Document:

EXHIBIT 10.2

COCA-COLA ENTERPRISES INC.

DEFERRED COMPENSATION PLAN

FOR

NONEMPLOYEE DIRECTORS

(As Amended and Restated Effective January 1, 2005)

     1.    
          Purpose. The purpose of the Deferred Compensation Plan for Nonemployee
          Directors (the “Plan”) is to provide certain Directors of Coca-Cola
          Enterprises Inc. (the “Corporation”) a vehicle for the deferral of
          certain of their compensation as a Director. 

     2.    
          Effective Date. The Plan, as amended and restated, shall be effective as
          of January 1, 2005. 

     3.    
          Eligibility. All Directors of the Corporation who are not employees of
          the Corporation or of any subsidiary of the Corporation and the Chairman of the
          Board of Directors and shall participate in the Plan. 

     4.    
          Automatic Deferral of Compensation. 

         (a)       
          Automatic Deferrals. Fifteen Thousand Dollars ($15,000) of each annual
          retainer and one-third of all meeting fees payable to a participant shall be
          deferred under the Plan. Deferrals under this paragraph 4 shall be known as
          “Automatic Deferrals.” 

         (b)       
          Qualifying Director. There shall be no Automatic Deferrals during any
          calendar year with respect to any Director having direct or indirect beneficial
          ownership of the Corporation’s shares representing one percent (1%) or more
          of the Corporation’s issued and outstanding shares of common stock as of
          the last trading day of the prior year (a “Qualifying Director”). The
          percentage will be determined by information set forth in the Corporation’s
          most recent quarterly report, and any current report subsequent thereto, filed
          with the Securities and Exchange Commission most immediately prior to December
          31 of the preceding calendar year. 

     5.    
          Voluntary Deferral of Compensation. 

         (a)       
          Amount of Voluntary Deferral. A participant may defer receipt of all or a
          specified portion of the annual retainer and meeting fees receivable for service
          as a Director of the Corporation after deduction of Automatic Deferrals, if any,
          (“Net Compensation”), but not any other compensation or expense
          reimbursement. Deferrals under this paragraph 5 shall be known as
          “Voluntary Deferrals.” 

         (b)       
          Manner of Electing Voluntary Deferral. A participant shall elect to make
          a Voluntary Deferral by giving written notice to the Corporation on the
          applicable election form provided by the Corporation (the “Election
          Form”), specifying the following: 

               	(i)	  	 the
                    amount of the Voluntary Deferral, expressed as a percentage
                    of Net Compensation; and 

 

	
                    (ii)	 	 whether
                    and, if so, what percentage of Voluntary Deferrals shall be
                    credited to the Stock Account. 

                        (c)       
          Time of Election. Elections with respect to Voluntary Deferrals may be
          made at the following times:

 

               	
                    (i)	  	
                    A nominee for election for Director (who is not at the time of nomination a
                    sitting Director or an employee of the Corporation) may elect a Voluntary
                    Deferral any time before election to the Board or within 30 days after election
                    to the Board, provided such election is made before the individual receives any
                    compensation for service on the Board or a committee. 
                    

 

               	(ii)	  	
                    A sitting Director who has never elected to make a Voluntary Deferral may elect
                    to make a Voluntary Deferral at any time during the year. Such Voluntary
                    Deferral election shall not, however, be effective until January 1 of the
                    following year. 

                    

         (d)       
          Change in, or Discontinuance of, Voluntary Deferral Election. A
          participant may elect to change or discontinue a prior election with respect to
          his or her Voluntary Deferral by completing a new Election Form, but such
          election shall not, however, be effective until January 1 of the following year. 

     
    (e)       
          Term of Election. Unless changed or discontinued pursuant to subparagraph
          (d) above, a Voluntary Deferral shall continue in effect until the end of the
          participant’s service as a Director. 

     6.    
          Deferred Compensation in Lieu of Retirement Benefits. A participant shall
          receive deferred compensation in lieu of retirement benefits (“Retirement
          Benefit Deferrals”) in the amount of $16,000 for each calendar year, as
          described below: 

         (a)       
          With respect to a participant other than a Qualifying Director, such increase
          shall be made to the participant’s Stock Account in accordance with
          subparagraph 7(b)(ii). 

         (b)       
          With respect to a Qualifying Director, such increase shall be to his or her
          Basic Account, unless he or she elects, on the applicable Election Form, to have
          such increase be made to his or her Stock Account. 

         (c)       
          Notwithstanding the foregoing, no Retirement Benefit Deferrals shall be credited
          to the Account of the Chairman of the Board in the event such Chairman is an
          employee of the Company as of the first trading day of a calendar year. 

     7.    
          Deferred Compensation Accounts. The Corporation shall establish on its
          books and records one or more deferred compensation accounts for each
          participant, as provided below. 

         (a)       
          Basic Account. Except to the extent a participant elects otherwise, all
          Voluntary Deferrals and the Retirement Benefit Deferrals of a Qualifying
          Director will be credited to the participant’s Basic Account. At the end of
          each calendar year or initial or terminal portion of a year, such Basic Account
          will be credited with interest, at an annual rate equivalent to the weighted
          average prime lending rate of SunTrust Bank, Atlanta for the relevant year or
          portion thereof (the “Interest Equivalents”), upon the average daily
          balance in the Basic Account during such year or portion thereof. 

         (b)       
          Stock Account. 

               	(i) 	  	
                    All Automatic Deferrals and, to the extent specified on the participant’s
                    Election Form, any Voluntary Deferrals, shall be credited to the
                    participant’s Stock Account. The Corporation shall credit to the Stock
                    Account that number of whole shares of common stock of the Corporation that
                    could be purchased with an amount equal to such Automatic Deferrals and
                    Voluntary Deferrals, determined on the basis of the average of the high and low
                    market prices at which a share of common stock of the Corporation sold on the
                    trading day preceding the date such compensation would otherwise be payable, as
                    reported on the New York Stock Exchange Composite Transactions listing.
                    

 

               	(ii) 	  	
                    All Retirement Benefit Deferrals of participants other than Qualifying Directors
                    (unless such Qualifying Director elects otherwise) shall be credited to the
                    participant’s Stock Account. The Corporation shall credit to the Stock
                    Account that number of whole shares of the common stock of the Corporation that
                    could be purchased with an amount equal to such Retirement Benefit Deferrals,
                    determined on the basis of the average of the high and low market prices at
                    which a share of common stock of the Corporation sold on the first trading day
                    of the calendar year to which such Retirement Benefit Deferral relates, as
                    reported on the New York Stock Exchange Composite Transactions listing.
                    

 

               	(iii) 	  	
                    After crediting such number of whole shares to a participant’s Stock
                    Account in accordance with subparagraphs 7(b)(i) and (ii), any amount which
                    represents a fractional share shall be credited to the participant’s Basic
                    Account. 

                        (c)       
          Treatment of Hypothetical Dividends. 

               	(i) 	  	
                    “Hypothetical Dividends” refers to an amount equal to dividends paid
                    on shares of common stock which are credited to a participant’s Stock
                    Account, as if that number of shares had been actually outstanding on the record
                    date of such dividend, and “dividends” means the dividends paid on a
                    share of the Corporation’s common stock from time to time.
                    

 

               	(ii) 	  	
                    Hypothetical Dividends on the Stock Account balances will be credited to the
                    participant’s Dividend Account. 

                    

         (d)       
          Dividend Account. Balances in the Dividend Account will be credited with
          Interest Equivalents as if they were in the Basic Account. However, once a year,
          effective as of the second Wednesday in February (the “Dividend Conversion
          Date”) the credit balance of the Dividend Account will first be credited
          with any Interest Equivalents earned since the last date it was credited and,
          second, will be treated as if it had been used to purchase the maximum number of
          whole shares of the common stock of the Corporation. That number of whole shares
          will be automatically credited to the Stock Account and any amounts which would
          represent a fractional share shall remain in the Dividend Account as a cash
          credit balance. To compute the maximum number of whole shares purchasable, each
          share will be valued at the average of the high and low market prices at which a
          share of common stock of the Corporation was sold on the trading day preceding
          the Dividend Conversion Date, as reported on the New York Stock Exchange
          Composite Transactions listing. 

     8.    
          Value of Deferred Compensation Accounts. A participant’s Basic
          Account, Stock Account and Dividend Account shall be referred to collectively as
          his or her “Accounts.” The value of each participant’s Accounts
          shall consist of the total balance in all such Accounts. As promptly as
          practicable following the close of each calendar year, a statement will be sent
          to each participant as to the balance in the participant’s Accounts as of
          the end of such year, including the number of shares credited to the Stock
          Account and the value of such shares, based upon the average of the high and low
          market prices at which a share of common stock of the Corporation sold on the
          trading day coincident with or immediately preceding the end of such calendar
          year, as reported on the New York Stock Exchange Composite Transactions listing. 

     9.    
          Payment of Deferred Compensation. 

         (a)       
          Medium of Payment. Payments from the Stock Account will be made in whole
          shares of the Corporation’s common stock, and payments from all other
          Accounts will be made in cash. All payments of cash shall include an amount
          equal to any Interest Equivalents on the Basic Account and the Dividend Account
          that have accrued through the date immediately preceding the date such payments
          are made. 

         (b)       
          Time and Manner of Payment. 

               	(i) 	  	
                    A participant’s Account shall be paid at such time and in such manner as
                    specified by the participant in accordance with the terms of this paragraph
                    9(b). 

 

     	(A) 	  	
          For an individual who was a participant as of December 31, 2004, the election of
          payment timing and manner that the participant had in place on December 31, 2004
          shall govern. If no such election was in place, the default time and manner of
          payment specified in this paragraph 9(b) shall apply. 

 

     	(B) 	  	
          For an individual who becomes a participant on or after January 1, 2005, such
          participant’s Account shall be paid as elected by such participant on the
          Election Form provided by the Corporation before or within 30 days following
          election to the Board. If no such election is made, the default time and manner
          of payment specified in paragraphs 9(b)(iii) and (iv) shall apply. 

 

               	(ii) 	  	
                    A participant’s election or default election pursuant to the preceding
                    paragraph may not be changed once such election is made, except as follows.
                    

 

     	(A) 	  	 A
          participant may elect to change his or her election, provided 

 

     	
              	
          (1)  such participant makes such election on the Election Form specified by the
          Corporation, 

 
	
            	
          (2)  such election is
          made at least 12 months before the first scheduled payment would
          otherwise be made,

 
	  	
          (3)  the election is not effective for at least 12 months, and 

 
	  	
          (4)  the election further defers the first scheduled payment by at least
          five years. 

 

          

	  	
For
this purpose, installment payments shall be treated as being made on the date of the first
scheduled payment. 

 	(B) 	  	
          A participant may elect to change his or her election in the manner and during
          the periods specified by the Corporation in 2006 and 2007. Except with respect
          to any participant who is not subject to United States income tax, any such
          change made in 2006 may not accelerate payment into 2006 nor defer any payment
          that would otherwise be made in 2006, and any such change made in 2007 may not
          accelerate payment into 2007 nor defer any payment that would otherwise be made
          in 2007.

 

               	(iii) 	  	
                    A participant’s Account under the Plan shall be distributed in the form of
                    either a lump sum or annual installments (not to exceed ten) as elected by the
                    participant pursuant to this paragraph 9(b). If a participant does not make an
                    election as to the form of payment, the Account shall be distributed in a lump
                    sum. |

 

               	(iv) 	  	
                    A participant’s Account under the Plan shall be distributed
                    either 

 

	
                    (A)	
                      	
                    upon the participant’s separation from service with the
                    Corporation or

 

     	(B) 	  	
          upon the later of the participant’s separation from service with the
          Corporation or a date specified by the participant. 

 

	  	
If
a participant does not make an election as to the time of payment, payment shall be made
upon the participant’s separation from service with the Corporation. 

 

               	(v) 	  	 If
                    the participant elects installment payments, the following
                    rules apply: 

 

     	(A) 	  	
          The participant may designate as part of such election what portion of each
          payment shall be debited to and be deemed paid from his or her Stock Account, or
          from his Basic Account and Dividend Account. If, however, no such designation is
          made before payments are to begin, the Corporation shall debit payments
          proportionately from each of the Accounts. 

 

     	(B) 	  	
          During any such installment payment period, the Corporation shall continue to
          maintain the Stock Account and the Dividend Account, as provided above, and
          shall on each Dividend Conversion Date transfer the credit balance from the
          Dividend Account to the Stock Account, as provided above. 

          10.    
          Amount Payable on Death. In the event of a participant’s death,
          prior to a total distribution of his or her Accounts, the balance in such
          Accounts (including Interest Equivalents in relation to the elapsed portion of
          the year of death) shall be determined as of the date of death, and the balance
          shall be paid in a single lump sum as soon as reasonably possible thereafter to
          the beneficiary or beneficiaries previously designated by the participant. Any
          such designation shall be in writing and delivered to the Secretary of the
          Corporation or the Office of the General Counsel and may be changed by a
          later-dated designation. If there is no designation in effect, the balance of
          the participant’s Accounts shall be paid to his or her estate. 

     11.    
          Unfunded Promise to Pay; No Segregation of Funds or Assets. The right of
          a participant to receive any unpaid portion of the participant’s Accounts
          shall be an unsecured claim against the general assets of the Corporation.
          Neither anything contained in the Agreement nor the establishment or maintenance
          of the Basic Account, the Stock Account or the Dividend Account shall require
          the segregation of any assets of the Corporation or any type of funding by the
          Corporation of such Accounts or the amounts payable therefrom, it being the
          intention of the parties that the Plan be an unfunded arrangement for federal
          income tax purposes. No participant shall have any rights to or interest in any
          specific assets or shares of common stock of the Corporation by reason of the
          Plan, and his or her only rights to enforce payment of the obligations of the
          Corporation hereunder shall be those of a general creditor of the Corporation.
          It is further understood that the shares credited to the Stock Account shall be
          only a means for measuring the amount of deferred compensation payable under the
          Plan and shall not constitute or represent outstanding shares of common stock of
          the Corporation for any purpose. 

     12.    
          Changes in Capitalization. The number of shares of common stock credited
          to each participant’s Stock Account shall be proportionately adjusted for
          any increase or decrease in the number of issued and outstanding shares of
          common stock of the Corporation resulting from a subdivision or combination of
          shares or the payment of a stock dividend in shares of common stock of the
          Corporation to holders of outstanding shares or any other increase or decrease
          in the number of such shares effected without receipt of consideration by the
          Corporation. Appropriate adjustments shall also be made to reflect any
          recapitalization, reclassification of shares or reorganization affecting the
          capital structure of the Corporation. In the event of a merger or consolidation
          in which the Corporation is not the surviving corporation or in which the
          Corporation survives only as a subsidiary of another corporation, and in such
          transaction the holders of common stock of the Corporation become entitled to
          receive shares of stock or securities of the surviving corporation, the
          participant’s Stock Account shall be credited with that number of
          hypothetical shares of securities of the surviving corporation that would be
          exchanged for the shares of common stock of the Corporation in such transaction
          if they had been outstanding shares, and any cash or other consideration that
          would be receivable if such shares had been outstanding shall be credited to the
          participant’s Basic Account. 

     13.    
          Nonassignability. The right of a participant to receive any unpaid
          portion of the participant’s Accounts shall not be assigned, transferred,
          pledged or encumbered or be subject in any manner to alienation or anticipation. 

     14.    
          Administration. This Plan shall be administered by the Board of Directors
          or a Committee designated by the Board, which shall have the authority to adopt
          rules and regulations for carrying out the Plan and to interpret, construe and
          implement the provisions thereof. The Plan is intended to be and at all times
          shall be interpreted and administered so as to comply with Internal Revenue Code
          Section 409A. 

     15.    
          Amendment and Termination. This Plan may be amended or modified at any
          time by the Board of Directors of the Corporation; provided, however, that no
          such amendment or modification shall, without the consent of a participant,
          adversely affect such participant’s rights with respect to amounts
          theretofore accrued to the participant’s Accounts. The Plan may be
          terminated and Accounts distributed to participants in accordance with and
          subject to the rules of Prop. Treas. Reg. §1.409A-3(h)(2)(viii) (or the
          corresponding provision of the final regulations under Internal Revenue Code
          Section 409A) and any generally applicable guidance issued by the Internal
          Revenue Service permitting such termination and distribution; provided, however,
          that no such termination shall, without the consent of a participant, adversely
          affect such participant’s rights with respect to amounts theretofore
          accrued to the participant’s Accounts. Notwithstanding the foregoing, no
          additional amounts shall be credited to the Stock Account on or after February
          17, 2014, and any such amounts that would have been credited to the Stock
          Account shall be credited to the Basic Account.Auxilio 10.1 Loan Agreement

    

    LOAN
      AND
      SECURITY AGREEMENT

    

    $1,500,000                                                                 El
      Segundo, California

                                                                          Date:
      October 25,
      2006

    

    FOR
      VALUE
      RECEIVED, the undersigned AUXILIO, INC., a Nevada corporation (“Company”),
      hereby promises to pay to CAMBRIA INVESTMENT FUND, L.P., a California limited
      partnership (the “Holder”) and the other holders listed on Schedule 1 hereto
      (together, the “Holders”)
      at
      such place as Holder may specify, in lawful money of the United States of
      America, the principal amount of up to $1,500,000 (the “Loan
      Amount”)
      on or
      before October 22, 2007 (the “Maturity
      Date”),
      plus
      interest on the principal amount outstanding from time to time hereunder at
      a
      rate equal to the lesser of (i) the maximum lawful rate or (ii) twelve percent
      (12%) per year. Interest on the outstanding principal balance shall accrue
      and
      be payable on the last day of each fiscal quarter. Interest due and payable
      hereunder shall be computed on the basis of a year of 360 days and for the
      actual number of days elapsed. Company shall also have delivered to Holder
      a
      warrant to purchase stock, in form reasonably acceptable to Holder
      (“Warrant”,
      together with this Loan and Security Agreement (this “Agreement”)
      and
      any other documents delivered in connection with this Agreement, the
“Loan
      Documents”).
      

    

    1.     Advances;
      Payments.
      As
      requested by the Company from time to time, and provided there shall be no
      Event
      of Default (as defined below) under this Agreement, the Holders will advance
      the
      Loan Amount to the Company in increments of $50,000. The initial advance of
      $250,000 will be made on October 27, 2006. Of the total loan amount of
      $1,500,000, the final $500,000 advance (a) shall not be made prior to February
      15, 2007, and (b) shall only be made by the Holders if no Material Adverse
      Change (as defined below) shall have occurred. All payments under this Agreement
      shall be applied first to fees and expenses, then to accrued but unpaid interest
      and then to principal. Any principal or interest payments on this Agreement
      outstanding after the occurrence and during the continuance of a default under
      this Agreement shall bear interest at a rate equal to the lesser of (i) the
      lawful legal rate or (ii) five percent (5%) (computed annually) above the
      interest rate otherwise applicable under this Agreement. As used herein,
“Material
      Adverse Change” means, when used in connection with the Company, any change or
      effect materially adverse to the business, financial condition or results of
      operations of the Company and its subsidiaries taken as a whole.

    

    2.     Secured
      Agreement.
      To
      secure repayment of all obligations evidenced by this Agreement and performance
      of all of Company’s obligations hereunder, Company, grants Holder a second
      priority security interest (subject to the first lien held by Laurus Master
      Fund, LTD) in all of Company’s inventory, accounts, equipment, cash, deposit
      accounts, securities, Intellectual Property (as defined in Exhibit
      A
      hereto),
      chattel paper, general intangibles and instruments, now existing or hereafter
      arising, and all proceeds thereof, as such terms are defined in the California
      Uniform Commercial Code (the “UCC”),
      whether now owned or hereafter acquired, or any value received in exchange
      for
      any of the foregoing (collectively, the “Collateral”)
      as set
      forth in Exhibit
      A.
      Company
      shall take such actions as Holder reasonably requests from time to time to
      perfect or continue the second priority security interest granted hereunder
      including, without limitation, the filing of all necessary UCC financing
      statements in connection therewith. Company shall not dispose of or encumber
      all
      or any substantial part of the Collateral, other than in the ordinary course
      of
      business, without the prior written consent of Holder. 

    

    3.     Representations,
      Warranties and Covenants of Company.

    

    (a)
      Corporate
      Existence and Authority.
      Company
      is and will continue to be duly organized, validly existing and in good standing
      under the laws of the jurisdiction of its incorporation or organization. Company
      is and will continue to be qualified and licensed to do business in all
      jurisdictions in which any failure to do so would have a material adverse effect
      on Company. Company has all requisite power to transact the business it
      transacts and proposes to transact, to execute and deliver this Agreement,
      and
      all other documents and agreements contemplated by this Agreement, and to
      perform the provisions of this Agreement and to consummate the transactions
      contemplated by this Agreement. The execution, delivery and performance of
      this
      Agreement, and all other documents and agreements contemplated by this
      Agreement, and the consummation of the transactions contemplated by this
      Agreement, have been duly authorized and approved by Company. This Agreement,
      and all other documents and agreements contemplated by this Agreement have
      each
      been duly authorized, executed and delivered by, and each is the valid and
      binding obligation of, Company enforceable against Company in accordance with
      its terms, except as may be limited by applicable bankruptcy, reorganization,
      insolvency, moratorium or other similar laws or by legal or equitable principles
      relating to or limiting creditors’ rights generally.

    

    (b)
      No
      Conflicts.
      Except
      as set forth on Schedule 3(b), the consummation of the transactions contemplated
      by this Agreement and the performance of the terms and provisions of this
      Agreement, and any other documents or agreements contemplated by this Agreement
      will not (i) contravene, result in any breach of, or constitute a default
      under any indenture, mortgage, deed of trust, bank loan or credit agreement,
      corporate charter, by-laws or other material agreement or instrument to which
      Company is a party or by which Company or any of its properties or the
      Collateral is bound, (ii) conflict with or result in a breach of any of the
      terms, conditions or provisions of any order of any court, arbitrator or
      Federal, State, municipal or other governmental department, commission, board,
      bureau, agency or instrumentality, domestic or foreign (collectively,
“Governmental
      Person”)
      applicable to Company or (iii) violate any material provision of any statute
      or
      other rule or regulation of any Governmental Person applicable to Company,
      which
      could have a material adverse effect on Company.

    

    (c)
      Place
      of Business; Location of Collateral.
      The
      address set forth in Section
      8(c)
      of this
      Agreement is Company’s chief executive office. Company will give Holder prior
      written notice before opening any additional place of business or changing
      its
      chief executive office. Holder acknowledges that portions of the Collateral
      are
      located in the field and are moved from time to time. The Company will cooperate
      with Holder in (i) perfecting the security interests granted hereunder in all
      Collateral and (ii) in providing Holder, at Holder’s request, with current
      information regarding the whereabouts of the Collateral from time to time.
      

    

    (d)
      Title
      to Collateral; Permitted Liens.
      Company
      is now, and will at all times in the future be, the sole owner of all the
      Collateral, except for items of equipment which are leased by Company. The
      Collateral now is and will remain free and clear of any and all liens, charges,
      security interests, encumbrances and adverse claims, except for the first
      priority security interest held by Laurus Master Fund LTD in all of the assets
      of the Company and any purchase money or lessor security interests in certain
      equipment Holder now has, and will continue to have, a second-priority perfected
      and enforceable security interest in all of the Collateral, subject only to
      the
      purchase money or lessor security interests, contractual rights of set off
      under
      bank agreements, and the liens in favor of the other parties to the
      Intercreditor Agreement, and Company will at all times defend Holder and the
      Collateral against all claims of others (subject to the rights of Laurus Master
      Fund LTD and the holders of purchase money or lessor security interests in
      certain equipment, contractual rights of set off under bank agreements, and
      the
      liens in favor of the other parties to the Intercreditor Agreement). So long
      as
      the loan is outstanding, none of the Collateral now is or will be affixed to
      any
      real property in such a manner, or with such intent, as to become a fixture.
      Company is not and will not become a lessee under any real property lease
      pursuant to which the lessor may obtain any rights in any of the Collateral
      and
      no such lease now prohibits, restrains, impairs or will prohibit, restrain
      or
      impair Company’s right to remove any Collateral from the leased premises
      (subject to statutory rights of landlords). Whenever any Collateral is located
      upon premises in which any third party has an interest (whether as owner,
      mortgagee, beneficiary under a deed of trust, lien or otherwise), Company shall,
      whenever requested by Holder, use its best efforts to cause such third party
      to
      execute and deliver to Holder, in form acceptable to Holder, such waivers and
      subordinations as Holder shall specify, so as to ensure that Holder’s rights in
      the Collateral are, and will continue to be, superior to the rights of any
      such
      third party. Company will keep in full force and effect, and will comply with
      all the terms of, any lease of real property where any of the Collateral now
      or
      in the future may be located.

    

    (e)
      Maintenance
      of Collateral.
      Company
      will maintain the Collateral in good working condition, ordinary wear and tear
      excepted, and Company will not use the Collateral for any unlawful purposes.
      Company will immediately advise Holder in writing of any material loss or damage
      to the Collateral.

    

    (f)
      Books
      and Records.
      Company
      has maintained and will maintain at Company’s chief executive office complete
      and accurate books and records, comprising an accounting system in accordance
      with generally accepted accounting principles.

    

    (g)
      Financial
      Condition, Statements and Reports.
      All
      financial statements now or in the future delivered to Holder have been, and
      will be, prepared in conformity with generally accepted accounting principles
      and now and in the future will completely and fairly reflect the financial
      condition of Company, at the times and for the periods therein stated. Between
      the last date covered by any such statement provided to Holder and the date
      hereof, there has been no material adverse change in the financial condition
      or
      business of Company. Company is now and will continue to be
      solvent.

    

    (h)
      Compliance
      with Law.
      Company
      has complied, and will comply, in all material respects, with all provisions
      of
      all applicable laws and regulations, including, but not limited to, those
      relating to Company’s ownership of real or personal property, the conduct and
      licensing of Company’s business, and all environmental matters.

    

    (i)
      Litigation.
      There
      is no claim, suit, litigation, proceeding or investigation pending or (to the
      best of Company’s knowledge) threatened by or against or affecting Company in
      any court or before any governmental agency (or any basis therefor known to
      Company) which could normally or reasonably be expected to result, either
      separately or in the aggregate, in any material adverse change in the financial
      condition or business of Company, or in any material impairment in the ability
      of Company to carry on its business in substantially the same manner as it
      is
      now being conducted. Company will promptly inform Holder in writing of any
      claim, proceeding, litigation or investigation in the future threatened or
      instituted by or against Company.

    

    (j)
      Use
      of
      Proceeds.
      All
      proceeds of the loan shall be used solely for lawful business
      purposes.

     

    (k)
      Intellectual
      Property.
      Company
      possesses all material licenses, permits, franchises, authorizations, patents,
      copyrights, trademarks and trade names and any other tangible or intangible
      or
      intellectual property rights, or rights thereto, required to conduct its
      business substantially as now conducted and as currently proposed to be
      conducted, without actual knowledge of conflict with the rights of
      others.

     

    (l)
      Indebtedness.
      Except
      for the loan evidenced by this Agreement and the indebtedness identified on
      Schedule
      3(l)
      or as
      otherwise disclosed in Company’s financial statements, as of June 30, 2006,
      previously delivered to Holder, Company has no outstanding indebtedness of
      any
      kind (including contingent obligations, tax assessments and unusual forward
      or
      long-term commitments). 

    

    (m)
      Disclosure.
      No
      representation or other statement made by Company to Holder contains any untrue
      statement of a material fact or omits to state a material fact necessary to
      make
      any statements made to Holder not misleading. 

    

    (n)
      Performance.
      Company
      shall pay the principal of and interest on the loan evidenced by this Agreement
      in the manner provided in this Agreement. The obligation of Company described
      in
      the preceding sentence is absolute and unconditional, irrespective of any tax
      or
      accounting treatment of such obligation including without limitation any
      documentary stamp, transfer, ad valorem or other taxes assessed by any
      jurisdiction in connection with this transaction.

    

    (o)
      Stay,
      Extension and Usury Laws.
      Company
      agrees (to the extent it may lawfully do so) that it will not at any time insist
      upon, plead or in any manner whatsoever claim or take the benefit or advantage
      of, any stay or extension law or any usury law or other law that would prohibit
      or forgive Company from paying all or a portion of the principal of, finance
      fee, or interest on the loan contemplated by this Agreement, wherever enacted,
      now or at any time hereinafter in force, or that may materially affect the
      covenants or the performance of this Agreement in any manner inconsistent with
      the provisions of this Agreement. Company expressly waives all benefit or
      advantage of any such law. If a court of competent jurisdiction prescribes
      that
      Company may not waive its rights to take the benefit or advantage of any stay
      or
      extension law or any usury law or other law in accordance with the prior
      sentence, then the obligation to pay interest on the principal shall be reduced
      to the maximum legal limit under applicable law governing the interest payable
      in connection with this Agreement, and any amount of interest paid by Company
      that is deemed illegal shall be deemed to have been a prepayment of principal
      on
      the loan.

    

    (p)
      Taxes.
      Company
      shall make all necessary tax filings and reports and pay prior to delinquency
      all taxes, assessments and governmental levies that may be imposed upon Company,
      except as contested in good faith and by appropriate proceedings.

    

    (q)
      Limitations
      on Indebtedness.
      Other
      than amounts owing to Laurus Master Fund, LTD, without Holder’s prior written
      consent, Company shall not, directly or indirectly, create, incur, assume,
      suffer to exist or otherwise in any manner become liable or commit to become
      liable for any indebtedness other than Company’s obligations to Holder under
      this Agreement and indebtedness incurred in the ordinary course of business
      not
      in excess of US$50,000 in the aggregate. 

    

    (r)
      Insurance.
      Company
      shall maintain insurance with responsible and reputable insurance companies
      or
      associations in such amounts and covering such risks as is usually carried
      by
      companies engaged in similar businesses and owning similar properties in the
      same general areas in which Company operates. 

    

    (s)
      Reports.
      Company
      will provide Holder with quarterly financial statements within 45 days after
      the
      end of each quarter and such additional financial and other information as
      Holder may reasonably request from time to time.

    

    (t)
      Insurance.
      Company
      will maintain insurance on the Collateral that includes a lender’s loss payable
      endorsement in favor of Holder as an additional loss payee. Company will
      maintain insurance in a form acceptable to Holder relating to the Collateral
      and
      Company’s business in amounts and of a type that are customary to businesses
      similar to Company’s.

    

    (u)
      Consolidation.
      Company
      will not merge or consolidate with any person or entity, or make any
      investments, or dispose of any substantial portion of its assets without
      Holder’s prior written consent.

    

    (v)
      Operations
      of the Company.
      During
      the period of time that any amount under this Loan Agreement is unpaid and
      outstanding, Company shall, and shall cause each of its subsidiaries to, in
      all
      material respects, except as contemplated by this Loan Agreement, carry on
      its
      business in the usual and ordinary course in substantially the same manner
      as
      heretofore conducted and, to the extent consistent therewith, use reasonable
      efforts to preserve intact its current business organizations, keep available
      the services of its current officers and key employees and preserve its present
      relationships with customers, suppliers and others having significant business
      dealings with it. Without limiting the generality of the foregoing, during
      such
      period, the Company shall not, and the Company shall cause its Subsidiaries
      not
      to, without the prior written consent of the Holder pursuant
      to the procedure set forth in
      Section 3(v)(vii)
      below:

     

    (i)  (A) declare,
      set aside or pay any dividends on, or make any other actual, constructive or
      deemed distributions in respect of, any of its capital stock, or otherwise
      make
      any payments to its stockholders in their capacity as such, (B) split,
      combine or reclassify any of its capital stock or issue or authorize the
      issuance of any other securities in respect of, in lieu of or in substitution
      for shares of its capital stock, or (C) purchase, redeem or otherwise
      acquire any shares of its capital stock or any other securities thereof or
      any
      rights, warrants or options to acquire any such shares or other
      securities;

     

    (ii)  amend
      its
      articles or certificate of incorporation or bylaws or other similar
      organizational documents;

     

    (iii)  sell,
      lease, license, encumber or otherwise dispose of, or agree to sell, lease,
      encumber or otherwise dispose of, any of its assets, other than transactions
      that are in the ordinary course of business consistent with past practice or
      pursuant to licenses entered into in the ordinary course of business consistent
      with past practice, and, in any event, which involve assets which in the
      aggregate are not in excess of $50,000;

     

    (iv)  other
      than borrowings under this Loan Agreement and the loan of Laurus Master Fund,
      LTD, incur any indebtedness for borrowed money on terms less favorable to
      Company than those set forth in this Loan Agreement, or guarantee any such
      indebtedness or issue or sell any debt securities or warrants or rights to
      acquire any debt securities of the Company or its Subsidiaries on terms less
      favorable to Company than those set forth in this Loan Agreement, guarantee
      any
      debt securities of others, enter into any “keep-well” or other agreement to
      maintain any financial statement condition of another person or enter into
      any
      arrangement having the economic effect of any of the foregoing, or make any
      loans, advances or capital contributions to, or other investments in, any other
      person, other than to or in the Company or its Subsidiaries;

     

    (v)  increase
      the compensation payable or to become payable to its directors, officers or
      employees, except for increases required under employment agreements existing
      on
      the date hereof, or with respect to non-executive officer and non-director
      employees, in the ordinary course of business consistent with past practice
      and
      permitted under employment agreements, existing on the date hereof, or grant
      any
      severance or termination pay to, or enter into any employment or severance
      agreement, or establish, adopt, enter into, or amend or take action to enhance
      or accelerate any rights or benefits under, any collective bargaining, bonus,
      profit sharing, thrift, compensation, stock option, restricted stock, pension,
      retirement, deferred compensation, employment, termination, severance or other
      plan, agreement, trust, fund, policy or arrangement for the benefit of any
      director, officer or employee, except, in each case, as may be required by
      the
      terms of any such plan, agreement, trust, fund, policy or arrangement or to
      comply with applicable law or regulation;

     

    (vi)  knowingly
      violate or fail to perform any material obligation or duty imposed upon it
      by
      any applicable federal, state or local law, rule, regulation, guideline or
      ordinance;

     

    (vii)  other
      than in the ordinary course of business consistent with past practice, enter
      into, modify, amend or terminate any material contract or agreement to which
      the
      Company or any of its Subsidiaries is a party or waive, release or assign any
      material rights or claims;

     

    (viii)  Holder
      hereby designates Sandra Hahn (the “Agent
      Designee”),
      as
      the officer of Holder from which the Company must receive consent prior
      to
      taking (or any of its subsidiaries taking) the actions set forth in Section
      3(v)
      hereof.
      Within
      seventy-two (72) hours following receipt by the Agent Designee of written notice
      from Company’s
      designee
      of the
      Company’s (or any of its subsidiary’s) desire to take any actions set forth in
Section
      3(v),
      the
      Agent Designee shall respond to the Company in writing indicating whether Agent
      consents to such action. If the Agent Designee fails to respond to the Company
      within such seventy-two (72) hour period, then Agent shall be deemed to have
      consented in writing to such requested actions for purposes of Section
      3(v)
      hereof.

     

    4.     Prepayments.
      

    

    (a)
      Optional.
      Company
      may, from time to time, prepay the loan evidenced hereby, in whole or in part,
      so long as each partial prepayment of principal is equal to or greater than
      $10,000 and Company has given Holder two (2) or more business days’ written
      notice of such optional prepayment. Any such optional prepayment of principal
      shall be without premium or penalty. Each prepayment of principal under this
      Section
      shall be
      accompanied by all interest then accrued and unpaid on the principal so prepaid.
      Any principal prepaid pursuant to this Section
      shall be
      in addition to, and not in lieu of, all payments otherwise required to be paid
      under this Agreement at the time of such prepayment. . 

    

    (b)
      Mandatory.
      Unless
      otherwise agreed to by Holder, Company shall, subject to the consent of the
      Laurus Master Fund, such consent being required by that certain Subordination
      Agreement dated as of October 25, 2006, by and between the Company, Laurus
      Master Fund LTD and Cambria (the “Subordination Agreement”), prepay the loan to
      the extent of the net financing proceeds actually received by Company in the
      event that Company completes any financing transaction, including without
      limitation any public or private placements of debt or equity, that results
      in
      net proceeds to the Company in an amount in excess of $2,000,000 and that is
      unrelated to the exercise of: (i) any existing stock option, (ii) the Company’s
      Incentive Stock Option plan, or (iii) any existing contractual stock purchase
      right as of the date of this Agreement. 

    

    
      	5.  	
                  Optional
                Conversion.
                

            

    

    

    (a)
      At
      Holder’s option and upon the occurrence of one of the following events: (i)
      funding of the next Succeeding Financing of Company, or (ii) the sale and
      purchase of substantially all of the assets or stock of Company, the outstanding
      principal balance and all accrued interest under the loan evidenced by this
      Agreement shall be convertible, without the payment of any additional
      consideration by Holder and at the option of Holder, into equity securities
      of
      Company of the class and series offered by the Company in the Succeeding
      Financing described in (i) above or the sale and purchase of the assets or
      stock
      of Company described in (ii) above (the “Conversion
      Securities”).
      Holder’s option to convert will expire 60 days after the occurrence of one of
      the events described in subsections (i) and (ii) above, provided, that Company
      has given Holder at least 15 days’ prior written notice of such event. In the
      event Holder elects to convert upon a funding of the Succeeding Financing
      described in (i) above, Company shall issue the Conversion Securities to Holder
      at a price per share equal to the “Exercise Price” as defined in the Warrant,
      or, in the event the Holder elects to convert upon a sale of the assets or
      stock
      of Company described in (ii) above, Company shall issue common stock at a price
      per share equal to the lower of (y) the Exercise Price or (z) eighty percent
      (80%) of the book value of the common stock determined after giving effect
      to
      the purchase price of the assets, in each case by converting outstanding
      principal balance and all accrued interest under the loan evidenced by this
      Agreement into such equity. The outstanding principal shall continue to accrue
      interest, and Company shall be obligated to pay such interest, according to
      the
      terms and conditions of this Agreement until the Conversion Date (as defined
      below). 

    

    For
      purposes of this Section
      5,
      “Succeeding
      Financing”
means
      a
      sale of the Company of its debt or equity securities in a transaction that
      results in aggregate net proceeds to the Company in an amount in excess of
      $2,000,000. 

    

    (b)
      In
      order for the Holder to convert all amounts owing under this Agreement into
      equity, Holder shall deliver a written notice to Company that Holder elects
      to
      convert. Any conversion made at the election of Holder shall be deemed to have
      been made immediately prior to the close of business on the date Company is
      deemed to have received such notice, and the Holder or its nominee or nominees
      entitled to receive the equity shall be treated for all such purposes as the
      record holder or holders of such equity on such date (the “Conversion
      Date”).
      Company shall have no obligation to issue any fractional shares upon conversion.
      Any fractional shares shall be rounded up to the nearest whole share.
 

    

    6.     Fees
      and Expenses.
      Cambria
      Capital, LLC (“Cambria”)
      has
      served as placement agent in connection with the Loan, and the Company will
      pay
      Cambria an administrative and placement fee equal to 2% of the face amount
      of
      the Loan upon the initial funding of the Loan. Each party hereto shall pay
      its
      own costs and expenses, including reasonable attorney’s fees, incurred in the
      preparation of this Agreement and the other documents executed in connection
      with this Agreement. Company shall pay all reasonable and actual costs that
      Holder incurs in enforcing this Agreement or exercising any rights with respect
      to the collateral, including without limitation reasonable attorneys’ fees and
      expenses.

    

    7.     Events
      of Default; Remedies.

    

    (a)
      Events
      of Default Defined; Acceleration of Maturity.
      If any
      of the following events (“Events
      of Default”)
      shall
      occur (for any reason whatsoever and whether it shall be voluntary or
      involuntary or by operation of law or otherwise):

    

    (i)
      failure
      by the Company to make a payment of principal within ten days after the due
      date, whether at maturity or by reason of acceleration pursuant to the terms
      of
      this Agreement or
      by
      required prepayment;

    

    (ii)
      failure by the Company to pay any interest accrued and owing within ten days
      after the applicable due date, or failure to pay any other liabilities or make
      any other payment, fee or charge provided for herein or in any other document
      contemplated hereby within ten days after the due date;

    

    (iii)
      any
      representation or warranty made or deemed made by the Company in this Agreement
      shall prove to have been incorrect, untrue, or misleading in any material
      respect on the date when made or deemed to have been made;
      provided,
      however,
      that
      the Company shall have ten Business Days from notice of default to cure any
      such
      failure that is capable of cure before an Event of Default shall be deemed
      to
      have occurred under this Section;

    

    (iv)
      failure
      by the Company to perform any of the covenants imposed by this Agreement;
provided,
      however,
      that
      the Company shall have ten Business Days from notice of the default to cure
      any
      such failure that is capable of cure before an Event of Default shall be deemed
      to have occurred under this Section; 

    

    (v)
      the
      Company shall (1) apply for or consent to the appointment of, or the taking
      of
      possession by, a receiver, custodian, trustee or liquidator of itself or of
      all
      or a substantial part of its property and assets, (2) be generally unable to
      pay
      its debts as such debts become due, (3) make a general assignment for the
      benefit of its creditors, (4) commence a voluntary case under the United States
      Bankruptcy Code or similar law or regulation (as now or hereafter in effect),
      (5) file a petition seeking to take advantage of any other law providing for
      the
      relief of debtors, (6) fail to controvert in a timely or appropriate manner,
      or
      acquiesce in writing to, any petition filed against it in an involuntary case
      under the United States Bankruptcy Code or other law or regulation, (7)
      dissolve, (8) take any corporate action under any applicable law analogous
      to
      any of the foregoing, or (9) take any corporate action for the purpose of
      effecting any of the foregoing;

    

    (vi)
      a
      proceeding or case shall be commenced, without the application or consent of
      Company in any court of competent jurisdiction, seeking (1) the liquidation,
      reorganization, dissolution, winding up or composition or readjustment of its
      debts, (2) the appointment of a trustee, receiver, custodian, liquidator or
      the
      like of it or for all or any substantial part of its assets, or (3) similar
      relief in respect of Company, under any law providing for the relief of debtors,
      and such proceeding or case shall continue undismissed, or unstayed and in
      effect, for a period of sixty (60) days; or an order for relief shall be entered
      in an involuntary case under the United States Bankruptcy Code or other similar
      law or regulation, against Company; or action under the laws of any jurisdiction
      affecting Company analogous to any of the foregoing shall be taken with respect
      to Company and shall continue unstayed and in effect for any period of sixty
      (60) days; or

    

    (vii)
      final judgment for the payment of money shall be rendered by a court of
      competent jurisdiction against Company and Company shall not discharge the
      same
      or provide for its discharge in accordance with its terms, or procure a stay
      of
      execution thereof within sixty (60) days from the date of entry thereof and
      within said period of sixty (60) days, or such longer period during which
      execution of such judgment shall have been stayed, appeal therefrom and cause
      the execution thereof to be stayed during such appeal, and such judgment
      together with all other such judgments shall exceed in the aggregate US$50,000.
      

    

    

    then,
      subject to the rights of the Laurus Master Fund LTD contained in the
      Subordination Agreement, (x) upon the occurrence of any Event of Default
      described in Section
      7(a)(vi) or (vii),
      the
      unpaid principal amount of the loan, together with the interest accrued thereon
      and all other amounts payable by Company under this Agreement, shall
      automatically become immediately due and payable, without presentment, demand,
      protest, notice of acceleration or intent to accelerate or other requirements
      of
      any kind, all of which are hereby expressly waived by Company or (y) upon the
      occurrence of any other Event of Default, Holder may, by notice to Company,
      declare the unpaid principal amount of the loan to be, and the same shall
      forthwith become, due and payable, together with the interest accrued thereon
      and all other amounts payable by Company hereunder. Failure by Holder to
      indicate any Event of Default in any one notice shall not preclude Holder from
      indicating such omitted Event or Events of Default in future notices and shall
      not relieve Company of any liability under this Agreement, nor constitute a
      waiver of Holder’s rights under this Agreement. 

    

    (b)
      Suits
      for Enforcement.
      If any
      Event of Default shall have occurred and be continuing, Holder may proceed
      to
      protect and enforce its rights against Company, subject to the terms of the
      Intercreditor Agreement, either by suit in equity or by action at law, or both,
      whether for the specific performance of any covenant or agreement contained
      in
      this Agreement or in aid of the exercise of any power granted in this Agreement,
      or Holder may proceed to enforce the payment by Company of all sums due under
      this Agreement or to enforce any other legal or equitable right of Holder
      including without limitation all rights of a secured party under the
      UCC.

    

    Company
      covenants that, if it shall default in the making of any payment due hereunder
      or in the performance or observance of any agreement contained in this
      Agreement, it will pay to Holder such further amounts, to the extent lawful,
      to
      cover any reasonable costs and expenses of collection or of otherwise enforcing
      Holder’s rights, including without limitation the reasonable counsel fees and
      costs and expenses incurred in connection with any restructuring, negotiation,
      refinancing, workout, bankruptcy or other similar transaction or proceeding.
      The
      obligations set forth in this paragraph shall survive the payment in full of
      the
      loan.

    

    (c)
      Remedies
      Cumulative.
      No
      remedy herein conferred upon Holder is intended to be exclusive of any other
      remedy and each and every such remedy shall be cumulative and shall be in
      addition to every other remedy given hereunder or now or hereafter existing
      at
      law or in equity or by statute or otherwise.

    

    (d)
      Remedies
      Not Waived.
      No
      course of dealing between Company and any other person and no delay or failure
      in exercising any rights hereunder or under the loan in respect thereof shall
      operate as a waiver of Holder’s rights.

    

    8.     Miscellaneous.
      

    

    (a)
      Reliance
      on and Survival of Representations.
      All
      representations, warranties, covenants and agreements of Company herein shall
      be
      deemed to be material and to have been relied upon by Holder and shall survive
      the execution and delivery of this Agreement and of the securities, for so
      long
      as the loan remains outstanding.

    

    (b)
      Successors
      and Assigns.
      This
      Agreement shall bind and inure to the benefit of and be enforceable by Company,
      Holder and each of their respective successors and assigns, and, in addition,
      shall inure to the benefit of and be enforceable by each person who shall from
      time to time be a holder of the loan. Holder shall be permitted to transfer
      the
      securities being sold hereunder in accordance with their terms and in accordance
      with applicable restrictions under applicable federal and state securities
      laws.

    

    (c)
      Notices.
      All
      notices and other communications provided for in this Agreement shall be in
      writing and delivered by registered or certified mail, postage prepaid, or
      delivered by overnight courier (for next business day delivery) or telecopied,
      addressed as follows, or at such other address as any of the parties hereto
      may
      hereafter designate by notice to the other parties given in accordance with
      this
Section:

    

    1)     if
      to
      Company:

     

    Auxilio,
      Inc.

    27401
      Los Altos, Suite 100

    Mission
      Viejo, CA 92691

    Phone:
      949-614-0700

    Fax:
      949-614-0701 

    

    

    
      	 	
              2)

            	
              if
                to Holder:

            

    

     

    CAMBRIA
      INVESTMENT FUND, LP

    2321
      Rosecrans Avenue, Suite 4270

    El
      Segundo, CA 90245

    Fax:
      310.606.5555

    Phone:
      310.606.5556

    

    Any
      such
      notice or communication shall be deemed to have been duly given on the fifth
      day
      after being so mailed, the next business day after delivery by overnight
      courier, when received when sent by telecopy or upon receipt when delivered
      personally.

    

    (d)
      Counterparts.
      This
      Agreement may be executed in two or more counterparts, each of which shall
      be
      deemed an original but all of which together shall constitute one and the same
      instrument. Signatures may be exchanged by telecopy, with original signatures
      to
      follow. Each of the parties hereto agrees that it will be bound by its own
      telecopied signature and that it accepts the telecopied signatures of the other
      parties to this Agreement. The original signature pages shall be forwarded
      to
      Holder or its counsel and Holder or its counsel will provide all of the parties
      hereto with a copy of the entire Agreement.

    

    (e)
      Amendments.
      This
      Agreement may only be amended by a writing duly executed by the parties
      hereto.

    

    (f)
      Severability.
      If any
      term or provision of this Agreement or any other document executed in connection
      herewith shall be determined to be illegal or unenforceable, all other terms
      and
      provisions hereof and thereof shall neverthe-less remain effective and shall
      be
      enforced to the fullest extent permitted by applicable law.

    

    (g)
      Governing
      Law; Submission to Process.
      THIS
      AGREEMENT AND ALL AMENDMENTS, SUPPLEMENTS, WAIVERS AND CONSENTS RELATING HERETO
      OR THERETO SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
      THE
      STATE OF CALIFORNIA WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. THE
      COMPANY HEREBY IRREVOCABLY SUBMITS ITSELF TO THE NON-EXCLUSIVE JURISDICTION
      OF
      THE STATE AND FEDERAL COURTS SITTING IN THE STATE OF CALIFORNIA AND AGREES
      AND
      CONSENTS THAT SERVICE OF PROCESS MAY BE MADE UPON IT IN ANY LEGAL PROCEEDINGS
      RELATING HERETO BY ANY MEANS ALLOWED UNDER CALIFORNIA OR FEDERAL LAW. THE
      COMPANY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
      ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY
      SUCH PROCEEDING BROUGHT IN SUCH COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING
      BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. 

    

    (h)
      Entire
      Agreement.
      This
      Agreement and the other Loan Documents contain the entire Agreement of the
      parties hereto with respect to the transactions contemplated hereby and
      supersedes all previous oral and written, and all previous contemporaneous
      oral
      negotiations, commitments and understandings.

    

    (i)
      Further
      Assurances.
      Company
      agrees promptly to execute and deliver such documents and to take such other
      acts as are reasonably necessary to effectuate the purposes of this
      Agreement.

    

    (j)
      Headings.
      The
      headings contained herein are for reference purposes only and shall not affect
      in any way the meaning or interpretation of this Agreement.

    

    (k)
      Assignments
      and Participations.
      Company
      may not assign its rights or obligations hereunder or under the loan without
      the
      prior written consent of Holder. Subject to compliance with applicable Federal
      and State Securities laws, Holder may assign all or any portion of the loan
      without the prior consent of Company. Holder may sell or agree to sell to one
      or
      more other persons a participation in all or any part of any of the loan without
      the prior consent of Company. Upon surrender of the loan, Company shall execute
      and deliver one or more substitute notes in such denominations and of a like
      aggregate unpaid principal amount or other amount issued to Holder and/or to
      Holder’s designated transferee or transferees. Holder may furnish any
      information in the possession of Holder concerning Company, or any of its
      respective subsidiaries, from time to time to assignees and participants
      (including prospective assignees and participants).

    

    (l)
      Waivers;
      Indemnity.
      Company
      waives presentment and demand for payment, notice of dishonor, protest of this
      Agreement, notice of acceleration or intent to accelerate, and shall pay all
      costs of collection when incurred, including reasonable attorneys’ fees, costs
      and expenses. Company shall indemnify and hold harmless from any claim,
      obligation or liability (including without limitation reasonable attorneys
      fees
      and expenses) arising out of this Agreement or the transactions contemplated
      under the Loan Documents.

    

    (m)
      JURY
      WAIVER.
      HOLDER
      AND COMPANY EACH WAIVES ANY RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
      ACTION ARISING OUT OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED
      HEREIN.

    

    (n)
      Interest
      Payments.
      Interest on the debt evidenced by this Agreement will not exceed the maximum
      rate or amount of non-usurious interest that may be contracted for, taken,
      reserved, charged, or received under law. Any interest in excess of that maximum
      amount will be credited on the principal amount or, if the principal amount
      has
      been paid, refunded. On any acceleration or required or permitted prepayment,
      any excess interest above the maximum lawful amount will be canceled
      automatically as of the acceleration or prepayment, or, if the excess interest
      has already been paid, credited on the principal amount, or, if the principal
      amount has been paid, refunded. This provision overrides any conflicting
      provisions in this Agreement and all other instruments concerning the
      debt.

    

    

    [Signature
      page follows.]

    

    

    IN
      WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
      as
      of the day and year set forth above.

    

    COMPANY:

    

    AUXILIO,
      INC.

    a
      Nevada
      corporation

    

    

    By:
      ________________________________

    Name:
      Joseph J. Flynn 

    Title:
      Chief Executive Officer

    

    

    

    HOLDER:

    

    CAMBRIA
      INVESTMENT FUND, L.P. 

    a
      California limited partnership

    

    By: 
      CAMBRIA INVESTMENT ADVISORS, LLC

    a
      California limited liability company,

    its
      general partner

    

     

    By:
      _____________________________

    Eric
      W.
      Richardson

    President

    

    

    

    

    
      
        
          

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    EXHIBIT
      A

    

    The
      Collateral shall consist of all right, title and interest of Company, subject
      to
      the first priority security interest held by the Laurus Master Fund LTD in
      and
      to all of the assets of the Company, in and to the following:

    

    (a) All
      goods
      and equipment now owned or hereafter acquired, including, without limitation,
      all machinery, fixtures, vehicles (including motor vehicles and trailers),
      and
      any interest in any of the foregoing, and all attachments, accessories,
      accessions, replacements, substitutions, additions, and improvements to any
      of
      the foregoing, wherever located;

    

    (b) All
      inventory, now owned or hereafter acquired, including, without limitation,
      all
      merchandise, raw materials, parts, supplies, packing and shipping materials,
      work in process and finished products including such inventory as is temporarily
      out of Company’s custody or possession or in transit and including any returns
      upon any accounts or other proceeds, including insurance proceeds, resulting
      from the sale or disposition of any of the foregoing and any documents of title
      representing any of the above, and Company’s books relating to any of the
      foregoing;

    

    (c) All
      contract rights and general intangibles now owned or hereafter acquired,
      including, without limitation, all leases, license agreements, franchise
      agreements, blueprints, drawings, purchase orders, customer lists, route lists,
      infringements, claims, computer programs, computer discs, computer tapes,
      literature, reports, catalogs, design rights, income tax refunds, payments
      of
      insurance and rights to payment of any kind, all copyrights, copyright
      registrations and applications, copyright renewals or extensions, patents and
      patent applications, all reissues, divisions, continuations, renewals,
      extensions and continuations-in-part of all patents or patent applications,
      all
      trademarks, trade names, trade styles, service marks, logos, together with
      product lines and goodwill of the business connected with the use of, or
      otherwise symbolized by, each such trade name, trademark and service mark,
      trademark and service mark registrations and applications for trademark and
      service mark registrations, all renewals and extensions of any trademarks,
      trade
      names, trade styles, and service marks, all trade secret rights, including
      all
      rights to unpatented inventions, know-how, operating manuals, license rights
      and
      agreements and confidential information, all mask work or similar rights
      available for the protection of semiconductor chips, and all rights in the
      foregoing intellectual property to income, royalties, damages, and other
      payments, and all rights to sue for all past, present and future infringements,
      and all rights otherwise accruing under or pertaining to any of the foregoing
      throughout the world (“Intellectual
      Property”);

    

    (d) All
      now
      existing and hereafter arising accounts, contract rights, royalties, license
      rights and all other forms of obligations owing to Company arising out of the
      sale or lease of goods, the licensing of technology or the rendering of services
      by Company, whether or not earned by performance, and any and all credit
      insurance, guaranties, and other security therefor, as well as all merchandise
      returned to or reclaimed by Company and Company’s books relating to any of the
      foregoing;

    

    (e) All
      documents, cash, deposit accounts, securities, letters of credit, certificates
      of deposit, instruments and chattel paper now owned or hereafter acquired and
      Company’s books relating to the foregoing; and

    

    (f) Any
      and
      all claims, rights and interests in any of the above and all substitutions
      for,
      additions and accessions to and proceeds thereof.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule
      1

    

    IN
      WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
      as
      of the day and year set forth above.

    

    Signature,
      Name and Address of Holder      Loan
      Amount     Date
      of Loan     Number
      of Warrants

     

          

    _______________________________

    By:
      Eric
      W. Richardson, President of

    Cambria
      Investment Advisors, LLC, the
      General
        partner of 

    

    
       

    

    CAMBRIA
      INVESTMENT FUND, LP        $125,000                       
      Oct.
      25,
      2006      62,500

    2321
      Rosecrans Ave., Suite 4270

    El
      Segundo, CA 90245

    

    

    

    __________________________________

    Donald
      Danks           $25,000      Oct.
      25,
      2006      12,500

    

    

    

    

    

    _________________________________

    Robert
      Burgess                                                                       
$25,000     Oct.
      25,
      2006      12,500

    

    

    

    

    __________________________________

    James
      Burgess                                                                        
$25,000                           Oct.
      25,
      2006      
      12,500

    

    

    

    

    ___________________________________

    Andy
      Evans            $25,000                          Oct.
      25,
      2006                           
12,500

    

    

    

    

    

    __________________________________

    Zav
      Lieblin            $25,000                         Oct.
      25,
      2006                            12,500

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    Schedule
      3(l)

    

    $2,800,000
      principal amount loan with Laurus Master Fund LTD; which loan is secured by
      a
      first priority interest in all of the assets of the Company.

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