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RON BENDER (SBN 143364) JACQUELINE L. RODRIGUEZ (SBN 198838) TODD M. ARNOLD (SBN 221868) JOHN-PATRICK M. FRITZ (SBN 245240) LEVENE, NEALE, BENDER, YOO & BRILL L.L.P. 10250 Constellation Boulevard, Suite 1700 Los Angeles, California 90067 Telephone: (310) 229-1234 Facsimile: 310) 229-1244 Email: rb@lnbyb.com; jlr@lnbyb.com; tma@lnbyb.com; jpf@lnbyb.com

FILED & ENTERED JUL 15 2010

CLERK U.S. BANKRUPTCY COURT Central District of California BY ngo DEPUTY CLERK

Attorneys for Chapter 11 Debtors and Debtors in Possession UNITED STATES BANKRUPTCY COURT CENTRAL DISTRICT OF CALIFORNIA SANTA ANA DIVISION ) ) WESTCLIFF MEDICAL LABORATORIES, ) ) INC., ) ) Debtor. ) ________________________________ ) ) ) BIOLABS, INC., ) ) Debtor. ________________________________ ) ) ) Affects Both Debtors ) ) ) Affects WESTCLIFF MEDICAL ) LABORATORIES, INC. only ) ) Affects BIOLABS, INC. only ) ) ) ) ) ) ) In re: Case No. 8:10-bk-16743-TA Lead Case, Jointly Administered with Case No. 8:10-bk-16746-TA Chapter 11 Cases STIPULATED ORDER APPROVING APPLICATION OF DEBTORS AND DEBTORS IN POSSESSION TO EMPLOY MTS HEALTH PARTNERS L.P. AS THEIR INVESTMENT BANKER AND FINANCIAL ADVISOR AND TO COMPENSATE MTS HEALTH PARTNERS L.P. Court Hearing: Date: May 27, 2010 Time: 11:00 a.m. Place: Courtroom 5B 411 West Fourth Street Santa Ana, CA 92701-4593

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This Stipulated Order approving the Application (the Application) filed by Westcliff Medical Laboratories, Inc. and Biolabs Inc., the debtors and debtors in possession in the aboveentitled Chapter 11 bankruptcy cases (the Debtors), to employ MTS Health Partners L.P. (MTS) as their investment banker and financial advisor and to compensate MTS, is hereby entered into by and between the Debtors and MTS, and is consented to by the Official Committee of Unsecured Creditors (the Committee) and by GE Business Financial Services, Inc. (formerly known as Merrill Lynch Capital, a division of Merrill Lynch Business Financial Services Inc.), as administrative agent for various secured lender (the Secured Lenders) with reference to the following: RECITALS A. On May 19, 2010 (the Petition Date), the Debtors filed

voluntary petitions for relief under chapter 11 of Title 11 of the United States Code, 11 U.S.C. 101 et seq. (the Bankruptcy Code) in the United States Bankruptcy Court for the Central District of California, Santa Ana Division (the Bankruptcy Court). The Debtors bankruptcy cases (the Bankruptcy Cases)

are jointly administered under case numbers 8:10-bk-16743-TA and 23 24 25 26 27 28 8:10-bk-16746-TA. The Debtors have continued to operate their

businesses and manage their affairs as debtors in possession since the Petition Date. B. On or near the Petition Date, the Debtors filed an 2

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emergency motion seeking Bankruptcy Court approval of the Debtors application to employ MTS as their investment banker and financial advisor. At a hearing held on May 27, 2010, the Court advised the

parties that the Court would be willing to enter an order approving the Debtors employment and compensation of MTS provided the order was signed by the Secured Lenders, the Committee and the Debtors. C. At a hearing held on June 3, 2010, the Court approved the

Debtors sale of substantially all of their tangible and intangible assets (excluding cash and accounts receivable) to Wave Newco, Inc., a wholly-owned subsidiary of Laboratory Corporation of America (LabCorp). D. On June 16, 2010, LabCorp consummated its purchase of the Also on June 16, 2010, the Secured Lenders, the

Debtors assets.

Committee and the Debtors entered into a written stipulation (the Sale Proceeds Allocation Stipulation) which provided for, among other things, the allocation of the proceeds from the Debtors sale of assets to LabCorp, which written stipulation memorialized the terms of the agreement which was previously reached between the Secured Lenders, the Committee and the Debtors and which was placed on to the record of the Court at the hearing held on June 3, 2010.

23 24 25 26 27 28 F. In Section 1.b. of the Sale Proceeds Allocation

Stipulation, the Secured Lenders, the Committee and the Debtors agreed that concurrently with the LabCorp asset sale closing, the Debtors would set aside $1,350,000 into a segregated account to be 3

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paid to MTS upon approval by the Bankruptcy Court of MTS compensation. G. Pursuant to the Application, the Debtors paid MTS a pre-

petition retainer in the amount of $75,000 to be used by MTS towards its fees and expenses. Pursuant to the Application, the

Debtors agreed to pay to MTS an additional post-petition retainer in the amount of $50,000 by June 2, 2010 but this post-petition retainer was never made. Also pursuant to the Application, the

Debtors agreed to pay to MTS a monthly fee of $100,000 per month by the 19th of each month starting in June, 2010 until the later of: (a) the consummation of a sale transaction, (b) four months and one day after the date of execution of the pre-petition engagement agreement between the parties, and (c) the date of termination of the engagement agreement. As of the date of this Stipulated Order,

the Debtors have not made any of these monthly payments to MTS. Also pursuant to the Application, in the event that a sale transaction is consummated, the Debtors agreed to pay MTS a success fee of $900,000 out of the sale proceeds. Since the Debtors have

not paid any money to MTS post-petition, and in light of the closing of the Debtors asset sale to LabCorp, the Debtors

23 24 25 26 27 28 currently owe a total fee to MTS of $1,350,000 (computed as the initial $50,000 post-petition payment which was not made + four monthly fee payments of $100,000 each + a success fee of $900,000). In addition, pursuant to the Application, the Debtors agreed to 4

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promptly reimburse MTS, upon its monthly request, for its reasonable out-of-pocket expenses incurred in connection with its services provided to the Debtors, with the agreement that the total expenses cannot exceed the sum of $50,000. The Debtors had agreed

to pay to MTS $50,000 as an expense advance post-petition with MTS to return to the Debtors any unused portion, but none of this expense advance payment was made by the Debtors to MTS. incurred total expenses of $19,855.20. MTS

As a result, the Debtors

owe MTS the total sum of $1,369,855.20 (computed as $1,350,000 of fees + $19,855.20 of expenses). BASED UPON THE FOREGOING, IT IS HEREBY STIPULATED, CONSENTED AND AGREED BY AND BETWEEN THE PARTIES HERETO, AS FOLLOWS: 1. Upon entry of an order of the Court approving this

Stipulated Order, the Debtors shall pay to MTS the total sum of $1,369,855.20, inclusive of the $1,350,000 the Debtors are currently maintaining in a segregated account for the benefit of MTS. 2. This Stipulated Order shall be binding upon, and inure to

the benefit of, the parties hereto, the parties released herein, and their respective heirs, executors, representatives, successors

23 24 25 26 27 28 and assigns, including any trustee or other fiduciary or legal representatives that may be hereafter appointed for the Debtors, including a trustee under Chapter 7 or Chapter 11 of the Bankruptcy Code, a liquidating trustee under a Chapter 11 plan, or a 5

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representative of the Estates appointed under Section 1123 of the Bankruptcy Code. 3. This Stipulated Order and the rights and obligations of

the parties herein shall be governed by, and construed in accordance with the Bankruptcy Code. To the extent that the

Bankruptcy Code does not address the issue presented, this Stipulated Order and the rights and obligations of the parties herein shall be governed by, and construed in accordance with, the laws of the State of California (without giving effect to its principles of conflicts of law). 4. The parties agree that the Bankruptcy Court has and shall

retain exclusive jurisdiction to implement and enforce the terms and provisions of this Stipulated Order, including any disputes or controversies relating thereto. 5. This Stipulated Order may be executed in counterparts,

and all such executed counterparts when taken together shall constitute an original of one and the same document. /// /// /// Counterparts

23 24 25 26 27 28 /// /// /// /// 6

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constitute an original of one and the same document.

Counterparts

may be transmitted by facsimile, electronic mail or other electronic means. AGREED: LEVENE, NEALE, BENDER, YOO & BRILL L.L.P.

By:__

_______ Ron Bender Attorneys for Chapter 11 Debtors and Debtors in Possession

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DATED: July 15, 2010 United States Bankruptcy Judge

###

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Service by E-Mail:
In re: WESTCLIFF MEDICAL LABORATORIES, INC., Debtor(s). BIOLABS, INC., Debtor. CHAPTER 11 Case No. 8:10-bk-16743-TA Jointly Administered with Case No. 8:10-bk-16746-TA

PROOF OF SERVICE OF DOCUMENT

I am over the age of 18 and not a party to this bankruptcy case or adversary proceeding. My business address is: 10250 Constellation Boulevard, Suite 1700, Los Angeles, California 90067

A true and correct copy of the foregoing document described as STIPULATED ORDER APPROVING APPLICATION OF DEBTORS AND DEBTORS IN POSSESSION TO EMPLOY MTS HEALTH PARTNERS L.P. AS THEIR INVESTMENT BANKER AND FINANCIAL ADVISOR AND TO COMPENSATE MTS HEALTH PARTNERS L.P. will be served or was served (a) on the judge in chambers in the form and manner required by LBR 5005-2(d); and (b) in the manner indicated below: I. TO BE SERVED BY THE COURT VIA NOTICE OF ELECTRONIC FILING (NEF) Pursuant to controlling General Order(s) and Local Bankruptcy Rule(s) (LBR), the foregoing document will be served by the court via NEF and hyperlink to the document. On ___________, 2010, I checked the CM/ECF docket for this bankruptcy case or adversary proceeding and determined that the following person(s) are on the Electronic Mail Notice List to receive NEF transmission at the email address(es) indicated below: Service information continued on attached page II. SERVED BY U.S. MAIL OR OVERNIGHT MAIL(indicate method for each person or entity served): On ______, 2010, I served the following person(s) and/or entity(ies) at the last known address(es) in this bankruptcy case or adversary proceeding by placing a true and correct copy thereof in a sealed envelope in the United States Mail, first class, postage prepaid, and/or with an overnight mail service addressed as follows. Listing the judge here constitutes a declaration that mailing to the judge will be completed no later than 24 hours after the document is filed. Service information continued on attached page III. SERVED BY PERSONAL DELIVERY, FACSIMILE TRANSMISSION OR EMAIL (indicate method for each person or entity served): Pursuant to F.R.Civ.P. 5 and/or controlling LBR, on July 8, 2010, I served the following person(s) and/or entity(ies) by personal delivery, or (for those who consented in writing to such service method), by facsimile transmission and/or email as follows. Listing the judge here constitutes a declaration that personal delivery on the judge will be completed no later than 24 hours after the document is filed. Via Personal Attorney Service Hon. Theodor Albert United States Bankruptcy Court 411 West Fourth Street Santa Ana, CA 92701

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Office of the U.S. Trustee Frank.Cadigan@usdoj.gov; nancy.goldenberg@usdoj.gov; Terry.Biers@usdoj.gov Debtors m.pakkala@westclifflabs.com MTS Health Partners L.P. lane@mtspartners.com

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Counsel to GE Business Financial Services, Inc. rrogers@winston.com; jrawlins@winston.com Counsel for Committee bseigel@buchalter.com; jgarfinkle@buchalter.com Service information continued on attached page I declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. July 8, 2010 Date
January 2009

Lourdes Cruz Type Name

/s/ Lourdes Cruz Signature

This form is mandatory. It has been approved for use by the United States Bankruptcy Court for the Central District of California.

F 9013-3.1

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In re: WESTCLIFF MEDICAL LABORATORIES, INC., Debtor(s). BIOLABS, INC., Debtor. CHAPTER 11 Case No. 8:10-bk-16743-TA Jointly Administered with Case No. 8:10-bk-16746-TA

NOTE TO USERS OF THIS FORM:

1) Attach this form to the last page of a proposed Order or Judgment. Do not file as a separate document. 2) The title of the judgment or order and all service information must be filled in by the party lodging the order. 3) Category I. below: The United States trustee and case trustee (if any) will always be in this category. 4) Category II. below: List ONLY addresses for debtor (and attorney), movant (or attorney) and person/entity (or attorney) who filed an opposition to the requested relief. DO NOT list an address if person/entity is listed in category I.

NOTICE OF ENTERED ORDER AND SERVICE LIST

Notice is given by the court that a judgment or order entitled STIPULATED ORDER APPROVING APPLICATION OF DEBTORS AND DEBTORS IN POSSESSION TO EMPLOY MTS HEALTH PARTNERS L.P. AS THEIR INVESTMENT BANKER AND FINANCIAL ADVISOR AND TO COMPENSATE MTS HEALTH PARTNERS L.P. was entered on the date indicated as Entered on the first page of this judgment or order and will be served in the manner indicated below: I. SERVED BY THE COURT VIA NOTICE OF ELECTRONIC FILING (NEF) Pursuant to controlling General Order(s) and Local Bankruptcy Rule(s), the foregoing document was served on the following person(s) by the court via NEF and hyperlink to the judgment or order. As of July 8, 2010, the following person(s) are currently on the Electronic Mail Notice List for this bankruptcy case or adversary proceeding to receive NEF transmission at the email address(es) indicated below. Todd M Arnold tma@lnbrb.com Richard L Barnett rick@barnettrubin.com, rlbsec@barnettrubin.com Ron Bender rb@lnbrb.com Jennifer Witherell Crastz jcrastz@hemar-rousso.com Carol J Fogleman mfrost@bwslaw.com John-patrick M Fritz jpf@lnbrb.com Jeffrey K Garfinkle bkgroup@buchalter.com, jgarfinkle@buchalter.com Nancy S Goldenberg nancy.goldenberg@usdoj.gov Michael J Heyman michael.heyman@klgates.com Mark D Houle mark.houle@pillsburylaw.com Andy Kong Kong.Andy@ArentFox.com Rodger M Landau rlandau@lgbfirm.com, kmoss@lgbfirm.com Michael B Lubic michael.lubic@klgates.com Aram Ordubegian ordubegian.aram@arentfox.com Justin E Rawlins jrawlins@winston.com, docketla@winston.com Jacqueline L Rodriguez jlr@lnbrb.com Benjamin Seigel bseigel@buchalter.com, IFS_filing@buchalter.com David B Shemano dshemano@pwkllp.com United States Trustee (SA) ustpregion16.sa.ecf@usdoj.gov Howard J Weg hweg@pwkllp.com Sharon Z Weiss sharon.weiss@hro.com Service information continued on attached page II. SERVED BY THE COURT VIA U.S. MAIL: A copy of this notice and a true copy of this judgment or order was sent by United States Mail, first class, postage prepaid, to the following person(s) and/or entity(ies) at the address(es) indicated below:

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Debtors Westcliff Medical Laboratories, Inc. BioLabs, Inc. 1821 E. Dyer Road, #100 Santa Ana, CA 92705-0000 Service information continued on attached page III. TO BE SERVED BY THE LODGING PARTY: Within 72 hours after receipt of a copy of this judgment or order which bears an Entered stamp, the party lodging the judgment or order will serve a complete copy bearing an Entered stamp by U.S. Mail, overnight mail, facsimile transmission or email and file a proof of service of the entered order on the following person(s) and/or entity(ies) at the address(es), facsimile transmission number(s) and/or email address(es) indicated below: Service information continued on attached page
This form is mandatory. It has been approved for use by the United Stat es Bankruptcy Court for the Central District of California.

January 2009

F 9021-1.1

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