Exhibit 10.4
 
SERVICING AGREEMENT
 
This Servicing Agreement (this "Agreement") is made as of December 31, 2009, by
and between CarePayment, LLC, an Oregon limited liability company ("Owner"), and
WS Technologies, LLC, an Oregon limited liability company
("Servicer").  Aequitas Holdings, LLC, an Oregon limited liability company
("Aequitas") is a party to this Agreement solely for purposes of agreeing to
Section 8.1.
 
Recitals
 
A.           Owner is in the business of purchasing or obtaining the right to
collect consumer receivables generated by hospitals on a recourse basis with
respect to the hospital ("Receivables").
 
B.           Servicer provides Receivables origination, servicing, collection
and administration services.
 
C.           Owner desires to engage Servicer to originate, manage and service
the collection of Receivables purchased or controlled by Owner, and Servicer
wishes to provide such services, all on the terms and conditions provided for in
this Agreement.
 
Agreement
 
NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements hereinafter set forth, Owner and Servicer hereby agree as follows:
 
1.           Servicing.
 
1.1           Appointment of Servicer.  Owner hereby appoints Servicer as the
sole and exclusive servicer to collect, administer and service the Receivables
purchased or controlled by Owner, including negotiating with hospitals on behalf
Owner with respect to such services.  Owner hereby appoints Servicer as the
non-exclusive originator of Receivables purchased or controlled by Owner,
including negotiating with hospitals on behalf Owner with respect to such
services.  Servicer shall have the full power and authority to do or cause to be
done any and all things in connection with such servicing, administration and
collection as Servicer may deem to be necessary or desirable to optimize the
recoverable value from such Receivables, and in furtherance thereof is
authorized and shall have the sole authority to (a) collect and post all
payments on the Receivables, (b) communicate with the hospitals and patients to
whom the Receivables relate, (c) commence and pursue collection actions with
respect to any Receivable, and (d) perform such other practices and procedures
as Servicer may deem necessary or desirable in connection with servicing,
administering and collecting Receivables.  Upon request, Owner shall furnish
Servicer with any powers of attorney or other documents that Servicer may
reasonably request in order for Servicer to perform its obligations under this
Agreement.  Servicer agrees to employ lawful means in its efforts to collect
Receivables.  In providing its services, Servicer shall conform to a standard of
practice and care consistent with industry standards.
 
Page 1 – MICROHELIX/CAREPAYMENT SERVICING AGREEMENT
 

--------------------------------------------------------------------------------

 
 
1.2           Receivable Files.  Owner shall deliver or cause to be delivered to
the Servicer all files and records related to the Receivables, together with
such other documents as Servicer may reasonably require in order to perform its
duties under this Agreement.  All documents described in this Section 1.2 are
referred to collectively herein as the "Receivable Documents."  Servicer will
retain in its possession originals of the Receivable Documents and will hold all
such documents on behalf of Owner.  Such documents shall be accessible for
inspection and copying by Owner or its representative or agent upon reasonable
advance notice during normal business hours.  For purposes of this Agreement,
"original" Receivable Documents may include documents received in electronic
form (whether by facsimile transmission, in "pdf" files or otherwise).
 
1.3           Subservicing.
 
 1.3.1          Servicer may appoint one or more sub-servicers from the list of
Approved Sub-servicers (defined below) to perform Servicer's duties under this
Agreement (each, a "Sub-servicer").  The appointment of any Sub-servicer by the
Servicer does not relieve Servicer of any of its duties or responsibilities
under this Agreement, and Servicer shall be responsible for managing the
activities of any Sub-servicer.  The amount of the subservicing fees payable to
any Sub-servicer shall be payable by Servicer from the Servicing Fee paid to
Servicer by Owner.
 
 1.3.2          Servicer's list of approved Sub-servicers ("Approved
Sub-servicers") and sub-contractors is on the attached Exhibit A.  Servicer
shall not add or remove Sub-servicers from the list of Approved Sub-servicers or
amend, modify or replace any agreement it may have with its Sub-servicers
without the prior written consent of Owner, which consent shall not be
unreasonably withheld, delayed or conditioned.
 
1.4           Payment Collections.  Servicer is responsible for collection of
all payments made with respect to Receivables. and for accounting to Owner for
all Collections.  Servicer is responsible for instructing hospitals and patients
to remit payments and/or settlements to Servicer.  Owner will promptly report to
Servicer any direct payments it receives from hospitals or patients with respect
to any Receivables.
 
1.5           Deposit to Collection Account; Reports. Servicer shall cause all
collections of Receivables ("Collections") received by Servicer to be deposited
daily into an account (the "Collection Account") within two business days after
receipt.  Servicer shall provide Owner with a daily and weekly (on Monday of
each week unless such day is a legal holiday) reconciliation report, in
electronic form reasonably satisfactory to Owner, of all Collections and
deposits since the date of the last daily or weekly report, as applicable (the
"Reconciliation Report").
 
1.6           Insurance.  Servicer shall maintain policies of insurance or other
evidence of insurance coverage as follows:
 
 1.6.1          Comprehensive general liability insurance with a combined single
limit of not less than $1 million.
 
Page 2 – MICROHELIX/CAREPAYMENT SERVICING AGREEMENT
 

--------------------------------------------------------------------------------

 
 
 1.6.2          Comprehensive errors and omissions insurance providing coverage
in the amount of not less than $1 million covering any loss or damage for which
Servicer may become liable arising out of errors, omissions or other defects
arising out of or relating to collection and administration of the Receivables,
including alleged violations of federal or state laws relating to collection
practices, including credit protection laws.
 
 1.6.3          Employee dishonesty insurance (or similarly named and purposed
insurance or bond) providing coverage in the amount of not less than $2 million.
 
Owner shall be designated as an additional insured on all such liability
policies.  In addition, Servicer shall use commercially reasonable efforts, to
the extent possible, to extend coverage under Servicer's liability and errors
and omissions policies to include coverage for the liabilities, errors and
omissions of its Sub-servicers.  Servicer shall maintain all insurance required
above and by applicable law with financially sound and reputable independent
insurers.  Servicer shall provide to Owner, upon Owner's request, copies of such
policies or certificates of insurance.  The policies required above shall
provide that Owner shall receive 30 days' written notice prior to amendment or
cancellation.
 
Servicer shall adhere to Servicer's standard practices and policies in the
selection of all Sub-servicers and shall use Sub-servicers that are reputable
and licensed and shall use commercially reasonable efforts to ensure that all
Sub-servicers are bonded (where appropriate) and that they maintain commercially
reasonable forms and levels of insurance coverage.
 
1.7           Access By Financing Sources.  Upon reasonable advance notice,
Servicer agrees to make its representatives reasonably available from time to
time to discuss with Owner and/or its financing sources the status of Servicer's
servicing activities and the status of the Receivable portfolios.
 
2.           Compensation.
 
2.1           Servicing Fee.  Owner will pay Servicer the following fees:
 
 2.1.1          a monthly Servicing Fee (the "Servicing Fee") in an amount equal
to 0.4167% of total Eligible Receivables existing as of the last business day of
the preceding month;
 
 2.1.2          an origination fee ("Origination Fee") equal to 6.0% of the
original balance of all newly generated Eligible Receivables, plus 6.0% of the
balance of all Transferred Billing Receivables, and
 
 2.1.3          The Back End Fee.
 
2.2           "Eligible Receivables" are those Receivables owed by a debtor
deemed credit worthy by mutual agreement of Owner and Servicer that have been
funded by Owner.
 
2.3           "Transferred Billing Receivables" are those Receivables that are
not initially Eligible Receivables, but become Eligible Receivables following
satisfaction of performance metrics as developed from time to time by Owner and
Servicer and are funded by Owner.
 
Page 3 – MICROHELIX/CAREPAYMENT SERVICING AGREEMENT
 

--------------------------------------------------------------------------------

 
 
2.4           "Back End Fee" means 25.0% of the amount calculated as follows
with respect to each calendar quarter during the Term:
 
 2.4.1          The net income of Owner as determined on a quarterly basis in
accordance with generally accepted accounting principles,
 
 2.4.2          plus actual interest expense for the quarterly period,
 
 2.4.3          minus an assumed cost of funds of Owner of 18% per annum with
respect to all funded Receivables.
 
2.5           Payment of Servicing Fee, Origination Fee and Back End Fee.
 
 2.5.1          On or after the first business day of each month, Servicer shall
invoice Owner for the Servicing Fee for the immediately preceding month.  Such
invoice shall include Servicer's calculation of the unpaid balance of Eligible
Receivables and Transferred Billing Receivables serviced by Servicer during the
immediately preceding month in reasonable detail satisfactory to Owner.  The
Servicing Fee shall be due on the 15th day of the month immediately following
the month in which Services were performed or, if the 15th day of the month is
not a business day, then the first business day thereafter.
 
 2.5.2          Owner shall pay Servicer all Origination Fees simultaneously
with Owner's funding of Eligible Receivables and Transferred Billing
Receivables.  Such payments shall be accompanied by certificates, in reasonable
detail satisfactory to Servicer, identifying the Eligible Receivables and/or
Transferred Billing Receivables to which such payments apply.
 
 2.5.3          Owner shall pay Servicer all Back End Fees quarterly in arrears,
with each payment due by the 30th day following the end of each calendar
quarter.
 
2.6           Additional Compensation.  Owner shall pay Servicer an amount equal
to Servicer's actual monthly losses incurred during the first three months of
the Term, and an amount equal to 50% of Servicer's actual monthly losses
incurred during months four through six of the Term (each such payment being a
"Shortfall Fee").  If Servicer incurs actual monthly losses in months four
through six of the Term, the parties will negotiate in good faith as to whether
the Shortfall Fee will continue after month six of the Term.  Beginning on
February 15, 2010, such payments shall be made within 15 days after the end of
each month, following Owner's receipt from Servicer of information detailing the
amount of the loss for each month, in such form as is reasonably acceptable to
Owner.  Owner may, in its discretion, make an advance payment under this Section
2.6 in January 2010, which payment would be credited toward any future payments
due under this Section 2.6.
 
2.7           Owner's Offset.  Owner may offset any amounts due from Owner under
this Agreement against amounts owed by Servicer to Owner under the
Administrative Services Agreement dated December 31, 2009 between Owner and
Servicer and the Sublease dated December 31, 2009 between Owner and Servicer.
 
Page 4 – MICROHELIX/CAREPAYMENT SERVICING AGREEMENT
 

--------------------------------------------------------------------------------

 
 
2.8           Taxes.  All taxes, duties or charges in the nature of sales, use
or excise taxes resulting from Servicer's performance under this Agreement will
be treated as operating costs of, and will be paid by, Owner.  Notwithstanding
the prior sentence, Owner shall have no responsibility for any taxes based on
Servicer's income, which taxes will be Servicer's sole responsibility.
 
3.           Books and Records; Reports; Inspection Rights.
 
3.1           Books and Records.  Servicer shall keep books and records
pertaining to the Receivables.  Owner shall keep books and records pertaining to
the Back End Fee.  Upon reasonable prior notice, each party shall grant the
other reasonable access to such books and records.  All such books and records
and all Receivable Documents, whether or not developed or originated by
Servicer,  shall remain at all times the property of Owner; provided, however,
that Servicer shall have the right to maintain a copy of such books, records and
Receivable Documents and shall retain the right to use such books, records and
Receivable Documents to develop data, databases, information and reports
(collectively, the "Data").  All right, title and interest in and to the Data
shall remain at all times the sole property of Servicer, and Owner shall not
have any rights to the Data, except that Owner shall have a nonexclusive,
royalty-free perpetual license to use the Data developed by Servicer in
connection with this Agreement.
 
3.2           Reporting.  In addition to the Reconciliation Reports, Servicer
shall provide Owner mutually agreed upon reports and information on a weekly or
as needed basis.
 
3.3           Inspection and Audit Rights.
 
 3.3.1          Servicer will be responsible to make such examinations of the
books and records of each Sub-servicer that is servicing Receivables owned or
controlled by Owner as Servicer deems reasonably necessary in order to verify
the accuracy of cash receipts and disbursements reported by each Sub-servicer.
 
 3.3.2          Subject to Section 3.3.3 below, on not less than five business
days prior written notice, each party shall permit the other party or its
respective agents, representatives or designees, at the sole cost and expense of
the examining party, during normal business hours, to examine or make copies of
abstracts from all books, records and documents, including computer tapes and
disks and constituting Receivable Documents or otherwise relating to the
Receivables or Servicer's or any Sub-servicer's collection activities with
respect to the Receivables, or the Back End Fee.  Subject to Section 3.3.3
below, the examining party shall reimburse all costs and expenses of the party
whose books and records are being examined, or its respective agents,
representatives or designees incurred under this Section at prevailing
rates.  Examinations may be performed either on-site or remotely at Owner's
discretion.  Upon request, the party whose books and records are being examined
shall provide to the examiner(s) a reasonable workspace and the use of on-site
photocopying equipment.  The party whose books and records are being examined
shall allow full and free access to records relating to the Receivable Documents
or the Back End Fee and shall provide necessary technical assistance as required
to access such records.  The party whose books and records are being examined
shall deliver any document or instrument necessary for the examining party, as
it may from time to time reasonably request, to obtain records from any service
bureau or other person that maintains records for the party whose books and
records are being examined, and shall maintain duplicate records or supporting
documentation on media, including computer tapes and discs owned by the party
whose books and records are being examined.  The examining party agrees to
advise the party whose books and records are being examined of the
exceptions/discrepancies identified in any examination and agrees to allow the
party whose books and records are being examined a reasonable period of time to
respond to them.
 
Page 5 – MICROHELIX/CAREPAYMENT SERVICING AGREEMENT
 

--------------------------------------------------------------------------------

 
 
 3.3.3          If, after examination, there is a discrepancy as to the amount
of any fees paid or payable under this Agreement with respect to the period
examined (which period shall not be less than 90 days), the parties will use
commercially reasonable efforts to resolve the discrepancy.  If the parties
cannot resolve the discrepancy within 30 days after the last date on which the
examination of the records giving rise to the discrepancy occurred, the parties
will submit the discrepancy to an independent accounting firm to be agreed to by
the parties for resolution.  If the discrepancy, as agreed by the parties or as
determined by the independent accountants, is 10% or greater, the fees and
expenses of the examination and of the independent accountants will be borne by
the losing party.
 
 3.3.4          So long as the party whose books and records are being examined
is not in default of its obligations under this Agreement, examination of that
party's books and records shall occur no more often than once per calendar
quarter.
 
3.4           Record Retention.  Each party agrees to maintain all records
relating to this Agreement for a period of not less than seven years from the
date of origination of such records or such longer time as may be required by
law or regulation.  Such records may be retained in electronic format unless
otherwise required by specific law or regulation in which case the records will
be retained in the required format.
 
4.           Term and Termination.
 
4.1           Term.  This Agreement will be for term ending on December 31, 2034
(the "Term").
 
4.2           Termination by Owner.  Notwithstanding anything herein to the
contrary, Owner may terminate Servicer's services under this Agreement, by
giving at least 30 days' prior written notice to Servicer upon the occurrence of
any of the following (each a "Termination Event"):
 
 4.2.1          Servicer's failure to observe or perform in any material respect
any obligation, covenant or agreement required to be performed by Servicer under
this Agreement or Servicer's material breach of any agreement with a third party
that would materially affect Servicer's ability to observe or perform in any
material respect any obligation, covenant or agreement required to be performed
by Servicer under this Agreement, which failure or material breach is not cured
(if capable of being cured) within 90 days after receipt of notice from Owner or
the third party specifying such failure or material breach or, if the cure
requires more than 90 days, the failure of Servicer to promptly initiate steps
to cure such failure or material breach and thereafter to diligently continue
and complete all commercially reasonable and necessary steps sufficient to cure
such material breach.
 
Page 6 – MICROHELIX/CAREPAYMENT SERVICING AGREEMENT
 

--------------------------------------------------------------------------------

 
 
 4.2.2          Any gross negligence or willful misconduct by Servicer directly
resulting in material damage to Owner's reputation in the industry and an actual
monetary loss to Owner, regardless of whether Owner has been reimbursed by
Servicer or its insurer.
 
 4.2.3          Servicer closes for business, dissolves, becomes insolvent,
admits in writing its inability to pay its debts generally, applies for the
appointment of a receiver or custodian, makes an assignment for the benefit of
creditors, or a voluntary or involuntary petition under any state or federal
bankruptcy laws is filed by or against Servicer and, in the case of any
involuntary filing, the petition is not dismissed within 30 days after the
filing thereof.
 
 4.2.4          Servicer fails to meet the Benchmark during any 12 month period
during the Term on a rolling basis, beginning with the twelve month period
ending December 31, 2010, which failure remains uncured for more than 90 days
following Servicer's receipt of written notice identifying with specificity any
failure to meet the Benchmark.  For purposes of this Agreement, the "Benchmark"
means, with respect to Receivables and Transferred Billing Receivables for a
calendar year, the finance charge income of Owner from such Receivables for such
calendar year represents at least an 18% annual internal rate of return on
Owner's funding of such Receivables, after deduction of Servicing Fees and
Origination Fees paid to Servicer during such calendar year.
 
4.3           Termination by Servicer.  Notwithstanding anything herein to the
contrary, Servicer may terminate this Agreement by giving at least 30 days'
prior written notice to Owner and Lender upon the occurrence of any of the
following events:
 
 4.3.1          Owner fails to pay to Servicer any undisputed Servicing Fee,
Origination Fee, Back End Fee or Shortfall Fee payment when due and such failure
is not cured within 30 days after receipt of notice from Servicer specifying
such failure.
 
 4.3.2          Any gross negligence or willful misconduct by Owner or any
member, employee, agent or Affiliate of Owner resulting in damage to Servicer's
reputation and a material loss or damage to Servicer, regardless of whether
Servicer has been reimbursed by Owner or its insurer.
 
 4.3.3          Owner closes for business, dissolves, becomes insolvent, admits
in writing its inability to pay its debts generally, applies for the appointment
of a receiver or custodian, makes an assignment for the benefit of creditors, or
a voluntary or involuntary petition under any state or federal bankruptcy laws
is filed by or against Owner and, in the case of any involuntary filing, the
petition is not dismissed within 30 days after the filing thereof.
 
4.4           Effect of Termination. Upon termination of this Agreement,
Servicer shall:
 
 4.4.1          within 10 business days, deliver or cause to be delivered to
Owner all Receivable Documents then in the possession of Servicer or any
Sub-servicer, together with all Data and all other information and documentation
relating to the servicing and collection of the Receivables (with Servicer
having the right to retain copies thereof), in an orderly form as reasonably
requested by Owner;
 
Page 7 – MICROHELIX/CAREPAYMENT SERVICING AGREEMENT
 

--------------------------------------------------------------------------------

 
 
 4.4.2          within five business days after termination and thereafter
within five business days after receipt by Servicer, remit all Collections to
Owner;
 
 4.4.3          within two business days after receipt, forward to Owner or
other person designated by Owner all correspondence received by Servicer or, to
Servicer's knowledge, any Sub-servicer with respect to any Receivable; and
 
 4.4.4          upon written request from Owner, Servicer shall (i) prepare,
execute and deliver any and all documents and other instruments reasonably
required by Owner in connection with the succession by Owner, (ii) place in
Owner's possession all records related to the Receivables and all other
servicing files, (iii) transfer to Owner for administration by it all cash
amounts, if any, which as of such time have been deposited by Servicer, or
Sub-servicer in the Collection Account or thereafter be received by Servicer or
Sub-servicer with respect to the Receivables, and (iv) use commercially
reasonable efforts to do or accomplish all other acts or things reasonably
necessary or appropriate to enable Owner to assume and discharge the servicing
obligations.  In addition, Servicer agrees to cooperate and use commercially
reasonable efforts in providing at the Servicer's expense Owner with reasonable
access (including at the premises of the Servicer or Sub-servicer) to Servicer's
employees, and to use commercially reasonable efforts to cause its Sub-servicers
to provide Owner with access to the employees of any Sub-servicer, and
reasonable access to any and all of the books, records (in electronic or other
form) or other information reasonably requested by it to enable Owner to assume
the servicing functions.
 
5.           Representations and Warranties.
 
5.1           By Servicer.  Servicer represents and warrants to Owner as
follows:
 
 5.1.1          Servicer is a corporation duly organized and validly existing
under the laws of the State of Oregon, and is authorized to conduct business in
all states in which a failure to qualify would materially and adversely affect
its ability to perform its services, including origination services, pursuant to
this Agreement.
 
 5.1.2          The execution, delivery and performance of this Agreement have
been duly authorized by all necessary corporate action by Servicer.  This
Agreement has been duly and validly executed and delivered on behalf of Servicer
and is binding upon and enforceable against Servicer in accordance with its
terms, except as enforceability may be limited or affected by applicable
bankruptcy, insolvency, reorganization or other laws of general application
relating to or affecting the rights of creditors, and except as enforceability
may be limited by rules of law governing specific performance, injunctive relief
or other applicable remedies.
 
 5.1.3          Servicer has operated and will continue to operate its business
in accordance with all federal, state and local laws, statutes and regulations,
including credit protection laws and the Health Insurance Portability and
Accountability Act of 1996 ("HIPAA"), and Servicer is not in violation of any
such laws or regulations other than such violations which singly or in the
aggregate do not, and, with the passage of time will not, have a material
adverse effect on its business or assets, or its ability to perform its
obligations under this Agreement.
 
Page 8 – MICROHELIX/CAREPAYMENT SERVICING AGREEMENT
 

--------------------------------------------------------------------------------

 
 
5.2           By Owner.  Owner represents and warrants to Servicer as follows:
 
 5.2.1          Owner is a limited liability company duly organized and validly
existing under the laws of the State of Oregon.
 
 5.2.2          The execution, delivery and performance of this Agreement have
been duly authorized by all necessary limited liability company action by
Owner.  This Agreement has been duly and validly executed and delivered on
behalf of Owner and is binding upon and enforceable against Owner in accordance
with its terms, except as enforceability may be limited or affected by
applicable bankruptcy, insolvency, reorganization or other laws of general
application relating to or affecting the rights of creditors, and except as
enforceability may be limited by rules of law governing specific performance,
injunctive relief or other applicable remedies.
 
 5.2.3          Neither the execution and delivery of this Agreement by Servicer
nor the consummation of the transactions contemplated by this Agreement will
(i) violate any applicable law, judgment, order, decree, regulation or ruling of
any governmental authority, or (ii) either alone or with the giving of notice or
the passage of time or both, conflict with, constitute grounds for termination
of, or result in the breach of the terms, conditions or provisions of or
constitute a default under any agreement, instrument, license or permit to which
Servicer is a party or by which Servicer is bound.
 
6.           Indemnification; Limitation of Liability.
 
6.1           Indemnity by Servicer.  Servicer agrees to indemnify, defend and
hold harmless Owner and its respective officers, directors, managers, employees,
agents and affiliates (each an "Owner Indemnified Party"), from and against any
and all claims, losses, liabilities, damages, penalties, fines, forfeitures,
legal and accounting fees and all other fees or costs of any kind, judgments or
expenses (collectively, "Losses") resulting from or arising out of (a) any
breach by Servicer of any of the representations and warranties made by it in
this Agreement; (b) any failure of Servicer to comply with and perform all of
its duties and agreements under this Agreement; and (c) any and all claims,
actions or proceedings brought against Owner by any third party as a result of
or based upon the actions or omissions by Servicer in the performance of its
obligations under this Agreement (provided that such action or inaction was not
undertaken at the direction of Owner Indemnified Party), including any failure
by Servicer, any Sub-servicer or any of their agents, representatives or
employees to comply with all applicable laws, rules and regulations, including
credit protection laws and HIPAA, and any other action taken in collection of
the Receivables.  Servicer shall have no obligation to indemnify, defend or hold
any Owner Indemnified Party harmless in the event that any Losses result from
the negligent or wrongful acts or omissions of such person or its respective
agents or employees.
 
6.2           Indemnity by Owner. Owner agrees to indemnify, defend and hold
harmless Servicer and its officers, directors, employees, agents and affiliates
(each a "Servicer Indemnified Party") from and against any and all Losses
resulting from or arising out of (a) any breach by Owner of any of the
representations and warranties made by it in this Agreement; (b) any failure of
Owner to comply with and perform all of its duties and agreements under this
Agreement; (c) and any and all claims, actions or proceedings brought against
Servicer by any third party as a result of or based upon the actions or
omissions of Owner in the performance of its obligations under this Agreement
(provided that such action or inaction was not undertaken at the direction of
the Servicer Indemnified Party).  Owner shall have no obligation to indemnify,
defend or hold any Servicer Indemnified Party harmless in the event that any
Losses result from the negligent or wrongful acts or omissions of such person or
its agents or employees.
 
Page 9 – MICROHELIX/CAREPAYMENT SERVICING AGREEMENT
 

--------------------------------------------------------------------------------

 
 
6.3           Limitation of Liability.  Except as set forth above, in no event
will any party be liable to another party for any punitive or exemplary damages,
even if a party has been advised of the possibility of such damages, arising out
of this Agreement.  In no event will Servicer be liable for the uncollectibility
of any Receivables or the timing of actual collections on any Receivables under
any circumstances.
 
7.           Confidential Information.
 
7.1           Confidentiality.  Each party hereto agrees that it shall not
disclose or transfer to any third party any information concerning the
customers, trade secrets, methods, processes or procedures or any other
confidential, financial or business information (collectively, "Confidential
Information") of the other party which it learns during the course of this
Agreement, without the prior written consent of such other
party.  Notwithstanding the foregoing, the parties may disclose each other's
Confidential Information without obtaining prior written consent in the
following circumstances only: (i) to employees of the disclosing party or the
disclosing party's consultants or agents or attorneys, on a "need to know
basis," who require such information in order to assist the disclosing party in
performing this Agreement (so long as the disclosing party takes such
precautions or obtains such agreements as it would take or obtain in the
ordinary course of its business to protect its own confidential and proprietary
information); and (ii) as required in order to comply with any subpoena, court
order or applicable law, rule or regulation, provided that the disclosing party
gives the other party prior written notice of such disclosure (unless prohibited
by applicable law) and reasonably cooperates with the other party in protecting
the confidential or proprietary nature of the information which must be so
disclosed, at the other party's expense.  Notwithstanding anything to the
contrary in this Agreement, no party shall have an obligation to keep secret any
Confidential Information which is in or becomes part of the public domain not
due to the fault of any such party or is known to such party prior to entry into
this Agreement.
 
7.2           Protection of Confidential Information.  Each party agrees that it
will take all commercially reasonable steps to protect the secrecy of and avoid
disclosure of Confidential Information of the other party in order to prevent it
from falling into the public domain or the possession of unauthorized
persons.  Each party agrees to promptly notify the other party in writing of any
misuse or misappropriation of Confidential Information of the other party that
may come to its attention.
 
7.3           Relief.  In the event of a breach or threatened breach by any
party of the foregoing provisions, because of the uncertainty of damages
resulting there from, each party shall be entitled to an injunction restraining
another party from any such breach or threatened breach.  Nothing herein shall
be construed as prohibiting a party from pursuing any other remedies available
to it for such breach or threatened breach, including the recovery of damages
from the breaching party.
 
Page 10 – MICROHELIX/CAREPAYMENT SERVICING AGREEMENT
 

--------------------------------------------------------------------------------

 
 
7.4           Continuing Obligations.  The obligations of the parties under this
Section 7 shall survive the expiration, cancellation or other termination of
this Agreement.
 
8.           Exclusivity.
 
8.1           Owner and Aequitas Exclusivity.  Each of Owner and Aequitas agrees
that:
 
 8.1.1          During the Term, Servicer will be entitled, at Servicer’s
option, to service any Receivables purchased by Owner or Aequitas or any
affiliate of Owner or Aequitas on terms substantially identical to those
included herein, whether or not such Receivables were identified for purchase by
Servicer, Owner, Aequitas, any affiliate of Servicer, Owner or Aequitas or any
third party.  This subsection shall terminate upon the occurrence of Servicer’s
material breach of this Agreement, which material breach is not cured by
Servicer within any applicable cure period (which shall not be less than thirty
(30) days) following Servicer’s receipt of a reasonably detailed written notice
from Owner describing the alleged breach.
 
 8.1.2          During the Term, neither Owner, Aequitas, nor any affiliate of
Owner or Aequitas will, acting alone or in conjunction with others, directly or
indirectly, engage (either as sole proprietor, owner, partner, manager, member,
shareholder, employer, employee, officer, director, consultant or agent) in the
United States in the creation, management or ownership of or in any sole
proprietorship, corporation, partnership, limited liability company or other
entity that has or obtains the right to collect or service Receivables in any
manner that would circumvent Servicer's rights under Section 8.1.1.  Ownership
of not more than 1% of the equity securities of any company having securities
listed on an exchange or regularly traded in the over-the-counter market will
not, of itself, be deemed inconsistent with this Section 8.1.2.
 
8.2           Servicer Exclusivity.  Servicer agrees that:
 
 8.2.1          During the Term, Owner will have the exclusive right to purchase
any receivables identified for purchase by Servicer and its affiliates.
 
 8.2.2          During the Term, Servicer will not (and will cause its
affiliates to not) participate in the purchase, sale or funding of any
receivables unless and until Owner or any of its affiliates has waived in
writing its rights to purchase such receivables.
 
9.           Miscellaneous.
 
9.1           Severability.  Any part, provision, representation or warranty of
this Agreement which is prohibited or which is held to be void or unenforceable
shall be ineffective to the extent of such prohibition or unenforceability
without invalidating the remaining provisions hereof.  Any part, provision,
representation or warranty of this Agreement which is prohibited or
unenforceable or is held to be void or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this
Agreement, and any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction.  To the extent permitted by applicable law, the parties to this
Agreement waive any provision of law which prohibits or renders void or
unenforceable any provision of this Agreement.  If the invalidity of any part,
provision, representation or warranty of this Agreement shall deprive any party
of the economic benefit intended to be conferred by this Agreement, the parties
shall negotiate in good faith to develop a structure the economic effect of
which is as nearly as possible the same as the economic effect of this Agreement
without regard to such invalidity.
 
Page 11 – MICROHELIX/CAREPAYMENT SERVICING AGREEMENT
 

--------------------------------------------------------------------------------

 
 
9.2           Notices.  Each notice, consent, request, or other communication
required or permitted under this Agreement will be in writing, will be delivered
personally or sent by certified mail (postage prepaid, return receipt requested)
or by a recognized US overnight courier, and will be addressed as follows:
 
  If to Servicer:                                 WS Technologies LLC
Attn:  President
5300 SW Meadows Road, Suite 400
Lake Oswego, OR 97035

  If to Owner:                                    CarePayment, LLC
Attn:  Legal Department
5300 SW Meadows Road, Suite 400
Lake Oswego, OR 97035

Each notice, consent, request, or other communication will be deemed to have
been received by the party to whom it was addressed (a) when delivered if
delivered personally; (b) on the second business day after the date of mailing
if mailed; or (c) on the date officially recorded as delivered according to the
record of delivery if delivered by overnight courier.  Each party may change its
address for purposes of this Agreement by giving written notice to the other
party in the manner set forth above.

9.3           Counterparts.  This Agreement may be executed in
counterparts.  Each counterpart will be considered an original, and all of them,
taken together, will constitute a single Agreement.  This Agreement may be
delivered by facsimile or electronically, and any such delivery will have the
same effect as physical delivery of a signed original.  At the request of any
party, the other party will confirm facsimile or electronic transmission
signatures by signing an original document.
 
9.4           Governing Law.  This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Oregon, without giving effect to
conflicts of laws principles thereunder.
 
Page 12 – MICROHELIX/CAREPAYMENT SERVICING AGREEMENT
 

--------------------------------------------------------------------------------

 

9.5           Venue/Jurisdiction.  Each of the parties hereby irrevocably agrees
that any dispute arising under or in any way relating to this Agreement shall be
litigated solely and exclusively in a federal or state court sitting in
Multnomah County, Oregon.  Each party hereby agrees that if it attempts to
commence any action regarding a dispute arising under or in any way relating to
this Agreement in any court other than a federal or state court sitting in
Multnomah County, Oregon, the other party may obtain an immediate order
dismissing such action for improper venue or an order transferring venue to a
federal or state court sitting in Multnomah County, Oregon.  Each of the parties
hereby irrevocably submits to the personal jurisdiction of any federal or state
court sitting in Multnomah County, Oregon, in any action or proceeding arising
out of or in any way relating to this Agreement.  Each of the parties agrees
that a final judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law.  Each party also irrevocably waives the right to a trial
by jury in connection with any action brought to construe or enforce this
Agreement.
 
9.6           Amendments.  This Agreement may be amended from time to time by a
written instrument signed by Servicer and Owner and no waiver of any of the
terms hereof by any party shall be effective unless it is in writing and signed
by the other parties.
 
9.7           Integration.  This Agreement comprises the final and complete
integration of all prior expressions by the parties hereto with respect to the
subject matter hereof and shall constitute the entire agreement among the
parties hereto with respect to such subject matter, superseding all prior oral
or written understandings.
 
9.8           Agreement Effectiveness.  This Agreement shall become effective
upon delivery of fully executed counterparts hereof to each of the parties
hereto.
 
9.9           Headings Descriptive; Interpretation.  The headings of the
sections and subsections of this Agreement are inserted for convenience only and
shall not in any way affect the meaning or construction of any provision of this
Agreement.  All references in this Agreement to "Section" or "Sections" without
additional identification refer to the Section or Sections of this
Agreement.  The words "will" and "shall" have the same meaning.  The words
"include," "includes" and "including" shall not be deemed to be terms of
limitation, but rather shall be deemed to be followed by the words "without
limitation."
 
9.10           Advice from Independent Counsel.  The parties hereto understand
that this Agreement is a legally binding agreement that may affect such party's
rights.  Each party hereto represents to the other that it has received legal
advice from counsel of its choice regarding the meaning and legal significance
of this Agreement and that it is satisfied with its legal counsel and the advice
received from it.
 
9.11           Assignment.  Except as may otherwise be provided herein, Servicer
may not assign, delegate and/or subcontract all or substantially all of this
Agreement or its rights hereunder, or delegate its obligations hereunder without
the prior written consent of Owner.  Any attempted assignment, delegation,
and/or subcontracting without the requisite consent of Owner shall be null and
void.  Subject to the foregoing, this Agreement shall be binding upon and shall
inure to the benefit of the parties and their respective successors and assigns.
 
9.12           Judicial Interpretation.  Should any provision of this Agreement
require judicial interpretation, it is agreed that a court interpreting or
construing the same shall not apply a presumption that the terms hereof shall be
more strictly construed against any person by reason of the rule of construction
that a document is to be construed more strictly against the person who itself
or through its agent prepared the same, it being agreed that all parties hereto
have participated in the preparation of this Agreement.
 
Page 13 – MICROHELIX/CAREPAYMENT SERVICING AGREEMENT
 
 

--------------------------------------------------------------------------------

 
 
9.13           Further Assurances.  The parties agree to execute such other
documents as may be necessary to implement this Agreement and carry out the
intent of the parties to this Agreement.
 
9.14           Survival.  Sections 2, 3, 6, 7, 8 and 9 and each other provision
of this Agreement that expressly or by its nature provides for rights,
obligations or remedies that extend beyond the expiration or earlier termination
of this agreement, will survive and continue in full force and effect after this
Agreement expires or is earlier terminated.
 
9.15           Independent Contractor Status.  Servicer's relationship to Owner
with respect to the services to be performed under this Agreement shall be that
of an independent contractor.  Servicer assumes full responsibility for the
actions of its personnel in the performance of the services under this Agreement
and will be solely responsible for their supervision, daily direction and
control and will be responsible for their acts or omissions in performing
Servicer's obligations hereunder.  Servicer shall have sole responsibility for
the payment of salary (including withholding of income taxes and social
security), worker's compensation and all other forms of compensation for its
personnel.
 
9.16           Attorney Fees.  In the event arbitration, suit or action is
instituted to enforce or determine the parties' rights or duties in connection
with this Agreement, the prevailing party shall recover from the losing party
all costs and expenses, including reasonable attorney fees, incurred in such
proceedings, including any appellate or bankruptcy proceedings.
 
9.17           Public Announcements.  Except as required by applicable law or
regulations, no party to this Agreement will make any public announcement or any
press release regarding this Agreement, or the transactions contemplated herein,
without the prior written consent of the other parties.  In addition, prior to
making any public announcement or press release, each party will afford the
other parties the opportunity to review and reasonably comment on the contents
of such release.

[Signature page follows]
 
Page 14 – MICROHELIX/CAREPAYMENT SERVICING AGREEMENT
 
 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed by
their authorized officer as of the day and year first above written.
 

 
MICROHELIX, INC., as Servicer
       
By
s/ Brian A. Oliver
   
Brian A. Oliver
   
 Secretary
       
CAREPAYMENT, LLC
       
By
Aequitas Capital Management, Inc., its Manager
       
By
/s/ Robert J. Jesenik
   
Robert J. Jesenik, President
     
For purposes of agreeing to Section 8.1 only:
           
AEQUITAS HOLDINGS, LLC
       
By
Aequitas Capital Management, Inc., its Manager
       
By
/s/ Robert J. Jesenik
   
Robert J. Jesenik, President

 
Signature page to Servicing Agreement

 
 

--------------------------------------------------------------------------------