EXHIBIT 10.1
 
BUSINESS LOAN AGREEMENT

       
BORROWER:
CarePayment Technologies, Inc.
5300 SW Meadows Road, Suite 400
Lake Oswego, OR 97035
Telephone: (503) 419-3505
LENDER:
Aequitas Commercial Finance, LLC
5300 Meadows Road, Suite 400
Lake Oswego, OR  97035
Telephone: (503) 419-3500
       

1.           THIS BUSINESS LOAN AGREEMENT (this “Agreement”) dated effective
September 29, 2011, is made and executed between CarePayment Technologies, Inc.,
an Oregon corporation (“Borrower”), and Aequitas Commercial Finance, LLC, an
Oregon limited liability company (“Lender”), on the following terms and
conditions.  Borrower has applied to Lender for a commercial loan or loans or
other financial accommodations, including those which may be described on any
exhibit or schedule attached to this Agreement (“Loans” and each a “Loan”), in
the maximum principal amount of $3,000,000.  Borrower understands and agrees
that: (a) in granting, renewing, or extending any Loan, Lender is relying upon
Borrower’s representations, warranties, and agreements as set forth in this
Agreement; (b) the granting, renewing, or extending of any Loan by Lender at all
times shall be subject to Lender’s sole judgment and discretion; and (c) all
such Loans shall be and remain subject to the terms and conditions of this
Agreement.

2.           TERMS.  This Agreement shall be effective as of the date set forth
above, and shall continue in full force and effect until such time as all Loans
in favor of Lender have been paid in full, including principal, interest, costs,
expenses, attorneys’ fees and other fees and charges, or until such time as the
parties may agree in writing to terminate this Agreement.  Borrower shall
execute a revolving line of credit Note in the original principal amount of
$3,000,000.  The Note shall provide for advances and repayments on the Note
pursuant to the terms and conditions of this Agreement.  The initial Advance to
Borrower shall be for $1,631,000.  Subsequent Advances shall be made in
increments of $100,000 and shall be made within five (5) business days after
written request from Borrower and satisfaction of the conditions provided in
Section 3 below.  Contemporaneously with the execution of this Agreement,
Borrower shall execute a Security Agreement in favor of Lender wherein, in order
to secure the Note in part, Borrower shall grant to Lender a Security Interest
in the collateral described therein which consists, among other things, of a
first priority lien in all assets of Borrower including, without limitation,
accounts, inventory, furniture, fixtures, equipment and general intangibles. The
principal terms of the Loan to be reflected in the Note are as follows:

 
(a)
Interest.  Interest shall accrue on the unpaid balance of the Loan at the rate
of 11% per annum calculated on the basis of a 365-day year and actual days
elapsed.

 
(b)
Payments.  Borrower will make monthly interest-only payments on the outstanding
balance of the Loan commencing one (1) month after the effective date of this
Agreement and continuing on the same day of each month thereafter.  At Lender’s
option, such payments shall be made to Lender via an Automated Clearing House
(“ACH”) transfer from Borrower’s checking account.

 
(c)
Maturity.  The outstanding principal balance and all accrued and unpaid interest
shall be due and payable on or before December 31, 2012; provided, however, that
after the occurrence of an Event of Default, the outstanding principal and all
accrued interest shall be payable on demand.  In addition, the outstanding
principal balance and all accrued and unpaid interest shall be due and payable
in the event of (1) a sale of all or substantially all of the assets of
Borrower, or (2) the transfer of ownership or beneficial interest, by merger or
otherwise, of 25% or more of the stock or membership interests of Borrower.

 
(d)
Late Charge.  If a payment is fifteen (15) days or more late, Borrower will pay
to Lender a late charge equal to the lesser of 5.0% of the regularly scheduled
payment or the maximum amount permitted under applicable law.

 
(e)
Interest After Default.  Upon an Event of Default, including failure to pay all
amounts due upon final maturity of the Loan and Note, Lender may, at its option
without notice to Borrower and if permitted by applicable law, increase the
interest rate of the Note by 5.00 percentage points (500 basis points).  The
interest rate will not exceed the maximum rate permitted by law.

 
(f)
Prepayment.  All or any portion of the Loan may be prepaid at any time following
notice to Lender of not less than five (5) business days.  Early payments will
not, unless agreed to by Lender in writing, relieve Borrower of Borrower’s
obligation to continue to make payments under the payment schedule; early
payments will reduce the outstanding principal balance due.  Borrower agrees not
to send Lender payments marked “paid in full”, “without recourse”, or similar
language.  If Borrower sends such payment, Lender may accept it without losing
any of Lender’s rights under the Loan, and Borrower will remain obligated to pay
any further amount owed to Lender.  All written communications concerning
disputed amounts, including any check or other payment instrument that indicates
that payment constitutes “payment in full” of the amount owed or that is
tendered with other conditions or limitations or as full satisfaction of any
disputed amount must be mailed or delivered to Lender at the address above.

Page 1 of 10- BUSINESS LOAN AGREEMENT
(revised 12/1/08)
 
 

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3.           CONDITIONS PRECEDENT TO EACH ADVANCE.  Lender’s obligations to make
the initial Advance and each subsequent Advance under this Agreement shall be
subject to the fulfillment to Lender’s satisfaction of all of the conditions set
forth in this Agreement and in the Related Documents, specifically including:

 
(a)
Loan Documents.  Borrower shall execute and deliver or otherwise provide to
Lender the following documents for the Loan: (1) the Note; (2) Security
Agreements granting to Lender security interests in the Collateral; (3)
financing statements and all other documents perfecting Lender’s Security
Interests; and (4) all such additional Related Documents as Lender may require
for the Loan.  All such documents shall be in form and substance satisfactory to
Lender and Lender’s counsel.

 
(b)
Authorizations.  Borrower shall have provided in form and substance satisfactory
to Lender properly certified resolutions, duly authorizing the execution and
delivery of this Agreement, the Note and the Related Documents.  In addition,
Borrower shall have provided such other resolutions, authorizations, documents
and instruments as Lender or its counsel may require.

 
(c)
Payment of Fees and Expenses.  Borrower shall have paid to Lender all fees,
charges and other expenses which are incurred by Lender in connection with the
Loan, or as specified in this Agreement or any Related Document, including
without limitation attorney fees (including fees of in-house counsel),
collateral appraisal costs, travel costs, lien search fees and filing fees.

 
(d)
Representations and Warranties.  The representations and warranties set forth in
this Agreement, in the Related Documents, and in any document or certificate
delivered to Lender under this Agreement are true and correct.

 
(e)
Completion of Due Diligence.  Lender shall have completed, to its satisfaction,
all financial, legal and operational due diligence with respect to Borrower.

 
(f)
No Event of Default.  There shall not exist at the time of any Advance a
condition which, with the passage of time or otherwise, would constitute an
Event of Default under this Agreement or under any Related Document.

 
(g)
Consents; Intercreditor Agreements.  Borrower shall have obtained any necessary
consents and approvals from other lenders or third parties in order to
consummate the transactions contemplated by this Agreement or any Related
Document.  If deemed appropriate by Lender, an intercreditor agreement, a
subordination agreement and lien releases satisfactory to Lender shall have been
executed by other lenders to ensure the priority of Lender’s Security Interests.

 
(h)
Advisory Services Agreement.  Borrower shall not be in default of its
obligations under the Amended and Restated Advisory Services Agreement between
Borrower and Aequitas Capital Management, Inc. (“Aequtias”) dated effective
December 31, 2009.

 
(i)
Financial Statements and Plan.  Borrower shall have provided Lender with a three
(3) year company financial plan, including financial (income statement and
balance sheet) projections and corresponding cash flow forecasts satisfactory in
form and substance to Lender.

 
(j)
No Material Adverse Change.  No Material Adverse Change with respect to the
financial condition, operations, industry, business or prospects of Borrower
(including no litigation commenced which, if successful, could have a material
adverse effect upon any of the foregoing) shall have occurred.  Borrower shall
promptly notify Lender of any material change in the foregoing, adverse or
otherwise.

4.           REPRESENTATIONS AND WARRANTIES.  Borrower represents and warrants
to Lender, as of the date of this Agreement, as of the date of each disbursement
of Loan proceeds, as of the date of any renewal, extension or modification of
any Loan, and at all times any Indebtedness exists:

 
(a)
Organization.  Borrower is, and at all times shall be, duly organized, validly
existing and in good standing under and by virtue of the laws of the state of
its incorporation or formation.  Borrower is duly authorized to transact
business in all other states in which Borrower is doing business, having
obtained all necessary filings, governmental licenses and approvals for each
state in which Borrower is doing business.  Specifically, Borrower is, and all
times shall be, duly qualified to do business in all states in which the failure
to so qualify would have a material adverse effect on its business or financial
condition.  Borrower has the full power and authority to own its properties and
to transact the business in which it is presently engaged or presently proposes
to engage.  Borrower maintains its principal office at the address set forth on
the first page of this Agreement, and any other office locations are listed in
the Disclosure Schedule provided by Borrower to Lender in connection with the
execution of this Agreement.  Unless Borrower has designated otherwise in
writing, the principal office is the office at which Borrower keeps its books
and records including its records concerning the Collateral.  Borrower will
notify Lender at least thirty (30) days prior to any change in the location of
Borrower’s state of organization or any change in Borrower’s name.  Borrower
shall do all things necessary to preserve and to keep in full force and effect
its existence, rights and privileges, and shall comply with all regulations,
rules, ordinances, statutes, orders and decrees of any governmental or
quasi-governmental authority or court applicable to Borrower and Borrower’s
business activities.

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(b)
Authorization.  Borrower’s execution, delivery and performance of this Agreement
and all the Related Documents have been duly authorized by all necessary action
by Borrower and do not conflict with, result in a violation of, or constitute a
default under (1) any provision of Borrower’s articles of organization,
operating agreement, articles of incorporation, other organizational documents
or agreements or instruments binding upon Borrower or (2) any law, governmental
regulation, court decree or order applicable to Borrower or to Borrower’s
properties.

 
(c)
Capitalization.  The authorized capital stock of Borrower consists of 65,000,000
class A shares of and 10,000,000 class B common stock and, as of the date
hereof, 2,590,787 class A shares and 8,010,092 class B shares are issued and
outstanding.

 
(d)
Financial Information.  Each of Borrower’s financial statements supplied to
Lender truly and completely disclosed Borrower’s financial condition as of the
date of the statement, and there has been no material adverse change in
Borrower’s financial condition subsequent to the date of the most recent
financial statement supplied to Lender.  Borrower has no material contingent
obligations except as disclosed in such financial statements.

 
(e)
Properties.  Except as contemplated by this Agreement or as previously disclosed
in Borrower’s financial statements or in writing to Lender and as accepted by
Lender, and except for property tax liens for taxes not presently due and
payable and security interests of record, Borrower owns and has good title to
all of Borrower’s properties free and clear of all Security Interests, and has
not executed any security documents or financing statements relating to such
properties.  All of Borrower’s properties are titled in Borrower’s legal name,
and Borrower has not used or filed a financing statement under any other name
for at least the last five (5) years.

 
(f)
Hazardous Substances.  Except as disclosed to and acknowledged by Lender in
writing, Borrower represents and warrants that: (1) During the period of
Borrower’s ownership of Borrower’s Collateral, there has been no use,
generation, manufacture, storage, treatment, disposal, release or threatened
release of any Hazardous Substance by any person on, under, about or from any of
the Collateral.  (2) Borrower has no knowledge of, or reason to believe that
there has been (a) any breach or violation of any Environmental Laws; (b) any
use, generation, manufacture, storage, treatment, disposal, release or
threatened release of any Hazardous Substance on, under, about or from the
Collateral by any prior owners or occupants of any of the Collateral; or (c) any
actual or threatened litigation or claims of any kind by any person relating to
such matters.  (3) Neither Borrower nor any tenant, contractor, agent or other
authorized user of any of the Collateral shall use, generate, manufacture,
store, treat, dispose of or release any Hazardous Substance on, under, about or
from any of the Collateral, except to the extent any such activity is permitted
under applicable Environmental Laws and conducted in compliance with all
applicable federal, state and local laws, regulations and ordinances including
without limitation all Environmental Laws.  Borrower authorizes Lender and its
agents to enter upon the Collateral to make such inspections and tests as Lender
may deem appropriate to determine compliance of the Collateral with this section
of the Agreement.  Any inspections or tests made by Lender shall be at
Borrower’s expense and for Lender’s purposes only and shall not be construed to
create any responsibility or liability on the part of Lender to Borrower or to
any other person.  The representations and warranties contained herein are based
on Borrower’s due diligence in investigating the Collateral for hazardous waste
and Hazardous Substances.  Borrower hereby (1) releases and waives any future
claims against Lender for indemnity or contribution in the event Borrower
becomes liable for cleanup or other costs under any such laws, and (2) agrees to
indemnify and hold harmless Lender against any and all claims, losses,
liabilities, damages, penalties and expenses which Lender may directly or
indirectly sustain or suffer resulting from a breach of this section of the
Agreement or as a consequence of any use, generation, manufacture, storage,
disposal, release or threatened release of a hazardous waste or substance on the
Collateral, or as a result of a violation of any Environmental Laws.  The
provisions of this section of the Agreement, including the obligation to
indemnify, shall survive the payment of the Indebtedness and the termination,
expiration or satisfaction of this Agreement and shall not be affected by
Lender’s acquisition of any interest in any of the Collateral, whether by
foreclosure or otherwise.

 
(g)
Litigation and Claims.  No litigation, claim, investigation, administrative
proceeding or similar action (including those for unpaid taxes) against Borrower
is pending or threatened, and no other event has occurred which may materially
adversely affect Borrower’s financial condition or properties, other than
litigation, claims or other events, if any, that have been disclosed to Lender
in the Disclosure Schedule.

 
(h)
Taxes.  To the best of Borrower’s knowledge, all of Borrower’s tax returns and
reports that are or were required to be filed, have been filed, and all taxes,
assessments and other governmental charges have been paid in full, except those
presently being or to be contested by Borrower in good faith in the ordinary
course of business and for which adequate reserves have been provided.

 
 

 
(i)
Lien Priority.  Except as disclosed to Lender in the Disclosure Schedule,
Borrower has not entered into or granted any Security Agreements, or permitted
the filing or attachment of any Security Interests on or affecting any of the
Collateral securing repayment of Borrower’s Loan and Note, that would be prior
or that may in any way be superior to Lender’s Security Interests and rights in
and to such Collateral.

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(j)
OFAC/USA PATRIOT Act Restrictions.  Borrower is not (nor will be) a person with
whom Lender is restricted from doing business under regulations of the Office of
Foreign Asset Control (“OFAC”) of the Department of the Treasury of the United
States of America (“Treasury”) or under any list of known or suspected
terrorists or terrorist organizations issued by any federal government agency
and designated as such by Treasury in consultation with the federal functional
regulators, or under any statute, executive order, or other governmental action,
and Borrower is not engaging, nor shall engage, in any dealings or transactions
or shall otherwise be associated with such persons.  In addition, Borrower
hereby agrees to provide to Lender any additional information that Lender deems
necessary from to time in order to ensure compliance with all applicable laws
concerning money laundering and similar activities.

 
(k)
No Misleading Statements.  All information and statements furnished by Borrower
in connection with the Related Documents are true and correct, in all material
respects, and contain no false or misleading statement.

 
(l)
Binding Effect.  This Agreement constitutes, and any instrument or agreement
Borrower is required to give under this Agreement when delivered will
constitute, legal, valid and binding obligations of Borrower enforceable against
Borrower in accordance with their respective terms, subject to applicable
bankruptcy, insolvency, reorganization and moratorium laws and other laws of
general application affecting enforcement of creditors’ rights generally.

5.           AFFIRMATIVE COVENANTS.  Borrower covenants and agrees with Lender
that, so long as this Agreement remains in effect, Borrower will:

 
(a)
Notices of Claims and Litigation.  Promptly inform Lender in writing of (1) all
material adverse changes in Borrower’s financial condition, and (2) all existing
and all threatened litigation, claims, investigations, administrative
proceedings or similar actions affecting Borrower which could materially affect
the financial condition of Borrower.

 
(b)
Financial Records.  Maintain its books and records in accordance with GAAP,
applied on a consistent basis, and permit Lender to examine and audit Borrower’s
books and records at all reasonable times.

 
(c)
Financial Statements.  Furnish Lender with the following:

 
i.
Annual Statements.  As soon as available, but in no event later than one hundred
twenty (120) days after the end of each fiscal year, Borrower’s balance sheet
and income statements for the year ended, audited by a certified public
accountant satisfactory to Lender.

 
ii.
Interim Statements.  As soon as available, but in no event later than forty-five
(45) days after the end of each fiscal quarter, Borrower’s balance sheet and
profit and loss statement for the period ended, prepared by Borrower in form
satisfactory to Lender.

 
iii.
Additional Requirements.  Copies of tax returns within fifteen (15) days of
filing.

 
(d)
GAAP.  Prepare all financial reports required to be provided under this
Agreement according to GAAP and certify the same as being true and correct.

 
(e)
Additional Information.  Furnish such additional information and statements,
including confirmation of paid obligations (e.g., tax obligations), as Lender
may request from time to time.

 
(f)
Insurance.  Maintain fire and other risk insurance, public liability insurance
and such other insurance as Lender may require with respect to Borrower’s
properties and operations, in form, amounts, coverages and with insurance
companies acceptable to Lender.  Borrower, upon request of Lender, will deliver
to Lender from time to time the policies or certificates of insurance in form
satisfactory to Lender, including stipulations that coverages will not be
cancelled or diminished without at least thirty (30) days prior written notice
to Lender.  Each insurance policy also shall include an endorsement providing
that coverage in favor of Lender will not be impaired in any way by any act,
omission or default of Borrower or any other person.  In connection with all
policies covering assets in which Lender holds or is offered a Security Interest
for the Loans, Borrower will provide Lender with such lender’s loss payable or
other endorsements as Lender may require.

 
(g)
Subordination.  Upon request of Lender, deliver to Lender subordination
agreements on Lender’s forms, executed by Borrower’s creditors named below,
subordinating all of Borrower’s indebtedness to such creditors, or such lesser
amounts as may be agreed to by Lender in writing, and any Security Interests in
collateral securing that indebtedness to the Loans and Security Interests of
Lender.

 
(h)
Other Agreements. Comply with all terms and conditions of all other agreements,
whether now or hereafter existing, between Borrower and any other party and
notify Lender immediately in writing of any default in connection with any other
such agreements.

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(i)
Loan Proceeds.  Use all Loan proceeds solely for Borrower’s business operations
or such purpose(s) as may be specifically set forth in this Agreement, unless
specifically consented to the contrary by Lender in writing.

 
(j)
Advisory Engagement.  Continue to utilize the advisory services of Aequitas
pursuant to the Amended and Restated Advisory Services Agreement dated December
31, 2009, as the same may be modified by mutual agreement of the parties
thereto.  At Lender’s option, any fees or reimbursable costs and expenses due to
Aequitas from Borrower may be added to and become a part of the Indebtedness,
shall be payable on demand, and failure to pay the same shall constitute an
Event of Default.

 
(k)
Taxes, Charges and Liens.  Pay and discharge when due all of its indebtedness
and obligations, including without limitation all assessments, taxes,
governmental charges, levies and liens, of every kind and nature, imposed upon
Borrower or its properties, income or profits, prior to the date on which
penalties would attach, and all lawful claims that, if unpaid, might become a
lien or charge upon any of Borrower’s properties, income or profits.

 
(l)
Performance.  Perform and comply in a timely manner with all terms, conditions
and provisions set forth in this Agreement, in the Related Documents, and in all
other instruments and agreements between Borrower and Lender.  Borrower shall
notify Lender immediately in writing of any default in connection with any
agreement.

 
(m)
Operations.  Maintain executive and management personnel with substantially the
same qualifications and experience as the present executive and management
personnel; provide written notice to Lender of any change in executive and
management personnel; and conduct its business affairs in a reasonable and
prudent manner.

 
(n)
Environmental Studies.  Promptly conduct and complete, at Borrower’s expense,
all such investigations, studies, samplings and testings as may be requested by
Lender or any governmental authority relative to any substance, or any waste or
by-product of any substance, defined as toxic or a hazardous substance under
applicable federal, state or local law, rule, regulations, order or directive,
on or affecting any property or any facility owned, leased or used by Borrower.

 
(o)
Compliance with Governmental Requirements.  Comply with all laws, ordinances and
regulations, now or hereafter in effect, of all governmental authorities,
applicable to the conduct of Borrower’s properties, businesses and operations,
and to the use or occupancy of the Collateral, including without limitation, the
Americans With Disabilities Act.  Borrower may contest in good faith any such
law, ordinance or regulation and withhold compliance during any proceeding,
including appropriate appeals, so long as Borrower has notified Lender in
writing prior to doing so and so long as, in Lender’s sole opinion, Lender’s
interests in the Collateral are not jeopardized.  Lender may require Borrower to
post adequate security or surety bond, reasonably satisfactory to Lender, to
protect Lender’s interest.

 
(p)
Inspection.  Permit employees or agents of Lender at any reasonable time to
inspect any and all Collateral for the Loan or Loans and Borrower’s other
properties and to examine or audit Borrower’s books, accounts and records and to
make copies and memoranda of Borrower’s books, accounts and records.  If
Borrower now or at any time hereafter maintains any records (including without
limitation computer generated records and computer software programs for the
generation of such records) in the possession of a third party, Borrower, upon
request of Lender, shall notify such party to permit Lender free access to such
records at all reasonable times and to provide Lender with copies of any records
it may request, all at Borrower’s expense.  Any expense incident to the exercise
by Lender of any right under this section for one annual inspection or audit and
any inspections or audits following the occurrence of an uncured Event of
Default shall be borne by Borrower, otherwise such expense shall be borne by
Lender.

 
(q)
Environmental Compliance and Reports.  Comply in all respects with any and all
Environmental Laws and furnish to Lender promptly and in any event within thirty
(30) days after receipt thereof a copy of any notice, summons, lien, citation,
directive, letter or other communication from any governmental agency or
instrumentality concerning any intentional action or omission on Borrower’s part
in connection with any environmental activity whether or not there is damage to
the environment and/or other natural resources.

 
(r)
Additional Assurances.  Make, execute and deliver to Lender such promissory
notes, mortgages, deeds of trust, security agreements, assignments, financing
statements, landlord waivers, instruments, documents and other agreements as
Lender or its counsel may reasonably request to evidence and secure the Loans
and to perfect all Security Interests.  Borrower shall promptly reimburse Lender
upon request or invoice for all fees, charges and other expenses which are
subsequently incurred by Lender in connection with the Loan, including without
limitation attorney fees (including fees of in-house counsel), collateral
appraisal and inspection costs, travel costs, lien search fees and filing fees.

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6.           LENDER’S EXPENDITURES.  If any action or proceeding is commenced
that would materially affect Lender’s interest in the Collateral or if Borrower
fails to comply with any provision of this Agreement or any Related Documents,
including but not limited to Borrower’s failure to discharge or pay when due any
amounts Borrower is required to discharge or pay under this Agreement or any
Related Documents, Lender on Borrower’s behalf may (but shall not be obligated
to) take any action that Lender deems appropriate, including but not limited to
discharging or paying all taxes, liens, security interests, encumbrances and
other claims, at any time levied or placed on any Collateral and paying all
costs for insuring, maintaining and preserving any Collateral.  All such
expenditures incurred or paid by Lender for such purposes will then bear
interest at the rate charged under the Note from the date incurred or paid by
Lender to the day of repayment by Borrower.  All such expenses will become a
part of the Indebtedness and, at Lender’s option, will (a) be payable on demand;
or (b) be treated as a balloon payment which will be due and payable at the
Note’s maturity.

7.           NEGATIVE COVENANTS.  Borrower covenants and agrees with Lender that
while this Agreement is in effect, Borrower shall not, without the prior written
consent of Lender:

 
(a)
Indebtedness and Liens. (1) Except for trade debt incurred in the normal course
of business and indebtedness to Lender contemplated by this Agreement, create,
incur or assume indebtedness for borrowed money, including capital leases, or
incur any other liabilities, (2) sell, transfer, mortgage, assign, pledge,
lease, grant a security interest in, or encumber any of Borrower’s assets
(except as allowed as Permitted Liens), or (3) sell any of Borrower’s accounts,
except to Lender.

 
(b)
Continuity of Operations.  (1)  Engage in any business activities substantially
different than those in which Borrower is presently engaged, (2) cease
operations, liquidate, merge, transfer, acquire or consolidate with any other
entity, amend its organizational documents (including a change of its name) or
dissolve, (3) transfer or sell Collateral, except for sales of inventory in the
ordinary course of business, (4) make any distribution to shareholders or
members or with respect to any capital account, whether by reduction of capital
or otherwise, except a distribution to pay taxes attributable to pass-through
taxable income from Borrower, (5) redeem or repurchase any of Borrower’s
outstanding capital stock or membership interests or any option to acquire
Borrower’s capital stock or membership interests, or (6) issue any additional
capital stock or membership interest or any option to acquire capital stock or
membership interests.

 
(c)
Loans, Acquisitions and Guaranties. (1) Loan, invest in or advance money or
assets, (2) purchase, create or acquire any interest in any other enterprise or
entity, or (3) incur any obligations as surety or guarantor other than in the
ordinary course of business.

8.           CESSATION OF ADVANCES.  If Lender has made any commitment to make
any Loan to Borrower, whether under this Agreement or under any other agreement,
Lender shall have no obligation to make Loan Advances or to disburse Loan
proceeds if: (a) Borrower is in default under the term of this Agreement or any
of the Related Documents or any other agreement that Borrower has with Lender;
(b) Borrower becomes insolvent, files a petition in bankruptcy or similar
proceedings, or is adjudged as bankrupt; (c) there occurs a material adverse
change in Borrower’s financial condition or in the value of any Collateral
securing any Loan; or (e) Lender in good faith deems itself insecure, even
though no Event of Default shall have occurred.

9.           DEFAULT.  Each of the following shall constitute an Event of
Default under this Agreement.

 
(a)
Payment Default.  Borrower fails to make any payment when due under the Note.

 
(b)
Other Defaults.  Borrower fails to comply with or to perform any other term,
obligation, covenant or condition contained in the Note or in any of the Related
Documents or to comply with or to perform any term, obligation, covenant or
condition contained in any other agreement between Lender (or an affiliate of
Lender) and Borrower.  If any failure, other than a failure to pay money or to
comply with financial covenants and ratio requirements, is curable and if
Borrower, as the case may be, has not been given a notice of a similar breach
within the preceding twelve (12) months, it may be cured (and no Event of
Default will have occurred) if Borrower, as the case may be, after delivery of
written notice from Lender demanding cure of such failure: (a) cures the failure
within fifteen (15) days; or (b) if the cure requires more than fifteen (15)
days, immediately initiates steps sufficient to cure the failure and thereafter
continues and completes all reasonable and necessary steps sufficient to produce
compliance within sixty (60) days after notice is sent.

 
(c)
Default in Favor of Third Parties.  Borrower defaults under any loan, extension
of credit, security agreement, purchase or sales agreement, or any other
agreement, in favor of any other creditor or person that may materially affect
any of Borrower’s property or Borrower’s ability to repay the Note or perform
Borrower’s obligations under the Note or any of the Related Documents.

 
(d)
False Statements.  Any warranty, representation or statement made or furnished
to Lender by Borrower or on Borrower’s behalf under this Agreement, the Note or
the Related Documents is false or misleading in any material respect, either now
or at the time made or furnished or becomes false or misleading at any time
thereafter.

 
(e)
Dissolution, Insolvency, etc.  The dissolution of Borrower (regardless of
whether election to continue is made), or any other termination of Borrower’s
existence as a going business, the insolvency of Borrower, the appointment of a
receiver for any part of Borrower’s property, any assignment for the benefit of
creditors, any type of creditor workout, or the commencement of any proceeding
under any bankruptcy or insolvency laws by or against Borrower.

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(f)
Creditor or Forfeiture Proceedings.  Commencement of foreclosure or forfeiture
proceedings, whether by judicial proceeding, self-help, repossession or any
other method, by any creditor of Borrower or by any governmental agency against
any collateral securing the loan.

 
(g)
Adverse Change.  A Material Adverse Change occurs in Borrower’s financial
condition, or Lender reasonably believes the prospect of payment performance of
the Note has been impaired.

 
(h)
Insecurity.  Lender in good faith believes itself insecure.

10.           EFFECT OF AN EVENT OF DEFAULT.  If any Event of Default shall
occur, except where otherwise provided in this Agreement or the Related
Documents, all commitments and obligations of Lender under this Agreement or the
Related Documents or any other agreement immediately will terminate (including
any obligation to make further Loan Advances or disbursements), and, at Lender’s
option all Indebtedness immediately will become due and payable, all without
notice of any kind to Borrower, except that in the case of an Event of Default
of the type described in the “Insolvency” subsection above, such acceleration
shall be automatic and not optional.  In addition, Lender shall have all the
rights and remedies provided in the Related Documents or available at law, in
equity or otherwise.  Except as may be prohibited by applicable law, all of
Lender’s rights and remedies shall be cumulative and may be exercised singularly
or concurrently.  Election by Lender to pursue any remedy shall not exclude
pursuit of any other remedy, and an election to make expenditures or to take
action to perform any obligation of Borrower shall not affect Lender’s right to
declare a default and to exercise its rights and remedies.

11.           MISCELLANEOUS PROVISIONS.  The following miscellaneous provisions
are a part of this Agreement:

 
(a)
Amendments.  This Agreement, together with any Related Documents, constitutes
the entire understanding and agreement of the parties as to the matters set
forth in this Agreement.  No alteration of or amendment to this Agreement shall
be effective unless given in writing and signed by the party or parties sought
to be charged or bound by the alteration or amendment.

 
(b)
Loan Expenses.  From time to time following the initial Advance, Borrower will
pay all reasonable expenses of Lender on demand (including, without limitation,
search costs, audit fees, appraisal fees and the fees and expenses of outside
and in-house legal counsel for Lender) relating to this Agreement, and all
Related Documents, including, without limitation, expenses incurred in the
analysis, negotiation, preparation, closing, administration and enforcement of
this Agreement and the Related Documents, the enforcement, protection and
defense of the rights of Lender in and to the Loans and Collateral or otherwise
hereunder, and any reasonable expenses relating to extensions, amendments,
waivers or consents pursuant to the provisions hereof, or any Related Documents
or relating to agreements with other creditors, or termination of this Agreement
(collectively, the “Expenses”).

 
(c)
Legal and Collection Expenses.  Lender may hire or pay someone else to help
collect the Indebtedness if Borrower does not pay.  Borrower will pay Lender
that amount in addition to the Expenses.  This includes, subject to any limits
under applicable law, Lender’s reasonable attorneys’ fees and legal expenses,
whether or not there is a lawsuit, including without limitation attorneys’ fees
and expenses incurred by Lender at trial, on appeal, and in any arbitration
or  bankruptcy proceedings (including efforts to modify or vacate any automatic
stay or injunction).  If not prohibited by applicable law, Borrower also will
pay any court costs, in addition to all other sums provided by law.

 
(d)
Marketing Authorization.  Borrower agrees that Lender or its affiliates may use
Borrower’s name and logo, and general information concerning Borrower’s
relationship with Lender and its affiliates, on the website and in firm
brochures maintained and created by Lender or its affiliates (typically in a
form commonly known as “tombstones”), in press releases, advertisements, and in
other related marketing materials. This authorization will extend to reissues of
the advertisements and other marketing tools which Lender or its affiliates may
utilize in marketing activities.  Borrower may notify Lender in writing at any
time to stop further use of references to Borrower in marketing materials.

 
(e)
Caption Headings.  Caption headings in this Agreement are for convenience
purposes only and are not to be used to interpret or define the provisions of
this Agreement.

 
(f)
Assignments. Borrower acknowledges that Lender may (i) sell and assign its
interest in this Agreement, the Note, the  payments due thereunder and the
Related Documents, in whole or in part, or sell participations therein, to an
assignee (the “Assignee”) which may be represented by a bank or trust company
acting as a trustee of such Assignee.  BORROWER ACKNOWLEDGES THAT ANY ASSIGNMENT
OR TRANSFER BY LENDER OR ANY ASSIGNEE SHALL NOT MATERIALLY CHANGE BORROWER’S
OBLIGATIONS UNDER THE ASSIGNED NOTE AND RELATED DOCUMENTS.  Any Assignee shall
be entitled to enforce all the rights so assigned but be under no obligation to
Borrower to perform any of Lender’s obligations under the assigned Note and any
Related Documents, the sole remedy of Borrower being against Lender with
Borrower’s right against Lender being unaffected except as provided
herein.  Borrower agrees that upon notice of assignment of the Note and any
Related Documents, it shall pay directly to the Assignee, unconditionally, all
amounts which become due thereunder.  Borrower specifically covenants and agrees
that it will not assert against any Assignee any claims by way of abatement,
defense, set-off, counterclaim, recoupment or otherwise which Borrower may have
against Lender or any third party, and BORROWER SHALL NOT ASSERT AGAINST SUCH
ASSIGNEE IN ANY ACTION FOR NOTE PAYMENTS OR OTHER MONEYS PAYABLE THEREUNDER ANY
DEFENSE EXCEPT THE DEFENSE OF PAYMENT TO SUCH ASSIGNEE.  Upon Lender’s request,
Borrower will acknowledge to any assignee receipt of Lender’s notice of
assignment.

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(g)
Governing Law; Choice of Venue.  This Agreement will be governed by, construed
and enforced in accordance with the laws of the State of Oregon.  This Agreement
has been accepted by Lender in the State of Oregon.  If there is a lawsuit,
Borrower agrees to submit to the jurisdiction of the courts located in Portland,
Oregon and waives any objections that such venue is an inconvenient forum.

 
(h)
No Waiver by Lender.  Lender shall not be deemed to have waived any rights under
this Agreement unless such waiver is given in writing and signed by Lender.  No
delay or omission on the part of Lender in exercising any right shall operate as
a waiver of such right or any other right.  A waiver by Lender of a provision of
this Agreement shall not prejudice or constitute a waiver of Lender’s right
otherwise to demand strict compliance with that provision or any other provision
of this Agreement.  No prior waiver by Lender, nor any course of dealing between
Lender and Borrower, shall constitute a waiver of any of Lender’s rights or of
any of Borrower’s obligations as to any future transactions.  Whenever the
consent of Lender is required under this Agreement, the granting of such consent
by Lender in any instance shall not constitute continuing consent to subsequent
instances where such consent is required and in all cases such consent may be
granted or withheld in the sole discretion of Lender.

 
(i)
Notices.  Any notice required to be given under this Agreement shall be given in
writing, and shall be effective when actually delivered, when deposited with a
reputable overnight courier for next business day delivery, or if mailed, when
deposited in the United States mail as first class, certified or registered mail
with postage prepaid, directed to the addresses shown near the beginning of this
Agreement.  Any party may change its address for notices under this Agreement by
giving written notice to the other parties, specifying that the purpose of the
notice is to change the party’s address.  Unless otherwise provided or required
by law, if there is more than one Borrower, any notice given by Lender to any
Borrower is deemed to be notice given to all Borrowers.

 
(j)
Severability.  If a court of competent jurisdiction finds any provision of this
Agreement to be illegal, invalid or unenforceable as to any circumstance, that
finding shall not make the offending provision illegal, invalid or unenforceable
as to any other circumstance.  If feasible, the offending provision shall be
considered modified so that it becomes legal, valid and enforceable.  If the
offending provision cannot be so modified, it shall be considered deleted from
this Agreement.  Unless otherwise required by law, the illegality, invalidity or
unenforceability of any provision of this Agreement shall not affect the
legality, validity or enforceability of any other provision of this Agreement.

 
(k)
Subsidiaries and Affiliates of Borrower.  To the extent the context of any
provision of this Agreement makes it appropriate, including without limitation
any representation, warranty or covenant, the word “Borrower” as used in this
Agreement shall include all of Borrower’s subsidiaries and
affiliates.  Notwithstanding the foregoing however, under no circumstances shall
this Agreement be construed to require Lender to make any Loan or other
financial accommodation to any of Borrower’s subsidiaries or affiliates.

 
(l)
Successors and Assigns.  All covenants and agreements contained herein by or on
behalf of Borrower shall bind Borrower’s successors and assigns and shall inure
to the benefit of Lender and its successors and assigns.  Borrower shall not,
however, have the right to assign Borrower’s rights under this Agreement or any
interest therein without the prior written consent of Lender.

 
(m)
Survival of Representations and Warranties.  Borrower understands and agrees
that in making the Loan, Lender is relying on all representations, warranties
and covenants made by Borrower in this Agreement or in any certificate or other
instrument delivered by Borrower to Lender under this Agreement or the Related
Documents. Borrower further agrees that regardless of any investigation made by
Lender, all such representations, warranties and covenants will survive the
making of the Loan and delivery to Lender of the Related Documents, shall be
continuing in nature, and shall remain in full force and effect until such time
as Borrower’s Indebtedness shall be paid in full, or until this Agreement shall
be terminated in the manner provided above, whichever is the last to occur.

 
(n)
Time is of the Essence.  Time is of the essence in the performance of this
Agreement.

 
(o)
Jury Waiver.  ALL PARTIES TO THIS AGREEMENT HEREBY WAIVE THE RIGHT TO ANY JURY
TRIAL IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY PARTY AGAINST ANY
OTHER PARTY.

12.           DEFINITIONS.  The following capitalized words and terms shall have
the following meanings when used in this Agreement.   Unless specifically stated
to the contrary, all references to dollar amounts shall mean amounts in lawful
money of the United States of America.  Words and terms used in the singular
shall include the plural, and the plural shall include the singular, as the
context may require.  Words and terms not otherwise defined in this Agreement
shall have the meanings attributed to such terms in the Uniform Commercial
Code.  Accounting words and terms not otherwise defined in this Agreement shall
have the meanings assigned to them in accordance with generally accepted
accounting principles as in effect on the date of this Agreement:

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(a)
Advance.  The word “Advance” means a disbursement of Loan funds made, or to be
made, to Borrower or on Borrower’s behalf on a multiple advance basis under the
terms of this Agreement.

 
(b)
Agreement.  The word “Agreement” means this Business Loan Agreement, as this
Business Loan Agreement may be amended or modified from time to time, together
with all exhibits and schedules attached to the Business Loan Agreement from
time to time.

 
(c)
Borrower.  The word “Borrower” means the person named as Borrower on the first
page of this Agreement and all other persons and entities signing the Note in
whatever capacity.

 
(d)
Collateral.  The word “Collateral” means all property and assets granted as
collateral security for a Loan, whether real or personal property, whether
granted directly or indirectly, whether granted now or in the future, and
whether granted in the form of a security interest, mortgage, collateral
mortgage, deed of trust, assignment, pledge, crop pledge, chattel mortgage,
chattel trust, factor’s lien, equipment trust, conditional sale, trust receipt,
lien, charge, lien and title retention contract, lease or consignment intended
as a security device, or any other security or lien interest whatsoever, whether
created by law, contract or otherwise.

 
(e)
Environmental Laws.  The words “Environmental Laws” mean any and all state,
federal and local statutes, regulations and ordinances relating to the
protection of human health or the environment, including without limitation the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, 42 U.S.C. Section 9601, et seq. (“CERCLA”), the Superfund Amendments
and Reauthorization Act of 1986, Pub. L. No. 99-499 (“SARA”), the Hazardous
Materials Transportation Act, 49 U.S.C. Section 1808, et seq., the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., or other
applicable state or federal laws, rules or regulations adopted pursuant thereto
or intended to protect human health or the environment.

 
(f)
Event of Default.  The words “Event of Default” mean any of the events of
default set forth in this Agreement in the default section of this Agreement.

 
(g)
GAAP.  The word “GAAP” means United States generally accepted accounting
principles, consistently applied.

 
(h)
Hazardous Substances.  The words “Hazardous Substances” mean materials that,
because of their quality, concentration or physical, chemical or infectious
characteristics, may cause or pose a present or potential hazard to human health
or the environment when improperly used, treated, stored, disposed of,
generated, manufactured, transported or otherwise handled.  The words “Hazardous
Substances” are used in their very broadest sense and include without limitation
any and all hazardous or toxic substances, materials or waste as defined by or
listed under the Environmental Laws.  The term “Hazardous Substances” also
includes, without limitation, petroleum and petroleum by-products or any
fraction thereof and asbestos.

 
(i)
Indebtedness.  The word “Indebtedness” means the indebtedness evidenced by the
Note or Related Documents, including all principal and interest together with
all other indebtedness and costs and expenses for which Borrower is responsible
under this Agreement or under any of the Related Documents.

 
(j)
Loans.  The word “Loans” means any and all loans and financial accommodations
from Lender to Borrower whether now or hereafter existing, and however
evidenced, including without limitation those loans and financial accommodations
described herein or described on any exhibit or schedule attached to this
Agreement from time to time.

 
(k)
Material Adverse Change.  The words “Material Adverse Change” mean any condition
or event that Lender determines has or is reasonably likely to have a material
adverse effect on (a) the business, operations, property, condition (financial
or otherwise) or prospects of Borrower and its subsidiaries and affiliates, if
any, taken as a whole, or (b) the validity or enforceability of this Agreement
or any of the other Related Documents or the rights and remedies of Lender
hereunder or thereunder.

 
(l)
Note.  The word “Note” means each promissory note executed and delivered by
Borrower to Lender, including without limitation, the Promissory Note executed
by Borrower in the principal amount of $3,000,000 of even date herewith,
together with all renewals of, extensions of, modifications of, refinancings of,
consolidations of, and substitutions for each note or credit agreement.

 
(m)
Permitted Liens.  The words “Permitted Liens” mean (1) liens and security
interests securing indebtedness owed by Borrower to Lender; (2) liens for taxes,
assessments or similar charges either not yet due or being contested in good
faith; (3) liens of materialmen, mechanics, warehousemen or carriers, or other
like liens arising in the ordinary course of business and securing obligations
which are not yet delinquent; (4) purchase money liens or purchase money
security interests upon or in any property acquired or held by Borrower in the
ordinary course of business to secure indebtedness outstanding on the date of
this Agreement or permitted to be incurred under the paragraph of this Agreement
titled “Indebtedness and Liens”; (5) liens and security interests which, as of
the date of this Agreement, have been disclosed to and approved by Lender in
writing; and (6) those liens and security interests which in the aggregate
constitute an immaterial and insignificant monetary amount with respect to the
value of Borrower’s assets.

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(n)
Related Documents.  The words “Related Documents” mean all promissory notes,
credit agreements, loan agreements, environmental agreements, guaranties,
security agreements, mortgages, deeds of trust, security deeds, collateral
mortgages, landlord waivers and all other instruments, agreements and documents,
whether now or hereafter existing, executed in connection with the Loans.

 
(o)
Security Agreement.  The words “Security Agreement” mean and include without
limitation any agreements, promises, covenants, arrangements, understandings or
other agreements, whether created by law, contract or otherwise, evidencing,
governing, representing or creating a Security Interest.

 
(p)
Security Interest.  The words “Security Interest” mean, without limitation, any
and all types of collateral security, present and future, whether in the form of
a lien, charge, encumbrance, mortgage, deed of trust, security deed, assignment,
pledge, crop pledge, chattel mortgage, chattel trust, factor’s lien, equipment
trust, conditional sale, trust receipt, lien or title retention contract, lease
or consignment intended as a security device, or any other security or lien
interest whatsoever whether created by law, contract or otherwise.

UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE BY LENDER AFTER
OCTOBER 3, 1989 CONCERNING LOANS AND OTHER CREDIT EXTENSIONS MUST BE IN WRITING,
EXPRESS CONSIDERATION AND BE SIGNED BY LENDER TO BE ENFORCEABLE.

BORROWER ACKNOWLEGES HAVING READ ALL OF THE PROVISIONS OF THIS BUSINESS LOAN
AGREEMENT AND BORROWER AGREES TO ITS TERMS.

BORROWER:
         
CarePayment Technologies, Inc.
           
By:
             
Name:
James T. Quist
           
Title:
President
           
LENDER:
         
Aequitas Commercial Finance, LLC
           
By:
        
Andrew N. MacRitchie
     
Executive Vice President
   

Page 10 of 10- BUSINESS LOAN AGREEMENT
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