Exhibit 10.1

Customer No.                     

Loan No.                             

 

RBC BANK       

LOAN AND SECURITY AGREEMENT

(SD-L&S)

This LOAN AND SECURITY AGREEMENT (“Agreement”) is entered into as of the 31st
day of December 2008, by and between RBC BANK (USA) (“Bank”) and A.D.A.M., INC.
(“Borrower”).

RECITALS

Borrower wishes to obtain credit from time to time from Bank, and Bank desires
to extend credit to Borrower for use by Borrower in its business. This Agreement
sets forth the terms and conditions on which Bank will advance credit to
Borrower.

AGREEMENT

The parties agree as follows:

1. DEFINITIONS AND INTERPRETATION.

1.1 Definitions. Capitalized terms used herein and not defined in the specific
section in which they are used shall have the meanings assigned to such terms in
Exhibit A. Terms not defined in a specific section or in Exhibit A which are
defined in the Code shall have the meanings assigned to such terms in the Code.

1.2 Accounting Terms. All accounting terms not specifically defined in Exhibit A
shall be construed in accordance with GAAP and all calculations shall be made in
accordance with GAAP. The term “financial statements” shall include the
accompanying notes and schedules.

1.3 Use and Application of Terms. To the end of achieving the full realization
by Bank of its rights and remedies under this Agreement, including payment in
full of the Obligations, in using and applying the various terms, provisions and
conditions in this Agreement, the following shall apply: (i) the terms “hereby”,
“hereof”, “herein”, “hereunder” and any similar words refer to this Agreement;
(ii) words in the masculine gender mean and include correlative words of the
feminine and neuter genders and words importing the singular numbered meaning
include the plural number, and vice versa; (iii) words importing persons include
firms, companies, associations, general partnerships, limited partnerships,
limited liability partnerships, limited liability limited partnerships, limited
liability companies, trusts, business trusts, corporations and other registered
or legal organizations, including public and quasi-public bodies, as well as
individuals; (iv) the use of the terms “including” or “included in”, or the use
of examples generally, are not intended to be limiting, but shall mean, without
limitation, the examples provided and others that are not listed, whether
similar or dissimilar; (v) the phrase “costs and expenses”, or variations
thereof, shall include, without limitation, the reasonable fees of the following
persons: attorneys, legal assistants, accountants, engineers, surveyors,
appraisers and other professionals and service providers; (vi) as the context
requires, the word “and” may have a joint meaning or a several meaning and the
word “or” may have an inclusive meaning or an exclusive meaning; (vii) this
Agreement shall not be applied, interpreted and construed more strictly against
a person because that person or that person’s attorney drafted this Agreement;
and (viii) wherever possible each provision of this Agreement and the other Loan
Documents shall be interpreted and applied in such manner as to be effective and
valid under applicable Requirements of Law, but if any provision of this
Agreement or any of the other Loan Documents shall be prohibited or invalid
under such law, or the application thereof shall be prohibited or invalid under
such law, such provision shall be ineffective to

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the extent of such prohibition or invalidity without invalidating the remainder
of such provision or the remaining provisions, or the application thereof shall
be in a manner and to an extent permissible under applicable Requirements of
Law.

2. CREDIT EXTENSIONS.

2.1 Credit Extensions. Subject to and upon the terms and conditions of this
Agreement and provided that no Event of Default has occurred and is continuing,
Bank shall make available to Borrower the following Credit Facilities and Credit
Extensions thereunder: a Revolving Facility, Letters of Credit and a Term Loan.
The Credit Facilities and related Credit Extensions which are to be made
available to Borrower are more fully described below in this Section 2.1 and
unless otherwise provided in this Agreement, the Credit Facilities and related
Credit Extensions shall be evidenced by one or more Promissory Notes from
Borrower to Bank and the Credit Extensions shall bear interest, and the Credit
Extensions, the interest and the fees, charges, premiums and costs and expenses
associated therewith, shall be repayable in accordance with the terms of such
Promissory Notes and this Agreement.

(a) Revolving Facility. At any time from the date hereof through the Revolving
Maturity Date, Borrower may request and Bank agrees to make advances (“Advance”
or “Advances”) to Borrower for use in its business – and not for any other
purpose. Borrower may request no more than two (2) Advances in a calendar month.
The aggregate amount of outstanding Advances shall not exceed at any time
(i) the lesser of (A) the Committed Revolving Line or (B) the Borrowing Base,
minus the aggregate face amount of all outstanding Letters of Credit. If no
Event of Default has occurred and is continuing, amounts borrowed under the
Revolving Facility may be repaid and reborrowed at any time prior to the
Revolving Maturity Date.

(b) Term Loan Facility. On the Closing Date, Borrower may request and Bank
agrees to make a term loan advance (the “Term Loan Advance”) to Borrower to
refinance existing debt and for other general corporate purposes - and for no
other purposes.

(c) Reserved.

(d) Letters of Credit. At any time from the date hereof through the Revolving
Maturity Date, Borrower may request and Bank agrees to issue, or cause to be
issued, letters of credit for the account of Borrower (each, a “Letter of
Credit” and, collectively, the “Letters of Credit”) in an aggregate outstanding
face amount not to exceed the amount of Advances available under the Revolving
Facility at the time of any such issuance; provided (i) any such request shall
be subject to availability of Advances under the Revolving Facility; (ii) the
availability of Advances shall be reduced by the aggregate outstanding face
amount of Letters of Credit issued by Bank for the account of Borrower under
this subsection plus any other amounts which become due and owing by Borrower to
Bank under this subsection and any amounts which become due and owing in
connection with the Letters of Credit; and (iii) in no event shall the aggregate
outstanding face amount of Letters of Credit plus any other amounts which become
due and owing by Borrower to Bank under this subsection and in connection with
the Letters of Credit exceed Five Hundred Thousand Dollars ($500,000). All
Letters of Credit shall be, in form and substance, acceptable to Bank in its
sole discretion. The Letters of Credit and Borrower’s reimbursement obligations
to Bank in connection therewith shall be subject to and in accordance with the
terms and conditions of Bank’s form of standard application and letter of credit
agreement (which Borrower shall execute and deliver to Bank prior to the
issuance of any Letters of Credit), this Agreement and separate Promissory Notes
if Borrower is requested to execute Promissory Notes in connection with the
application and letter of credit agreement; and, to the extent a conflict exists
or conflicts exist between the aforementioned application and letter of credit
agreement, Promissory Notes and this Agreement, Bank shall have the right to
resolve such conflict or conflicts and Bank’s resolution thereof shall be
binding on Borrower.

2.2 Credit Extensions – Disbursements. Whenever Borrower desires an Advance,
Borrower shall notify Bank (which notice shall be irrevocable) by facsimile
transmission or telephone no later than 10:00 a.m. eastern time, on the Business
Day on which Borrower desires the Advance to be made. Each notification by
facsimile transmission shall include the information requested on the form
attached as Exhibit B, shall be submitted substantially in the form of Exhibit B
and shall be signed by a Responsible Officer or a designee thereof. Each
notification by telephone shall include the information requested on the form
attached as Exhibit B and each notification by telephone shall be followed
within one (1) Business Day by a facsimile transmission which meets

 

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the criteria regarding a facsimile transmission. Bank shall be entitled to rely
on any telephonic notice given by a person who Bank reasonably believes to be a
Responsible Officer or a designee thereof. Bank shall not have any liability to
Borrower or any other person for its failure to make an Advance on the date
requested by Borrower, unless such failure is the result of willful misconduct
or gross negligence of Bank; and if Bank’s failure is a result of willful
misconduct or gross negligence, its liability shall be limited to actual damages
only – Bank shall not be liable for indirect, speculative, consequential or
punitive damages and losses. If Borrower maintains its operating deposit account
with Bank, Bank will credit the amount of the Advances and Term Loan Advances to
such account. If Borrower does not maintain its operating deposit account with
Bank, Bank will issue to Borrower for deposit in its operating deposit account a
bank check or other negotiable instrument drawn on Bank in the amount of the
Advances or the Term Loan Advance.

2.3 Overadvances. If, at any time, the aggregate amount of the outstanding
principal under any Credit Extension exceeds the maximum amount that is
permitted to be outstanding at any one time, as provided in this Section 2, the
Borrower shall immediately pay to Bank, in cash, the amount of such excess.

2.4 Charging of Payments. Bank may, at its option, set-off and apply to the
Obligations and otherwise exercise its rights of recoupment as to any and all
(i) balances and deposits of Borrower held by Bank, (ii) indebtedness and other
obligations at any time owing to or for the credit or the account of Borrower by
Bank and by any of Bank’s Affiliates. Bank may, at its option, also charge all
payments required to be made on any of the Obligations against the Committed
Revolving Line. If Bank charges the aforementioned payments against the
Committed Revolving Line, the same shall be deemed an Advance thereunder and the
amount of the Advance shall thereafter accrue interest at the interest rate
applicable from time to time to Advances; and if Bank charges payments as
aforesaid, Bank may, in its discretion, limit, declare a moratorium on and
terminate Borrower’s right under this Agreement to receive additional Advances,
all without prior notice to Borrower, unless notice is otherwise specifically
required under this Agreement – and Bank’s decision to do one of the foregoing
does not prevent it from later doing any one or more of the others.

2.5 Fees. In addition to the other fees, charges, costs and expenses required to
be paid by Borrower under this Agreement and the other Loan Documents, Borrower
shall pay to Bank the fees, charges, costs and expenses set forth in this
Section 2.5.

(a) Facility Fee. On or before the Closing Date, Borrower shall pay to Bank a
facility fee of Seventy Five Thousand Dollars ($75,000) for the commitment made
in Section 2.1, which fee shall be nonrefundable.

(b) Bank Expenses. On the Closing Date, Borrower shall pay to Bank all Bank
Expenses incurred through the Closing Date and shall pay, as and when demand is
so made by Bank to Borrower, all Bank Expenses incurred relating to completion,
after the Closing Date, of matters related to closing of this Agreement.
Notwithstanding the foregoing, Bank’s legal fees in regard to the closing of
this Agreement shall be capped at $10,000 unless otherwise agreed upon by
Borrower. Borrower shall be responsible for its own fees and expenses, including
its legal fees.

(c) Letter of Credit Fees. Prior to or simultaneously with the opening of each
Letter of Credit, Borrower shall pay to Bank, a letter of credit fee (each a
“Letter of Credit Fee” and collectively the “Letter of Credit Fees”) in an
amount equal to one and one half percent (1.50%) per annum of the face amount of
the Letter of Credit. The Letter of Credit Fees shall be paid upon the opening
of each Letter of Credit and upon each anniversary thereof, if any. In addition,
Borrower shall pay to Bank all other reasonable and customary amendment,
negotiation, processing, transfer or other fees to the extent and as and when
required by the provisions of any agreement executed by Borrower in connection
with the issuance of any Letter of Credit.

2.6 Documentary and Intangible Taxes; Additional Costs. To the extent not
prohibited by law and notwithstanding who is liable for payment of the taxes and
fees, Borrower shall pay, on Bank’s demand, all intangible personal property
taxes, documentary stamp taxes, excise taxes and other similar taxes assessed,
charged and required to be paid in connection with the Credit Extensions and any
extension, renewal and modification thereof, or assessed, charged and required
to be paid in connection with this Agreement, any of the other Loan Documents
and any extension, renewal and modification of any of the foregoing. If, with
respect to this

 

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Agreement or the transactions hereunder, any Requirement of Law (i) subjects
Bank to any tax (except federal, state and local income taxes on the overall net
income of Bank), (ii) imposes, modifies and deems applicable any deposit
insurance, reserve, special deposit or similar requirement against assets held
by, or deposits in, or loans by Bank, or (iii) imposes upon Bank any other
condition, and the result of any of the foregoing is to increase the cost to
Bank, reduce the income receivable by Bank or impose any expense upon Bank with
respect to the Obligations, Borrower agrees to pay to Bank the amount of such
increase in cost, reduction in income or additional expense within thirty
(30) days following presentation by Bank of a statement of the amount and
setting forth Bank’s calculation thereof, all in reasonable detail, which
statement shall be deemed true and correct absent manifest error.

2.7 Term of Agreement. This Agreement shall become effective on the Closing Date
and shall continue in full force and effect until the last to occur of
(i) payment in full of all of the Obligations or (ii) termination of Bank’s
obligation to make Credit Extensions under this Agreement. Notwithstanding the
foregoing, Bank shall have the right to limit, declare a moratorium on and
terminate its obligation to make Credit Extensions under this Agreement
immediately and without notice upon the occurrence and during the continuance of
an Event of Default; and such action by Bank shall not constitute a termination
of this Agreement, shall not constitute a termination of Borrower’s obligations
under this Agreement and the other Loan Documents and shall not adversely affect
or impair Bank’s security interests in the Collateral. Bank’s decision to do any
one of the foregoing (i.e., limit, declare a moratorium and terminate its
obligations to make Credit Extensions) shall not prevent it from exercising any
one or more of the other options available to it at any other time.

3. CONDITIONS OF CREDIT EXTENSIONS.

3.1 Conditions Precedent to Initial Credit Extension. The obligation of Bank to
make the initial Credit Extension is subject to the condition precedent that all
of the conditions and requirements set forth in this Section 3.1 and Section 3.2
have been satisfied and completed, or the satisfaction and completion thereof
waived by Bank. If all of the conditions are not met to Bank’s satisfaction, or
the completion thereof waived by Bank, Bank may, at its option, (i) withhold
disbursement until the same are met, (ii) close and require that any unsatisfied
conditions be satisfied as a condition subsequent to closing within such period
of time as may be designated by the Bank or (iii) terminate its obligation to
make any Credit Extension and recover from Borrower all Bank Expenses incurred
by Bank in connection with its preparations for making the Credit Extensions,
together with the fees and other costs and expenses required to be paid by
Borrower under the Loan Documents. A waiver by Bank of a condition or
requirement must be in writing to be effective and a waiver as to one or more
conditions or requirements shall not constitute a waiver as to other conditions
or requirements and shall not establish a “course of dealing or practice” that
would require a waiver of the same or a similar condition or requirement at some
later time.

(a) Loan Documents, etc. Bank shall have received an original of this Agreement,
duly executed by Borrower and any other persons who are parties hereto, and all
of the information, certifications, certificates, authorizations, consents,
approvals, title and other insurance policies and commitments, financial
statements, financing statements, agreements, documents and records listed on
the Closing Memorandum and Checklist as items to be received, reviewed,
completed, executed, recorded, filed and satisfied prior to Bank making the
initial Credit Extension, and such other information, agreements, documents and
records as Bank and its counsel may deem reasonably necessary or appropriate.

(b) Payment of Fees. Bank shall have received payment of the fees and Bank
Expenses then due, as specified in Section 2.

(c) No Event of Default. No Event of Default shall have occurred and be
continuing as of the Closing Date, or after giving effect to the initial Credit
Extension to be made at or immediately after closing.

(d) Additional Matters. All other legal and non-legal matters as Bank or its
counsel deem reasonably necessary or appropriate to be satisfied, completed and
received prior to the initial Credit Extension shall be satisfied, completed and
received in form and substance satisfactory to the Bank and its counsel; and
Bank’s counsel shall have received duly executed counterpart originals, or
certified or other such copies of all records as such counsel may reasonably
request.

 

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3.2 Conditions Precedent to All Credit Extensions. The obligation of Bank to
make each Credit Extension, including the initial Credit Extension, is further
subject to all of the conditions and requirements set forth in this Section 3.2
being satisfied and completed, or the satisfaction and completion thereof waived
by Bank.

(a) Loan Payment/Advance Request Form. Bank shall have received, as and when
required, a completed Loan Payment/Advance Request Form in the form of Exhibit B
attached hereto.

(b) Representations and Warranties; No Event of Default. The representations and
warranties referenced in Section 5 and in the other Loan Documents shall be true
and correct on and as of the date of such Loan Payment/Advance Request Form and
on the effective date of each Credit Extension as though made at and as of each
such date, and no Event of Default shall have occurred and be continuing, or
would exist after giving effect to such Credit Extension (provided, however,
that those representations and warranties expressly referring to another date
shall be true, correct and complete as of such date). The making of each Credit
Extension shall be deemed to be a representation and warranty by Borrower on the
date of such Credit Extension as to the accuracy of the facts referred to in
this subsection.

(c) Audit of Collateral. In the case of any Advances under the Revolving
Facility, at Bank’s election, the Bank shall have received and conducted an
audit of the Collateral (including, without limitation, Borrower’s Accounts),
the results of which shall be satisfactory to the Bank.

4. CREATION OF SECURITY INTEREST.

4.1 Grant of Security Interest. Borrower grants and pledges to Bank a continuing
security interest in all presently existing and hereafter acquired or arising
Collateral to secure the prompt repayment of any and all Obligations and to
secure the prompt performance by Borrower of each of its covenants, duties and
obligations under the Loan Documents. Except as set forth in the Schedule, such
security interest constitutes a valid, first priority security interest in the
presently existing Collateral, and will constitute a valid, first priority
security interest in Collateral acquired or arising after the date hereof.
Notwithstanding any limitation of, moratorium on or termination of Bank’s
obligation to make Credit Extensions under this Agreement, Bank’s security
interest on the Collateral shall remain in full force and effect for so long as
any Obligations are outstanding.

4.2 Delivery of Additional Documentation Required. Borrower shall from time to
time execute and deliver to Bank, at the request of Bank, all Negotiable
Collateral, all Financing Statements and other documents and records that Bank
may request, in form and substance satisfactory to Bank and its counsel, to
perfect and continue perfected Bank’s security interests in the Collateral and
in order to fully consummate all of the transactions contemplated under the Loan
Documents. Borrower hereby consents to the filing by Bank of Financing
Statements and such other instruments and documents in any jurisdictions or
locations deemed advisable or necessary in Bank’s discretion to preserve,
protect and perfect Bank’s security interest and rights in the Collateral.
Borrower further consents to and ratifies the filing of such Financing
Statements and other instruments and documents prior to the Closing Date. If
Borrower has executed and delivered to Bank a separate security agreement or
agreements in connection with any or all of the Obligations, that security
agreement or those security agreements and the security interests created
therein shall be in addition to and not in substitution of this Agreement and
the security interests created hereby, and this Agreement shall be in addition
to and not in substitution of the other security agreement or agreements and the
security interests created thereby. In all cases this Agreement and the
aforesaid security agreement or agreements, as well as all other evidences or
records of any and all of the Obligations and agreements of Borrower, Bank and
other persons who may be obligated on any of the Obligations, shall be applied
and enforced in harmony with and in conjunction with each other to the end that
Bank realizes fully upon its rights and remedies in each and the Liens created
by each; and, to the extent conflicts exist between this Agreement and the other
security agreements and records, they shall be resolved in favor of Bank for the
purpose of achieving the full realization of Bank’s rights and remedies
thereunder and the Liens as aforesaid.

4.3 Power of Attorney. Borrower does hereby irrevocably constitute and appoint
Bank its true and lawful attorney with full power of substitution, for it and in
its name, place and stead, to execute, deliver and file such agreements,
documents, notices, statements and records, to include, without limitation,
Financing Statements, and to do or undertake such other acts as Bank, in its
sole discretion, deems necessary or advisable to effect the terms and conditions
of this Agreement, the other Loan Documents and to otherwise preserve, protect
and perfect the security of the security interest in the Collateral. The
foregoing appointment is and the same shall be coupled with an interest in favor
of Bank.

 

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4.4 Right to Inspect and Audit. Bank (through any of its officers, employees,
agents or other persons designated by Bank) shall have the right, upon
reasonable prior notice, from time to time during Borrower’s usual business
hours, to inspect Borrower’s Books and to make copies thereof and to inspect,
check, test, audit and appraise the Collateral and Borrower’s business affairs
in order to verify Borrower’s financial condition or the amount, condition of,
or any other matter relating to the Collateral and Borrower’s compliance with
the terms and conditions of this Agreement and the other Loan Documents,
provided, however, Borrower shall not be obligated to reimburse Bank for more
than two (2) inspections during any fiscal year while no Event of Default
exists. Borrower shall permit representatives of Bank to discuss the business,
operations, properties and financial and other conditions of Borrower with its
officers, board members, executives, managers, members, partners, employees,
agents, independent certified public accountants and others, as applicable.
Notwithstanding the foregoing provisions of this Section 4.4, Bank shall not be
required to give prior notice or limit its inspections to normal business hours
if it deems an emergency or other extraordinary situation to exist with respect
to the Collateral, Borrower’s Books and its other rights hereunder.

4.5 Collection of Accounts. In addition to its other rights and remedies in this
Agreement, Bank shall have the rights and remedies set forth in this
Section 4.5, all of which may be exercised by Bank upon the occurrence of an
Event of Default:

(a) Bank is authorized and empowered at any time in its sole discretion (i) to
require Borrower to notify, or itself to notify, either in its own name or in
the name of Borrower, all or any of the Borrower’s account debtors, and any
other person obligated to Borrower, that Borrower’s Accounts have been assigned
to Bank and to request in its name, in the name of Borrower or in the name of a
third person, confirmation from any such account debtor or other person of the
amount payable and any other matter stated therein or relating thereto, (ii) to
demand, collect, settle, compromise for, recover payment of, to hold as
additional security for the Obligations and to apply against the Obligations any
and all sums which are now owing and which may hereafter arise and become due
and owing upon any of said Accounts and upon any other obligation to Borrower
(to include making, settling, adjusting, collecting and recovering payment of
all claims under and decisions with respect to Borrower’s policies of
insurance), (iii) to enforce payment of any Account and any other obligation of
any person to Borrower either in its own name or in the name of Borrower,
(iv) to endorse in the name of Borrower and to collect any instrument or other
medium of payment, whether tangible or electronic, tendered or received in
payment of the Accounts that constitute Collateral and any other obligation to
Borrower; (v) to sign Borrower’s name on any invoice or bill of lading relating
to any Account, drafts against account debtors, schedules and assignments of
Accounts, verifications of Accounts and notices to account debtors; and
(vi) dispose of any Collateral constituting Accounts and to convert any
Collateral constituting Accounts into other forms of Collateral. But, under no
circumstances shall Bank be under any duty to act in regard to any of the
foregoing matters. Without limiting the provisions of Section 4.3 hereof, but in
addition thereto, Borrower hereby appoints Bank and any employee or
representative of Bank as Bank may from time to time designate, as
attorneys-in-fact for Borrower, to sign and endorse in the name of Borrower, to
give notices in the name of Borrower and to perform all other actions necessary
or desirable in the reasonable discretion of Bank to effect these provisions and
carry out the intent hereof. Borrower hereby ratifies and approves all acts of
such attorneys-in-fact and neither Bank nor any other such attorneys-in-fact
will be liable for any acts of commission or omission or for any error of
judgment or mistake of fact or law. The foregoing power, being coupled with an
interest, is irrevocable so long as any Account pledged and assigned to Bank
remains unpaid and this Agreement or any other Loan Document is in force. The
costs and expenses of such collection and enforcement shall be borne solely by
Borrower whether the same are incurred by Bank or on behalf of Bank or Borrower
and, if paid or incurred by Bank, the same shall be an Obligation owing by
Borrower to Bank, payable on demand with interest at the Default Rate, and
secured by this Agreement and the other Loan Documents. Borrower hereby
irrevocably authorizes and consents to all account debtors and other persons
communicating with Bank, or its agent, with respect to Borrower’s property,
business and affairs and to all of the foregoing persons acting upon and in
accordance with Bank’s, or its representative’s, instructions, directions and
demands, including, without limitation, Bank’s request and demand to pay money
and deliver other property to Bank or Bank’s representatives, all without
liability to Borrower for so doing.

 

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(b) At Bank’s request, Borrower will forthwith upon receipt of all checks,
drafts, cash and other tangible and electronic remittances in payment or on
account of Borrower’s Accounts, deposit the same in a special bank account
maintained with Bank or its representative, over which Bank and its
representative (as applicable) have the sole power of withdrawal and will
designate with each such deposit the particular Account upon which the
remittance was made. The funds in said account shall be held by Bank as security
for the Obligations. Said proceeds shall be deposited in precisely the form
received except for the endorsement of Borrower where necessary to permit
collection of items, which endorsement Borrower agrees to make, and which
endorsement Bank and its representative (as applicable) are also hereby
authorized to make on Borrower’s behalf. Pending such deposit, Borrower agrees
that it will not commingle any such checks, drafts, cash and other remittances
with any of Borrower’s funds or property, but will hold them separate and apart
therefrom and upon an express trust for Bank until deposit thereof is made in
the special account. Bank may at anytime and from time to time, in its sole
discretion, apply any part of the credit balance in the special account to the
payment of all or any of the Obligations, whether or not the same be due, and to
payment of any other obligations owing to Bank under or on account of this
Agreement or any of the other Loan Documents. In the event the balance of the
Obligations outstanding is ZERO at anytime prior to the Revolving Maturity Date,
and provided no Event of Default has occurred or is continuing, Bank will pay
over to the Borrower any excess good and collected funds received by Bank from
Borrower as aforesaid. On the Revolving Maturity Date and upon the full and
final payment of all of the Obligations and the other obligations as aforesaid,
together with a termination of Bank’s obligation to make additional Advances,
Bank will pay over to the Borrower any excess good and collected funds received
by Bank from Borrower, whether received as a deposit in the special account or
received as a direct payment on any of the Obligations.

(c) Bank shall have the absolute and unconditional right to apply for and to
obtain the appointment of a receiver, custodian or similar official for all or a
portion of the Collateral, including, without limitation, the Accounts, to,
among other things, manage and sell the same, or any part thereof, and to
collect and apply the proceeds therefrom to payment of the Obligations as
provided in this Agreement and the other Loan Documents. In the event of such
application, Borrower consents to the appointment of such receiver, custodian or
similar official and agrees that such receiver, custodian or similar official
may be appointed without notice to Borrower, without regard to the adequacy of
any security for the Obligations secured hereby and without regard to the
solvency of Borrower or any other person who or which may be liable for the
payment of the Obligations or any other obligations of Borrower hereunder. All
costs and expenses related to the appointment of a receiver, custodian or other
similar official hereunder shall be the responsibility of Borrower, but if paid
by Bank, Borrower hereby agrees to pay to Bank, on demand, all such costs and
expenses, together with interest thereon from the date of payment at the Default
Rate. All sums so paid by Bank, and the interest thereon, shall be an Obligation
owing by Borrower to Bank, and secured by this Agreement and the other Loan
Documents. Notwithstanding the appointment of any receiver, custodian or other
similar official, Bank shall be entitled as pledgee to the possession and
control of any cash, deposits, accounts, account receivables, documents, chattel
paper, documents of title or instruments at the present or any future time held
by, or payable or deliverable under the terms of the Loan Documents to Bank.

5. REPRESENTATIONS AND WARRANTIES.

Borrower represents and warrants to Bank that the certifications,
representations and warranties set forth in the Certificate of Borrower which
has been executed and delivered by Borrower to Bank contemporaneously with the
execution and delivery of this Agreement by Borrower to Bank are true, correct
and accurate as of the date of this Agreement or such other date as may be
specifically set forth in a particular certification, representation or
warranty; and Borrower agrees that such certifications, representations and
warranties shall be continuing certifications, representations and warranties of
Borrower to Bank.

6. AFFIRMATIVE COVENANTS.

Borrower covenants and agrees that until the termination of Bank’s obligation
under this Agreement to make Credit Extensions and the payment in full of the
Obligations, Borrower shall do each and all of the matters set forth in this
Section 6; and Borrower acknowledges to Bank that the breach or default by
Borrower of any of the covenants and agreements set forth below in this
Section 6 is and the same shall be material.

6.1 Good Standing and Government Compliance. Borrower shall maintain in good
standing its and each of its Subsidiaries’ organizational existence in their
respective jurisdictions of organization and maintain qualification in each
jurisdiction in which the

 

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conduct of their respective businesses or their respective ownership of property
requires that they be so qualified. Borrower shall comply, and shall cause each
Subsidiary to comply with all Requirements of Law to which they are subject, and
without limiting the foregoing with respect to compliance with all Requirements
of Law, Borrower shall remain in material compliance with and each of its
Subsidiaries shall remain in material compliance with (i) the Trading with the
Enemy Act, as amended, and each of the foreign assets control regulations of the
United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended)
and any other enabling legislation or executive order relating thereto, and
(ii) the Uniting And Strengthening America By Providing Appropriate Tools
Required To Intercept And Obstruct Terrorism (USA Patriot Act of 2001). Borrower
shall maintain, and shall cause each of its Subsidiaries to maintain, in force
all licenses, approvals and agreements, the loss of which or failure to comply
with which could have a Material Adverse Effect, or an adverse effect in a
material manner on the Collateral or the priority of Bank’s security interest in
the Collateral.

6.2 Payment/Performance. Borrower shall pay when due all amounts owing to Bank
under this Agreement and the other Loan Documents and promptly perform all other
obligations of Borrower thereunder and hereunder.

6.3 Use of Loan Funds. Borrower shall use all loan proceeds disbursed to
Borrower only for the purposes stated in this Agreement and the other Loan
Documents.

6.4 Financial Statements; Reports; Certificates.

(a) Borrower shall deliver to Bank each and all of the financial statements,
reports, certificates and other records referenced under this subsection (a) and
such other statements, reports, certificates and records as Bank may reasonably
request from time to time.

(i) As soon as available, but in any event within forty five (45) days after the
end of each fiscal quarter, Borrower shall deliver to Bank an unaudited
consolidated balance sheet and a statement of income and retained earnings
prepared in accordance with GAAP, consistently applied, covering Borrower’s
consolidated operations during such period, in a form acceptable to Bank and
certified by a Responsible Officer.

(ii) Beginning with the fiscal year ending December 31, 2008, as soon as
available, but in any event within one hundred fifty (150) days after the end of
Borrower’s fiscal year, Borrower shall deliver to Bank audited consolidated
financial statements of Borrower (including a balance sheet, an income statement
and a statement of retained earnings, each with the related notes and changes in
the financial position for such year and setting forth in comparative form the
figures for the prior year) prepared in accordance with GAAP, consistently
applied, together with an opinion on such financial statements that is
unqualified or qualified in a manner acceptable to Bank from Grant Thornton or
another independent certified public accounting firm reasonably acceptable to
Bank.

(iii) If applicable, Borrower shall deliver to Bank copies of all statements,
reports and notices sent or made available generally by Borrower to its security
holders or to any holders of Subordinated Debt and all reports on Forms 10-K and
10-Q filed with the Securities and Exchange Commission.

(iv) Promptly upon receipt of notice thereof, Borrower shall deliver to Bank a
report of any legal actions pending or threatened against Borrower or any
Subsidiary that could result in damages or costs to Borrower or any Subsidiary
of Fifty Thousand Dollars ($50,000) or more.

(v) Borrower shall deliver to Bank such budgets, sales projections, operating
plans or other financial information generally prepared by Borrower in the
ordinary course of business as Bank may reasonably request from time to time.

(vi) Within twenty (20) days after the last day of each fiscal quarter, Borrower
shall deliver to Bank a report signed by Borrower, in form reasonably acceptable
to Bank, listing any applications or registrations that Borrower has made or
filed in respect of any Patents, Copyrights or Trademarks and the status of any
outstanding applications or registrations, as well as any change in Borrower’s
Intellectual Property Collateral, including, but not limited to, any subsequent
ownership right of Borrower in or to any Trademark, Patent or Copyright not
specified in Exhibits A, B and C to the Intellectual Property Security Agreement
or Negative Pledge Agreement delivered to Bank by Borrower in connection with
this Agreement.

 

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(vii) As soon as available, but in any event within ten (10) days after the end
of each calendar month, Borrower shall deliver to Bank copies of minutes of
meetings of the Borrower’s board of directors.

(b) Within ten (10) days after the last calendar day of each month so long as
any amounts remain outstanding under the Revolving Facility, Borrower shall
deliver to Bank a Borrowing Base Certificate dated and signed by a Responsible
Officer in substantially the form of Exhibit D hereto, together with aged
listings of accounts receivable and accounts payable and a schedule of future
billings.

(c) Borrower shall deliver to Bank with the quarterly financial statements a
Compliance Certificate signed by a Responsible Officer in substantially the form
of Exhibit E hereto.

(d) At least thirty (30) days prior to the beginning of each fiscal year of
Borrower, Borrower shall deliver to Bank a detailed annual budget, and Borrower
shall notify Bank of each material change to or deviation from such budget
within five (5) days after the Borrower’s board of directors has approved such
change or deviation.

(e) Borrower shall permit Bank directly and through another person on Bank’s
behalf and Bank shall have a right from time to time hereafter, directly and
through another person on Bank’s behalf, to audit Borrower’s Accounts and
appraise Collateral at Borrower’s expense.

(f) Borrower shall provide such additional statements and information as Bank
may from time to time request, in form reasonably acceptable to Bank.

6.5 Taxes. Borrower shall make, and shall cause each Subsidiary to make, due and
timely payment of, or deposit or withholding of, all federal, state and local
taxes, assessments or contributions required of it by all Requirements of Law,
and will execute and deliver to Bank, on demand, appropriate certificates
attesting to the payment, deposit or withholding thereof; provided that Borrower
or a Subsidiary need not make any payment if the amount or validity of such
payment is contested in good faith by appropriate proceedings and is reserved
against (to the extent required by GAAP) by Borrower.

6.6 Insurance.

(a) Borrower, at its expense, shall keep the Collateral insured against loss or
damage by fire, theft, explosion, sprinklers and all other hazards and risks
required by Bank, acting reasonably and taking into account the types and risks
customarily insured against by businesses similar to Borrower’s. Unless
otherwise directed by Bank, the insurance shall be all risk replacement cost
insurance with agreed amount endorsement, standard noncontributing mortgagee
clauses and standard waiver of subrogation clauses. Borrower shall also maintain
general liability, workmen’s compensation and other insurance in amounts and of
a type that are customary to businesses similar to Borrower’s , unless Bank
directs otherwise, in Bank’s reasonable discretion, in which event Borrower
shall maintain such insurance in amounts and types as Bank directs in Bank’s
reasonable discretion.

(b) All policies of insurance shall be in such form and with such companies as
may be reasonably satisfactory to Bank. All policies of property insurance shall
contain a lender’s loss payable endorsement, in a form reasonably satisfactory
to Bank, showing Bank as an additional loss payee, and all liability insurance
policies shall show Bank as an additional insured. All policies shall specify
that the insurer must give at least twenty (20) days’ notice to Bank before
canceling its policy for any reason. Upon Bank’s request, Borrower shall deliver
to Bank certified copies of the policies of insurance and evidence of all
premium payments. All proceeds payable under any such policy or policies shall,
at Bank’s option, be payable to Bank to be applied on account of the
Obligations.

 

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6.7 Primary Depository. Borrower shall maintain its primary operating depository
accounts with Bank. If Borrower elects to maintain any accounts with another
person, Borrower shall grant to Bank a perfected, first priority security
interest in such accounts maintained by it with such other person. The security
interest in any accounts with another person shall secure the Obligations and
the same shall be evidenced by such security documents as Bank and its counsel
deem necessary or appropriate, in their discretion. Notwithstanding the
foregoing, no control agreements shall be required in regard to accounts with
Bank of America so long as the aggregate balance of such accounts at Bank of
America does not exceed $100,000, and no control agreement shall be required in
regard to accounts with persons other than Bank or Bank of America so long as
the aggregate balance of all such accounts does not exceed $100,000.

6.8 Financial Covenants. Borrower shall maintain, as of the last day of each
calendar month unless stated otherwise, and Borrower shall fully and timely
comply with, each and every one of the financial maintenance covenants set forth
in this Section and others that may be contained in this Agreement and the other
Loan Documents.

6.9 (a) Funded Debt to EBITDA. A ratio of Funded Debt to EBITDA, calculated on a
rolling 4 quarters basis for the fiscal quarter then ended and the immediately
preceding 3 fiscal quarters, of not greater than 2.00 to 1.00.

(b) Modified Fixed Charge Coverage Ratio. A ratio of (i) EBITDA, less cash
taxes, less unfunded Capital Expenditures, less capitalized software to
(ii) Debt Service, calculated on a rolling 4 quarters basis for the fiscal
quarter then ended and the immediately preceding 3 fiscal quarters, of not less
than (A) 1.15 to 1.00 for the fiscal quarters ended March 31, 2009 and June 30,
2009 and (B) 1.25 to 1.00 for the fiscal quarter ended September 30, 2009 and
each fiscal quarter thereafter. For purposes of the foregoing calculation,
Borrower’s Capital Expenditures for the fiscal quarter ending September 30, 2008
shall be deemed to have been $400,000 (regardless of the actual amount thereof).

6.10 Maintenance of Property. Borrower shall keep and maintain the Collateral in
good working order and condition and make all needful and proper repairs,
replacements, additions, or improvements thereto as are necessary, reasonable
wear and tear excepted.

6.11 Maintain Security Interest. Borrower shall maintain, protect and preserve
the security interest of Bank in the Collateral and the lien position of Bank in
the Collateral, including, without limitation, (i) the filing of “claims” under
insurance policies and (ii) protecting, defending and maintain the validity and
enforceability of the Trademarks, Patents and Copyrights.

6.12 Further Assurances. At any time and from time to time, Borrower shall
execute and deliver such further instruments, agreements, documents and other
records and take such further action as may be requested by Bank to effect the
purposes of this Agreement, including, without limitation, the perfection and
continuation of perfection of Bank’s security interests in the Collateral.

7. NEGATIVE COVENANTS.

Borrower covenants and agrees that until the termination of Bank’s obligation
under this Agreement to make Credit Extensions and the payment in full of the
Obligations, Borrower shall not do or permit to be done any of the matters set
forth in this Section 7; and Borrower acknowledges to Bank that the breach or
default by Borrower of any of the covenants and agreements set forth below in
this Section 7 is and the same shall be material.

7.1 Dispositions. Borrower shall not convey, sell, lease, transfer and otherwise
dispose of and Borrower shall not permit any of its Subsidiaries to convey,
sell, lease, transfer and otherwise dispose of (with respect to both Borrower
and Borrower’s Subsidiaries, by operation of law or otherwise) any of the
Collateral, other than Permitted Transfers.

7.2 Change in Business; Change in Control or Executive Office. Borrower shall
not engage in any business, or permit any of its Subsidiaries to engage in any
business, other than as reasonably related or incidental to the businesses
currently engaged in by Borrower. Borrower shall not have a Change in Control
and will not, without thirty (30) days’ prior written notification to Bank,
relocate its chief executive office, change its state of organization or change
any other matter that will or could result in Bank’s security interests in the
Collateral becoming unperfected.

 

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7.3 Mergers or Acquisitions; New Subsidiary. Other than the merger of Online
Benefits, Inc. with and into Borrower effective December 31, 2008 (the “Online
Merger”), Borrower shall not merge or consolidate, or permit any of its
Subsidiaries to merge or consolidate, with or into any other business
organization, or acquire, or permit any of its Subsidiaries to acquire, all or
substantially all of the capital stock or property of another person. Borrower
shall not create or cause to be created or to come into existence any new
subsidiary after the Closing Date, without the prior written consent of the
Bank.

7.4 Indebtedness. Borrower shall not create, incur, assume or be or remain
liable with respect to any Indebtedness, or permit any Subsidiary so to do,
other than Permitted Indebtedness. With respect to Indebtedness described in
clause (iii) of the definition of Permitted Indebtedness in Exhibit A, to the
extent not specifically prohibited by the terms of such Indebtedness, Bank shall
have a subordinate lien in and to all equipment and property financed or
acquired with such Indebtedness.

7.5 Encumbrances. Borrower shall not create, incur, assume or allow any Lien
with respect to the Collateral or assign or otherwise convey any right to
receive income, including the sale of any Accounts, or permit any of its
Subsidiaries so to do, except for Permitted Liens, or covenant to any other
person that Borrower in the future will refrain from creating, incurring,
assuming or allowing any Lien with respect to any of Borrower’s property.

7.6 Judgments. Borrower shall not permit a judgment for the payment of money to
be entered against it which judgment Borrower permits to remain unsatisfied or
unstayed for a period of thirty (30) days after the same is entered against
Borrower.

7.7 Distributions. Borrower shall not pay any dividends or make any other
distribution or payment on account of or in redemption, retirement or purchase
of any capital stock, or permit any of its Subsidiaries to do so, other than
Permitted Investments.

7.8 Investments. Borrower shall not directly or indirectly acquire or own, or
make any Investment in or to any person, or permit any of its Subsidiaries so to
do, other than Permitted Investments.

7.9 Loans. Borrower shall not make or commit to make any advance, loan,
extension of credit or capital contribution to, or purchase of any stock, bonds,
notes, debentures or other securities of any person, other than Permitted
Investments including without limitation that certain Promissory Note and
Security Agreement by Paul Russo in favor of Borrower dated December 31, 2008
issued in connection with the YHIA Sale.

7.10 Loans to Officers. Borrower shall not make any loan or advance directly or
indirectly for the benefit of any past, present, or future stockholder,
director, officer, executive, manager, member, partner or employee of Borrower,
other than employee relocation loans, employee bridge loans and other incidental
loans to employees, all in the ordinary course of business.

7.11 Compensation. Borrower shall not pay any compensation to any past, present
and future shareholder, director, officer, executive, member, manager, partner
or employee, whether through salary, bonus or otherwise, in excess of industry
standards and norms.

7.12 Transactions with Affiliates. Borrower shall not directly or indirectly
enter into or permit to exist any material transaction with any Affiliate of
Borrower except for (a) the Online Merger and (b) transactions that are in the
ordinary course of Borrower’s business, upon fair and reasonable terms that are
no less favorable to Borrower than would be obtained in an arm’s length
transaction with a non-affiliated Person.

7.13 Subordinated Debt. Borrower shall not make any payment in respect of any
Subordinated Debt, or permit any of its Subsidiaries to make any such payment
except in compliance with the terms of such Subordinated Debt, or amend any
provision contained in any documentation relating to the Subordinated Debt
without Bank’s prior written consent.

 

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7.14 Inventory and Equipment. Borrower shall not store its Inventory and shall
not store its Equipment with a bailee, warehouseman or similar person unless
Bank has received a pledge of the warehouse receipt covering such Inventory and
Equipment. Except for Inventory sold in the ordinary course of business and
except for such other locations as Bank may approve in writing, Borrower shall
not move or relocate its Inventory and shall not move or relocate its Equipment
from the location or locations identified in the Certificate of Borrower and
such other locations of which Borrower gives Bank prior written notice.

7.15 Licenses. Borrower shall not become bound by any license, agreement or
other record which would have a Material Adverse Effect.

7.16 Compliance. Borrower shall not become or be controlled by an “investment
company”, within the meaning of the Investment Company Act of 1940, or become
principally engaged in, or undertake as one of its important activities, the
business of extending credit for the purpose of purchasing or carrying margin
stock, or use the proceeds of any Credit Extension for such purpose, or permit
any of its Subsidiaries to do any of the foregoing.

7.17 Foreign Corrupt Practices. Borrower shall not use any part of or all of the
Credit Extensions, directly or indirectly, for any payments to any governmental
official or employee, political party, official of a political party, candidate
for political office, or anyone else acting in an official capacity, in order to
obtain, retain or direct business or obtain any improper advantage, in violation
of the United States Foreign Corrupt Practices Act of 1977, as amended.

7.18 Negative Pledge Agreements. Borrower shall not permit the inclusion in any
agreement, document, investment or other arrangement to which it is or becomes a
party of any provisions that could restrict or invalidate the creation of a
security interest in Borrower’s rights and interests in any of Borrower’s
property.

7.19 Third Party Agreements. Borrower shall not enter into any agreement
containing any provision that would be violated or breached by the performance
of the obligations of Borrower under this Agreement.

8. EVENTS OF DEFAULT.

The occurrence of any one or more of the events, conditions, circumstances and
matters set forth below in this Section 8 shall constitute an Event of Default
by Borrower under this Agreement and the other Loan Documents.

8.1 Default under Obligations. The occurrence of any event of default or default
condition under any of the Obligations, including, without limitation,
Borrower’s failure to pay, when due, the principal of and interest on any of the
Obligations, or Borrower’s failure to pay, within seven (7) days after the same
shall become due and payable, interest on and any and all other amounts due
under any of the Obligations, including, without limitation, any taxes, fees,
charges, premiums and costs and expenses.

8.2 Covenant Default. Borrower fails to perform or satisfy any obligation under
Section 6 or violates any of the covenants contained in Section 7 of this
Agreement, or fails or neglects to perform or observe or otherwise defaults
under any other term, provision, condition, covenant or agreement contained in
this Agreement, in any of the other Loan Documents, or in any other present or
future instrument, document, agreement and other record between Borrower and
Bank or from Borrower to Bank or for the benefit of Bank, whether monetary or
non-monetary, and as to any default under such other term, provision, condition,
covenant or agreement that can be cured, has failed to cure such default within
ten (10) days after Borrower receives notice thereof or any officer of Borrower
becomes aware thereof; provided, however, that if the default is non-monetary
and cannot by its nature be cured within the ten (10) day period or cannot after
diligent attempts by Borrower be cured within such ten (10) day period, and such
default is likely to be cured within a reasonable time, then Borrower shall have
an additional reasonable period (which shall not in any case exceed twenty
(20) days) to attempt to cure such non-monetary default, and within such
reasonable time period the failure to have cured such default shall not be
deemed an Event of Default (provided that Bank shall not be required to make any
Credit Extensions during such cure period).

 

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8.3 Guarantor Default. The failure of any other person obligated for the payment
of any of the Obligations, either directly or indirectly, or obligated under
this Agreement or any of the other Loan Documents to perform any of the terms
and conditions imposed upon such other person by any of said agreements, as and
when the same are required to be so performed, or the occurrence of some other
default by such other person under any of said agreements.

8.4 Termination of Supporting Obligation. The termination of or the occurrence
of an event of default or a default condition under any guaranty agreement or
other supporting obligation (inclusive of letters of credit, third person pledge
agreements and third person security agreements) which applies to this Agreement
or any of the other Loan Documents.

8.5 Material Adverse Change. The occurrence, in Bank’s opinion, of a material
adverse change in Borrower’s business or financial condition, or if, in Bank’s
opinion, there is a material impairment of the prospect of repayment of any
portion of the Obligations or a material impairment of the value or priority of
Bank’s security interests in the Collateral.

8.6 Attachment. Borrower’s assets, or any part or portion thereof, are attached,
seized, subjected to a writ or distress warrant, or are levied upon, or come
into the possession of any trustee, receiver or person acting in a similar
capacity and such attachment, seizure, writ or distress warrant or levy has not
been removed, discharged or rescinded within ten (10) days, or if Borrower is
enjoined, restrained or in any way prevented by court order from continuing to
conduct all or any material part of its business affairs, or if a judgment or
other claim becomes a lien or encumbrance upon any material portion of
Borrower’s assets, or if a notice of lien, levy or assessment is filed of record
with respect to any of Borrower’s assets by the United States Government, or any
department, agency or instrumentality thereof, or by any state, county,
municipal or governmental agency, and the same is not paid within ten (10) days
after Borrower receives notice thereof, provided that none of the foregoing
shall constitute an Event of Default where such action or event is stayed or an
adequate bond has been posted pending a good faith contest by Borrower (provided
that no Credit Extensions will be required to be made during such cure period).

8.7 Insolvency. Borrower becomes insolvent, or an Insolvency Proceeding is
commenced by Borrower, or an Insolvency Proceeding is commenced against Borrower
and is not dismissed or stayed within forty-five (45) days (provided that no
Credit Extensions will be required to be made prior to the dismissal of such
Insolvency Proceeding).

8.8 Other Agreements. The occurrence of a default in any agreement to which
Borrower is a party with a third person or persons which results in a right by
such third person or persons, whether or not exercised, to accelerate the
maturity of any Indebtedness in an amount in excess of Two Hundred Fifty
Thousand Dollars ($250,000) or that could have a Material Adverse Effect.

8.9 Subordinated Debt. Borrower makes any payment on account of Subordinated
Debt, except to the extent the payment is allowed under any subordination
agreement entered into with Bank.

8.10 Misrepresentations. Any misrepresentation or misstatement exists now or
hereafter in any warranty or representation set forth herein, in any other Loan
Document or in any certificate delivered to Bank by any Responsible Officer
pursuant to this Agreement or any other Loan Document, or to induce Bank to
enter into this Agreement or any other Loan Document.

8.11 Affiliate or Subsidiary Default. An “Event of Default” by any of Borrower’s
Affiliates or Subsidiaries under any Indebtedness or other obligation now owing
or which hereafter arises and is owing to Bank.

 

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9. BANK’S RIGHTS AND REMEDIES.

9.1 Rights and Remedies upon an Event of Default. If an Event of Default shall
occur under this Agreement, in addition to any other rights and remedies which
may be available to Bank and without limiting any other rights and remedies
granted to Bank in this Agreement, the other Loan Documents and at law and in
equity, including, without limitation, the rights and remedies provided to Bank
under the Code, which rights and remedies are fully exercisable by Bank as and
when provided herein and therein, Bank shall have the rights and remedies set
forth below in this Section 9.1, any and all of which it may exercise at its
election, without notice of its election and without demand.

(a) Acceleration of Obligations. Bank may, at its option, accelerate and declare
immediately due and payable the Obligations, as well as any of and all of the
other indebtedness and obligations owing under this Agreement and the other Loan
Documents that are not already due hereunder and that are not already due
thereunder. If there is more than one Obligation, Bank may accelerate and
declare immediately due and payable all of the Obligations, or Bank may from
time to time and at any number of times after the occurrence of an Event of
Default, accelerate and declare immediately due and payable any one or more of
the Obligations as Bank in its discretion elects to accelerate (provided that
upon the occurrence of an Event of Default described in Section 8 under the
heading “Insolvency”, all Obligations shall become immediately due and payable
without any action by Bank).

(b) Terminate Credit Extensions. Bank may limit Borrower’s right to receive any
and all advances under this Agreement and under any other agreement between Bank
and Borrower to such amounts as Bank determines from time to time to be
appropriate under the circumstances, Bank may impose a moratorium on future
advances under this Agreement and under any other agreement between Bank and
Borrower, and Bank may terminate the right of Borrower to receive advances under
this Agreement and under any other agreement between Borrower and Bank, and in
all the foregoing instances, Bank’s rights relative to Credit Extensions may be
exercised cumulatively, concurrently, alternatively and in any other manner and
at any time or times as Bank deems appropriate, in its discretion.

(c) Protection of Collateral. Bank may make such payments and do or cause to be
done such acts as Bank considers necessary or advisable to protect the
Collateral and to preserve, protect, perfect and continue the perfection of its
security interest in the Collateral, including, modifying, in its sole
discretion, any intellectual property security agreement entered into between
Borrower and Bank without first obtaining Borrower’s approval of or signature to
such modification by amending Exhibits A, B and C thereof, as appropriate, to
include reference to any right, title and interest in any Copyrights, Patents
and Trademarks acquired by Borrower after the execution hereof and transferring
the Intellectual Property Collateral into the name of Bank or a third person to
the extent permitted under the Code. Borrower agrees to assemble the Collateral
if Bank so requires and to make the Collateral available to Bank as Bank may
designate. Borrower authorizes Bank and its representatives to enter the
premises where the Collateral is located, to do, among other things Bank deems
necessary or advisable, the following: (i) take and maintain possession of the
Collateral, or any part or parts of it, (ii) pay, purchase, contest or
compromise any encumbrance, charge or lien which in Bank’s determination appears
to be prior or superior to its security interest, and (iii) pay all costs and
expenses incurred in connection with any of the foregoing. With respect to any
of Borrower’s premises, Borrower hereby grants Bank a license to enter into
possession of such premises and to occupy the same, without charge, in order to
exercise any of Bank’s rights and remedies provided herein, at law, in equity
and otherwise.

(d) Sale and Disposition of Collateral.

(i) Bank, directly and through others on its behalf, may ship, reclaim, recover,
store, finish, maintain, repair, prepare for sale, advertise for sale and/or
sell the Collateral, or part or parts thereof, for cash or on terms, at one or
more private or public sales held at such place or places as Bank determines to
be commercially reasonable, after having complied with the provisions of this
Agreement, the other Loan Documents and applicable Requirements of Law relating
to sale of the Collateral, including, without limitation, the requirements of
the Code. Bank is hereby irrevocably granted a license or other right, pursuant
to the provisions of this Section 9.1, to use, without charge, Borrower’s
labels, patents, copyrights, rights of use of any name, trade secrets, trade
names, trademarks, service marks, advertising matter and any property of a
similar nature, together with the right of access to all

 

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tangible or electronic media in which any of the foregoing may be recorded or
stored, in completing production of, management of, advertising for sale and
selling any Collateral and, in connection with Bank’s exercise of its rights
under this Section 9.1, Borrower’s rights under all licenses and all franchise
agreements shall inure to Bank’s benefit. Borrower hereby agrees: (i) that ten
(10) days notice of any intended sale or disposition of any Collateral is
commercially reasonable; (ii) that a shorter period of notice will be
commercially reasonable if Bank, in its opinion, deems it necessary to move more
expeditiously with disposition of the Collateral or any part thereof; and
(iii) that the foregoing shall not require a notice if no notice is required
under the Code.

(ii) Bank may credit bid and purchase at any sale or sales.

(iii) The proceeds of any sale of, or other realization upon, all or any part of
the Collateral pursuant to this Section 9.1 shall be applied by Bank in the
following order of priorities, or such other order as Bank may determine or as
may be required under applicable Requirements of Law: first, to payment of the
costs and expenses of such sale or other realization, and all expenses,
liabilities and advances incurred or made by Bank in connection therewith, and
any other unreimbursed costs and expenses for which Bank is to be reimbursed
pursuant to this Agreement and the other Loan Documents; second, to the payment
of unpaid principal of the Obligations; third, to the payment of accrued but
unpaid interest on the Obligations; fourth, to the payment of all other amounts
owing or outstanding by Borrower under the Obligations, this Agreement, the
other Loan Documents and otherwise to Bank as provided herein or therein, until
all the foregoing shall have been paid in full; finally, to payment to Borrower
or its successors or assigns, or as a court of competent jurisdiction may
direct, of any surplus then remaining from such proceeds.

(iv) Any deficiency that exists after disposition of the Collateral as provided
above will be paid immediately by Borrower, without demand by Bank, but this
provision shall not require Bank to first dispose of the Collateral before
attempting to recover payment of the Obligations from Borrower or any other
person and Bank shall have the right to proceed successively, concurrently and
alternatively against the Collateral, the Borrower and any other person
obligated on any of the Obligations in any order and at any time or times as it
deems to be in its best interest.

(e) Discontinuance of Proceedings; Position of Parties Restored. If Bank shall
have proceeded to enforce any right or remedy under the Loan Documents by
foreclosure, entry, or otherwise and such proceedings shall have been
discontinued or abandoned for any reason, or such proceedings shall have
resulted in a final determination adverse to Bank, then and in every such case
Borrower and Bank shall be restored to their former positions and rights
hereunder, and all rights, powers and remedies of Bank shall continue as if no
such proceedings had occurred or had been taken.

9.2 Remedies Cumulative. Bank’s rights and remedies under this Agreement, the
Loan Documents and all other agreements shall be cumulative and may be exercised
successively, concurrently, alternatively and in any other order and at such
time or times as Bank elects in its discretion. Bank shall have all other rights
and remedies not inconsistent herewith as provided under the Code, by law and in
equity. No exercise by Bank of one right or remedy shall be deemed an election,
and no waiver by Bank of any Event of Default on Borrower’s part shall be deemed
a continuing waiver. No delay by Bank shall constitute a waiver, election or
acquiescence by it. No waiver by Bank shall be effective unless made in a
written document signed on behalf of Bank and then shall be effective only in
the specific instance and for the specific purpose for which it was given.

10. NOTICES.

Unless otherwise provided in this Agreement, all notices or demands by any party
relating to this Agreement or any other agreement entered into in connection
herewith shall be in writing and (except for financial statements and other
informational documents which may be sent by first-class mail, postage prepaid)
shall be personally delivered or sent by a recognized overnight delivery
service, certified mail, postage prepaid, return receipt requested, or by
facsimile to Borrower or to Bank, as the case may be, at their respective
addresses as set forth on the signature page of this Agreement. The parties may
change the address at which they are to receive notices hereunder by notice in
writing in the foregoing manner given to the other.

 

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11. WAIVERS.

11.1 Waiver Of Trial By Jury. To the extent not prohibited by applicable
Requirements of Law, Borrower and Bank each hereby waive their respective rights
to a jury trial of any claim or cause of action based upon or arising out of any
of the Loan Documents or any of the transactions contemplated therein, including
contract claims, tort claims, breach of duty claims and all other common law or
statutory claims. Each party recognizes and agrees that the foregoing waiver
constitutes a material inducement for it to enter into this Agreement. Each
party represents and warrants that it has reviewed this waiver with its legal
counsel and that it knowingly and voluntarily waives its jury trial rights
following consultation with legal counsel.

11.2 Marshalling of Assets. Borrower hereby waives, to the extent permitted by
law, the benefit of all appraisal, valuation, stay, extension, reinstatement and
redemption laws now in force and those hereafter in force and all rights of
marshalling in the event of any sale hereunder of the Collateral or any part or
any interest therein.

11.3 Waiver of Action Against Third Persons. Borrower waives any right to
require Bank to bring any action against any other person or to require that
resort be had to any security or to any balances of any deposit or other
accounts or debts or credits on the books of Bank in favor of any other person.

12. GENERAL PROVISIONS.

12.1 Indemnification. Borrower hereby agrees to defend, protect, indemnify and
hold harmless Bank, all directors, officers, employees, attorneys, agents and
independent contractors of Bank, from and against all claims, actions,
liabilities, damages and costs and expenses asserted against, imposed upon or
incurred by Bank or any of such other persons as a result of, or arising from,
or relating to this Agreement, the other Loan Documents or the transactions
contemplated hereby or thereby, except for losses resulting from the gross
negligence or willful misconduct of the person otherwise to be indemnified
hereunder.

12.2 Choice of Law. This Agreement shall be governed by and construed in
accordance with the substantive laws of the State of Georgia, excluding,
however, the conflict of law provisions thereof.

12.3 Incorporation of Exhibits; Customer and Loan Numbers. All exhibits,
schedules, addenda and other attachments to this Agreement are by this reference
incorporated herein and made a part hereof as if fully set forth in the body of
this Agreement. The Customer and Loan Numbers, if any, stated in this Agreement
are for Bank’s internal business use and reference only and do not and shall not
limit the scope and extent of Bank’s rights hereunder, including the Obligations
secured hereby and the security interests of Bank in the Collateral.

12.4 Maintenance of Records by Bank. Borrower acknowledges and agrees that Bank
is authorized to maintain, store and otherwise retain the Loan Documents or any
of them in their original, inscribed tangible form or a record thereof in an
electronic medium or other non-tangible medium which permits such record to be
retrieved in a perceivable form; that a record of any of the Loan Documents in a
non-tangible medium which is retrievable in a perceivable form shall be the
agreement of Borrower to the same extent as if such Loan Document was in its
original, inscribed tangible medium and such a record shall be binding on and
enforceable against Borrower notwithstanding the same is in a non-tangible form
and notwithstanding the signatures of the signatories hereof are electronic,
typed, printed, computer generated, facsimiles or other reproductions,
representations or forms; and that Bank’s certification that a non-tangible
record of any of the Loan Documents is an accurate and complete copy or
reproduction of the original, inscribed tangible form shall be conclusive,
absent clear and convincing evidence of the incorrectness of said certification,
and such non-tangible record or a reproduction thereof shall be deemed an
original and have the same force and effect as the original, inscribed tangible
form.

12.5 Credit Investigations; Sharing of Information; Control Agreements. Bank is
irrevocably authorized by Borrower to make or have made such credit
investigations as it deems appropriate to evaluate Borrower’s and its
Subsidiaries’ credit or financial standing, and Borrower authorizes Bank to
share with consumer reporting agencies and creditors its experiences with
Borrower and its Subsidiaries and other information in Bank’s possession
relative to Borrower and its Subsidiaries. Bank (i) shall not have any
obligation or responsibility to provide information to third persons relative to
Bank’s security interest in the Collateral, this

 

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Agreement and otherwise with respect to Borrower and its Subsidiaries and
(ii) shall not have any obligation or responsibility to subordinate its security
interest in the Collateral to the interests of any third persons or to enter
into control agreements relative to the Collateral.

12.6 Bank’s Liability for Collateral. Notwithstanding anything in this Agreement
or any of the other Loan Documents to the contrary, Bank may at any time or
times during the term of this Agreement make such payments and do or cause to be
done such acts as Bank considers necessary or advisable to protect the
Collateral and to preserve, protect and perfect or continue the perfection of
its security interest in the Collateral. So long as Bank complies with
reasonable banking practices, Bank shall not in any way or manner be liable or
responsible for: (i) the safekeeping of the Collateral; (ii) any loss or damage
thereto occurring or arising in any manner or fashion from any cause; (iii) any
diminution in the value thereof; or (iv) any act or default of any carrier,
warehouseman, bailee, forwarding agency or other person whomsoever. All risk of
loss, damage or destruction of the Collateral shall be borne by Borrower.

12.7 Bank Expenses. If Borrower fails to pay any amounts or furnish any required
proof of payment due to third persons, as required under the terms of this
Agreement and the other Loan Documents, then Bank may do or cause to be done any
or all of the following: (i) make payment of the same or any part thereof;
(ii) set up such reserves as Bank deems necessary to protect Bank from the
exposure created by such failure; and (iii) obtain and maintain insurance
policies of the type required by this Agreement, and take any action with
respect to such policies as Bank deems prudent. Any amounts so paid or deposited
by Bank shall constitute Bank Expenses, shall be immediately due and payable,
shall bear interest at the Default Rate from the date of payment or deposit and
shall be secured by the Collateral. Any payments made by Bank shall not
constitute an agreement by Bank to make similar payments in the future or a
waiver by Bank of any Event of Default under this Agreement. If Bank is
requested to waive an Event of Default or forbear taking action relative
thereto, Bank may condition any waiver or forbearance it elects, in its
discretion, to grant Borrower on payment by Borrower of such fees to Bank as
Bank deems appropriate under the circumstances and may condition any such waiver
or forbearance on Borrower reimbursing Bank for all costs and expenses Bank
incurs in connection with such waiver or forbearance.

12.8 No Waiver; No Course of Dealing. Bank, at any time or times, may grant
extensions of time for payment or other indulgences or accommodations to any
person obligated on any of the Obligations, or permit the renewal, amendment or
modification thereof or substitution or replacement therefor, or permit the
substitution, exchange or release of any property securing any of the
Obligations and may add or release any person primarily or secondarily liable on
any of the Obligations, all without releasing Borrower from any of its
liabilities and obligations under any of the Loan Documents and without Bank
waiving any of its rights and remedies under any of the Loan Documents, or
otherwise. No delay or forbearance by Bank in exercising any or all of its
rights and remedies hereunder and under the other Loan Documents or rights and
remedies otherwise afforded by law or in equity shall operate as a waiver
thereof or preclude the exercise thereof during the continuance of any Event of
Default as set forth herein or in the event of any subsequent Event of Default
hereunder. Also, no act or inaction of Bank under any of the Loan Documents
shall be deemed to constitute or establish a “course of performance or dealing”
that would require Bank to so act or refrain from acting in any particular
manner at a later time under similar or dissimilar circumstances.

12.9 Relationship of Parties; Successors and Assigns. The relationship of Bank
to Borrower is that of a creditor to an obligor (inclusive of a person obligated
on a supporting obligation) and a creditor to a debtor; and in furtherance
thereof and in explanation thereof, Bank has no fiduciary, trust, guardian,
representative, partnership, joint venturer or other similar relationship to or
with Borrower and no such relationship shall be drawn or implied from any of the
Loan Documents and any of Bank’s actions or inactions hereunder or with respect
hereto – and, Bank has no obligation to Borrower or any other person relative to
administration of any of the Obligations and the Collateral, or any part or
parts thereof. The covenants, terms and conditions herein contained shall bind,
and the benefits and powers shall inure to, the respective heirs, executors,
administrators, successors and assigns of the parties hereto, as well as any
persons who become bound hereto as a debtor. If two or more persons or entities
have joined as Borrower, each of the persons and entities shall be jointly and
severally obligated to perform the conditions and covenants herein contained.
The term “Bank” shall include any payee of the Obligations hereby secured and
any transferee or assignee thereof, whether by operation of law or otherwise,
and Bank may transfer, assign or negotiate all or any of the Obligations secured
by this Agreement from time to time without the consent of Borrower and without
notice to Borrower and any transferee or assignee of Bank or any transferee or
assignee

 

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of another may do the same without Borrower’s consent and without notice to
Borrower. Borrower waives and will not assert against any transferee or assignee
of Bank any claims, defenses, set-offs or rights of recoupment which Borrower
could assert against Bank, except defenses which Borrower cannot waive.

12.10 Time of Essence. Time is of the essence for the performance of all of
Borrower’s covenants and agreements (inclusive of the Obligations) set forth in
this Agreement and each of the Loan Documents.

12.11 Amendments in Writing; Integration. All amendments to or terminations of
this Agreement must be in writing. All prior agreements, understandings,
representations, warranties and negotiations between the parties hereto with
respect to the subject matter of this Agreement, if any, are merged into this
Agreement and the Loan Documents.

12.12 Counterparts. This Agreement may be executed in any number of counterparts
and by different parties on separate counterparts, each of which, when executed
and delivered, shall be deemed to be an original, and all of which, when taken
together, shall constitute but one and the same Agreement.

12.13 Survival. All covenants, representations and warranties made in this
Agreement shall continue in full force and effect so long as any Obligations
remain outstanding. Notwithstanding anything in this Agreement or the other Loan
Documents to the contrary, the obligations of Borrower to indemnify Bank as
described in Section 12.1 shall survive until all applicable statute of
limitations periods with respect to actions that may be brought against Bank
have run.

12.14 Limited License. During the term of this Agreement, Borrower hereby grants
to Bank and its Affiliates, a non-exclusive, world-wide, non-transferable,
royalty-free irrevocable license to use the Borrower’s Marks (as herein defined)
solely for and in connection with the general marketing, promotion and
advertising activities of Bank and its Affiliates. General marketing, promotion
and advertising activities shall include press releases, product brochures,
tombstone ads and other advertising typical in industry practice and disclosure
of Borrower’s Marks on the Bank’s website, including a link to the Borrower’s
website. “Marks” shall mean Borrower’s names, logos, Trademarks, trade names,
service marks and world wide web addresses. Bank shall use commercially
reasonable efforts to cause the appropriate designation “™” or the registration
symbol “®” to be placed adjacent to the Marks in connection with the use
thereof. Notwithstanding the foregoing, Bank shall be under no obligation to use
any of such Marks.

[THE NEXT PAGE IS THE SIGNATURE PAGE]

 

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In witness whereof, the parties have caused this agreement to be executed with
authority duly obtained, as of the date first written above.

BORROWER:

 

A.D.A.M., INC.     Witness:   By:  

/s/ Mark B. Adams

   

/s/ Kelly H. Hunt

Print Name:   Mark B. Adams     Print Name:   Kelly H. Hunt Title:   Chief
Financial Officer       A.D.A.M., Inc.       10 Tenth Street, NE       Suite 525
      Atlanta, Georgia 30309      

 

RBC BANK (USA) By:  

/s/ Brendan McGuire

Name:   Brendan McGuire Title:   Senior Vice President RBC Bank (USA) 75 Fifth
Street, NW, Suite 900 Atlanta, Georgia 30308

[Signature Page to Loan and Security Agreement]

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EXHIBIT A

DEFINITIONS

“Accounts” shall have a broad meaning and shall include all accounts (as such
term is defined in Article 9 of the Code) owned by the Borrower and all accounts
in which the Borrower has any rights (including, without limitation, rights to
grant a security interest in accounts owned by other persons), both now existing
and hereafter owned, acquired and arising; and, to the extent not included in
the term accounts as so defined after ascribing a broad meaning thereto, all
accounts receivable, health-care-insurance receivables, credit and charge card
receivables, bills, acceptances, documents, choses in action, chattel paper
(both tangible and electronic), promissory notes and other instruments, deposit
accounts, license fees payable for use of software, commercial tort claims,
letter of credit rights and letters of credit, rights to payment for money or
funds advanced or sold other than through use of a credit card, lottery
winnings, rights to payment with respect to investment property, general
intangibles and other forms of obligations and rights to payment of any nature,
now owing to the Borrower and hereafter arising and owing to the Borrower,
together with (i) the proceeds of all of the accounts and other property and
property rights described hereinabove, including all of the proceeds of
Borrower’s rights with respect to any of its goods and services represented
thereby, whether delivered or returned by customers, and all rights as an unpaid
vendor and lienor, including rights of stoppage in transit and of recovering
possession by any proceedings, including replevin and reclamation, and (ii) all
customer lists, books and records, ledgers, account cards, and other records
including those stored on computer or electronic media, whether now in existence
or hereafter created, relating to any of the foregoing.

“Affiliate” means, with respect to any person, any person that owns or controls
directly or indirectly such person, any person that controls or is controlled by
or is under common control with such person, and each of such person’s senior
executive officers, directors and partners.

“Agreement” means this Loan and Security Agreement, and any and all amendments,
modifications, renewals, extensions, replacements and substitutions thereof and
therefor.

“Available Unused Revolving Facility” means the amount of the Unused Revolving
Facility that Borrower is entitled to receive as an Advance pursuant to the
terms of this Agreement.

“Bank” means RBC Bank (USA) and its successors, assigns, transferees and the
holder of this Agreement and the other Loan Documents.

“Bank Expenses” means all costs and expenses incurred and suffered by Bank in
connection with the preparation, negotiation, administration and enforcement of
the Loan Documents and its rights and remedies thereunder, including, without
limitation, perfection, audit, inspection, protection and enforcement of Bank’s
security interests in the Collateral.

“Borrower” means A.D.A.M., Inc., a Georgia corporation, and its successors and
permitted assigns.

“Borrower’s Books” means all of Borrower’s books and records including, without
limitation, ledgers, journals, spread sheets, business plans, business
projections, tax returns and accompanying worksheets and notes related thereto,
governmental and regulatory filings and reports and all other records concerning
Borrower’s assets and liabilities, the Collateral, business operations and
financial condition; and the term includes media on which such records are
stored or maintained, whether electronic, printed, imbedded in software or other
computer programs or on tape files, and the equipment containing such
information.

“Borrowing Base” means an amount equal to the sum of (a) eighty percent (80%) of
Eligible Accounts, plus (b) sixty five percent (65%) of Eligible Foreign
Accounts, plus (c) the lesser of (i) fifty percent (50%) of Eligible Contracted
Revenue or (ii) $1,000,000, all as determined by Bank with reference to the most
recent Borrowing Base Report delivered by Borrower.

“Business Day” means any day that is not a Saturday, Sunday or other day on
which banks in the State of Georgia are authorized or required to close.

“Capital Expenditures” means any amounts accrued or paid in respect of any
purchase or other acquisition for value of capital assets and, for greater
certainty, excludes amounts expended in respect of the normal repair and
maintenance of capital assets utilized in the ordinary course of business.

“Capitalized Leases” means all leases that have been or should be, in accordance
with GAAP, recorded as capitalized leases.

“Change in Control” shall mean a transaction in which any “person” or “group”
(within the meaning of Section 13(d) and 14(d)(2) of the Securities Exchange Act
of 1934) becomes the “beneficial owner” (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934), directly or indirectly, of a sufficient number
of shares of all classes of stock then outstanding of Borrower ordinarily
entitled to vote in the election of directors, empowering such “person” or
“group” to elect a majority of the Board of Directors of Borrower, who did not
have such power before such transaction.

[Exhibit A to Loan and Security Agreement]

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“Close” or “Closing” means the completion of the conditions precedent to the
initial Credit Extension.

“Closing Date” means the date of this Agreement, which is the last date on which
this Agreement is signed by a party hereto.

“Closing Memorandum and Checklist” is the document referenced by such name in
the Section of the Agreement pertaining to Conditions of Credit Extensions
(i.e., Section 3.1) and is the document by such name which has been executed and
delivered by Borrower to Bank contemporaneously with the execution and delivery
of this Agreement by Borrower to Bank.

“Code” means the Uniform Commercial Code as in effect, from time to time, in the
State of Georgia.

“Collateral” means the property and property rights described on Exhibit C and
all Negotiable Collateral and Intellectual Property Collateral to the extent not
described on Exhibit C.

“Committed Revolving Line” means Credit Extensions of up to Three Million
Dollars ($3,000,000).

“Contingent Obligation” or “Contingent Liabilities” means, as applied to any
person, any direct or indirect liability, contingent or otherwise, of that
person with respect to (i) any account, instrument, chattel paper, document,
general intangible, indebtedness, lease, dividend, letter of credit, letter of
credit right or other obligation of another person, including, without
limitation, any such obligation directly or indirectly guaranteed, endorsed,
co-made or discounted or sold with recourse by that person, or in respect of
which that person is otherwise directly or indirectly liable; (ii) any
obligations with respect to undrawn letters of credit issued for the account of
that person; and (iii) all obligations arising under any interest rate, currency
or commodity swap agreement, interest rate cap agreement, interest rate collar
agreement, or other agreement or arrangement designated to protect a person
against fluctuation in interest rates, currency exchange rates or commodity
prices; provided, however, that the term “Contingent Obligation” shall not
include endorsements for collection or deposit in the ordinary course of
business. The amount of any Contingent Obligation shall be deemed to be an
amount equal to the stated or determined amount of the primary obligation in
respect of which such Contingent Obligation is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof as
determined by such person in good faith; provided, however, that such amount
shall not in any event exceed the maximum amount of the obligations under the
guarantee or other support arrangement.

“Copyrights” means any and all copyright rights, copyright applications,
copyright registrations and like protections in each work of authorship and
derivative work thereof, both published and unpublished and whether or not the
same also constitutes a trade secret, now existing and hereafter arising,
created, acquired or held.

“Corporate Distributions” means all payments to (i) any shareholder (or other
holder of an equity interest in Borrower), director, executive or officer of the
Borrower, (ii) any Affiliate or holder of Subordinated Debt of the Borrower, or
(iii) any shareholder (or other holder of an equity interest in Borrower),
director, executive or officer of any Affiliate or holder of Subordinated Debt
of the Borrower. For greater certainty, it includes bonuses, dividends, salaries
(except salaries to officers or other employees in the ordinary course of
business), and repayment of Indebtedness or making of loans to any such person.

“Credit Extension” means each Advance, Term Loan Advance or any other extension
of credit by Bank for the benefit of Borrower hereunder, including credit
extensions under or related to corporate credit cards and Letters of Credit.

“Credit Facilities” is a reference to the credit facilities available under this
Agreement and can include one or more of the Revolving Facility, the Term Loan
Facility and Letters of Credit.

“Default Rate” means a rate of interest per annum equal to the contract rate of
interest defined as the “Default Rate” in the Promissory Note, and if there is
more than one Promissory Note, it shall mean a rate of interest per annum equal
to the highest of the contract rates of interest defined in the Promissory Notes
as a “Default Rate”.

“Debt Service” means the total of Interest Expense and scheduled principal
payments in respect of Funded Debt (excluding unamortized principal due under
this Agreement on the Revolving Maturity Date and Term Loan Maturity Date).

“EBITDA” means the total of (i) net income from continuing operations (excluding
Extraordinary Gains or Losses), and to the extent deducted in determining net
income (ii) Interest Expense, (iii) income taxes, (iv) depreciation, depletion
and amortization expenses and (v) other non-cash charges such as stock option
expenses.

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“Eligible Accounts” means only those Accounts that are within the meaning of the
term “account” as defined under the Code, that are in existence and have arisen
in the ordinary course of Borrower’s business and that comply with all of
Borrower’s representations and warranties to Bank set forth in this Agreement
and the other Loan Documents; provided, the Bank may change the standards of
eligibility by giving Borrower thirty (30) days’ prior written notice. Unless
otherwise agreed to by Bank, Eligible Accounts shall not include the following:
(i) Accounts that the account debtor has failed to pay within ninety (90) days
of invoice date; (ii) Accounts with respect to an account debtor, twenty-five
percent (25%) of whose Accounts the account debtor has failed to pay within
ninety (90) days of invoice date; (iii) Accounts with respect to which the
account debtor is an officer, employee or agent of Borrower; (iv) Accounts with
respect to which goods are placed on consignment, guaranteed sale, sale or
return, sale on approval, bill and hold, or other terms by reason of which the
payment by the account debtor may be conditional; (v) Accounts with respect to
which the account debtor is an Affiliate of Borrower; (vi) Accounts with respect
to which the account debtor does not have its principal place of business in the
United States, except for Eligible Foreign Accounts; (vii) Accounts with respect
to which the account debtor is the United States, a State, or any department,
agency or instrumentality of the United States or a State; (viii) Accounts with
respect to which Borrower is liable to the account debtor for goods sold or
services rendered by the account debtor to Borrower, but only to the extent of
any amounts owing to the account debtor against amounts owed to Borrower;
(ix) Accounts with respect to an account debtor, including Subsidiaries and
Affiliates, whose total obligations to Borrower exceed twenty-percent (20%) of
all Accounts, to the extent such obligations exceed the aforementioned
percentage, except as approved in writing by Bank; (x) Accounts with respect to
which the account debtor disputes liability or makes any claim with respect
thereto as to which Bank believes, in its sole discretion, that there may be a
basis for dispute (but only to the extent of the amount subject to such dispute
or claim), or is subject to any Insolvency Proceeding, or becomes insolvent, or
goes out of business; (xi) Accounts subject to any Lien ranking or capable of
ranking in priority to the Bank’s Lien, (xii) Accounts which the Bank has
previously advised Borrower are not Eligible Accounts, and (xiii) Accounts the
collection of which Bank reasonably determines after inquiry to be doubtful.

“Eligible Contracted Revenue” means any contracted revenue due to be billed
within ninety (90) days from the date of the Advance request.

“Eligible Foreign Accounts” means Accounts with respect to which the account
debtor does not have its principal place of business in the United States and
that (i) are supported by one or more letters of credit in an amount and of a
tenor, and issued by a financial institution, acceptable to Bank, or (ii) that
Bank approves on a case-by-case basis; which Accounts, at the Bank’s sole
discretion, may include Accounts owing from account debtors in countries such as
Canada, Germany, the United Kingdom, Italy, Hong Kong, Australia and Belgium.

“Event of Default” has the meaning assigned in Section 8.

“Extraordinary Gains or Losses” means non-recurring items of gain or loss that
are unrelated to the ongoing operations of Borrower’s business and subject to
Bank’s approval in its reasonable discretion.

“Funded Debt” means, at any time, all obligations for borrowed money which bear
interest or to which interest is imputed plus, without duplication, the face
amount of all outstanding Letters of Credit issued by Bank for the account of
Borrower under this Agreement, all obligations for the deferred payment of the
purchase of property, all Capitalized Lease obligations and all Indebtedness
secured by purchase money security interests, plus, without duplication, the
amount of any Contingent Liabilities.

“GAAP” means generally accepted accounting principles and practices in effect
from time to time as promulgated by the American Institute of Certified Public
Accountants.

“Governmental Authority” means any nation or government, any state or other
political subdivision thereof, and any organization exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.

“Indebtedness” means (a) all liabilities which would be reflected on a balance
sheet prepared in accordance with GAAP, (b) all indebtedness for borrowed money
or the deferred purchase price of property or services, including without
limitation reimbursement and other obligations with respect to surety bonds and
letters of credit, (c) all obligations evidenced by notes, bonds, debentures or
similar instruments, (d) all capital lease obligations, (e) all indebtedness
under agreements relating to derivatives transactions (e.g. interest rate swaps,
caps, floors or collar transactions, or other similar transactions made pursuant
to an International Swap Dealers Association, Inc. Master Agreement or similar
agreement), and (f) all Contingent Obligations.

“Insolvency Proceeding” means any proceeding commenced by or against any person
or entity under any provision of the United States Bankruptcy Code, as amended,
or under any other bankruptcy or insolvency law, including assignments for the
benefit of creditors, formal or informal moratoria, compositions, extension
generally with its creditors, or proceedings seeking reorganization, arrangement
or other relief.

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“Intellectual Property Collateral” means all of Borrower’s right, title and
interest in and to its intellectual property, including without limitation, the
following: (i) Copyrights, Trademarks and Patents; (ii) any and all trade
secrets, and any and all intellectual property rights in software and software
products now or hereafter existing, created, acquired or held; (iii) any and all
design rights which may be available to Borrower now or hereafter existing,
created, acquired or held; (iv) any and all mask works or similar rights now or
hereafter existing, created, acquired or held; (v) any and all claims for
damages by way of past, present and future infringement of any of the rights
included above, with the right, but not the obligation, to sue for and collect
such damages for said use or infringement of the intellectual property rights
identified above; (vi) all licenses or other rights to use any of the
Copyrights, Patents or Trademarks, and all license fees and royalties arising
from such use to the extent permitted by such license or rights; (vii) all
amendments, renewals, re-issues, divisions, continuations and extensions of any
of the Copyrights, Trademarks or Patents; and (viii) all proceeds and products
of the foregoing, including without limitation all payments under insurance or
any indemnity or warranty payable in respect of any of the foregoing.

“Interest Expense” means the total of the costs of advances outstanding under
Indebtedness including (i) interest charges, (ii) capitalized interest,
(iii) the interest component of Capitalized Leases, (iv) fees payable in respect
of letters of credit and letters of guarantee, and (v) discounts incurred and
fees payable in respect of bankers’ acceptances.

“Investment” means any beneficial ownership of (including stock, partnership
interest or other securities) any person, or any loan, advance or capital
contribution to any person.

“IRC” means the Internal Revenue Code of 1986, as amended, and the regulations
thereunder.

“Knowledge” means actual knowledge or such level of knowledge or awareness as
would be obtained or should have been known at the time by a prudent business
person under substantially similar circumstance after diligent investigation.

“Lien” means any mortgage, lien, deed of trust, deed to secure debts, charge,
pledge, security interest or other encumbrance and the term “security interest”
and Lien shall be interchangeable, as necessary or appropriate.

“Loan Documents” means, collectively, this Agreement, any instruments, including
promissory notes, executed and delivered by Borrower to Bank, and any one or
more of the following entered into by Borrower and Bank, or by Borrower for the
benefit of Bank, or by another person and Bank or by another person for benefit
of Bank in connection with the Agreement or any of the Obligations, together
with any and all renewals, extensions, amendments, modifications, replacements
and substitutions thereof and therefor: mortgages, deeds to secure debt, deeds
of trust, security agreements, negative pledge agreements, pledge agreements,
guaranty agreements, control agreements, hypothecation agreements, documents,
agreements and other records.

“Material Adverse Effect” means a material adverse effect on (i) the business
operations or condition (financial or otherwise) of Borrower or (ii) the ability
of Borrower to repay the Obligations or otherwise perform its obligations under
the Loan Documents as and when required thereunder.

“Material Agreements” means each of the agreements which has been filed with the
Securities and Exchange Commission as an exhibit (including any document which
in lieu of being filed as an exhibit, is incorporated by reference) to
Borrower’s most recently-filed Annual Report on Form 10-K or any subsequently
filed report on Form 10-Q or Form 8-K, pursuant to the requirements of
Item 601(b)(10) of SEC Regulation S-K.

“Negotiable Collateral” means all of Borrower’s present and future
letters-of-credit and letter-of-credit rights of which it is a beneficiary,
instruments (including promissory notes), drafts, securities, documents of title
and chattel paper (including electronic chattel paper), and Borrower’s Books
relating to any of the foregoing.

“Net Profit” means total cash value of sales less total expenses of sale, as
determined in accordance with GAAP.

“Net Worth” means assets minus all liabilities, as determined in accordance with
GAAP.

“Obligations” means all indebtedness, including principal, interest, fees,
premiums, penalties, charges, Bank Expenses and other amounts owed to Bank by
Borrower pursuant to this Agreement, the other Loan Documents and any other
agreement, document and record, including, without limitation, indebtedness
under agreements relating to derivatives transactions (e.g. interest rate swaps,
caps, floors or collar transactions, or other similar transactions made pursuant
to an International Swap Dealers Association, Inc. Master Agreement or similar
agreement), both absolute and contingent, due and to become due, now existing
and hereafter arising, including any interest and fees that accrue after the
commencement of an Insolvency Proceeding and including any indebtedness,
liability and obligation now owing and any indebtedness, liability and
obligation hereafter arising and owing from Borrower to others that Bank has
obtained or may in the future obtain by assignment or otherwise.

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

“Online Merger” has the meaning set forth in Section 7.3.

“Patents” means all patents, patent applications and like protections including
without limitation improvements, divisions, continuations, renewals, reissues,
extensions and continuations-in-part of the same.

“Periodic Payments” means all installment and similar recurring payments that
Borrower may now be obligated to pay and may hereafter become obligated to pay
to Bank pursuant to the terms and provisions of any instrument, agreement,
document and record now in existence and which may hereafter come into existence
between Borrower and Bank.

“Permitted Indebtedness” means: (i) Indebtedness of Borrower in favor of Bank
arising under this Agreement or any other Loan Document; (ii) Indebtedness
existing on the Closing Date which is disclosed in the Schedule;
(iii) Indebtedness not to exceed Five Hundred Thousand Dollars ($500,000) in the
aggregate secured by a lien described in clause (iii) of the defined term
“Permitted Liens”, provided such Indebtedness does not exceed the lesser of the
cost or fair market value of the Equipment financed with such Indebtedness; and
(iv) Subordinated Debt.

“Permitted Investment” means: (i) Investments existing on the Closing Date
disclosed in the Certificate of Borrower; (ii) (A) Marketable direct obligations
issued or unconditionally guaranteed by the United States of America or any
agency or any State thereof maturing within one year from the date of
acquisition thereof, (B) commercial paper maturing no more than one year from
the date of creation thereof and currently having a rating of at least A-2 or
P-2 from either Standard & Poor’s Corporation or Moody’s Investors Service,
(C) certificates of deposit maturing no more than one year from the date of
investment therein issued by Bank, and (D) Bank’s money market accounts;
(iii) Repurchases of stock from former employees or directors of Borrower under
the terms of applicable repurchase agreements or stock option agreements
approved by Borrower’s board of directors in an amount not to exceed Five
Hundred Thousand Dollars ($500,000) in the aggregate in any fiscal year,
provided that no Event of Default has occurred, is continuing or would exist
after giving effect to the repurchases; (iv) Investments accepted in connection
with Permitted Transfers; (v) Investments consisting of (A) travel advances and
employee relocation loans and other employee loans and advances in the ordinary
course of business, and (B) loans to employees, officers or directors relating
to the purchase of equity securities of Borrower or its Subsidiaries pursuant to
employee stock purchase plan agreements or stock option agreements approved by
Borrower’s board of directors, provided that no Event of Default has occurred,
is continuing or would exist after giving effect to the such transactions;
(vi) Investments (including debt obligations) received in connection with the
bankruptcy or reorganization of customers or suppliers and in settlement of
delinquent obligations of, and other disputes with, customers or suppliers
arising in the ordinary course of Borrower’s business; (vii) Investments
consisting of notes receivable of, or prepaid royalties and other credit
extensions, to customers and suppliers who are not Affiliates, in the ordinary
course of business, provided that this part shall not apply to Investments of
Borrower in any Subsidiary; and (viii) Joint ventures or strategic alliances in
the ordinary course of Borrower’s business consisting of the non-exclusive
licensing of technology, the development of technology or the providing of
technical support, provided that any cash Investments by Borrower do not exceed
Fifty Thousand Dollars ($50,000) in the aggregate in any fiscal year, and
provided further that no Event of Default has occurred, is continuing or would
exist after such event.

“Permitted Liens” means the following: (i) any Liens existing on the Closing
Date and disclosed in the Schedule or arising under this Agreement or the other
Loan Documents; (ii) Liens for taxes, fees, assessments or other governmental
charges or levies, either not delinquent or being contested in good faith by
appropriate proceedings and for which Borrower maintains adequate reserves,
provided the same have no priority over any of Bank’s security interests;
(iii) Liens not to exceed Five Hundred Thousand Dollars ($500,000) in the
aggregate (A) upon or in any Equipment acquired or held by Borrower or any of
its Subsidiaries to secure the purchase price of such Equipment or indebtedness
incurred solely for the purpose of financing the acquisition of such Equipment,
or (B) existing on such Equipment at the time of its acquisition, provided that
the Lien is confined solely to the property so acquired and improvements
thereon, and the proceeds of such Equipment, provided that, to the extent not
specifically prohibited by the terms of such financings, Borrower shall grant
and pledge to Bank a valid, perfected security interest which is second in
priority to any lien granted under this provision; and (iv) Liens incurred in
connection with the extension, renewal or refinancing of the indebtedness
secured by Liens of the type described in clauses (i) through (iii) above,
provided that any extension, renewal or replacement Lien shall be limited to the
property encumbered by the existing Lien and the principal amount of the
indebtedness being extended, renewed or refinanced does not increase;
(v) statutory Liens of landlords, carriers, warehousemen, mechanics and/or
materialmen and other similar Liens imposed by law or that arise by operation of
law in the ordinary course of business that, in any such case, are only for
amounts not yet due or which are being contested in good faith by appropriate
proceedings (which have the effect of preventing the forfeiture or sale of the
property subject thereto) and with respect to which adequate reserves or other
appropriate provisions are being maintained by such person in accordance with
GAAP; (vi) Liens (other than any Lien imposed by ERISA) incurred or deposits or
pledges made in the ordinary course of business (including, without limitation,
surety bonds and appeal bonds) in connection with workers’ compensation,
unemployment insurance and other types of social security benefits or to secure
the performance of tenders, bids, leases, trade contracts, statutory obligations
and other similar obligations (other than for the repayment of Indebtedness);
and (vii) Liens arising from attachments or judgments in circumstances not
constituting an Event of Default provided that the enforcement of such Lien is
effectively stayed.

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

“Permitted Transfer” means the conveyance, sale, lease, transfer or disposition
by Borrower or any Subsidiary of: (i) Inventory in the ordinary course of
business; (ii) non-exclusive licenses and similar arrangements for the use of
the property of Borrower or its Subsidiaries in the ordinary course of business;
(iii) surplus, worn-out or obsolete Equipment or (iv) the sale of Your Health
Insurance Agency, Inc. to Paul Russo, effective December 31, 2008 (the “YHIA
Sale”), in accordance with the Stock Purchase Agreement dated December 31, 2008,
2008, a copy of which has been provided to Bank.

“Promissory Note” means any promissory note or other instrument of Borrower in
favor of Bank evidencing any indebtedness of Borrower to Bank under this
Agreement or evidencing any of the other Obligations, together with any
amendments, modifications, extensions, renewals, substitutions or replacements
thereto or therefor.

“Requirement of Law” means as to any person, any law, treaty, rule, or
regulation, or determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such person or any of its
properties or to which such person or any of its properties is subject, either
individually, or jointly or collectively with another person or persons.

“Responsible Officer” means each of the Chief Executive Officer, the Chief
Operating Officer, the Chief Financial Officer, Director of Finance and the
Controller of Borrower.

“Revolving Facility” means the facility under which Borrower may request Bank to
issue Advances, as specified in Section 2 under subsection entitled “Revolving
Facility”.

“Revolving Maturity Date” means the day before the second anniversary of the
Closing Date.

“Schedule” means the schedule of exceptions attached hereto, if any.

“Shareholders’ Equity” means the total of (i) share capital (excluding
redeemable preferred shares and treasury stock), (ii) contributed surplus, and
(iii) retained earnings.

“Software Products” and “Software” are interchangeable and mean software,
computer source codes and other computer programs.

“Subordinated Debt” means any debt incurred by Borrower that is subordinated to
the indebtedness owing by Borrower to Bank on terms reasonably acceptable to
Bank (and identified as being such by Borrower and Bank).

“Subsidiary” means any registered organization or other organization (1) the
majority (by number of votes) of the outstanding voting interests of which is at
the time owned or controlled by Borrower, or by one or more Subsidiaries of
Borrower, or Borrower and one or more Subsidiaries of Borrower, or (2) otherwise
controlled by or within the control of Borrower or any Subsidiary.

“Tangible Net Worth” means the total of Shareholders’ Equity less
(i) intangibles, (ii) deferred charges, (iii) leasehold improvements and
(iv) loans receivable from related parties.

“Term Loan” means a Credit Extension of up to Ten Million Dollars ($10,000,000).

“Term Loan Advance” has the meaning set forth in the subsection of Section 2
relating to the Term Loan Facility.

“Term Loan Facility” means the facility under which Borrower may request Bank to
make a Term Loan Advance, as specified in a subsection of Section 2.

“Term Loan Maturity Date” means, the day that is thirty-six (36) months from the
Closing Date.

“Trademarks” means any trademark and service mark rights, whether registered or
not, applications to register and registrations of the same and like
protections, and the entire goodwill of the business of Borrower connected with
and symbolized by such trademarks.

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

EXHIBIT B

LOAN PAYMENT/ADVANCE REQUEST FORM

DEADLINE FOR SAME DAY PROCESSING IS 10:00 A.M., E.T.

 

TO:                     

   DATE:                     

FAX #:                     

   TIME:                      

FROM:   

A.D.A.M., Inc.

   CLIENT NAME (BORROWER)

REQUESTED BY:   

 

AUTHORIZED SIGNATURE:   

 

PHONE NUMBER:   

 

FROM ACCOUNT #       TO ACCOUNT #      

REQUESTED TRANSACTION TYPE     REQUEST DOLLAR AMOUNT PRINCIPAL INCREASE
(ADVANCE)   $       PRINCIPAL PAYMENT (ONLY)   $       INTEREST PAYMENT (ONLY)  
$       PRINCIPAL AND INTEREST (PAYMENT)   $      

OTHER INSTRUCTIONS:  

 

 

IF AN EQUIPMENT ADVANCE INCLUDE COPY OF INVOICE FOR EQUIPMENT AND INVOICE FOR
SOFTWARE PRODUCTS BEING FINANCED.

 

All representations and warranties of Borrower stated in the Loan and Security
Agreement are true, correct and complete in all respects as of the date of this
Loan Payment/Advance Request; provided, however, that those representations and
warranties expressly referring to another date shall be true, correct and
complete as of such date.

BANK USE ONLY TELEPHONE REQUEST:

The following person is authorized to request the loan payment transfer/loan
advance on the advance designated account and is known to me.

 

 

     

 

Authorized Requester         Phone #

 

     

 

Received By (Bank)         Phone #

 

      Authorized Signature (Bank)      

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

EXHIBIT C

 

DEBTOR:   A.D.A.M., INC. SECURED PARTY:   RBC BANK (USA)

COLLATERAL DESCRIPTION ATTACHMENT TO LOAN AND SECURITY AGREEMENT

All personal property owned by Borrower and all personal property in which
Borrower has a property interest, both presently existing and hereafter created,
written, produced, developed, acquired and arising, of every nature, kind and
description, wherever located and notwithstanding in whose custody and
possession any of the foregoing may be at any time or times, including, but not
limited to:

 

(i) all accounts (as such term is defined in Article 9 of the Uniform Commercial
Code in effect from time to time in the State of Georgia) owned by the Borrower
and all accounts in which the Borrower has any rights (including, without
limitation, rights to grant a security interest in accounts owned by other
persons), both now existing and hereafter owned, acquired and arising and, to
the extent not included in the term accounts as so defined after ascribing a
broad meaning thereto, all accounts receivable, health-care-insurance
receivables, credit and charge card receivables, bills, acceptances, documents,
choses in action, chattel paper (both tangible and electronic), promissory notes
and other instruments, deposit accounts, license fees payable for use of
software, commercial tort claims, letter of credit rights and letters of credit,
rights to payment for money or funds advanced or sold other than through use of
a credit card, lottery winnings, investment property, rights to payment with
respect to investment property, general intangibles and other forms of
obligations and rights to payment of any nature, now owing to the Borrower and
hereafter arising and owing to the Borrower, together with (1) the proceeds of
all of the accounts and other property and property rights described
hereinabove, including all of the proceeds of Borrower’s rights with respect to
any of its goods and services represented thereby, whether delivered or returned
by customers, and all rights as an unpaid vendor and lienor, including rights of
stoppage in transit and of recovering possession by any proceedings, including
replevin and reclamation, and (2) all customer lists, books and records,
ledgers, account cards, and other records including those stored on computer or
electronic media, whether now in existence or hereafter created, relating to any
of the foregoing;

 

(ii) all now existing and hereafter acquired software, computer source codes,
computer programs embedded in goods that consist solely of the medium in which
the program is embedded and other computer programs and supporting information
(collectively, the “Software Products”), and all common law and statutory
copyrights and copyright registrations, applications for registration, now
existing and hereafter arising, United States of America and foreign, obtained
and to be obtained on or in connection with the Software Products, and any parts
thereof and any underlying and component elements of the Software Products,
together with the right to copyright and all rights to renew and extend such
copyrights and the right (but not the obligation) of Bank to sue in its own name
and in the name of the Borrower for past, present and future infringements of
copyright;

 

(iii) all now existing and hereafter acquired goods, including, without
limitation, fixtures, equipment and inventory;

 

(iv) all now existing and hereafter arising rights in oil, gas or other minerals
before extraction;

 

(v) all now existing and hereafter arising guarantees and other supporting
obligations, together with the security therefor;

 

(vi) all now existing and hereafter arising copyrights, trademarks, service
marks, trade names and service names and the goodwill associated therewith;

 

(vii)

all now existing and hereafter arising (a) patents and patent applications filed
in the United States Patent and Trademark Office or any similar office of any
foreign jurisdiction, and interests under patent license agreements, including,
without limitation, the inventions and improvements described and claimed
therein, (b) licenses pertaining to any patent whether Borrower is licensor or
licensee, (c) income, royalties, damages, payments, accounts and accounts
receivable now due and those hereafter arising and due under and with respect
thereto, including, without limitation, damages and payments for past, present
and future infringements thereof, (d) the right (but not the obligation) to sue
for past, present and future infringements thereof, (e) rights corresponding
thereto throughout the world in all jurisdictions in which such patents have
been issued or applied for,

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

 

and (f) the reissues, divisions, continuations, renewals, extensions and
continuations-in-part with any of the foregoing (all of the foregoing patents
and applications and interests under patent license agreements, together with
the items described in clauses (a) through (f) in this paragraph are sometimes
herein individually and collectively referred to as the “Patents”); and

 

(viii) all now existing and hereafter arising accessions, products and proceeds,
including, without limitation, insurance proceeds and condemnation proceeds, of
any and all of the foregoing property and property rights.

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

EXHIBIT D

Customer No.                     

Loan No.                             

 

RBC BANK  

BORROWING BASE CERTIFICATE

(Accounts Receivable)

 

 

 

 

Borrower: A.D.A.M., Inc.

      Lender: RBC Bank (USA)        

Credit Line Amount:

   $ 3,000,000   

 

 

 

ACCOUNTS RECEIVABLE  

 

  1.   Borrower’s Accounts Book Value as of                           

                   

  2.   Hypothecated Accounts Book Value as of                           

 

  3.   Additions (please explain on a signed attachment)      

 

  4.   TOTAL ACCOUNTS RECEIVABLE      

 

ACCOUNTS RECEIVABLE DEDUCTIONS (without duplication)   5.   Amounts over 90 days
past due (i)  

 

      6.   Accounts with balance 25% over 90 day accounts (ii)  

 

      7.   Officer and Employee Accounts (iii)  

 

      8.   Demo/Consignment Accounts (iv)  

 

      9.   Subsidiary/Affiliate Accounts (v)  

 

      10.   Non-Eligible Foreign Accounts (vi)  

 

      11.   Government Accounts (vii)  

 

      12.   Potential Liability Accounts (viii)  

 

      13.   Concentration (20%) Accounts (ix)  

 

      14.   Disputed Accounts (x)  

 

      15.   Doubtful Accounts (xi)  

 

      16.   Other (please explain on reverse)  

 

      17.   TOTAL ACCOUNTS RECEIVABLE DEDUCTIONS      

 

  18.   Eligible Accounts (#4 minus #17)      

 

  19.   LOAN VALUE OF ACCOUNTS (80% of #18)      

 

FOREIGN ACCOUNTS RECEIVABLE    

 

   

 

ACCOUNTS FOREIGN RECEIVABLE DEDUCTIONS (without duplication)      

 

  20.   Borrower’s Eligible Foreign Accounts Book Value as of
                          

 

  21.   Loan Value Of Eligible Foreign Accounts (65% of #20)      

 

ELIGIBLE CONTRACTED REVENUE (without duplication)         22.   Borrower’s
Eligible Contracted Revenue Book Value as of                           

 

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

  23.   Loan Value of Eligible Contracted Revenue (lesser of $1,000,000 or 50%
of 22)      

 

BALANCES         24.   Maximum Credit Line      

$3,000,000

  25.   Total Permissible Borrowings on Credit Line (Lesser of #20 or sum of
#19, 21 and 23)      

 

  26.   Present balance owing on Line of Credit      

 

  27.   Outstanding under Sublimits (Letters of Credit)      

 

  28.   RESERVE POSITION (#25 minus #26 and #27)      

 

The undersigned represents and warrants that the foregoing is true, accurate and
complete as of the date indicated below, and that the information reflected in
this Borrowing Base Certificate complies with the representations and warranties
set forth in the Loan Agreement between the undersigned and RBC Bank (USA).

 

A.D.A.M., Inc.     Date:                      By:  

 

      Authorized Signer    

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

EXHIBIT E

Customer No.                     

Loan No.                             

 

RBC BANK   COMPLIANCE CERTIFICATE  

 

TO:    RBC BANK (USA) FROM:    A.D.A.M., INC.

The undersigned authorized officer of A.D.A.M., Inc. (“Borrower”) hereby
certifies that in accordance with the terms and conditions of the Loan and
Security Agreement between Borrower and Bank dated December 31, 2008 (the
“Agreement”), (i) Borrower is in complete compliance for the period ending
                     with all covenants set forth in the Agreement, except as
noted below and (ii) all representations and warranties of Borrower stated in
the Agreement are true, correct and accurate as of the date hereof. Attached
herewith are the required documents supporting the above certification. The
undersigned authorized officer further certifies that this Compliance
Certificate and any supporting financial documents have been prepared in
accordance with Generally Accepted Accounting Principles (GAAP) and are
consistently applied from one period to the next except as explained in an
accompanying letter or footnotes – or unless otherwise permitted in the
Agreement. Reference is made to the Agreement for the relevant meanings of the
reporting requirements and covenants which are stated below in a “short-hand”
manner.

Please indicate compliance status by circling Yes/No under “Complies” column.

 

Reporting Covenant

  

Required

       

Complies

Quarterly financial statements

   Quarterly within 45 days       Yes      No

Annual financial statements (Audited)

   FYE within 150 days       Yes      No

10K and 10Q

   As applicable       Yes      No

Borrowing Base Cert. – Receivables

   Monthly within 10 days       Yes      No

Aged Accounts Report and schedule of future billings

   Monthly within 10 days       Yes      No

Board of Directors Report

   Monthly within 10 days       Yes      No

Intellectual Property Reports

   Quarterly within 20 days       Yes      No

Annual Budget

   Within 30 days prior to each fiscal year       Yes      No

Financial Covenant

  

Required

                  

Actual

            

Complies

Funded Debt to EBITDA

   2.00   to    1.00           to    1.00       Yes      No                    
                 

Modified Fixed Charge Coverage Ratio

                                                                     

12 months ended 3/31/09

   1.15   to    1.00           to    1.00       Yes      No                    
                 

12 months ended 6/30/09

   1.15   to    1.00           to    1.00       Yes      No                    
                 

12 months ended 9/30/09 and the 12 months ended as of each quarter thereafter

   1.25   to    1.00           to    1.00       Yes      No                    
                 

(Continued on Next Page)

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

Compliance Certificate

(Continued from Previous Page)

 

Comments Regarding Exceptions: See Attached.

    BANK USE ONLY

A.D.A.M., Inc.

    Received by:  

 

         Authorized Signer     

 

    Date:  

 

  

Authorized Signatory of Borrower

               Verified:  

 

  

 

      Authorized Signer     

Title

          

 

    Date:  

 

  

Date

               Compliance Status   Yes            No