{"id":41129,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/loan-and-security-agreement-drkoop-lifecare-inc-and-heller.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"loan-and-security-agreement-drkoop-lifecare-inc-and-heller","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/finance\/loan-and-security-agreement-drkoop-lifecare-inc-and-heller.html","title":{"rendered":"Loan and Security Agreement &#8211; DrKoop LifeCare Inc. and Heller Healthcare Finance Inc."},"content":{"rendered":"<pre>\n\n                                 $10,000,000.00\n\n\n                           LOAN AND SECURITY AGREEMENT\n\n                                 by and between\n\n                              DRKOOP LIFECARE, INC.\n\n                                  (\"Borrower\")\n\n                                       and\n\n                         HELLER HEALTHCARE FINANCE, INC.\n\n                                   (\"Lender\")\n\n\n\n                                 August 20, 2001\n   2\n\n                           LOAN AND SECURITY AGREEMENT\n\n        THIS LOAN AND SECURITY AGREEMENT (the \"Agreement\") is made as of August\n20, 2001 by and between DRKOOP LIFECARE, INC., a Delaware corporation\n(\"Borrower\"), and HELLER HEALTHCARE FINANCE, INC., a Delaware corporation\n(\"Lender\").\n\n                                    RECITALS\n\n        WHEREAS, Borrower desires to establish certain financing arrangements\nwith and borrow funds from Lender, and Lender is willing to establish such\narrangements for and make loans and extensions of credit to Borrower, on the\nterms and conditions set forth below.\n\n        WHEREAS, the parties desire to define the terms and conditions of their\nrelationship and to reduce their agreements to writing.\n\n        NOW, THEREFORE, in consideration of the promises and covenants contained\nin this Agreement, and for other good and valuable consideration, the receipt\nand sufficiency of which are hereby acknowledged, the parties covenant and agree\nas follows:\n\n                                    ARTICLE I\n\n                                   DEFINITIONS\n\n        As used in this Agreement, unless otherwise specified, all references to\n\"Sections\" shall be deemed to refer to Sections of this Agreement, and the\nfollowing terms shall have the meanings set forth below:\n\n        SECTION 1.1. ACCOUNT. \"Account\" means any right to payment of a monetary\nobligation, whether or not earned by performance, including, but not limited to,\nthe right to payment of management fees. Without limiting the generality of the\nforegoing, the term \"Account\" shall further include any \"account\" (as that term\nis defined in the Uniform Commercial Code now or hereafter in effect), any\naccounts receivable, any \"health-care-insurance receivables\" (as that term is\ndefined in the Uniform Commercial Code now or hereafter in effect), any \"payment\nintangibles\" (as that term is defined in the Uniform Commercial Code now or\nhereafter in effect) and all other rights to payment of every kind and\ndescription, whether or not earned by performance.\n\n        SECTION 1.2. ACCOUNT DEBTOR. \"Account Debtor\" means any Person obligated\non any Account of Borrower, including without limitation, any Insurer and any\nMedicaid\/Medicare Account Debtor.\n\n        SECTION 1.3. AFFILIATE. \"Affiliate\" means, with respect to a specified\nPerson, any Person directly or indirectly controlling, controlled by, or under\ncommon control with the specified Person, including without limitation their\nstockholders and any Affiliates thereof. A Person shall be deemed to control a\ncorporation or other entity if the Person possesses, directly or indirectly, the\npower to direct or cause the direction of the management and business of the\ncorporation or other entity, whether through the ownership of voting securities,\nby contract, or otherwise.\n\n        SECTION 1.4. AFFILIATED LOAN DOCUMENTS. \"Affiliated Loan Documents\"\nshall mean any and all documents evidencing, securing and\/or governing any\nfinancing provided by Lender or Lender's Affiliates to Borrower, Guarantor or\nany Affiliate of Borrower or Guarantor, as the same may be amended, modified,\nincreased, renewed or restated from time to time.\n\n\n\n\n                                       1\n   3\n        SECTION 1.5. AGREEMENT. \"Agreement\" means this Loan and Security\nAgreement, as it may be amended or supplemented from time to time, together with\nall attachments, exhibits, schedules, riders and addenda, all of which are\nincorporated herein by this reference and made a part hereof.\n\n        SECTION 1.6. BASE RATE. \"Base Rate\" means a rate of interest equal to\none and three quarters percent (1.75 %) per annum above the \"Prime Rate of\nInterest\".\n\n        SECTION 1.7. BORROWED MONEY. \"Borrowed Money\" means, with respect to any\nPerson, without duplication (a) all indebtedness for borrowed money, (b) all\nobligations of such Person evidenced by bonds, debentures, notes or similar\ninstruments, or upon which interest payments are customarily made, (c) that\nportion of obligations with respect to capital leases that is properly\nclassified as a liability on a balance sheet in conformity with GAAP, (d) any\nobligations of such Person issued or assumed as the deferred purchase price of\nproperty or services purchased by such Person if the purchase price is due more\nthan six (6) months from the date the obligation is incurred (other than trade\ndebt incurred in the ordinary course of business and due within six (6) months\nof the incurrence thereof) or is evidenced by a note or other instrument, (e)\nall Borrowed Money of others secured by (or for which the holder of such\nBorrowed Money has an existing right, contingent or otherwise, to be secured by)\nany Lien on, or payable out of the proceeds of production from, any property or\nasset owned, held or acquired by such Person regardless of whether the\nindebtedness secured thereby shall have been assumed by that Person or is\nnon-recourse to the credit of that Person, (f) all guaranty obligations of such\nPerson in respect of any Borrowed Money of any other person, (g) the maximum\namount of all standby letters of credit issued or bankers' acceptances\nfacilities created for the account of such Person and, without duplication, all\ndrafts drawn thereunder (to the extent unreimbursed), (h) the principal balance\noutstanding under any synthetic lease, tax retention operating lease,\noff-balance sheet loan or similar off-balance sheet financing product plus any\naccrued interest thereon, and (i) the Borrowed Money of any partnership or\nunincorporated joint venture in which such Person is a general partner or joint\nventurer.\n\n        SECTION 1.8. BORROWER. \"Borrower\" has the meaning set forth in the\nPreamble.\n\n        SECTION 1.9. BORROWING BASE. \"Borrowing Base\" has the meaning set forth\nin Section 2.1(d).\n\n        SECTION 1.10. BUSINESS DAY. \"Business Day\" means any day on which\nfinancial institutions are open for business in the State of Maryland, excluding\nSaturdays and Sundays.\n\n        SECTION 1.11 INTENTIONALLY LEFT BLANK.\n\n        SECTION 1.12. CLOSING; CLOSING DATE. \"Closing\" and \"Closing Date\" have\nthe meanings set forth in Section 5.3.\n\n        SECTION 1.13. COLLATERAL. \"Collateral\" has the meaning set forth in\nSection 3.1.\n\n        SECTION 1.14. COMMITMENT FEE. \"Commitment Fee\" has the meaning set forth\nin Section 2.4(a).\n\n        SECTION 1.15. CONCENTRATION ACCOUNT. \"Concentration Account\" has the\nmeaning set forth in Section 2.3.\n\n        SECTION 1.16. CONTROLLED GROUP. \"Controlled Group\" means all businesses\nthat would be treated as a single employer under Section 401(b) of ERISA.\n\n        SECTION 1.17. DEFAULT RATE. \"Default Rate\" means a rate per annum equal\nto five percent (5%) per annum above the then applicable Base Rate.\n\n\n\n                                       2\n   4\n\n        SECTION 1.18. ERISA. \"ERISA\" has the meaning set forth in Section 4.12.\n\n        SECTION 1.19. EVENT OF DEFAULT. \"Event of Default\" and \"Events of\nDefault\" have the meanings set forth in Section 8.1.\n\n        SECTION 1.20. INTENTIONALLY LEFT BLANK.\n\n        SECTION 1.21. GAAP. \"GAAP\" means generally accepted accounting\nprinciples applied in a consistent manner.\n\n        SECTION 1.22. GOVERNMENTAL AUTHORITY. \"Governmental Authority\" means and\nincludes any federal, state, District of Columbia, county, municipal, or other\ngovernment and any department, commission, board, bureau, agency or\ninstrumentality thereof, whether domestic or foreign.\n\n        SECTION 1.23. GUARANTOR. \"Guarantor\" means any Person who may from time\nto time guaranty, pledge assets as security for or otherwise become obligated in\nrespect of the obligations of Borrower under the Loan Documents.\n\n        SECTION 1.24. GUARANTY. \"Guaranty\" means any guaranty of the obligations\nof Borrower under the Loan Documents from time to time outstanding, as the same\nmay be amended, modified, or supplemented from time to time.\n\n        SECTION 1.25. HAZARDOUS MATERIAL. \"Hazardous Material\" means any\nsubstances defined or designated as hazardous or toxic waste, hazardous or toxic\nmaterial, hazardous or toxic substance, or similar term, by any environmental\nstatute, rule or regulation or any Governmental Authority applicable to Borrower\nor its business, operations or assets.\n\n        SECTION 1.26. HIGHEST LAWFUL RATE. \"Highest Lawful Rate\" means the\nmaximum lawful rate of interest referred to in Section 2.7 that may accrue\npursuant to this Agreement.\n\n        SECTION 1.27. HIPAA. \"HIPAA\" means the Health Insurance Portability and\nAccountability Act of 1996, as the same may be amended, modified or supplemented\nfrom time to time, and any successor statute thereto, and any and all rules or\nregulations promulgated from time to time thereunder.\n\n        SECTION 1.28. INSURER. \"Insurer\" means a Person that insures any Person\nagainst certain of the costs incurred in the receipt by such Person of goods or\nservices, or that has an agreement with Borrower to compensate Borrower for\nproviding goods or services to a Person.\n\n        SECTION 1.29. LENDER. \"Lender\" has the meaning set forth in the\nPreamble.\n\n        SECTION 1.30. LIEN. \"Lien\" shall mean any mortgage, pledge,\nhypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or\notherwise), charge or other security interest or any preference, priority or\nother security agreement or preferential arrangement of any kind or nature\nwhatsoever (including, without limitation, any conditional sale or other title\nretention agreement and any capital lease having substantially the same\npractical effect as any of the foregoing).\n\n        SECTION 1.31. LOAN. \"Loan\" has the meaning set forth in Section 2.1(a).\n\n        SECTION 1.32. LOAN DOCUMENTS. \"Loan Documents\" means and includes this\nAgreement, the Note, the Certificate of Validity, any Guaranty and each and\nevery other document now or hereafter delivered by Borrower or \n\n\n\n                                       3\n   5\n\nany Guarantor in connection with this Agreement, as any of them may be amended,\nmodified, increased, renewed or restated from time to time.\n\n        SECTION 1.33. LOAN MANAGEMENT FEE. \"Loan Management Fee\" has the meaning\nset forth in Section 2.4(c).\n\n        SECTION 1.34. LOCKBOX. \"Lockbox\" has the meaning set forth in Section\n2.3.\n\n        SECTION 1.35. LOCKBOX ACCOUNT. \"Lockbox Account\" means an account or\naccounts maintained at the Lockbox Bank into which all collections of Accounts\nare paid directly.\n\n        SECTION 1.36. LOCKBOX BANK. \"Lockbox Bank\" has the meaning set forth in\nSection 2.3.\n\n        SECTION 1.37. MAXIMUM LOAN AMOUNT. \"Maximum Loan Amount\" has the meaning\nset forth in Section 2.1(a).\n\n        SECTION 1.38. MEDICAID\/MEDICARE ACCOUNT DEBTOR. \"Medicaid\/ Medicare\nAccount Debtor\" means any Account Debtor which is (a) the United States of\nAmerica acting under the Medicaid\/Medicare program established pursuant to the\nSocial Security Act, (b) any state or the District of Columbia acting pursuant\nto a health plan adopted pursuant to Title XIX of the Social Security Act or (c)\nany agent, carrier, administrator or intermediary for any of the foregoing.\n\n        SECTION 1.39. INTENTIONALLY LEFT BLANK.\n\n        SECTION 1.40. INTENTIONALLY LEFT BLANK.\n\n        SECTION 1.41. MINIMUM NET WORTH. \"Minimum Net Worth\" shall mean tangible\nnet worth of $1,000,000.00. \"Tangible net worth\" means assets (excluding\nintangible assets) less liabilities. \"Intangible assets\" means all intangible\nassets (determined in conformity with GAAP) including, without limitation,\ngoodwill, intellectual property, licenses, organizational costs, deferred\namounts, covenants not to compete, unearned income and restricted funds.\n\n        SECTION 1.42. NOTE. \"Note\" has the meaning set forth in Section 2.1(c).\n\n        SECTION 1.43. OBLIGATIONS. \"Obligations\" has the meaning set forth in\nSection 3.1.\n\n        SECTION 1.44. INTENTIONALLY LEFT BLANK.\n\n        SECTION 1.45. PERMITTED LIENS. \"Permitted Liens\" means: (a) deposits or\npledges to secure obligations under workmen's compensation, social security or\nsimilar laws, or under unemployment insurance; (b) deposits or pledges to secure\nbids, tenders, contracts (other than contracts for the payment of money),\nleases, statutory obligations, surety and appeal bonds and other obligations of\nlike nature arising in the ordinary course of business; (c) mechanic's,\nworkmen's, materialmen's or other like Liens arising in the ordinary course of\nbusiness with respect to obligations which are not due, or which are being\ncontested in good faith by appropriate proceedings which suspend the collection\nthereof and in respect of which adequate reserves have been made (provided that\nsuch proceedings do not, in Lender's sole discretion, involve any substantial\nrisk of the sale, loss or forfeiture of such property or assets or any interest\ntherein); (d) Liens and encumbrances in favor of Lender; (e) Liens set forth on\nSchedule 1.45, (f) Liens for taxes, assessments, charges or other governmental\nlevies not yet due or as to which the applicable grace period (not to exceed\nsixty (60) days) has not expired or which are being contested in good faith by\nappropriate proceedings and in respect of which adequate reserves have been\nmade; and (g) Liens placed upon assets \n\n\n\n                                       4\n   6\n\nto secure the purchase price thereof, provided that the aggregate amount of\nindebtedness or outstanding amounts secured by such Liens shall not at any one\ntime outstanding exceed $1,000,000.00.\n\n        SECTION 1.46. PERSON. \"Person\" means an individual, partnership,\ncorporation, trust, joint venture, joint stock company, limited liability\ncompany, association, unincorporated organization, Governmental Authority, or\nany other entity.\n\n        SECTION 1.47. PLAN. \"Plan\" has the meaning set forth in Section 4.12.\n\n        SECTION 1.48. PREMISES. \"Premises\" has the meaning set forth in Section\n4.14.\n\n        SECTION 1.49. PRIME RATE OF INTEREST. \"Prime Rate of Interest\" means\nthat rate of interest designated as such by Citibank, N.A., or any successor\nthereto, as the same may from time to time fluctuate.\n\n        SECTION 1.50. PROHIBITED TRANSACTION. \"Prohibited Transaction\" means a\n\"prohibited transaction\" within the meaning of Section 406 of ERISA or Section\n4975(c)(1) of the Internal Revenue Code that is not exempt under Section 407 or\nSection 408 of ERISA or Section 4975(c)(2) or (d) of the Internal Revenue Code\nor under a class exemption granted by the U.S. Department of Labor.\n\n        SECTION 1.51. QUALIFIED ACCOUNT. \"Qualified Account\" means an Account of\nBorrower generated in the ordinary course of Borrower's business from the sale\nof goods or rendition of services which Lender, in its sole credit judgment,\ndeems to be a Qualified Account. Without limiting the generality of the\nforegoing, no Account shall be a Qualified Account if: (a) the Account or any\nportion of the Account is payable by an individual beneficiary, recipient or\nsubscriber individually and not directly to Borrower by a Medicaid\/Medicare\nAccount Debtor or commercial medical insurance carrier acceptable to Lender in\nits sole discretion; (b) the Account remains unpaid more than one hundred eighty\n(180) days past the claim or invoice date (but in no event more than one hundred\nninety-five (195) days after the applicable goods have been sold or services\nhave been rendered); provided that, until such time as Borrower has received the\napplicable Medicaid and\/or Medicare provider number and associated provider\naccount agreement, with respect to any Account payable by any Medicaid\/Medicare\nAccount Debtor or any Account Debtor that is Blue Cross\/Blue Shield to the\nextent Borrower requires Medicaid and\/or Medicare provider numbers to invoice\nsuch Blue Cross\/Blue Shield Account (any such Account, individually, during such\ntime an \"Unbilled Account\"), such Account shall not be a Qualified Account if\nthe Account remains unpaid more than one hundred twenty (120) days past the\nclaim or invoice date (but in no event more than one hundred thirty-five (135)\ndays after the applicable goods have been sold or services have been rendered);\n(c) the Account is subject to any defense, set-off, counterclaim, deduction,\ndiscount, credit, chargeback, freight claim, allowance, or adjustment of any\nkind; (d) any part of any goods the sale of which has given rise to the Account\nhas been returned, rejected, lost, or damaged; (e) if the Account arises from\nthe sale of goods by Borrower, the sale was not an absolute sale, or the sale\nwas made on consignment or on approval or on a sale-or-return basis, or the sale\nwas made subject to any other repurchase or return agreement, or the goods have\nnot been shipped to the Account Debtor or its designee; (f) if the Account\narises from the performance of services, the services have not been actually\nbeen performed or the services were undertaken in violation of any law; (g) the\nAccount is subject to a Lien other than a Permitted Lien; (h) Borrower knows or\nshould have known based on information to which participants in the industry can\nreasonably be expected to have access of the bankruptcy, receivership,\nreorganization, or insolvency of the Account Debtor; (i) the Account is\nevidenced by chattel paper or an instrument of any kind, or has been reduced to\njudgment; (j) the Account is an Account of an Account Debtor having its\nprincipal place of business or executive office outside the United States; (k)\nthe Account Debtor is an Affiliate or subsidiary of Borrower; (l) except as\nexpressly approved in writing by Lender, more than ten percent (10%) of the\naggregate balance of all Accounts owing from the Account Debtor obligated on the\nAccount are outstanding more than two hundred ten (210) days past their invoice\ndate; (m) except with respect to such Account Debtors expressly approved by\nLender in writing, Accounts due from an Account Debtor with respect to which\nfifty percent (50%) or more of the aggregate unpaid Accounts from such Account\nDebtor are not deemed Qualified Accounts under this Agreement; (n) Accounts due\n\n\n\n                                       5\n   7\n\nfrom a single Account Debtor with respect to which the total unpaid Accounts of\nsuch Account Debtor, except for a Medicaid\/Medicare Account Debtor and any\nAccount Debtor that is Blue Cross\/Blue Shield, exceed twenty percent (20%) of\nthe net amount of all Qualified Accounts (including Medicaid\/Medicare Account\nDebtors); provided that, in such event, only that portion of total unpaid\nAccounts of such Account Debtor in excess of twenty percent (20%) of the net\namount of all Qualified Accounts (including Medicaid\/Medicare Account Debtors)\nshall be deemed not to be Qualified Accounts; (o) the total Accounts of Borrower\nthat remain unpaid between one hundred fifty (150) and one hundred eighty (180)\ndays past their invoice date exceed fifteen percent (15%) of the net amount of\nall Accounts that remain unpaid up to one hundred eighty (180) days past their\ninvoice date; provided that, in such event, only that portion of such total\nAccounts in excess of fifteen percent (15%) of such net amount of Accounts that\nremain unpaid up to one hundred eighty (180) days past their invoice date shall\nbe deemed not to be Qualified Accounts; (p) any covenant, representation or\nwarranty contained in the Loan Documents with respect to such Account has been\nbreached; or (q) the Account fails to meet such other specifications and\nrequirements which may from time to time be established by Lender in its\nreasonable credit judgment.\n\n        SECTION 1.52. REPORTABLE EVENT. \"Reportable Event\" means a \"reportable\nevent\" as defined in Section 4043(c) of ERISA for which the notice requirements\nof Section 4043(a) of ERISA are not waived.\n\n        SECTION 1.53. REVOLVING CREDIT LOAN. \"Revolving Credit Loan\" has the\nmeaning set forth in Section 2.1(b).\n\n        SECTION 1.54. INTENTIONALLY LEFT BLANK.\n\n        SECTION 1.55. TERM. \"Term\" has the meaning set forth in Section 2.8.\n\n        SECTION 1.56. TERMINATION FEE. \"Termination Fee \" shall mean a fee\npayable upon termination of the Agreement, as yield maintenance for the loss of\nbargain and not as a penalty, equal to the greater of (a) two percent (2%) of\nthe Maximum Loan Amount and (b) the Yield Maintenance Amount; provided that, in\nany event, the Termination Fee shall not in any event exceed five percent (5%)\nof the Maximum Loan Amount.\n\n        SECTION 1.57. YIELD MAINTENANCE AMOUNT. \"Yield Maintenance Amount\" shall\nmean the product obtained by multiplying (a) the difference between (i) the all\nin effective yield (measured as a percentage per annum) earned by Lender under\nthis Agreement during the three (3) full calendar months immediately preceding\nthe Termination Date minus (ii) Heller Financial Inc.'s weighted average cost of\ncapital (measured as a percentage per annum) for the most recent publicly\ndisclosed quarterly financial period; times (b) the average principal amount of\noutstanding Revolving Credit Loans for the three (3) calendar months immediately\npreceding the Termination Date; times (c) the quotient of (i) the number of\nmonths (full or partial) then-remaining in the Term, divided by (ii) twelve\n(12).\n\n                                   ARTICLE II\n\n                                      LOAN\n\n        SECTION 2.1. TERMS.\n\n                (a) The maximum aggregate principal amount of credit extended by\nLender to Borrower under this Agreement (the \"Loan\") that will be outstanding at\nany time is Ten Million and No\/100 Dollars ($10,000,000.00) (the \"Maximum Loan\nAmount\").\n\n                (b) The Loan shall be in the nature of a revolving line of\ncredit, and shall include sums advanced and other credit extended by Lender to\nor for the benefit of Borrower from time to time under this Article II (each a\n\"Revolving Credit Loan\") up to the Maximum Loan Amount depending upon the\navailability in the \n\n\n\n                                       6\n   8\n\nBorrowing Base, the requests of Borrower pursuant to the terms and conditions of\nSection 2.2, and on such other basis as Lender may reasonably determine. The\noutstanding principal balance of the Loan may fluctuate from time to time, be\nreduced by repayments made by Borrower (which may be made without penalty or\npremium) and be increased by future Revolving Credit Loans, advances and other\nextensions of credit to or for the benefit of Borrower, and shall be due and\npayable in full upon the expiration of the Term. For purposes of this Agreement,\nany determination as to whether there is availability within the Borrowing Base\nfor advances or extensions of credit shall be made by Lender in its sole\ndiscretion and is final and binding upon Borrower.\n\n                (c) At Closing, Borrower shall execute and deliver to Lender a\npromissory note evidencing Borrower's unconditional obligation to repay Lender\nfor Revolving Credit Loans, advances, and other extensions of credit made under\nthe Loan, in the form of Exhibit A to this Agreement (as amended, modified,\nincreased, restated or replaced from time to time, the \"Note\"), dated the date\nof this Agreement, payable to the order of Lender in accordance with the terms\nthereof. The Note shall bear interest on the outstanding principal balance of\nthe Note from the date of the Note until repaid, with interest payable monthly\nin arrears on the first Business Day of each month, at a rate per annum (on the\nbasis of the actual number of days elapsed over a year of 360 days) equal to the\nBase Rate, provided that after the occurrence and during the continuance of an\nEvent of Default such rate shall be equal to the Default Rate. Each Revolving\nCredit Loan, advance and other extension of credit shall be deemed evidenced by\nthe Note, which is deemed incorporated into and made a part of this Agreement by\nthis reference.\n\n                (d) Subject to the terms and conditions of this Agreement,\nadvances under the Loan shall be made against a borrowing base equal to\neighty-five percent (85%) of Qualified Accounts due and owing from any\nMedicaid\/Medicare Account Debtor, Insurer or other Account Debtor (the\n\"Borrowing Base\"). Lender, in its sole credit judgment, may further adjust the\nBorrowing Base by applying percentages (known as \"liquidity factors\") to\nQualified Accounts by payor class based upon Borrower's actual recent collection\nhistory for each such payor class (i.e., Medicare, Medicaid, commercial\ninsurance, etc.) in a manner consistent with Lender's underwriting practices and\nprocedures; provided that, (i) at Closing the initial liquidity factor to be\napplied to the Borrowing Base shall be seventy percent (70%) and (ii) Lender\nagrees to perform an audit within three (3) months of the initial Closing\nhereunder, at which time such liquidity factor may be adjusted, in Lender's sole\ndiscretion, based on the results of such audit; and provided further that Lender\nshall apply a second liquidity factor to the Unbilled Accounts equal to\nseventy-five percent (75%). Such liquidity factors may be adjusted by Lender\nthroughout the Term as warranted by Lender's underwriting practices and\nprocedures and using its sole credit judgment.\n\n        SECTION 2.2. LOAN ADMINISTRATION. Borrowings under the Loan shall be as\nfollows:\n\n                (a) A request for a Revolving Credit Loan shall be made, or\nshall be deemed to be made, in the following manner: (i) Borrower may give\nLender notice of its intention to borrow, in which notice Borrower shall specify\nthe amount of the proposed borrowing and the proposed borrowing date, not later\nthan noon Eastern time on the proposed borrowing date by telephone (which\ntelephonic notice shall be promptly confirmed by Borrower in writing); provided,\nhowever, that no such request may be made at a time when there exists an Event\nof Default; and (ii) the becoming due of any amount required to be paid under\nthis Agreement, whether as interest or for any other Obligation, shall be deemed\nirrevocably to be a request for a Revolving Credit Loan on the day following the\ndue date in the amount required to pay such interest or other Obligation if such\nwas not paid by Borrower on the due date.\n\n                (b) Borrower hereby irrevocably authorizes Lender to disburse\nthe proceeds of each Revolving Credit Loan requested, or deemed to be requested,\nas follows: (i) the proceeds of each Revolving Credit Loan requested under\nsubsection 2.2(a)(i) shall be disbursed by Lender by wire transfer to such bank\naccount as may be agreed upon by Borrower and Lender from time to time or\nelsewhere if pursuant to written direction from Borrower; and (ii) the proceeds\nof each Revolving Credit Loan deemed to be requested under subsection 2.2(a)(ii)\nshall be disbursed by Lender by way of direct payment of the relevant interest\nor other Obligation.\n\n\n\n                                       7\n   9\n\n                (c) All Revolving Credit Loans, advances and other extensions of\ncredit to or for the benefit of Borrower shall constitute one general Obligation\nof Borrower, and shall be secured by Lender's Lien upon all of the Collateral.\n\n                (d) Lender shall enter all Revolving Credit Loans as debits to a\nloan account in the name of Borrower and shall also record in said loan account\nall payments made by Borrower on any Obligations and all proceeds of Collateral\nwhich are indefeasibly paid to Lender, and may record therein, in accordance\nwith customary accounting practice, other debits and credits, including interest\nand all charges and expenses properly chargeable to Borrower. All collections\ninto the Concentration Account pursuant to Section 2.3 shall be applied first to\nfees, costs and expenses due and owing under the Loan Documents, then to\ninterest due and owing under the Loan Documents, and then to principal\noutstanding with respect to Revolving Credit Loans.\n\n                (e) Lender will account to Borrower monthly with a statement of\nRevolving Credit Loans, charges and payments made pursuant to this Agreement,\nand such accounting rendered by Lender shall be deemed final, binding and\nconclusive upon Borrower, absent manifest error, unless Lender is notified by\nBorrower in writing to the contrary within thirty (30) days of the date each\naccounting is mailed to Borrower. Such notice shall be deemed an objection to\nthose items specifically objected to in the notice.\n\n        SECTION 2.3. COLLECTIONS, DISBURSEMENTS, BORROWING AVAILABILITY, AND\nLOCKBOX ACCOUNT.\n\n                (a) Borrower shall establish and maintain a lockbox (the\n\"Lockbox\") and a lockbox account (the \"Lockbox Account\") with National City\nBank, MI\/IL (the \"Lockbox Bank\"), subject to the provisions of this Agreement,\nand shall execute with the Lockbox Bank a lockbox agreement in the form attached\nas Exhibit B-1, and such other agreements related to such lockbox agreement as\nLender may reasonably require. Borrower shall ensure that all collections of\nAccounts from Medicaid\/Medicare Account Debtors only are paid directly by such\nMedicaid\/Medicare Account Debtors into such Lockbox established pursuant to this\nsubsection (a) for deposit into the Lockbox Account established pursuant to this\nsubsection (a), and that all funds deposited into such Lockbox Account are\nimmediately transferred into a depository account maintained by Lender at Bank\nOne, N.A., or such other financial institution as determined by Lender in its\nsole discretion, by written notice to Borrower and the Lockbox Bank (the\n\"Concentration Account\").\n\n                (b) Borrower shall establish and maintain a second lockbox (also\nreferred to herein as the \"Lockbox\") with the Lockbox Bank in Borrower's name,\nsubject to the provisions of this Agreement. Lender shall establish and maintain\na second lockbox account with the Lockbox Bank (also referred to herein as the\n\"Lockbox Account\"), and Borrower shall execute with the Lockbox Bank a second\nlockbox agreement in the form attached as Exhibit B-2, and such other agreements\nrelated to such lockbox agreement as Lender may reasonably require.\nNotwithstanding the provisions of Section 2.3(a), Borrower shall ensure that all\ncollections of Accounts due from Account Debtors other than Medicaid\/Medicare\nAccount Debtors are paid directly by such Account Debtors into such Lockbox\nestablished pursuant to this subsection (b) for deposit into the Lockbox Account\nestablished pursuant to this subsection (b), and that all funds deposited into\nsuch Lockbox Account are immediately transferred into the Concentration Account.\n\n                (c) Notwithstanding anything in any lockbox agreement to the\ncontrary, Borrower agrees that it shall be liable for any fees and charges in\neffect from time to time and charged by the Lockbox Bank in connection with the\nLockbox and the Lockbox Account, and that Lender shall have no liability\ntherefor. Borrower further acknowledges and agrees that, to the extent such fees\nand charges are not paid by Borrower directly but are satisfied using\ncollections in the Lockbox Account, such fees and charges shall be deemed to be\nRevolving Credit Loans made by Lender hereunder and, to the extent that the\npayment of such fees or charges by Borrower as provided herein results in any\noveradvance under this Agreement, Borrower agrees to immediately (upon notice)\nrepay to Lender the amount of such overadvance. Lender acknowledges that\nBorrower is entitled to all interest accrued on amounts in the Lockbox Account.\nBorrower agrees to indemnify and hold Lender harmless from any \n\n\n\n                                       8\n   10\n\nand all liabilities, claims, losses and demands whatsoever, including reasonable\nattorney's fees and expenses, arising from or relating to actions of Lender or\nthe Lockbox Bank pursuant to this Section 2.3 or any lockbox agreement.\n\n                (d) Lender shall apply, on a daily basis, all funds transferred\ninto the Concentration Account pursuant to this Section 2.3 to reduce the\noutstanding indebtedness under the Loan (in accordance with Section 2.2(d)), and\nall future Revolving Credit Loans, advances and other extensions of credit to be\nmade by Lender under the conditions set forth in this Article II. To the extent\nthat any collections of Accounts or proceeds of other Collateral are not sent\ndirectly to the Lockbox as required by this Section 2.3 but are received by\nBorrower, such collections shall be held in trust for the benefit of Lender and\nimmediately remitted, in the form received, to the Lockbox Bank for transfer to\nthe Concentration Account immediately upon receipt by Borrower.\n\n                (e) Borrower acknowledges and agrees that its compliance with\nthe terms of this Section 2.3 is essential, and that Lender will suffer\nimmediate and irreparable injury and have no adequate remedy at law, if\nBorrower, through its acts or omissions, causes or permits Account Debtors to\nsend payments other than to the Lockbox, or if Borrower fails to immediately\ndeposit collections of Accounts or proceeds of other Collateral in the Lockbox\nAccount as herein required. Upon Borrower's failure to comply with the terms of\nthis Section 2.3, Lender will be entitled, in addition to exercising any other\nrights and remedies available to it, to assess a non-compliance fee which shall\noperate to increase the Base Rate by two percent (2%) per annum during any\nperiod of non-compliance; provided, that such non-compliance fee shall not be\ncharged with respect to any non-compliance by Borrower hereunder that\nconstitutes an Event of Default for which Lender has exercised its right to\ncharge the Default Rate.\n\n                (f) All funds transferred from the Concentration Account for\napplication to Borrower's indebtedness to Lender shall be applied to reduce the\nLoan balance, but for purposes of calculating interest shall be subject to a\nfour (4) Business Day clearance period. If as the result of collections of\nAccounts pursuant to the terms and conditions of this Section 2.3 a credit\nbalance exists with respect to the Concentration Account, such credit balance\nshall not accrue interest in favor of Borrower, but shall be available to\nBorrower at any time or times for so long as no Event of Default, and no fact,\nevent or circumstance that, with notice or the passage of time (or both), would\nconstitute an Event of Default, exists.\n\n        SECTION 2.4. FEES.\n\n                (a) By executing this Agreement, Borrower agrees unconditionally\nto pay to Lender a commitment fee equal to one percent (1 %) of the Maximum Loan\nAmount (the \"Commitment Fee\").\n\n                (b) For so long as the Loan is available to Borrower, Borrower\nunconditionally shall pay to Lender a monthly usage fee (the \"Usage Fee\") equal\nto 0.0425% of the average amount by which the Maximum Loan Amount exceeds the\naverage amount of the outstanding principal balance of the Revolving Credit\nLoans during the preceding month. The Usage Fee shall be payable monthly in\narrears on the first Business Day of each successive calendar month.\n\n                (c) For so long as the Loan is available to Borrower, Borrower\nunconditionally shall pay to Lender a monthly loan management fee (the \"Loan\nManagement Fee\") equal to one twelfth of one percent (0.083%) of the average\namount of the outstanding principal balance of the Revolving Credit Loans during\nthe preceding month. The Loan Management Fee shall be payable monthly in arrears\non the first Business Day of each successive calendar month.\n\n                (d) Subject to the provisions of this Section 2.4(d), Borrower\nshall pay to or reimburse Lender for, as the case may be, any and all\nout-of-pocket fees incurred by Lender in connection with up to one (1) audit per\ncalendar quarter of Borrower's books and records; provided, that for purposes\nhereof, \"audit\" shall not include any reconciliation or other activities\nperformed by Lender pursuant to the Intercreditor Agreement (as defined). All\namounts to be paid or reimbursed by Borrower hereunder shall be due and payable\non the first \n\n\n\n                                       9\n   11\n\nBusiness Day of the month following the date of issuance by Lender of a request\nfor payment or reimbursement thereof to Borrower; provided, however, that on the\noccurrence and during the continuance of any Event of Default under this\nAgreement or any of the other Loan Documents, the foregoing limitation on the\nnumber of audits to be paid for or reimbursed by Borrower shall not apply, and\n(i) Borrower shall be required to pay or reimburse Lender for any and all fees\ndescribed in this Section 2.4(d) that are incurred by Lender in connection with\nany audits conducted by Lender during such period, without regard to the\nforegoing cap on such fees, and (ii) any audits conducted Lender during such\nperiod shall not be applied towards the number of audits for which Borrower is\nrequired to pay or reimburse Lender as provided herein. Notwithstanding anything\nin this Section 2.4(d) to the contrary, Lender shall not be limited in the\nnumber of any audits or other similar actions conducted or permitted to be\nconducted by it under this Agreement.\n\n                (e) Borrower shall pay to Lender, on demand, any and all\ncustomary fees, costs or expenses which Lender or any participant pays to a bank\nor other similar institution (including, without limitation, any fees paid by\nLender to any participant) arising out of or in connection with (i) the\nforwarding to Borrower or any other Person on behalf of Borrower, by Lender, of\nproceeds of Revolving Credit Loans made by Lender to Borrower pursuant to this\nAgreement, and (ii) the depositing for collection, by Lender or any participant,\nof any check or item of payment received or delivered to Lender or any\nparticipant on account of Obligations.\n\n        SECTION 2.5. PAYMENTS. Principal payable on account of Revolving Credit\nLoans shall be payable by Borrower to Lender immediately upon the earliest of\n(a) the receipt by Borrower or Lender of any payments on or proceeds from any of\nthe Collateral, to the extent of such proceeds, (b) the occurrence of an Event\nof Default if the Loan and the maturity of the payment of the Obligations are\naccelerated, or (c) the termination of this Agreement pursuant to Section 2.8 of\nthis Agreement; provided, however, that if the outstanding principal balance of\nthe Revolving Credit Loans is at any time in excess of the Borrowing Base,\nBorrower shall, immediately upon demand, repay such excess. Interest accrued on\nthe Revolving Credit Loans shall be due on the earliest of (x) the first\nBusiness Day of each month (for the immediately preceding month), computed on\nthe last calendar day of the preceding month, (y) the occurrence of an Event of\nDefault if the Loan and the maturity of the payment of the Obligations are\naccelerated, or (z) the termination of this Agreement pursuant to Section 2.8.\nExcept to the extent otherwise set forth in this Agreement, all payments of\nprincipal and of interest on the Loan, all other charges and any other\nobligations of Borrower under this Agreement, shall be made to Lender to the\nConcentration Account, in immediately available funds. All payments shall be\nmade without deduction for any set-off, recoupment, counterclaim or defense that\nBorrower now has or may have in the future.\n\n        SECTION 2.6. USE OF PROCEEDS. The proceeds of Lender's advances under\nthe Loan shall be used solely for working capital and for other costs of\nBorrower arising in the ordinary course of Borrower's business.\n\n        SECTION 2.7. INTEREST RATE LIMITATION. The parties intend to conform\nstrictly to the applicable usury laws in effect from time to time during the\nterm of the Loan. Accordingly, if any transaction contemplated by this Agreement\nwould be usurious under such laws, then notwithstanding any other provision of\nthis Agreement: (a) the aggregate of all interest that is contracted for,\ncharged, or received under this Agreement or under any other Loan Document shall\nnot exceed the maximum amount of interest allowed by applicable law (the\n\"Highest Lawful Rate\"), and any excess shall be promptly credited to Borrower by\nLender (or, to the extent that such consideration shall have been paid, such\nexcess shall be promptly refunded to Borrower by Lender); (b) neither Borrower\nnor any other Person now or hereafter liable under this Agreement shall be\nobligated to pay the amount of such interest to the extent that it is in excess\nof the Highest Lawful Rate; and (c) the effective rate of interest shall be\nreduced to the Highest Lawful Rate. All sums paid, or agreed to be paid, to\nLender for the use, forbearance, and detention of the debt of Borrower to Lender\nshall, to the extent permitted by applicable law, be allocated throughout the\nfull term of the Note until payment is made in full so that the actual rate of\ninterest does not exceed the Highest Lawful Rate in effect at any particular\ntime during the full term thereof. If at any time the rate of interest under the\nNote exceeds the Highest Lawful Rate, the rate of interest to accrue pursuant to\nthis Agreement shall be limited, notwithstanding anything to the contrary in\nthis Agreement, to the Highest Lawful Rate, but any subsequent reductions in the\nBase \n\n\n\n                                       10\n   12\n\nRate shall not reduce the interest to accrue pursuant to this Agreement below\nthe Highest Lawful Rate until the total amount of interest accrued equals the\namount of interest that would have accrued if a varying rate per annum equal to\nthe interest rate under the Note had at all times been in effect.\n\n        SECTION 2.8. TERM.\n\n                (a) Subject to Lender's right to cease making Revolving Credit\nLoans to Borrower upon or after any Event of Default, this Agreement shall be in\neffect for a period of two (2) years from the Closing Date, unless terminated as\nprovided in this Section 2.8 (the \"Term\"), and this Agreement shall be renewed\nfor one (1) year periods thereafter upon the mutual written agreement of the\nparties.\n\n                (b) Notwithstanding anything in this Agreement to the contrary,\nLender may terminate this Agreement without notice upon or after the occurrence\nof an Event of Default.\n\n                (c) Upon at least thirty (30) days prior written notice to\nLender (the \"Termination Notice Period\"), Borrower may terminate this Agreement\nprior to the expiration of the Term (as provided in Section 2.8(a)).\n\n                (d) All of the Obligations shall be immediately due and payable\nupon the termination date stated in any notice of termination of this Agreement\ndelivered pursuant to Section 2.8(c) (the \"Termination Date\"); provided that,\nnotwithstanding anything in Section 2.8(c) to the contrary, the Termination Date\nshall be effective no earlier than the first Business Day of the month following\nthe expiration of the Termination Notice Period. All undertakings, agreements,\ncovenants, warranties, and representations of Borrower contained in the Loan\nDocuments shall survive any such termination and Lender shall retain its Liens\nin the Collateral and all of its rights and remedies under the Loan Documents\nnotwithstanding such termination until Borrower has paid the Obligations to\nLender, in full, in immediately available funds. At the effective date of any\ntermination of this Agreement other than upon expiration of the Term (whether by\nvoluntary termination by Borrower or by termination by Lender following the\noccurrence of an Event of Default), Borrower shall pay to Lender (in addition to\nthe then outstanding principal, accrued interest and other Obligations owing\nunder the terms of this Agreement and any other Loan Documents) as yield\nmaintenance for the loss of bargain and not as a penalty, an amount equal to the\napplicable Termination Fee.\n\n                (e) Notwithstanding any provision of this Agreement which makes\nreference to the continuance of an Event of Default, nothing in this Agreement\nshall be construed to permit Borrower to cure an Event of Default following the\nlapse of the applicable cure period, and Borrower shall have no such right in\nany instance unless specifically granted in writing by Lender.\n\n        SECTION 2.9. INTENTIONALLY LEFT BLANK.\n\n\n                                   ARTICLE III\n\n                                   COLLATERAL\n\n        SECTION 3.1. GENERALLY. As security for the payment of all liabilities\nof Borrower to Lender, including without limitation: (x) indebtedness evidenced\nunder the Note, repayment of Revolving Credit Loans, advances and other\nextensions of credit, all fees and charges owing by Borrower (including without\nlimitation the Termination Fee) and all other liabilities and obligations of\nevery kind or nature whatsoever of Borrower to Lender under the Loan Documents,\nwhether now existing or hereafter incurred, joint or several, matured or\nunmatured, direct or indirect, primary or secondary, related or unrelated, due\nor to become due, including but not limited to any extensions, modifications,\nsubstitutions, increases and renewals thereof, (y) the payment of all amounts\nadvanced by Lender to preserve, protect, defend, and enforce its rights under\nthis Agreement and in the following property in accordance with the terms of\nthis Agreement, and (z) the payment of all expenses incurred by Lender in\nconnection \n\n\n\n                                       11\n   13\n\ntherewith ((x), (y) and (z) collectively, the \"Obligations\"), and as further\nsecurity for the payment and performance by Borrower, Guarantor and their\nrespective Affiliates of their respective obligations under the Affiliated Loan\nDocuments to the extent such payment and performance are expressly secured by,\namong other things, the Collateral pledged hereunder, Borrower hereby assigns\nand grants to Lender a continuing first priority Lien (subject to any Permitted\nLien described in Section 1.45 that may, by operation of law, have priority over\nLender's first priority Lien hereunder) on and security interest in, upon, and\nto the following property whether now owned or hereafter acquired or arising\n(the \"Collateral\"; unless otherwise defined in this Agreement, all terms used in\nthe following subparagraphs shall have the meanings given them in the Uniform\nCommercial Code as now or hereafter in effect):\n\n                (a) all of Borrower's Accounts, and all of Borrower's money,\ncontract rights, chattel paper, documents, deposit accounts, securities,\ninvestment property and instruments with respect thereto, and all of Borrower's\nrights, remedies, security, Liens and supporting obligations, in, to and in\nrespect of the foregoing, including, without limitation, rights of stoppage in\ntransit, replevin, repossession and reclamation and other rights and remedies of\nan unpaid vendor, lienor or secured party, guaranties or other contracts of\nsuretyship with respect to the Accounts, deposits or other security for the\nobligation of any Account Debtor, and credit and other insurance;\n\n                (b) to the extent not listed above, all of Borrower's money,\nsecurities, investment property, deposit accounts, instruments and other\nproperty and the proceeds thereof that are now or hereafter held or received by,\nin transit to, in possession of, or under the control of Lender or a bailee or\nAffiliate of Lender, whether for safekeeping, pledge, custody, transmission,\ncollection or otherwise;\n\n                (c) to the extent not listed above, all of Borrower's now owned\nor hereafter acquired deposit accounts into which Accounts or the proceeds of\nAccounts are deposited, including the Lockbox Account;\n\n                (d) all of Borrower's right, title and interest in, to and in\nrespect of all goods relating to, or which by sale have resulted in, Accounts,\nincluding, without limitation, all goods described in invoices or other\ndocuments or instruments with respect to, or otherwise representing or\nevidencing, any Account, and all returned, reclaimed or repossessed goods;\n\n                (e) all of Borrower's general intangibles (including, but not\nlimited to, payment intangibles) and other property of every kind and\ndescription with respect to, evidencing or relating to its Accounts, including,\nbut not limited to, all existing and future customer lists, choses in action,\nclaims, books, records, ledger cards, contracts, licenses, formulae, tax and\nother types of refunds, returned and unearned insurance premiums, rights and\nclaims under insurance policies, and computer programs, information, software,\nrecords, and data, as the same relates to the Accounts;\n\n                (f) all of Borrower's other money, securities, investment\nproperty, deposit accounts, instruments, documents, supporting obligations and\nchattel paper;\n\n                (g) all of Borrower's letter-of-credit rights and commercial\ntort claims;\n\n                (h) all of Borrower's other general intangibles (including,\nwithout limitation, any proceeds from insurance policies after payment of prior\ninterests), patents, unpatented inventions, trade secrets, copyrights, contract\nrights, goodwill, literary rights, rights to performance, rights under licenses,\nchoses-in-action, claims, information contained in computer media (such as data\nbases, source and object codes, and information therein), things in action,\ntrademarks and trademarks applied for (together with the goodwill associated\ntherewith) and derivatives thereof, trade names, including the right to make,\nuse, and vend goods utilizing any of the foregoing, and permits, licenses,\ncertifications, authorizations and approvals, and the rights of Borrower\nthereunder, issued by any governmental, regulatory, or private authority,\nagency, or entity whether now owned or hereafter acquired, together with all\ncash and non-cash proceeds and products thereof;\n\n\n\n                                       12\n   14\n\n                (i) all of Borrower's now owned or hereafter acquired inventory\nof every description which is held by Borrower for sale or lease or is furnished\nby Borrower under any contract of service or is held by Borrower as raw\nmaterials, work in process or materials used or consumed in a business, wherever\nlocated, and as the same may now and hereafter from time to time be constituted,\ntogether with all cash and non-cash proceeds and products thereof;\n\n                (j) all of Borrower's now owned or hereafter acquired machinery,\nequipment, computer equipment, tools, tooling, furniture, fixtures, goods,\nsupplies, materials, work in process, whether now owned or hereafter acquired,\ntogether with all additions, parts, fittings, accessories, special tools,\nattachments, and accessions now and hereafter affixed thereto and\/or used in\nconnection therewith, all replacements thereof and substitutions therefor, and\nall cash and non-cash proceeds and products thereof; and\n\n                (k) to the extent not listed above as original collateral, the\nproceeds (including, without limitation, insurance proceeds) and products of all\nof the foregoing.\n\n        SECTION 3.2. LIEN DOCUMENTS. At Closing and thereafter as Lender deems\nnecessary in its sole discretion, Borrower shall execute and deliver to Lender,\nor have executed and delivered (all in form and substance satisfactory to Lender\nin its sole discretion) any agreements, documents, instruments, and writings\ndeemed necessary by Lender or as Lender may otherwise request from time to time\nin its sole discretion to evidence, perfect, or protect Lender's Lien and\nsecurity interest in the Collateral required under this Agreement. Borrower\nhereby authorizes Lender to file one or more financing statements and amendments\nthereto describing the Collateral and describing any agricultural liens or other\nstatutory liens held by Lender.\n\n        SECTION 3.3. COLLATERAL ADMINISTRATION.\n\n                (a) All Collateral (except deposit accounts) shall at all times\nbe kept by Borrower at its principal office(s) as set forth on Schedule 4.15 and\nshall not be moved from such locations without (i) providing prior written\nnotice to Lender in accordance with Section 6.15, and (ii) obtaining the prior\nwritten consent of Lender, which consent shall not be unreasonably withheld.\n\n                (b) Borrower shall keep accurate and complete records of its\nAccounts and all payments and collections thereon and shall submit to Lender on\nsuch periodic basis as Lender shall request a sales and collections report for\nthe preceding period, in form satisfactory to Lender. In addition, if Accounts\nin an aggregate face amount in excess of $50,000.00 become ineligible because\nthey fall within one of the specified categories of ineligibility set forth in\nthe definition of Qualified Accounts or otherwise, Borrower shall notify Lender\nof such occurrence within five (5) Business Days following such occurrence and\nthe Borrowing Base shall thereupon be adjusted to reflect such occurrence. If\nrequested by Lender, Borrower shall execute and deliver to Lender formal written\nassignments of all of its Accounts weekly or daily, which shall include all\nAccounts that have been created since the date of the last assignment, together\nwith copies of claims, invoices or other information related thereto.\n\n                (c) Whether or not an Event of Default has occurred, any of\nLender's officers, employees or agents shall have the right, at any time or\ntimes hereafter, in the name of Lender or any designee of Lender or Borrower, to\nverify the validity, amount or any other matter relating to any Accounts by\nmail, telephone, telegraph or otherwise. Borrower shall cooperate fully with\nLender in an effort to facilitate and promptly conclude such verification\nprocess.\n\n                (d) To expedite collection, Borrower shall endeavor in the first\ninstance to make collection of its Accounts for Lender. Lender shall have the\nright at any time to notify Account Debtors (subject to applicable law regarding\nMedicaid\/Medicare Account Debtors) that Accounts have been assigned to Lender.\n\n\n\n                                       13\n   15\n\n                (e) As between Borrower and Lender, Borrower shall bear the risk\nof loss on all Collateral, regardless of whether such Collateral is in the\npossession or control of Borrower, Lender, a bailee or any other Person,\nprovided that Lender agrees to treat any Collateral in its possession in a\ncommercially reasonable manner.\n\n        SECTION 3.4. OTHER ACTIONS. In addition to the foregoing, Borrower:\n\n                (a) shall provide prompt written notice to each private\nindemnity, managed care or other Insurer who either is currently an Account\nDebtor or becomes an Account Debtor at any time following the date of this\nAgreement that Lender has been granted a first priority Lien and security\ninterest in, upon and to all Accounts applicable to such Insurer and directs\neach Account Debtor to make payments into the Lockbox, and hereby authorizes\nLender, upon Borrower's failure to send such notices within ten (10) days after\nthe date of this Agreement (or ten (10) days after the Insurer becomes an\nAccount Debtor), to send any and all similar notices to such Insurers;\n\n                (b) shall do and hereby authorizes Lender to do anything further\nthat may be lawfully required by Lender to secure Lender and effectuate the\nintentions and objects of this Agreement, including but not limited to the\nexecution and delivery of lockbox agreements, continuation statements,\namendments to financing statements, and any other documents required under this\nAgreement;\n\n                (c) at Lender's request, shall immediately deliver to Lender all\nitems for which Lender must receive possession to obtain a perfected security\ninterest;\n\n                (d) shall, on Lender's demand, deliver to Lender all notes,\ncertificates, and documents of title, chattel paper, warehouse receipts,\ninstruments, and any other similar instruments constituting Collateral;\n\n                (e) shall, where Collateral is in the possession of a third\nparty, join with Lender in notifying the third party of Lender's security\ninterests and obtaining an acknowledgement from the third party that it is\nholding the Collateral for the benefit of Lender;\n\n                (f) shall cooperate with Lender in obtaining control with\nrespect to Collateral consisting of deposit accounts, investment property,\nletter of credit rights, electronic chattel paper and any other portion of the\nCollateral for which control is required in order to perfect a security\ninterest; and\n\n                (g) shall not create any chattel paper without placing a legend\non the chattel paper acceptable to Lender indicating that Lender has a security\ninterest in the chattel paper.\n\n        SECTION 3.5. SEARCHES. Before Closing, and thereafter (as and when\ndetermined by Lender in its sole discretion), Lender will perform the searches\ndescribed in clauses (a), (b) and (c) below against Borrower (the results of\nwhich are to be consistent with Borrower's representations and warranties under\nthis Agreement), all at Borrower's expense:\n\n                (a) Uniform Commercial Code searches with the Secretary of State\nand local filing offices of each jurisdiction where Borrower maintains its\nexecutive offices, a place of business, or assets and the jurisdiction in which\nthe Borrower is organized;\n\n                (b) judgment, federal tax lien and corporate and partnership tax\nlien searches, in each jurisdiction searched under clause (a) above; and\n\n                (c) searches of applicable corporate, limited liability company,\npartnership and related records to confirm the continued existence, organization\nand good standing of Borrower and the exact legal name under which Borrower is\norganized.\n\n\n\n                                       14\n   16\n\n        SECTION 3.6. POWER OF ATTORNEY. Each of the officers of Lender is hereby\nirrevocably made, constituted and appointed the true and lawful attorney for\nBorrower (without requiring any of them to act as such) with full power of\nsubstitution to do the following: (a) endorse the name of Borrower upon any and\nall checks, drafts, money orders, and other instruments for the payment of money\nthat are payable to Borrower and constitute collections on Borrower's Accounts;\n(b) execute in the name of Borrower any financing statements, schedules,\nassignments, instruments, documents, and statements that Borrower is obligated\nto give Lender under this Agreement; (c) take any action Borrower is required to\ntake under Section 3.4 above; and (d) do such other and further acts and deeds\nin the name of Borrower that Lender may deem necessary or desirable to enforce\nany Account or other Collateral or perfect Lender's security interest or Lien in\nany Collateral. In addition, if Borrower breaches its obligation to direct\npayments of the proceeds of the Collateral to the Lockbox Account, Lender, as\nthe irrevocably made, constituted and appointed true and lawful attorney for\nBorrower pursuant to this paragraph, may, by the signature or other act of any\nof Lender's officers (without requiring any of them to do so), direct any\nfederal, state or private payor or fiscal intermediary to pay proceeds of the\nCollateral to Borrower by directing payment to the Lockbox Account.\n\n                                   ARTICLE IV\n\n                         REPRESENTATIONS AND WARRANTIES\n\n        Borrower represents and warrants to Lender, and shall be deemed to\nrepresent and warrant on each day on which any Obligations shall be outstanding\nunder this Agreement, that:\n\n        SECTION 4.1. SUBSIDIARIES. Except as set forth in Schedule 4.1, Borrower\nhas no subsidiaries.\n\n        SECTION 4.2. ORGANIZATION AND GOOD STANDING. Borrower is a corporation,\nlimited liability company or limited liability partnership, as the case may be,\nduly organized, validly existing, and in good standing under the laws of its\nstate of formation, is in good standing as a foreign corporation, limited\nliability company or limited liability partnership, as the case may be, in each\njurisdiction in which the character of the properties owned or leased by it\ntherein or the nature of its business makes such qualification necessary, has\nthe corporate, limited liability company or limited liability partnership power\nand authority, as the case may be, to own its assets and transact the business\nin which it is engaged, and has obtained all certificates, licenses and\nqualifications required under all laws, regulations, ordinances, or orders of\npublic authorities necessary for the ownership and operation of all of its\nproperties and transaction of all of its business, all of which are in the name\nof Borrower. Borrower's state of organization is listed on Schedule 4.2 and its\nexact legal name is as set forth in the first paragraph of this Agreement.\n\n        SECTION 4.3. AUTHORITY. Borrower has full corporate, limited liability\ncompany or limited liability partnership power and authority, as the case may\nbe, to enter into, execute, and deliver this Agreement and to perform its\nobligations under this Agreement, to borrow the Loan, to execute and deliver the\nNote, and to incur and perform the obligations provided for in the Loan\nDocuments, all of which have been duly authorized by all necessary corporate,\nlimited liability company or limited liability partnership action, as the case\nmay be. No consent or approval of shareholders, members or partners of, or\nlenders to, Borrower and no consent, approval, filing or registration with any\nGovernmental Authority is required as a condition to the validity of the Loan\nDocuments or the performance by Borrower of its obligations under the Loan\nDocuments.\n\n        SECTION 4.4. BINDING AGREEMENT. This Agreement and all other Loan\nDocuments constitute, and the Note, when issued and delivered pursuant to this\nAgreement for value received, will constitute, the valid and legally binding\nobligations of Borrower, enforceable against Borrower in accordance with their\nrespective terms.\n\n\n\n                                       15\n   17\n\n        SECTION 4.5. LITIGATION. Except as disclosed in Schedule 4.5, there are\nno actions, suits, proceedings or investigations pending or, to Borrower's\nknowledge, threatened against Borrower before any court or arbitrator or before\nor by any Governmental Authority which, in any one case or in the aggregate, if\ndetermined adversely to the interests of Borrower, could have a material adverse\neffect on the business, properties, condition (financial or otherwise) or\noperations, current or prospective, of Borrower, or upon its ability to perform\nits obligations under the Loan Documents. Borrower is not in default with\nrespect to any order of any court, arbitrator, or Governmental Authority\napplicable to Borrower or its properties.\n\n        SECTION 4.6. NO CONFLICTS. The execution and delivery by Borrower of\nthis Agreement and the other Loan Documents do not, and the performance of its\nobligations under the Loan Documents will not, violate, conflict with,\nconstitute a default under, or result in the creation of a Lien or encumbrance\nupon the property of Borrower (other than for the benefit of Lender) under: (a)\nany provision of Borrower's articles of incorporation or bylaws, certificate of\nformation or operating agreement, or certificate of limited liability\npartnership or agreement of limited liability partnership, as the case may be,\n(b) any provision of any law, rule, or regulation applicable to Borrower, (c)\nany indenture or other agreement or instrument to which Borrower is a party or\nby which Borrower or its property is bound, or (d) any judgment, order or decree\nof any court, arbitration tribunal, or Governmental Authority having\njurisdiction over Borrower which is applicable to Borrower.\n\n        SECTION 4.7. FINANCIAL CONDITION. The financial statements of Borrower\nwhich have been delivered to Lender fairly present the financial condition of\nBorrower and the results of its operations and changes in financial condition as\nof the dates and for the periods referred to, and have been prepared in\naccordance with GAAP. There are no material unrealized or anticipated\nliabilities, direct or indirect, fixed or contingent, of Borrower as of the\ndates of such financial statements which are not reflected in such financial\nstatements or in the notes to such financial statements. There has been no\nadverse change in the business, properties, condition (financial or otherwise)\nor operations (current or prospective) of Borrower since the date of the last\nfinancial statement delivered to Lender. The federal tax identification number\nand fiscal year of Borrower is as described on Schedule 4.7.\n\n        SECTION 4.8. NO DEFAULT. Borrower is not in default under or with\nrespect to any obligation in any respect which could be materially adverse to\nits business, operations, property or financial condition, or which could\nmaterially adversely affect the ability of Borrower to perform its obligations\nunder the Loan Documents. No Event of Default or event that, with the giving of\nnotice or lapse of time, or both, could become an Event of Default, has occurred\nand is continuing.\n\n        SECTION 4.9. TITLE TO PROPERTIES. Borrower has good, marketable and\nindefeasible title to, rights in and the power to transfer its properties and\nassets, including the Collateral and the properties and assets reflected in the\nfinancial statements described in Section 4.7, subject to no Lien, mortgage,\npledge, encumbrance or charge of any kind, other than Permitted Liens. Borrower\nhas not agreed or consented to cause any of its properties or assets whether\nowned now or hereafter acquired to be subject in the future (upon the happening\nof a contingency or otherwise) to any Lien, mortgage, pledge, encumbrance or\ncharge of any kind other than Permitted Liens. All of the Collateral, and all\nother property and assets of Borrower that are necessary to the conduct of\nBorrower's business, is owned by Borrower or the rights to same are held by\nBorrower in its name, and none of the Collateral, or any such property or assets\nare owned or the rights thereto held in the name of any other entity.\n\n        SECTION 4.10. TAXES. Borrower has filed, or has obtained extensions for\nthe filing of, all federal, state and other tax returns which are required to be\nfiled, and has paid all taxes shown as due on those returns and all assessments,\nfees and other amounts due as of the date of this Agreement. All tax liabilities\nof Borrower are adequately provided for on Borrower's books. No tax liability\nhas been asserted by the Internal Revenue Service or other taxing authority\nagainst Borrower for taxes in excess of those already paid, except for such\nliabilities as are being contested by Borrower in good faith by appropriate\nproceedings and in respect of which adequate reserves have been made.\n\n\n\n                                       16\n   18\n\n        SECTION 4.11. SECURITIES AND BANKING LAWS AND REGULATIONS.\n\n                (a) The use of the proceeds of the Loan and Borrower's issuance\nof the Note will not directly or indirectly violate or result in a violation of\nthe Securities Act of 1933 or the Securities Exchange Act of 1934, as amended,\nor any regulations issued pursuant thereto, including without limitation\nRegulations U, T or X of the Board of Governors of the Federal Reserve System.\nBorrower is not engaged in the business of extending credit for the purpose of\nthe purchasing or carrying \"margin stock\" within the meaning of those\nregulations. No part of the proceeds of the Loan under this Agreement will be\nused to purchase or carry any margin stock or to extend credit to others for\nsuch purpose.\n\n                (b) Borrower is not an investment company within the meaning of\nthe Investment Company Act of 1940, as amended, nor is it, directly or\nindirectly, controlled by or acting on behalf of any Person which is an\ninvestment company within the meaning of that Act.\n\n        SECTION 4.12. ERISA. No employee benefit plan (a \"Plan\") subject to the\nEmployee Retirement Income Security Act of 1974 (\"ERISA\") and regulations issued\npursuant to ERISA that is maintained by Borrower or under which Borrower could\nhave any material liability under ERISA (i) has failed to meet minimum funding\nstandards established in Section 302 of ERISA, (ii) has failed to substantially\ncomply with all applicable requirements of ERISA and of the Internal Revenue\nCode, including all applicable rulings and regulations thereunder, or (iii) has\nengaged in or been involved in a prohibited transaction (as defined in ERISA)\nunder ERISA or under the Internal Revenue Code. Neither Borrower nor any member\nof a Controlled Group that includes Borrower has assumed, or received notice of\na claim asserted against Borrower or another member of the Controlled Group for,\nwithdrawal liability (as defined in the Multi-Employer Pension Plan Amendments\nAct of 1980, as amended) with respect to any multi-employer pension plan.\nBorrower has timely made when due all contributions with respect to any\nmulti-employer pension plan in which it participates and no event has occurred\ntriggering a material claim against Borrower for withdrawal liability with\nrespect to any multi-employer pension plan in which Borrower participates.\n\n        SECTION 4.13. COMPLIANCE WITH LAWS. Except as described in Schedule\n4.13, Borrower is not in violation of any statute, rule or regulation of any\nGovernmental Authority (including, without limitation, any statute, rule or\nregulation relating to employment practices or to environmental, occupational\nand health standards and controls). Borrower has obtained all licenses, permits,\nfranchises, and other governmental authorizations necessary for the ownership of\nits properties and the conduct of its business. Borrower is current with all\nreports and documents required to be filed with any state or federal securities\ncommission or similar Governmental Authority and is in full compliance with all\napplicable rules and regulations of such commissions.\n\n        SECTION 4.14. ENVIRONMENTAL MATTERS. Other than in the ordinary course\nof business and in compliance with all applicable laws, rules and regulations\ngoverning same, no use, exposure, release, generation, manufacture, storage,\ntreatment, transportation or disposal of Hazardous Material has occurred or is\noccurring on or from any real property on which the Collateral is located or\nwhich is owned, leased or otherwise occupied by Borrower (the \"Premises\"), or\noff the Premises as a result of any action of Borrower, except as described in\nSchedule 4.14. All Hazardous Material used, treated, stored, transported to or\nfrom, generated or handled on the Premises, or off the Premises by Borrower, has\nbeen disposed of on or off the Premises by or on behalf of Borrower in a lawful\nmanner. There are no underground storage tanks present on or under the Premises\nowned or, to Borrower's knowledge after due inquiry, leased by Borrower. No\nother environmental, public health or safety hazards exist with respect to the\nPremises.\n\n        SECTION 4.15. PLACES OF BUSINESS. As of the Closing Date, the only\nplaces of business of Borrower, and the places where it keeps and intends to\nkeep the Collateral and records concerning the Collateral, are at the addresses\nset forth in Schedule 4.15. Schedule 4.15 also lists the owner of record of each\nsuch property. Borrower's Chief Executive Office is located in the state and at\nthe address shown in Schedule 4.15.\n\n\n\n                                       17\n   19\n\n        SECTION 4.16. INTELLECTUAL PROPERTY. Borrower exclusively owns or\npossesses all the patents, patent applications, trademarks, trademark\napplications, service marks, trade names, copyrights, franchises, licenses, and\nrights with respect to the foregoing necessary for the current and planned\nfuture conduct of its business, without any conflict with the rights of others.\nA list of all such intellectual property (indicating the nature of Borrower's\ninterest), as well as all outstanding franchises and licenses given by or held\nby Borrower, is attached as Schedule 4.16. Borrower is not in default of any\nobligation or undertaking with respect to such intellectual property or rights.\nExcept as otherwise disclosed on Schedule 4.16, Borrower is not infringing on\nany patents, patent applications, trademarks, trademark applications, service\nmarks, trade names, copyrights, franchises, licenses, any rights with respect to\nthe foregoing, or any other intellectual property rights of others and the\nBorrower is not aware of any infringement by others of any such rights owned by\nBorrower.\n\n        SECTION 4.17. CAPITALIZATION. The authorized equity securities (whether\ncapital stock, partnership or membership interests or otherwise) of each entity\ncomprising Borrower are as set forth in Schedule 4.17. All issued and\noutstanding equity securities of the Borrower are duly authorized and validly\nissued, fully paid, nonassessable, free and clear of all Liens or pledges other\nthan those in favor of Lender or for the benefit of Lender, and such equity\nsecurities were issued in compliance with all applicable state, federal and\nforeign laws concerning the issuance of securities. The identity of all holders\nof Borrower's outstanding equity securities and the percentage of such holder's\nfully diluted ownership of such equity securities are set forth on Schedule\n4.17. No shares of the equity securities of Borrower, other than those described\nabove, are issued and outstanding. Except as provided in Schedule 4.17, there\nare no preemptive or other outstanding rights, options, warrants, conversion\nrights or similar agreements or understandings for the purchase or acquisition\nfrom Borrower of any equity securities of Borrower.\n\n        SECTION 4.18. MATERIAL FACTS. Neither this Agreement nor any other Loan\nDocument nor any other agreement, document, certificate, or statement furnished\nto Lender by or on behalf of Borrower in connection with the transactions\ncontemplated by this Agreement contains any untrue statement of material fact or\nomits to state a material fact necessary to make the statements contained in\nthis Agreement or other Loan Document not misleading. There is no fact known to\nBorrower that adversely affects or in the future may materially adversely affect\nthe business, operations, affairs or financial condition of Borrower, or any of\nits properties or assets.\n\n        SECTION 4.19. INVESTMENTS, GUARANTEES, AND CERTAIN CONTRACTS. Borrower\ndoes not own or hold any equity or long-term debt investments in, have any\noutstanding advances to, have any outstanding guarantees for the obligations of,\nor have any outstanding borrowings from, any Person, except as described on\nSchedule 4.19. Borrower is not a party to any contract or agreement, or subject\nto any corporate restriction, which adversely affects its business.\n\n        SECTION 4.20. BUSINESS INTERRUPTIONS. Within five years before the date\nof this Agreement, neither the business, property or assets, or operations of\nBorrower has been adversely affected in any way by any casualty, strike,\nlockout, combination of workers, or order of the United States of America or\nother Governmental Authority, directed against Borrower. There are no pending\nor, to Borrower's knowledge, threatened labor disputes, strikes, lockouts, or\nsimilar occurrences or grievances against Borrower or its business.\n\n        SECTION 4.21. NAMES. Within five years before the date of this\nAgreement, Borrower has not conducted business under or used any other name\n(whether corporate, partnership or assumed) other than as shown on Schedule\n4.21. Borrower is the sole owner of all names listed on that Schedule and any\nand all business done and invoices issued in such names are Borrower's sales,\nbusiness, and invoices. Each trade name of Borrower represents a division or\ntrading style of Borrower and not a separate Person or independent Affiliate.\n\n        SECTION 4.22 JOINT VENTURES. Borrower is not engaged in any joint\nventure or partnership with any other Person, except as set forth on Schedule\n4.22.\n\n\n\n                                       18\n   20\n\n        SECTION 4.23 ACCOUNTS. Lender may rely, in determining which Accounts\nare Qualified Accounts, on all statements and representations made by Borrower\nwith respect to any Account or Accounts. Unless otherwise indicated in writing\nto Lender, with respect to each Qualified Account, Borrower represents that:\n\n                (a) the Account is genuine and in all respects what it purports\nto be, and is not evidenced by a judgment;\n\n                (b) the Account arises out of a completed, bona fide sale and\ndelivery of goods or rendition of services by Borrower in the ordinary course of\nits business and in accordance with the terms and conditions of all purchase\norders, contracts, certification, participation, certificate of need, or other\ndocuments relating thereto and forming a part of the contract between Borrower\nand the Account Debtor;\n\n                (c) the Account is for a liquidated amount maturing as stated in\na duplicate claim or invoice covering such sale of goods or rendition of\nservices, a copy of which has been furnished or is available to Lender;\n\n                (d) the Account, and Lender's security interest in such Account,\nis not, and will not (by voluntary act or omission by Borrower), be in the\nfuture, subject to any offset, Lien, deduction, defense, dispute, counterclaim\nor any other adverse condition, and each such Account is absolutely owing to\nBorrower and is not contingent in any respect or for any reason;\n\n                (e) there are no facts, events or occurrences which in any way\nimpair the validity or enforceability of any Accounts or tend to reduce the\namount payable thereunder from the face amount of the claim or invoice and\nstatements delivered to Lender with respect thereto;\n\n                (f) to the best of Borrower's knowledge, (i) the Account Debtor\nunder the Account had the capacity to contract at the time any contract or other\ndocument giving rise to the Account was executed and (ii) such Account Debtor is\nsolvent;\n\n                (g) to the best of Borrower's knowledge, there are no\nproceedings or actions which are threatened or pending against any Account\nDebtor under the Account which might result in any material adverse change in\nsuch Account Debtor's financial condition or the collectibility of such Account;\n\n                (h) the Account has been billed and forwarded to the Account\nDebtor for payment in accordance with applicable laws and compliance and\nconformance with any and requisite procedures, requirements and regulations\ngoverning payment by such Account Debtor with respect to such Account, and such\nAccount if due from a Medicaid\/Medicare Account Debtor is properly payable\ndirectly to Borrower; and\n\n                (i) except with respect to obtaining Medicaid and Medicare\nprovider numbers, which Borrower shall in any event obtain within one hundred\ntwenty (120) days from the date of the initial Closing hereunder, Borrower has\nobtained and currently has all certificates of need, Medicaid and Medicare\nprovider numbers, licenses, permits and authorizations that are necessary in the\ngeneration of such Accounts.\n\n        SECTION 4.24. SOLVENCY. Both before and after giving effect to the\ntransactions contemplated by the terms and provisions of this Agreement,\nBorrower (taken as a whole) (a) owns property whose fair saleable value is\ngreater than the amount required to pay all of Borrower's Indebtedness\n(including contingent debts), (b) was and is able to pay all of its Indebtedness\nas such Indebtedness matures, and (c) had and has capital sufficient to carry on\nits business and transactions and all business and transactions in which it\nabout to engage. For purposes of this Agreement, the term \"Indebtedness\" means,\nwithout duplication (x) all items which in accordance with GAAP would be\nincluded in determining total liabilities as shown on the liability side of a\nbalance sheet of such Borrower as of the date on which Indebtedness is to be\ndetermined, (y) all obligations of any other person or entity which such\nBorrower has guaranteed, and (z) the Obligations.\n\n\n\n                                       19\n   21\n\n        SECTION 4.25. RECOUPMENTS. On each Borrowing Base certificate given to\nLender in connection with a request for a Revolving Credit Loan, Borrower has\ndisclosed to Lender the amount of any Medicare or Medicaid recoupments or\nrecoupments of any third-party payor being sought, requested or claimed, or, to\nBorrower's knowledge, threatened against the Borrower, or any of its Affiliates.\n\n        SECTION 4.26. REPORTS. Borrower has timely filed or caused to be timely\nfiled, all cost reports and other reports of every kind whatsoever required by\nlaw or by written or oral contracts or otherwise to have been filed or made by\nBorrower. There are no claims, actions or appeals pending (and Borrower has not\nfiled any claims or reports which should result in any such claims, actions or\nappeals) before any commission, board or agency including without limitation any\nintermediary or carrier, the Provider Reimbursement Review Board or the\nAdministrator of the Health Care Financing Administration, with respect to any\nstate or federal Medicare or Medicaid cost reports or claims filed by Borrower,\nor any disallowance by any commission, board or agency in connection with any\naudit of such cost reports. No validation review or program integrity review\nrelated to Borrower, or the consummation of the transactions contemplated\nherein, or related to the Collateral, have been conducted by any commission,\nboard or agency in connection with the Medicare or Medicaid programs, and to the\nknowledge of Borrower, no such reviews are scheduled, pending or threatened\nagainst or affecting any of the providers, or the Collateral, or the\nconsummation of the transactions contemplated hereby.\n\n        SECTION 4.27. COMPLIANCE WITH HEALTH CARE LAWS. Without limiting the\ngenerality of Section 4.13 or any other representation or warranty made herein,\nBorrower is in compliance with all applicable statutes, laws, ordinances, rules\nand regulations of any governmental authority with respect to regulatory matters\nprimarily relating to patient healthcare (including without limitation Section\n1128B(b) of the Social Security Act, as amended, 42 U.S.C. Section 1320a-7(b)\n(Criminal Penalties Involving Medicare or State Health Care Programs), commonly\nreferred to as the \"Federal Anti-Kickback Statute,\" and the Social Security Act,\nas amended, Section 1877, 42 U.S.C Section 1395nn (Prohibition Against Certain\nReferrals), commonly referred to as \"Stark Statute\" (collectively, \"Healthcare\nLaws\")). Borrower has maintained in all material respects all records required\nto be maintained by the Joint Commission on Accreditation of Healthcare\nOrganizations, the Food and Drug Administration, Drug Enforcement Agency and\nState Boards of Pharmacy and the federal and state Medicare and Medicaid\nprograms as required by the Healthcare Laws and, to the knowledge of Borrower,\nthere are no presently existing circumstances which would result or likely would\nresult in material violations of the Healthcare Laws. Borrower and its\nAffiliates and the owners of the facilities and other businesses managed by the\nBorrower or its Affiliates have such permits, licenses, franchises, certificates\nand other approvals or authorizations of governmental or regulatory authorities\nas are necessary under applicable law to own their respective properties and to\nconduct their respective business (including without limitation such permits as\nare required under such federal, state and other health care laws, and under\nsuch HMO or similar licensure laws and such insurance laws and regulations, as\nare applicable thereto), and with respect to those facilities and other\nbusinesses that participate in Medicare and\/or Medicaid, to receive\nreimbursement under Medicare and Medicaid. To Borrower's knowledge, there\ncurrently exist no restrictions, deficiencies, required plans of correction\nactions or other such remedial measures with respect to federal and state\nMedicare and Medicaid certifications or licensure.\n\n        SECTION 4.28. INTENTIONALLY LEFT BLANK.\n\n        SECTION 4.29. PARTICIPATION AGREEMENTS. Schedule 4.29 hereto sets forth\nan accurate, complete and current list of all participation agreements of\nBorrower with health maintenance organizations, insurance programs, third party\npayors and preferred provider organizations.\n\n        SECTION 4.30. HIPAA COMPLIANCE. To the extent that and for so long as\nBorrower is a \"covered entity\" within the meaning of HIPAA, Borrower (i) has\nundertaken or will promptly undertake all necessary surveys, audits,\ninventories, reviews, analyses and\/or assessments (including any necessary risk\nassessments) of all areas of its business and operations required by HIPAA\nand\/or that could be adversely affected by the failure of \n\n\n\n                                       20\n   22\n\nBorrower to be HIPAA Compliant (as defined below); (ii) has developed or will\npromptly develop a detailed plan and time line for becoming HIPAA Compliant (a\n\"HIPAA Compliance Plan\"); and (iii) has implemented or will implement those\nprovisions of such HIPAA Compliance Plan in all material respects necessary to\nensure that Borrower is or becomes HIPAA Compliant. For purposes hereof, \"HIPAA\nCompliant\" shall mean that Borrower (x) is or will be in compliance with each of\nthe applicable requirements of the so-called \"Administrative Simplification\"\nprovisions of HIPAA on and as of each date that any part thereof, or any final\nrule or regulation thereunder, becomes effective in accordance with its or their\nterms, as the case may be (each such date, a \"HIPAA Compliance Date\") and (y) is\nnot and could not reasonably be expected to become, as of any date following any\nsuch HIPAA Compliance Date, the subject of any civil or criminal penalty,\nprocess, claim, action or proceeding, or any administrative or other regulatory\nreview, survey, process or proceeding (other than routine surveys or reviews\nconducted by any government health plan or other accreditation entity) that\ncould result in any of the foregoing or that could reasonably be expected to\nadversely affect Borrower's business, operations, assets, properties or\ncondition (financial or otherwise), in connection with any actual or potential\nviolation by Borrower of the then effective provisions of HIPAA.\n\n                                    ARTICLE V\n\n                        CLOSING AND CONDITIONS OF LENDING\n\n        SECTION 5.1. CONDITIONS PRECEDENT TO AGREEMENT. The obligation of Lender\nto enter into and perform this Agreement and to make Revolving Credit Loans is\nsubject to the following conditions precedent:\n\n                (a) Lender shall have received two (2) originals of this\nAgreement, the Certificate of Validity, any Guaranty and all other Loan\nDocuments required to be executed and delivered at or before Closing (other than\nthe Note, as to which Lender shall receive only one (1) original), executed by\nBorrower and any other required Persons, as applicable;\n\n                (b) Lender shall have received all searches required by Section\n3.5;\n\n                (c) Borrower and any Guarantor shall have complied and shall\nthen be in compliance with all the terms, covenants and conditions of the Loan\nDocuments;\n\n                (d) there shall have occurred and be continuing no Event of\nDefault and no event that, with the giving of notice or the lapse of time, or\nboth, could constitute such an Event of Default;\n\n                (e) the representations and warranties contained in Article IV\nshall be true and correct in all material respects;\n\n                (f) Lender shall have received two (2) duly executed copies of a\ncertificate of the Secretary of Borrower substantially in the form previously\nprovided to Borrower, together with all attachments thereto which attachments\nshall include, at a minimum, (i) copies, certified as true, correct and complete\nby the secretary of state of the state of incorporation of Borrower, of the\ncertificate of incorporation of Borrower, together with any and all amendments\nthereto, (ii) copies, certified by the Secretary of Borrower of the Bylaws of\nBorrower, together with any and all amendments thereto, (iii) the names and\nsignatures of the officers of the Borrower authorized to execute documents on\nits behalf in connection with this Agreement and the Loan, including but not\nlimited to any Borrowing Base certificates submitted to Lender by Borrower, and\n(iv) copies of all board of directors resolutions of Borrower and any other\naction taken by or on behalf of Borrower to authorize the execution, delivery\nand performance of the Loan Documents and the borrowing of the Loan under the\nLoan Documents;\n\n\n\n                                       21\n   23\n\n                (g) Lender shall have received certificates of good standing for\nBorrower by the state of incorporation of Borrower and by each state in which\nBorrower is doing and intends as of the date hereof to do business for which\nqualification is required;\n\n                (h) Lender shall have received a written opinion of counsel for\nBorrower and any Guarantor, dated the date of this Agreement, substantially in\nthe form of Exhibit C;\n\n                (i) Lender shall have received such financial statements,\nreports, certifications, and other operational information required to be\ndelivered under this Agreement, including without limitation an initial\nborrowing base certificate calculating the Borrowing Base;\n\n                (j) Lender shall have received the Commitment Fee;\n\n                (k) the Lockbox, Lockbox Account and the Concentration Account\nshall have been established and all of the Lockbox Agreements shall have been\nexecuted by each of Borrower and the Lockbox Bank and delivered to Lender;\n\n                (l) the transactions described in that certain Asset Purchase\nAgreement dated April 13, 2001 by and among IVonyx Group Services, Inc.\n(\"IVonyx\"), IVonyx, Inc. (\"IVonyx Sub\" and, together with IVonyx, the \"IVonyx\nParties\"), drkoop.com, Inc. (\"Parent\") and Infusion Acquisition Sub, Inc.\n(\"Acquisition Sub\"), as amended by that certain Amendment No. 1 to Asset\nPurchase Agreement dated as of July 30, 2001 and that certain Amendment No. 2 to\nAsset Purchase Agreement dated as of August 8, 2001 (as amended, the \"Asset\nPurchase Agreement\") shall have been consummated;\n\n                (m) Borrower shall have provided Lender with evidence\nestablishing to Lender's sole satisfaction that the Assets (as defined in the\nAsset Purchase Agreement) have been sold, transferred or assigned to Borrower;\n\n                (n) Borrower shall have provided Lender with evidence\nestablishing to Lender's sole satisfaction that Borrower has, following the\nconsummation of the Asset Purchase Agreement, received a minimum of One Million\nand No\/100 Dollars ($1,000,000) in capital contributions from drkoop.com, Inc.;\n\n                (o) Lender shall have received a mutually acceptable\nIntercreditor Agreement duly executed by each of Borrower, the IVonyx Parties\nand DVI Business Credit Corporation, a Delaware corporation (the \"Intercreditor\nAgreement\"); and\n\n                (p) Lender shall have received a certificate of Borrower's chief\nfinancial officer, dated the Closing Date, certifying that all of the conditions\nspecified in this Section have been fulfilled.\n\n        SECTION 5.2. CONDITIONS PRECEDENT TO ADVANCES. Notwithstanding any other\nprovision of this Agreement, no Loan proceeds, Revolving Credit Loans, advances\nor other extensions of credit under the Loan shall be disbursed under this\nAgreement unless the following conditions have been satisfied or waived\nimmediately before such disbursement:\n\n                (a) the representations and warranties on the part of Borrower\ncontained in Article IV of this Agreement shall be true and correct in all\nmaterial respects at and as of the date of disbursement or advance, as though\nmade on and as of such date (except to the extent that such representations and\nwarranties expressly relate solely to an earlier date and except that the\nreferences in Section 4.7 to financial statements shall be deemed to be a\nreference to the then most recent annual and interim financial statements of\nBorrower furnished to Lender pursuant to Section 6.1);\n\n\n\n                                       22\n   24\n\n               (b) no Event of Default or event that, with the giving of notice\nor the lapse of time, or both, could become an Event of Default shall have\noccurred and be continuing or would result from the making of the disbursement\nor advance; and\n\n                (c) no adverse change in the condition (financial or otherwise),\nproperties, business, or operations of Borrower shall have occurred and be\ncontinuing with respect to Borrower or any Guarantor since the date of this\nAgreement.\n\n        In addition to and not in limitation of the foregoing, and\nnotwithstanding anything in this Agreement to the contrary, as of the date that\nis one hundred twenty (120) days after the initial Closing Date (as defined\nbelow), Lender shall not be obligated to continue to make any Loans, Revolving\nCredit Loans, advances or other extensions of credit under the Loan available to\nBorrower with respect to any Accounts in the Borrowing Base that constitute\nUnbilled Accounts unless and until Borrower shall have received the applicable\nMedicare and\/or Medicaid provider numbers and provider account agreements, and\nprovided Lender with copies of same.\n\n        SECTION 5.3. CLOSING. Subject to the conditions of this Article V, the\nLoan shall be made available on the date as is mutually agreed by the parties\n(the \"Closing Date\") at such time as may be mutually agreeable to the parties\nupon the execution of this Agreement (the \"Closing\") at such place as may be\nrequested by Lender.\n\n        SECTION 5.4. WAIVER OF RIGHTS. By completing the Closing under this\nAgreement, or by making advances under the Loan, Lender does not waive a breach\nof any representation or warranty of Borrower under this Agreement or under any\nother Loan Document, and all of Lender's claims and rights resulting from any\nbreach or misrepresentation by Borrower are specifically reserved by Lender.\n\n                                   ARTICLE VI\n\n                              AFFIRMATIVE COVENANTS\n\n        Borrower covenants and agrees that for so long as Borrower may borrow\nunder this Agreement and until payment in full of the Note and performance of\nall other obligations of Borrower under the Loan Documents:\n\n        SECTION 6.1. FINANCIAL STATEMENTS AND COLLATERAL REPORTS. Borrower will\nfurnish to Lender (a) a sales and collections report and accounts receivable\naging schedule on a form acceptable to Lender within fifteen (15) days after the\nend of each calendar month, which shall include, but not be limited to, a report\nof sales, credits issued, and collections received; (b) payables aging schedules\nwithin fifteen (15) days after the end of each calendar month; (c) internally\nprepared monthly financial statements for Borrower, certified by the chief\nfinancial officer of Borrower, within forty-five (45) days of the end of each\ncalendar month, accompanied by management analysis and actual vs. budget\nvariance reports; (d) to the extent prepared by Borrower, annual projections,\nprofit and loss statements, balance sheets, and cash flow reports (prepared on a\nmonthly basis) for the succeeding fiscal year within thirty (30) days before the\nend of each of Borrower's fiscal years; (e) internally prepared annual financial\nstatements for Borrower within sixty (60) days after the end of each of\nBorrower's fiscal years; (f) annual audited financial statements for Borrower\nprepared by a firm of independent public accountants satisfactory to Lender,\nwithin ninety (90) days after the end of each of Borrower's fiscal years; (g)\npromptly upon receipt thereof, copies of any reports submitted to Borrower by\nthe independent accountants in connection with any interim audit of the books of\nBorrower and copies of each management control letter provided to Borrower by\nindependent accountants; (h) as soon as available, copies of all financial\nstatements and notices provided by Borrower to all of its stockholders; (i) on\nthe last business day of every month, evidence satisfactory to Lender that all\nfederal and state taxes, including, without limitation payroll taxes, that are\ndue have been paid in full; and (j) such additional information, reports or\nstatements as Lender may from time to time request. Annual financial statements\nshall set forth in comparative form \n\n\n\n                                       23\n   25\n\nfigures for the corresponding periods in the prior fiscal year. All financial\nstatements shall include a balance sheet and statement of earnings and shall be\nprepared in accordance with GAAP.\n\n        SECTION 6.2. PAYMENTS UNDER THIS AGREEMENT. Borrower will make all\npayments of principal, interest, fees, and all other payments required under\nthis Agreement and under the Loan, and under any other agreements with Lender to\nwhich Borrower is a party, as and when due.\n\n        SECTION 6.3. EXISTENCE, GOOD STANDING, AND COMPLIANCE WITH LAWS.\nBorrower will do or cause to be done all things necessary (a) to obtain and keep\nin full force and effect all corporate, limited liability company or limited\nliability partnership existence, rights, licenses, permits, certificates of\nneeds, regulatory approvals, privileges, and franchises (collectively,\n\"Permits\") of Borrower necessary to the ownership of its property or the conduct\nof its business, and comply with all applicable current and future laws,\nordinances, rules, regulations, orders and decrees of any Governmental Authority\nhaving or claiming jurisdiction over Borrower; (b) to maintain and protect the\nproperties used or useful in the conduct of the operations of Borrower, in a\nprudent manner, including without limitation the maintenance at all times of\nsuch insurance upon its insurable property and operations as required by law or\nby Section 6.7; and (c) to maintain all Permits free from restrictions or known\nconflicts which could materially impair their use or operation or cause the\nPermits to be provisional, probationary or restricted in any way.\n\n        SECTION 6.4. LEGALITY. The making of the Loan and each disbursement or\nadvance under the Loan shall not be subject to any penalty or special tax, shall\nnot be prohibited by any governmental order or regulation applicable to\nBorrower, and shall not violate any rule or regulation of any Governmental\nAuthority, and necessary consents, approvals and authorizations of any\nGovernmental Authority to or of any such disbursement or advance shall have been\nobtained.\n\n        SECTION 6.5. LENDER'S SATISFACTION. All instruments and legal documents\nand proceedings in connection with the transactions contemplated by this\nAgreement shall be satisfactory in form and substance to Lender and its counsel,\nand Lender shall have received all documents, including records of corporate\nproceedings and opinions of counsel, which Lender may have requested in\nconnection therewith.\n\n        SECTION 6.6. TAXES AND CHARGES. Borrower will timely file all tax\nreports and pay and discharge all taxes, assessments and governmental charges or\nlevies imposed upon Borrower, or its income or profits or upon its properties or\nany part thereof, before the same shall be in default and before the date on\nwhich penalties attach thereto, as well as all lawful claims for labor,\nmaterial, supplies or otherwise which, if unpaid, might become a Lien or charge\nupon the properties or any part thereof of Borrower; provided, however, that\nBorrower shall not be required to pay and discharge or cause to be paid and\ndischarged any such tax, assessment, charge, levy or claim so long as the\nvalidity or amount thereof shall be contested in good faith and by appropriate\nproceedings by Borrower, and Borrower shall have set aside on their books\nadequate reserve therefor; and provided further, that such deferment of payment\nis permissible only so long as Borrower's title to, and its right to use, the\nCollateral is not adversely affected thereby and Lender's Lien and priority on\nthe Collateral are not adversely affected, altered or impaired thereby.\n\n        SECTION 6.7. INSURANCE. Borrower will carry adequate public liability\nand professional liability insurance with responsible companies reasonably\nsatisfactory to Lender in such amounts and against such risks as is customarily\nmaintained by similar businesses and by owners of similar property in the same\ngeneral area.\n\n        SECTION 6.8. INFORMATION; VISITS AND INSPECTIONS. Borrower shall furnish\nto Lender such information as Lender may, from time to time, request with\nrespect to the business or financial affairs of Borrower. Borrower shall also\npermit any officer, employee, agent or representative of Lender to visit and\ninspect any of the properties of Borrower, to inspect, audit and make copies of\nor prepare extracts from Borrower's minute books, books of account and other\nrecords, including management letters prepared by Borrower's auditors, of\nBorrower, and make copies thereof or extracts therefrom, and to discuss the\nbusiness affairs, finances and accounts of Borrower with, and be \n\n\n\n                                       24\n   26\n\nadvised as to the same by, the officers, employees and independent accountants\nBorrower, all at such times and as often as Lender may reasonably require.\n\n        SECTION 6.9. MAINTENANCE OF PROPERTY. Borrower will maintain, keep and\npreserve all of its properties in good repair, working order and condition and\nfrom time to time make all necessary repairs, renewals, replacements,\nbetterments and improvements thereto, so that the business carried on in\nconnection therewith may be properly conducted at all times.\n\n        SECTION 6.10. NOTIFICATION OF EVENTS OF DEFAULT AND ADVERSE\nDEVELOPMENTS. Borrower promptly will notify Lender upon the occurrence of: (a)\nany Event of Default; (b) any event that, with the giving of notice or lapse of\ntime, or both, could constitute an Event of Default; (c) any event, development\nor circumstance whereby the financial statements previously furnished to Lender\nfail in any material respect to present fairly, in accordance with GAAP, the\nfinancial condition and operational results of Borrower; (d) any judicial,\nadministrative or arbitration proceeding pending against Borrower, and any\njudicial or administrative proceeding known by Borrower to be threatened against\nit which, if adversely decided, could adversely affect its condition (financial\nor otherwise) or operations (current or prospective) or which may expose\nBorrower to uninsured liability of $25,000.00 or more (not including any\napplicable deductibles); (e) any default claimed by any other creditor for\nBorrowed Money of Borrower other than Lender; and (f) any other development in\nthe business or affairs of Borrower which may be materially adverse; in each\ncase describing the nature of the event or development. In the case of\nnotification under clauses (a) and (b)), Borrower should set forth the action\nBorrower proposes to take with respect to such event.\n\n        SECTION 6.11. EMPLOYEE BENEFIT PLANS. Borrower will (a) comply with the\nfunding requirements of ERISA with respect to the Plans for its employees, or\nwill promptly satisfy any accumulated funding deficiency that arises under\nSection 302 of ERISA; (b) furnish Lender, promptly after filing the same, with\ncopies of all reports or other statements filed with the United States\nDepartment of Labor, the Pension Benefit Guaranty Corporation, or the Internal\nRevenue Service with respect to all Plans, or which Borrower, or any member of a\nControlled Group, may receive from such Governmental Authority with respect to\nany such Plans, and (c) promptly advise Lender of the occurrence of any\nReportable Event or Prohibited Transaction with respect to any such Plan and the\naction which Borrower proposes to take with respect thereto. Borrower will make\nall contributions when due with respect to any multi-employer pension plan in\nwhich it participates and will promptly advise Lender: (x) upon its receipt of\nnotice of the assertion against Borrower of a claim for withdrawal liability;\n(y) upon the occurrence of any event that could trigger the assertion of a claim\nfor withdrawal liability against Borrower; and (z) upon the occurrence of any\nevent that would place Borrower in a Controlled Group as a result of which any\nmember (including Borrower) thereof may be subject to a claim for withdrawal\nliability, whether liquidated or contingent.\n\n        SECTION 6.12. FINANCING STATEMENTS. Borrower shall provide to Lender\nevidence satisfactory to Lender as to the due recording of termination\nstatements, releases of collateral, and Forms UCC-3, and shall cause to be\nrecorded financing statements on Form UCC-1, in all places necessary to release\nall existing security interests and other Liens in the Collateral (other than as\npermitted by this Agreement) and to perfect and protect Lender's first priority\nLien and security interest in the Collateral, as Lender may request.\n\n        SECTION 6.13. FINANCIAL RECORDS. Borrower shall keep current and\naccurate books of records and accounts in which full and correct entries will be\nmade of all of its business transactions, and will reflect in its financial\nstatements adequate accruals and appropriations to reserves, all in accordance\nwith GAAP.\n\n        SECTION 6.14. COLLECTION OF ACCOUNTS. Borrower shall continue to collect\nits Accounts in the ordinary course of business.\n\n        SECTION 6.15. PLACES OF BUSINESS. Borrower shall give thirty (30) days'\nprior written notice to Lender of any change in the location of any of its\nplaces of business, of the places where its records concerning its Accounts \n\n\n\n                                       25\n   27\n\nare kept, of the places where the Collateral is kept, or of the establishment of\nany new, or the discontinuance of any existing, places of business.\n\n        SECTION 6.16. BUSINESS CONDUCTED. Borrower shall continue in the\nbusiness currently conducted by it using its best efforts to maintain its\ncustomers and goodwill. Borrower shall not engage, directly or indirectly, in\nany line of business substantially different from the business conducted by it\nimmediately before the Closing Date, or engage in business or lines of business\nwhich are not reasonably related thereto.\n\n        SECTION 6.17. LITIGATION AND OTHER PROCEEDINGS. Borrower shall give\nprompt notice to Lender of any litigation, arbitration, or other proceeding\nbefore any Governmental Authority against or affecting Borrower if the amount\nclaimed is more than $25,000.00.\n\n        SECTION 6.18. BANK ACCOUNTS. Borrower shall assign to Lender all of its\ndepository and disbursement accounts into which collections of Accounts are\ndeposited.\n\n        SECTION 6.19. SUBMISSION OF COLLATERAL DOCUMENTS. Borrower will, on\ndemand of Lender, make available to Lender copies of shipping and delivery\nreceipts evidencing the shipment of goods that gave rise to an Account, medical\nrecords, insurance verification forms, assignment of benefits, in-take forms or\nother proof of the satisfactory performance of services that gave rise to an\nAccount, a copy of the claim or invoice for each Account and copies of any\nwritten contract or order from which the Account arose. Borrower shall promptly\nnotify Lender if an Account becomes evidenced or secured by an instrument or\nchattel paper and upon request of Lender, will promptly deliver any such\ninstrument or chattel paper to Lender.\n\n        SECTION 6.20. LICENSURE; MEDICAID\/MEDICARE COST REPORTS. Borrower will\nmaintain all certificates of need, provider numbers and licenses necessary to\nconduct its business as currently conducted, and take any steps required to\ncomply with any such new or additional requirements that may be imposed on\nproviders of medical products and services. If required, all Medicaid\/Medicare\ncost reports will be properly filed.\n\n        SECTION 6.21. OFFICER'S CERTIFICATES. Together with the monthly\nfinancial statements delivered pursuant to clause (c) of Section 6.1, and\ntogether with the audited annual financial statements delivered pursuant to\nclause (f) of that Section, Borrower shall deliver to Lender a certificate of\nits chief financial officer, in form and substance satisfactory to Lender:\n\n                (a) setting forth the information (including detailed\ncalculations) required to establish whether Borrower is in compliance with the\nrequirements of Articles VI and VII as of the end of the period covered by the\nfinancial statements then being furnished; and\n\n                (b) stating that such officer has reviewed the relevant terms of\nthis Agreement, and has made (or caused to be made under such officer's\nsupervision) a review of the transactions and conditions of Borrower from the\nbeginning of the accounting period covered by the income statements being\ndelivered to the date of the certificate, and that such review has not disclosed\nthe existence during such period of any fact, event or circumstance that\nconstitutes an Event of Default or that is then, or with the passage of time or\ngiving of notice or both, could become an Event of Default, and if any such\ncondition or event existed during such period or now exists, specifying the\nnature and period of existence thereof and what action Borrower has taken or\nproposes to take with respect thereto.\n\n        SECTION 6.22. NET WORTH. Borrower will not at any time allow its\ntangible net worth, as computed in accordance with GAAP, to fall below the\nMinimum Net Worth.\n\n        SECTION 6.23. INTENTIONALLY LEFT BLANK.\n\n\n\n                                       26\n   28\n\n        SECTION 6.24. POST-CLOSING OBLIGATIONS. Borrower shall cause to be\nperformed and completed, to Lender's satisfaction, all of the obligations set\nforth on Schedule 6.24 hereto within the time periods set forth on Schedule\n6.24.\n\n        SECTION 6.25. INTENTIONALLY LEFT BLANK.\n\n        SECTION 6.26. CAPITAL ADEQUACY AND OTHER ADJUSTMENTS. In the event that\nLender shall have determined that the adoption after the date hereof of any law,\ntreaty, governmental (or quasi-governmental) rule, regulation, guideline or\norder regarding capital adequacy, reserve requirements or similar requirements\nor compliance by Lender or any corporation controlling Lender with any request\nor directive regarding capital adequacy, reserve requirements or similar\nrequirements (whether or not having the force of law and whether or not failure\nto comply therewith would be unlawful) from any central bank or governmental\nagency or body having jurisdiction does or shall have the effect of increasing\nthe amount of capital, reserves or other funds required to be maintained by\nLender or any corporation controlling Lender and thereby reducing the rate of\nreturn on Lender's or such corporation's capital as a consequence of its\nobligations hereunder, then Borrower shall from time to time within fifteen (15)\ndays after notice and demand from Lender pay to Lender additional amounts\nsufficient to compensate Lender for such reduction. A certificate as to the\namount of such cost and showing the basis of the computation of such cost\nsubmitted by such Lender to Borrower shall, absent manifest error, be final,\nconclusive and binding for all purposes.\n\n        SECTION 6.27. TAXES.\n\n                (a) No Deductions. Any and all payments or reimbursements made\nunder the Loan Documents shall be made free and clear of and without deduction\nfor any and all taxes, levies, imposts, deductions, charges or withholdings, and\nall liabilities with respect thereto of any nature whatsoever imposed by any\ntaxing authority, excluding such taxes to the extent imposed on Lender's net\nincome by the jurisdiction in which Lender is organized. If Borrower shall be\nrequired by law to deduct any such amounts from or in respect of any sum payable\nhereunder to Lender, then the sum payable hereunder shall be increased as may be\nnecessary so that, after making all required deductions, Lender receives an\namount equal to the sum it would have received had no such deductions been made.\n\n                (b) Changes in Tax Laws. In the event that, subsequent to the\ninitial advance under the Loan, (1) any changes in any existing law, regulation,\ntreaty or directive or in the interpretation or application thereof, (2) any new\nlaw, regulation, treaty or directive enacted or any interpretation or\napplication thereof, or (3) compliance by Lender with any request or directive\n(whether or not having the force of law) from any governmental authority, agency\nor instrumentality:\n\n                        (A) does or shall subject Lender to any tax of any kind\nwhatsoever with respect to this Agreement or the other Loan Documents, or change\nthe basis of taxation of payments to Lender of principal, fees, interest or any\nother amount payable hereunder (except for net income taxes, or franchise taxes\nimposed in lieu of net income taxes, imposed generally by federal, state or\nlocal taxing authorities with respect to interest or commitment fees or other\nfees payable hereunder or changes in the rate of tax on the overall net income\nof Lender); or\n\n                        (B) does or shall impose on Lender any other condition\nor increased cost in connection with the transactions contemplated hereby or\nparticipations herein;\n\nand the result of any of the foregoing is to increase the cost to Lender of\nmaking or continuing the Loan hereunder, as the case may be, or to reduce any\namount receivable hereunder, then, in any such case, Borrower shall promptly pay\nto Lender, upon its demand, any additional amounts necessary to compensate\nLender, on an after-tax basis, for such additional cost or reduced amount\nreceivable, as determined by Lender with respect to this Agreement or the \n\n\n\n                                       27\n   29\n\nother Loan Documents. If Lender becomes entitled to claim any additional amounts\npursuant to this subsection, it shall promptly notify Borrower of the event by\nreason of which Lender has become so entitled. A certificate as to any\nadditional amounts payable pursuant to the foregoing sentence submitted by\nLender to Borrower shall, absent manifest error, be final, conclusive and\nbinding for all purposes.\n\n        SECTION 6.28. FURTHER DOCUMENTATION. In the event any further\ndocumentation or information is (a) required by Lender or any prospective\ntransferee in connection with selling, transferring, delivering, assigning,\nsecuritizing or granting a participation in the Loan (or transferring the\nservicing of the Loan), or (b) deemed necessary or appropriate by Lender in the\nexercise of its rights under the Loan Documents or to correct patent mistakes in\nthe Loan Documents, materials relating to mortgagee's land title insurance or\nthe funding of the Loan, Borrower shall provide, or cause to be provided to\nLender, at Borrower's cost and expense, such documentation or information.\nBorrower shall execute and deliver to Lender and\/or the prospective transferee\nor servicer such documentation, including but not limited to, any amendments,\ncorrections, deletions or additions to the Loan Documents as is required by\nLender and\/or the prospective transferee; provided, however, that Borrower shall\nnot be required to do anything that has the effect of changing the essential\neconomic terms of the Loan set forth in the Loan Documents.\n\n        SECTION 6.29. COMPLIANCE WITH REQUIREMENTS OF PROSPECTIVE TRANSFEREE.\nBorrower shall do anything necessary to comply with the requirements of any\nprospective transferee or servicer of the Loan, in order to enable Lender or\nsuch transferee to sell, transfer, deliver, assign, securitize or grant a\nparticipation in the Loan; provided, however, that Borrower shall not be\nrequired to do anything that has the effect of changing the essential economic\nterms of this Agreement.\n\n        SECTION 6.30. TERMINATION\/DEFAULT OF CONTRACTS. Borrower shall notify\nLender of any (a) default or event of default under, (b) termination of, or (c)\nfailure of any party to renew, any of Borrower's contracts (unless the default\nor event of default under, termination of or failure to renew such contract, as\nthe case may be, could not reasonably be expected to have a material adverse\neffect on Borrower, including without limitation, on Borrower's business, the\nCollateral or the Loan hereunder) as soon as reasonably possible (other than\nwith respect to any notice of default, termination or failure to renew that\noriginates with Borrower, which notice shall be sent concurrently to Lender).\nNotwithstanding anything in this Section 6.30 to the contrary, no provision in\nthis Section 6.30 shall modify, reduce or otherwise affect Lender's rights\nhereunder or under any other Loan Document.\n\n                                   ARTICLE VII\n\n                               NEGATIVE COVENANTS\n\n        Borrower covenants and agrees that so long as Borrower may borrow under\nthis Agreement and until payment in full of the Note and performance of all\nother obligations of Borrower under the Loan Documents:\n\n        SECTION 7.1. BORROWING. Borrower will not create, incur, assume or\nsuffer to exist any liability for Borrowed Money except: (a) indebtedness to\nLender; (b) accounts payable to trade creditors and current operating expenses\n(other than for borrowed money) which are not aged more than one hundred twenty\n(120) days from the billing date or more than thirty (30) days from the due\ndate, in each case incurred in the ordinary course of business and paid within\nsuch time period, unless the same are being contested in good faith and by\nappropriate and lawful proceedings, and Borrower shall have set aside such\nreserves, if any, with respect thereto as are required by GAAP and deemed\nadequate by Borrower and its independent accountants; (c) borrowings incurred in\nthe ordinary course of its business and not exceeding $25,000.00 in the\naggregate outstanding at any one time; and (d) indebtedness secured by Permitted\nLiens. Borrower will not make prepayments on any existing or future indebtedness\nfor \n\n\n\n                                       28\n   30\n\nBorrowed Money to any Person (other than Lender, to the extent permitted by this\nAgreement or any subsequent agreement between Borrower and Lender).\n\n        SECTION 7.2. JOINT VENTURES. Borrower will not invest directly or\nindirectly in any joint venture for any purpose without the prior written notice\nto, and the prior written consent of, Lender, which consent shall not be\nunreasonably withheld.\n\n        SECTION 7.3. NO LIENS AND ENCUMBRANCES; NO DISPOSITION OF THE\nCOLLATERAL. Lender does not authorize, and Borrower agrees not to: (a) create,\nincur, assume or suffer to exist any mortgage, pledge, Lien or other encumbrance\nof any kind (including the charge upon property purchased under a conditional\nsale or other title retention agreement) upon, or any security interest in, any\nof its Collateral, whether now owned or hereafter acquired, except for Permitted\nLiens; (b) make any sale or leases of any of the Collateral other than any sale\nof inventory in the ordinary course of business and, to the extent no Event of\nDefault has occurred or is continuing hereunder in which case Lender's prior\nwritten approval shall be required, any sale in the ordinary course of business\nof equipment, parts or machinery that is obsolete or no longer used or useful in\nthe conduct of the business of Borrower as determined by Borrower in its\nreasonable discretion; or (c) license any of the Collateral.\n\n        SECTION 7.4. RESTRICTION ON FUNDAMENTAL CHANGES. Borrower will not: (a)\nenter into any transaction of merger or consolidation; (b) liquidate, wind-up or\ndissolve itself (or suffer any liquidation or dissolution); (c) convey, sell,\nlease, sublease, transfer or otherwise dispose of, in one transaction or a\nseries of transactions, any of its assets, or the capital stock of any\nsubsidiary of Borrower, whether now owned or hereafter acquired; or (d) acquire\nby purchase or otherwise all or any substantial part of the business or assets\nof, or stock or other evidence of beneficial ownership of, any Person. Borrower\nagrees that compliance with this Section 7.4 is a material inducement to\nLender's advancing credit under this Agreement and Borrower further agrees that\nany breach of the terms of this Section 7.4 shall constitute fraud. Borrower\nfurther agrees that in addition to all other remedies available to Lender,\nLender shall be entitled to specific enforcement of the covenants in this\nSection 7.4, including injunctive relief.\n\n        SECTION 7.5. SALE AND LEASEBACK. Borrower will not, directly or\nindirectly, enter into any arrangement whereby Borrower sells or transfers all\nor any part of its assets and thereupon and within one year thereafter rents or\nleases the assets so sold or transferred without prior written notice to and the\nprior written consent of Lender, which consent shall not be unreasonably\nwithheld.\n\n        SECTION 7.6. DISTRIBUTIONS AND MANAGEMENT FEES. Borrower shall not make\nany \"Distributions\" (as defined below) to any of its Affiliates or to any\nshareholder, member, partner or other person holding an equity interest in\nBorrower or to any other Person related to or affiliated with any of the\nforegoing (each, a \"Related Party\"). \"Distributions\" shall mean management fees,\nsalaries or other fees or compensation, lease or rental payments, repayments of\nor debt service on loans or other indebtedness, dividends or other distributions\nwith respect to any of its stock, partnership or membership interests (as the\ncase may be) now or hereafter outstanding, the purchase, redemption or other\nacquisition for value of any of its stock, partnership or membership interests\n(as the case may be) now or hereafter outstanding, or the return of any capital\nof its stockholders, partners or members. Notwithstanding the foregoing, so long\nas no Event of Default has occurred and is continuing, Borrower may pay salaries\nto the Related Party(ies) identified in Schedule 7.6 in the amount(s) described\nin Schedule 7.6.\n\n        SECTION 7.7. LOANS. Borrower will not make loans or advances to any\nPerson, other than (a) trade credit extended in the ordinary course of its\nbusiness, and (b) advances for business travel and similar temporary advances\nmade in the ordinary course of business to officers, stockholders, directors,\nand employees.\n\n        SECTION 7.8. CONTINGENT LIABILITIES. Borrower will not assume,\nguarantee, endorse, contingently agree to purchase or otherwise become liable\nupon the obligation of any Person, except by the endorsement of negotiable\ninstruments for deposit or collection or similar transactions in the ordinary\ncourse of business.\n\n\n\n                                       29\n   31\n\n        SECTION 7.9. SUBSIDIARIES. Borrower will not form any subsidiary, or\nmake any investment in or any loan in the nature of an investment to, any other\nPerson.\n\n        SECTION 7.10. COMPLIANCE WITH ERISA. Borrower will not permit with\nrespect to any Plan covered by Title IV of ERISA any Prohibited Transaction or\nany Reportable Event.\n\n        SECTION 7.11. CERTIFICATES OF NEED. Borrower will not amend, alter or\nsuspend or terminate or make provisional in any material way, any certificate of\nneed or provider number without the prior written consent of Lender, which\nconsent shall not be unreasonably withheld.\n\n        SECTION 7.12. TRANSACTIONS WITH AFFILIATES. Borrower will not enter into\nany transaction, including without limitation the purchase, sale, or exchange of\nproperty, or the loaning or giving of funds to any Affiliate or subsidiary,\nexcept in the ordinary course of business and pursuant to the reasonable\nrequirements of Borrower's business and upon terms substantially the same and no\nless favorable to Borrower as it would obtain in a comparable arm's length\ntransaction with any Person not an Affiliate or subsidiary, and so long as the\ntransaction is not otherwise prohibited under this Agreement. For purposes of\nthe foregoing, Lender consents to the transactions described on Schedule 7.12.\n\n        SECTION 7.13. USE OF LENDER'S NAME. Borrower will not use Lender's name\n(or the name of any of Lender's affiliates) in connection with any of its\nbusiness operations. Borrower may disclose to third parties that Borrower has a\nborrowing relationship with Lender. Nothing contained in this Agreement is\nintended to permit or authorize Borrower to make any contract on behalf of\nLender.\n\n        SECTION 7.14. CHANGE IN CAPITAL STRUCTURE. Without Lender's prior\nwritten consent, (a) there shall occur no change in the legal or beneficial\nownership of the capital stock, or in the capital structure, of Borrower or any\nGuarantor, from that set forth on Schedule 4.17, (b) there shall occur no\npledge, assignment or hypothecation of or Lien or encumbrance on any of the\nlegal or beneficial equity interests in the Borrower or any Guarantor, and (c)\nBorrower shall not consent to or acknowledge any of the transactions described\nin the foregoing subparts (a) and (b) of this sentence.\n\n        SECTION 7.15. CONTRACTS AND AGREEMENTS. Borrower will not become or be a\nparty to any contract or agreement which would breach this Agreement, or breach\nany other instrument, agreement, or document to which Borrower is a party or by\nwhich it is or may be bound.\n\n        SECTION 7.16. MARGIN STOCK. Borrower will not carry or purchase any\n\"margin security\" within the meaning of Regulations U, T or X of the Board of\nGovernors of the Federal Reserve System.\n\n        SECTION 7.17. TRUTH OF STATEMENTS AND CERTIFICATES. Borrower will not\nfurnish to Lender any certificate or other document that contains any untrue\nstatement of a material fact or that omits to state a material fact necessary to\nmake it not misleading in light of the circumstances under which it was\nfurnished.\n\n        SECTION 7.18. CONFIDENTIALITY. Borrower will not disclose the contents\nof this Loan Agreement and the other Loan Documents to any third party\n(including, without limitation, any financial institution or intermediary)\nwithout Lender's prior written consent, other than to Borrower's officers and\nadvisors on a need-to-know basis. Borrower agrees to inform all such persons who\nreceive information concerning this Agreement that such information is\nconfidential and may not be disclosed to any other person. Lender reserves the\nright to review and approve all materials that Borrower prepares that contain\nLender's name or describe this Agreement.\n\n        SECTION 7.19. CERTAIN FUNDAMENTAL CHANGES. Borrower will not, without\nproviding Lender with thirty (30) days' prior written notice, change the state\nof its formation or change its legal name.\n\n\n\n                                       30\n   32\n\n        SECTION 7.20. EARNOUT PAYMENT UNDER THE ASSET PURCHASE AGREEMENT. During\nthe Term hereof, Borrower shall not be permitted to make any \"Earnout Payment\"\n(as defined in the Asset Purchase Agreement) to Ivonyx and agrees that, as\nbetween Borrower and Parent, Parent shall make any and all Earnout Payments\n(including the cash portion of such payments) required to be made under the\nAsset Purchase Agreement in full unless and until (a) the cash portion of the\nEarnout Payment exceeds Parent's aggregate cash and cash equivalents at the time\nsuch Earnout Payment is required to be made, (b) Lender shall have been provided\nwith notice of and consented in writing to Borrower's proposal to pay to Ivonyx\ndirectly the cash portion of the Earnout Payment that Parent is unable to pay as\nprovided in subsection (a) above and (c) no Event of Default or event which,\nwith the giving of notice or passage of time or both could constitute an Event\nof Default, is occurring or continuing at the time such payment is required to\nbe made.\n\n                                  ARTICLE VIII\n\n                                EVENTS OF DEFAULT\n\n        SECTION 8.1. EVENTS OF DEFAULT. Each of the following (individually, an\n\"Event of Default\" and collectively, the \"Events of Default\") shall constitute\nan event of default under this Agreement:\n\n                (a) a default in the payment of any principal of, or interest\nupon, the Note when due and payable, whether at maturity or otherwise, or any\nbreach of Section 2.3, which default or breach, as applicable, shall have\ncontinued unremedied for a period of five (5) days after written notice of the\ndefault or breach from Lender to Borrower;\n\n                (b) a default in the payment of any other charges, fees, or\nother monetary obligations owing to Lender arising out of or incurred in\nconnection with this Agreement when such payment is due and payable, which\ndefault shall have continued unremedied for a period of five (5) days after\nwritten notice of the default from Lender to Borrower;\n\n                (c) a default in the due observance or performance by Borrower\nor any guarantor of the Obligations of any other term, covenant or agreement\ncontained in any of the Loan Documents, which default shall have continued\nunremedied for a period of ten (10) days after written notice of the default\nfrom Lender to Borrower;\n\n                (d) any representation or warranty made by Borrower in this\nAgreement or in any of the other Loan Documents, any financial statement, or any\nstatement or representation made in any other certificate, report or opinion\ndelivered in connection with this Agreement or the other Loan Documents proves\nto have been incorrect or misleading in any material respect when made;\n\n                (e) any obligation of Borrower (other than its Obligations under\nthis Agreement) for the payment of Borrowed Money having an aggregate principal\namount in excess of $50,000 is not paid when due or within any applicable grace\nperiod, or such obligation becomes or is declared to be due and payable before\nthe expressed maturity of the obligation, or there shall have occurred an event\nthat, with the giving of notice or lapse of time, or both, would cause any such\nobligation to become, or allow any such obligation to be declared to be, due and\npayable;\n\n                (f) Borrower makes an assignment for the benefit of creditors,\noffers a composition or extension to creditors, or makes or sends notice of an\nintended bulk sale of any business or assets now or hereafter conducted by\nBorrower;\n\n\n\n                                       31\n   33\n\n               (g) Borrower or any Guarantor (i) files a petition in bankruptcy,\n(ii) is adjudicated insolvent or bankrupt, petitions or applies to any tribunal\nfor any receiver of or any trustee for itself or any substantial part of its\nproperty, (iii) commences any proceeding relating to itself under any\nreorganization, arrangement, readjustment or debt, dissolution or liquidation\nlaw or statute of any jurisdiction, whether now or hereafter in effect, or any\nsuch proceeding is commenced against Borrower or any Guarantor and such\nproceeding remains undismissed for a period of sixty (60) days, (iv) by any act\nindicates its consent to, approval of, or acquiescence in, any such proceeding\nor the appointment of any receiver of or any trustee for a Borrower or Guarantor\nor any substantial part of its property, or suffers any such receivership or\ntrusteeship to continue undischarged for a period of sixty (60) days, or (v)\nadmits in writing its inability to pay its debts as they become due;\n\n                (h) one or more (i) final judgments against Borrower or\nattachments against its property shall be rendered by a court, arbitrator,\narbitration panel, mediator or any individual(s) or entity with the authority to\nissue binding judgments against Borrower or (ii) final settlements by or on\nbehalf of Borrower of any pending litigation, arbitration or other claim or\notherwise disputed matter, in any event not fully and unconditionally covered by\ninsurance, shall remain unpaid, unstayed on appeal, undischarged, unbonded and\nundismissed for a period of ten (10) days;\n\n                (i) a Reportable Event that might constitute grounds for\ntermination of any Plan covered by Title IV of ERISA or for the appointment by\nthe appropriate United States District Court of a trustee to administer any such\nPlan or for the entry of a Lien or encumbrance to secure any deficiency, has\noccurred and is continuing thirty (30) days after its occurrence, or any such\nPlan is terminated, or a trustee is appointed by an appropriate United States\nDistrict Court to administer any such Plan, or the Pension Benefit Guaranty\nCorporation institutes proceedings to terminate any such Plan or to appoint a\ntrustee to administer any such Plan, or a Lien or encumbrance is entered to\nsecure any deficiency or claim;\n\n                (j) any outstanding equity interest in Borrower is sold or\notherwise transferred by the Person owning such equity interest on the date of\nthis Agreement;\n\n                (k) there shall occur any uninsured damage to or loss, theft or\ndestruction of any portion of the Collateral that exceeds $25,000 in the\naggregate (not including any applicable deductibles);\n\n                (l) INTENTIONALLY LEFT BLANK;\n\n                (m) upon the issuance of any execution or distraint process\nagainst Borrower or any of its property or assets in excess of $25,000\nindividually or in the aggregate;\n\n                (n) Borrower ceases any material portion of its business\noperations as currently conducted;\n\n                (o) any indication or evidence is received by Lender that\nBorrower may have directly or indirectly been engaged in any type of activity\nwhich, in Lender's discretion, may result in the forfeiture of any property of\nBorrower to any Governmental Authority, which default shall have continued\nunremedied for a period of ten (10) days after written notice from Lender;\n\n                (p) Borrower or any Affiliate of Borrower, shall challenge or\ncontest, in any action, suit or proceeding, the validity or enforceability of\nthis Agreement, or any of the other Loan Documents, the legality or the\nenforceability of any of the Obligations or the perfection or priority of any\nLien granted to Lender;\n\n                (q) Borrower shall be criminally indicted or convicted under any\nlaw that could lead to a forfeiture of any Collateral;\n\n\n\n                                       32\n   34\n\n                (r) there shall occur a material adverse change in the financial\ncondition or business prospects of Borrower, or if Lender in good faith deems\nitself insecure as a result of acts or events bearing upon the financial\ncondition of Borrower or the repayment of the Note, which default shall have\ncontinued unremedied for a period of ten (10) days after written notice from\nLender; or\n\n                (s) a default or event of default occurs under any of the\nAffiliated Loan Documents;\n\n                (t) an Event of Default occurs under any Guaranty.\n\n        Notwithstanding the foregoing, Borrower's failure to comply with any\nsame provision of this Agreement two (2) times in any twelve (12) month period\nshall effect an immediate Event of Default (without the expiration of any\napplicable cure period) with respect to all subsequent failures by Borrower to\ncomply with such provision of this Agreement, and Lender thereupon may exercise\nany remedy set forth in this Article VIII without affording Borrower any\nopportunity to cure such Event of Default.\n\n        SECTION 8.2. ACCELERATION. Upon the occurrence of any of the foregoing\nEvents of Default, the Obligations under the Note shall become and be\nimmediately due and payable upon declaration to that effect delivered by Lender\nto Borrower; provided that, upon the happening of any event specified in Section\n8.1(g), all Obligations including, without limitation the Termination Fee, shall\nbe immediately due and payable without declaration or other notice to Borrower.\n\n        SECTION 8.3. REMEDIES.\n\n                (a) Upon the occurrence of and during the continuance of an\nEvent of Default under this Agreement or the other Loan Documents, Lender, in\naddition to all other rights, options, and remedies granted to Lender under this\nAgreement or at law or in equity, may take any of the following steps (which\nlist is given by way of example and is not intended to be an exhaustive list of\nall such rights and remedies):\n\n                        (i) terminate the Loan, whereupon all outstanding\nObligations (including without limitation the Termination Fee) shall be\nimmediately due and payable;\n\n                        (ii) exercise all other rights granted to it under this\nAgreement and all rights under the UCC in effect in the applicable\njurisdiction(s) and under any other applicable law; and\n\n                        (iii) exercise all rights and remedies under all Loan\nDocuments now or hereafter in effect, including but not limited to:\n\n                                (A) the right to take possession of, send\nnotices regarding, and collect directly the Collateral, with or without judicial\nprocess;\n\n                                (B) the right to (by its own means or with\njudicial assistance) enter any of Borrower's premises and take possession of the\nCollateral, or render it unusable, or dispose of the Collateral on such premises\nin compliance with subsection (C) below, without any liability for rent,\nstorage, utilities, or other sums, and Borrower shall not resist or interfere\nwith such action;\n\n                                (C) the right to require Borrower at Borrower's\nexpense to assemble all or any part of the Collateral and make it available to\nLender at any place designated by Lender;\n\n                                (D) the right to reduce the Maximum Loan Amount\nor to use the Collateral and\/or funds in the Concentration Account in amounts up\nto the Maximum Loan Amount for any reason; and\n\n\n\n                                       33\n   35\n\n                                (E) the right to enforce Borrower's rights\nagainst Account Debtors and other obligors, including, but not limited to, the\nright to collect Accounts directly in Lender's own name and to charge the\ncollection costs and expenses, including attorneys' fees, to Borrower.\n\n                (b) Borrower agrees that a notice received by it at least five\n(5) days before the time of any intended public sale, or the time after which\nany private sale or other disposition of the Collateral is to be made, shall be\ndeemed to be reasonable notice of such sale or other disposition. If permitted\nby applicable law, any perishable Collateral which threatens to speedily decline\nin value or which is sold on a recognized market may be sold immediately by\nLender without prior notice to Borrower. At any sale or disposition of\nCollateral, Lender may (to the extent permitted by applicable law) purchase all\nor any part of the Collateral, free from any right of redemption by Borrower,\nwhich right is hereby waived and released. Borrower covenants and agrees not to\ninterfere with or impose any obstacle to Lender's exercise of its rights and\nremedies with respect to the Collateral. Lender shall have no obligation to\nclean-up or otherwise prepare the Collateral for sale. Lender may comply with\nany applicable state or federal law requirements in connection with a\ndisposition of the Collateral and compliance will not be considered to adversely\naffect the commercial reasonableness of any sale of the Collateral. Lender may\nsell the Collateral without giving any warranties as to the Collateral. Lender\nmay specifically disclaim any warranties of title or the like. This procedure\nwill not be considered to adversely affect the commercial reasonableness of any\nsale of the Collateral. If Lender sells any of the Collateral upon credit,\nBorrower will be credited only with payments actually made by the purchaser,\nreceived by Lender and applied to the indebtedness of the purchaser. In the\nevent the purchaser fails to pay for the Collateral, Lender may resell the\nCollateral and Borrower shall be credited with the proceeds of the sale.\n\n                (c) Lender shall have no obligation to marshal any assets in\nfavor of Borrower, or against or in payment of the Note, any of the other\nObligations or any other obligation owed to Lender by Borrower or any other\nperson.\n\n        SECTION 8.4. NATURE OF REMEDIES. Lender shall have the right to proceed\nagainst all or any portion of the Collateral to satisfy in any order (a) the\nliabilities and Obligations of Borrower or any of its subsidiaries or Affiliates\nto Lender or any Affiliate of Lender under this Agreement or any other loan\ndocuments evidencing financings provided to Borrower or (b) the liabilities and\nobligations of Borrower, Guarantor and their respective Affiliates to Lender\nunder the Affiliated Loan Documents. All rights and remedies granted Lender\nunder this Agreement and under any agreement referred to in this Agreement, or\notherwise available at law or in equity, shall be deemed concurrent and\ncumulative, and not alternative remedies, and Lender may proceed with any number\nof remedies at the same time until the Loan, and all other existing and future\nliabilities and obligations of Borrower to Lender, are satisfied in full. The\nexercise of any one right or remedy shall not be deemed a waiver or release of\nany other right or remedy, and Lender, upon the occurrence of an Event of\nDefault, may proceed against Borrower, and\/or the Collateral, at any time, under\nany agreement, with any available remedy and in any order. All sums received\nfrom Borrower and\/or the Collateral in respect of the Loan may be applied by\nLender to the any other liabilities and obligations of Borrower under the Loan\nDocuments and the Affiliated Loan Documents in such order of application and in\nsuch amounts as Lender shall deem appropriate in its sole and absolute\ndiscretion. Borrower waives any right it may have to require Lender to pursue\nany Person for any of the Obligations.\n\n                                   ARTICLE IX\n\n                                  MISCELLANEOUS\n\n        SECTION 9.1. EXPENSES AND TAXES.\n\n                (a) Borrower agrees to pay, whether or not the Closing occurs, a\nreasonable documentation preparation fee, together with reasonable legal, audit\nand appraisal fees and all other reasonable charges and \n\n\n\n                                       34\n   36\n\nexpenses (including actual out-of-pocket expenses) incurred by Lender in\nconnection with the negotiation, preparation, legal review and execution of each\nof the Loan Documents, including but not limited to UCC and judgment lien\nsearches and UCC filings and fees for post-Closing UCC and judgment lien\nsearches. In addition, Borrower shall pay all such fees associated with any\namendments, modifications and terminations to the Loan Documents following\nClosing, except those amendments necessitated by the syndication, participation\nor other transfer of the Loan by Lender. If Lender uses in-house counsel for any\nof these purposes, Borrower further agrees that its Obligations under the Loan\nDocuments include reasonable charges for such work commensurate with the fees\nthat would otherwise be charged by outside legal counsel selected by Lender for\nthe work performed.\n\n                (b) Borrower also agrees to pay all out-of-pocket charges and\nexpenses incurred by Lender (including the fees and expenses of Lender's\ncounsel) in connection with the enforcement, protection or preservation of any\nright or claim of Lender, the termination of this Agreement, the termination of\nany Liens of Lender on the Collateral, or the collection of any amounts due\nunder the Loan Documents. If Lender uses in-house counsel for any of these\npurposes (i.e., for any task in connection with the enforcement, protection or\npreservation of any right or claim of Lender and the collection of any amounts\ndue under its Loan Documents), Borrower further agrees that its Obligations\nunder the Loan Documents include reasonable charges for such work commensurate\nwith the fees that would otherwise be charged by outside legal counsel selected\nby Lender for the work performed.\n\n                (c) Borrower shall pay all taxes (other than taxes based upon or\nmeasured by Lender's income or revenues or any personal property tax), if any,\nin connection with the issuance of the Note and the recording of the security\ndocuments therefor. The obligations of Borrower under this clause (c) shall\nsurvive the payment of Borrower's indebtedness under this Agreement and the\ntermination of this Agreement.\n\n        SECTION 9.2. ENTIRE AGREEMENT; AMENDMENTS. This Agreement and the other\nLoan Documents constitute the full and entire understanding and agreement among\nthe parties with regard to their subject matter and supersede all prior written\nor oral agreements, understandings, representations and warranties made with\nrespect thereto. No amendment, supplement or modification of this Agreement nor\nany waiver of any provision thereof shall be made except in writing executed by\nthe party against whom enforcement is sought.\n\n        SECTION 9.3. NO WAIVER; CUMULATIVE RIGHTS. No waiver by any party to\nthis Agreement of any one or more defaults by the other party in the performance\nof any of the provisions of this Agreement shall operate or be construed as a\nwaiver of any future default or defaults, whether of a like or different nature.\nNo failure or delay on the part of any party in exercising any right, power or\nremedy under this Agreement, nor acceptance of partial performance or partial\npayment, shall operate as a waiver of such right, power or remedy nor shall any\nsingle or partial exercise of any such right, power or remedy preclude any other\nor further exercise of such right, power or remedy or the exercise of any other\nright, power or remedy. The remedies provided for in this Agreement are\ncumulative and are not exclusive of any remedies that may be available to any\nparty to this Agreement at law, in equity or otherwise.\n\n        SECTION 9.4. NOTICES. Any notice or other communication required or\npermitted under this Agreement shall be in writing and personally delivered,\nmailed by registered or certified mail (return receipt requested and postage\nprepaid), sent by telecopier (with a confirming copy sent by regular mail), or\nsent by prepaid overnight courier service, and addressed to the relevant party\nat its address set forth below, or at such other address as such party may, by\nwritten notice, designate as its address for purposes of notice under this\nAgreement:\n\n\n\n                                       35\n   37\n\n                (a)     If to Lender, at:\n\n                        Heller Healthcare Finance, Inc.\n                        2 Wisconsin Circle, 4th Floor\n                        Chevy Chase, Maryland 20815\n                        Attention:  Pascale Bissainthe, Esq., Chief Counsel\n                        Telephone:  (301) 961-1640\n                        Telecopier:  (301) 664-9866\n\n\n                (b)     If to Borrower, at:\n\n                        drkoop LifeCare, Inc.\n                        17852 Laurel Park Dr. N.\n                        Suite 210C\n                        Livonia, Michigan 48152\n                        Attention:  G. Peter Molloy, President &amp; CEO\n                        Telephone:  (734) 462-9290\n                        Telecopier:  (734) 462-2781\n\n                        With a copy to:\n\n                        Latham &amp; Watkins\n                        633 W. 5th Street\n                        Suite 3800\n                        Los Angeles, California  90071\n                        Attention:  Jennifer U. Saunders, Esq.\n                        Telephone:  (213) 485-1234\n                        Telecopier:  (213) 891-8763\n\nIf mailed, notice shall be deemed to be given five (5) days after being sent,\nand if sent by personal delivery, telecopier or prepaid courier, notice shall be\ndeemed to be given when delivered.\n\n        SECTION 9.5. SEVERABILITY. If any term, covenant or condition of this\nAgreement, or the application of such term, covenant or condition to any party\nor circumstance shall be found by a court of competent jurisdiction to be, to\nany extent, invalid or unenforceable, the remainder of this Agreement and the\napplication of such term, covenant, or condition to parties or circumstances\nother than those as to which it is held invalid or unenforceable, shall not be\naffected thereby, and each term, covenant or condition shall be valid and\nenforced to the fullest extent permitted by law. Upon determination that any\nsuch term is invalid, illegal or unenforceable, Lender may, but is not obligated\nto, advance funds to Borrower under this Agreement until the parties to this\nAgreement amend this Agreement so as to effect the original intent of the\nparties as closely as possible in a valid and enforceable manner.\n\n        SECTION 9.6. SUCCESSORS AND ASSIGNS. This Agreement, the Note, and the\nother Loan Documents shall be binding upon and inure to the benefit of Borrower\nand Lender and their respective successors and assigns and shall bind all\nPersons who become bound as a debtor to this Agreement. Notwithstanding the\nforegoing, Borrower may not assign any of its rights or delegate any of its\nobligations under this Agreement without the prior written consent of Lender,\nwhich may be withheld in its sole discretion. Lender may sell, assign, transfer,\nor participate any or all of its rights or obligations under this Agreement\nwithout notice to or consent of Borrower.\n\n        SECTION 9.7. COUNTERPARTS. This Agreement may be executed in any number\nof counterparts, each of which shall be deemed an original, but all of which\ntogether shall constitute but one instrument.\n\n\n\n                                       36\n   38\n\n        SECTION 9.8. INTERPRETATION. No provision of this Agreement or any other\nLoan Document shall be interpreted or construed against any party because that\nparty or its legal representative drafted that provision. The titles of the\nparagraphs of this Agreement are for convenience of reference only and are not\nto be considered in construing this Agreement. Any pronoun used in this\nAgreement shall be deemed to include singular and plural and masculine, feminine\nand neuter gender as the case may be. The words \"herein,\" \"hereof,\" and\n\"hereunder\" shall be deemed to refer to this entire Agreement, except as the\ncontext otherwise requires.\n\n        SECTION 9.9. SURVIVAL OF TERMS. All covenants, agreements,\nrepresentations and warranties made in this Agreement, any other Loan Document,\nand in any certificates and other instruments delivered in connection with this\nAgreement shall be considered to have been relied upon by Lender and shall\nsurvive the making by Lender of the Loans contemplated by this Agreement and the\nexecution and delivery to Lender of the Note, and shall continue in full force\nand effect until all liabilities and obligations of Borrower to Lender are\nsatisfied in full.\n\n        SECTION 9.10. RELEASE OF LENDER. For and in consideration of the Loan\nand each advance or other financial accommodation hereunder, each Borrower,\nvoluntarily, knowingly, unconditionally, and irrevocably, with specific and\nexpress intent, for and on behalf of itself and its agents, attorneys, heirs,\nsuccessors, and assigns (collectively the \"Releasing Parties\") does hereby fully\nand completely release, acquit and forever discharge Lender, and its successors,\nassigns, heirs, affiliates, subsidiaries, parent companies, principals,\ndirectors, officers, employees, shareholders and agents (hereinafter called the\n\"Lender Parties\"), and any other person, firm, business, corporation, insurer,\nor association which may be responsible or liable for the acts or omissions of\nthe Lender Parties, or who may be liable for the injury or damage resulting\ntherefrom (collectively the \"Released Parties\"), of and from any and all\nactions, causes of action, suits, debts, disputes, damages, claims, obligations,\nliabilities, costs, expenses and demands of any kind whatsoever, at law or in\nequity, whether matured or unmatured, liquidated or unliquidated, vested or\ncontingent, choate or inchoate, known or unknown that the Releasing Parties (or\nany of them) have or may have, against the Released Parties or any of them\n(whether directly or indirectly), other than any such acts or omissions arising\nfrom the gross negligence or willful misconduct of any Lender Party. Borrower\nacknowledges that the foregoing release is a material inducement to Lender's\ndecision to extend to Borrower the financial accommodations hereunder and has\nbeen relied upon by Lender in agreeing to make the Loan and in making each\nadvance of Loan proceeds hereunder.\n\n        SECTION 9.11. TIME. Whenever Borrower is required to make any payment or\nperform any act on a Saturday, Sunday, or a legal holiday under the laws of the\nState of Maryland (or other jurisdiction where Borrower is required to make the\npayment or perform the act), the payment may be made or the act performed on the\nnext Business Day. Time is of the essence in Borrower's performance under this\nAgreement and all other Loan Documents.\n\n        SECTION 9.12. COMMISSIONS. The transaction contemplated by this\nAgreement was brought about by Lender and Borrower acting as principals and\nwithout any brokers, agents, or finders being the effective procuring cause\nother than Commonwealth Associates. Borrower represents that all fees and other\namounts payable to Commonwealth Associates in connection with the transaction\ncontemplated by this Agreement shall be borne by Parent, and that neither Lender\nnor Borrower shall have any liability therefor. Borrower represents that it has\nnot committed Lender to the payment of any brokerage fee, commission, or charge\nin connection with this transaction. If any such claim is made on Lender by any\nbroker, finder, or agent or other person, Borrower will indemnify, defend, and\nhold Lender harmless from and against the claim and will defend any action to\nrecover on that claim, at Borrower's cost and expense, including Lender's\ncounsel fees. Borrower further agrees that until any such claim or demand is\nadjudicated in Lender's favor, the amount demanded will be deemed a liability of\nBorrower under this Agreement, secured by the Collateral.\n\n        SECTION 9.13. THIRD PARTIES. No rights are intended to be created under\nthis Agreement or under any other Loan Document for the benefit of any third\nparty donee, creditor, or incidental beneficiary of Borrower. \n\n\n\n                                       37\n   39\n\nNothing contained in this Agreement shall be construed as a delegation to Lender\nof Borrower's duty of performance, including without limitation Borrower's\nduties under any account or contract in which Lender has a security interest.\n\n        SECTION 9.14. DISCHARGE OF BORROWER'S OBLIGATIONS. Lender, in its sole\ndiscretion, shall have the right at any time, and from time to time, without\nprior notice to Borrower if Borrower fails to do so, to: (a) obtain insurance\ncovering any of the Collateral as required under this Agreement; (b) pay for the\nperformance of any of Borrower's obligations under this Agreement; (c) discharge\ntaxes, Liens, security interests, or other encumbrances at any time levied or\nplaced on any of the Collateral in violation of this Agreement unless Borrower\nis in good faith with due diligence by appropriate proceedings contesting those\nitems; and (d) pay for the maintenance and preservation of any of the\nCollateral. Expenses and advances shall be added to the Loan, until reimbursed\nto Lender and shall be secured by the Collateral. Any such payments and advances\nby Lender shall not be construed as a waiver by Lender of an Event of Default.\n\n        SECTION 9.15. INFORMATION TO PARTICIPANTS. Lender may divulge to any\nparticipant it may obtain in the Loan, or any portion of the Loan, all\ninformation, and furnish to such participant copies of reports, financial\nstatements, certificates, and documents obtained under any provision of this\nAgreement or any other Loan Document; provided that Lender shall require that\nany such participant execute a confidentiality agreement with respect to such\ninformation.\n\n        SECTION 9.16. INDEMNITY. Borrower hereby indemnifies and agrees to\ndefend (with counsel acceptable to Lender) and hold harmless Lender, its\npartners, officers, agents and employees (collectively, \"Indemnitee\") from and\nagainst any liability, loss, cost, expense (including reasonable attorneys' fees\nand expenses for both in-house and outside counsel), claim, damage, suit, action\nor proceeding ever suffered or incurred by Lender or in which Lender may ever be\nor become involved (whether as a party, witness or otherwise) (a) arising from\nBorrower's failure to observe, perform or discharge any of its covenants,\nobligations, agreements or duties under this Agreement, (b) arising from the\nbreach of any of the representations or warranties contained in Article IV of\nthis Agreement, (c) by reason of this Agreement, the other Loan Documents or the\ntransactions contemplated hereby or thereby, or (d) relating to claims of any\nPerson with respect to the Collateral other than, in each case, to the extent\narising from the gross negligence or willful misconduct of Indemnitee.\nNotwithstanding any contrary provision in this Agreement, the obligation of\nBorrower under this Section 9.16 shall survive the payment in full of the\nObligations and the termination of this Agreement.\n\n        SECTION 9.17. INTENTIONALLY LEFT BLANK.\n\n        SECTION 9.18. LENDER APPROVALS. Unless expressly provided herein to the\ncontrary, any approval, consent, waiver or satisfaction of Lender with respect\nto any matter that is the subject of this Agreement or the other Loan Documents\nmay be granted or withheld by Lender in its sole and absolute discretion.\n\n        SECTION 9.18A. FURTHER ASSURANCES. Borrower hereby agrees that at any\ntime and from time to time, at the expense of Borrower, Borrower will promptly\nexecute and deliver all further instruments and documents, and take all further\naction, that may be necessary or that Lender may reasonably request, in order to\nperfect and protect any security interest granted or purported to be granted\nhereby, or to enable Lender or any of its agents to exercise and enforce its\nrights and remedies under this Agreement with respect to any portion of such\ncollateral.\n\n        SECTION 9.19. CHOICE OF LAW; CONSENT TO JURISDICTION. EXCEPT TO THE\nEXTENT THAT THE UCC PROVIDES FOR THE APPLICATION OF THE LAW OF THE BORROWER'S\nSTATE OF ORGANIZATION, THIS AGREEMENT AND THE NOTE SHALL BE GOVERNED BY, AND\nCONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF MARYLAND, WITHOUT REGARD\nTO ANY OTHERWISE APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS. IF ANY ACTION\nARISING OUT OF THIS AGREEMENT OR THE NOTE IS COMMENCED BY LENDER IN \n\n\n\n                                       38\n   40\n\nTHE STATE COURTS OF THE STATE OF MARYLAND OR IN THE U.S. DISTRICT COURT FOR THE\nDISTRICT OF MARYLAND, BORROWER HEREBY CONSENTS TO THE JURISDICTION OF ANY SUCH\nCOURT IN ANY SUCH ACTION AND TO THE LAYING OF VENUE IN THE STATE OF MARYLAND.\nANY PROCESS IN ANY SUCH ACTION SHALL BE DULY SERVED IF MAILED BY REGISTERED\nMAIL, POSTAGE PREPAID, TO BORROWER AT ITS ADDRESS DESCRIBED IN SECTION 9.4. OR\nIF SERVED BY ANY OTHER MEANS PERMITTED BY APPLICABLE LAW.\n\n        SECTION 9.20. COOPERATION IN DISCOVERY AND LITIGATION. IN ANY\nLITIGATION, TRIAL, ARBITRATION OR OTHER DISPUTE RESOLUTION PROCEEDING RELATING\nTO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, ALL DIRECTORS, OFFICERS,\nEMPLOYEES AND AGENTS OF BORROWER OR OF ITS AFFILIATES SHALL BE DEEMED TO BE\nEMPLOYEES OR MANAGING AGENTS OF BORROWER FOR PURPOSES OF ALL APPLICABLE LAW OR\nCOURT RULES REGARDING THE PRODUCTION OF WITNESSES BY NOTICE FOR TESTIMONY\n(WHETHER IN A DEPOSITION, AT TRIAL OR OTHERWISE). BORROWER AGREES THAT LENDER'S\nCOUNSEL IN ANY SUCH DISPUTE RESOLUTION PROCEEDING MAY EXAMINE ANY OF THESE\nINDIVIDUALS AS IF UNDER CROSS-EXAMINATION AND THAT ANY DISCOVERY DEPOSITION OF\nANY OF THEM MAY BE USED IN THAT PROCEEDING AS IF IT WERE AN EVIDENCE DEPOSITION.\nBORROWER IN ANY EVENT WILL USE ALL COMMERCIALLY REASONABLE EFFORTS TO PRODUCE IN\nANY SUCH DISPUTE RESOLUTION PROCEEDING, AT THE TIME AND IN THE MANNER REQUESTED\nBY LENDER, ALL PERSONS, DOCUMENTS (WHETHER IN TANGIBLE, ELECTRONIC OR OTHER\nFORM) OR OTHER THINGS UNDER BORROWER'S CONTROL AND RELATING TO THE DISPUTE IN\nANY JURISDICTION THAT RECOGNIZES THAT (OR ANY SIMILAR) DISTINCTION.\n\n        SECTION 9.21. WAIVER OF TRIAL BY JURY. BORROWER HEREBY (A) COVENANTS AND\nAGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY A JURY, AND\n(B) WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT\nSHALL NOW OR HEREAFTER EXIST. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS\nSEPARATELY GIVEN, KNOWINGLY AND VOLUNTARILY, BY BORROWER, AND THIS WAIVER IS\nINTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE\nRIGHT TO A JURY TRIAL WOULD OTHERWISE ACCRUE. LENDER IS HEREBY AUTHORIZED AND\nREQUESTED TO SUBMIT THIS AGREEMENT TO ANY COURT HAVING JURISDICTION OVER THE\nSUBJECT MATTER AND THE PARTIES TO THIS AGREEMENT, SO AS TO SERVE AS CONCLUSIVE\nEVIDENCE OF BORROWER'S WAIVER OF THE RIGHT TO JURY TRIAL. FURTHER, BORROWER\nHEREBY CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF LENDER (INCLUDING LENDER'S\nCOUNSEL) HAS REPRESENTED, EXPRESSLY OR OTHERWISE, TO BORROWER THAT LENDER WILL\nNOT SEEK TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION.\n\n        SECTION 9.22. CONFESSION OF JUDGMENT. BORROWER AUTHORIZES ANY ATTORNEY\nADMITTED TO PRACTICE BEFORE ANY COURT OF RECORD IN THE UNITED STATES OR THE\nCLERK OF SUCH COURT TO APPEAR ON BEHALF OF BORROWER IN ANY COURT IN ONE OR MORE\nPROCEEDINGS, OR BEFORE ANY CLERK THEREOF OR PROTHONOTARY OR OTHER COURT\nOFFICIAL, AND TO CONFESS JUDGMENT AGAINST BORROWER IN FAVOR OF LENDER IN THE\nFULL AMOUNT DUE ON THIS AGREEMENT (INCLUDING PRINCIPAL, ACCRUED INTEREST AND ANY\nAND ALL CHARGES, FEES AND COSTS) PLUS ATTORNEYS' FEES EQUAL TO FIFTEEN PERCENT\n(15%) OF THE AMOUNT DUE, PLUS COURT COSTS, ALL WITHOUT PRIOR NOTICE OR\nOPPORTUNITY OF BORROWER FOR PRIOR HEARING; PROVIDED THAT BORROWER ACKNOWLEDGES\nTHAT ATTORNEYS' FEES ARE STATED TO BE FIFTEEN PERCENT (15%) SOLELY FOR PURPOSES\nOF FIXING A SUM CERTAIN FOR WHICH JUDGMENT CAN BE ENTERED BY CONFESSION AND\nAGREES THAT IN ENFORCING ANY SUCH JUDGMENT, LENDER SHALL NOT DEMAND, SOLELY WITH\nRESPECT TO ATTORNEYS' FEES INCURRED BY LENDER IN CONNECTION WITH SUCH\nINDEBTEDNESS AFTER SUCH JUDGMENT IS RENDERED, ANY AMOUNTS IN EXCESS OF THE\nACTUAL AMOUNT OF REASONABLE ATTORNEYS' FEES CHARGED BY OR BILLED TO LENDER FOR\nITS IN-HOUSE OR OUTSIDE COUNSEL (WHICH ATTORNEYS' FEES SHALL IN ANY EVENT BE\nCHARGED BY OR BILLED TO LENDER AT \n\n\n\n                                       39\n   41\n\nCOMMERCIAL HOURLY RATES FOR MATTERS OF SUCH TYPE). BORROWER AGREES AND CONSENTS\nTHAT VENUE AND JURISDICTION SHALL BE PROPER IN THE CIRCUIT COURT OF ANY COUNTY\nOF THE STATE OF MARYLAND OR OF BALTIMORE CITY, MARYLAND, OR IN THE UNITED STATES\nDISTRICT COURT FOR THE DISTRICT OF MARYLAND. BORROWER WAIVES THE BENEFIT OF ANY\nAND EVERY STATUTE, ORDINANCE, OR RULE OF COURT WHICH MAY BE LAWFULLY WAIVED\nCONFERRING UPON BORROWER ANY RIGHT OR PRIVILEGE OF EXEMPTION, HOMESTEAD RIGHTS,\nSTAY OF EXECUTION, OR SUPPLEMENTARY PROCEEDINGS, OR OTHER RELIEF FROM THE\nENFORCEMENT OR IMMEDIATE ENFORCEMENT OF A JUDGMENT OR RELATED PROCEEDINGS ON A\nJUDGMENT. THE AUTHORITY AND POWER TO APPEAR FOR AND ENTER JUDGMENT AGAINST\nBORROWER SHALL NOT BE EXHAUSTED BY ONE OR MORE EXERCISES THEREOF, OR BY ANY\nIMPERFECT EXERCISE THEREOF, AND SHALL NOT BE EXTINGUISHED BY ANY JUDGMENT\nENTERED PURSUANT THERETO; SUCH AUTHORITY AND POWER MAY BE EXERCISED ON ONE OR\nMORE OCCASIONS FROM TIME TO TIME, IN THE SAME OR DIFFERENT JURISDICTIONS, AS\nOFTEN AS LENDER SHALL DEEM NECESSARY, CONVENIENT, OR PROPER.\n\n                               [SIGNATURES FOLLOW]\n\n\n\n                                       40\n   42\n\n        IN WITNESS WHEREOF, intending to be legally bound, and intending that\nthis Loan and Security Agreement constitutes an instrument executed under seal,\nthe parties have caused this Loan and Security Agreement to be executed under\nseal as of the date first written above.\n\n                                       LENDER:\n\n                                       HELLER HEALTHCARE FINANCE, INC.,\n                                       a Delaware corporation\n\n                                       By:                                (SEAL)\n                                          --------------------------------------\n                                       Name:\n                                       Title:\n\n                                       BORROWER:\n\n                                       DRKOOP LIFECARE, INC.,\n                                       a Delaware corporation\n\n                                       By:                                (SEAL)\n                                          --------------------------------------\n                                       Name:\n                                       Title:\n\nACKNOWLEDGEMENT:\n\nDRKOOP.COM, INC. HEREBY ACKNOWLEDGES AND\nAGREES TO BE BOUND BY THOSE PROVISIONS OF\nSECTION 7.6 AND SECTION 7.20 OF THIS\nLOAN AND SECURITY AGREEMENT:\n\nDRKOOP.COM, INC., a Delaware corporation\n\n\nBy: (SEAL)\n   --------------------------------------\n   Name:\n   Title:\n\n\n\n                                       41\n   43\n\n                                LIST OF EXHIBITS\n\nExhibit A - Form of Revolving Credit Note\n\nExhibit B - Form of Lockbox Agreement\n\nExhibit C - Form of Legal Opinion\n\nExhibit D - Form of Estoppel Certificate\n\n\n\n                                       42\n   44\n\n                                   EXHIBIT A\n                              REVOLVING CREDIT NOTE\n\n$10,000,000.00                                                  AUGUST 20, 2001\n\n\n        FOR VALUE RECEIVED, the undersigned, DRKOOP LIFECARE, INC., a Delaware\ncorporation (\"Borrower\"), promises to pay, in lawful money of the United States,\nto the order of HELLER HEALTHCARE FINANCE, INC., a Delaware corporation\n(together with its successors and assigns, \"Lender\"), the principal sum of Ten\nMillion and No\/100 Dollars ($10,000,000.00), or so much of such principal sum as\nshall be advanced or readvanced and shall remain unpaid under the Loan\nestablished pursuant to that certain Loan and Security Agreement of even date\nherewith by and between the undersigned and Lender (as amended, modified,\nrestated or replaced from time to time, the \"Loan Agreement\"), plus interest on\nthe unpaid balance thereof, computed on a 360-day basis, at the rate per annum\nthat is set forth in the Loan Agreement.\n\n        1. All capitalized terms used and not otherwise specifically defined in\nthis Revolving Credit Note (as amended, modified, restated or replaced from time\nto time, the \"Note\") shall have the meanings given to them in the Loan\nAgreement.\n\n        2. This Note shall evidence the undersigned's obligation to repay all\nsums advanced by Lender from time to time under the Loan Agreement and as part\nof the Loan. The actual amount due and owing from time to time under this Note\nshall be evidenced by Lender's records of receipts and disbursements with\nrespect to the Loan, which shall be conclusive evidence of that amount, absent\nmanifest error.\n\n        3. Interest due pursuant to this Note shall be payable monthly, in\narrears, on the first Business Day of each month after the date of this Note\n(for the previous month). For purposes of this Note, a \"Business Day\" shall mean\nany day on which banks are open for business in Maryland, excluding Saturdays\nand Sundays.\n\n        4. This Note shall become due and payable upon the earlier to occur of\n(a) the expiration of the Term, or (b) the occurrence of any Event of Default\nunder the Loan Agreement if the Loan and the maturity of the payment of the\nObligations are accelerated, or any other event under any other Loan Documents\nwhich would result in this Note becoming due and payable. At such time, the\nentire principal balance of this Note and all other fees, costs and expenses, if\nany, shall be due and payable in full. Lender shall then have the option at any\ntime and from time to time to exercise all of the rights and remedies set forth\nin this Note and in the other Loan Documents, as well as all rights and remedies\notherwise available to Lender at law or in equity, to collect the unpaid\nindebtedness under this Note and the other Loan Documents. This Note is secured\nby the Collateral, as defined in and described in the Loan Agreement.\n\n        5. Whenever any principal and\/or interest and\/or fee under this Note\nshall not be paid when due, whether at the stated maturity or by acceleration,\ninterest on such unpaid amounts shall thereafter be payable at a rate per annum\nequal to five (5) percentage points above the stated rate of interest on this\nNote until such amounts shall be paid.\n\n   45\n\n        6. The undersigned and Lender intend to conform strictly to the\napplicable usury laws in effect from time to time during the term of the Loan.\nAccordingly, if any transaction contemplated by the Loan Agreement or this Note\nwould be usurious under such laws, then notwithstanding any other provision\nhereof: (a) the aggregate of all interest that is contracted for, charged, or\nreceived under this Note or under any other Loan Document shall not exceed the\nmaximum amount of interest allowed by applicable law, and any excess shall be\npromptly credited to the undersigned by Lender (or, to the extent that such\nconsideration shall have been paid, such excess shall be promptly refunded to\nthe undersigned by Lender); (b) neither the undersigned nor any other Person (as\ndefined in the Loan Agreement) now or hereafter liable hereunder shall be\nobligated to pay the amount of such interest to the extent that it is in excess\nof the maximum interest permitted by applicable law; and (c) the effective rate\nof interest shall be reduced to the Highest Lawful Rate (as defined in the Loan\nAgreement). All sums paid, or agreed to be paid, to Lender for the use,\nforbearance, and detention of the debt of Borrower to Lender shall, to the\nextent permitted by applicable law, be allocated throughout the full term of\nthis Note until payment is made in full so that the actual rate of interest does\nnot exceed the Highest Lawful Rate in effect at any particular time during the\nfull term thereof. If at any time the rate of interest under this Note exceeds\nthe Highest Lawful Rate, the rate of interest to accrue pursuant to this Note\nshall be limited, notwithstanding anything to the contrary in this Note, to the\nHighest Lawful Rate, but any subsequent reductions in the Base Rate shall not\nreduce the interest to accrue pursuant to this Note below the Highest Lawful\nRate until the total amount of interest accrued equals the amount of interest\nthat would have accrued if a varying rate per annum equal to the interest rate\nunder the Note had at all times been in effect.\n\n        7. This Note is the \"Note\" referred to in the Loan Agreement, and is\nissued pursuant to the Loan Agreement. Reference is made to the Loan Agreement\nfor a statement of the additional rights and obligations of the undersigned and\nLender. In the event of any conflict between the terms of this Note and the\nterms of the Loan Agreement, the terms of the Loan Agreement shall prevail. All\nof the terms, covenants, provisions, conditions, stipulations, promises and\nagreements contained in the Loan Documents to be kept, observed and\/or performed\nby the undersigned are made a part of this Note and are incorporated into this\nNote by this reference to the same extent and with the same force and effect as\nif they were fully set forth in this Note; the undersigned promises and agrees\nto keep, observe and perform them or cause them to be kept, observed and\nperformed, strictly in accordance with the terms and provisions thereof.\n\n        8. Each party liable on this Note in any capacity, whether as maker,\nendorser, surety, guarantor or otherwise, (a) waives presentment for payment,\ndemand, protest and notice of presentment, notice of protest, notice of\nnon-payment and notice of dishonor of this debt and each and every other notice\nof any kind respecting this Note and all lack of diligence or delays in\ncollection or enforcement hereof; (b) agrees that Lender at any time or times,\nwithout notice to the undersigned or its consent, may grant extensions of time,\nwithout limit as to the number of the aggregate period of such extensions, for\nthe payment of any principal, interest or other sums due hereunder; (c) to the\nextent permitted by law, waives all exemptions under the laws of the\n\n                                       2\n   46\n\nState of Maryland and\/or any state or territory of the United States; (d) to the\nextent permitted by law, waives the benefit of any law or rule of law intended\nfor its advantage or protection as an obligor under this Note or providing for\nits release or discharge from liability on this Note, in whole or in part, on\naccount of any facts or circumstances other than full and complete payment of\nall amounts due under this Note; and (e) agrees to pay, in addition to all other\nsums of money due, all cost of collection and reasonable attorney's fees,\nwhether suit be brought or not, if this Note is not paid in full when due,\nwhether at the stated maturity or by acceleration.\n\n        9. No waiver by Lender of any one or more defaults by the undersigned in\nthe performance of any of its obligations under this Note shall operate or be\nconstrued as a waiver of any future default or defaults, whether of a like or\ndifferent nature. No failure or delay on the part of Lender in exercising any\nright, power or remedy under this Note (including, without limitation, the right\nto declare this Note due and payable) shall operate as a waiver of such right,\npower or remedy nor shall any single or partial exercise of any such right,\npower or remedy preclude any other or further exercise of such right, power or\nremedy or the exercise of any other right, power or remedy.\n\n        10. If any term, provision, covenant or condition of this Note or the\napplication of any term, provision, covenant or condition of this Note to any\nparty or circumstance shall be found by a court of competent jurisdiction to be,\nto any extent, invalid or unenforceable, then the remainder of this Note and the\napplication of such term, provision, covenant, or condition to parties or\ncircumstances other than those as to which it is held invalid or unenforceable,\nshall not be affected thereby, and each term, provision, covenant or condition\nshall be valid and enforced to the fullest extent permitted by law. Upon\ndetermination that any such term, provision, covenant or condition is invalid,\nillegal or unenforceable, Lender may, but is not obligated to, advance funds to\nBorrower under this Note until Borrower and Lender amend this Note so as to\neffect the original intent of the parties as closely as possible in a valid and\nenforceable manner.\n\n        11. No amendment, supplement or modification of this Note nor any waiver\nof any provision of this Note shall be made except in writing executed by the\nparty against whom enforcement is sought.\n\n        12. This Note shall be binding upon the undersigned and its successors\nand assigns. Notwithstanding the foregoing, the undersigned may not assign any\nof its rights or delegate any of its obligations under this Note without the\nprior written consent of Lender, which may be withheld in its sole discretion.\n\n        13. THIS NOTE IS TO BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE\nLAWS OF THE STATE OF MARYLAND WITHOUT RESPECT TO ANY OTHERWISE APPLICABLE\nCONFLICTS-OF-LAWS PRINCIPLES, BOTH AS TO INTERPRETATION AND PERFORMANCE, AND THE\nPARTIES EXPRESSLY CONSENT AND AGREE TO THE NON-EXCLUSIVE JURISDICTION OF THE\nCOURTS OF THE STATE OF MARYLAND AND THE UNITED STATES DISTRICT COURT FOR THE\nDISTRICT OF MARYLAND AND TO\n\n                                       3\n   47\n\nTHE LAYING OF VENUE IN THE STATE OF MARYLAND, WAIVING ALL CLAIMS OR DEFENSES\nBASED ON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE, INCONVENIENT FORUM OR\nTHE LIKE. BORROWER HEREBY CONSENTS TO SERVICE OF PROCESS BY MAILING A COPY OF\nTHE SUMMONS TO BORROWER, BY CERTIFIED OR REGISTERED MAIL, POSTAGE PREPAID, TO\nBORROWER'S ADDRESS SET FORTH IN SECTION 9.4 OF THE LOAN AGREEMENT. BORROWER\nFURTHER WAIVES ANY CLAIM FOR CONSEQUENTIAL DAMAGES IN RESPECT OF ANY ACTION\nTAKEN OR OMITTED TO BE TAKEN BY LENDER IN GOOD FAITH.\n\n        14. IN ANY LITIGATION, TRIAL, ARBITRATION OR OTHER DISPUTE RESOLUTION\nPROCEEDING RELATING TO THIS NOTE OR ANY OF THE OTHER LOAN DOCUMENTS, ALL\nDIRECTORS, OFFICERS, EMPLOYEES AND AGENTS OF BORROWER OR OF ITS AFFILIATES SHALL\nBE DEEMED TO BE EMPLOYEES OR MANAGING AGENTS OF BORROWER FOR PURPOSES OF ALL\nAPPLICABLE LAW OR COURT RULES REGARDING THE PRODUCTION OF WITNESSES BY NOTICE\nFOR TESTIMONY (WHETHER IN A DEPOSITION, AT TRIAL OR OTHERWISE). BORROWER AGREES\nTHAT LENDER'S COUNSEL IN ANY SUCH DISPUTE RESOLUTION PROCEEDING MAY EXAMINE ANY\nOF THESE INDIVIDUALS AS IF UNDER CROSS-EXAMINATION AND THAT ANY DISCOVERY\nDEPOSITION OF ANY OF THEM MAY BE USED IN THAT PROCEEDING AS IF IT WERE AN\nEVIDENCE DEPOSITION. BORROWER IN ANY EVENT WILL USE ALL COMMERCIALLY REASONABLE\nEFFORTS TO PRODUCE IN ANY SUCH DISPUTE RESOLUTION PROCEEDING, AT THE TIME AND IN\nTHE MANNER REQUESTED BY LENDER, ALL PERSONS, DOCUMENTS (WHETHER IN TANGIBLE,\nELECTRONIC OR OTHER FORM) OR OTHER THINGS UNDER BORROWER'S CONTROL AND RELATING\nTO THE DISPUTE IN ANY JURISDICTION THAT RECOGNIZES THAT (OR ANY SIMILAR)\nDISTINCTION.\n\n        15. THE UNDERSIGNED HEREBY (A) COVENANTS AND AGREES NOT TO ELECT A TRIAL\nBY JURY OF ANY ISSUE TRIABLE OF RIGHT BY A JURY, AND (B) WAIVES ANY RIGHT TO\nTRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER\nEXIST. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY\nBY THE UNDERSIGNED, AND THIS WAIVER IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH\nINSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A JURY TRIAL WOULD OTHERWISE\nACCRUE. LENDER IS HEREBY AUTHORIZED AND REQUESTED TO SUBMIT THIS NOTE TO ANY\nCOURT HAVING JURISDICTION OVER THE SUBJECT MATTER AND THE PARTIES HERETO, SO AS\nTO SERVE AS CONCLUSIVE EVIDENCE OF THE UNDERSIGNED'S WAIVER OF THE RIGHT TO JURY\nTRIAL. FURTHER, THE UNDERSIGNED HEREBY CERTIFIES THAT NO REPRESENTATIVE OR AGENT\nOF LENDER (INCLUDING LENDER'S COUNSEL) HAS REPRESENTED, EXPRESSLY OR OTHERWISE,\nTO ANY BORROWER THAT LENDER WILL NOT SEEK TO ENFORCE THIS WAIVER OF RIGHT TO\nJURY TRIAL PROVISION.\n\n        16. THE UNDERSIGNED HEREBY AUTHORIZES ANY ATTORNEY ADMITTED TO PRACTICE\nBEFORE ANY COURT OF RECORD IN THE UNITED STATES OR THE CLERK OF SUCH COURT TO\nAPPEAR ON BEHALF OF THE\n\n                                       4\n   48\n\nUNDERSIGNED IN ANY COURT IN ONE OR MORE PROCEEDINGS, OR BEFORE ANY CLERK THEREOF\nOF PROTHONOTARY OR OTHER COURT OFFICIAL, AND TO CONFESS JUDGMENT AGAINST THE\nUNDERSIGNED IN FAVOR OF LENDER IN THE FULL AMOUNT DUE ON THIS NOTE (INCLUDING\nPRINCIPAL, ACCRUED INTEREST AND ANY AND ALL CHARGES, FEES AND COSTS) PLUS\nATTORNEYS' FEES EQUAL TO FIFTEEN PERCENT (15%) OF THE AMOUNT DUE, PLUS COURT\nCOSTS, ALL WITHOUT PRIOR NOTICE OR OPPORTUNITY OF BORROWER FOR PRIOR HEARING;\nPROVIDED THAT THE UNDERSIGNED ACKNOWLEDGES THAT ATTORNEYS' FEES ARE STATED TO BE\nFIFTEEN PERCENT (15%) SOLELY FOR PURPOSES OF FIXING A SUM CERTAIN FOR WHICH\nJUDGMENT CAN BE ENTERED BY CONFESSION AND AGREES THAT IN ENFORCING ANY SUCH\nJUDGMENT, LENDER SHALL NOT DEMAND, SOLELY WITH RESPECT TO ATTORNEYS' FEES\nINCURRED BY LENDER IN CONNECTION WITH SUCH INDEBTEDNESS AFTER SUCH JUDGMENT IS\nRENDERED, ANY AMOUNTS IN EXCESS OF THE ACTUAL AMOUNT OF REASONABLE ATTORNEYS'\nFEES CHARGED BY OR BILLED TO LENDER FOR ITS IN-HOUSE OR OUTSIDE COUNSEL (WHICH\nATTORNEYS' FEES SHALL IN ANY EVENT BE CHARGED BY OR BILLED TO LENDER AT\nCOMMERCIAL HOURLY RATES FOR MATTERS OF SUCH TYPE). THE UNDERSIGNED AGREES AND\nCONSENTS THAT VENUE AND JURISDICTION SHALL BE PROPER IN THE CIRCUIT COURT OF ANY\nCOUNTY OF THE STATE OF MARYLAND OR OF BALTIMORE CITY, MARYLAND, OR IN THE UNITED\nSTATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND. THE UNDERSIGNED WAIVES THE\nBENEFIT OF ANY AND EVERY STATUTE, ORDINANCE, OR RULE OF COURT WHICH MAY BE\nLAWFULLY WAIVED CONFERRING UPON BORROWER ANY RIGHT OR PRIVILEGE OF EXEMPTION,\nHOMESTEAD RIGHTS, STAY OF EXECUTION, OR SUPPLEMENTARY PROCEEDINGS, OR OTHER\nRELIEF FROM THE ENFORCEMENT OR IMMEDIATE ENFORCEMENT OF A JUDGMENT OR RELATED\nPROCEEDINGS ON A JUDGMENT. THE AUTHORITY AND POWER TO APPEAR FOR AND ENTER\nJUDGMENT AGAINST THE UNDERSIGNED SHALL NOT BE EXHAUSTED BY ONE OR MORE EXERCISES\nTHEREOF, OR BY ANY IMPERFECT EXERCISE THEREOF, AND SHALL NOT BE EXTINGUISHED BY\nANY JUDGMENT ENTERED PURSUANT THERETO; SUCH AUTHORITY AND POWER MAY BE EXERCISED\nON ONE OR MORE OCCASIONS FROM TIME TO TIME, IN THE SAME OR DIFFERENT\nJURISDICTIONS, AS OFTEN AS LENDER SHALL DEEM NECESSARY, CONVENIENT, OR PROPER.\n\n                               [SIGNATURES FOLLOW]\n\n\n                                       5\n   49\n\n        IN WITNESS WHEREOF, intending to be legally bound, and intending that\nthis Revolving Credit Note constitutes an instrument executed under seal, the\nBorrower has caused this Revolving Credit Note to be executed under seal as of\nthe date first written above.\n\n                                            BORROWER:\n\n                                            DRKOOP LIFECARE, INC.,\n                                            a Delaware corporation\n\n\n                                            By:___________________________(SEAL)\n                                            Name:\n                                            Title:\n\n                                       6\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7359],"corporate_contracts_industries":[9438],"corporate_contracts_types":[9560,9567],"class_list":["post-41129","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-drkoopcom-inc","corporate_contracts_industries-health__misc","corporate_contracts_types-finance","corporate_contracts_types-finance__loan"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/41129","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=41129"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=41129"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=41129"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=41129"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}