<SEC-DOCUMENT>0001019687-13-001424.txt : 20130422
<SEC-HEADER>0001019687-13-001424.hdr.sgml : 20130422
<ACCEPTANCE-DATETIME>20130422083027
ACCESSION NUMBER:		0001019687-13-001424
CONFORMED SUBMISSION TYPE:	DEF 14A
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20130606
FILED AS OF DATE:		20130422
DATE AS OF CHANGE:		20130422
EFFECTIVENESS DATE:		20130422

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			RadNet, Inc.
		CENTRAL INDEX KEY:			0000790526
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-MEDICAL LABORATORIES [8071]
		IRS NUMBER:				133326724
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		DEF 14A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-33307
		FILM NUMBER:		13772744

	BUSINESS ADDRESS:	
		STREET 1:		1516 COTNER AVE
		CITY:			LOS ANGELES
		STATE:			CA
		ZIP:			90025
		BUSINESS PHONE:		3104787808

	MAIL ADDRESS:	
		STREET 1:		1516 COTNER AVE
		CITY:			LOS ANGELES
		STATE:			CA
		ZIP:			90025

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	PRIMEDEX HEALTH SYSTEMS INC
		DATE OF NAME CHANGE:	19930518

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	CCC FRANCHISING CORP
		DATE OF NAME CHANGE:	19920703
</SEC-HEADER>
<DOCUMENT>
<TYPE>DEF 14A
<SEQUENCE>1
<FILENAME>radnet_def14a.htm
<DESCRIPTION>DEFINITIVE PROXY
<TEXT>
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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">UNITED STATES</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">SECURITIES AND EXCHANGE COMMISSION</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Washington, D.C. 20549</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">SCHEDULE&nbsp;14A</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Proxy Statement Pursuant to Section&nbsp;14(a)&nbsp;of
the Securities<BR>
Exchange Act of 1934</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Filed by the Registrant&#9;<FONT STYLE="font-family: Wingdings">
&yacute; </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Filed by a Party other than the Registrant&#9;<FONT STYLE="font-family: Wingdings">
&uml; </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Check the appropriate box:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: 0.5in"><FONT STYLE="font-family: Wingdings">&uml;
</FONT>&#9;Preliminary Proxy Statement</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: 0.5in"><FONT STYLE="font-family: Wingdings">&uml;
</FONT>&#9;Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: 0.5in"><FONT STYLE="font-family: Wingdings">&yacute;
</FONT>&#9;Definitive Proxy Statement</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: 0.5in"><FONT STYLE="font-family: Wingdings">&uml;
</FONT>&#9;Definitive Additional Materials</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: 0.5in"><FONT STYLE="font-family: Wingdings">&uml;
</FONT>&#9;Soliciting Material Pursuant to &sect; 240.14a-12</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">RADNET, INC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Name of Registrant as Specified in its
Charter)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>__________________________________________</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Name of Person(s)&nbsp;Filing Proxy Statement,
if other than the Registrant)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Payment of Filing Fee (Check the appropriate box):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt"><FONT STYLE="font-family: Wingdings">&yacute;
</FONT>&#9;No fee required</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt"><FONT STYLE="font-family: Wingdings">&uml; </FONT>&#9;Fee computed on table below per Exchange Act Rules
14a-6(i)(1)&nbsp;and 0-11.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 9%; padding-right: 5.4pt; padding-bottom: 6pt; padding-left: 5.4pt">(1)</TD>
    <TD STYLE="width: 70%; padding-right: 5.4pt; padding-bottom: 6pt; padding-left: 5.4pt">Title of each class of securities to which transaction applies:</TD>
    <TD STYLE="width: 21%; padding-right: 5.4pt; padding-bottom: 6pt; padding-left: 5.4pt; text-align: center">Not applicable</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 6pt; padding-left: 5.4pt">(2)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 6pt; padding-left: 5.4pt">Aggregate number of securities to which transaction applies:</TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 6pt; padding-left: 5.4pt; text-align: center">Not applicable</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 6pt; padding-left: 5.4pt">(3)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 6pt; padding-left: 5.4pt">Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined):</TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 6pt; padding-left: 5.4pt; text-align: center">Not applicable</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 6pt; padding-left: 5.4pt">(4)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 6pt; padding-left: 5.4pt">Proposed maximum aggregate value of transaction:</TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 6pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 6pt; padding-left: 5.4pt">(5)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 6pt; padding-left: 5.4pt">Total fee paid:</TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 6pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt"><FONT STYLE="font-family: Wingdings">&uml;
</FONT>&#9;Fee paid previously with preliminary materials:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt"><FONT STYLE="font-family: Wingdings">&uml;
</FONT>&#9;Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2)&nbsp;and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule&nbsp;and the date of its filing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt">&nbsp;</P>



<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 9%; padding-right: 5.4pt; padding-bottom: 6pt; padding-left: 5.4pt">(1)</TD>
    <TD STYLE="width: 91%; padding-right: 5.4pt; padding-bottom: 6pt; padding-left: 5.4pt">Amount Previously Paid:&nbsp;&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 6pt; padding-left: 5.4pt">(2)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 6pt; padding-left: 5.4pt">Form, Schedule&nbsp;or Registration Statement No.:&nbsp;&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 6pt; padding-left: 5.4pt">(3)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 6pt; padding-left: 5.4pt">Filing Party:&nbsp;&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 6pt; padding-left: 5.4pt">(4)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 6pt; padding-left: 5.4pt">Date Filed:&nbsp;&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="text-underline-style: double"><B><U></U></B></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">RADNET, INC.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">1510 Cotner Ave.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Los Angeles, CA 90025</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">April 26, 2013</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Dear Stockholder:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On behalf of the Board of Directors and
management, we cordially invite you to attend the Annual Meeting of Stockholders of RadNet, Inc. to be held at our principal executive
office at 1510 Cotner Avenue, Los Angeles, CA 90025, on Thursday, June&nbsp;6, 2013, at 10:00 a.m. (Pacific time). At this meeting,
stockholders will vote on matters set forth in the accompanying Notice of Annual Meeting of Stockholders and Proxy Statement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Your vote is very important. Whether or
not you plan to attend the Annual Meeting, we hope you will vote as soon as possible. You may vote by mailing your proxy or voting
instruction card using the postage-paid return envelope included for your convenience. If your shares are registered in the name
of a broker or other nominee, your nominee may be participating in a program provided through Broadridge Financial Solutions, Inc.
that allows you to vote by telephone or the Internet. If so, the voting form that your nominee sends you will provide telephone
and Internet instructions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have also enclosed a copy of our annual
report on Form 10-K for our fiscal year ended December 31, 2012, as amended. We encourage you to read our annual report, which
includes information on our business, as well as our audited financial statements for the fiscal year ended December 31, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Thank you for your continued interest in
RadNet, Inc. We look forward to seeing you at the Annual Meeting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3in">Sincerely,</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3in"><IMG SRC="hames_sig.jpg" ALT="">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3in; color: Red"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3in">Norman R. Hames</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3in"><I>Corporate Secretary </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Important Notice Regarding Availability
of Proxy Materials for the 2013 Annual Meeting of Stockholders: </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>The Proxy Statement for the 2013 Annual
Meeting of Stockholders and the Annual Report for the year ended December 31, 2012, are available at http://radnet.com/2013Proxy.html.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">RADNET, INC.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">1510 Cotner Ave.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Los Angeles, CA 90025</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">____________________________________________</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">NOTICE OF ANNUAL MEETING OF STOCKHOLDERS<BR>
June 6, 2013<BR>
____________________________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">RadNet, Inc. will hold
its Annual Meeting of Stockholders on Thursday, June 6, 2013, at 10:00 a.m. (Pacific time) at our principal executive office at
1510 Cotner Avenue, Los Angeles, CA 90025.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Stockholders of record
at the close of business on April 16, 2013, the record date fixed by the Board of Directors, are entitled to notice of, and to
vote at, the Annual Meeting of Stockholders. The following items are on the agenda:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">1.</TD><TD STYLE="text-align: justify">The election of seven nominees named in the attached Proxy Statement as directors to hold office
until the 2014 Annual Meeting of Stockholders;</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">2.</TD><TD STYLE="text-align: justify">The ratification of the appointment of Ernst&nbsp;&amp; Young LLP as our independent registered
public accounting firm for the fiscal year ending December&nbsp;31, 2013;</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">3.</TD><TD STYLE="text-align: justify">An advisory vote to approve the compensation of our Named Executive Officers; and</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">4.</TD><TD STYLE="text-align: justify">Other business that may properly come before the Annual Meeting (including adjournments and postponements).</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The foregoing items
of business are more fully described in the accompanying Proxy Statement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3in; text-align: justify">By Order of the Board of Directors,</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3in; text-align: justify"><IMG SRC="hames_sig.jpg" ALT="">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3in; color: Red"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3in">Norman R. Hames</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3in"><I>Corporate Secretary</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">April 26, 2013</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Los Angeles, California</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Whether or not you expect to attend
the Annual Meeting, please complete, sign, date and return the enclosed proxy card as soon as possible to ensure your representation
at the meeting. A postage-paid return envelope is enclosed for your convenience. Stockholders holding shares with a broker, bank
or other nominee may also be eligible to vote via the Internet or to vote telephonically. If a stockholder&rsquo;s broker, bank
or other nominee participates in a program that allows voting via telephone or the Internet, such stockholder may do so by following
the instructions on the form they receive from their broker, bank or other nominee. Even if you have given your proxy, you may
still vote in person if you attend the meeting. Please note, however, that if a broker, bank or other nominee holds your shares
of record and you wish to vote at the meeting, then you must obtain from the record holder a proxy issued in your name.<FONT STYLE="text-underline-style: double"><U>
</U></FONT></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><FONT STYLE="text-underline-style: double">&nbsp;</FONT></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><FONT STYLE="text-underline-style: double"></FONT></B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><FONT STYLE="text-underline-style: double">&nbsp;</FONT></B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">RADNET, INC.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">1510 Cotner Ave.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Los Angeles, CA 90025</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">____________________________________________</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">PROXY STATEMENT</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">FOR ANNUAL MEETING OF STOCKHOLDERS</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">TO BE HELD JUNE 6, 2013<BR>
____________________________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Board of Directors
of RadNet, Inc., a Delaware corporation, is providing these proxy materials to you in connection with the solicitation of the enclosed
proxy for use at our 2013 Annual Meeting of Stockholders. The meeting will be held at our principal office at 1510 Cotner Avenue,
Los Angeles, CA 90025, on Thursday, June 6, 2013, at 10:00 a.m. (Pacific time) or at any adjournment or postponement thereof, for
the purposes stated herein. This Proxy Statement summarizes the information that you will need to know to vote in an informed manner.
Our telephone number is (310) 445-2800.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">All stockholders are
cordially invited to attend the Annual Meeting of Stockholders in person. In any event, please complete, sign, date and return
the proxy in the enclosed envelope. We intend to mail this proxy statement and the accompanying proxy card on or about April 26,
2013 to all stockholders of record that are entitled to vote.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>ABOUT THE ANNUAL MEETING</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>Q:</B></TD><TD STYLE="text-align: justify"><B>What is the purpose of the Annual Meeting?</B></TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>A:</B></TD><TD STYLE="text-align: justify">At the Annual Meeting, our stockholders will vote to (i) elect seven directors to serve until our
next annual meeting and until their successors are elected, (ii) ratify the appointment of Ernst &amp; Young LLP as our independent
registered public accounting firm for the fiscal year ending December 31, 2013 and (iii) approve (on an advisory basis) the compensation
of our Named Executive Officers.</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>Q:</B></TD><TD STYLE="text-align: justify"><B>Who is entitled to vote at the Annual Meeting?</B></TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>A:</B></TD><TD STYLE="text-align: justify">Only stockholders of record at the close of business on April 16, 2013, the record date for the
Annual Meeting, are entitled to receive notice of and to participate in the Annual Meeting. If you were a stockholder of record
on that date, you will be entitled to vote all of the shares that you held on that date at the Annual Meeting and at any postponements
or adjournments thereof.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
                                                   <P STYLE="margin-top: 0; margin-bottom: 0"><B>Q:</B></P></TD><TD STYLE="text-align: justify"><BR>
<B>What are the voting rights of the holders of common stock?</B></TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>A:</B></TD><TD STYLE="text-align: justify">Each outstanding share of our common stock is entitled to one vote on each matter considered at
the Annual Meeting.</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>Q:</B></TD><TD STYLE="text-align: justify"><B>How is a quorum determined?</B></TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>A:</B></TD><TD STYLE="text-align: justify">We will have a quorum to conduct the business of the Annual Meeting if holders of a majority of
the shares of our common stock outstanding as of the record date are present in person or represented by proxy. On the record date
40,089,196 shares of our common stock were issued and outstanding. Consequently, we will need to have 20,044,599 shares present
in person or represented by proxy at the Annual Meeting in order to establish a quorum. Abstentions and broker non-votes (i.e.,
shares of common stock held by a broker, bank or other nominee that are represented at the meeting, but that the broker, bank or
other nominee is not empowered to vote on a particular proposal) will be counted in determining whether a quorum is present at
the meeting.</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">A representative from our transfer
agent, American Stock Transfer&nbsp;&amp; Trust Company, will tabulate the votes. The shares of our common stock represented by
proxy will be voted in accordance with the instructions given on the proxy so long as the proxy is properly executed and received
by us prior to the close of voting at the Annual Meeting or any adjournment or postponement of the meeting (or in the case of proxies
submitted by telephone or via the Internet, by the deadline specified in the instructions you receive from your broker or bank).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>Q:</B></TD><TD STYLE="text-align: justify"><B>What is a &ldquo;broker non-vote&rdquo;?</B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>A:</B></TD><TD STYLE="text-align: justify">A &ldquo;broker non-vote&rdquo; occurs when a nominee (typically a broker or bank) holding shares
for a beneficial owner (typically referred to as shares being held in &ldquo;street name&rdquo;) submits a proxy for the Annual
Meeting, but does not vote on a particular proposal because the nominee has not received voting instructions from the beneficial
owner and does not have discretionary authority to vote the shares with respect to that particular proposal. Shares that constitute
broker non-votes will be counted as present for purposes of establishing a quorum, but will not be counted as having voting power
to vote on the proposal in question. Under the applicable rules of the exchanges and other self-regulatory organizations, brokers
will generally have discretionary authority to vote on routine matters. The ratification of the appointment of Ernst &amp; Young,
as our independent registered public accounting firm, is considered a routine matter. The uncontested election of directors is
considered a non-routine matter and brokers do not have discretionary authority to vote on that proposal. The advisory vote to
approve the compensation of our Named Executive Officers is considered a non-routine matter and brokers do not have discretionary
authority to vote on that proposal. You must instruct your bank, broker or nominee on how to vote your shares for the election
of directors and for the advisory vote to approve the compensation of our Named Executive Officers.</TD></TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>Q:</B></TD><TD STYLE="text-align: justify"><B>How do I vote?</B></TD></TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>A:</B></TD><TD STYLE="text-align: justify">If you are a stockholder of record, you may vote in one of two ways: (1) attend the 2013 Annual
Meeting of Stockholders and vote in person; or (2) complete, sign, date and return the enclosed proxy card as instructed therein.</TD></TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">If you are a stockholder who
holds stock in &ldquo;street name&rdquo; you will likely receive instructions for voting your shares from your broker, bank, or
other nominee rather than our proxy card. A number of brokers and banks participate in a program that allows stockholders to grant
their proxy to vote shares by means of the telephone or the Internet. If your shares are held in an account with a broker or bank
participating in such a program, then you may vote your shares via the Internet or telephonically by following the instructions
on the form received from your broker or bank. If you wish to vote in person at the Annual Meeting, then you must obtain a legal
proxy issued in your name from the broker, bank or other nominee that holds your shares of record.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>Q:</B></TD><TD STYLE="text-align: justify"><B>Can I revoke my proxy later?</B></TD></TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>A:</B></TD><TD STYLE="text-align: justify">Yes. As a stockholder of record, once you have submitted your proxy you may revoke it at any time
before it is voted at the Annual Meeting. You may revoke your proxy in one of three ways:</TD></TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in">(1)</TD><TD STYLE="text-align: justify">You may grant another proxy marked with a later date (which automatically revokes the earlier proxy)
and submit it as indicated therein (and until the applicable deadline);</TD></TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in">(2)</TD><TD STYLE="text-align: justify">You may notify our Corporate Secretary in writing that you wish to revoke your proxy before it
is voted at the Annual Meeting; or</TD></TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in">(3)</TD><TD STYLE="text-align: justify">You may vote in person at the Annual Meeting. However, if your shares are held in &ldquo;street
name&rdquo; and you wish to vote at the Annual Meeting, you must first obtain from the record holder a proxy issued in your name.</TD></TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>Q:</B></TD><TD STYLE="text-align: justify"><B>What vote is required to approve the proposals?</B></TD></TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>A:</B></TD><TD STYLE="text-align: justify">The election of directors requires a plurality of votes cast by shares present or represented at
the Annual Meeting. Accordingly, if a quorum exists, the directorships to be filled at the Annual Meeting will be filled by the
nominees receiving the highest number of votes in favor of their election.&nbsp;Shares not present at the Annual Meeting and broker
non-votes will have no impact on the election of directors.</TD></TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The ratification of the appointment
of our independent registered public accounting firm must be approved by a majority of the shares present in person or represented
by proxy and entitled to vote on such matters at the Annual Meeting. With respect to such proposal, abstentions will be included
in the number of shares present and entitled to vote and, accordingly, will have the effect of a vote &ldquo;AGAINST&rdquo; the
proposal. However, broker non-votes with respect to such proposal will not be counted as shares present and entitled to vote and,
accordingly, will not have any effect with respect to the approval of such proposal (other than to reduce the number of affirmative
votes required to approve the proposal).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The advisory vote to approve
the compensation of our Named Executive Officers will be approved if a majority of the shares present in person or represented
by proxy and entitled to vote on such matter at the Annual Meeting vote in favor of such proposal. With respect to such proposal,
abstentions will be included in the number of shares present and entitled to vote and, accordingly, will have the effect of a vote
&ldquo;AGAINST&rdquo; the proposal. However, broker non-votes with respect to such proposal will not be counted as shares present
and entitled to vote and, accordingly, will not have any effect with respect to the approval of such proposal (other than to reduce
the number of affirmative votes required to approve the proposal). Although the vote to approve the compensation of our Named Executive
Officers is advisory only, meaning that it is not binding on the Company, our Board of Directors will consider the results of the
vote in its future consideration of the compensation of our Named Executive Officers.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>Q:</B></TD><TD STYLE="text-align: justify"><B>What are my voting choices for each proposal?</B></TD></TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>A:</B></TD><TD STYLE="text-align: justify">With respect to the election of directors, stockholders may vote for, against or withhold the vote
for each nominee for director. With respect to each other proposal, stockholders may vote for the proposal, against the proposal
or abstain from voting.</TD></TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>Q:</B></TD><TD STYLE="text-align: justify"><B>How does the Board of Directors recommend I vote on the proposals?</B></TD></TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>A:</B></TD><TD STYLE="text-align: justify">Our Board of Directors unanimously recommends a vote FOR each of the seven director nominees set
forth in this proxy statement, FOR the ratification of the appointment of Ernst &amp; Young LLP as our independent registered public
accounting firm for the fiscal year ending December 31, 2013, and FOR the approval of the compensation of our Named Executive Officers,
on an advisory basis.</TD></TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>Q:</B></TD><TD STYLE="text-align: justify"><B>How will my shares be voted if I return a blank proxy card?</B></TD></TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>A:</B></TD><TD STYLE="text-align: justify">If you sign and send in your proxy card and do not indicate how you want to vote, we will count
your proxy as a vote FOR each of the seven director nominees named in this proxy statement, FOR the ratification of the appointment
of Ernst &amp; Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2013, and
FOR the approval of the compensation of our Named Executive Officers, on an advisory basis.</TD></TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>Q:</B></TD><TD STYLE="text-align: justify"><B>How will voting on any other business be conducted?</B></TD></TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>A:</B></TD><TD STYLE="text-align: justify">Although we do not know of any business to be conducted at the Annual Meeting other than the proposals
discussed in this proxy statement, if any other business comes before the Annual Meeting, the individuals that we have designated
as proxies for the Annual Meeting, Jeffrey Linden and Mark Stolper, will have the discretionary authority to vote for or against
any other matter that is properly presented at the Annual Meeting.</TD></TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>Q:</B></TD><TD STYLE="text-align: justify"><B>Who will bear the costs of this solicitation?</B></TD></TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>A:</B></TD><TD STYLE="text-align: justify">This solicitation is made by our Board of Directors on behalf of the Company, and we will bear
the entire cost of soliciting proxies, including preparation, assembly, printing and mailing of this proxy statement, the proxy
card and any additional information furnished to stockholders. We will provide copies of solicitation materials to banks, brokerage
houses, fiduciaries and custodians holding in their names shares of our common stock that are beneficially owned by others for
forwarding to the beneficial owners. We may reimburse persons representing beneficial owners of common stock for their costs of
forwarding solicitation materials to the beneficial owners. Solicitations will be made primarily through the mail, but may be supplemented
by telephone, telegram, facsimile, Internet or personal solicitation by our directors, executive officers, employees or other agents.
No additional compensation will be paid to these individuals for these services.</TD></TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>Q:</B></TD><TD STYLE="text-align: justify"><B>How can I find out the results of the voting at the Annual Meeting?</B></TD></TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>A:</B></TD><TD STYLE="text-align: justify">Preliminary voting results will be announced at the Annual Meeting. Final voting results will be
published in a report on Form 8-K within four business days after the Annual Meeting.</TD></TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>Q:</B></TD><TD STYLE="text-align: justify"><B>When are stockholder proposals due for the next year&rsquo;s annual meeting?</B></TD></TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>A:</B></TD><TD STYLE="text-align: justify"><I>Requirements for Stockholder Proposals to be Considered for Inclusion in RadNet, Inc.&rsquo;s
Proxy Materials. </I>Stockholder proposals submitted pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as amended
(the &ldquo;Exchange Act&rdquo;), and intended to be presented at the 2014 Annual Meeting must be received by us no later than
December 26, 2013, in order to be considered for inclusion in our proxy materials for that meeting.</TD></TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B>&nbsp;</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><I>Requirements for Stockholder
Proposals to be Brought Before an Annual Meeting.</I> Our bylaws provide that, for stockholder nominations to the Board of Directors
or other proposals to be considered at an annual meeting, the stockholder must have given timely notice of the proposal or nomination
in writing to our Corporate Secretary. To be timely for the 2014 Annual Meeting, a stockholder&rsquo;s notice must be delivered
to or mailed and received by our Corporate Secretary at our principal executive offices between February 6, 2014 and March 8, 2014.
A stockholder&rsquo;s notice to the Corporate Secretary must set forth, as to each matter the stockholder proposes to bring before
the annual meeting, the information required by our bylaws.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B></B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>
<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table
presents information concerning the beneficial ownership of the shares of our common stock as of March 31, 2013, by:</P>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">each person we know to be the beneficial owner of 5% or more of our outstanding shares of common
stock;</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">our principal executive officer, principal financial officer and each of our three other most highly
compensated executive officers as of December 31, 2012 (collectively, the &ldquo;Named Executive Officers&rdquo;); and</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">all of our current executive officers and directors as a group.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Unless otherwise noted
below, the address of each beneficial owner listed in the table is c/o RadNet, Inc., 1510 Cotner Ave., Los Angeles, CA 90025.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Except as indicated
by the footnotes below, we believe, based on the information furnished to us, that the persons and entities named in the table
below have sole voting and investment power with respect to all shares of common stock that they beneficially own, subject to applicable
community property laws.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Applicable percentage
ownership is based on <FONT STYLE="color: black">39,889,196 </FONT>shares of common stock outstanding on March 31, 2013. We have
determined beneficial ownership in accordance with the rules of the Securities and Exchange Commission (the &ldquo;SEC&rdquo;).
In computing the number of shares of common stock beneficially owned by a person and the percentage ownership of that person, we
deemed as outstanding shares of common stock subject to options or warrants held by that person that are currently exercisable
or exercisable within 60 days of March 31, 2013. We did not deem these shares outstanding, however, for the purpose of computing
the percentage ownership of any other person.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: bottom; width: 60%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt"><B>Name of Beneficial Owner</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 2%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 14%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt"><B>Shares Beneficially Owned</B></FONT></TD>
    <TD STYLE="vertical-align: top; width: 6%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 2%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 16%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt"><B>Percent of Shares Beneficially Owned</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt"><B>5% or Greater Stockholders</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; padding-top: 3pt"><FONT STYLE="font-size: 10pt">BlueMountain Capital Management, LLC<SUP>(1)</SUP></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">2,580,613</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">6.47%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; padding-top: 3pt"><FONT STYLE="font-size: 10pt">Red Mountain Capital Partners II, L.P.<SUP>(2)</SUP></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">3,618,048</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">9.07%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font-size: 10pt"><B>Directors and Named Executive Officers</B></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; padding-top: 3pt"><FONT STYLE="font-size: 10pt">Howard G. Berger, M.D.<SUP>(3)</SUP> </FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">5,396,140</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; padding-top: 3pt"><FONT STYLE="font-size: 10pt"><SUP>(4)</SUP></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">13.53%</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; padding-top: 3pt"><FONT STYLE="font-size: 10pt">Marvin S. Cadwell</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">235,178</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; padding-top: 3pt"><FONT STYLE="font-size: 10pt"><SUP>(5)</SUP></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 0.2in; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">*</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; padding-top: 3pt"><FONT STYLE="font-size: 10pt">John V. Crues, III, M.D.</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">784,708</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; padding-top: 3pt"><FONT STYLE="font-size: 10pt"><SUP>(6)</SUP></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">1.96%</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; padding-top: 3pt"><FONT STYLE="font-size: 10pt">Norman R. Hames</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">1,445,714</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; padding-top: 3pt"><FONT STYLE="font-size: 10pt"><SUP>(7)</SUP></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">3.58%</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; padding-top: 3pt"><FONT STYLE="font-size: 10pt">Lawrence L. Levitt</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">266,250</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; padding-top: 3pt"><FONT STYLE="font-size: 10pt"><SUP>(8)</SUP></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 0.2in; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">*</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; padding-top: 3pt"><FONT STYLE="font-size: 10pt">Michael L. Sherman, M.D.</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">277,015</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; padding-top: 3pt"><FONT STYLE="font-size: 10pt"><SUP>(9)</SUP></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 0.2in; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">*</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; padding-top: 3pt"><FONT STYLE="font-size: 10pt">David L. Swartz</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">304,750</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; padding-top: 3pt"><FONT STYLE="font-size: 10pt"><SUP>(10)</SUP></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 0.2in; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">*</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; padding-top: 3pt"><FONT STYLE="font-size: 10pt">Stephen M. Forthuber</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">816,677</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; padding-top: 3pt"><FONT STYLE="font-size: 10pt"><SUP>(11)</SUP></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">2.01%</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; padding-top: 3pt"><FONT STYLE="font-size: 10pt">Jeffrey L. Linden</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">1,191,522</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; padding-top: 3pt"><FONT STYLE="font-size: 10pt"><SUP>(12)</SUP></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">2.95%</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; padding-top: 3pt"><FONT STYLE="font-size: 10pt">Mark D. Stolper</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">788,940</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; padding-top: 3pt"><FONT STYLE="font-size: 10pt"><SUP>(13)</SUP></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">1.95%</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; padding-top: 3pt"><FONT STYLE="font-size: 10pt"><B>All directors and executive officers as a group (11 persons)</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">11,506,884</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; padding-top: 3pt"><FONT STYLE="font-size: 10pt"><SUP>(14)</SUP></FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font-size: 10pt">27.01%</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 5%; padding-right: 5.4pt; padding-bottom: 3pt; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 8pt">*</FONT></TD>
    <TD STYLE="width: 95%; padding-right: 5.4pt; padding-bottom: 3pt; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt">Represents less than 1%.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 8pt">(1)</FONT></TD>
    <TD STYLE="text-align: justify; padding-bottom: 6pt"><FONT STYLE="font-size: 10pt">According to the Schedule 13G filed with the SEC on February 13, 2013, BlueMountain Capital Management, LLC, or BMCM, maintains shared voting power over an aggregate of 2,580,613 shares of our common stock. BMCM acts as the investment manager to, and exercises investment discretion with respect to our common stock owned by the following entities: Blue Mountain Credit Master Fund L.P. (1,280,255 of our shares of common stock); BlueMountain Long/Short Credit Master Fund L.P. (503,189 shares of our common stock); BlueMountain Long/Short Equity Master Fund L.P. (250,205 shares of our common stock); BlueMountain Equity Alternatives Master Fund L.P. (153,975 shares of our common stock); BlueMountain Kicking Horse Fund L.P. (120,765 shares of our common stock); BlueMountain Timberline Ltd. (150,956 shares of our common stock); AAI BlueMountain Fund PLC (64,408 shares of our common stock); BlueMountain Long Short Grasmoor Fund Ltd. (56,860 shares of our common stock). In addition BlueMountain GP Holdings, LLC serves as the ultimate general partner for each of the partnerships for which BMCM acts as investment manager and that directly own shares of our common stock. The address set forth in the Schedule 13G filing is 280 Park Avenue, 5<SUP>th</SUP> Floor East, New York, New York 10017.</FONT></TD></TR>
</TABLE>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

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<P STYLE="margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left; vertical-align: top; width: 5%"><FONT STYLE="font-size: 8pt">(2)</FONT></TD>
    <TD STYLE="text-align: justify; padding-bottom: 6pt; width: 95%"><FONT STYLE="font-size: 10pt">According to the Schedule 13D/A filed with the SEC on September 19, 2011, Red Mountain Capital Partners II, L.P., or RMCP II, holds an aggregate of 3,618,048 shares of our common stock. RMCP GP LLC, or RMCP GP, is the general partner of RMCP II.&nbsp;&nbsp;Red Mountain Capital Partners LLC, or RMCP LLC, is the managing member of RMCP GP. Red Mountain Capital Management, Inc., or RMCM, is the managing member of RMCP LLC and Willem Mesdag, an individual, is the president, sole executive officer, sole director and sole stockholder of RMCM. Mr. Mesdag and RMCM disclaim beneficial ownership of all shares of our common stock held by RMCP II.&nbsp;&nbsp;&nbsp;The address set forth in the Schedule 13D/A filing is 10100 Santa Monica Boulevard, Suite 925, Los Angeles, CA 90067.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 6pt; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 8pt">(3)</FONT></TD>
    <TD STYLE="padding-bottom: 6pt; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt">As a result of his stock ownership and positions as president, chief executive officer and director, Dr. Berger may be deemed to be a controlling person of our Company. </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 6pt; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 8pt">(4)</FONT></TD>
    <TD STYLE="padding-bottom: 6pt; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt">Beneficial ownership includes 270,026 shares held by the Howard and Fran Berger Family Trust, or the Trust, and 5,126,114 shares held by HFB Enterprises, LLC, or the LLC; Dr. and Mrs. Berger are co-trustees of the Trust and are co-managers of the LLC.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 6pt; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 8pt">(5)</FONT></TD>
    <TD STYLE="padding-bottom: 6pt; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt">Beneficial ownership includes 116,250 shares subject to options exercisable within 60 days of March 31, 2013.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 6pt; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 8pt">(6)</FONT></TD>
    <TD STYLE="padding-bottom: 6pt; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt">Beneficial ownership includes 6,000 shares held by Dr. Crues&rsquo; spouse and 100,000 shares subject to options exercisable within 60 days of March 31, 2013.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 6pt; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 8pt">(7)</FONT></TD>
    <TD STYLE="padding-bottom: 6pt; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt">Beneficial ownership includes 450,000 shares subject to options exercisable within 60 days of March 31, 2013.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 6pt; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 8pt">(8)</FONT></TD>
    <TD STYLE="padding-bottom: 6pt; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt">Beneficial ownership includes 116,250 shares subject to options exercisable within 60 days of March 31, 2013.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 6pt; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 8pt">(9)</FONT></TD>
    <TD STYLE="padding-bottom: 6pt; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt">Beneficial ownership
    includes 116,250</FONT> <FONT STYLE="font-size: 10pt">shares subject to options exercisable within 60 days of March 31, 2013
    and 1,950 shares held by Dr. Sherman&rsquo;s spouse.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 6pt; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 8pt">(10)</FONT></TD>
    <TD STYLE="padding-bottom: 6pt; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt">Beneficial ownership
    includes 116,250 subject to options exercisable within 60 days of March 31, 2013 and 13,500 shares held by Mr. Swartz&rsquo;s
    spouse.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 6pt; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 8pt">(11)</FONT></TD>
    <TD STYLE="padding-bottom: 6pt; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt">Beneficial ownership includes 691,667 shares subject to options exercisable within 60 days of March 31, 2013.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 6pt; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 8pt">(12)</FONT></TD>
    <TD STYLE="padding-bottom: 6pt; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt">Beneficial ownership includes 450,000 shares subject to options exercisable within 60 days of March 31, 2013.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 6pt; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 8pt">(13)</FONT></TD>
    <TD STYLE="padding-bottom: 6pt; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt">Beneficial ownership includes 550,000 shares subject to options exercisable within 60 days of March 31, 2013.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 6pt; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 8pt">(14)</FONT></TD>
    <TD STYLE="padding-bottom: 6pt; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt">Beneficial ownership includes 2,706,667 shares subject to options exercisable within 60 days of March 31, 2013 and 21,450 shares held indirectly by certain spouses of the officers and directors.</FONT></TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">PROPOSAL NO.&nbsp;1</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">ELECTION OF DIRECTORS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">At the 2013 Annual
Meeting of Stockholders, all directors will be elected for a term expiring at the next annual meeting of stockholders to be held
after their election, subject to earlier resignation or removal. Our Board of Directors, in accordance with our bylaws, has determined
that the authorized number of directors shall be seven. Based on the recommendation of our Nominating and Governance Committee,
our Board of Directors has nominated the seven individuals set forth below for election.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Unless instructed otherwise,
the persons named in the accompanying proxy will vote the shares represented by such proxy for the election of the seven director
nominees listed in the table below. Each of the nominees is currently a director of the Company and has consented to serve if elected,
and we have no reason to believe that any nominee will be unable to serve. If any nominee becomes unavailable or unable to serve
before the Annual Meeting, the Board of Directors may determine to leave the position vacant, reduce the number of authorized directors
or designate a substitute nominee. If a substitute nominee is named, then the persons named as proxies will have full discretion
and authority to vote or refrain from voting for such substitute nominee in their discretion.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following paragraphs
include information that each of the seven nominees has provided to us about the positions he currently holds, his principal occupation
and experience for the past five years, and the other companies in which he currently serves as a director or has served as a director
during the past five years. In addition, the information below includes each nominee&rsquo;s specific experience, qualifications,
attributes and skills that led our Board of Directors to conclude that each nominee should serve as a director.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Nominees for Director</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The names of the director
nominees, their ages as of March 31, 2013 and other information about them are set forth below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 30%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; border-bottom: Black 1.5pt solid"><B>Name
        of Director Nominee</B></P></TD>
    <TD STYLE="width: 8%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; border-bottom: Black 1.5pt solid"><B>Age</B></P></TD>
    <TD STYLE="width: 48%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; border-bottom: Black 1.5pt solid"><B>Position</B></P></TD>
    <TD STYLE="width: 14%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; border-bottom: Black 1.5pt solid"><B>Director
        Since</B></P></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-top: 6pt; padding-right: 5.4pt; padding-left: 5.4pt">Howard G. Berger, M.D.</TD>
    <TD STYLE="padding-top: 6pt; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">67</TD>
    <TD STYLE="padding-top: 6pt; padding-right: 5.4pt; padding-left: 5.4pt">President, Chief Executive Officer and Chairman of the Board</TD>
    <TD STYLE="padding-top: 6pt; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">1992</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Marvin S. Cadwell</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">69</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Director</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">2007</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">John V. Crues, III, M.D.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">63</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Director, Vice President, Medical Director</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">2000</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Norman R. Hames</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">57</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Director, Executive Vice President, Chief Operating Officer-Western Operations, Secretary</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">1996</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Lawrence L. Levitt</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">70</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Director</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">2005</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Michael L. Sherman, M.D.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">70</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Director</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">2007</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">David L. Swartz</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">69</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Director</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">2004</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Howard G. Berger,
M.D</I>. has served as President and Chief Executive Officer of our Company and its predecessor entities since 1987.&nbsp;&nbsp;Dr.
Berger is also the president or co-president of the entities that own Beverly Radiology Medical Group, or BRMG.&nbsp;&nbsp;He began
his career in medicine at the University of Illinois Medical School, is Board Certified in Nuclear Medicine and trained in an Internal
Medicine residency, as well as in a masters program in medical physics in the University of California system. Dr. Berger brings
business leadership skills to our Board of Directors derived from his more than 25 years of experience in the development and management
of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Marvin&nbsp;S. Cadwell</I>
served as a director of Radiologix, Inc. between June&nbsp;2002 and November&nbsp;2006, until its acquisition by the Company. He
was appointed Chairman of the Board of Radiologix in December&nbsp;2002 and served as Chairman of the Nominations and Governance
Committee of the Board of Radiologix. He was the Radiologix interim Chief Executive Officer from September&nbsp;2004 until November&nbsp;2004.
From December&nbsp;2001 until November&nbsp;2002, Mr.&nbsp;Cadwell served as Chief Executive Officer of SoftWatch, Ltd., an Israeli
based company that provides Internet software. Mr. Cadwell previously served as a director of ChartOne, Inc., a private company
that provides patient chart management services to the healthcare industry, from 2003 until September 2008 when it was acquired.
Mr. Cadwell has experience as an executive officer of several companies in the healthcare industry and brings to our Board of Directors
a strong background in operating management of various organizations. Mr. Cadwell has been a member of our Audit Committee since
2007 and a member of our Nominating and Governance Committee since January 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>John&nbsp;V. Crues,
III, M.D</I>. is a world-renowned radiologist. Dr.&nbsp;Crues has served as our Vice President and Medical Director since 2000.
Dr.&nbsp;Crues received his M.D. at Harvard University, completed his internship at the University of Southern California in Internal
Medicine, and completed a residency at Cedars-Sinai in Internal Medicine and Radiology. Dr.&nbsp;Crues has authored numerous publications
while continuing to actively participate in radiological societies such as the Radiological Society of North America, American
College of Radiology, California Radiological Society, International Society for Magnetic Resonance Medicine and the International
Skeletal Society. Dr. Crues is also currently Co-President of Pronet Imaging Medical Group and a director of BRMG. Dr.&nbsp;Crues
plays a significant role as a musculoskeletal specialist for many of our patients as well as a resource for physicians providing
services at our facilities and his active participation in radiological societies gives our Board of Directors access to thought
leadership in the field of radiology.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Norman&nbsp;R. Hames</I>
has served as our Chief Operating Officer since 1996 and currently serves as our Executive Vice President, Chief Operating Officer-Western
Operations and Corporate Secretary. Applying his 20 years of experience in the industry, Mr.&nbsp;Hames oversees all aspects of
our California facility operations. His management team, comprised of regional directors, managers and sales managers, is responsible
for responding to all of the day-to-day concerns of our California facilities, patients, payors and referring physicians. Prior
to joining our Company, Mr.&nbsp;Hames was President and Chief Executive Officer of his own company, Diagnostic Imaging Services,
Inc. (which we acquired), which owned and operated 14 multi-modality imaging facilities throughout Southern California. Mr.&nbsp;Hames
gained his initial experience in operating imaging centers for American Medical International, or AMI, and was responsible for
the development of AMI&rsquo;s single and multi-modality imaging centers. Mr. Hames brings business leadership skills from his
experience as President and Chief Executive Officer of his own company and has a 20-year background in the day-to-day operations
of imaging centers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Lawrence&nbsp;L.
Levitt</I> is a certified public accountant and received his MBA in Accounting from the University of California Los Angeles. Since
1987, Mr. Levitt has been the President and Chief Financial Officer of Canyon Management Company, a company which manages a privately
held investment fund. Mr. Levitt brings to our Board of Directors extensive financial accounting experience and is an audit committee
financial expert under the SEC rules. Mr. Levitt has been a member of our Audit Committee since March 2005 and a member of our
Nominating and Governance Committee since January 2011. Mr. Levitt has served as the chair of our Compensation and Management Development
Committee since July 2007.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Michael&nbsp;L.
Sherman, M.D., F.A.C.R.,</I> served as a director of Radiologix from 1997 until November&nbsp;2006, until its acquisition by the
Company. He founded and served as President of Advanced Radiology, P.A., a 90-person radiology practice located in Baltimore, Maryland,
from its inception in 1995 to 2001, and subsequently as its board chairman and a consultant until his retirement from active clinical
practice in 2005. In addition, Dr.&nbsp;Sherman was a director of MedStar Health, a ten-hospital system in the Baltimore-Washington,
D.C. area from 1998 until 2006 and served as a director of Medstar&rsquo;s captive insurance company until 2011. Dr. Sherman has
trained as a mediator and runs Medical Mediation, LLC through which he has mediated professional liability and business cases.
He was a director of HX Technologies, a healthcare IT private company, from 2006 until its sale in 2010. Dr. Sherman has broad
experience in the medical and business aspects of radiology as a board member and chairman of various companies in the healthcare
industry. Effective January 2011, Dr. Sherman was elected to serve as the chair of our Nominating and Governance Committee and
has been a member of our Compensation and Management Development Committee since 2007.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>David&nbsp;L. Swartz</I>
is a certified public accountant with over thirty-five years of experience providing accounting and advisory services to clients.
Mr.&nbsp;Swartz served as a member of the board of directors of the California State Board of Accountancy until November 2012 and
previously served as president. Between 1993 and 2008, Mr.&nbsp;Swartz served as the managing partner of Good, Swartz, Brown&nbsp;&amp;
Berns LLP, a division of JH Cohn, and currently provides consulting services. Prior to that, Mr.&nbsp;Swartz served as managing
partner and was on the national board of directors of a 50 office international accounting firm. Mr.&nbsp;Swartz is also a former
chief financial officer of a publicly held shopping center and development company. Mr. Swartz brings to our Board of Directors
extensive public financial accounting experience and is an audit committee financial expert under the SEC rules. Effective January
2011, Mr. Swartz was appointed as Lead Independent Director and has been the chair of our Audit Committee since 2004. In addition,
Mr. Swartz has been a member of our Compensation and Management Development Committee since 2008 and a member of our Nominating
and Governance Committee since January 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">There are no family
relationships between any nominees or executive officers of our Company, and there are no arrangements or understandings between
any nominee and any other person pursuant to which such nominee was or is selected as a director or nominee.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Vote Required</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The nominees who receive
the highest number of votes represented by shares of common stock present or represented by proxy and entitled to vote at the Annual
Meeting will be elected.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">OUR BOARD OF DIRECTORS UNANIMOUSLY
RECOMMENDS A VOTE &ldquo;FOR&rdquo; THE ELECTION<BR>
TO THE BOARD OF EACH OF THESE NOMINEES</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">BOARD OF DIRECTORS AND CORPORATE GOVERNANCE</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify"><FONT STYLE="font-weight: normal">Our
business is managed under the direction of our Board of Directors. Our Board of Directors selects our officers, delegates responsibilities
for the conduct of our operations to those officers, and monitors their performance. </FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Meetings of the Board of Directors
and Board Committees</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our Board of Directors
meets at least on a quarterly basis and during calendar year 2012, held eight meetings and took action by written consent on one
occasion. Each of the current directors serving in 2012 attended at least 75% of the total number of meetings of the Board of Directors
and applicable committees that each director was eligible to attend. We, as a matter of policy, encourage our directors to attend
meetings of stockholders but we do not require attendance.&nbsp;Four of the seven directors attended the 2012 Annual Meeting of
Stockholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Board Leadership Structure</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Chairman of the
Board also serves as our Chief Executive Officer. Our Board of Directors has determined that its leadership structure is appropriate
and effective. Our Board of Directors believes that having a single individual serve as both chair and chief executive officer
fosters an important unity of leadership between our Board of Directors and our management team, provides clear accountability
and promotes strategic development and execution. Our Board of Directors further believes that the combination of the offices facilitates
the organization and efficiency of board meetings over the calendar year by permitting the Chief Executive Officer to develop a
thoughtful and comprehensive agenda for review by our Board of Directors of the issues and matters most critical to the Company
and to guide the review process in a manner that will assure efficient use of the time available to our Board of Directors.&nbsp;
This structure effectively utilizes the Chief Executive Officer&rsquo;s knowledge of our Company and the industry as well as fostering
greater communication between management and our directors which produces a greater degree of transparency among management and
our directors. Effective January 2011, our Board of Directors appointed Mr. Swartz as Lead Independent Director. In this capacity,
Mr. Swartz serves as chairman of meetings of the Board of Directors in the absence of the Chairman of the Board, calls, sets the
agenda and chairs the executive sessions of the independent directors, works together with the chairman of the Compensation and
Management Development Committee to oversee the evaluation of our Chief Executive Officer and serves as the liaison between the
independent directors and the Chairman of the Board. Four of the seven members of our Board of Directors are independent directors
and all of those individuals serve on the committees of our Board of Directors. Our Chairman and Chief Executive Officer does not
serve on any committee. Our Board of Directors holds regular executive sessions outside the presence of the Chief Executive Officer
and other management, which our Board of Directors believes promotes appropriate independent leadership.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Board Role in Risk Oversight</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">While risk management
is primarily the responsibility of our management, the Board of Directors does have an oversight role in managing the Company&rsquo;s
risk. A fundamental part of risk management is not only understanding the risks we face and what steps management is taking to
manage those risks, but also understanding what level of risk is appropriate for our Company. In reviewing our strategy, business
plan, budgets and major transactions, the Board of Directors considers, among other factors, the risks the Company faces, and how
such risks can be managed.<B> </B>Our senior management regularly reports to the Board of Directors on areas of material risk,
including operational, financial, legal and strategic risks which enable the Board of Directors to understand management&rsquo;s
views on risk identification, risk management and risk mitigation strategies. While the full Board of Directors has an oversight
role in managing our risk, various committees of the Board of Directors also have responsibility for risk management. The Director
of Internal Audit reports directly to our Audit Committee on areas of material financial risk, including internal controls, and
the Audit Committee reports to the full Board of Directors on risks identified by the Director of Internal Audit that the Audit
Committee believes are material. In addition, the Compensation Committee oversees the risks associated with our compensation policies
and practices.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Director Independence</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our Board of Directors
annually determines the independence of our directors in accordance with the independence requirements under the NASDAQ and the
SEC rules. As a result of this review, our Board of Directors has determined that Marvin S. Cadwell, Lawrence L. Levitt, Michael
L. Sherman, M.D. and David Swartz each qualify as independent directors in accordance with the NASDAQ and the SEC rules. Each of
Howard G. Berger, M.D., John V. Crues, III, M.D., and Norman R. Hames is an executive officer of our Company and therefore they
do not qualify as independent directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B>Director Nomination
Process</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Nominating and
Governance Committee is responsible for identifying and evaluating director candidates and has the authority to employ a third
party search firm to assist in this process, if needed. The Nominating and Governance Committee considers stockholder nominees
if such nominations have been made in accordance with our bylaws and will evaluate candidates recommended by stockholders in the
same manner as all other candidates brought to the attention of the Nominating and Governance Committee. Stockholder recommendations
may be submitted to the Nominating and Governance Committee in care of the Corporate Secretary at the address set forth below under
&ldquo;Communication with Our Board of Directors.&rdquo; No director candidates have been put forward by a stockholder or group
of stockholders who beneficially owned more than five percent of our stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify"><FONT STYLE="font-weight: normal">The
Nominating and Governance Committee recommends nominees to the Board of Directors for election after carefully considering all
candidates, taking into account all factors the committee considers appropriate, which may include career specialization, relevant
technical skills or financial acumen, diversity of viewpoint and industry knowledge and the minimum qualifications as specified
in the Nominating and Governance Committee Charter. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our Board of Directors
does not have a&nbsp;formal&nbsp;policy with regard to the consideration of diversity in the identification of director nominees.
However,&nbsp;as part of the evaluation of board composition,&nbsp;the Nominating and Governance Committee considers the diversity
of candidates to ensure that our Board of Directors is comprised of individuals with a broad range of experiences and backgrounds
(including, among other things, career specialization, relevant technical skills or financial acumen, diversity of viewpoint and
industry knowledge) who can contribute to the board&rsquo;s overall effectiveness in carrying out its responsibilities and who
can represent diverse viewpoints on our Board of Directors.&nbsp;&nbsp; The Nominating and Governance Committee assesses the effectiveness
of&nbsp;our efforts&nbsp;when annually evaluating the composition of the Board of Directors as part of the annual nomination process.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Code of Ethics</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify"><FONT STYLE="font-weight: normal">We
have adopted a written code of financial ethics applicable to our directors, officers and employees which is designed to deter
wrongdoing and to promote: </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 33.1pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>honest and ethical conduct;</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 33.1pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>full, fair, accurate, timely and understandable disclosure in reports and documents that we file with the SEC and in our other
public communications;</TD></TR>                                <TR STYLE="vertical-align: top">
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR>
</TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 33.1pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>compliance with applicable laws, rules and regulations, including insider trading compliance; and</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 33.1pt"></TD><TD STYLE="width: 18pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>accountability for adherence to the code and prompt internal reporting of violations of the code, including illegal or unethical
behavior regarding accounting or auditing practices.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">You may obtain a copy
of our Code of Financial Ethics on our website at <I>www.radnet.com</I> under Investors&nbsp;&mdash;&nbsp;Corporate Governance.
The Board of Directors has designated that the Audit Committee is responsible for reviewing the Code of Financial Ethics and amending
as necessary. Any amendments will be disclosed on our website.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Committees of the Board of Directors</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have three standing
committees: the Audit Committee, the Compensation and Management Development Committee and the Nominating and Governance Committee.
The committees are comprised entirely of independent directors. The membership of each committee is as follows, with the chairperson
listed first:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: bottom; width: 27%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font-weight: bold"><FONT STYLE="font-weight: normal">Audit Committee</FONT></TD>
    <TD STYLE="vertical-align: top; width: 3%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 37%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-weight: normal">Compensation
        and Management </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-weight: normal">Development
        Committee </FONT></P></TD>
    <TD STYLE="vertical-align: top; width: 3%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 30%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; font-weight: bold"><FONT STYLE="font-weight: normal">Nominating and Governance Committee</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(238,238,238)">
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold"><FONT STYLE="font-weight: normal">David L. Swartz</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold"><FONT STYLE="font-weight: normal">Lawrence L. Levitt</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold"><FONT STYLE="font-weight: normal">Michael Sherman, M.D. </FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold"><FONT STYLE="font-weight: normal">Marvin S. Cadwell </FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold"><FONT STYLE="font-weight: normal">Michael Sherman, M.D. </FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold"><FONT STYLE="font-weight: normal">Marvin S. Cadwell</FONT></TD></TR>
<TR STYLE="background-color: rgb(238,238,238)">
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold"><FONT STYLE="font-weight: normal">Lawrence L. Levitt</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold"><FONT STYLE="font-weight: normal">David L. Swartz</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold"><FONT STYLE="font-weight: normal">Lawrence L. Levitt</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold"><FONT STYLE="font-weight: normal">David L. Swartz</FONT></TD></TR>
<TR STYLE="background-color: rgb(238,238,238)">
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font-weight: normal"><I><U>Audit
Committee</U></I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Audit Committee
meets periodically, but at least once a quarter to review the Company&rsquo;s financial statements and the adequacy of and compliance
with the Company&rsquo;s internal and external financial reporting processes. The Audit Committee held<B> </B>four<B> </B>meetings
in 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Audit Committee&rsquo;s
responsibilities include, among other things:</P>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">overseeing our accounting and financial reporting processes and the audits of our financial statements;</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">overseeing, along with management, the reliability and integrity of our accounting policies and
financial reporting and disclosure practices;</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">serving as an independent and objective party to monitor our financial reporting processes and
internal controls systems;</TD></TR>                                    <TR STYLE="vertical-align: top">
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD></TR>
</TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">retaining our independent registered public accounting firm, reviewing and evaluating their independence,
qualifications and performance, approving the terms of the annual engagement letter and approving all audit and non-audit services
to be performed by our independent registered public accounting firm; and</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">providing independent, direct, and open communications among our independent registered public
accounting firm, financial and senior management and the full Board of Directors.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The responsibilities
of the Audit Committee are more fully described in the Audit Committee Charter. The Audit Committee is required to review the charter
at least annually and modify it as needed. The Audit Committee Charter can be found on our website at <U>www.radnet.com</U> under
Investors&nbsp;&mdash; Corporate Governance.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Board of Directors
has determined that all members of the Audit Committee are independent and financially literate. Further, the Board of Directors
has determined that Mr. Swartz and Mr. Levitt possess the requisite accounting and financial management expertise required under
the NASDAQ Marketplace Rules and each qualifies as an &ldquo;audit committee financial expert&rdquo; as defined under the applicable
SEC rules.<I> </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I><U>Compensation
and Management Development Committee</U></I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Compensation and
Management Development Committee meets at least annually and is responsible for approving the compensation of executive officers
and certain senior management and oversees the Company&rsquo;s management development programs, performance assessment of senior
executives and succession planning. The Compensation and Management Development Committee held three meetings in 2012 and took
action by written consent on one occasion.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Compensation and
Management Development Committee&rsquo;s responsibilities include, among other things:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">reviewing and, as it deems appropriate, recommending to our Board of Directors the compensation
of executive officers and certain other senior management;</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">reviewing and administering our stock and equity incentive plans;</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">overseeing the compensation philosophy and strategy of the Company and the establishment and administration
of our qualified and non-qualified pension plans; and</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">reviewing and approving the corporate goals and objectives relevant to CEO compensation and evaluating
the CEO&rsquo;s performance in light of those goals and recommending the CEO&rsquo;s compensation levels based on such evaluation.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As noted in the Compensation
Discussion and Analysis Section below, certain executive officers receive compensation from an affiliate of BRMG. Our relationship
with BRMG is described in further detail under &ldquo;Certain Relationships and Related Party Transactions &ndash; Related Party
Transactions&rdquo; below. The process employed by the Compensation and Management Development Committee in determining the appropriate
compensation of executive officers is the same regardless of whether payments are made by the Company or an affiliate of BRMG.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The responsibilities
of the Compensation and Management Development Committee are more fully described in the Compensation and Management Development
Committee Charter. The Compensation and Management Development Committee is required to review the charter annually and, as it
deems appropriate, make recommendations of any proposed changes to the Board of Directors for approval. The Compensation and Management
Development Committee Charter can be found on our website at <U>www.radnet.com</U> under Investors&nbsp;&mdash; Corporate Governance.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I><U>Nominating and
Governance Committee</U></I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Nominating and
Governance Committee meets as frequently as circumstances dictate, but not less than once a year, and is responsible for identifying,
evaluating and recommending qualified potential candidates to serve on the Board of Directors and its committees, coordinating
the process for the Board of Directors to evaluate its performance and overseeing matters of corporate governance. The Nominating
and Governance Committee held one meeting in 2012.<B> </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Nominating and
Governance Committee&rsquo;s responsibilities include, among other things:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">developing and recommending the criteria to be used in screening and evaluating potential candidates
or nominees for election or appointment as directors;</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">establishing and overseeing a policy for considering stockholder nominees for directors, and developing
the procedures that must be followed by stockholders in submitting recommendations;</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">monitoring and reviewing any issues regarding the independence of directors or involving potential
conflicts of interest and evaluating any change of status or circumstances with respect to a director;</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">evaluating all nominees for election of directors;</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">developing and recommending to the Board of Directors, as necessary, corporate governance policies
to be adopted and maintained;</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">identifying committee member qualifications and recommending appropriate committee member appointments
to the Board of Directors; and</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">establishing and reviewing annually with the Board of Directors the procedures for stockholders
to send communications to the Board of Directors.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The responsibilities
of the Nominating and Governance Committee are more fully described in the Nominating and Governance Committee Charter. The Nominating
and Governance Committee is required to regularly review the charter and recommend changes as it deems appropriate. The Nominating
and Governance Committee Charter can be found on our website at <U>www.radnet.com</U> under Investors&nbsp;&mdash; Corporate Governance.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase">COMMUNICATION
WITH OUR BOARD OF DIRECTORS</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Stockholders may communicate
with our Board of Directors through the Corporate Secretary by writing to the following address: Board of Directors, c/o Corporate
Secretary, RadNet, Inc., 1510 Cotner Avenue, Los Angeles, CA 90025. The envelope containing such communication should contain a
clear notation that the letter is &ldquo;Stockholder-Board Communication&rdquo; or &ldquo;Stockholder-Director Communication&rdquo;
or a similar statement to indicate it is intended for the Board of Directors. All such communications must clearly indicate the
author as a stockholder and state whether the intended recipients are all members of the Board of Directors or just certain specified
directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>Compensation
Committee Interlocks and Insider Participation</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The members of the
Compensation and Management Development Committee are listed under &ldquo;Board of Directors and Corporate Governance &mdash; Committees
of the Board of Directors.&rdquo; No member of the Compensation and Management Development Committee has had a relationship with
our Company or any of our subsidiaries other than as directors and stockholders and no member has been an officer or employee of
our Company or any of our subsidiaries, a participant in a &ldquo;related person&rdquo; transaction or an executive officer of
another entity, where one of our executive officers serves on the board of directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase">Section&nbsp;16(a)&nbsp;Beneficial
Ownership Reporting Compliance</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Section&nbsp;16(a)&nbsp;of
the Exchange Act requires our directors, executive officers and beneficial owners of more than 10% of our common stock to file
reports of ownership and changes in ownership with the SEC. Based solely on copies of these reports provided to us and written
representations that no other reports were required, we believe that these persons timely met all of the applicable Section&nbsp;16(a)&nbsp;filing
requirements during fiscal 2012.<B> </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>Executive
Officers</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The names of our current
executive officers, their ages as of March 31, 2013, and their positions are shown below.&nbsp;&nbsp;Biographical summaries of
each of our executive officers who are not also members of our Board of Directors are included below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 30%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; border-bottom: Black 1.5pt solid"><B>Name
        of Executive Officer</B></P></TD>
    <TD STYLE="width: 7%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; border-bottom: Black 1.5pt solid"><B>Age</B></P></TD>
    <TD STYLE="width: 51%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; border-bottom: Black 1.5pt solid"><B>Position</B></P></TD>
    <TD STYLE="width: 12%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; border-bottom: Black 1.5pt solid"><B>Officer
        Since</B></P></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding: 3pt 5.4pt">Howard G. Berger, M.D.</TD>
    <TD STYLE="padding-top: 3pt; padding-bottom: 3pt; text-align: center">67</TD>
    <TD STYLE="padding: 3pt 5.4pt">President, Chief Executive Officer and Chairman of the Board</TD>
    <TD STYLE="padding-top: 3pt; padding-bottom: 3pt; text-align: center">1992</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 3pt; padding-left: 5.4pt">John V. Crues, III, M.D.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 3pt; padding-left: 5.4pt; text-align: center">63</TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 3pt; padding-left: 5.4pt">Vice President and Medical Director</TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 3pt; padding-left: 5.4pt; text-align: center">2000</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 3pt; padding-left: 5.4pt">Norman R. Hames</TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 3pt; padding-left: 5.4pt; text-align: center">57</TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 3pt; padding-left: 5.4pt">Executive Vice President, Secretary, Chief Operating Officer &ndash; Western Operations</TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 3pt; padding-left: 5.4pt; text-align: center">1996</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 3pt; padding-left: 5.4pt">Stephen M. Forthuber</TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 3pt; padding-left: 5.4pt; text-align: center">52</TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 3pt; padding-left: 5.4pt">Executive Vice President and Chief Operating Officer &ndash; Eastern Operations</TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 3pt; padding-left: 5.4pt; text-align: center">2006</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 3pt; padding-left: 5.4pt">Jeffrey L. Linden</TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 3pt; padding-left: 5.4pt; text-align: center">70</TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 3pt; padding-left: 5.4pt">Executive Vice President and General Counsel</TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 3pt; padding-left: 5.4pt; text-align: center">2001</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 3pt; padding-left: 5.4pt">Michael M. Murdock</TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 3pt; padding-left: 5.4pt; text-align: center">58</TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 3pt; padding-left: 5.4pt">Executive Vice President and Chief Development Officer</TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 3pt; padding-left: 5.4pt; text-align: center">2007</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 3pt; padding-left: 5.4pt">Mark D. Stolper</TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 3pt; padding-left: 5.4pt; text-align: center">41</TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 3pt; padding-left: 5.4pt">Executive Vice President and Chief Financial Officer</TD>
    <TD STYLE="padding-right: 5.4pt; padding-bottom: 3pt; padding-left: 5.4pt; text-align: center">2004</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Stephen M.
Forthuber </I>became our Executive Vice President and Chief Operating Officer for Eastern Operations subsequent to the
Radiologix acquisition. He joined Radiologix in January 2000 as Regional Director of Operations, Northeast. From July 2002
until January 2005 he served as Regional Vice President of Operations, Northeast and from February 2005 until December 2005
he was Senior Vice President and Chief Development Officer for Radiologix. Prior to working at Radiologix, Mr. Forthuber was
employed from 1982 until 1999 by Per-Se Technologies, Inc. and its predecessor companies, where he had significant physician
practice management and radiology operations responsibilities. Mr. Forthuber received a B.A. in Business Administration from
The College of William and Mary in Virginia.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 31.7pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 31.7pt"><I>Jeffrey L.
Linden</I> joined us in 2001 and currently serves as our Executive Vice President and General Counsel. Prior to joining us, Mr.
Linden had been engaged in the private practice of law. He has lectured before numerous organizations on various topics, including
the California State Bar, the American Society of Therapeutic Radiation Oncologists, the California Radiological Association, and
the National Radiology Business Managers Association. Mr. Linden received his J.D. and undergraduate degree from the University
of California, Los Angeles.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Michael Murdock</I>
has served as our Executive Vice President and Chief Development Officer since 2007. Mr. Murdock has spent the majority of his
career in senior financial positions with healthcare companies, ranging in size from venture-backed startups to multi-billion dollar
corporations, including positions with American Medical International and its successor American Medical Holding, Inc., a publicly
traded owner and operator of acute care facilities, that was acquired by National Medical Enterprises, now Tenet Healthcare. From
1999 through 2004, Mr. Murdock served as Chief Financial Officer of Dental One, a venture capital-backed owner and operator of
48 dental practices in Texas, Arizona, Colorado and Utah. From 2005 to 2006, Mr. Murdock served as Chief Financial Officer of Radiologix
and joined us following the Radiologix acquisition. Mr. Murdock began his career in 1978 as an auditor with Arthur Andersen after
receiving a B.S. degree from California State University, Northridge.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Mark D.
Stolper </I>has served as our Chief Financial Officer since July 2004 and prior to that was an independent member of our
Board of Directors. Prior to joining us, he had diverse experiences in investment banking, private equity, venture capital
investing and operations. Mr. Stolper began his career as a member of the corporate finance group at Dillon, Read and Co.,
Inc., executing mergers and acquisitions, public and private financings, and private equity investments with Saratoga
Partners LLP, an affiliated principal investment group of Dillon Read. After Dillon Read, Mr. Stolper joined Archon Capital
Partners, which made private equity investments in media and entertainment companies. Mr. Stolper also worked for Eastman
Kodak, where he was responsible for business development for Kodak&rsquo;s Entertainment Imaging subsidiary ($1.5 billion in
sales). Mr. Stolper was also co-founder of Broadstream Capital Partners, a Los Angeles-based investment banking firm focused
on advising middle market companies engaged in financing and merger and acquisition transactions. Mr. Stolper is currently a
member of the board of directors and audit committee for On Track Innovations (NASDAQ: OTIV), and is Chairman of the Board of
CompuMed, Inc. (PINK: CMPD). <FONT STYLE="color: black">Mr. Stolper graduated with a liberal arts degree from the University
of Pennsylvania and a finance degree from the Wharton School. Additionally, Mr. Stolper earned a postgraduate Award
in Accounting from the University of California, Los Angeles.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our officers are elected
annually and serve at the discretion of the Board of Directors. There are no family relationships among any of our officers and
directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase">Certain
Relationships and Related PARTY Transactions</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Review and Approval of Related Party Transactions</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As a matter of
policy, the Board of Directors reviews any transaction in which we are proposed to be a party, directly or indirectly, and any
of the following persons or entities is or is entitled to be a party, directly or indirectly, to the transaction or any director
has a material financial interest in the transaction: (i) any of our executive officers or any related person of any such officer
or a director, (ii) any person or entity of which the executive officer or director or any related person is the owner of more
than 5% of the securities, (iii) any person or entity that controls one or more of the persons specified in subparagraph (ii) or
a person that is controlled by, or is under common control with, one or more of the persons specified in subparagraph (ii), or
(iv) an individual who is a general partner, principal or employer of a director. Additionally, any transaction which would be
required to be disclosed pursuant to Item 404 of Regulation S-K is reviewed by the Board of Directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Related Party Transactions </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Howard G. Berger, M.D.,
is our President and Chief Executive Officer, a member of our Board of Directors and is deemed to be the beneficial owner, directly
and indirectly, of approximately 13.53% of our outstanding common stock as of March 31, 2013. Dr. Berger also owns, indirectly,
99% of the equity interests in BRMG. BRMG provides all of the professional medical services at 101 of our facilities located in
California under a management agreement with us, and contracts with various other independent physicians and physician groups to
provide the professional medical services at most of our other California facilities. We obtain professional medical services from
BRMG in California, rather than provide such services directly or through subsidiaries, in order to comply with California&rsquo;s
prohibition against the corporate practice of medicine. However, as a result of our close relationship with Dr. Berger and BRMG,
we believe that we are able to better ensure that medical service is provided at our California facilities in a manner consistent
with our needs and expectations and those of our referring physicians, patients and payors than if we obtained these services from
unaffiliated physician groups.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 15pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under our management
agreement with BRMG, which expires on January 1, 2014, BRMG pays us, as compensation for the use of our facilities and equipment
and for our services, a percentage of the gross amounts collected for the professional services it renders. The percentage, which
was 79%, at December 31, 2012, is adjusted annually, if necessary, to ensure that the parties receive fair value for the services
they render. In operation and historically, the annual revenue of BRMG from all sources closely approximates its expenses, including
Dr. Berger&rsquo;s compensation, fees payable to us and amounts payable to third parties. For administrative convenience and in
order to avoid inconveniencing and confusing our payors, a single bill is prepared for both the professional medical services provided
by the radiologists and our non-medical, or technical, services, generating a receivable for BRMG. BRMG is a guarantor under the
term loan facility and revolving credit facility we entered into in October 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Dr. Crues receives all
of his salary from BRMG. In 2012, Dr. Crues received a fixed base salary amount of $409,238.67
and was also entitled to 10% of the revenues from certain programs Dr. Crues administers for BRMG, for a total salary of $527,375.76.
In 2012, Dr. Berger received $500,000 of his salary from BRMG.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Cohen&nbsp;&amp; Lord,
a professional corporation, a law firm with which Mr.&nbsp;Linden is associated, received $401,310 in fees for the year ended December
31, 2012, $895,581 in fees for the year ended December 31, 2011 and $598,262 in fees for the year ended December 31, 2010. Mr.
Linden has specifically waived any interest in the fees paid to Cohen &amp; Lord by RadNet since becoming an officer.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We use World Wide
Express, a package delivery company owned 40% by Mr. Hames, to provide delivery services for us. During the year ended December
31, 2012, we expensed approximately $948,000 to World Wide Express for those services.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On June 1, 2009 we entered
into a 10-year operating lease for a building at one of our imaging centers located in Wilmington, Delaware in which our Senior
Vice President of Materials Management is a 50% owner. The monthly rent under this operating lease is approximately $25,000. We
believe that the monthly lease amount is in line with similar 10-year lease contracts available for comparable buildings in the
area.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Indemnification Agreements </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 15pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have indemnification
agreements with each of our directors and certain officers in addition to provisions which are reflected in our certificate of
incorporation and bylaws which require us to indemnify our directors and officers to the fullest extent permitted by Delaware law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 15pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 15pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 15pt">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">REPORT OF THE AUDIT COMMITTEE OF THE
BOARD OF DIRECTORS*</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Audit Committee
of the Board of Directors is comprised entirely of independent directors who meet the independence requirements of NASDAQ and the
SEC. The Audit Committee operates pursuant to a charter that is available on our website at www.radnet.com under Investors &mdash;
Corporate Governance.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Audit Committee
oversees our financial reporting process on behalf of the Board of Directors. Management is responsible for the preparation, presentation
and integrity of the financial statements, including establishing accounting and financial reporting principles and designing systems
of internal control over financial reporting. Our independent registered public accounting firm, Ernst&nbsp;&amp; Young LLP (&ldquo;Ernst
&amp; Young&rdquo;), is responsible for expressing an opinion as to the conformity of our consolidated financial statements with
generally accepted accounting principles.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In performing its responsibilities,
the Audit Committee has reviewed and discussed, with management and Ernst&nbsp;&amp; Young, the audited consolidated financial
statements in our annual report on Form 10-K for the year ended December&nbsp;31, 2012. The Audit Committee has also discussed
with Ernst&nbsp;&amp; Young matters required to be discussed by Statement on Auditing Standards 61, as amended (AICPA, Professional
Standards, Vol. 1, AU Section&nbsp;380), as adopted by the Public Company Accounting Oversight Board in Rule 3200T.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Audit Committee
has received the written disclosures and the letter from Ernst&nbsp;&amp; Young required by applicable requirements of the Public
Company Accounting Oversight Board regarding Ernst&nbsp;&amp; Young&rsquo;s communications with the Audit Committee concerning
independence, and has discussed Ernst&nbsp;&amp; Young&rsquo;s independence with Ernst&nbsp;&amp; Young.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Based on the reviews
and discussions referred to above, the Audit Committee recommended to the Board of Directors that the audited consolidated financial
statements of RadNet, Inc. be included in the Company&rsquo;s annual report on Form 10-K for the year ended December&nbsp;31, 2012
for filing with the SEC. The Audit Committee has also reappointed Ernst &amp; Young to serve as independent auditors for the fiscal
year ending December 31, 2013, and requested that this appointment be submitted to our stockholders for ratification at their annual
meeting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Submitted by the Audit Committee:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3in">David L. Swartz, Chair</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3in">Marvin S. Cadwell</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3in">Lawrence L. Levitt</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">---------------------------------</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">*&#9;The material in this report is not &ldquo;soliciting material,&rdquo;
is not deemed filed with the SEC and is not to be incorporated by reference into any of our filings under the Securities Act of
1933, as amended (the &ldquo;Securities Act&rdquo;), or the Exchange Act whether made before or after the date of this proxy statement
and irrespective of any general incorporation language therein.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">COMPENSATION DISCUSSION AND ANALYSIS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">This discussion describes
our compensation program for our Named Executive Officers and has been divided into the following sections:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>Executive Summary</U>:
summarizes our 2012 executive compensation program.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>Compensation Philosophy</U>:
describes the principles forming the foundation of our compensation and benefits programs for executives.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>Board Process</U>:
describes the processes, participants and tools that help us make compensation decisions for our Named Executive Officers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>Elements of Executive
Compensation</U>: describes the various components of the compensation that may be awarded to each of our Named Executive Officers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>2012 Stockholder
Advisory Vote on Executive Compensation</U>: describes the outcome of the 2012 advisory vote regarding the approval of the compensation
for our Named Executive Officers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>2012 and 2013 Compensation
Determinations</U>: describes the compensation decisions for each of our Named Executive Officers for the fiscal year ended December
31, 2012 and for the fiscal year ending December 31, 2013.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>Risk Consideration
in Our Compensation Programs</U>: describes the concept of risk as it relates to our compensation program.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Executive Summary</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify"><FONT STYLE="font-weight: normal">We
compensate our executive officers generally through a mix of base salary and equity compensation. Our executive compensation program
is designed to attract, retain and motivate talented executive officers who are capable of providing leadership, vision and execution
necessary to achieve our business objectives. We actively seek to foster an environment that aligns the interests of our executive
officers with the creation of stockholder value through our equity compensation program. To this end, we do not have a cash bonus
structure in place for our executive officers, however a cash bonus may be paid to a Named Executive Officer in limited circumstances,
the amount of which is at the discretion of the Compensation and Management Development Committee. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Compensation decisions
are determined by our independent Compensation and Management Development Committee and are not based on benchmarking against specific
peer companies. For the year ended December 31, 2012, the Compensation and Management Development Committee did not retain any
outside advisors or compensation consultants. The Compensation and Management Development Committee actively engages in dialogue
with the Chief Executive Officer (who is also a member of our Board) concerning the selection of strategic objectives and targets
for performance based compensation. Generally, salary adjustments and equity compensation grants are based upon the recommendation
of our Chief Executive Officer, with the Compensation and Management Development Committee retaining ultimate authority to accept,
reject or modify such recommendation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 40.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 40.5pt">The Named Executive
Officers for fiscal 2012 were: Howard G. Berger, M.D.; Mark D. Stolper; Jeffrey L. Linden; Norman R. Hames; and Stephen M. Forthuber.
Effective January 1, 2012, the base salary for Dr. Berger was increased by $75,000 and the base salary for each of Messrs. Stolper,
Linden, Hames and Forthuber was increased by $50,000. Each of <FONT STYLE="color: black">Messrs. Hames, Forthuber, Linden and Stolper
was awarded a restricted stock grant of 75,000 shares of our common stock as of January 3, 2012</FONT>, which vests in three
equal annual increments with the first installment vesting on the grant date<FONT STYLE="color: black">. </FONT>As of March 31,
2013, 50,000 shares of each grant had vested.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 40.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 40.5pt">The Compensation and
Management Development Committee elected not to increase base salary for the Named Executive Officers for 2013, and in lieu thereof,
determined to issue cash bonuses and restricted stock grants that together, in the aggregate, were to equal approximately fifty
percent of their current salaries. The cash bonuses were paid on December 31, 2012 and the restricted stock grants, in accordance
with the Company&rsquo;s policy, were issued on January 2, 2013.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 40.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 40.5pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 40.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 40.5pt">We also pay the premiums
for our executive officers&rsquo; coverage under our health insurance plans and some of our executive officers are provided a monthly
car allowance. Perquisites are not a material element of our executive compensation program.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Compensation Philosophy</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following principles
influence and guide the compensation decisions of the Compensation and Management Development Committee:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-weight: normal"><I>The
Compensation and Management Development Committee Believes in a Pay for Performance Culture</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">At the core of our
compensation philosophy is our guiding belief that pay should be directly linked to performance. A substantial portion of executive
officer compensation is contingent on, and variable with, achievement of objective corporate and/or individual performance objectives.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Compensation Decisions Should Promote
the Interests of Stockholders</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Compensation should
focus management on achieving strong short-term (annual) performance in a manner that supports and ensures our long-term success
and profitability. The Compensation and Management Development Committee believes that stock options and restricted stock create
long-term incentives that align the interest of management with the long-term interest of stockholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Compensation and Performance Pay Should
Reflect Position and Responsibility</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Total compensation
and accountability should generally increase with position and responsibility. Consistent with this philosophy:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Total compensation is higher for individuals with greater responsibility and greater ability to
influence the Company&rsquo;s achievement of targeted results and strategic initiatives.</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">As position and responsibility increases, a greater portion of the executive officer&rsquo;s total
compensation may be comprised of performance-based pay contingent on the achievement of performance objectives.</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Equity-based compensation is higher for persons with higher levels of responsibility, making a
significant portion of their total compensation dependent on long-term stock appreciation.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Internal Pay Equity</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Compensation and
Management Development Committee believes that internal equity is an important factor to be considered in establishing compensation
for our executive officers. A formal policy regarding the ratio of total compensation of the Chief Executive Officer to that of
the other officers has not been established, but the Compensation and Management Development Committee does review compensation
levels to ensure that appropriate equity exists. The Compensation and Management Development Committee intends to continue to review
internal compensation equity and may adopt a formal policy in the future, if it is determined that such a policy would be appropriate.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Compensation Should be Reasonable and
Responsible</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">It is essential that
our overall compensation levels be sufficiently competitive to attract talented leaders and motivate those leaders to achieve superior
results. At the same time, we believe that compensation should be set at responsible levels. Our executive compensation programs
are intended to be consistent with our focus on controlling costs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Compensation Disclosures Should be Clear
and Complete</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Compensation and
Management Development Committee and management believe that all aspects of executive compensation should be clear, comprehensible
and promptly disclosed in plain English. The Compensation and Management Development Committee and management believe that compensation
disclosures should provide all of the information necessary to permit stockholders to understand our compensation philosophy, our
compensation-setting process and how and how much our executives are paid.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Board Process</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><I>Compensation and Management
Development Committee</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Compensation and
Management Development Committee has been delegated the authority by our Board of Directors to approve all compensation and awards
to executive officers. With respect to equity compensation awarded to the executive officers and others, the Compensation and Management
Development Committee acts as the administrator under our stockholder-approved 2006 Equity Incentive Plan (the &ldquo;2006 Plan&rdquo;)
and has the authority under that plan to grant restricted stock or stock options. Generally, equity grants are based upon the recommendation
of our Chief Executive Officer, with the Compensation and Management Development Committee retaining ultimate authority to accept,
reject or modify such recommendation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our Compensation and
Management Development Committee meets as often as necessary to perform its duties and responsibilities. The Committee meets with
executive management, including our Chief Executive Officer, and conducts meetings in executive session.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Compensation and
Management Development Committee&rsquo;s annual process begins by determining the individual and corporate performance objectives
for senior executive officers in each fiscal year. The Committee engages in an active dialogue with the Chief Executive Officer
concerning the selection of strategic objectives and targets for performance based compensation. Corporate performance objectives
may be established on the basis of a targeted return on capital employed for the Company or a particular business unit, or on the
basis of another operating metric.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Compensation and
Management Development Committee meets in executive session each year to: (i) evaluate the performance of the Named Executive Officers,
(ii) set the annual compensation of the Named Executive Officers, (iii) establish annual performance objectives for the current
fiscal year, and (iv) consider and approve any grants of equity incentive compensation to the Named Executive Officers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-weight: normal"><I>Management&rsquo;s
Role in the Compensation-Setting Process</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Management plays a
significant role in the compensation-setting process. The most significant aspects of which are:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">to establish the operating budget which forms the basis for performance objectives; and</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">to make recommendations to the Compensation and Management Development Committee on salary levels
and option and restricted stock awards, which recommendations are made by our Chief Executive Officer.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our Chief Executive
Officer works with the Compensation and Management Development Committee in establishing the agenda for committee meetings. Management
also prepares meeting information for each Compensation and Management Development Committee meeting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our Chief Executive
Officer also participates in committee meetings at the request of the Compensation and Management Development Committee to provide,
among other things:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">background information regarding the Company&rsquo;s strategic objectives;</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">his evaluation of the performance of the senior executive officers, including accomplishments,
areas of strength and weakness; and</TD></TR>                                             <TR STYLE="vertical-align: top">
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD></TR>
</TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">compensation recommendations as to senior executive officers (other than himself).</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-weight: normal"><I>Committee
Advisors</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under its charter,
the Compensation and Management Development Committee is granted, where appropriate, the authority to hire and fire advisors and
compensation consultants. The Company is obligated to pay for the advisors and consultants. These advisors will report directly
to the Compensation and Management Development Committee. For the year ended December 31, 2012, the Compensation and Management
Development Committee did not retain any outside advisors or compensation consultants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-weight: normal"><I>Benchmarking</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our Compensation and
Management Development Committee does not base its compensation decisions on benchmarking against a specific peer group of companies.
However, the Committee recognizes that our compensation practices must be competitive in the marketplace. The Committee is generally
aware of pay practices at other companies in our industry. This marketplace information is only one of the many factors that the
Committee considers in assessing the reasonableness of compensation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Elements of Executive Compensation</B></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Base Salary</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Base pay is a critical
element of executive compensation. We seek to establish a compensation level that is appropriate recognizing the executive officer&rsquo;s
achievements and contributions. Base pay also provides executives with a secure level of monthly income that is not at risk, and
our Compensation and Management Development Committee believes that this gives our executive officers the ability to focus on the
longer term and avoid the urgency that could otherwise encourage an executive officer to take unnecessary risks. In determining
base salaries our Compensation and Management Development Committee considers the executive officer&rsquo;s qualifications and
experience, scope of responsibilities and future potential, the goals and objectives established for the executive officer, the
executive officer&rsquo;s past performance, the general pay practices at other companies in our industry, internal pay equity and
the tax deductibility of base salary.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Equity Based Compensation</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We believe that equity
compensation is the most effective means of creating a long-term link between the compensation provided to officers and other key
management personnel with gains realized by the stockholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our stock compensation
plans have been established to provide certain of our employees, including our Named Executive Officers (other than our Chief Executive
Officer), with incentives to help align those employees&rsquo; interests with the interests of our stockholders. Our stock compensation
plans have provided the principal method for our Named Executive Officers to acquire equity or equity linked interests in our Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Beginning in 2012,
the Compensation and Management Development Committee elected to use restricted stock awards as our primary equity compensation
vehicle for our Named Executive Officers. In connection with this decision, the Compensation and Management Development Committee
reviewed the type of equity awards other companies were granting to executive officers and also took into account the various costs
associated with differing equity awards and determined that granting restricted stock would serve as a better inducement to retaining
employees. The restricted stock grants generally vest in three equal annual increments with the first installment vesting on the
grant date<FONT STYLE="color: black">.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Prior to 2012, the
Compensation and Management Development Committee elected to use stock options as our primary equity compensation vehicle. All
stock options incorporate the following features:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">the term of the grant does not exceed 10 years (though often is limited to only five years);</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">the grant price is not less than the market price on the date of grant;</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">grants do not include &ldquo;reload&rdquo; provisions;</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">repricing of options is prohibited, unless approved by the stockholders; and</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">options generally vest over a term of years (3 to 5 years) beginning with the first anniversary
of the date of grant. <B> </B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The Compensation and Management Development
Committee uses equity awards, including restricted stock and stock options, as a long-term incentive vehicle because:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">restricted stock and stock options align the interests of executives with those of the stockholders,
support a pay-for-performance culture, foster employee stock ownership and focus the management team on increasing value for the
stockholders; and</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">the vesting period encourages executive retention and the preservation of stockholder value.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In determining the
number of options or shares of restricted stock to be granted to senior executive officers, the Compensation and Management Development
Committee takes into account the individual&rsquo;s position, scope of responsibility, ability to affect profits and stockholder
value and the individual&rsquo;s historic and recent performance, the value of the equity awards in relation to other elements
of total compensation, internal pay equity and market competitiveness. The Compensation and Management Development Committee has
also adopted a general policy of issuing equity awards to senior executive officers on the first business day of January and such
equity awards are also to recognize those individual&rsquo;s contributions for the prior fiscal year.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Additional Benefits</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our executive officers,
including our Named Executive Officers, participate in other employee benefit plans generally available to all employees on the
same terms as similarly situated employees.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Perquisites to our
Named Executive Officers are not a material element of our compensation program. We pay the premiums for our Named Executive Officers'
coverage under our health insurance plans and some of our Named Executive Officers are provided a monthly car allowance.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Change in Control and Severance
Arrangements</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The employment arrangements
of our Named Executive Officers provide them with benefits if their employment is terminated under certain circumstances, including
termination following a change in control. The details and amount of these benefits are set forth below under &ldquo;Compensation
of Executive Officers&nbsp;&mdash;Potential Payments Upon Termination or Change in Control &mdash; Severance Arrangements&rdquo;;
&ldquo;Compensation of Executive Officers &mdash; Potential Payments Upon Termination or Change in Control &mdash;&nbsp;Change-in-Control
Arrangements&rdquo; and &ldquo;Compensation of Executive Officers &mdash; Pension Benefits, Nonqualified Defined Contribution and
Other Deferred Compensation Plans.&rdquo; The employment agreements, including the change in control provisions and the right to
receive severance, were initially used to attract qualified executive officers and have continued to be used as a way to retain
such qualified executive officers.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Deductibility of Executive Compensation</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our
Compensation and Management Development Committee reviews and considers the deductibility of executive compensation under
Section 162(m) of the Internal Revenue Code, which provides that we may not deduct compensation of more than $1,000,000 that
is paid to certain individuals. This limitation does not apply to compensation that meets the requirements under Section
162(m) of the Internal Revenue Code for &ldquo;qualifying performance based&rdquo; compensation and we do intend that the
stock options and restricted stock awards granted under our equity incentive plans qualify as performance-based compensation
under Section 162(m) of the Internal Revenue Code and therefore exempt from the $1,000,000 limit. However, in certain
situations, our Compensation and Management Development Committee may approve compensation that will not meet these
requirements in order to ensure competitive levels of total compensation of our Named Executive Officers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>2012 Stockholder Advisory Vote on Executive Compensation</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In 2012, over 95% of
the stockholder votes which were cast (including those that abstained) on the advisory vote regarding our Named Executive Officers&rsquo;
compensation were in favor of approving such compensation, reflecting very strong stockholder support for our executive compensation
programs. The Compensation and Management Development Committee carefully considered these results and a variety of other information
in determining compensation during 2012 and the beginning of 2013. After taking into account all of the information the Compensation
and Management Development Committee believed was relevant to its review, including the high level of stockholder support based
on the advisory vote results, the Compensation and Management Development Committee did not make any significant changes to the
structure of our executive compensation plans and programs. However, the Compensation and Management Development Committee did
determine to continue to use restricted stock, in lieu of stock options, with respect to equity compensation awards that it issued
in 2013 as noted below under the heading &ldquo;2013 Compensation Determinations.&rdquo;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">2012 and 2013 Compensation Determinations</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 40.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 40.5pt">The Compensation and
Management Development Committee uses its judgment and discretion in determining the amount of base salary for each Named Executive
Officer, which is reviewed on an annual basis. Effective as of January 1, 2012, our Compensation and Management Development Committee
decided to increase the base salary of our Named Executive Officers. The base salary for Dr. Berger was increased by $75,000 and
the base salary for each of Messrs. Stolper, Linden, Hames and Forthuber was increased by $50,000. The decision to increase the
base salaries was based, in part, on the Company&rsquo;s successful year in 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The following table provides the salaries
of each of the Named Executive Officers for the fiscal&nbsp;&nbsp;years 2011 and 2012:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR>
    <TD STYLE="vertical-align: bottom; border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Name</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Fiscal Year 2011 Salary($)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Fiscal Year 2012 Salary($)</B></FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: #EEEEEE">
    <TD STYLE="width: 37%"><FONT STYLE="font-size: 10pt">Howard G. Berger, M.D.</FONT></TD>
    <TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 28%; text-align: right"><FONT STYLE="font-size: 10pt">625,000</FONT></TD>
    <TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 16%; text-align: right"><FONT STYLE="font-size: 10pt">700,000</FONT></TD>
    <TD STYLE="width: 11%; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: #EEEEEE">
    <TD><FONT STYLE="font-size: 10pt">Mark D. Stolper</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;425,000</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;475,000</FONT></TD>
    <TD STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: #EEEEEE">
    <TD><FONT STYLE="font-size: 10pt">Jeffrey L. Linden</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">475,000</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">525,000</FONT></TD>
    <TD STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: #EEEEEE">
    <TD><FONT STYLE="font-size: 10pt">Norman R. Hames</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">425,000</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">475,000</FONT></TD>
    <TD STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: #EEEEEE">
    <TD><FONT STYLE="font-size: 10pt">Stephen M. Forthuber</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">425,000</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">475,000</FONT></TD>
    <TD STYLE="text-align: right">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition to reviewing
base salary compensation, the Compensation and Management Development Committee also considered the need for equity grants since
equity compensation is an important component of total compensation. In December 2011, the Compensation and Management Development
Committee decided to issue restricted stock grants under our 2006 Plan, effective January 3, 2012 to some of our Named Executive
Officers. In the past our Named Executive Officers have received stock option awards. In connection with the decision to issue
restricted stock awards, the Compensation and Management Development Committee reviewed the type of equity awards other companies
were granting to executive officers and also took into account, among other things, the various costs associated with differing
equity awards and the risk market volatility would have on differing equity awards and determined that granting restricted stock
would serve as a better inducement to retaining employees, including our executive officers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">Therefore,
Messrs. Hames, Forthuber, Linden and Stolper were each awarded restricted stock grants of 75,000 shares of our common stock on
January 3, 2012</FONT>, all of which vest in three equal annual increments with the first installment vesting on the grant date<FONT STYLE="color: black">.</FONT>
The Compensation and Management Development Committee decided to make these awards in order to provide each of these Named Executive
Officers with a more significant equity stake in the Company and a greater incentive to contribute to our long-term success. No
equity awards were granted to Dr. Berger who is already the beneficial owner, directly and indirectly, of approximately 13.53%
of our outstanding common stock as of March 31, 2013. The Compensation and Management Development Committee determined that he
has a sufficient equity interest in the Company to align his interest with other stockholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 40.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 40.5pt">In December 2012,
the Compensation and Management Development Committee in connection with making a determination regarding base salaries for 2013,
agreed with management&rsquo;s recommendation, to issue, in lieu of increasing salaries, cash bonuses and restricted stock grants
to our Named Executive officers in aggregate amounts equal to approximately 50% of their current salaries. The cash bonuses were
paid on December 31, 2012 and are reflected in the Summary Compensation Table under &ldquo;Compensation of Executive Officers&rdquo;
below. The shares of restricted stock were granted on the first business day in 2013, which is consistent with the Company&rsquo;s
policy.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 40.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 40.5pt">Effective January
2, 2013, each of Messrs. Stolper, Hames and Forthuber were awarded restricted stock grants of 50,000 shares of our common stock
and Mr. Linden was awarded restricted stock grants of 55,000 shares of our common stock, all of which vest in three equal annual
increments with the first installment vesting on the grant date<FONT STYLE="color: black">. </FONT>The Compensation and Management
Development Committee decided to make these awards in order to provide each of these Named Executive Officers with a more significant
equity stake in the Company and a greater incentive to contribute to our long-term success. No equity awards were granted to Dr.
Berger who is already the beneficial owner, directly and indirectly, of approximately 13.53% of our outstanding common stock as
of March 31, 2013. The Compensation and Management Development Committee determined that he has a sufficient equity interest in
the Company to align his interest with other stockholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Risk Consideration in Our Compensation
Programs</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our Compensation and
Management Development Committee has discussed the concept of risk as it relates to our compensation program and does not believe
our compensation program encourages excessive or inappropriate risk taking. We structure our pay to consist of primarily fixed
compensation with base salary in cash and non-cash long-term incentive programs. The base salary portion of compensation is designed
to provide a steady income regardless of our stock price performance, so that our executive officers do not feel pressured to focus
exclusively on stock price performance to the detriment of other important aspects of our business. Our equity incentive grants
have traditionally been structured to provide longer term incentives. Our Compensation and Management Development Committee believes
our compensation programs strike a balance between providing secure compensation and appropriate long-term incentives, such that
our executive officers are not encouraged to take unnecessary or excessive risks.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase">Compensation
Committee Report*</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Compensation and
Management Development Committee of the Board of Directors is comprised of independent non-employee directors and operates pursuant
to a written charter. A copy of the charter can be viewed by visiting our website at www.radnet.com and clicking on &ldquo;Investors&rdquo;
and then on &ldquo;Corporate Governance.&rdquo; The Compensation and Management Development Committee is responsible for setting
and overseeing the administration of the policies governing annual compensation of the Company&rsquo;s executive officers. The
Compensation and Management Development Committee reviews the performance and compensation levels for executive officers, including
the Chief Executive Officer, and sets salary levels.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Compensation and
Management Development Committee has reviewed and discussed with RadNet&rsquo;s management the &ldquo;Compensation Discussion and
Analysis&rdquo; included in this Proxy Statement. Based upon that review and analysis, the Compensation and Management Development
Committee recommended to the Board of Directors that the &ldquo;Compensation Discussion and Analysis&rdquo; be included in this
Proxy Statement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Submitted by the Compensation and Management
Development Committee:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3in">Lawrence&nbsp;L. Levitt, Chair</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3in">Michael&nbsp;L. Sherman, M.D.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3in">David&nbsp;L. Swartz</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">*&#9;The material in this report is not &ldquo;soliciting material,&rdquo;
is not deemed filed with the SEC and is not to be incorporated by reference into any of our filings under the Securities Act or
the Exchange Act whether made before or after the date of this proxy statement and irrespective of any general incorporation language
therein.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">COMPENSATION OF EXECUTIVE OFFICERS</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Summary Compensation Table</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The table below summarizes
the total compensation paid or earned by our Named Executive Officers:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD COLSPAN="5" STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; border-bottom: Black 1pt solid"><B>Annual Compensation</B></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD></TR>
<TR>
    <TD STYLE="text-align: left; width: 40%; padding-right: 5.4pt; padding-left: 5.4pt; vertical-align: bottom; border-bottom: Black 1pt solid"><B>Name and Principal Position</B></TD>
    <TD STYLE="vertical-align: bottom; width: 6%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; border-bottom: Black 1pt solid"><B>Year</B></TD>
    <TD STYLE="vertical-align: bottom; width: 9%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; border-bottom: Black 1pt solid"><B>Salary($)</B></TD>
    <TD STYLE="vertical-align: bottom; width: 9%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; border-bottom: Black 1pt solid"><B>Bonus($)</B></TD>
    <TD STYLE="vertical-align: bottom; width: 9%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; border-bottom: Black 1pt solid"><B>Stock Awards ($)<SUP>(1)(2)</SUP></B></TD>
    <TD STYLE="vertical-align: bottom; width: 9%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; border-bottom: Black 1pt solid"><B>Option Awards($)<SUP>(1)</SUP></B></TD>
    <TD STYLE="vertical-align: bottom; width: 9%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; border-bottom: Black 1pt solid"><B>All Other Compensation ($)<SUP>(5)</SUP></B></TD>
    <TD STYLE="vertical-align: bottom; width: 9%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; border-bottom: Black 1pt solid"><B>Total ($)</B></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; vertical-align: middle">Howard G. Berger, M.D.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; vertical-align: middle">2012</TD>
    <TD STYLE="padding-right: 3pt; padding-top: 3pt; vertical-align: middle; text-align: right">700,000<SUP>(3)</SUP></TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">375,000</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">&mdash;</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">&mdash;</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">12,166</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">1,087,166</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 7.9pt; padding-left: 5.4pt; text-align: left; vertical-align: middle">President and Chief Executive</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; vertical-align: middle">2011</TD>
    <TD STYLE="padding-right: 3pt; padding-top: 3pt; vertical-align: middle; text-align: right">625,000<SUP>(3)</SUP></TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">&mdash;</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">&mdash;</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">&mdash;</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">15,336</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">640,336</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left; vertical-align: middle">Officer (principal executive officer)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; vertical-align: middle">2010</TD>
    <TD STYLE="padding-right: 3pt; padding-top: 3pt; vertical-align: middle; text-align: right">625,000<SUP>(3)</SUP></TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">&mdash;</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">&mdash;</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">&mdash;</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">9,765</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">634,765</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 7.9pt; padding-left: 5.4pt; text-align: left; vertical-align: middle">Mark D. Stolper</TD>
    <TD STYLE="padding-right: 7.9pt; padding-left: 5.4pt; text-align: center; vertical-align: middle">2012</TD>
    <TD STYLE="padding-right: 3pt; padding-top: 3pt; vertical-align: middle; text-align: right">475,000</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">118,750</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">162,750</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">&mdash;</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">29,596</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">786,096</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 7.9pt; padding-left: 5.4pt; text-align: left; vertical-align: middle">Executive Vice President</TD>
    <TD STYLE="padding-right: 7.9pt; padding-left: 5.4pt; text-align: center; vertical-align: middle">2011</TD>
    <TD STYLE="padding-right: 3pt; padding-top: 3pt; vertical-align: middle; text-align: right">425,000</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">&mdash;</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">&mdash;</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">136,981</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">36,785</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">598,766</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 7.9pt; padding-left: 5.4pt; text-align: left; vertical-align: middle">and Chief Financial Officer (principal financial officer)</TD>
    <TD STYLE="padding-right: 7.9pt; padding-left: 5.4pt; text-align: center; vertical-align: middle">2010</TD>
    <TD STYLE="padding-right: 3pt; padding-top: 3pt; vertical-align: middle; text-align: right">350,000</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">&mdash;</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">&mdash;</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">159,640</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">7,964</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">517,604</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 7.9pt; padding-left: 5.4pt; text-align: left; vertical-align: middle">Jeffrey L. Linden</TD>
    <TD STYLE="padding-right: 7.9pt; padding-left: 5.4pt; text-align: center; vertical-align: middle">2012</TD>
    <TD STYLE="padding-right: 3pt; padding-top: 3pt; vertical-align: middle; text-align: right">525,000<SUP>(4)</SUP></TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">131,250</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">162,750</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">&mdash;</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">21,766</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">840,766</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 7.9pt; padding-left: 5.4pt; text-align: left; vertical-align: middle">Executive Vice President</TD>
    <TD STYLE="padding-right: 7.9pt; padding-left: 5.4pt; text-align: center; vertical-align: middle">2011</TD>
    <TD STYLE="padding-right: 3pt; padding-top: 3pt; vertical-align: middle; text-align: right">475,000<SUP>(4)</SUP></TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">&mdash;</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">&mdash;</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">136,981</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">19,685</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">631,666</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 7.9pt; padding-left: 5.4pt; text-align: left; vertical-align: middle">and General Counsel</TD>
    <TD STYLE="padding-right: 7.9pt; padding-left: 5.4pt; text-align: center; vertical-align: middle">2010</TD>
    <TD STYLE="padding-right: 3pt; padding-top: 3pt; vertical-align: middle; text-align: right">400,000<SUP>(4)</SUP></TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">&mdash;</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">&mdash;</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">159,640</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">16,699</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">576,339</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 7.9pt; padding-left: 5.4pt; text-align: left; vertical-align: middle">Norman R. Hames</TD>
    <TD STYLE="padding-right: 7.9pt; padding-left: 5.4pt; text-align: center; vertical-align: middle">2012</TD>
    <TD STYLE="padding-right: 3pt; padding-top: 3pt; vertical-align: middle; text-align: right">475,000</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">118,750</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">162,750</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">&mdash;</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">4,875</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">761,375</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 7.9pt; padding-left: 5.4pt; text-align: left; vertical-align: middle">Executive Vice President</TD>
    <TD STYLE="padding-right: 7.9pt; padding-left: 5.4pt; text-align: center; vertical-align: middle">2011</TD>
    <TD STYLE="padding-right: 3pt; padding-top: 3pt; vertical-align: middle; text-align: right">425,000</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">50,000</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">&mdash;</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">136,981</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">4,875</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">616,856</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 7.9pt; padding-left: 5.4pt; text-align: left; vertical-align: middle">and Chief Operating Officer &ndash; Western Operations</TD>
    <TD STYLE="padding-right: 7.9pt; padding-left: 5.4pt; text-align: center; vertical-align: middle">2010</TD>
    <TD STYLE="padding-right: 3pt; padding-top: 3pt; vertical-align: middle; text-align: right">350,000</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">&mdash;</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">&mdash;</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">159,640</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">4,875</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">514,515</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 7.9pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 7.9pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 7.9pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 7.9pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 7.9pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 7.9pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 7.9pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 7.9pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 7.9pt; padding-left: 5.4pt; text-align: left; vertical-align: middle">Stephen M. Forthuber</TD>
    <TD STYLE="padding-right: 7.9pt; padding-left: 5.4pt; text-align: center; vertical-align: middle">2012</TD>
    <TD STYLE="padding-right: 3pt; padding-top: 3pt; vertical-align: middle; text-align: right">475,000</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">118,750</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">162,750</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">&mdash;</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">&mdash;</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">756,500</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 7.9pt; padding-left: 5.4pt; text-align: left; vertical-align: middle">Executive Vice President</TD>
    <TD STYLE="padding-right: 7.9pt; padding-left: 5.4pt; text-align: center; vertical-align: middle">2011</TD>
    <TD STYLE="padding-right: 3pt; padding-top: 3pt; vertical-align: middle; text-align: right">425,000</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">&mdash;</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">&mdash;</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">182,641</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">&mdash;</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">607,641</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 7.9pt; padding-left: 5.4pt; text-align: left; vertical-align: middle">and Chief Operating Officer &ndash; Eastern Operations</TD>
    <TD STYLE="padding-right: 7.9pt; padding-left: 5.4pt; text-align: center; vertical-align: middle">2010</TD>
    <TD STYLE="padding-right: 3pt; padding-top: 3pt; vertical-align: middle; text-align: right">350,000</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">&mdash;</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">&mdash;</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">159,640</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">&mdash;</TD>
    <TD STYLE="padding-right: 3pt; text-align: center; vertical-align: middle">509,640</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0">__________________&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U></U></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-size: 8pt">(1)</FONT></TD><TD STYLE="text-align: justify">Amounts reflect the aggregate grant date fair value of stock options and stock awards granted in
the year computed in accordance with FASB ASC Topic 718. These are not amounts paid to or realized by the officer. Assumptions
used in the calculation of these values are included in Note 12 to our audited financial statements included in our 2012 Annual
Report on Form 10-K, as amended.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-size: 8pt">(2)</FONT></TD><TD STYLE="text-align: justify">The Stock Awards reflected for 2012, are the awards that were issued on January 3, 2012.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-size: 8pt">(3)</FONT></TD><TD STYLE="text-align: justify">For fiscal years 2010, 2011 and 2012, Dr. Berger received $500,000 in salary from BRMG and received
the remaining portion of his base salary from Radnet Management, Inc.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-size: 8pt">(4)</FONT></TD><TD STYLE="text-align: justify">Mr.&nbsp;Linden has specifically waived any interest in the fees paid to Cohen &amp;
                                                                                               Lord since becoming an officer. See also &ldquo;Certain Relationships and Related Party Transactions&rdquo; above.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-size: 8pt">(5)</FONT></TD><TD STYLE="text-align: justify">In 2012, Mr. Stolper and Mr. Linden received an annual car allowance of $9,600 and Mr. Hames received
an annual car allowance of $4,875. All other perquisites received during 2012 related to payment by the Company of the premiums
for coverage under the Company&rsquo;s group health insurance plans.</TD></TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Grants of Plan-Based Awards</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table
sets forth certain information with respect to grants of awards to our Named Executive Officers under our 2006 Plan during 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 42%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><B>Name</B></TD>
    <TD STYLE="width: 15%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><B>Grant Date</B></TD>
    <TD STYLE="width: 22%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>All Other Stock Awards: </B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Number of Shares of Stock (#)</B></P></TD>
    <TD STYLE="width: 21%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><B>Grant Date Fair Value of Stock Awards<SUP>(1)</SUP></B></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt">Mark D. Stolper</TD>
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">01/03/12</TD>
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">75,000<SUP>(2)</SUP></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">162,750</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt">Jeffrey L. Linden</TD>
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">01/03/12</TD>
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">75,000<SUP>(2)</SUP></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">162,750</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt">Norman R. Hames</TD>
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">01/03/12</TD>
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">75,000<SUP>(2)</SUP></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">162,750</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt">Stephen M. Forthuber</TD>
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">01/03/12</TD>
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">75,000<SUP> (2)</SUP></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">162,750</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">________________</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-size: 8pt">(1)</FONT></TD><TD STYLE="text-align: justify">For discussion regarding the valuation model and assumptions used to calculate the fair value of
these option awards, see Note 12 to the consolidated financial statements included in our 2012 Annual Report on Form 10-K.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-size: 8pt">(2)</FONT></TD><TD STYLE="text-align: justify">Each restricted stock award was granted under the 2006 Plan and vests in equal annual increments
on January 3<SUP>rd</SUP> of 2012, 2013 and 2014, subject to the officer&rsquo;s continued service.</TD></TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Outstanding Equity Awards at Fiscal Year End</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The table below summarizes outstanding equity
awards held by our Named Executive Officers at December&nbsp;31, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>


<P STYLE="margin: 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD COLSPAN="4" STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><B>OPTION
    AWARDS</B></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><B>STOCK
    AWARDS</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 34%; padding-right: 5.4pt; padding-left: 5.4pt; border-bottom: Black 1pt solid"><B>Name</B></TD>
    <TD STYLE="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; border-bottom: Black 1pt solid"><B>Number of Securities Underlying Unexercised Options (#)<SUP>(1) </SUP><BR>
Exercisable</B></TD>
    <TD STYLE="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; border-bottom: Black 1pt solid"><B>Number of Securities Underlying Unexercised Options (#)<SUP>(1)<BR>
 </SUP>Unexercisable</B></TD>
    <TD STYLE="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; border-bottom: Black 1pt solid"><B>Option Exercise Price ($)</B></TD>
    <TD STYLE="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; border-bottom: Black 1pt solid"><B>Option Expiration Date</B></TD>
    <TD STYLE="width: 2%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; border-bottom: Black 1pt solid"><B>Number of Shares or Units of Stock That Have Not Vested (#)</B><FONT STYLE="font-family: Times New Roman, Times, Serif"><SUP>(5)</SUP></FONT></TD>
    <TD STYLE="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; border-bottom: Black 1pt solid"><B>Market Value of Shares or Units of
    Stock That Have Not Vested ($)</B><FONT STYLE="font-family: Times New Roman, Times, Serif"><SUP>(6)</SUP></FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Mark D. Stolper</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; padding-top: 3pt">150,000<FONT STYLE="font-family: Times New Roman, Times, Serif"><SUP>(3)</SUP></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">---</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">3.24</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">10/28/2013</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">50,000</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">126,500</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; padding-top: 3pt">250,000<FONT STYLE="font-family: Times New Roman, Times, Serif"><SUP>(3)</SUP></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">---</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">2.40</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">06/15/2014</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; padding-top: 3pt">100,000<FONT STYLE="font-family: Times New Roman, Times, Serif"><SUP>(3)</SUP></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">---</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">2.70</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">06/08/2015</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; padding-top: 3pt">25,000<SUP>(3)</SUP></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; padding-top: 3pt">50,000<FONT STYLE="font-family: Times New Roman, Times, Serif"><SUP>(3)(4)</SUP></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">2.98</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">01/07/2016</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Jeffrey L. Linden</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; padding-top: 3pt">150,000<SUP>(3)</SUP></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">---</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">3.24</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">10/28/2013</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">50,000</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">126,500</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; padding-top: 3pt">150,000<FONT STYLE="font-family: Times New Roman, Times, Serif"><SUP>(3)</SUP></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">---</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">2.40</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">06/15/2014</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; padding-top: 3pt">100,000<FONT STYLE="font-family: Times New Roman, Times, Serif"><SUP> (3)</SUP></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">---</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">2.70</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">06/08/2015</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; padding-top: 3pt">25,000<FONT STYLE="font-family: Times New Roman, Times, Serif"><SUP>(3)</SUP></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; padding-top: 3pt">50,000<FONT STYLE="font-family: Times New Roman, Times, Serif"><SUP>(3)(4)</SUP></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">2.98</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">01/07/2016</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Norman R. Hames</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; padding-top: 3pt">1,172,237<SUP>(2)</SUP></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">---</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">1.12</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">05/01/2013</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">50,000</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">126,500</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; padding-top: 3pt">150,000<SUP>(3)</SUP></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">---</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">3.24</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">10/28/2013</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; padding-top: 3pt">150,000<FONT STYLE="font-family: Times New Roman, Times, Serif"><SUP>(3)</SUP></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">---</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">2.40</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">06/15/2014</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; padding-top: 3pt">100,000<FONT STYLE="font-family: Times New Roman, Times, Serif"><SUP> (3)</SUP></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">---</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">2.70</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">06/08/2015</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; padding-top: 3pt">25,000<FONT STYLE="font-family: Times New Roman, Times, Serif"><SUP>(3)</SUP></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; padding-top: 3pt">50,000<FONT STYLE="font-family: Times New Roman, Times, Serif"><SUP>(3)(4)</SUP></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">2.98</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">01/07/2016</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Stephen M. Forthuber</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; padding-top: 3pt">250,000<SUP>(2)</SUP></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">---</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">5.77</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">04/03/2013</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">50,000</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">126,500</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; padding-top: 3pt">150,000<SUP>(3)</SUP></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">---</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">3.24</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">10/28/2013</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; padding-top: 3pt">100,000<SUP>(3)</SUP></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">---</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">1.47</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">04/29/2014</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; padding-top: 3pt">100,000<FONT STYLE="font-family: Times New Roman, Times, Serif"><SUP>(3)</SUP></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">---</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">2.70</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">06/08/2015</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; padding-top: 3pt">66,667<FONT STYLE="font-family: Times New Roman, Times, Serif"><SUP>(3)</SUP></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right; padding-top: 3pt">33,333<FONT STYLE="font-family: Times New Roman, Times, Serif"><SUP>(3)(4)</SUP></FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">2.98</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">01/07/2016</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD></TR>
</TABLE>


<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U></U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">_______________&nbsp;</P>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-size: 8pt">(1)</FONT></TD><TD STYLE="text-align: justify">Unless otherwise indicated, one-third of the options or nonqualified warrants are fully-vested
as of the date of grant and the remaining portion of the options vest in equal increments on the first and second anniversaries
of the date of grant. All options have a five-year term from the date of grant.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-size: 8pt">(2)</FONT></TD><TD STYLE="text-align: justify">Relates to nonqualified warrants issued to the Named Executive Officers.</TD></TR></TABLE>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-size: 8pt">(3)</FONT></TD><TD STYLE="text-align: justify">Relates to options issued to the Named Executive Officers under the 2006 Plan.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-size: 8pt">(4)</FONT></TD><TD STYLE="text-align: justify">Options vest in equal increments on the first, second and third anniversaries of the date of grant.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-size: 8pt">(5)</FONT></TD><TD STYLE="text-align: justify">Unless otherwise indicated, one-third of the stock awards are fully-vested as of the date of grant
and the remaining portion of the restricted stock award vests in equal increments on the first and second anniversaries of the
date of grant.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-size: 8pt">(6)</FONT></TD><TD STYLE="text-align: justify">The aggregate market value is based on the closing price of $2.52 per share of our common stock
as of December 31, 2012.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Warrant /</B> <B>Option Exercises and Stock Vested During
2012</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table
sets forth information for the Named Executive Officers regarding the value realized during fiscal year 2012 for such executives
pursuant to warrant or option exercises and the vesting of restricted stock:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>WARRANT / OPTION </B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>AWARDS</B></P></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><B>STOCK AWARDS</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 27%; padding-right: 5.4pt; padding-left: 5.4pt"><B>Name</B></TD>
    <TD STYLE="width: 20%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><B>Number of Shares Acquired on Exercise (#)</B></TD>
    <TD STYLE="width: 17%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><B>Value Realized on Exercise ($)<SUP>(1)</SUP></B></TD>
    <TD STYLE="width: 2%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 17%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><B>Number of Shares Acquired on Vesting (#)</B></TD>
    <TD STYLE="width: 17%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><B>Value Realized on Vesting ($)<SUP>(2)</SUP></B></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt">Mark D. Stolper</TD>
    <TD STYLE="padding-right: 0.2in; padding-left: 5.4pt; text-align: right">---</TD>
    <TD STYLE="padding-right: 0.2in; padding-left: 5.4pt; text-align: right">---</TD>
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">25,000</TD>
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">54,250</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt">Jeffrey L. Linden</TD>
    <TD STYLE="padding-right: 0.2in; padding-left: 5.4pt; text-align: right">74,022</TD>
    <TD STYLE="padding-right: 0.2in; padding-left: 5.4pt; text-align: right">78,463.32</TD>
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">25,000</TD>
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">54,250</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt">Norman R. Hames</TD>
    <TD STYLE="padding-right: 0.2in; padding-left: 5.4pt; text-align: right">---</TD>
    <TD STYLE="padding-right: 0.2in; padding-left: 5.4pt; text-align: right">---</TD>
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">25,000</TD>
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">54,250</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt">Stephen M. Forthuber</TD>
    <TD STYLE="padding-right: 0.2in; padding-left: 5.4pt; text-align: right">---</TD>
    <TD STYLE="padding-right: 0.2in; padding-left: 5.4pt; text-align: right">---</TD>
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">25,000</TD>
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">54,250</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">______________</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-size: 8pt">(1)</FONT></TD><TD STYLE="text-align: justify">The value realized equals the aggregate fair market value of the common stock acquired on the date
of exercise of the warrant minus the aggregate exercise price.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-size: 8pt">(2)</FONT></TD><TD STYLE="text-align: justify">The value realized equals the aggregate fair market value of the common stock based on our closing
price of $2.17 per share on January 3, 2012, the date of vesting.</TD></TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pension Benefits, Nonqualified Defined
Contribution and Other Deferred Compensation Plans</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We do not have any
tax-qualified defined benefit plans, nonqualified defined contribution plans or supplemental executive retirement plans that provide
for payments or other benefits to our Named Executive Officers in connection with their retirement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The employment arrangements
of some of our Named Executive Officers include a required payment of deferred compensation upon termination of employment. The
following table shows the contributions, earnings and current required payments of deferred compensation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Nonqualified Deferred
Compensation</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: bottom; width: 21%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><B>Name</B></TD>
    <TD STYLE="vertical-align: bottom; width: 14%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><B>Executive Contributions in Last Fiscal Year ($)</B></TD>
    <TD STYLE="vertical-align: top; width: 14%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><B>Registrant Contributions in Last Fiscal Year ($)</B></TD>
    <TD STYLE="vertical-align: bottom; width: 17%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><B>Aggregate Earnings in Last Fiscal Year ($)</B></TD>
    <TD STYLE="vertical-align: top; width: 18%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><B>Aggregate Withdrawals/ Distributions<BR>
 ($)</B></TD>
    <TD STYLE="vertical-align: top; width: 16%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><B>Aggregate Balance at Last Fiscal Year End<BR>
 ($)</B></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; padding-top: 3pt">Howard G. Berger, M.D.<FONT STYLE="font-family: Times New Roman, Times, Serif"><SUP> (1)</SUP></FONT></TD>
    <TD STYLE="padding-right: 26.1pt; padding-left: 5.4pt; text-align: right">---</TD>
    <TD STYLE="padding-right: 26.1pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 26.1pt; padding-left: 5.4pt; text-align: right">---</TD>
    <TD STYLE="padding-right: 26.1pt; padding-left: 5.4pt; text-align: right">---</TD>
    <TD STYLE="padding-top: 3pt; padding-right: 0.3in; text-align: right">$2,500,000</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; padding-top: 3pt">Jeffrey L. Linden<FONT STYLE="font-family: Times New Roman, Times, Serif"><SUP>(2)</SUP></FONT></TD>
    <TD STYLE="padding-right: 26.1pt; padding-left: 5.4pt; text-align: right">---</TD>
    <TD STYLE="padding-right: 26.1pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 26.1pt; padding-left: 5.4pt; text-align: right">---</TD>
    <TD STYLE="padding-right: 26.1pt; padding-left: 5.4pt; text-align: right">---</TD>
    <TD STYLE="padding-top: 3pt; padding-right: 0.3in; text-align: right">$2,000,000</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; padding-top: 3pt">Norman R. Hames<FONT STYLE="font-family: Times New Roman, Times, Serif"><SUP>(3)</SUP></FONT></TD>
    <TD STYLE="padding-right: 26.1pt; padding-left: 5.4pt; text-align: right">---</TD>
    <TD STYLE="padding-right: 26.1pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-right: 26.1pt; padding-left: 5.4pt; text-align: right">---</TD>
    <TD STYLE="padding-right: 26.1pt; padding-left: 5.4pt; text-align: right">---</TD>
    <TD STYLE="padding-top: 3pt; padding-right: 0.3in; text-align: right">$1,050,000</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">_______________</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-size: 8pt">(1)</FONT></TD><TD STYLE="text-align: justify">Dr. Berger is entitled to receive, upon his election to terminate employment, an amount equal to
five times his 2010 base salary paid by BRMG. Dr. Berger&rsquo;s 2010 base salary as paid by BRMG was $500,000. Such payment is
subject to post-termination covenants intended to protect the Company&rsquo;s business<B>. </B></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-size: 8pt">(2)</FONT></TD><TD STYLE="text-align: justify">Mr. Linden is entitled to receive, upon his election to terminate employment, an amount equal to
five times his 2010 base salary. Mr. Linden&rsquo;s 2010 base salary was $400,000. Such payment is subject to post-termination
covenants intended to protect the Company&rsquo;s business.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-size: 8pt">(3)</FONT></TD><TD STYLE="text-align: justify">Mr. Hames is entitled to receive, upon his election to terminate employment, an amount equal to
three times his 2010 base salary. Mr. Hames&rsquo; 2010 base salary was $350,000. Such payment is subject to post-termination covenants
intended to protect the Company&rsquo;s business.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Employment Agreements </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We entered into an
employment agreement with Mr. Linden on April 16, 2001, as amended on January 30, 2004, for an initial five-year term that renews
automatically for successive one year terms unless otherwise terminated by either party. The employment agreement provides that
Mr. Linden&rsquo;s base salary is $350,000, which was subsequently amended to $475,000 for the fiscal year 2010 and has since been
amended to $525,000, effective as of January 1, 2012. The employment agreement also provides that Mr. Linden is eligible for severance
benefits as described below under the heading &ldquo;Potential Payments Upon Termination or Change in Control&nbsp;&mdash;&nbsp;Severance
Arrangements&rdquo; and as described above under the heading &ldquo;Pension Benefits, Nonqualified Defined Contribution and Other
Deferred Compensation Plans.&rdquo; Mr. Linden currently serves as Executive Vice President and General Counsel.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We entered into an
employment agreement with Mr. Hames on May 1, 2001, as amended on January 30, 2004 for an initial three-year term that renews automatically
for successive one year terms unless otherwise terminated by either party. The employment agreement provides that Mr. Hames&rsquo;
base salary is $225,000, which was subsequently amended to $425,000 for the fiscal year 2011 and has since been amended to $475,000,
effective as of January 1, 2012. The employment agreement also provides that Mr. Hames is eligible for severance benefits as described
below under the heading &ldquo;Potential Payments Upon Termination or Change in Control &mdash;&nbsp;Severance Arrangements&rdquo;
and as described above under the heading &ldquo;Pension Benefits, Nonqualified Defined Contribution and Other Deferred Compensation
Plans.&rdquo; Mr. Hames currently serves as Executive Vice President and Chief Operating Officer &mdash; Western Operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We entered into an
employment agreement with Mr. Stolper effective as of January 1, 2009, under which he serves as our Executive Vice President and
Chief Financial Officer until the agreement is terminated by either party. The employment agreement provides that Mr. Stolper&rsquo;s
initial base salary was $350,000, which was subsequently amended to $425,000 for the fiscal year 2011 and has since been amended
to $475,000, effective as of January 1, 2012. The employment agreement also provides that he is eligible to participate in all
of our bonus or incentive compensation plans generally available to our corporate officers and that he is entitled to certain benefits
upon a change-in-control as described below under the heading &ldquo;Potential Payments Upon Termination or Change in Control&nbsp;&mdash;&nbsp;Change-in-Control
Arrangements.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Potential Payments Upon Termination or Change in Control
</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Payments Made Upon Termination and Retirement<B> </B></I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Regardless of the manner
in which the employment of a Named Executive Officer is terminated, he is entitled to receive amounts earned during his term of
employment. Such amounts include:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">non-equity incentive compensation earned, to the extent vested;</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">equity awarded pursuant to our 2006 Plan, to the extent vested; and</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">unused vacation pay.</TD></TR></TABLE>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Payments Made Upon Death or Disability</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In the event of the
death or disability of a Named Executive Officer, no additional benefits other than those listed under the heading &ldquo;Payments
Made Upon Termination and Retirement&rdquo; above, will be paid to our Named Executive Officers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Severance Arrangements</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under each employment
agreement discussed above under the heading &ldquo;Employment Agreements,&rdquo; we may terminate such Named Executive Officer&rsquo;s
employment at any time and for any reason upon notice, as specified in each Named Executive Officer&rsquo;s employment agreement
and each Named Executive Officer may resign at any time and for any reason.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>Dr. Berger</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Dr. Berger has a severance
arrangement with BRMG pursuant to a consulting agreement. Under this arrangement, in the event of termination &ldquo;without cause,&rdquo;
Dr. Berger is entitled to receive a severance payment in an amount equal to five times his 2010 BRMG annual compensation, or approximately
$2,500,000. Additionally, in the event of termination &ldquo;for cause&rdquo; by BRMG, Dr. Berger is entitled to receive a payment
in an amount equal to one year of his 2010 annual compensation from BRMG, or approximately $500,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">BRMG may terminate
Dr. Berger&rsquo;s consulting services &ldquo;for cause&rdquo; if (i) there is a material breach of the agreement which persists
for more than thirty (30) days after notice of such breach has been provided, (ii) Dr. Berger willfully breaches or habitually
neglects his duties, (iii) Dr. Berger commits any acts of a criminal nature, fraud, dishonest misrepresentations or any acts of
moral turpitude, (iv) Dr. Berger&rsquo;s professional license is suspended, revoked or terminated or (v) Dr. Berger is convicted
of a felony or of fraud involving payments or charges for professional medical services.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>Mr. Stolper</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If we terminate Mr.
Stolper&rsquo;s employment &ldquo;without cause,&rdquo; Mr. Stolper is entitled to receive a severance payment in an amount equal
to two times his then annual base salary over a twenty-four (24) month period commencing with the first month after his termination,
or a total of $950,000 with approximately $39,583.33 of such total paid monthly for twenty-four (24) months if hypothetically terminated
on December 31, 2012, based upon his 2012 base salary. Such payments are subject to post-termination covenants intended to protect
the Company&rsquo;s business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We may terminate Mr.
Stolper&rsquo;s employment &ldquo;for cause&rdquo; (i) if Mr. Stolper is convicted (or pleads guilty or nolo contendere) of a felony
or a misdemeanor involving fraud or dishonesty in connection with the performance of his duties under the employment agreement
or moral turpitude, (ii) based on the willful and continued failure of Mr. Stolper to perform his duties for a period of 10 days
within one fiscal year, or (iii) based on Mr. Stolper&rsquo;s willingness to engage in misconduct which has, or can reasonably
be expected to have, a direct and material adverse monetary effect on the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>Mr. Linden</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If we terminate Mr.
Linden&rsquo;s employment &ldquo;without cause&rdquo; or Mr. Linden elects to terminate his employment for any reason, Mr. Linden
will be entitled to receive a severance payment in an amount equal to five times his 2010 base salary, or approximately $2,000,000.
Such payments are subject to post-termination covenants intended to protect the Company&rsquo;s business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We may terminate Mr.
Linden&rsquo;s employment &ldquo;for cause&rdquo; if (i) there is a material breach of the agreement which persists for more than
thirty (30) days after notice of such breach has been provided, (ii) Mr. Linden willfully breaches or habitually neglects his duties,
or (iii) Mr. Linden commits any acts of a criminal nature, fraud, dishonest misrepresentations or any acts of moral turpitude.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>Mr. Hames</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If we terminate Mr.
Hames&rsquo; employment &ldquo;without cause&rdquo; or Mr. Hames elects to terminate his employment for any reason, Mr. Hames will
be entitled to receive a severance payment in an amount equal to three times his 2010 base salary, or approximately $1,050,000.
Such payments are subject to post-termination covenants intended to protect the Company&rsquo;s business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We may terminate Mr.
Hames&rsquo; employment &ldquo;for cause&rdquo; if (i) there is a material breach of the agreement which persists for more than
thirty (30) days after notice of such breach has been provided, (ii) Mr. Hames willfully breaches or habitually neglects his duties,
or (iii) Mr. Hames commits any acts of a criminal nature, fraud, dishonest misrepresentations or any acts of moral turpitude.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>Mr. Forthuber</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We entered into a retention
agreement with Mr. Forthuber on November 15, 2006. If we terminate Mr. Forthuber&rsquo;s employment for any reason other than for
&ldquo;disability&rdquo; or &ldquo;cause&rdquo;, Mr. Forthuber will be entitled to receive a lump sum severance payment in an amount
equal to his then annual salary, or a total of $475,000 if hypothetically terminated on December 31, 2012, based upon his 2012
base salary. The severance payment is required to be paid within fifteen business days of the effective date of such termination;
provided, that, if the payments are subject to Section 409A of the Code and Mr. Forthuber is deemed a &ldquo;specified employee&rdquo;
(as defined in Section 409A of the Code), then, such payment shall not be required to be paid until the first day of the seventh
month following the effective date of such termination. Mr. Forthuber is also subject to post-termination covenants for twelve
months from the effective date of termination intended to protect the Company&rsquo;s business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under the retention
agreement, &ldquo;disability&rdquo; means that for a period of at least 120 days during any twelve consecutive month period on
account of a mental or physical condition, Mr. Forthuber is unable to perform the essential functions of his job, even with reasonable
accommodation. The determination of Mr. Forthuber&rsquo;s disability is required to be made by a medical physician selected or
agreed to by the Company or upon mutual agreement between the Company and Mr. Forthuber or his personal representative.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We may terminate Mr.
Forthuber&rsquo;s employment for &ldquo;cause&rdquo; (i) if Mr. Forthuber was convicted (or pleads guilty or nolo contendere) of
a felony or a misdemeanor involving fraud or dishonesty in connection with the performance of his duties under the retention agreement
or moral turpitude; (ii) based on the willful and continued failure of Mr. Forthuber for a total of 10 days (which need not be
consecutive days) within any fiscal year to substantially perform his duties (other than any such failure resulting from illness
or &ldquo;disability&rdquo;) after a written demand for substantial performance from us has been delivered to Mr. Forthuber, which
demand specifically identifies the manner in which it claims Mr. Forthuber has not substantially performed his duties, or (iii)
Mr. Forthuber has willfully engaged in misconduct which has, or can reasonably be expected to have, a direct and material adverse
monetary effect on the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Change-in-Control Arrangements </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">None of our Named Executive
Officers is generally entitled to payment of any special benefits upon a change-in-control of the Company; however all options,
warrants and any other deferred equity compensation then granted to Mr. Stolper which is unvested at the time of such change-in-control
shall immediately vest. Hypothetically assuming a change-in-control occurred on December 31, 2012, the unamortized fair value of
such newly vested options, warrants, restricted stock and other deferred equity compensation would be approximately <FONT STYLE="color: black">$154,160</FONT>.
Additionally, if Mr. Stolper&rsquo;s employment is terminated within twelve (12) months of a change-in-control by the Company &ldquo;without
cause&rdquo; or voluntarily by Mr. Stolper due to (i) a material default on the part of the Company under his employment agreement
that remains uncured for ten (10) days or (ii) an adverse change in his duties that remains uncured for ten (10) days, Mr. Stolper
will be entitled to receive a lump sum payment of two (2) times his then annual base salary (which would have been $950,000 if
termination had hypothetically occurred on December 31, 2012).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under the 2006 Plan,
the Board of Directors of the Company, a committee thereof, or the board of directors of any surviving entity or acquiring entity,
may in its discretion, in connection with a &ldquo;change-in-control&rdquo;, accelerate the vesting of all or any part of the options
that are then outstanding and terminate any restrictions on all or any part of the restricted stock awards. A &ldquo;change-in-control&rdquo;
under the 2006 Plan shall mean: a merger or consolidation in which the Company is not the surviving entity (or survives only as
a subsidiary of another entity whose stockholder did not own all or substantially all of our common stock immediately before such
transaction); a sale of all or substantially all of our assets to another person or entity (other than a wholly-owned subsidiary
of the Company); an acquisition of beneficial ownership of a controlling interest in the outstanding shares of our common stock
by any person or entity (including a &ldquo;group&rdquo;) as defined under Section 13(d)(3) of the Securities Exchange Act of 1934,
as amended); the dissolution or liquidation of the Company; a contested director election that results in the persons who were
directors before such election or their nominees ceasing to constitute a majority of the board; or any other event that may be
specified in the specific awards granted by the Board of Directors or a committee thereof pursuant to the 2006 Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">COMPENSATION OF DIRECTORS</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Overview of Director Compensation</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We use cash and stock
based incentive compensation to attract and retain qualified candidates to serve on our board. In setting director compensation,
we consider the significant amount of time that our directors expend in fulfilling their duties to our Company as well as the skill
level required by the members of our board. In addition, our certificate of incorporation and bylaws include indemnification provisions
for our directors and executive officers and we maintain liability insurance for our directors and officers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Cash Compensation Paid to Non-Employee
Board Members </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Board of Directors revised the compensation structure for
non-employee directors, effective as of April 1, 2012, as set forth below:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; background-color: White">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 10%">&nbsp;</TD>
    <TD STYLE="width: 70%; padding-bottom: 3pt; padding-left: 10pt; text-indent: -10pt"><FONT STYLE="font-size: 10pt">Annual cash compensation</FONT></TD>
    <TD STYLE="width: 12%; padding-bottom: 3pt; text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 10pt">$35,000</FONT></TD>
    <TD STYLE="width: 8%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>
        <P STYLE="padding-bottom: 3pt; padding-left: 10pt; text-indent: -10pt">Annual Restricted Stock
        Grant of 50,000 shares on first trading day of year <BR>
Vesting 1/3 at grant and 1/3 on first two anniversaries of grant</P></TD>
    <TD STYLE="padding-bottom: 6pt; text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-bottom: 3pt; padding-left: 10pt; text-indent: -10pt"><FONT STYLE="font-size: 10pt">Audit Committee Chair annual cash compensation</FONT></TD>
    <TD STYLE="padding-bottom: 3pt; text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 10pt">$15,000</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>
        <P STYLE="padding-bottom: 3pt; padding-left: 10pt; text-indent: -10pt">Compensation and Management
Development Committee Chair annual cash compensation</P></TD>
    <TD STYLE="padding-bottom: 3pt; text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 10pt">$7,500</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-bottom: 3pt; padding-left: 10pt; text-indent: -10pt"><FONT STYLE="font-size: 10pt">Nominating and Governance Committee Chair annual cash compensation </FONT></TD>
    <TD STYLE="padding-bottom: 3pt; text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 10pt">$7,500</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-bottom: 3pt; padding-left: 10pt; text-indent: -10pt"><FONT STYLE="font-size: 10pt">Committee Meeting Attendance (per meeting)</FONT></TD>
    <TD STYLE="padding-bottom: 3pt; text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 10pt">$1,500</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-bottom: 3pt; padding-left: 10pt; text-indent: -10pt"><FONT STYLE="font-size: 10pt">Board Meeting Attendance (per meeting)</FONT></TD>
    <TD STYLE="padding-bottom: 3pt; text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 10pt">$2,000</FONT></TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Employee directors
do not receive any additional compensation for their service as a director.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Equity Compensation<B> </B></I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Effective as of January
1, 2012, non-employee members of our Board of Directors are entitled to receive an annual restricted stock grant of 50,000 shares
on the first trading day of the year. One third of the restricted stock shall vest on the date of grant and one-third shall vest
on the first and second anniversaries of the date of grant.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Director Compensation - 2012</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The table below summarizes
the cash and non-cash director fees received for the fiscal year ended December&nbsp;31, 2012 by each of our non-employee directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 48%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><B>Name</B></TD>
    <TD STYLE="width: 22%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><B>Fees Earned or Paid in Cash ($)</B></TD>
    <TD STYLE="width: 16%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><B>Stock Award <BR>
($)<SUP>(1) (2)(3)</SUP></B></TD>
    <TD STYLE="width: 14%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><B>Total ($)</B></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt">Marvin S. Cadwell</TD>
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">54,750</TD>
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">234,500</TD>
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">289,250</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt">Lawrence L. Levitt</TD>
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">65,375</TD>
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">234,500</TD>
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">299,875</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt">Michael L. Sherman, M.D.</TD>
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">60,125</TD>
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">234,500</TD>
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">294,625</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt">David L. Swartz</TD>
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">72,250</TD>
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">234,500</TD>
    <TD STYLE="padding-top: 3pt; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">306,750</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">_______________</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-size: 8pt">(1)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Amounts reflect the aggregate fair value of restricted stock awards
on the date of grant computed in accordance with FASB ASC Topic 718. Assumptions used in the calculation of these values are included
in Note 12 to our audited financial statements included in our 2012 Annual Report on Form 10-K, as amended.<B> </B></FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-size: 8pt">(2)</FONT></TD><TD STYLE="text-align: justify">Each non-employee director received a restricted stock award for 50,000 shares on January 3,
                                                                                               2012 under the 2006 Plan and which vests in equal annual increments beginning on the grant date, subject to the
                                                                                               director&rsquo;s continued service. The value realized for each such grant equals $108,500, the aggregate fair market value
                                                                                               of the common stock based on our closing price of $2.17 per share on January 3, 2012, the date of vesting. On December 20,
                                                                                               2012, each non-employee director received a restricted stock award for 50,000 shares and which restricted stock vests in
                                                                                               equal annual increments beginning  on the grant date, subject to the director&rsquo;s continued service. The value realized
                                                                                               for each such grant equals $126,000, the aggregate fair market value of the common stock based on our closing price of $2.52
                                                                                               on December 20, 2012.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-size: 8pt">(3)</FONT></TD><TD STYLE="text-align: justify">As of December 31, 2012, each of Messrs. Cadwell, Levitt, Sherman and Swartz had 100,000 shares
of restricted stock, 33,333.33 of which were vested.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in"><I>Director
Compensation - 2013</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Board of Directors
determined that the non-employee directors would receive the same compensation as provided in 2012. However, for 2013 only, the
Board of Directors determined, in part due to possible increase in taxes, that the annual restricted stock grant that would otherwise
be issued on the close of business on the first trading day of the year would be issued on December 20, 2012 instead.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase">Equity
Compensation Plan Information</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have two stock incentive
plans: our 2000 Long-Term Incentive Plan (the &ldquo;2000 Plan&rdquo;) and our 2006 Equity Incentive Plan (the &ldquo;2006 Plan&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We reserved 1,000,000
shares of common stock for issuance under our 2000 Plan. As of December 31, 2012, there were 57,500 options outstanding under the
2000 Plan. Upon approval of the 2006 Plan, we ceased granting options under the 2000 Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have reserved 11,000,000
shares of common stock for issuance under our 2006 Plan. The 2006 Plan provides for the grant of stock options (incentive and non-qualified),
stock awards, stock appreciation rights and cash awards. If an award is cancelled, terminates, expires, or lapses for any reason
without having been fully exercised or vested, or is settled for less than the full number of shares of common stock represented
by such award actually being issued, the unvested, cancelled, or unissued shares of common stock generally will be returned to
the available pool of shares reserved for issuance under the 2006 Plan. Notwithstanding the foregoing, the aggregate number of
shares of common stock that may be issued under the 2006 Plan upon the exercise of incentive stock options shall not be increased
for restricted shares that are forfeited or repurchased. Notwithstanding anything in the 2006 Plan, or any award agreement to the
contrary, shares attributable to awards transferred under any award transfer program shall not be again available for grant under
the 2006 Plan. In addition, if we experience a stock dividend, reorganization, or other change in our capital structure, the administrator
may, in its discretion, adjust the number of shares available for issuance under the 2006 Plan and any outstanding awards as appropriate
to reflect the stock dividend or other change. The share number limitations included in the 2006 Plan will also adjust appropriately
upon such event. As of December 31, 2012, we had 7,213,750 options, warrants and shares of restricted stock outstanding and 3,766,250
available for grant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table
sets forth, for each of the Company&rsquo;s equity compensation plans, the number of shares of common stock subject to outstanding
options and stock awards, the weighted-average exercise price of outstanding options, and the number of shares remaining available
for future award grants as of December&nbsp;31, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 43%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><B>Plan Category</B></TD>
    <TD STYLE="width: 19%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><B>(A)</B><BR>
<B>Number of Shares to Be Issued Upon Exercise of Outstanding Options And Warrants (#)</B></TD>
    <TD STYLE="width: 19%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><B>(B)</B><BR>
<B>Weighted Average Exercise Price of Outstanding Options and Warrants ($)</B></TD>
    <TD STYLE="width: 19%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><B>(C)</B><BR>
    <B>Number of Shares Remaining Available For Future Issuance Under Equity Incentive Plans (Excluding Shares Reflected in Column
    (A)) (#)</B></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">Equity incentive plans approved by stockholders</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">6,231,250</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">3.58</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">3,766,250</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; padding-top: 3pt">Equity incentive plans not approved by stockholders<SUP>(1)</SUP></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">1,502,898</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">1.50</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">---</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><B>&#9;TOTAL</B></TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">7,734,148</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 8pt">(1)</FONT>&#9;
Consists of shares available upon exercise of warrants granted under various agreements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The 2000 Plan and 2006
Plan are administered by the Compensation and Management Development Committee, which has the power to determine matters related
to outstanding option awards under the Plans, including conditions of vesting and exercisability. Options granted under the Plans
expire no later than 10 years from the grant date. Options generally vest in increments over three or five years from the date
of grant. Options granted to non-employee directors however are fully vested upon issuance. Restricted stock grants issued to employees
and non-employee directors generally vest in equal increments over two years from the date of grant with one-third vested as of
the date of grant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">PROPOSAL NO.&nbsp;2</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">RATIFICATION OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We are asking you to
ratify the appointment of Ernst&nbsp;&amp; Young LLP as our independent registered public accounting firm for the fiscal year ending
December&nbsp;31, 2013. Ernst&nbsp;&amp; Young LLP has audited our financial statements annually since January&nbsp;1, 2007. Representatives
of Ernst&nbsp;&amp; Young LLP are expected to be at the Annual Meeting to answer any questions and make a statement should they
choose to do so.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Although our bylaws
do not require that our stockholders approve the appointment of our independent registered public accounting firm, the Audit Committee
is submitting the selection of Ernst&nbsp;&amp; Young LLP to our stockholders for ratification as a matter of good corporate practice.
If our stockholders vote against the ratification of Ernst&nbsp;&amp; Young LLP, the Audit Committee will consider this in its
selection of auditors for the following year. Even if our stockholders ratify the appointment, the Audit Committee may choose to
appoint a different independent registered public accounting firm at any time during the year if it is determined that such a change
would be in the best interests of our Company and our stockholders.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Independent Registered Public Accounting
Firm Fees</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table
presents fees for professional audit and other services rendered by Ernst&nbsp;&amp; Young LLP for the audit of our annual financial
statements as of and for the fiscal years ended December&nbsp;31, 2011 and 2012 and fees billed for other services rendered by
Ernst&nbsp;&amp; Young LLP during that period.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2011</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2012</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD STYLE="width: 66%; padding-left: 5.4pt; padding-top: 3pt">Audit Fees<SUP>(1)</SUP></TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 13%; text-align: right">1,234,736</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 13%; text-align: right">1,039,500</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt; padding-top: 3pt">Audit-Related Fees<SUP>(2)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">323,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">160,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD STYLE="padding-left: 5.4pt; padding-top: 3pt">Tax Fees<SUP>(3)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&ndash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&ndash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt; padding-top: 3pt">All Other Fees<SUP>(4)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&ndash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&ndash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD STYLE="padding-left: 5.4pt; padding-top: 3pt">Total</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,557,736</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,199,500</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">________________</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-size: 8pt">(1)</FONT></TD><TD STYLE="text-align: justify">Audit Fees consist of fees billed for professional services rendered for the audit of our annual
consolidated financial statements and review of the interim consolidated financial statements included in quarterly reports and
services that are normally provided by Ernst&nbsp;&amp; Young LLP in connection with statutory and regulatory filings or engagements.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-size: 8pt">(2)</FONT></TD><TD STYLE="text-align: justify">Audit-Related Fees consist of fees billed for assurance and related services that are reasonably
related to the performance of the audit or review of our consolidated financial statements and are not reported under Audit Fees.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-size: 8pt">(3)</FONT></TD><TD STYLE="text-align: justify">Tax fees consist of fees billed for professional services rendered for tax compliance, tax advice
and tax planning. These services include assistance regarding federal and state tax compliance, acquisitions and tax planning.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-size: 8pt">(4)</FONT></TD><TD STYLE="text-align: justify">All Other Fees consist of fees for products and services other than the services reported above.</TD></TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Policy on Audit Committee Pre-Approval
of Audit and Permissible Non-Audit Services of the Independent Registered Public Accounting Firm</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As a matter of policy,
all audit and non-audit services provided by our independent registered public accounting firm are approved in advance by the Audit
Committee, which considers whether the provision of non-audit services is compatible with maintaining such firm&rsquo;s independence.
All services provided by Ernst&nbsp;&amp; Young LLP during the fiscal year 2012 and the fiscal year 2011 were pre-approved by the
Audit Committee. The Audit Committee has considered the role of Ernst&nbsp;&amp; Young LLP in providing services to us for the
fiscal year ended December&nbsp;31, 2012 and has concluded that such services are compatible with their independence as our auditors.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Vote Required</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Ratification of Ernst&nbsp;&amp;
Young LLP as our independent registered public accounting firm requires the affirmative vote of the holders of a majority of the
shares present in person or represented by proxy on this proposal at the Annual Meeting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">OUR BOARD OF DIRECTORS UNANIMOUSLY
RECOMMENDS A VOTE &ldquo;FOR&rdquo; RATIFICATION OF ERNST&nbsp;&amp; YOUNG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PROPOSAL NO.&nbsp;3</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>ADVISORY VOTE TO APPROVE THE COMPENSATION
OF OUR NAMED EXECUTIVE OFFICERS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In accordance with
the requirements of Section 14A of the Exchange Act (which was added by the Dodd-Frank Wall Street Reform and Consumer Protection
Act enacted in July 2010) and the related rules of the SEC, we are providing our stockholders with the opportunity to cast a non-binding,
advisory vote to approve the compensation of our Named Executive Officers as disclosed pursuant to the SEC&rsquo;s executive compensation
disclosure rules and set forth in this proxy statement (including the Compensation Discussion and Analysis, the compensation and
other related tables and narratives accompanying those tables).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As described in detail
under the &ldquo;Compensation Discussion and Analysis&rdquo; section above, our compensation policies are designed to be competitive
with comparable employers and to align management&rsquo;s incentives with both near term and long-term interests of our stockholders.
We compensate our executive officers through a mix of base salary, bonus and equity compensation. We intend that our compensation
decisions will attract and retain our Named Executive Officers and reward them for achieving the Company&rsquo;s strategic initiatives
and objective measures of success. Our Compensation and Management Development Committee and Board of Directors believe that our
executive compensation program is effective in implementing our principles and is strongly aligned with the long-term interests
of our stockholders and that our stockholders should approve our compensation program.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The vote on this resolution,
commonly known as the &ldquo;say-on-pay&rdquo; proposal, is not intended to address any specific element of compensation; rather,
the vote relates to the compensation of our Named Executive Officers, as described in this proxy statement in accordance with the
compensation disclosure rules of the SEC. The vote is advisory and its outcome will not be binding on our Board of Directors or
the Company nor require our Board of Directors or Compensation and Management Development Committee to take any action.&nbsp;&nbsp;However,
our Board of Directors and Compensation Committee values the opinion expressed by our stockholders in their vote on this proposal
and expect to take into account the outcome of this vote when evaluating future executive compensation arrangements for our Named
Executive Officers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Accordingly, we ask
our stockholders to vote on the following resolution at the Annual Meeting:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in; text-align: justify">&ldquo;RESOLVED, that the compensation
paid to the Company&rsquo;s Named Executive Officers, as disclosed pursuant to Item 402 of Regulation S-K, including Compensation
Discussion and Analysis, compensation tables and narrative discussion, is hereby APPROVED.&rdquo;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Vote Required</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Approval of the compensation
of our Named Executive Officers for the stockholder advisory vote requires the affirmative vote of the holders of a majority of
the shares present in person or represented by proxy on this proposal at the Annual Meeting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase">OUR
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE &ldquo;FOR&rdquo; the approval of the compensation of our named executive officers,
as disclosed in this proxy statement pursuant to the rules of the sec</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">HOUSEHOLDING</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Some banks, brokers
and other nominee record holders may be participating in the practice of &ldquo;householding&rdquo; proxy statements and annual
reports. This means that only one copy of our proxy statement or annual report to stockholders may have been sent to multiple stockholders
in each household. We will promptly deliver a separate copy of either document to any stockholder upon written or oral request.
To make such a request, please contact us by writing to Investor Relations at RadNet, Inc., 1510 Cotner Ave., Los Angeles, CA 90025
or by calling 310-445-2955. We will undertake to deliver promptly a copy of the annual report or proxy materials, as applicable,
upon the receipt of such request. Stockholders who share an address and receive multiple copies of our annual report and proxy
materials may also request to receive a single copy following the instructions above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">OTHER MATTERS</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We know of no other
matters to be submitted at the Annual Meeting. If any other matters are properly brought before the Annual Meeting, it is the intention
of the persons named in the enclosed proxy card to exercise their discretionary authority to vote the shares that they represent
in accordance with their judgment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For further information
about RadNet, Inc., please refer to our annual report on Form 10-K for the fiscal year ended December&nbsp;31, 2012, as amended,
which accompanies this Proxy Statement. Our annual report on Form 10-K is publicly available on the SEC&rsquo;s website at www.sec.gov
and on our website at www.radnet.com. You may also obtain a copy by sending a written request to Investor Relations, RadNet, Inc.,
1510 Cotner Ave., Los Angeles, CA 90025.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3in">By Order of the Board of Directors,</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3in"><IMG SRC="hames_sig.jpg" ALT="">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3in">Norman R. Hames</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3in">Corporate Secretary</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 9pt"><B>ANNUAL
MEETING OF STOCKHOLDERS OF </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>RADNET, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 8pt"><B>JUNE 6,
2013</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 8pt"><B><U>NOTICE
OF INTERNET AVAILABILITY OF PROXY MATERIAL</U>:</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 8pt">The Notice
of Meeting, proxy statement and proxy card</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 8pt">are available
at <B>http://radnet.com/2013Proxy.html</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 8pt"><B>Please
sign, date and mail</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 8pt"><B>your proxy
card in the</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 8pt"><B>envelope
provided as soon</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 8pt"><B>as possible.</B><BR>
&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 8pt">&#9660;&nbsp;Please
detach along perforated line and mail in the envelope provided.&#9660;</FONT></P>

















<HR SIZE="1" NOSHADE ALIGN="LEFT" STYLE="width: 100%; color: black">

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in"><FONT STYLE="font-size: 8pt"><B>THE
BOARD OF DIRECTORS RECOMMENDS A VOTE &ldquo;FOR&rdquo; ALL NOMINEES AND &ldquo;FOR&rdquo; PROPOSALS NO. 2, 3 &amp; 4. </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 8pt">PLEASE SIGN,
DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.&nbsp; PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE <FONT STYLE="font-family: Wingdings">x
</FONT></FONT></P>

<HR SIZE="1" NOSHADE ALIGN="LEFT" STYLE="width: 100%; color: black">

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 42%"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 13.5pt; text-indent: -9pt"><FONT STYLE="font-size: 8pt">1.
        Election of the following seven persons (except as marked to the contrary) as directors of the Company for a one-year
        term, or until their successors are duly elected and qualified:</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 4.5pt"><FONT STYLE="font-size: 8pt"><B>NOMINEES</B></FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 8pt Wingdings">m</FONT><FONT STYLE="font-size: 8pt">&nbsp;1.
        Howard G. Berger, M.D. <FONT STYLE="font-family: Wingdings">m</FONT>&nbsp;5. Lawrence L. Levitt</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 8pt Wingdings">m</FONT><FONT STYLE="font-size: 8pt">&nbsp;2.
        Marvin S. Cadwell&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT STYLE="font-family: Wingdings">m</FONT>&nbsp;6. Michael L. Sherman, M.D.</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 8pt Wingdings">m</FONT><FONT STYLE="font-size: 8pt">&nbsp;3.
John V. Crues, III, M.D.&nbsp;&nbsp;<FONT STYLE="font-family: Wingdings">m</FONT>&nbsp;7. David L Swartz</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 8pt Wingdings">m</FONT><FONT STYLE="font-size: 8pt">&nbsp;4.
        Norman R. Hames<FONT STYLE="font-family: Wingdings"> </FONT></FONT></P></TD>
    <TD STYLE="width: 1%; border-right: black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 11%"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 8pt">FOR
        ALL NOMINEES</FONT></P>
        <P STYLE="font: 10pt Wingdings; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 8pt">o</FONT></P></TD>
    <TD STYLE="width: 18%"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 8pt">WITHHOLD
        FOR ALL NOMINEES</FONT></P>
        <P STYLE="font: 10pt Wingdings; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 8pt">o</FONT></P></TD>
    <TD STYLE="width: 28%"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 8pt">FOR
        ALL</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 8pt">EXCEPT</FONT></P>
        <P STYLE="font: 10pt Wingdings; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 8pt">o</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 8pt">(see
        instructions below)</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 8pt">To
        withhold authority to vote for any individual nominee(s), mark <B>&ldquo;FOR ALL EXCEPT&rdquo;</B> and fill in the circle
        next to each nominee you wish to withhold, as shown here. &#9679;</FONT></P></TD></TR>
</TABLE>
<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD COLSPAN="5" STYLE="padding-top: 9pt; padding-bottom: 6pt; padding-left: 13.5pt; text-indent: -9pt"><FONT STYLE="font-size: 8pt">2.
    The ratification of the appointment of Ernst &amp; Young LLP as the company&rsquo;s independent&nbsp;registered public accounting
    firm for the year ending December 31, 2013.</FONT></TD>
    <TD><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 8pt">FOR</FONT></P>
        <P STYLE="font: 10pt Wingdings; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 8pt">o</FONT></P></TD>
    <TD><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 8pt">AGAINST</FONT></P>
        <P STYLE="font: 10pt Wingdings; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 8pt">o</FONT></P></TD>
    <TD COLSPAN="2"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 8pt">ABSTAIN</FONT></P>
        <P STYLE="font: 10pt Wingdings; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 8pt">o</FONT></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="5" STYLE="padding-top: 6pt; padding-bottom: 6pt; padding-left: 13.5pt; text-indent: -9pt"><FONT STYLE="font-size: 8pt">3.
    An advisory vote to approve the compensation of our Named Executive Officers.</FONT></TD>
    <TD><P STYLE="font: 10pt Wingdings; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 8pt">o</FONT></P></TD>
    <TD><P STYLE="font: 10pt Wingdings; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 8pt">o</FONT></P></TD>
    <TD COLSPAN="2"><P STYLE="font: 10pt Wingdings; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 8pt">o</FONT></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="5" STYLE="padding-top: 6pt; padding-bottom: 6pt; padding-left: 13.5pt; text-indent: -9pt"><FONT STYLE="font-size: 8pt">4.
    Other business that may properly come before the annual meeting (including adjournments and postponements).</FONT></TD>
    <TD><P STYLE="font: 10pt Wingdings; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 8pt">o</FONT></P></TD>
    <TD><P STYLE="font: 10pt Wingdings; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 8pt">o</FONT></P></TD>
    <TD COLSPAN="2"><P STYLE="font: 10pt Wingdings; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 8pt">o</FONT></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="9"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9pt"><FONT STYLE="font-size: 8pt"><B>THIS PROXY
        IS REVOCABLE AND WILL BE VOTED AS DIRECTED BY THE UNDERSIGNED BELOW. </B>Where no choice is specified, this proxy card
        will be voted FOR all nominees and For Proposals 2, 3 and 4.</FONT></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-right: black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="5"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="9" STYLE="border-bottom: black 1pt solid; padding-left: 9pt"><FONT STYLE="font-size: 8pt"><B>INSTRUCTIONS:&nbsp;&nbsp;</B>Please
    consider the issues discussed in the proxy statement and cast your vote by completing, dating, signing and mailing the proxy
    card in the postage-paid envelope included with the proxy statement.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="9"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9pt"><FONT STYLE="font-size: 8pt">Stockholders holding
        shares with a broker, bank or other nominee may also be eligible to vote via the Internet or to vote telephonically if
        their broker, bank or other nominee participates in a program that allows for such voting. Please consult the instruction
        form received from your broker or bank.</FONT></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-right: black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="5"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="8" STYLE="border-bottom: black 1pt solid; padding-left: 9pt"><FONT STYLE="font-size: 8pt">To change the address
    on your account, please check the box at right and indicate your new address in the address space above. Please note that
    changes to the registered name(s) on the account may not be submitted via this method. </FONT></TD>
    <TD><FONT STYLE="font-size: 8pt">&nbsp;<FONT STYLE="font-family: Wingdings">o</FONT></FONT></TD></TR>
<TR>
    <TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 240px"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 26px"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
</TABLE>
<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 15%"><FONT STYLE="font-size: 8pt">Signature of Stockholder</FONT></TD>
    <TD STYLE="width: 23%; border: black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 5%"><FONT STYLE="font-size: 8pt">&nbsp;&nbsp;&nbsp; Date</FONT></TD>
    <TD STYLE="width: 8%; border: black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 15%"><FONT STYLE="font-size: 8pt">Signature of Stockholder</FONT></TD>
    <TD STYLE="width: 20%; border: black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 5%"><FONT STYLE="font-size: 8pt">&nbsp;&nbsp;&nbsp; Date</FONT></TD>
    <TD STYLE="width: 9%; border: black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-indent: -27pt"><FONT STYLE="font-size: 8pt"><B>Note:</B>&nbsp;
Please sign exactly as your name or names&nbsp;appear on this Proxy. When shares are held jointly, each holder should sign.&nbsp;When
signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation,
please sign full corporate name by a duly authorized officer, giving full title as such.&nbsp;If signer is a partnership, please
sign in partnership name by authorized person.</FONT></P>




<HR SIZE="1" NOSHADE ALIGN="CENTER" STYLE="width: 100%; color: black">

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<!-- Field: Page; Sequence: 38 -->
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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PROXY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>RADNET, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>FOR THE ANNUAL MEETING OF STOCKHOLDERS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>JUNE 6, 2013</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">The
undersigned hereby appoints Mark Stolper and Jeffrey Linden, or any one of them, and each with full power of substitution, to act
as attorneys and proxies for the undersigned to attend the Annual Meeting of Stockholders of the Company to be held at our principal
executive office at 1510 Cotner Avenue, Los Angeles, CA 90025,</FONT> <FONT STYLE="font-size: 10pt">on June 6, 2013 at 10:00 a.m.
(Pacific Time) and any adjournments or postponements thereof, to cast on behalf of the undersigned all votes that the undersigned
is entitled to cast at such meeting and otherwise to represent the undersigned at the meeting with all powers possessed by the
undersigned if personally at the meeting. The undersigned acknowledges receipt from the Company prior to the execution of this
proxy of a Notice of Annual Meeting of Stockholders and a Proxy Statement, the terms of which are incorporated herein by reference,
and revokes any proxy heretofore given in respect to such meeting.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in"><B>THE VOTES ENTITLED
TO BE CAST BY THE UNDERSIGNED WILL BE CAST AS INSTRUCTED HEREIN.&nbsp;&nbsp;IF THIS PROXY IS EXECUTED BUT NO INSTRUCTION IS GIVEN,
THE VOTES ENTITLED TO BE CAST BY THE UNDERSIGNED WILL BE CAST &ldquo;FOR&rdquo; ALL NOMINEES AND &ldquo;FOR&rdquo; PROPOSALS 2,
3 &amp; 4.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="vertical-align: top; text-align: center"><FONT STYLE="font-size: 10pt"><B>(Continued and to be signed on the reverse side)</B></FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>

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