule, including, but not limited
to, 45 CFR ss. 164.524. Copies of the Protected Information in Designated Record
Sets requested by Covered Entity will be sent by Business Associate to Covered
Entity by mail or overnight courier, at the expense of Covered Entity, within
ten (10) calendar days after Business Associate receives Covered Entity's
request.

      2.8 Amendment of PHI. Within ten (10) calendar days of receipt of a
written request from Covered Entity for an amendment of Protected Information or
a record about an individual contained in a Designated Record Set maintained by
Business Associate (or its agents or subcontractors on behalf of Business
Associate), Business Associate shall make such Protected Information available
to Covered Entity for amendment and incorporate any such amendment to enable
Covered Entity to fulfill its obligations under the Privacy Rule, including, but
not limited to, 45 CFR ss. 164.526. If any individual requests an amendment of
Protected Information directly from Business Associate or its agents or
subcontractors, Business Associate must notify Covered Entity in writing within
five (5) business days of the request. All action and decisions on an
individual's request for amendment of Protected Information or a record
contained in a Designated Record Set, including but not limited to any denial of
amendment of Protected Information, maintained by Business Associate (or its
agents or subcontractors on behalf of Business Associate) shall be the
responsibility of Covered Entity and not of Business Associate, its agents or
subcontractors.

                                       34
<PAGE>

      2.9 Accounting Rights. Within thirty (30) calendar days of written notice
by Covered Entity of a request for an accounting of disclosures of Protected
Information, Business Associate and its agents or subcontractors shall make
available to Covered Entity the information required to provide an accurate and
complete accounting of disclosures by Business Associate, its agents and
subcontractors which, under 45 C.F.R ss. 164.528(a), are subject to disclosure
accounting, to enable Covered Entity to fulfill its obligations under the
Privacy Rule, including, but not limited to, 45 CFR ss. 164.528. Business
Associate agrees to implement a process that allows for it to collect, maintain
and document an accounting of disclosures for at least six (6) years following
the making of any disclosure of Protected Information subject to such an
accounting; provided, however, that reportable disclosures made prior to the
Addendum Effective Date are not subject to such process. The information to be
collected, maintained and documented by Business Associate shall be the
information specified, and shall be in the form referenced, in 45 C.F.R. ss.
164.528(b). In the event that the request for an accounting is delivered
directly to Business Associate or its agents or subcontractors, Business
Associate shall, within five (5) business days of its receipt of such a request,
forward it to Covered Entity. It shall be Covered Entity's responsibility to
prepare and deliver any such accounting requested.

      2.10 Government Access to Records. Unless prohibited by attorney-client
privilege and/or other applicable legal privileges, or unless so doing would
result in Business Associate violating its contractual and other legal
obligations to Covered Entity, Business Associate shall make its internal
practices, books and records, including policies and procedures and Protected
Information, relating to the use and disclosure of Protected Information
available to the Secretary of the U.S. Department of Health and Human Services
(the "Secretary") for purposes of determining Covered Entity's compliance with
the Privacy Rule. Business Associate shall provide to Covered Entity a copy of
any Protected Information that Business Associate provides to the Secretary
concurrently with providing such Protected Information to the Secretary. Nothing
in this Addendum or the Agreement will be construed to otherwise provide the
Secretary or Covered Entity any right of access to Business Associate's
financial, employment or other books and records.

      2.11 Minimum Necessary. Business Associate (and its agents or
subcontractors) shall only request, use and disclose the minimum amount of
Protected Information necessary to accomplish the purpose of the request, use or
disclosure.

      2.12 Retention of Protected Information. Notwithstanding Section 3 of this
Addendum, Business Associate shall retain all Protected Information throughout
the term of the Agreement and shall continue to maintain the information
required under Section 2.1 of this Addendum for a period of six (6) years after
termination of the Agreement.

3. Obligations of Covered Entity.

      3.1 Covered Entity shall be responsible for using appropriate safeguards
to maintain and ensure the confidentiality, privacy and security of Protected
Information transmitted to Business Associate pursuant to this Addendum and the
Agreement in accordance with the standards and requirements of the Privacy Rule
until Business Associate receives such Protected Information. In order to
protect the integrity, confidentiality and authenticity of Protected Information
transmitted and transferred by Covered Entity to Business Associate and by
Business Associate to Covered Entity and others in connection with Business
Associate's obligations under the Agreement, Covered Entity and Business
Associate agree to the procedures and protocols set forth in Attachment A. The
parties may change or amend a protocol or procedure set forth in Attachment A to
conform with best practices under current and future HIPAA requirements, subject
to their respective rights under Section 6.

                                       35
<PAGE>

      3.2 Covered Entity will notify Business Associate of any limitation(s) in
its notice of Covered Entity's privacy practices in accordance with 45 CFR ss.
164.520, to the extent that such limitation may affect Business Associate's use
or disclosure of Protected Information under this Addendum or the Agreement.

      3.3 Covered Entity will notify Business Associate of any restriction to
the use or disclosure of Protected Information that Covered Entity has agreed to
in accordance with 45 CFR ss. 164.522, to the extent that such restriction may
affect Business Associate's use or disclosure of Protected Information under
this Addendum or the Agreement.

      3.4 To be effective against Business Associate, any notice by Covered
Entity under this Section 3 will be in writing and received by Business
Associate not less than 30 calendar days prior to the date upon which the change
or limitations referenced in such notice will be effective as to Business
Associate's use and disclosure of Protected Information. Covered Entity's
written notice will set forth the limitation's proposed effective date. Business
Associate will have no liability or responsibility with respect to any provision
of Covered Entity's notice of privacy practices or of any limitation or
restriction on uses and disclosures of Protected Health Information agreed to by
Covered Entity except as provided in this Section 3.

      3.5 Business Associate's rights and duties with respect to a change or
limitation referenced in a written notice from Covered Entity pursuant to this
Section 3 will be as set forth, and governed by, Section 6 of this Addendum.

      3.6 Covered Entity will not request Business Associate to use or disclose
Protected Information in any manner that would not be permissible under the
Privacy Rule if done by Covered Entity, except that Business Associate may use
or disclose Protected Health Information as Required by Law, for data
aggregation and for management and administrative activities of Business
Associate as provided in this Addendum and the Agreement.

4. Covered Entity Representations and Warranties. Covered Entity represents and
warrants to Business Associate with respect to itself and with respect to the
Protected Information:

      4.1 Covered Entity has received all necessary or required consents or
authorizations under the Privacy Rule and all applicable state law, and has made
all necessary or required disclosures to Individuals, for such Protected
Information (a) to be disclosed to Business Associate by Covered Entity and (b)
to be used or disclosed by Business Associate in performing and providing the
services to Covered Entity and as provided or permitted under this Addendum and
the Agreement.

      4.2 The disclosure of Protected Information to Business Associate under
this Addendum and the Agreement, and the uses and disclosures of such Protected
Information by Business Associate in performing under the Agreement and this
Addendum constitute uses and disclosures of the Protected Information in
connection with payment and/or health care operations of Covered Entity and, if
Business Associate's uses and disclosures of Protected Information hereunder and
under the Agreement were made or done by Covered Entity, such uses and
disclosures would not violate the provisions of the Privacy Rule.

                                       36
<PAGE>

      4.3 Neither the disclosures of Protected Information to Business Associate
contemplated by this Addendum or the Agreement, nor Business Associate's uses
and disclosures of Protected Information permitted or authorized under this
Addendum or the Agreement, violate the Covered Entity's minimum necessary
policies and procedures.

      4.4 For all purposes of this Addendum the persons designated in Attachment
B are the designated officials of Covered Entity and Business Associate with
respect to all matters arising under the Privacy Rule and this Addendum. The
person so designated as acting on behalf of Covered Entity will at all times be
the person which Covered Entity has designated as its "privacy official" under
and pursuant to the Privacy Rule. A party to this Addendum may, upon written
notice to other party, change the name and address for the person (a) designated
as Covered Entity's "privacy official" or (b) designated by Business Associate
for purposes of this Section 4.4 .

      4.5 Set forth in Attachment B is the Protected Information, which Covered
Entity deems to be part of a Designated Record Set, created or maintained by
Business Associate under this Addendum and the Agreement.

      4.6 Covered Entity agrees and acknowledges that Business Associate will
not be deemed in violation of this Addendum, and a use or disclosure by Business
Associate of Protected Information will not be considered a violation of the
Privacy Rule, if such use or disclosure by Business Associate is made in one or
more of the circumstances described in 45 CFR ss. 164.502(j), dealing with
whistle blowers and workforce victims of crime.

      4.7 The parties agree that the laws of the State identified in Attachment
C to this Addendum (State Law) are applicable to Protected Information disclosed
to Business Associate, and used and disclosed by Business Associate, under this
Addendum and the Agreement. Attachment C sets forth those provisions of
applicable State Law that have been determined by Covered Entity to be more
stringent than the Privacy Rule under 45 CFR 60.202 with respect to uses and
disclosures of Protected Information permitted by the Privacy Rule, this
Addendum and the Agreement, and the duties and obligations of the parties
hereunder and under the Privacy Rule. The provisions of this Addendum and the
Agreement are hereby deemed modified and amended, as appropriate, to conform to
the provisions of State Law as set forth in Attachment C. Covered Entity will
notify Business Associate, in writing, of any restriction to the use or
disclosure of Protected Information for treatment, payment or health care
operations purposes under State Law that Covered Entity has determined are more
stringent than the provisions of the Privacy Rule or which may limit or restrict
the uses and disclosures of Protected Information under this Addendum and the
Agreement and in either case are deemed by Client to require an amendment or
modification of this Addendum, Attachment C or the Agreement.

5. Term and Termination.

      5.1 The Term of this Addendum shall begin on the Addendum Effective Date
and shall terminate when all Protected Information is destroyed or returned to
Covered Entity or, if it is not feasible to return or destroy Protected
Information, protections are extended to such information in accordance with the
termination provisions of this Section 5.

                                       37
<PAGE>

      5.2 Upon Covered Entity's knowledge of a material breach by Business
Associate of the provisions of this Addendum, Covered Entity will either:

            5.2.1 Provide an opportunity for Business Associate to cure the
breach or end the violation. If Business Associate does not cure the breach or
end the violation within the time specified by Covered Entity, which specified
time would be reasonable in view of the facts and circumstances of such breach,
Business Associate may terminate this Addendum and the Agreement;

            5.2.2 Immediately terminate this Addendum and the Agreement if
Business Associate has breached a material term of this Addendum and cure is not
possible within a reasonable period of time; or

            5.2.3 If neither termination nor cure is feasible, Covered Entity
will report the violation to the Secretary.

      5.3 Except as provided in this Section 5.3 , upon termination of this
Addendum for any reason, Business Associate will return or destroy all Protected
Information received from Covered Entity, or created or received by Business
Associate on behalf of Covered Entity. This provision will apply to Protected
Information that is in the possession of subcontractors or agents of Business
Associate. Subject to its rights under this Section 5.3 , Business Associate
will retain no copies of the Protected Information. In the event that Business
Associate determines that returning or destroying the Protected Information is
infeasible following termination of this Addendum, Business Associate will
furnish Covered Entity written notification of the conditions that make return
or destruction infeasible. Upon delivery of such written notice to Covered
Entity, Business Associate will extend the protections of this Addendum to such
Protected Information and limit further uses and disclosures of such Protected
Information to those purposes that make the return or destruction infeasible,
for so long as Business Associate maintains such Protected Information.

      5.4 Notwithstanding any express or implied provision of this Addendum,
termination of this Addendum and the Agreement by Covered Entity as permitted
under Section 5.3 shall not relieve Covered Entity of its obligations and
liabilities to Business Associate under the Agreement. Any such termination of
the Agreement by the Covered Entity under this Section 5 will be considered an
event of default described in Section 15 of the Agreement, and Business
Associate shall have the rights and remedies specified in said Section 15.

6. Amendment.

      6.1 The parties acknowledge that state and federal laws relating to data
security and privacy for Protected Information are rapidly evolving and that
amendment of this Addendum may be required to provide for procedures to ensure
compliance with such developments. Subject to the provisions of this Section 6,
the parties specifically agree to take such action as is necessary to implement
the standards and requirements of HIPAA, the Privacy Rule and other applicable
laws relating to the security or confidentiality of PHI and the Protected
Information. The parties understand and agree that Covered Entity must receive
satisfactory written assurance from Business Associate that Business Associate
will adequately safeguard all Protected Information. Unless otherwise
specifically stated, a reference in this Addendum to a section in the Privacy
Rule means the section as in effect or as amended.

                                       38
<PAGE>

      6.2 Subject to the other provisions of this Section 6, Covered Entity and
Business Associate agree to take such action as are reasonably necessary to
amend this Addendum from time to time as is necessary for Covered Entity to
comply with the requirements of the Privacy Rule and HIPAA. Covered Entity will
be the party responsible for initially determining whether any actions to amend
this Addendum described in this Section 6 are necessary and will provide written
notice to Business Associate of the need to so amend this Addendum, including
the reasons for the proposed amendment and the form of such amendment, to be
provided to Business Associate not less than 45 calendar days prior to the date
upon which the proposed amendment is to take effect. Business Associate's
obligations and responsibilities with respect to an amendment to this Addendum
proposed by Covered Entity pursuant to this Section 6 will be governed by and
subject to the provisions of Section 6.3 of this Addendum.

      6.3 If, in Business Associate's determination, either or both (a) a
limitation on its use and disclosure of Protected Information contained in any
notice it receives from Covered Entity pursuant to Section 6.2 hereof or (b) an
amendment to this Addendum proposed by Covered Entity pursuant to Section 6.2
hereof (such limitation or amendment herein referred to as a "Change") adversely
impacts on Business Associate's ability to perform under the Agreement or
imposes or creates or imposes a cost or burden on Business Associate not
contemplated by Business Associate at the time of Business Associate's execution
and delivery of this Addendum, as determined by Business Associate, Business
Associate will notify Covered Entity of such adverse impact and/or additional
cost or burden in writing not less than 15 calendar days prior to the effective
date of the Change, and the modifications or amendments to this Addendum or the
Agreement that Business Associate has determined are necessary to ameliorate
such adverse impact and/or reduce or eliminate the additional cost or burdens on
Business Associate's ability to perform under the Agreement resulting from such
Change.

      6.4 If Covered Entity does not object in writing to the modifications or
amendments to this Addendum and the Agreement set forth in a notice from
Business Associate pursuant to Section 6.3 prior to the effective date of the
Change giving rise to Business Associate's notice, such modifications or
amendments to this Addendum and the Agreement, including any increase in amounts
payable to Business Associate specified in Business Associate's notice, will
conclusively be deemed agreed to by Covered Entity and the Business Associate
notice pursuant to Section 6.3 will be deemed incorporated in and a part of this
Addendum and the Agreement from and after the effective date of the related
Change.

      6.5 If (a) Business Associate objects to a Change proposed by Covered
Entity and does not provide a proposed modification or amendment to Covered
Entity pursuant to Section 6.4 or (b) Covered Entity objects in writing to the
modification or amendment to this Addendum and the Agreement set forth in a
notice from Business Associate pursuant to Section 6.4 , prior to the effective
date of the Change giving rise to Business Associate's notice, Business
Associate will have the right to declare, in writing, a termination of this
Addendum and the Agreement as a termination by mutual consent pursuant to the
Agreement. Business Associate will thereupon give written notice of such
termination to Covered Entity and such termination without cause pursuant to
this Section 6.5 will become effective without further act or deed of Covered
Entity as provided in the Agreement. The parties shall treat termination of the
Agreement as provided in this Section 6 as an event of default under Section 15
of the Agreement.

                                       39
<PAGE>

7. No Third Party Beneficiaries. Nothing express or implied in this Addendum is
intended to confer, nor shall anything herein confer, upon any person other than
Covered Entity, Business Associate and their respective successors or assigns,
any rights, remedies, obligations or liabilities whatsoever.

8. Effect on Agreement. Except as specifically required to implement the
purposes of this Addendum, or to the extent inconsistent with this Addendum, all
other terms of the Agreement shall remain in force and effect.

9. Notices. Any notice by any Party to the other will be in writing and will be
deemed to have been duly given when delivered personally or 3 business days
after deposit in the US Mail, postage prepaid to their respective addresses, to
the attention of the person specified, in Attachment B to this Addendum.

10. Applicable Law. This Addendum will be deemed to have been made and entered
into in and will be interpreted in accordance with the laws of the State of
California.

11. Survival. The respective rights and obligations of the Parties under
Sections 5 and 6 hereof will survive the termination of this Addendum.

12. Interpretation. Any ambiguity in this Addendum will be resolved to permit
Covered Entity to comply with the Privacy Rule; provided, however, that if
resolving such ambiguity will be such as to change a term or provision of this
Addendum applicable to Business Associate, such change will be deemed a "Change"
under this Addendum and subject to the rights of Business Associate under
Section 6 hereof.

13. Severability. If any part of this Addendum will be held void or
unenforceable, such part will be treated as severable, leaving valid the
remainder of this Addendum notwithstanding the part or parts found void or
unenforceable. To the extent that any provision of this Addendum violates the
California Confidentiality of Medical Information Act (California Civil Code
Sections 56 et seq.,) or any other applicable state law and such provision does
not preempt the California Confidentiality of Medical Information Act or any
other applicable state law (by virtue of being required by HIPAA or the HIPAA
Regulations), such provision shall be deemed severed from this Addendum and the
remaining provisions shall remain in full force and effect. Any such severing of
a provision from this Addendum as provided in this Section 13 will be considered
an amendment of this Addendum subject to Section 6 hereof.

14. Entire Agreement. This Addendum contains the entire agreement of the parties
with respect to the subject matter hereof and may not be amended or modified
except in writing signed by both parties. All continuing covenants, duties, and
obligations contained herein will survive the expiration or termination of this
Addendum.

                                       40
<PAGE>

15. Changes in Law. In the event that performances under this Addendum are or
become unlawful as a result of any law, court decision, rule regulation, manual
provision, or memorandum enacted or promulgated by any federal, state, or
administrative body, or financially impossible or imprudent as a result of any
such change, the parties will in good faith restructure the Addendum by mutual
agreement with Covered Entity and Business Associate, and the parties will
thereafter be bound by the changes in the Addendum. If the Addendum cannot be
modified in a manner to comply with the change, then this Addendum and the
Agreement will terminate in accordance with the provisions of Section 6 hereof.

      IN WITNESS WHEREOF, the parties hereto have duly executed this Addendum as
of the Addendum Effective Date.

COVERED ENTITY:                            BUSINESS ASSOCIATE:

PRACTICEXPERT OF OKLAHOMA, INC.            MERIDIAN COMMERCIAL HEALTHCARE
                                           FINANCE, LLC
By:                                        By:
   -------------------------------

Print Name:                                Print Name:
           -----------------------

Title:                                     Title:
      ----------------------------

Date:                                      Date:
     -----------------------------

                                       41
<PAGE>

                                  ATTACHMENT A

            PROTECTED INFORMATION TRANSMISSION PROTOCOLS AND PROCEDURES

Transmissions by Fax:

      To Covered Entity:

      To Business Associate:  858.200.2051

      Covered Entity and Business Associate represent to the other that (1) the
fax number specified for it is connected to a telephone line and is not an
internet fax number, (2) Protected Information transmitted by fax to the other
will have a cover sheet referencing that the information being transmitted is
confidential, (3) the fax number for it set forth above is for a fax machine
that is in a secure location within the business premises of such Party and (4)
access to the fax machine and information received on such fax machines is
limited or otherwise restricted to persons within such Party's control who are
authorized to view Protected Information.

      Transmissions by internet (including email or email attachments):

      The Parties agree that any transmission of Protected Information via an
internet connection, email or email attachment instituted by (1) Covered Entity
to Business Associate, (2) Business Associate to Covered Entity, (3) Business
Associate to a health plan or (4) Business Associate to any other person or
entity to which it is permitted or authorized to disclose Protected Information
under the Addendum will be encrypted using encryption protocols (a) set forth
below in connection with internet communications and transmissions between
Covered Entity and Business Associate and (b) agreed to in writing between
Business Associate and a health plan or other person or entity described in (4)
above; provided that the encryption protocols applicable to a transmission or
communication in this (b) will be at least as stringent and robust as those set
forth below governing such transmissions or protocols between Covered Entity and
Business Associate.

      Communications via U.S. mail, commercial delivery services (such as
Federal Express, Airborne, etc.), courier or telephone voice communication:

      Communications and transmissions of Protected Information under this
protocol will be permitted without encryption so long as the Protected
Information is in a sealed envelope or package at the time it is delivered to a
post office, commercial delivery service or courier. Telephone voice
communication (other than through internet telephony devices) are not required
to be encrypted.

      Authentication Policies and Procedure

      Within a reasonable time after the execution of the Agreement and this
Addendum, but in no event later than __________, 200___, Covered Entity will
provide Business Associate with a description of the Authentication Policies and
Procedure. Pending establishment of the Authentication Policies and Procedure,
Business Associate may transmit Protected Information in the same manner in
which Covered Entity transmits Protected Information to Business Associate and
otherwise as provided in this Addendum.

                                       42
<PAGE>

      Reliance on Protocols, Policies and Procedures

      So long as Business Associate observes, in connection with any
transmission or exchange of Protected Information by it, the policies, protocols
and procedures set forth in this Addendum, Business Associate shall conclusively
be deemed, as between it and Covered Entity and parties asserted claims directly
or indirectly against Business Association with respect to any such transmission
or exchange of Protected Information, to have acted reasonably and with proper
exercise of care, and that Business Associate's reliance on the policies,
procedures and protocols of Covered Entity was conclusively reasonable.

                                       43
<PAGE>

                                  ATTACHMENT B

                          PRIVACY OFFICIAL DESIGNATION

Covered Entity Privacy Official:

      Name:
      Title:
      Address:

      Telephone:
      Fax:
      Email:

      Business Associate Privacy Official: TO BE PROVIDED BY BUSINESS ASSOCIATE
PRIOR TO ______________, 200___.

      Name:       Cory Smith
      Title:            Collateral Analyst
      Address:    Meridian Commercial Healthcare Finance
                  4320 La Jolla Village Drive
                  Suite 250
                  San Diego, CA 92121

      Telephone:  858.200.2066
      Fax:        858.200.2051
      Email:            csmith@meridianchf.com

                        PROTECTED INFORMATION COMPRISING
                             A DESIGNATED RECORD SET

      Within a reasonable time after the execution of the Agreement and this
Addendum, but in no event later than _________________, Covered Entity will
provide Business Associate a description of the Protected Information received
by Business Associate from Covered Entity or created or maintained by Business
Associate on behalf of Covered Entity and which comprises a part of a Designated
Record Set.

                                       44
<PAGE>

                                  ATTACHMENT C

                                    STATE LAW

      The laws of the State of _________________ are applicable to determining
whether state law is more stringent than the Privacy Law as it relates to the
uses and disclosures of Protected Information under the Addendum and the
Agreement.

      The following provisions of State Law have been determined by Covered
Entity to be more stringent under 45 CFR ss.160.202 and for purposes of applying
the preemption rules of 45 CFR ss. 160.203 through 160.205.

                                       45
<PAGE>

                                 EXHIBIT 10.20

                           [capitalization of Client]

                                       46
<PAGE>

                                   EXHIBIT 17A

                                 GENERAL RELEASE

      FOR GOOD AND VALUABLE CONSIDERATION, the receipt and adequacy of which are
hereby acknowledged, the undersigned and each of them (collectively "Releasor")
hereby forever releases, discharges and acquits Meridian Commercial Healthcare
Finance, LLC ("Releasee"), its parent, directors, shareholders, agents and
employees, of and from any and all claims of every type, kind, nature,
description or character, and irrespective of how, why, or by reason of what
facts, whether heretofore existing, now existing or hereafter arising, or which
could, might, or may be claimed to exist, of whatever kind or name, whether
known or unknown, suspected or unsuspected, liquidated or unliquidated, each as
though fully set forth herein at length, to the extent that they arise out of or
are in way connected to or are related to that certain Loan and Security
Agreement dated .

      Releasor agrees that the matters released herein are not limited to
matters which are known or disclosed, and the Releasor waives any and all rights
and benefits which it now has, or in the future may have, conferred upon it by
virtue of the provisions of Section 1542 of the Civil Code of the State of
California which provides as follows:

            A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
            NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING
            THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
            SETTLEMENT WITH THE DEBTOR.

      Acceptance of this Release shall not be deemed or construed as an
admission of liability by any party released.

      Releasor acknowledges that either (a) it has had advice of counsel of its
own choosing in negotiations for and the preparation of this release, or (b) it
has knowingly determined that such advice is not needed.

DATED:
       -----------------

                              Individual Releasor:
                                                    --------------------
                              [Name of individual], individually

                                    Entity Releasor:
                                                      ------------------

                                    By:
                                        --------------------------------
                                    Name:
                                          ------------------------------------
                                    Title:
                                           -----------------------------------

                                       47
<PAGE>

                                   EXHIBIT 17B

                                 GENERAL RELEASE

      FOR GOOD AND VALUABLE CONSIDERATION, the receipt and adequacy of which are
hereby acknowledged, the undersigned and each of them (collectively "Releasor")
hereby forever releases, discharges and acquits PracticeXpert of Oklahoma, Inc.
("Releasee"), its parent, directors, shareholders, agents and employees, of and
from any and all claims of every type, kind, nature, description or character,
and irrespective of how, why, or by reason of what facts, whether heretofore
existing, now existing or hereafter arising, or which could, might, or may be
claimed to exist, of whatever kind or name, whether known or unknown, suspected
or unsuspected, liquidated or unliquidated, each as though fully set forth
herein at length, to the extent that they arise out of or are in way connected
to or are related to that certain Loan and Security Agreement dated
______________________, except manifest error in the calculation of any payoff
amounts due thereunder.

      Releasor agrees that the matters released herein are not limited to
matters which are known or disclosed, and the Releasor waives any and all rights
and benefits which it now has, or in the future may have, conferred upon it by
virtue of the provisions of Section 1542 of the Civil Code of the State of
California which provides as follows:

            A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
            NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING
            THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
            SETTLEMENT WITH THE DEBTOR.

      Acceptance of this Release shall not be deemed or construed as an
admission of liability by any party released.

      Releasor acknowledges that either (a) it has had advice of counsel of its
own choosing in negotiations for and the preparation of this release, or (b) it
has knowingly determined that such advice is not needed.

DATED:
       -----------------

                                    Individual Releasor:
                                                          --------------
                                    [Name of individual], individually

                                    Entity Releasor:
                                                      ------------------

                                    By:
                                        --------------------------------
                                    Name:
                                          ------------------------------------
                                    Title:
                                           -----------------------------------

                                       48

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