smti_ex101





  Exhibit 10.1








LOAN AGREEMENT


 


THIS LOAN AGREEMENT (this
“Agreement”) is executed effective the 15th day of
January 2021, by SANARA MEDTECH
INC., a Texas corporation (“Borrower”),
CELLERATE, LLC, a Texas
limited liability company (“Cellerate”), and
UNITED WOUND AND SKIN SOLUTIONS,
LLC, a Delaware limited liability company (“UWS
Solutions”), and CADENCE
BANK, N.A., a national banking association
(“Bank”), whose address for purposes hereof is 2800
Post Oak Boulevard, Suite 3800, Houston, Texas 77056. The principal
place of business and chief executive office of each of Borrower,
Cellerate and UWS Solutions are located at 1200 Summit Avenue,
Suite 414, Fort Worth, Texas 76102.


 



W I
T N E S S E T H:


 


WHEREAS, Borrower
has requested that Bank extend to Borrower a revolving line of
credit up to a maximum principal amount of Two Million Five Hundred
Thousand and No/100 Dollars ($2,500,000.00), in order to provide
working capital to Borrower, and Bank is willing to extend such
credit facility to Borrower upon the terms and subject to the
conditions hereinafter set forth;


 


NOW,
THEREFORE, in consideration of the mutual covenants and agreements
contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and in
reliance upon the representations and warranties of Obligors
hereinafter set forth, the parties hereby agree as
follows:


 


ARTICLE
I



DEFINITIONS


 


For
purposes of this Agreement, the following terms shall have the
respective meanings assigned to them.


 


Adjusted EBITDA: EBITDA plus
non-cash stock compensation.


 


Advance: Any advance by Bank
to, or for the benefit of, Borrower.


 


Affiliate: With respect to any
Person (a) a Person that, directly or indirectly or through one or
more intermediaries, controls, is controlled by, or is under common
control with, such Person; and (b) a Person that is an officer,
director, manager, general partner, or, in the case of a trust, a
beneficiary or trustee of such Person, and, if that Person is a
natural person, that Person’s spouse, sibling, parent or
child. The term “control” as used with respect to any
Person, means the possession, directly or indirectly, of the power
to direct or influence the direction of the management or policies
of such Person, whether through the ownership of voting securities,
by contract, or otherwise.


 


Borrower Security Agreements:
That certain Security Agreement dated as of the effective date
hereof, executed by Borrower and Bank, and all modifications,
renewals, extensions, amendments, restatements and rearrangements
thereof, and substitutions therefor, and all security agreements,
pledges and collateral assignments hereafter executed by Borrower
in order to create or evidence a security interest of Bank in any
assets owned or to be acquired by Borrower.


 


 Business Day. Any day that is
not a Saturday, Sunday or other day on which commercial banks in
Houston, Texas are authorized or required to remain
closed.


 


Collateral:
“Collateral” as defined in the Security
Agreements.


 


Corporate Affiliate: With
respect to any Person, a Person that, directly or indirectly or
through one or more intermediaries, controls, is controlled by, or
is under common control with, such Person. The term
“control” as used with respect to any Person, means the
possession, directly or indirectly, of the power to direct or
influence the direction of the management or policies of such
Person, whether through the ownership of voting securities, by
contract, or otherwise.


 


Debtor Relief Laws: Any
applicable liquidation, conservatorship, bankruptcy, moratorium,
rearrangement, insolvency, reorganization, or similar laws, whether
state or federal, affecting the rights or remedies of creditors
generally, as in effect from time to time.


 


Default: The occurrence of any
event which, with the giving of notice, lapse or expiration of
time, or both, or other condition precedent, will constitute an
“Event of Default” under Section 7.1 of this Agreement,
regardless of whether any requirement for the giving of notice, the
lapse or expiration of time, or any other condition precedent to an
Event of Default, if any, has been satisfied.


 


Default Rate: A per annum rate
equal to the lesser of (a) the Prime-Based Rate plus five percent
(5.0%) or (b) the Maximum Rate.


 



 







 






 


EBITDA: The sum of earnings
before interest, taxes, depreciation and amortization, calculated
in accordance with generally accepted accounting principles,
consistently applied.


Environmental Laws: Any and all
Governmental Requirements relating to the environment or public or
worker health or safety, including ambient air, surface water, land
surface or subsurface strata, or to emissions, discharges, releases
or threatened releases of pollutants, contaminants, chemicals or
industrial, toxic or hazardous substances or wastes (including
solid wastes, hazardous wastes or hazardous substances) or noxious
noise or odor into the environment, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage,
disposal, recycling, removal, transport or handling of pollutants,
contaminants, chemicals or industrial, toxic or hazardous
substances or wastes (including petroleum, petroleum distillates,
asbestos or asbestos-containing material, volatile organic
compounds or polychlorinated biphenyls).


 


ERISA: The Employee Retirement
Income Security Act of 1974, as amended from time to
time.


 


Event of Default: Any event
specified as an “Event of Default” in Section 7.1 of this
Agreement.


 


Financial Statements: Such
balance sheets, income statements, profit and loss statements,
reconciliations of capital and surplus, and statements of cash
flows of a Person, all of which shall be prepared in accordance
with generally accepted accounting principles, consistently
applied, and in a manner consistent with prior periods and
historical customs and practices of such Person, and such other
financial information concerning each Obligor or the Collateral, as
shall be required by Bank from time to time.


 


Financing Statements: The
financing statements filed or to be filed with the appropriate
offices for the perfection of a security interest in any of the
Collateral, including those assigned to Bank heretofore,
concurrently herewith or hereafter, together with any continuation
statements or other amendments filed or to be filed in connection
therewith.


 


Governmental Authority: The
government of the United States of America or any other nation or
any political subdivision thereof in which an Obligor or any of the
Collateral is located, and any other political subdivision, agency,
or instrumentality exercising jurisdiction over an Obligor or an
Obligor’s property or assets, including without limitation
any state, county or city and any agency, authority,
instrumentality, regulatory body, court, central bank or other
entity exercising executive, legislative, judicial, taxing,
regulatory or administrative powers or functions of or pertaining
to government.


 


Governmental Requirements: All
statutes, laws, ordinances, rules, and regulations of any
Governmental Authority applicable to an Obligor or an
Obligor’s property or assets, or any site owned or operated
by an Obligor.


 


Guarantor(s): Individually or
collectively, as applicable, Cellerate, UWS Solutions and any other
Person (excluding natural persons) hereafter executing a
Guaranty.


 


Guarantor Security
Agreement(s): Individually or collectively, as applicable,
those certain Security Agreements dated as of the effective date
hereof, executed by Bank and each of Cellerate and UWS Solutions,
and all modifications, renewals, extensions and rearrangements
thereof, and substitutions therefor, and all security agreements,
pledges or collateral assignments hereafter executed by a Guarantor
in order to create or evidence a security interest of Bank in any
assets owned or to be acquired by such Guarantor.


 


Guarant(y/ies): Individually or
collectively, as applicable, the Corporate Guaranties effective of
even date herewith executed by Cellerate and UWS Solutions in favor
of Bank, and all amendments, modifications, renewals, extensions,
rearrangements, confirmations, ratifications and replacements
thereof, and any other guaranty of the Obligations (or any portion
thereof) executed by any Person heretofore, contemporaneously
herewith or hereafter, and all amendments, modifications, renewals,
extensions, rearrangements, confirmations, ratifications and
replacements thereof..


 


Indebtedness: The total
liabilities of Borrower, including the indebtedness evidenced by
the Note and any subordinated indebtedness, calculated in
accordance with generally accepted accounting principles,
consistently applied, and in a manner consistent with prior periods
and Borrower’s historical customs and practices.


 


Interest Coverage Ratio: The
ratio of (a) the sum of (i) Adjusted EBITDA for the preceding four
(4) fiscal quarters, minus the sum of (i) cash taxes, plus (ii) tax
distributions, plus (iii) cash capital expenditures during the same
period, to (b) interest expense during the same period. For
purposes of calculating the “Interest Coverage Ratio”,
each of the components above shall be calculated as follows: (i)
for the fiscal quarter ending June 30, 2021, each such component
during the fiscal quarter ending on that date multiplied by four;
(ii) for the fiscal quarter ending September 30, 2021, each such
component during the two (2) fiscal quarter period ending on that
date multiplied by two; (iii) for the fiscal quarter ending
December 31, 2021, each such component for the three (3) fiscal
quarter period ending on that date multiplied by 4/3; and (iv) for
the fiscal quarter ending March 31, 2022, and for each fiscal
quarter thereafter, each such component during the four (4) fiscal
quarter period ending on that date.


 


License: Exclusive License
Agreement dated as of May 18, 2018, executed by Applied
Nutritionals, LLC, as Licensor, and CGI Cellerate Rx, LLC, as
Licensee.


 


Loan: The Revolving
Loan.


 



 







 






 


Maximum Rate: On any day, the
maximum non-usurious rate of interest permitted for that day by
whichever of applicable federal or Texas (or any jurisdiction whose
usury laws are deemed to apply to the Loan or any documents
executed in connection therewith despite the intention and desire
of the parties to apply the usury laws of the State of Texas) laws
permit the higher interest rate, stated as a rate per annum. On
each day, if any, that the Texas Finance Code establishes the
Maximum Rate, the Maximum Rate shall be the “weekly
ceiling” (as defined in Section 303 of the Texas Finance
Code) for that day. Bank may from time to time, as to current and
future balances, implement any other ceiling under the Texas
Finance Code by notice to Borrower, if and to the extent permitted
by the Texas Finance Code. Without notice to Borrower or any other
Person, the Maximum Rate shall automatically fluctuate upward and
downward as and in the amount by which such maximum nonusurious
rate of interest permitted by applicable law fluctuates.
Notwithstanding the foregoing or any provision hereof to the
contrary, in no event shall the Maximum Rate exceed Eighteen
Percent (18.0%) per annum.


 


Minimum Equity Ownership:
Ownership interests constituting at least 25% of all voting
interests of Borrower then outstanding. Voting interests shall mean
the right to vote on the election or appointment of all directors
of Borrower.


 


Net Worth: At any time, for any
Person, such Person’s total assets less total liabilities as
set forth in such Person’s Financial Statements. Net Worth
shall not include (i) Subordinated Debt, (ii) the amount of any
write-up of any assets over their depreciated cost, or (iii) notes
or accounts receivable due from Affiliates (including all
officers).


 


Note: The Revolving
Note.


 


Obligations: The obligations
and liabilities of Borrower to Bank evidenced by the Note or this
Agreement, and any and all other Indebtedness, liabilities and
obligations whatsoever of Borrower to Bank, whether direct or
indirect, absolute or contingent, due or to become due, whether now
existing or hereafter arising, and whether in connection with this
or another transaction, and howsoever evidenced or acquired,
whether joint or several, including derivative-foreign exchange
transactions or any treasury management or other services provided
by Bank or its Corporate Affiliates, successors or assigns
(including, without limitation, controlled disbursement, automated
clearinghouse transactions, return items, overdrafts and interstate
network services),  and whether evidenced by note, draft,
acceptance, guaranty, open account, commercial credit card, stored
value card, merchant card, letter of credit, surety agreement, Rate
Management Agreement or otherwise; it being contemplated by the
parties hereto that Borrower may become indebted to Bank in
additional sums. The term “Obligations” shall expressly
include any and all obligations, contingent or otherwise, whether
now existing or hereafter arising, of Borrower to Bank, or to any
of its Corporate Affiliates or successors, arising under or in
connection with any Rate Management Agreement or Rate Management
Transaction; provided, however, that the definition of
“Obligations” shall not create any guarantee by a
Guarantor of (or grant of security interest by a Guarantor to
support, as applicable) any Excluded Swap Obligations (as defined
in Section 2.16 hereof) of
such Guarantor for purposes of determining any obligations of such
Guarantor.


 


Obligor or Obligors:
Individually or collectively, as applicable, Borrower and
Guarantors.


 


Overline:
“Overline” as defined in Section 2.7(e) of this
Agreement.


 


Person: Any corporation,
partnership, joint venture, limited liability company, association,
trust, trustee, estate, individual, unincorporated business entity
or governmental department, administrative agency or
instrumentality, or other entity.


 


Plan: Any plan subject to Title
IV of ERISA and maintained by an Obligor or any such plan to which
an Obligor is required to contribute on behalf of its
employees.


 


Prime-Based Rate: A fluctuating
interest rate per annum as shall be in effect from time to time
equal to the Prime Rate plus three-fourths percent (0.75%);
provided that in no event shall the Prime-Based Rate be greater
than the Maximum Rate. Without notice to Borrower, the Prime-Based
Rate shall change automatically from time to time, with each such
change to be effective as of the date of each change in the Prime
Rate.


 


Prime Rate: At any time, that variable per
annum rate of interest equal to the prime rate then most recently
published daily in the “Money Rates” section (or other
comparable section) of the Wall Street Journal. If more than one
“prime rate” is published, the highest rate shall be
used. If the Wall Street Journal no longer publishes the prime
rate, then Bank shall select another measure of the Prime Rate, at
its discretion. The Prime Rate is subject to change from time to
time. Bank makes loans based on other rates as well, it being
understood that many of Bank’s commercial or other loans are
priced in relation to the Prime Rate, that it is not necessarily
the lowest or best rate actually charged to any customer, and that
Bank may make various commercial or other loans at rates of
interest having no relationship to the Prime Rate.


 



 







 






 


Rate Management Agreement: Each
agreement between Borrower, on the one hand, and Bank or any of its
Corporate Affiliates or their successors, on the other hand,
including but not limited to any ISDA Master Agreement, whether now
existing or hereafter entered into, which provides for a Rate
Management Transaction.


 


Rate Management Transaction:
Any transaction (including an agreement with respect thereto) now
existing or hereafter entered into between Borrower, on the one
hand, and Bank or any of its Corporate Affiliates or their
successors, on the other hand, which is (i) a rate swap, swap
option, basis swap, forward rate transaction, commodity swap,
commodity option, equity or equity index swap, equity or equity
index option, bond option, interest rate option, foreign exchange
transaction, cap, floor, collar, currency swap, cross-currency rate
swap, currency option, credit protection transaction, credit swap,
credit default swap, credit default option, total return swap,
credit spread, repurchase transaction, reverse repurchase
transaction, buy/sell-back transaction, securities lending
transaction, weather index transaction or forward purchase or sale
of a security, commodity or other financial instrument or interest
(including an option with respect to any of these transactions), or
(ii) any type of transaction that is similar to any transaction
referred to in clause (i) above that is currently, or in the future
becomes, recurrently entered into in the financial markets and
which is a forward, swap, future, option or other derivative on one
or more rates, currencies, commodities, equity securities or other
equity instruments, debt securities or other debt instruments,
economic indices or measures of economic risk or value, or other
benchmarks against which payments or deliveries are to be made, or
any combination of the foregoing transactions.


 


Regulation U: Regulation U of
the Board of Governors of the Federal Reserve System as from time
to time in effect and any successor thereto.


 


Regulation X: Regulation X of
the Board of Governors of the Federal Reserve System as from time
to time in effect and any successor thereto.


 


Revolving Credit Advance: Any
Advance under the Revolving Note.


 


Revolving Loan: That certain
revolving loan made available to Borrower in the maximum principal
amount of Two Million Five Hundred Thousand and No/100 Dollars
($2,500,000.00), and being more particularly described in
Section 2.1 of this
Agreement.


 


Revolving Loan Maturity Date:
January 13, 2023.


 


Revolving Note: That certain
Revolving Line of Credit Note dated of even date with the effective
date hereof, executed by Borrower and payable to the order of Bank
in the maximum principal amount of the Revolving Loan, together
with all modifications, renewals, extensions, amendments and
restatements thereof and substitutions therefor, and being more
particularly described in Section
2.1 of this Agreement.


 


Security Agreements: The
Borrower Security Agreements and the Guarantor Security Agreements,
and all modifications, renewals, extensions, amendments,
restatements and rearrangements thereof, and substitutions
therefor, and all security agreements, pledges and collateral
assignments hereafter executed in order to create or evidence a
security interest of Bank in any assets owned or to be acquired by
any Person.


 


Security Instruments: This
Agreement, the Note, the Guaranties, the Security Agreements, the
Financing Statements, any Subordination Agreement and such other
documents, instruments or agreements evidencing, securing,
guaranteeing, or otherwise pertaining to the Loan as may be, from
time to time (whether heretofore, contemporaneously herewith or
hereafter), executed and delivered by an Obligor or any other
Person to Bank, and all modifications, renewals, extensions,
rearrangements, ratifications, restatements and replacements of any
of the foregoing. Notwithstanding the foregoing, or any provision
of any “Security Instrument” to the contrary, the term
“Security Instruments” shall not include a Rate
Management Agreement nor any swap agreement (as defined in 11
U.S.C. Section 101, as in effect from time to time).


 


Sublicense: Sublicense
Agreement dated August 27, 2018, executed by CGI Cellerate RX, LLC,
as Sublicensor, and Cellerate, as Sublicensee.


 


Subordinated Debt: Subordinated
indebtedness issued by Borrower on terms and conditions approved in
writing by Bank, and subject to an enforceable Subordination
Agreement under which no party is in default.


 


Subordination Agreements: Any
subordination agreements or intercreditor agreements executed
concurrently herewith or hereafter by Bank with any third Person,
in order (a) to subordinate any debt or obligation of Borrower owed
to such third Person to any debt or obligation of Borrower owed to
Bank, or (b) to agree on priority in rights of payment or lien
position, all as same may be modified, amended, renewed or extended
from time to time.


 


Subsidiary: Any Person of which
fifty percent (50%) or more of the issued and outstanding
securities having ordinary voting power for the election of
directors, general partners or managers is owned or controlled,
directly or indirectly, by Borrower and/or one or more of its
Subsidiaries.


 


Tangible Net Worth: Net Worth
less goodwill and all other intangible assets.


 



 







 






 


ARTICLE
II



THE LOAN


 

2.1           
Revolving Loan.
Subject to, and upon the terms, conditions, covenants and
agreements contained herein, and in reliance upon the covenants,
agreements, representations and warranties of Obligors set forth
herein, and provided that at the time of any proposed borrowing
hereunder no Default exists, Bank agrees to lend to Borrower, and
Borrower may borrow, repay and reborrow, at any time and from time
to time prior to the Revolving Loan Maturity Date, up to, but not
exceeding, an aggregate amount equal to Two Million Five Hundred
Thousand and No/100 Dollars ($2,500,000.00). Each Revolving Credit
Advance shall be evidenced by the Revolving Note. Notwithstanding
any provision of this Agreement or of the Revolving Note to the
contrary, Bank shall not be required to make any Advance under the
Revolving Note which would result in an aggregate amount
outstanding thereunder in excess of Two Million Five Hundred
Thousand and No/100 Dollars ($2,500,000.00). Bank’s business
records shall be prima facie evidence of the unpaid
principal amount of the Revolving Note, and the amount of accrued
but unpaid interest. The principal of and interest to accrue on the
Revolving Note shall be due and payable as follows:


 


Interest only on
the unpaid principal balance of the Revolving Note shall be due and
payable monthly as it accrues, beginning on February 5, 2021, and
continuing regularly and monthly on the fifth (5th) day of each month
thereafter until the Revolving Loan Maturity Date, at which time
the outstanding principal amount advanced under the Revolving Note,
together with all accrued but unpaid interest, shall mature and be
finally due and payable.


 


All
Revolving Credit Advances, and all renewals, extensions,
modifications and rearrangements of the Revolving Note, if any,
shall be deemed to have been made pursuant to this Agreement and,
accordingly, shall be subject to the terms, conditions and
provisions hereof, and Borrower shall be deemed to have ratified,
as of the date of each Revolving Credit Advance and each renewal,
extension, modification or rearrangement, all of the
representations, covenants, warranties, promises and agreements set
forth herein as of such date. Bank shall never be required to
modify, renew, extend or rearrange the Revolving Note, regardless
of whether any Default has ever occurred.


 


2.2           Advances
by Bank; Automatic Debit; Proceeds.


 

(a) Purpose and Use of Advances.
Subject to the further terms and conditions hereof, Bank will
advance the proceeds of the Loan as necessary for the purposes set
out in Section 6.6 below.
Subject to the terms and conditions of this Agreement, Bank may,
but shall never be obligated to, advance the proceeds of the
Revolving Loan to make the payment(s) due on the Note on the due
dates therefor. Bank may pay to any manufacturer, distributor or
other vendor the invoice or contract amount for any Collateral, and
be fully protected in relying in good faith upon any invoice,
contract or other advice that such Collateral has been ordered by
or shipped to Borrower, and that the amount thereof is correctly
stated. Any such payment shall be an Advance
hereunder.


 

(b) Bank may, but shall
never be required to, make or continue any Advance after a Default
which has not been cured to the satisfaction of Bank.


 

(c) Request for Advance.
Notwithstanding the foregoing or any provision hereof to the
contrary, Bank may require that each Advance be made pursuant to a
written request, in form and content acceptable to Bank, given by
Borrower to Bank not later than 10:00 a.m. (Houston, Texas time) on
the Business Day of the proposed Advance, specifying the requested
date and amount of such Advance.


 

(d) Automatic Debit. To effectuate
any payment due under this Agreement, the Note, any other Security
Instrument or a Rate Management Agreement, Borrower hereby
authorizes Bank to initiate debit entries to any deposit account of
Borrower maintained with Bank, and to debit the same to such
account. Bank will not provide notice of any regularly scheduled
recurring auto-debit, but will promptly notify Borrower after any
non-recurring debit pursuant to this Subsection 2.2(d), provided that the
failure to give such notice shall not affect the validity of such
debit This authorization to initiate debit entries shall remain in
full force and effect until Bank has received written notification
of its termination in such time and in such manner as to afford
Bank a reasonable opportunity to act on it. Borrower acknowledges
(i) that such debit entries may cause an overdraft of any such
account which may result in Bank’s refusal to honor items
drawn on any such account until adequate deposits are made to any
such account; (ii) that Bank is under no duty or obligation to
initiate any debit entry for any purpose; and (iii) that if a debit
is not made because any such account does not have a sufficient
available balance, or otherwise, the payment may be late or past
due.


 

(e) Sweep; Application of Payments.
Bank is hereby authorized to sweep the collected balance of good
funds from Borrower’s accounts periodically for application
to (i) the outstanding principal balance of the Loan to the extent
of amounts due and payable by Borrower under the Security
Instruments, at such times and in such manner as Bank, in its sole
discretion, deems appropriate, and (ii) any payments due under any
Rate Management Agreement with Bank or its Corporate Affiliates or
their successors. Bank may apply any payments received from any
source against any portion of the Obligations in such priority and
fashion as Bank may deem appropriate; provided, however, that any
amounts received from any source that is not a Qualified ECP
Guarantor, as defined in Section
2.16 hereof, shall not be applied to any
portion of the Excluded Swap Obligations.


 



 







 






 

2.3           
Interest.


 

(a)           
Rate. Each Advance
shall bear interest at the lesser of the Prime-Based Rate, as it
varies from time to time, or the Maximum Rate, provided that (i) while an
Event of Default pursuant to Section 7.1(a) is continuing or (ii) (A)
while any Event of Default other than pursuant to Section 7.1(a) is continuing and (B)
Bank has given Borrower notice that Bank has exercised its right to
increase the rate of interest, the Advances shall bear interest at
the Default Rate.


 


(b)           Recapture.
If the stated rates of interest under this Agreement ever exceed
the Maximum Rate, then the outstanding principal amount of the Loan
shall bear interest at the Maximum Rate until the difference
between the interest which would have been due at the stated rates
of interest and the amount due at the Maximum Rate (the “Lost
Interest”) has been recaptured by Bank. If when the Loan is
repaid in full the Lost Interest has not been fully recaptured by
Bank pursuant to the preceding sentence, then the outstanding
principal amount of the Note shall be deemed to have accrued
interest at the Maximum Rate from the date funds were advanced to
the extent necessary to recapture the Lost Interest not recaptured
pursuant to the preceding sentence and, to the extent allowed by
law, Borrower shall pay to Bank the amount of the Lost Interest
remaining to be recaptured by Bank. Notwithstanding the foregoing
or any other term in this Agreement or any document, instrument or
agreement executed in connection herewith to the contrary, it is
the intention of the parties hereto to conform strictly to any
applicable usury laws. Accordingly, if Bank contracts for, charges,
or receives any consideration which constitutes interest in excess
of the Maximum Rate, then any such excess shall be canceled
automatically and, if previously paid, shall at Bank’s option
be applied to any Obligations outstanding hereunder or refunded to
Borrower.


 


2.4           Late
Payments. If any payments due under the Note or this
Agreement are not timely made, Borrower shall also pay to Bank,
upon demand, a late charge equal to five percent (5.0%) of each
payment past due for ten (10) or more days. This late charge shall
not apply to payments due at maturity or by acceleration of the
Note.


 


2.5           Computation
of Interest and Fees. Interest on the unpaid principal
amounts from time to time outstanding, and any fees payable
hereunder, shall be computed on the basis of a year of three
hundred sixty (360) days, and paid for the actual number of days
elapsed, unless that calculation would result in a usurious
interest rate, in which case interest will be calculated on the
basis of a year of three hundred sixty-five (365) or three hundred
sixty-six (366) days, as the case may be.


 


2.6           Place
and Timing of Payments. All payments shall be made to Bank
at its office set forth in the preamble of this Agreement, without
offset or deduction. Payments received after Bank’s cut-off
times established from time to time or on a day that is not a
Business Day will be credited as of the next Business Day. Whenever
any payment under the Note becomes due and payable on a day that is
not a Business Day, if no Event of Default then exists, the
maturity of the payment shall be extended to the next succeeding
Business Day, except that if the result of the extension would be
to extend the payment into another calendar month, the payment must
be made on the immediately preceding Business Day.


 


2.7           Optional
and Mandatory Prepayments.


 

(a) Fees and Prepaid Charges Fully
Earned. Borrower agrees that all loan fees and other prepaid
charges are earned fully as of the date of the Loan and will not be
subject to refund, except as required by law.


 

(b) Revolving Note to Remain in
Effect. Borrower may pay all or a portion of the Revolving
Loan before it is due; provided, however, that because the
Revolving Note is a revolving credit note, the Revolving Note shall
remain in full force and effect until, at a time when no amounts,
principal, interest or otherwise, are then owing, Borrower releases
Bank in writing from any obligation to make Advances pursuant
thereto.


 

(c) Application of Prepayments.
Prepayment of the Note in full shall
consist of payment of the remaining unpaid principal balance
together with all accrued but unpaid interest and all other
amounts, costs and expenses for which Borrower is responsible under
the Note or any other agreement with Bank pertaining to the Note
before such amounts are due, whether such prepayment arises from a
voluntary or involuntary prepayment, acceleration of maturity, or
any other cause or reason. Prepayment in part shall consist of
payment of any portion of the unpaid principal balance before it is
due, whether such prepayment arises from a voluntary or involuntary
prepayment, acceleration of maturity, or any other cause or reason.
Unless otherwise agreed by Bank in writing and provided that
Borrower is current on all amounts due, payments applied to the
Note before Bank’s creation of a billing statement for the
next payment due will be applied entirely to principal, and
payments applied to the Note after the creation of such billing
statement will be applied according to that billing statement.
Unless otherwise agreed by Bank in writing and provided that
Borrower is current on all amounts due, payments applied to the
Note before Bank’s creation of a billing statement for the
next payment due shall not relieve Borrower of Borrower’s
obligation to continue making uninterrupted payments under the
Note.


 

(d) Rate Management Agreements
Independent. All Rate Management Agreements, if any, between
Borrower and Bank or its Corporate Affiliates are independent
agreements governed by the written provisions of such Rate
Management Agreements, which will remain in full force and effect,
unaffected by any repayment, prepayment, acceleration, reduction,
increase or change in the terms of the Note, except as otherwise
expressly provided in such Rate Management Agreements, and any
payoff statement from Bank relating to the Note shall not apply to
such Rate Management Agreements except as otherwise expressly
provided in such payoff statement. Any prepayment shall be without
prejudice to Borrower’s obligations under any Rate Management
Agreement, which shall remain in full force and effect subject to
the terms of such Rate Management Agreement (including provisions
that may require a reduction, modification or early termination of
a Rate Management Transaction, in whole or in part, in the event of
such prepayment, and may require Borrower to pay any fees or other
amounts for such reduction, modification or early termination), and
no such fees or amounts shall be deemed a penalty hereunder or
otherwise.


 



 







 






 

(e) Overlines. If at any time the
then outstanding principal under the Revolving Note, exceeds the
face amount of the Revolving Note, Borrower agrees to pay the
excess amount (each an
“Overline”) immediately upon demand by
Bank.    Overlines shall bear interest at the
Prime-Based Rate.  If not sooner paid, interest on Overlines
shall be paid on the fifth (5th) day of each month,
until the Revolving Loan Maturity Date.  Upon request of Bank,
Borrower shall execute a promissory note, payable to the order of
Bank, to represent the amount of any Overline; however, Borrower
acknowledges and agrees that the records of Bank and this Agreement
shall constitute prima
facie evidence of any Overline and the obligation of
Borrower to repay any Overline, with interest. All Overlines for
which Bank has not demanded payment earlier, and all unpaid and
accrued interest on Overlines not due and payable
earlier, shall be due and payable on the Revolving Loan
Maturity Date.  Borrower acknowledges and agrees that Bank is
not obligated to fund any Advance that would create an
Overline.


 

2.8           
Security. Payment
of the Note and the Obligations and the performance of the
covenants set forth in this Agreement will be guaranteed according
to the terms of the Guaranties, and secured by, and each Obligor
hereby grants to Bank a perfected security interest, assignment or
lien, as the case may be, in and upon, all of the accounts,
inventory, equipment, fixtures, general intangibles, chattel paper,
instruments, documents, deposit accounts and other property and
assets of such Obligor, whether now owned or hereafter acquired,
and the products and proceeds thereof, subject only to security
interests in favor of Bank or as otherwise permitted hereunder.
Each Obligor agrees that as any Collateral is sold or otherwise
disposed of, such Obligor will faithfully and promptly deposit the
proceeds thereof in such Obligor’s accounts at
Bank.


 

2.9           
Additional Security
Instruments. Obligors agree to execute, acknowledge and
deliver to Bank, or to cause to be executed, acknowledged and
delivered to Bank, such instruments, chattel mortgages, security
agreements, security agreement-pledges, assignments of rents and
leases, control agreements, lockbox agreements, blocked account
agreements, assignments of insurance and proceeds, guaranty
agreements, statements, and assignments, in form and substance
acceptable to Bank, as in the discretion of Bank or counsel for
Bank may be deemed necessary to enforce and grant to Bank, and to
perfect in the appropriate jurisdictions, the security interests,
liens, assignments and mortgages on the Collateral, including
without limitation, any machinery or equipment or other goods
purchased with the proceeds of any Advance hereunder. Each Obligor
hereby authorizes Bank to file, at Borrower’s expense,
financing statements and amendments thereto and other records,
without such Obligor’s signature thereon, to the maximum
extent permitted by applicable law, in order to perfect, amend or
continue Bank’s interest in the Collateral. With respect to
any Collateral for which a certificate of title is issued, upon
Bank’s request, the original negotiable certificate of title
shall be delivered to Bank, and Bank’s security interest
shall be duly noted thereon.


 


2.10           Cross-Default.
Borrower and Bank agree that as set forth in Article VII hereof, (i) any failure of
an Obligor to pay when due any indebtedness owed to Bank,
Bank’s parent, or any subsidiary of Bank’s parent, (ii)
any other default or failure of an Obligor to perform any other
obligation under any document, instrument or agreement evidencing
or securing any indebtedness to Bank, Bank’s parent, or any
subsidiary of Bank’s parent, or (iii) the occurrence or
existence of any default, event of default, termination event or
other similar condition or event (however described) under any swap
agreement (as defined in 11 U.S.C. Sec. 101, as in effect from time
to time) to which Borrower is a party, shall be an Event of Default
hereunder.


 

2.11           
Cross
Collateralization. Obligors and Bank agree that all
Collateral now or hereafter securing any of the Obligations
hereunder also shall secure any and all other Obligations now or
hereafter owing by Borrower to Bank or its Corporate Affiliates or
successors, including without limitation any and all obligations,
contingent or otherwise, whether now existing or hereafter arising,
of Borrower to Bank, or to any of its Corporate Affiliates or
successors, arising under or in connection with any Rate Management
Agreements or Rate Management Transactions.


 

2.12           
Other Collateral.
Collateral securing other loans from Bank to Borrower may also
secure the Loan. To the extent collateral previously has been given
to Bank by any Person that may secure the Loan, whether directly or
indirectly, it is specifically agreed that, to the extent
prohibited by law, all such collateral consisting of household
goods will not secure the Loan. In addition, if any collateral
requires the giving of a right of rescission under the Truth in
Lending Act for the Loan, such collateral also will not secure the
Loan unless and until all required notices of that right have been
given.


 

2.13           
Capital Adequacy
Charge. If Bank shall have determined that the adoption of
any law, rule or regulation regarding capital adequacy, or any
change therein or in the interpretation or application thereof, or
compliance by Bank with any request or directive regarding capital
adequacy (whether or not having the force of law) from any central
bank or governmental authority enacted after the date hereof, (i)
does or shall have the effect of reducing the rate of return on
Bank’s capital as a consequence of its obligations hereunder
to a level below that which Bank could have achieved but for such
adoption, change or compliance (taking into consideration
Bank’s policies with respect to capital adequacy) by a
material amount, and (ii) such reduction is not attributable to
Indemnified Taxes (as defined in Section 2.14) or Excluded Taxes
(as defined in Section 2.14), then from time to time, after
submission by Bank to Borrower of a written demand therefor
together with the certificate described below, Borrower shall pay
to Bank such additional amount or amounts as will compensate Bank
for such reduction, such written demand to be made with reasonable
promptness following such determination. A certificate of Bank
claiming entitlement to payment as set forth above shall be
conclusive in the absence of manifest error. Such certificate shall
set forth the nature of the occurrence giving rise to such
reduction, the amount of the additional amount or amounts to be
paid to Bank, and the method by which such amount was determined.
In determining such amount, Bank may use any reasonable averaging
and attribution method, applied on a non-discriminatory
basis.


 



 







 






 

2.14           
Taxes.


 

(a)           
Deduction as Required by
Law. Any and all payments to Bank shall be made, in
accordance with the provisions of this Agreement, free and clear of
and without deduction for any and all present or future taxes,
levies, imposts, deductions, withholdings, assessments, fees or
other charges imposed by any Governmental Authority (collectively,
“Taxes”), except as otherwise required by law. If an
Obligor shall be required by law to deduct any Taxes from or in
respect of any sum payable to Bank, and if such Taxes are
Indemnified Taxes (as defined below), then (i) the sum payable
shall be increased as may be necessary so that, after making all
required deductions, Bank receives an amount equal to the sum it
would have received had no such deductions been made; (ii) such
Obligor shall make such deductions; and (iii) such Obligor shall
pay the full amount deducted to the relevant taxation authority or
other authority in accordance with applicable law.


 


“Indemnified
Taxes” shall mean U.S. federal withholding Taxes imposed on
or with respect to any payment made by or on account of any
obligation of any Obligor under this Agreement other than Excluded
Taxes.


 


“Excluded
Taxes” shall mean any of the following Taxes imposed on or
with respect to Bank (including for purposes of this definition,
any transferee or participant with respect to Bank pursuant to
Section 8.13) or required to be withheld or deducted from payments
to Bank, (a) Taxes imposed on or measured by net income (however
denominated), franchise Taxes, and branch profits Taxes; (b)
withholding Taxes imposed on amounts payable to or for the account
of Bank pursuant to a law in effect on (i) the effective date
hereof; (ii) with respect to a transferee or a participant pursuant
to Section 8.13, the effective date of the applicable transfer or
participation; or (iii) any date on which Bank (or a transferee or
participant) changes the office at which it receives payments
hereunder (as applicable); (c) Taxes attributable to Bank’s
failure to provide any tax-related forms, certificates,
documentation, information, or evidence required under the Internal
Revenue Code (including the United States Treasury Regulations)
and/or reasonably requested by an Obligor to establish that Bank is
not subject to deduction or withholding of Taxes with respect to
any and all payments hereunder; (d) any U.S. federal withholding
Taxes imposed under the U.S. Foreign Account Tax Compliance Act
(“FATCA”) provisions enacted under the U.S. Hiring
Incentives to Restore Employment Act (and any guidance or
Regulations relating thereto and published from time to time, as
well as any legislation, rules, or practices adopted pursuant to
any applicable intergovernmental agreement entered into in
connection with the implementation of FATCA); or (e) any Taxes
attributable to Bank’s (or any transferee’s or
participant’s) negligence, fraud, or misconduct.


 

(b)           
Other Taxes. In
addition, each Obligor agrees to pay any present or future stamp or
documentary taxes or any other excise taxes, charges, or similar
levies which arise from any payment made by such Obligor, or from
the execution, delivery, or registration of, or otherwise with
respect to, this Agreement, the Note, the other Security
Instruments, or any documents, instruments or agreements executed
in connection herewith (hereinafter referred to as “Other
Taxes”), except such amounts that are imposed with respect to
a transfer or participation hereunder.


 

(c)           
Indemnification.
OBLIGORS INDEMNIFY BANK FOR THE FULL AMOUNT OF INDEMNIFIED TAXES OR
OTHER TAXES (AS DEFINED ABOVE) PAID BY BANK AND ANY LIABILITY
(INCLUDING PENALTIES, INTEREST, AND REASONABLE EXPENSES) ARISING
THEREFROM OR WITH RESPECT THERETO. EACH PAYMENT REQUIRED TO BE MADE
IN RESPECT OF THIS INDEMNIFICATION SHALL BE MADE TO BANK WITHIN 30
DAYS FROM THE DATE SUCH OBLIGOR RECEIVES WRITTEN DEMAND THEREFOR;
PROVIDED, HOWEVER, THAT SUCH DEMAND SHALL INCLUDE A STATEMENT IN
REASONABLE DETAIL SETTING FORTH THE BASIS FOR SUCH
INDEMNIFICATION.


 

(d)           
Tax Information. On
or before the effective date hereof, Bank shall deliver to each
Obligor two copies of Internal Revenue Service Form W-9 (or any
successor form), properly and accurately completed and duly
executed by Bank, certifying that Bank is entitled to an exemption
from U.S. backup withholding tax. In addition, Bank hereby agrees,
from time to time after the initial delivery of such form, that
whenever such form becomes (or is rendered) obsolete, expired,
invalid, or inaccurate, Bank shall promptly deliver to each Obligor
upon such Obligor’s written request two new copies of
Internal Revenue Service Form W-9 (or any successor form(s))
properly and accurately completed and duly executed by Bank,
certifying that Bank is entitled to an exemption from U.S. backup
withholding tax.


 

(e)           
Refund. If Bank
(including any transferee or participant with respect to Bank
pursuant to Section 8.13)
receives a refund of any Indemnified Taxes, it shall pay Obligors
an amount equal to the amount of such refund.


 

2.15           
Upfront Fee. In
consideration of Bank’s agreement, subject to the terms and
conditions hereof, to make Advances hereunder, both on or about the
date hereof and in the future, Borrower shall pay to Bank upon the
execution hereof an upfront fee in the amount of Five Thousand and
No/100 Dollars ($5,000.00). In no event shall this fee be, or be
deemed to be, compensation for the use, forbearance or detention of
money. Further, in no event shall this fee, together with all
amounts constituting interest under applicable laws and payable in
connection with this Agreement, the Note and the other documents,
instruments and agreements executed in connection herewith, exceed
the Maximum Rate.


 


2.16           
Provisions Relating to
Excluded Swap Obligations.


 

(a) Excluded Swap Obligation.
“Excluded Swap Obligation” means, with respect to a
Guarantor, any Swap Obligation if, and to the extent that, all or a
portion of the guarantee of 
such Guarantor of, or the grant by such Guarantor
of a security interest to secure, such Swap Obligation (or any
guarantee thereof) is or becomes illegal under the Commodity
Exchange Act or any rule, regulation or order of the Commodity
Futures Trading Commission (or the application or official
interpretation of any thereof) (i) by virtue of such Guarantor’s
failure for any reason to constitute an “eligible contract
participant” as defined in the Commodity Exchange Act and the
regulations thereunder at the time the guarantee of such Guarantor,
or the grant of such security interest, becomes or would become effective with respect to
such Swap Obligation or (ii) in the
case of a Swap Obligation subject to a clearing requirement
pursuant to Section 2(h) of the Commodity Exchange Act (or any
successor provision thereto), because such Guarantor is a
“financial entity,” as defined in Section 2(h)(7)(C)(i)
of the Commodity Exchange Act (or any successor provision thereto),
at the time the guarantee of such Guarantor becomes or would become effective with respect to
such related Swap Obligation. If a Swap Obligation arises
under a master agreement governing more than one swap, such
exclusion shall apply only to the portion of such Swap Obligation
that is attributable to swaps for which such guarantee or security
interest is or becomes illegal.

 



 







 





 

(b) Swap Obligation. “Swap
Obligation” means, with respect to a Guarantor, any
obligation to pay or perform under any agreement, contract or
transaction that constitutes a “swap” within the
meaning of Section 1a(47) of the Commodity Exchange
Act.


 

(c) Commodity Exchange Act.
“Commodity Exchange Act” means the Commodity Exchange
Act (7 U.S.C. § 1 et seq.), as amended from time to time, and
any successor statute.


 

(d) Qualified ECP Guarantor.
“Qualified ECP Guarantor” means, in respect of any Swap
Obligation, (A) a Guarantor under this Agreement that is not an
individual and that has total assets exceeding $10,000,000 at the
time the guarantee becomes or would
become effective with respect to such Swap Obligation or (B)
such entity as constitutes an “eligible contract
participant” under the Commodity Exchange Act or any
regulations promulgated thereunder and can cause another person to
qualify as an “eligible contract participant” at such
time by entering into a keepwell under Section 1a(18)(A)(v)(II) of
the Commodity Exchange Act or (C) an individual who meets the
definition of “eligible contract participant” at such
time under the Commodity Exchange Act or any regulations
promulgated thereunder.

(e) Keepwell. Each Guarantor, at
any and all times during which such Guarantor qualifies as a
Qualified ECP Guarantor, hereby jointly and severally absolutely,
unconditionally and irrevocably undertakes to provide such funds or
other support as may be needed from time to time by each other
Guarantor under this Agreement who is not a Qualified ECP Guarantor
at such time (a “Non-ECP Loan Guarantor”) to honor all
of such Non-ECP Loan Guarantor’s obligations under any
Guaranty issued in connection with this Agreement in respect of
Swap Obligations (provided, however, that each Guarantor, when a
Qualified ECP Guarantor, shall only be liable under this section
for the maximum amount of such liability that can be hereby
incurred without rendering the obligations of such Guarantor, when
a Qualified ECP Guarantor, under this section or otherwise under
this Agreement or the Guaranty, voidable under applicable law
relating to fraudulent conveyance or fraudulent transfer, and not
for any greater amount). The obligations of each Guarantor, when a
Qualified ECP Guarantor, under this section shall remain in full
force and effect until termination of the Guaranty in accordance
with the terms of the Guaranty. Each Guarantor, when a Qualified
ECP Guarantor, intends that this section constitute, and this
section shall be deemed to constitute, a “keepwell, support,
or other agreement” for the benefit of each other Non-ECP
Loan Guarantor for all purposes of Section 1a(18)(A)(v)(II) of the
Commodity Exchange Act.


 

2.17           
Accord and
Satisfaction. Borrower agrees not to send Bank payments
marked “paid in full,” “without recourse,”
or similar language. If Borrower sends such payment, Bank may
accept it without losing any of Bank’s rights under this
Agreement or the Note, and Borrower will remain obligated to pay
any further amounts owed or that may become owed to
Bank.


 


ARTICLE
III



ADVANCES TO BORROWER


 


During
the term of this Agreement and until the Obligations have been paid
and performed in full, unless compliance with the provisions of the
following sections shall have been waived in writing by Bank,
Obligors agree as follows:


 

3.1           
Conditions to
Advances. Any obligation of Bank to make Advances hereunder
is subject to (i) the performance by Obligors of all of their
respective obligations under this or any other agreement between
any of them and Bank, (ii) no material adverse change occurring in
the business, operations, or condition (financial or otherwise) of
any Obligor, and (iii) the satisfaction of the following further
conditions (but no Advance made before receipt of all of such items
shall be deemed to be a waiver of such conditions with respect to
any subsequent Advance):


 

(a)           
Accuracy of
Representations. Borrower representing and warranting, and
acknowledging and agreeing that each application by Borrower for an
Advance will be deemed to be a representation and warranty by
Borrower as of the date of such application, that (i) the
representations and warranties contained in this Agreement, the
Note and the other Security Instruments are true and correct in all
material respects on and as of the date hereof, and will be true
and correct in all material respects on and as of the applicable
date of each Advance; (ii) all conditions to Advances hereunder
have been satisfied, except as set forth in writing by Borrower in
any request for an Advance, and waived in writing by Bank; and
(iii) no Default has occurred and is continuing
hereunder.


 

(b)           
Priority of Security
Interests. The creation, attachment and perfection of liens
and security interests in all of the Collateral in favor of Bank,
and/or evidence satisfactory to Bank that Borrower has made
arrangements for prompt delivery to Bank of the original negotiable
certificates of title to any titled vehicles owned or being
purchased so that Bank’s security interest may be duly noted
thereon, and the maintenance of the Collateral free and clear of
all liens, claims and encumbrances except those of Bank, and as
otherwise expressly permitted hereunder.


 

(c)           
Delivery of Documents;
Reimbursement of Expenses. Receipt by Bank of all of the
documents, instruments and agreements required or contemplated
hereunder from the appropriate parties, including without
limitation such Subordination Agreements as Bank may request with
respect to any outstanding indebtedness of any Obligor, and of
payment or reimbursement, as applicable, of any fees or expenses
incurred by Bank in connection with the negotiation, preparation
and completion of this Agreement, the Note and the other Security
Instruments or any Rate Management Agreement.


 



 







 






 


(d)           Due
Diligence and Related Items. Receipt by Bank, in form and
substance satisfactory to Bank, of the following:


 


(i)           Results
satisfactory to Bank of any audit of the accounts receivable or
inventory of any Obligor;


 


(ii)           If
requested by Bank, a written notice in form and content acceptable
to Bank, outlining the terms of the requested Advance, and
including a certificate, dated of even date with each request for
an Advance, of the Chief Financial Officer of Borrower to the
effect that each Obligor has performed and complied with all of
such Obligor’s covenants and agreements required by this
Agreement or the other Security Instruments;


 


(iii)           Copies
of all organizational documents of each Obligor which is not an
individual, and such certificates and other documents as Bank may
reasonably request relating to the existence, good standing and
authority to do business of each such Obligor or to the
authorization, execution and delivery of this Agreement, the Note,
the other Security Instruments, the requests for Advances and other
matters relevant hereto;


 


(iv)           A
list and summary of all pending or threatened litigation against
each Obligor certified by such representative of such Obligor as
Bank may request;


 


(v)           Updated
and current Financial Statements of Obligors in form and content
satisfactory to Bank;


 


(vi)           Landlord
Waivers or Access Agreements from each owner of each location at
which any of the Collateral is currently or hereafter located, in
form and content acceptable to Bank;


 


(vii)
Such Security Agreements, UCC Financing Statements, UCC Amendments
and releases of liens encumbering the Collateral as Bank may
reasonably request; and


 


(viii)                      Copies
of all documents, instruments or agreements to which an Obligor is
a party or by which any of the Collateral is or may be affected,
and any and all additional information, documents, certificates or
instruments as Bank may reasonably request, including without
limitation, all instruments evidencing or securing any subordinated
indebtedness of an Obligor, all of which shall be in form and
content reasonably acceptable to Bank.


 


3.2           Post-Closing
Deliveries. As of the date of execution of this Agreement by
Bank, Borrower has not provided to Bank a Landlord Lien
Subordination Agreement (the “Property Owner
Agreement”) duly executed by the owner of 1200 Summit Ave.,
Fort Worth, Texas 76102 (the “Third Party Location”).
Borrower covenants and agrees to deliver to Bank on or before
February 15, 2021, a duly executed Property Owner Agreement, in
form and content acceptable to Bank, for the Third Party Location.
If Borrower fails to deliver to Bank on or before February 15,
2021, a duly executed Property Owner Agreement, in form and content
acceptable to Bank, for each Third Party Location, such failure
shall constitute an immediate Event of Default, and Bank shall be
entitled to exercise any and all rights and remedies provided for
in the Security Instruments without notice to Borrower or any other
party, except such notice as is required by law or by this
Agreement. Bank may in its sole discretion unilaterally extend the
due date in this Section 3.2
upon written notice to Borrower.


 


3.3           Advance
Not A Waiver. No Advance of the proceeds of the Loan shall
constitute a waiver of any of the conditions to Bank’s
obligation to make further Advances, nor, in the event Borrower is
unable to satisfy any such condition, shall any such Advance have
the effect of precluding Bank from thereafter declaring such
inability if existing at such later time to be an Event of Default
as hereinafter provided.


 


ARTICLE
IV



AFFIRMATIVE COVENANTS


 


During
the term of this Agreement and until the Obligations have been paid
and performed in full, unless compliance with the provisions of the
following sections shall have been waived in writing by Bank,
Obligors agree as follows:


 

4.1           
Financial
Statements. Obligors will furnish the following to
Bank:


 

(a) Borrower Annual Financial
Statements. As soon as available, but in any event within
one hundred twenty (120) days after the last day of each fiscal
year of Borrower, Borrower’s annual audited Financial
Statements (consisting of at least a balance sheet and related
statements of income, retained earnings, and cash flows) prepared
on a consolidated and consolidating basis in conformity with
generally accepted accounting principles, consistently applied, and
certified (with an unqualified opinion) by an independent certified
public accountant acceptable to Bank;


 

(b) Borrower Interim Financial
Statements. As soon as available, but in any event within
sixty (60) days after the last day of each fiscal quarter of
Borrower, including yearend, quarterly Financial Statements of
Borrower, certified by such representative of Borrower as Bank may
request, prepared on a consolidated and consolidating basis in
conformity with generally accepted accounting principles,
consistently applied, and consisting of at least a balance sheet as
of the close of such period and profit and loss statements for the
fiscal quarter then ended and for the period from the beginning of
the fiscal year to the close of such period;


 



 







 






 

(c)  Compliance Certificate.
Contemporaneously with the Financial Statements to be delivered
pursuant to Subsections
4.1(a) and 4.1(b), a
Compliance Certificate in the form attached hereto as Exhibit A,
certified by such representative of Borrower as Bank may request,
calculating the financial covenants required to be maintained
pursuant to this Agreement, together with, for the fiscal quarters
ending December 31, 2020, and March 31, 2021, a Liquid Assets
Report, including copies of relevant statements and otherwise in
form and content acceptable to Bank, demonstrating compliance by
Borrower with Borrower’s obligations under Subsection 4.2(c) hereof;
and


 

(d) Additional Information. Such
other financial and other information concerning any Obligor or the
Collateral as Bank shall reasonably request from time to
time.


 


4.2           Financial
Covenants.


 

(a) Minimum Tangible Net Worth.
Borrower will maintain, on a consolidated basis, a minimum Tangible
Net Worth of One Million and No/100 Dollars ($1,000,000.00). This
covenant shall be calculated as of the last day of each fiscal
quarter of Borrower.


 

(b) Minimum Interest Coverage
Ratio. Borrower will maintain, on a consolidated basis, a
minimum Interest Coverage Ratio of 1.5 to 1.0. This covenant shall
be calculated as of the last day of each fiscal quarter of
Borrower, commencing with the fiscal quarter ending June 30,
2021.


 

(c) Minimum Liquidity. Borrower
will maintain, on a consolidated basis, as of December 31, 2020,
and March 31, 2021, unencumbered Liquid Assets in an amount not
less than One Million and No/100 Dollars ($1,000,000.00). The term
“Liquid Assets” shall mean the sum of (a) cash on
Borrower’s balance sheet, plus (b) the amount available to
Borrower under Section 2.1
hereof. This covenant shall be tested as of the last day of
Borrower’s fiscal quarters ending December 31, 2020, and
March 31, 2021.


 

(d) Minimum Equity Investment.
Borrower will cause its shareholders (or other Persons approved in
writing in advance by Bank if such equity investment would result
in an Event of Default under Subsection 7.1(h) hereof) to make an
equity investment in cash in Borrower of at least Seven Million
Five Hundred Thousand and No/100 Dollars ($7,500,000.00) by no
later than March 31, 2021.


 

(e) Sanara Pulsar, LLC. Borrower
will not permit Sanara Pulsar, LLC to have assets with a fair
market value in excess of Two Hundred Thousand Dollars ($200,000)
at any time.


 

4.3           
Depository
and Disbursement Relationship.
For so long as any of the Obligations remain outstanding and
unpaid, or Bank has any obligation to advance funds hereunder, each
Obligor will maintain its primary banking depository and
disbursement relationship with Bank.


 


4.4           Insurance.


 

(a) Required Insurance.
Each Obligor will maintain
insurance with financially sound and responsible companies, in such
form, in such amounts and against such risks (including, without
limitation, public liability, worker’s compensation,
commercial liability, casualty, hazard or property damage providing
special form of loss coverage on such
Obligor’s assets, and business interruption insurance)
as is customarily carried by companies engaged in the same or
similar businesses, operating like properties and similarly
situated, plus any additional insurance, including endorsements
covering specific exclusions, required in the Security Instruments
or requested by Bank. Bank shall have the right to specify the
maximum amount of deductibles Bank deems acceptable for each
insurance policy. Bank shall be named as loss payee, on a
“lender’s loss payable” basis, on each policy of
property insurance, and as an additional insured on each policy of
liability insurance. Each policy of property insurance shall
provide coverage on a replacement cost basis. Each policy of
insurance shall provide that the insurer waives all rights of
subrogation against Bank and that coverage under such policy is
primary to any other insurance carried by Bank. Obligors will have the right to place any
such insurance with any insurance carrier reasonably acceptable to
Bank. Upon execution of this Agreement, Obligors will furnish to
Bank (i) a summary of the insurance coverages of Obligors, together with certificates
showing Bank as an additional insured or loss payee with waiver of
subrogation provisions, as specified above, all such policies to be
non-cancelable without thirty (30) days prior written notice to
Bank, (ii) supplements to such summary from time to time as the
amounts or terms of such insurance coverage change, and (iii) upon
request, copies of the applicable policies and proof of payment of
the premiums therefor. Obligors will provide Bank with immediate
written notice of the cancellation of any insurance of any
Obligor.


 

(b) Collateral Protection
Insurance. Borrower is
required to (i) keep the Collateral insured against damage in the
amount Bank specifies, (ii) purchase the insurance from an insurer
that is authorized to do business in Texas or an eligible surplus
lines insurer, (iii) name Bank as the person to be paid under the
policy in the event of a loss, and (iv) deliver to Bank a copy of
the policy and proof of the payment of premiums. If Borrower fails to meet any requirement
listed in this section, Bank may obtain collateral protection
insurance on behalf of Borrower
at Borrower’s expense and
such amounts shall be added to the Obligations.


 



 







 






 

4.5           
Collateral Audits and
Appraisals; Inspection of Property, Books, Records and
Collateral. At all reasonable times and as often as may be
reasonably requested by Bank during normal business hours (with two
(2) Business Day’s advance notice if no Event of Default has
occurred and is continuing), Obligors will permit Bank, and any person
appointed by Bank to act for it and on its behalf, at
Borrower’s sole cost and expense (i) to examine and make
copies of Obligors’
corporate and financial books and records, and other books,
records, and properties, specifically including but not limited to
all contracts, statements, invoices, bills and claims for labor,
material, and services, (ii) to discuss Obligors’ affairs, finances and
accounts with the officers, agents and employees of Obligors and Obligors’ independent certified
public accountants, (iii) to enter upon any premises at which any
Collateral is located and inspect the Collateral and all books and
records related thereto, and (iv) to conduct such appraisals of the
Collateral as Bank or any Governmental Authority may reasonably
require (provided that
absent an Event of Default during the then preceding 3-month
period, such audits and appraisals shall not be conducted at
Borrower’s expense more than once per calendar year). In
addition, Borrower shall
conduct, and Bank is hereby authorized to conduct, in each case at
Borrower’s sole cost and
expense, such environmental site assessments, testing and
monitoring, as may be requested by any Governmental Authority or by
Bank.


 


4.6           Notice;
Litigation. Each Obligor will promptly give written notice
to Bank, in each case at Bank’s address set forth above, of
(i) the occurrence of any Default or Event of Default, (ii) any
legal, judicial or regulatory proceedings affecting an Obligor, the
Collateral, or any properties or assets of an Obligor, being
commenced or threatened, (iii) any dispute between an Obligor and
any Governmental Authority, or between an Obligor and any other
Person that could reasonably be expected to interfere with the
normal business operations of such Obligor, (iv) any material
damage to the Collateral (including without limitation any fire or
other casualty) affecting any material part of the Collateral,
specifying the nature and extent of damage and whether such damage
is being repaired in due course, (v) any notice of taking or
eminent domain action or proceeding affecting any material part of
the Collateral, (vi) any other action, event or condition of any
nature of which an Obligor has knowledge which may have, or lead
to, or result in, any material adverse effect upon the business,
assets or condition, financial or otherwise, of an Obligor, or any
material change in the condition, financial or otherwise, of an
Obligor, (vii) any additions to or changes in the locations of an
Obligor’s business, (viii) any change in management of an
Obligor, or (ix) the voluntary or involuntary bankruptcy of, or any
assignment for the benefit of creditors or the seeking of any
relief under any Debtor Relief Law by, an Obligor.


 

4.7           
Application of
Advances. Borrower shall disburse all Advances for the
purposes specified herein. Bank shall have the right, but not the
obligation, to disburse and directly apply the proceeds of any
Advance to the satisfaction of any of Borrower’s covenants,
duties or agreements hereunder. Bank may disburse any portion of
any Advance at any time, and from time to time, to persons other
than Borrower for the purposes specified in this Agreement
irrespective of the provisions of Article II, and the amount of Advances
to which Borrower shall thereafter be entitled shall be
correspondingly reduced. Bank may advance and incur such expenses
for the protection of the Collateral as provided for in the
Security Instruments.


 


4.8           Subsidiary
Guaranties and Pledges. (a) Subject to the provisions of
Subsection 4.8(b), within
ten (10) Business Days after Bank’s written request, Borrower
will cause each present and future Subsidiary of Borrower to
execute a Guaranty in form and content acceptable to Bank, and
grant to Bank a lien (subject only to liens approved by Bank in its
reasonable discretion) on all of such Subsidiary’s assets to
secure payment of such Guaranty and the Obligations.

 


(b)           Notwithstanding
the provisions of Subsection
4.8(a), except as provided in
the last sentence of this Subsection, no foreign Subsidiary shall
become a Guarantor. Upon the occurrence and during the continuance
of any Event of Default Borrower will, within ten (10)
Business Days after Bank’s written request, cause each foreign Subsidiary to execute a
Guaranty in form and content acceptable to Bank, and to pledge all of such Subsidiary’s
assets (subject only to liens approved by Bank in its
reasonable discretion) to secure
payment of such Guaranty and the Obligations.

 

4.9           
Payment of Taxes.
Each Obligor will pay when due all taxes, assessments and other
liabilities levied or assessed upon such Obligor’s income,
assets and/or properties (real and personal) or upon such
Obligor’s business, except those being contested in good
faith and against which such Obligor has set up adequate reserves
in accordance with generally accepted accounting principles,
consistently applied.


 

4.10           
Payment of Claims;
Discharge of Liens and Encumbrances. Each Obligor will
promptly pay or cause to be paid when due its indebtedness.
Obligors will promptly pay or
cause to be paid when due all costs and expenses incurred in
connection with the Collateral, and will keep the Collateral free
and clear of any liens, charges, or claims other than the liens of
Bank, and other liens approved in writing by Bank.


 

4.11           
ERISA Compliance.
All of Obligors’ Plans
will be maintained in compliance with all applicable provisions of
ERISA and the regulations issued thereunder, as well as with all
other applicable federal, state and local statutes, ordinances and
regulations. All reports and other documents required to be filed
with any governmental agency or distributed to Plan participants or
beneficiaries will be filed or distributed in accordance with
applicable law.


 

4.12           
Accounts Receivable and
Payable. Each Obligor will pay its accounts payable and will
maintain its accounts receivable in a manner consistent with
prudent business practices, including normal terms and conditions
for payment for companies engaged in similar operations in similar
jurisdictions.


 


4.13           Compliance
with Governmental Requirements. Each Obligor shall timely
comply with all Governmental Requirements (including without
limitation all Environmental Laws), and shall promptly furnish to
Bank true and complete copies of any official notice or claim by
any Governmental Authority pertaining to the operation of the
business of an Obligor or to the Collateral.


 

4.14           
Maintenance of Corporate
Existence and Properties. Each Obligor will (i) engage
solely in the business presently operated by it (or currently
contemplated to be operated by it as disclosed to Bank), without
material change therein, (ii) maintain its limited liability
company or corporate existence, in its current form and current
jurisdiction of organization, (iii) maintain its good standing and
authority to do business in each jurisdiction in which it is
organized or required to be qualified to do business, and (iv) keep
and maintain all franchises, licenses, permits and properties
useful or necessary in the conduct of its business in good order
and condition.


 



 







 






 

4.15           
No Liability of
Bank. Bank shall have no liability, obligation, or
responsibility whatsoever with respect to any Obligor except to
advance funds pursuant and subject to this Agreement and the
conditions set forth herein. Bank shall not be obligated to inspect
or review the Collateral, or the terms of any contracts or
agreements constituting a portion of the Collateral, nor be liable
for the performance or default of any Obligor, or any other party,
or for the performance of any obligation of any Obligor whatsoever.
Nothing, including without limitation any Advance or acceptance of
any document or instrument, shall be construed as a representation
or warranty, express or implied, to any Person by
Bank.


 

4.16           
Errors and Omissions;
Additional Documents. Each Obligor hereby agrees that
immediately upon the written request of Bank, such Obligor will
execute and/or deliver, and cause to be executed and/or delivered,
such additional promissory notes, guaranties, security agreements,
or other documents, instruments or agreements as Bank may
reasonably request, or will correct or cause to be corrected any
documents, instruments or agreements already executed or delivered.
Any additional documents, instruments, agreements, revisions or
corrections will be in conformity with the terms and conditions set
forth in this Agreement. Any written request by Bank for additional
documents, instruments or agreements or for revisions or
corrections shall be prima
facie evidence of the necessity for such additional
documents, instruments, agreements, revisions or
corrections.


 

4.17           
Additional
Information. Each Obligor acknowledges that Bank is subject
to federal and state regulations requiring Bank to obtain, verify,
and record information that identifies Bank’s customers,
including all Obligors. Each Obligor agrees to provide Bank with
any information Bank deems necessary to comply with all such
regulations. Should an Obligor fail to do so promptly, it shall be
an Event of Default hereunder, entitling Bank to exercise all
remedies available to Bank upon an Event of Default
hereunder.


 


ARTICLE
V



NEGATIVE COVENANTS


 


During
the term of this Agreement and until the Obligations have been paid
and performed in full, unless compliance with the provisions of the
following sections shall have been waived in writing by Bank,
Obligors agree as follows:


 

5.1           
Limitations on
Liens. No Obligor will create, assume or suffer to exist
any mortgage, lien, pledge, charge, security interest or other
encumbrance of any kind upon any of its properties or assets,
whether now owned or hereafter acquired, except (i) liens created
by this Agreement, the other Security Instruments or otherwise in
favor of Bank, (ii) liens for taxes, assessments and other
governmental charges not yet due and payable, (iii) deposits to
secure the payment of workmen’s compensation, unemployment
insurance or other social security benefits or obligations or other
obligations of a like general nature incurred in the ordinary
course of business and in accordance with such Obligor’s
historical customs and practices, provided that the payment and
performance of any such obligations are not past due or otherwise
in default, (iv) landlords’, warehousemen’s,
carriers’, or other like liens arising by operation of law in
the ordinary course of business securing obligations which are not
past due or otherwise in default, (v) inchoate liens arising under
ERISA to secure current service pension liabilities as they are
incurred under the provisions of Plans from time to time in effect,
provided such liabilities are not past due or otherwise in default,
or (vi) liens expressly permitted in the Security Instruments or
otherwise consented to by Bank in writing on or after the date
hereof.


 

5.2           
Limitations on
Liabilities. No Obligor will create, assume or suffer to
exist any liabilities, contingent or otherwise, whether by
guaranty, endorsement, agreement to purchase or repurchase,
agreement to lease, agreement to supply or advance funds
(including, without limitation, agreements to maintain working
capital, solvency or other balance sheet conditions or agreements
to purchase any equity interest or make capital contributions or
otherwise), except (i) as expressly permitted hereunder, (ii)
endorsements of instruments for collection in the ordinary course
of business, (iii) trade accounts payable in the ordinary course of
business, (iv) Subordinated Debt approved in writing by Bank prior
to its issuance, and (v) Rate Management Agreements with Bank or
its Corporate Affiliates.


 

5.3           
Negative Pledges.
No Obligor will enter into, incur, or permit to exist any agreement
or other arrangement that prohibits, restricts, or imposes any
condition upon the ability of Borrower or any Subsidiary to
create, incur, or permit to exist any mortgage, lien or security
interest upon any of its property or assets.


 

5.4           
Limitations on Fundamental
Changes; Disposition of Assets. No Obligor will (a) form or
acquire any new Subsidiary except in compliance with Section 4.8 hereof, (b) enter into any
merger or consolidation, (c) liquidate or dissolve itself (or
suffer any liquidation or dissolution), (d) cease, suspend or
materially curtail business operations, (e) enter into any
arrangement, directly or indirectly, whereby such Obligor would
sell or transfer any real or personal property either now owned or
hereafter acquired, and then or thereafter lease as lessee such
properties or any part thereof or any other property to be used for
substantially the same purpose, (f) either (i) make an
investment in or capital contribution to any Person, (ii) sell,
lease, charter or otherwise dispose of all or any material part of
its property, assets or business, including any material equity
ownership interest, or (iii) acquire, or agree to acquire, assets
or properties, which in any such case would cause Borrower to
violate any term or provision (including any financial covenant) of
this Agreement, (g) transfer any equity interests held by such
Obligor in another Obligor, (h) change its form or jurisdiction of
organization, or (i) amend its Certificate of
Formation, Certificate
or Articles of Incorporation, Bylaws, Articles of Organization,
Company Agreement or Regulations, Certificate of Limited
Partnership, Agreement of Limited Partnership, Partnership
Agreement or other organizational documents in any manner which
could reasonably be expected to be materially adverse to
Bank.


 

5.5           
Restricted
Payments. No Obligor will pay any dividend or distribution,
or purchase, acquire, retire, or redeem any interest in an Obligor,
whether now or hereafter issued or outstanding, without prior
written approval of Bank, at any time when a Default has occurred
and is continuing, or would result from such payment, purchase,
acquisition, retirement or redemption upon giving hypothetical
effect thereto on a pro
forma basis.


 



 







 






 

5.6           
Loans and Advances.
No Obligor will make or permit to remain outstanding any loans,
advances or extensions of credit to any Person or Persons, except
trade credit in the ordinary course of business.


 

5.7           
Nature of Business.
No Obligor will, without the prior written consent of Bank, (i)
engage in any lines of business or business ventures materially
different than those in which it is presently engaged (or currently
contemplated to be engaged as disclosed to Bank) or that are
directly related thereto, (ii) change in any material respect its
methods of operation or accounting or manner of doing business, or
(iii) change its name, tax identification number, corporate form or
jurisdiction of organization.


 

5.8           
Transactions with
Affiliates. Except as set forth in the agreements listed in
Schedule 5.8, no Obligor
will engage in any transaction with an Affiliate (other than
another Obligor) on terms less favorable to such Obligor than would
be obtainable at the time in comparable transactions with Persons
not affiliated with such Obligor.


 

5.9           
ERISA. No Obligor
will engage in any transaction prohibited by ERISA. No Plan will
incur an accumulated funding deficiency. No Obligor will incur any
liability for excise tax or penalty due to the Internal Revenue
Service or any liability to the Pension Benefit Guaranty
Corporation; and no “reportable events” (as that phrase
is defined in Section 4043 of ERISA) will occur with respect to any
Plan.


 

5.10           
Subordinated
Indebtedness. Except as expressly permitted herein and in
any Subordination Agreement, Borrower will not amend, modify or
obtain or grant a waiver of any provision of any document or
instrument evidencing or securing any subordinated indebtedness of
Borrower, nor purchase, redeem, retire or otherwise acquire for
value, deposit any monies with any Person with respect to, or make
any payment or prepayment of the principal of or any other amount
owing in respect of, any subordinated indebtedness of Borrower,
except to the extent permitted under the applicable Subordination
Agreement.


 

5.11           
Government
Regulation. No Obligor shall (i) be or become subject at any
time to any law, regulation, or list of any government agency
(including, without limitation, the U.S. Office of Foreign Asset
Control) that prohibits
or limits Bank from making any Advance or extension of credit to
Borrower or from otherwise conducting business with any Obligor, or
(ii) fail to provide documentary and other evidence of such
Obligor’s identity as may be requested by Bank at any time to
enable Bank to verify such Obligor’s identity or to comply
with any applicable law or regulation, including, without
limitation, Section 326 of the USA Patriot Act of 2001, 31 U.S.C.
Section 5318.


 



ARTICLE VI



REPRESENTATIONS AND WARRANTIES


 


In
order to induce Bank to enter into this Agreement, Obligors hereby
represent and warrant to Bank that the following representations
and warranties are true and correct, and shall remain true and
correct at all times prior to the full and final payment and
performance of the Obligations:


 

6.1           
Corporate
Authority. Each Obligor (a) is duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization, (b) is duly licensed, qualified to do business and in
good standing in each jurisdiction in which the ownership of its
assets or the conduct of its business requires such licensing and
qualification, and (c) has all powers and all permits, licenses,
consents and authorizations necessary to own and operate its assets
and to carry on its business as presently conducted. The execution,
delivery and performance of this Agreement by each Obligor, the
borrowings hereunder and the execution, delivery and performance of
the Note, the other Security Instruments and the agreements,
documents and instruments contemplated hereby and thereby (i) have
been duly authorized by proper corporate proceedings, and (ii) will
not contravene, or constitute a default under, any provision of
applicable law or regulation or of the Certificate of Formation,
Certificate or Articles of Incorporation, Bylaws, Articles of
Organization, Company Agreement or Regulations, Certificate of
Limited Partnership, Agreement of Limited Partnership, Partnership
Agreement or other organizational document of any Obligor, or of
any note, mortgage, security agreement, pledge, indenture,
contract, agreement or other instrument, or any judgment, order or
decree, binding upon any Obligor or any Obligor’s property.
Except for any consent or approval which has been duly obtained, no
consent or approval of Borrower’s shareholders, or of any
other Person, is required in connection with the execution,
delivery or performance of this Agreement or any other Security
Instrument, or the creation of any of the liens or security
interests contemplated herein or therein. Each of this Agreement,
the Note, the other Security Instruments and the several agreements
and instruments contemplated hereby and thereby, when duly executed
and delivered by the party or parties thereto, will constitute the
legal, valid and binding obligation of each Obligor signatory
thereto, and will be enforceable in accordance with its
terms.


 

6.2           
Financial
Statements. The Financial Statements which have been
delivered to Bank are in accordance with the books and records of
the applicable Obligor, and fairly present the financial position
of such Obligor, as of the dates thereof, and such Obligor’s
results of operations and cash flows for the periods then ended, in
conformity with generally accepted accounting principles,
consistently applied, and such Obligor’s historical customs
and practices. Such Financial Statements are true, complete and
correct in all material respects, and have been prepared in
accordance with generally accepted accounting principles,
consistently applied, and in a manner consistent with prior periods
and the historical customs and practices of such
Obligor.


 


6.3           Absence
of Undisclosed Liabilities or Obligations. All material
obligations, investments and liabilities, contingent or otherwise,
of each Obligor are truly, completely and accurately disclosed in
the Financial Statements. No material adverse change has occurred
in the assets, liabilities, financial condition, business or
affairs of any Obligor, since the date of the most recent Financial
Statements of such Obligor delivered to Bank. No Obligor is party
to any agreement or a party to any litigation or proceeding (and no
litigation or proceeding is threatened) or otherwise subject to any
restriction that would prevent or impair the performance of such
Obligor’s obligations under this Agreement or any Security
Instrument. None of the information supplied by any Obligor
contains a material misstatement of fact, or omits any material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not materially
misleading; provided that, with respect to
any projected financial information, the Obligors represent only
that such information was prepared in good faith based upon
assumptions believed to be reasonable at the time delivered and, if
such projected financial information was delivered prior to the
date hereof, as of the date hereof..


 



 







 






 

6.4           
Title. Each Obligor
has, and until the Obligations are fully and finally paid will
continue to have, good and indefeasible title to all of its assets
and property (including without limitation the Collateral), free
and clear of all liens, mortgages, security interests and other
encumbrances, except those in favor of Bank, or as otherwise
expressly permitted herein.


 


6.5                      Liens
and Security Interests; Pari Passu
Obligations. The
security interests, mortgages and liens attaching to the Collateral
will constitute at all times valid, perfected and enforceable
security interests, mortgages and liens in favor of Bank, subject
to no prior or superior lien, mortgage, security interest or other
encumbrance, except those of Bank or as otherwise expressly
permitted in this Agreement. Before funding any Advances, Obligors
will have taken, or will have participated with Bank in taking, all
necessary action (including making all necessary filings) to
provide Bank with perfected security interests, mortgages and liens
in the Collateral under the laws of all applicable jurisdictions,
subject only to liens and security interests expressly permitted
hereunder. The Obligations of Borrower hereunder rank at least
pari passu with all other
Indebtedness.


 


6.6           Use
of Proceeds. The Loan is for business, commercial,
investment or other similar purposes, and not for personal, family,
household or agricultural use. The Loan is not subject to
Regulation Z issued by the Board of Governors of the Federal
Reserve System, Title I (Truth-In-Lending Act) nor Title V (General
Provisions) of the Consumer Credit Protection Act, nor the Real
Estate Settlement Procedures Act of 1974 (RESPA), and no
disclosures are required to be given under such regulations and
federal laws in connection with the Loan. The funds advanced by
Bank under the Revolving Note will be used solely to provide
working capital in support of current assets and for other general
corporate purposes. Borrower represents and warrants that no
portion of any Advance shall be used directly or indirectly (a) to
purchase ineligible securities, as defined by applicable
regulations of the Federal Reserve Board, underwritten by Bank or
any Corporate Affiliate of Bank during the underwriting period and
for thirty (30) days thereafter, or (b) to acquire any assets
outside of the ordinary course of business, or (c) to acquire any
equity interests in any Person.


 

6.7           
Litigation. There
is no action, suit or proceeding pending, or to the knowledge of
any Obligor threatened, against any Obligor or before any court,
governmental department, administrative agency or instrumentality
which, if such action, suit or proceeding were adversely
determined, (i) would subject an Obligor to any liability not fully
covered by insurance, or (ii) would materially adversely affect the
financial position or the results of operations of an Obligor or
such Obligor’s business or an Obligor’s ability to
perform such Obligor’s obligations under this Agreement, the
Note or any Security Instrument to which such Obligor is a
party.


 

6.8           
Solvency. Each
Obligor (i) is solvent with assets of a value that exceeds the
amounts of such Obligor’s liabilities, (ii) is able to meet
such Obligor’s debts as they mature, and (iii) in such
Obligor’s reasonable opinion, has adequate capital to conduct
the businesses in which such Obligor is engaged.


 

6.9           
Subsidiaries and
Investments. Except as set forth on Schedule 6.9, Borrower does not have any
Subsidiaries or investments in any Person.


 

6.10           
No Event of
Default. No Default or Event of Default has occurred and is
continuing. No Obligor is in default of any of its obligations
under any agreements with any Person.


 

6.11           
Tax Returns. Each
Obligor has filed all United States tax returns and all city, state
and foreign tax returns required to be filed by such Obligor by the
applicable filing date (or a permitted extension thereof) and has
paid all taxes which have become due pursuant to any such return or
pursuant to any assessment received by such Obligor by the
applicable due date. All such returns properly reflect any United
States income tax, foreign tax, state tax and city tax of the
applicable Obligor for the periods covered thereby.


 

6.12           
Insurance. Each
Obligor has maintained and now maintains (i) insurance of such
types (including, without limitation, public liability,
worker’s compensation, commercial liability, casualty, hazard
or property damage providing all risk coverage on such
Obligor’s assets, and business interruption insurance), and
in such amounts as is customary in the industry, and (ii) adequate
insurance protection against all liabilities, claims and risks
against which it is customary to insure.


 

6.13           
Real Property. As
of the date hereof, no Obligor owns or leases any real property or
real property interests, or stores any Collateral at any location,
other than as set forth on Schedule
6.13. Until the Obligations have been fully and finally
paid, all of the Collateral (other than Collateral in transit in
the ordinary course of business) is or will be located at one of
the locations set forth on Schedule
6.13, as such Schedule may be updated in writing from time
to time.


 

6.14           
Environmental
Matters. Each Obligor has complied, and remains in
compliance, in all material respects with the provisions of all
Environmental Laws applicable to such Obligor or any of such
Obligor’s owned or operated facilities, sites or other
properties, businesses and operations, including those which relate
to the reporting by such Obligor of all sites owned or operated by
such Obligor where solid wastes, hazardous or toxic wastes or
hazardous or toxic substances have been treated, stored, disposed
of or otherwise handled. No release (as defined under applicable
Environmental Laws) at, from, in or on any site owned or operated
by an Obligor has occurred which, if all relevant facts were known
to the relevant Governmental Authorities (i) would require
remediation to avoid deed record notices, restrictions, liabilities
or other duties, or (ii) would result in other consequences that
would not be applicable if that release had not occurred. Neither
an Obligor nor any agent or contractor of an Obligor has
transported or arranged for the transportation of any solid wastes,
hazardous or toxic wastes or hazardous or toxic substances to, or
disposed or arranged for the disposition of any solid wastes,
hazardous or toxic wastes or hazardous or toxic substances at, any
off-site location that could lead to any claim against an Obligor,
as a potentially responsible party or otherwise, for any fines,
clean-up costs, remedial work, damage to natural resources,
personal injury or property damage.


 



 







 






 

6.15           
Compliance with
Laws. No Obligor (i) is in violation of any law, ordinance,
statute, or governmental rule or regulation to which such Obligor
is subject, and (ii) has failed to obtain any license, permit,
franchise, or other governmental authorization necessary in
connection with the ownership or operation of such Obligor’s
assets, property, business or operations. In furtherance and not in
limitation of the foregoing, each Obligor represents and warrants
that each Plan of each Obligor is in compliance in all material
respects with the applicable provisions of ERISA and, to the best
of each Obligor’s knowledge, no “reportable
event,” as such term is defined in Section 4043 of ERISA, has
occurred with respect to any Plan. Each Obligor, and each
Subsidiary of an Obligor, and each of their respective managers,
directors, officers, and employees, is in compliance in all
material respects with all federal, state and local laws, rules and
regulations applicable to its properties, operations, business, and
finances, including, without limitation, any federal or state laws
relating to liquor (including 18 U.S.C. § 3617, et seq.) or
narcotics (including 21 U.S.C. § 801, et seq.) and/or any
commercial crimes. Neither any Obligor, nor any Subsidiary of an
Obligor, nor any of their respective managers, directors, officers,
employees or other agents acting or benefiting in any capacity in
connection with the Loan or any other capital raising transaction
involving Bank or Bank’s parent or any subsidiary of
Bank’s parent, is a Designated Person. Borrower shall not,
directly or indirectly, use the proceeds of the Loan, or lend,
contribute or otherwise make available such proceeds to any
Subsidiary, joint venture partner or other Person (a) to fund any
activities or business of or with any Designated Person, or in any
country or territory, that at the time of such funding is the
subject of any sanctions under any Sanctions Laws and Regulations,
or (b) in any other manner that would result in a violation of any
Sanctions Laws and Regulations by any party to this Agreement. None
of the funds or assets of Obligors that are used to pay any amount
due pursuant to the Loan shall constitute funds obtained from
transactions with or relating to Designated Persons or countries
which are the subject of sanctions under any Sanctions Laws and
Regulations. As used above, “Sanctions Laws and
Regulations” means (a) any sanctions, prohibitions or
requirements imposed by any executive order (an “Executive
Order”) or by any sanctions program administered by the U.S.
Department of the Treasury Office of Foreign Assets Control
(“OFAC”, and (b) any sanctions measures imposed by the
United Nations Security Council, European Union or the United
Kingdom. “Designated Person” means a person or entity
(A) listed in the annex to, or otherwise the subject of the
provisions of, any Executive Order, (B) named as a “Specially
Designated National and Blocked Person” (“SDN”)
on the most current list published by OFAC at its official website
or any replacement website or other replacement official
publication of such list, or is otherwise the subject of any
Sanctions Laws and Regulations, or (C) in which an entity or person
on the SDN list has 50% or greater ownership interest or that is
otherwise controlled by an SDN.


 

6.16           
Governmental
Approvals. No approvals of any governmental department,
administrative agency, instrumentality or authority having
jurisdiction over an Obligor, or an Obligor’s property, are
necessary in connection with the execution, delivery or performance
of the Security Instruments, the perfection of the liens and
security interests provided for thereby, or the consummation of the
transactions contemplated hereby.


 

6.17           
Regulations U and
X. No Advance will be used, directly or indirectly, for the
purpose of purchasing or carrying, or for payment in full or in
part of Indebtedness which was incurred for the purpose of
purchasing or carrying, any “margin stock,” as such
term is defined in Regulation U. No part of the proceeds of the
Loan will be used for any purpose which violates Regulation
X.


 

6.18           
Investment Company Act of
1940.                                                                           


 

6.19           
Assumed Names.
Except for the use by Borrower of the name “Wound Management
Technologies, Inc.” prior to changing its name on May 3,
2019, and the adoption and use by Cellerate of the assumed name
“Wound Care Innovations” in November 2018, within the
past five (5) years, no Obligor has conducted its business under
any corporate, trade, assumed or fictitious name, and following the
date hereof no Obligor will conduct its business under any other
corporate, trade, assumed or fictitious name without thirty (30)
days prior written notice to Bank, and execution and delivery of
such additional documents as Bank may request.


 


ARTICLE
VII



DEFAULT


 

7.1           
Default. The
occurrence and continuance of any of the following events or
conditions shall constitute an “Event of Default” under
this Agreement, and under the Note:


 

(a) Failure (i) to pay
any principal of the Note when due or declared due, whether at the
stated maturity, by acceleration or otherwise, or (ii) to pay any
interest, fee or any other amount (other than an amount referred to
in clause (i) of this
Subsection (a)) payable
under this Agreement or any other Security Instrument, within three
(3) Business Days after the same shall become due and payable,
whether at the stated maturity, by acceleration or otherwise, or
(iii) of an Obligor to pay when due any debt, liability or
obligation owed to Bank, Bank’s parent, or any subsidiary of
Bank’s parent, or to perform any other obligation under any
document, instrument or agreement evidencing or securing any debt,
liability or obligation to Bank, Bank’s parent, or any
subsidiary of Bank’s parent, if the effect thereof is to
cause the holder of such debt, liability or obligation to assert in
writing that a default or event of default has occurred with
respect to such debt, liability or obligation, or (iv) to make any
other payment or required prepayment of any other indebtedness of
an Obligor beyond the grace period, if any, provided therefor, or
(v) by Obligors to comply with the financial reporting obligations
under Section 4.1, or (vi)
to comply with the financial covenants set forth in Section 4.2, or (vii) by an Obligor to
comply with Section 3.2,
4.3, 4.4, 4.5, 4.6, 4.7 or 4.8, or (viii) by an Obligor to comply
with Article V, or (ix) by
an Obligor or any other party to a Subordination Agreement to
comply with the terms of any Subordination Agreement or any
instrument evidencing or securing Subordinated Debt, or (x) by an
Obligor to comply with any real property lease or other agreement
with respect to any facility at which any Collateral is located,
which failure continues beyond any applicable cure
period;


 

(b) Failure of an
Obligor to observe or perform (or to furnish adequate evidence of
performance of) any other covenants, terms or agreements of this
Agreement, the other Security Instruments or any other agreements
with Bank, which covenants, terms or agreements are not referenced
in the other subsections of this Section 7.1, and such failure continues
unremedied for a period of ten (10) Business Days after the earlier
of (i) notice thereof to Borrower from Bank and (ii) actual
knowledge thereof by an executive officer or director of
Borrower;


 



 







 






 

(c) Any representation
or warranty made by an Obligor in this Agreement, any of the other
Security Instruments or in any certificate, financial or other
statement furnished by any of them, is untrue, incorrect or
misleading in any material respect as of the date made or
furnished, or becomes untrue, incorrect or misleading at any time
prior to the full and final payment of the Obligations, and the
termination of any obligation by Bank to make Advances
hereunder;


 

(d) Default occurring,
or an Obligor seeking to disaffirm its obligations, under any of
the Security Instruments;


 

(e) Any security
interest, lien or assignment purported to be created by any
Security Instrument shall cease to be in full force and effect
(other than in accordance with the terms hereof and thereof), or
shall cease to give Bank the liens, rights, powers and privileges
purported to be created or granted under such Security Instrument
(including a perfected first priority security interest in and lien
on, all of the Collateral thereunder (except as otherwise expressly
provided in such Security Instrument or any other Security
Instrument)) or shall be asserted by any Obligor not to be a valid,
perfected, first priority (except as otherwise expressly provided
in this Agreement) security interest in or lien on any Collateral
covered or purported to be covered thereby;


 

(f) An Obligor failing
to observe or perform any other term, condition or agreement with
respect to any obligation for borrowed money or leased assets or in any
instrument or agreement evidencing, securing or relating to any
indebtedness of such Obligor, if the effect thereof is to cause or
permit the holder or holders of such obligation or indebtedness (or
a trustee or an agent on behalf of such holder or holders) to cause
any such obligation or indebtedness to become due prior to its
stated maturity;


 

(g) (i) The License or
the Sublicense expires or is terminated; (ii) the License is
modified or amended, or any provision thereof is waived or
released, in any manner which adversely impacts, or could
reasonably be expected to adversely impact, the Sublicense, without
the prior written consent of Bank; (iii) the Sublicense ceases to
be enforceable for any reason, or Cellerate’s rights in and
to the “Licensed IP” (as such term is defined in the
Sublicense) to sell, export, market or distribute “Products
for Wound Care” (as such terms are defined in the
Sublicense), on the terms and conditions set forth in the
Sublicense, are materially impaired; or (iv) the Sublicense is
modified, amended, or any provision thereof is waived or released,
without the prior written consent of Bank;


 

(h) (i) The Catalyst
Group, Inc., either directly or indirectly through CGI Cellerate
RX, LLC and any other affiliate of The Catalyst Group, Inc., shall
fail to maintain a Minimum Equity Ownership interest in Borrower;
or (ii) Borrower shall fail to own, directly or indirectly, one
hundred percent (100%) of the issued and outstanding economic
interests and membership voting interests in Cellerate and UWS
Solutions;


 

(i) The entry of any
judgment against an Obligor individually or in the aggregate in
excess of $250,000 (in either case to the extent not adequately
covered by insurance as to which the insurer has not denied
coverage) and which shall remain undischarged, unvacated, unstayed
or unbonded pending appeal for a period of thirty (30) days, or any
attachment or other levy against the property of an
Obligor;


 

(j) Dissolution, death,
liquidation, termination of existence, insolvency or winding up of
an Obligor;


 

(k) The occurrence or
existence of any default, event of default, termination event or
other similar condition or event (however described) under any swap
agreement (as defined in 11 U.S.C. Sec. 101, as in effect from time
to time) to which Borrower is a party;


 

(l) An involuntary
proceeding shall be commenced or an involuntary petition shall be
filed seeking (i) liquidation, reorganization or other relief in
respect of an Obligor or any Obligor’s debts, or of a
substantial part of any Obligor’s assets, under any Debtor
Relief Law now or hereafter in effect, or (ii) the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar
official for an Obligor or for a substantial part of any
Obligor’s assets, and, in any such case, such proceeding or
petition shall continue undismissed for thirty (30) days, or an
order or decree approving or ordering any of the foregoing shall be
entered; or


 

(m) Any Obligor shall
(i) voluntarily commence any proceeding or file any petition
seeking liquidation, reorganization or other relief under any
Debtor Relief Law now or hereafter in effect, (ii) consent to the
institution of, or fail to contest in a timely and appropriate
manner (not to exceed ten (10) Business Days), any proceeding or
petition described in Subsection
(l) of this section, (iii) apply for or consent to the
appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for an Obligor or for a substantial
part of any Obligor’s assets, (iv) file an answer admitting
the material allegations of a petition filed against it in any such
proceeding, (v) make a general assignment for the benefit of
creditors, (vi) admit in writing its inability to pay its debts as
they mature, or (vii) take any action for the purpose of effecting
any of the foregoing;


 


Bank
may remedy any Event of Default, without waiving same, or may waive
any Event of Default without waiving any prior or subsequent Event
of Default.


 



 







 






 

7.2           
Optional
Acceleration. Upon the occurrence and during the continuance
of any Event of Default or any material adverse change that impairs
Borrower’s ability to pay or perform any covenant or
obligation under this Agreement or any Security Instrument, or Bank
in good faith determining that payment or performance of any of the
Obligations to be impaired or insecure, then any obligation of Bank
to extend credit or make Advances shall immediately terminate, and
upon the occurrence and continuance of any Event of Default set
forth in Section 7.1 (a), (b), (c),
(d), (e), (f), (g), (h), (i), (j) or (k), Bank, at its option, may declare
the Obligations (including without limitation all unpaid principal
and accrued but unpaid interest, but expressly excluding any
Obligations related to any Rate Management Agreement or Rate
Management Transaction) to be forthwith due and payable, whereupon
the same (other than Obligations related to any Rate Management
Transaction) shall become due and payable without any presentment,
demand, protest, notice of protest, notice of intent to accelerate,
notice of acceleration, or notice of any kind (except notice
required by law which cannot be waived), all of which are hereby
waived. Bank will notify Borrower concurrently upon any
acceleration by Bank of the maturity of the Obligations under this
Section 7.2, however failure
to give such notice shall not affect the validity of such
acceleration.


 

7.3           
Automatic
Acceleration. Upon the occurrence of any Event of Default
set forth in Section 7.1(l)
or (m), any obligation of
Bank to extend credit or make Advances shall immediately terminate,
and the Obligations (including without limitation all unpaid
principal and accrued but unpaid interest, but expressly excluding
any Obligations related to any Rate Management Agreement or Rate
Management Transaction) shall be immediately and automatically due
and payable without any presentment, acceleration, demand, protest,
notice of protest, notice of intent to accelerate, notice of
acceleration, or notice of any kind (except notice required by law
which cannot be waived), all of which are hereby
waived.


 

7.4           
Rate Management
Agreements. Borrower understands, acknowledges and agrees
that any Event of Default hereunder shall also constitute an Event
of Default under each Rate Management Agreement, and Bank shall
have all rights and remedies following the occurrence of an Event
of Default under this Agreement and under each Rate Management
Agreement.


 

7.5           
Right of Setoff.
Upon the occurrence and during the continuance of any Event of
Default, Bank is hereby authorized at any time and from time to
time, to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at
any time owing by Bank to or for the credit or the account of
Borrower against any and all of the Obligations now or hereafter
existing under this Agreement or the Note, irrespective of whether
or not Bank shall have made any demand under this Agreement or the
Note and although such Obligations may be unmatured. Bank agrees
promptly to notify Borrower after any such setoff and application
made by Bank, provided that the failure to give such notice shall
not affect the validity of such setoff and application. The rights
of Bank under this Section
7.5 are in addition to other rights and remedies (including,
without limitation, other rights of setoff) which Bank may
have.


 

7.6           
Performance by
Bank. If Borrower shall fail to perform any covenant, duty
or agreement contained in any of the Security Instruments, Bank may
perform or attempt to perform such covenant, duty or agreement on
behalf of Borrower. In such event, Borrower shall, at the request
of Bank, promptly pay any and all amounts expended by Bank in such
performance or attempted performance to Bank, together with
interest thereon at the Default Rate from the date of such
expenditure until paid. Notwithstanding the foregoing, it is
expressly agreed that Bank shall not have any liability or
responsibility for the performance of any obligation of Borrower
under this Agreement or any other Security Instrument.


 


ARTICLE
VIII



MISCELLANEOUS


 

8.1           
Indemnification; Release
of Bank. Obligors, jointly
and severally, shall indemnify and hold Bank and each Corporate
Affiliate of Bank, and their respective officers, directors,
employees, counsel, agents, representatives, controlling persons
and attorneys-in-fact (each, an “Indemnified Person”)
harmless from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs,
charges, expenses and disbursements (including reasonable
attorneys’ fees) of any kind or nature whatsoever which may
at any time (including at any time following repayment of the
Obligations) be imposed on, incurred by or asserted against any
such Indemnified Person (including, but not limited to, those
incurred in connection with the investigation of, preparation for
or defense of any pending or threatened claim or any other action
or proceeding, including any insolvency proceeding or appellate
proceeding) in any way relating to or arising out of this
Agreement, any document contemplated hereby or referred to herein,
or the transactions contemplated hereby or entered into by the
parties hereto, or any action taken or omitted by any such
Indemnified Person under or in connection with any of the
foregoing; and the foregoing indemnity shall apply to any
investigation, litigation or proceeding (including any insolvency
proceeding or appellate proceeding) related to or arising out of
this Agreement, whether or not any Indemnified Person is a party
thereto (all the foregoing, collectively, the “Indemnified
Liabilities”). The Indemnified
Liabilities shall include all negligent acts and omissions of each
Indemnified Person; provided, that Obligors shall not have any
obligation hereunder to any Indemnified Person for any claims,
damages, losses, liabilities, costs or expenses to the extent, but
only to the extent, caused (as determined by a final, nonappealable
judgment in a court of competent jurisdiction) by the willful
misconduct or gross negligence of the Person seeking
indemnification. Obligors hereby release the Indemnified Persons
for any claims, damages, losses, liabilities, costs or expenses to
the extent, but only to the extent, caused by the negligence of any
Indemnified Person. The
obligations under this Section are all payable on demand, and shall
survive satisfaction of all other Obligations, and the termination,
release or expiration of this Agreement and the documents executed
in connection herewith.


 



 







 






 

8.2           
Interest. It is the
intention of the parties hereto to comply with applicable usury
laws; accordingly, it is agreed that notwithstanding any provision
to the contrary in this Agreement, the Note, the other Security
Instruments or any of the documents securing payment thereof or
otherwise relating thereto, in no event shall this Agreement or
such instruments or documents require the payment or permit the
collection of interest, as defined under applicable usury laws, in
excess of the Maximum Rate. If any such excessive interest is
contracted for, charged or received under this Agreement, the Note,
the other Security Instruments or the terms of any of the documents
securing payment thereof or otherwise relating thereto, or if the
maturity of any Obligations to Bank is accelerated in whole or in
part, or in the event that all or part of the principal of or
interest on the Note shall be prepaid, so that under any of such
circumstances the amount of interest contracted for, charged or
received under this Agreement, the Note, the other Security
Instruments or any of the documents securing payment thereof or
otherwise relating thereto, on the amount of principal actually
outstanding from time to time under the Note, shall exceed the
Maximum Rate, then in any such events (i) the provisions of this
section shall govern and control, (ii) no Obligor shall be
obligated to pay the amount of such interest to the extent that it
is in excess of the maximum amount of interest permitted to be
contracted for by, charged to or received from the Person obligated
thereon under applicable usury laws, (iii) any such excess which
may have been collected either shall be applied as a credit against
the then unpaid principal amount on the Note or refunded to the
Person paying the same, at the Noteholder’s option, and (iv)
the effective rate of interest shall be automatically reduced to
the Maximum Rate. It is further agreed that, without limitation of
the foregoing, all calculations of the rate of interest contracted
for, charged or received under this Agreement, the Note, the other
Security Instruments or such other documents which are made for the
purpose of determining whether such rate exceeds the Maximum Rate
shall be made, to the extent permitted by applicable usury laws, by
amortizing, prorating, allocating and spreading in equal parts
during the period of the full stated term of the Note, all interest
at any time contracted for, charged or received from an Obligor or
otherwise by the holder or holders of the Note in connection with
the Note, the other Security Instruments or this
Agreement.


 

8.3           
Expenses. Borrower
will pay on demand (i) all costs and expenses of Bank and its
Corporate Affiliates (including fees, expenses and disbursements of
counsel for Bank and its Corporate Affiliates) in connection with
the preparation, negotiation, interpretation, operation and
administration of this Agreement, the Note, any other Security
Instruments, or any Rate Management Agreements, or any waiver,
modification, renewal, extension or amendment of any provision of
any of the foregoing, and (ii) all costs and expenses of
enforcement of this Agreement, the Note, any other Security
Instruments, or any Rate Management Agreements, and collection of
the Obligations (including fees, expenses and disbursements of
counsel for Bank and its Corporate Affiliates). Borrower agrees to
pay on demand and to indemnify Bank from and hold it harmless
against any filing or recording fees, taxes, assessments, or
charges made by any Governmental Authority by reason of the
execution, delivery, recordation or filing by Borrower or Bank of
this Agreement, the Note, the other Security Instruments and any
documents, instruments or agreements executed or delivered in
connection therewith.


 

8.4           
No Waiver; Cumulative
Remedies. No failure by Bank to exercise, and no delay by
Bank in exercising, any right, power or privilege hereunder shall
operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies provided herein
and under the Security Instruments are cumulative and not exclusive
of any rights or remedies provided by law or in any other
agreement, and may be pursued separately, successively or
concurrently against Obligors (or any of them) and/or the
Collateral, at the sole discretion of Bank.


 

8.5           
Successors. This
Agreement shall be binding upon Obligors and their respective
successors and assigns, and shall inure to the benefit of Bank and
its successors and assigns. No Obligor may assign any rights or
obligations under this Agreement without the prior written consent
of Bank.


 

8.6           
Notices. All
notices, requests and demands shall be given to or made to Bank or
an Obligor, as applicable, at such party’s address set forth
in the preamble of this Agreement. All notices and other
communications given under the provisions of this Agreement shall
be deemed to have been given (i) four (4) days after being
deposited, postage prepaid, with the U.S. Postal Service when sent
by registered or certified mail, (ii) the day of confirmed receipt
when sent by facsimile transmission or (iii) when actually
received, if sent by hand delivery or courier service, in each case
addressed to such party as provided herein or according to the most
recent records of the notifying party.


 

8.7           
Form and Substance.
All documents, certificates, insurance policies, and other items
required under this Agreement to be executed and/or delivered to
Bank shall be in form and substance satisfactory to Bank, in
Bank’s sole and absolute discretion.


 


8.8              Survival
of Agreements. All agreements, covenants, representations
and warranties made herein shall survive the execution and delivery
of the Note and the other Security Instruments and the
modification, renewal, extension or rearrangement thereof, shall
continue in full force and effect until the Loan has been paid in
full, and shall not be affected by any investigation made by any
party.


 

8.9           
Severability.
Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective, valid and
enforceable under applicable law, but if any provision of this
Agreement shall be prohibited by, or invalid or unenforceable
under, applicable law, then (i) the parties hereto agree that they
will negotiate to amend such provisions by the minimal amount
necessary to bring such provisions within the ambit of
enforceability, and (ii) the court may, at the request of any
party, revise, reform or reconstruct such provisions in a manner
sufficient to cause them to be enforceable. Bank is relying and is
entitled to rely upon each and all of the provisions of this
Agreement. In no event shall any prohibition against, or the
invalidity or unenforceability of, any provision hereof affect the
validity or enforceability of any other provision hereof, and if
any provision or provisions of this Agreement should be held to be
invalid or ineffective, all other provisions hereof shall continue
in full force and effect.


 



 







 






 

8.10           
Controlling
Document. In the event of actual conflict in the terms and
provisions of this Agreement, the Note and the other Security
Instruments, the terms and provisions of this Agreement will
control.


 

8.11           
Amendment. This
Agreement may not be amended except in writing signed by the
parties hereto.


 

8.12           
Descriptive
Headings. Descriptive headings of the several articles and
sections of this Agreement are inserted for convenience of
reference only, and shall in no way alter, modify, define or be
used in construing, and do not constitute a part of, this
Agreement.


 

8.13           
Sharing of Information;
Participations. Each Obligor agrees that Bank may provide
information or knowledge Bank may have about each Obligor, this
Agreement, the Note, or the other Security Instruments to
Bank’s parent, or any of such parent’s Subsidiaries or
their successors, or to any one or more purchasers or potential
purchasers of the Note or any interest or participation therein or
in the Security Instruments. Each Obligor acknowledges and agrees
that Bank may at any time sell, assign or transfer one or more
interests or participations in all or any part of its rights or
obligations in the Note or this Agreement to one or more purchasers
or participants, whether or not related to Bank.


 


If Bank
sells one or more participations, then Bank shall maintain a
register on which it records the name and address of each
participant and the principal amounts (and stated interest) of each
participant’s participation interest with respect to any Loan
(each, a “Participant Register”) maintained in
registered form under Section 5f.103-1(c) of the United States
Treasury Regulations, Section 1.163-5 of the proposed United States
Treasury Regulations, and any other applicable temporary, final or
other successor regulations.


 


Each
transferee and participant shall, and Bank shall require each
transferee and participant to, provide to each Obligor on a timely
basis (including, to the extent required by law, on or before the
date of any transfer or assignment), and in a manner complying with
applicable United State Treasury Regulations, any tax-related
forms, certificates, documentation, information, or evidence
required under the Internal Revenue Code (including the United
States Treasury Regulations) and/or reasonably requested by
Obligors, to establish that Obligors are not subject to deduction
or withholding of Taxes with respect to any payments to such
transferee or participant hereunder (collectively,
“Bank’s Tax-Related Deliveries”). Further, to the
extent Bank is not required to provide Bank’s Tax-Related
Deliveries on or before the date of any transfer or assignment,
Bank will nevertheless use commercially reasonable efforts to do so
upon Borrower’s request.


 


A
transferee or participant shall not be entitled to receive any
greater payment under Section
2.14 than Bank would have been entitled to receive with
respect to the interest or participation sold to such transferee or
participant.


 

8.14           
Governing Law; Venue;
Jurisdiction. THIS
AGREEMENT, THE NOTE AND THE OTHER SECURITY INSTRUMENTS SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF TEXAS (WITHOUT REGARD TO CONFLICTS OF LAW
PRINCIPLES), AND THE LAWS OF THE UNITED STATES OF AMERICA
APPLICABLE IN TEXAS, EXCEPT TO THE EXTENT TO WHICH TEXAS LAW
DICTATES THAT THE LAWS OF ANOTHER STATE ARE TO GOVERN CERTAIN
PROCEDURAL AND SUBSTANTIVE MATTERS RELATING ONLY TO THE CREATION,
PERFECTION AND/OR FORECLOSURE OF THE LIENS AND SECURITY INTERESTS
CREATED HEREIN OR IN THE OTHER SECURITY INSTRUMENTS, OR TO THE
ENFORCEMENT OF BANK’S RIGHTS AND REMEDIES AGAINST THE
COLLATERAL, IN WHICH EVENT THE LAWS OF SUCH OTHER STATE SHALL
GOVERN. VENUE FOR ANY LITIGATION BETWEEN OR AMONG THE PARTIES
HERETO WITH RESPECT TO THE SUBJECT MATTER OF THIS AGREEMENT SHALL
BE HARRIS COUNTY, TEXAS. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO
PERSONAL JURISDICTION IN TEXAS, AND WAIVES ALL OBJECTIONS TO
PERSONAL JURISDICTION IN TEXAS AND VENUE IN HARRIS COUNTY FOR
PURPOSES OF SUCH LITIGATION.


 

8.15           
Waiver of Jury.
EACH PARTY HEREBY KNOWINGLY,
VOLUNTARILY, IRREVOCABLY, UNCONDITIONALLY AND INTENTIONALLY WAIVES
ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE
(WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR IN
ANY WAY RELATED TO THIS AGREEMENT, THE NOTE OR THE OTHER SECURITY
INSTRUMENTS. THIS PROVISION IS A MATERIAL INDUCEMENT TO BANK TO
PROVIDE THE FINANCING CONTEMPLATED HEREIN. EACH OBLIGOR HEREBY
CERTIFIES THAT NEITHER ANY REPRESENTATIVE OR AGENT OF BANK NOR
BANK’S COUNSEL HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
BANK WOULD NOT,
IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THIS
WAIVER.


 

8.16           
Waiver of Special
Damages. TO THE MAXIMUM
EXTENT NOT PROHIBITED BY LAW, EACH PARTY WAIVES ANY RIGHT SUCH
PARTY MAY HAVE TO CLAIM OR RECOVER IN ANY LEGAL ACTION OR
PROCEEDING ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT,
THE NOTE OR THE OTHER SECURITY INSTRUMENTS ANY SPECIAL, EXEMPLARY,
PUNITIVE OR CONSEQUENTIAL DAMAGES, OR DAMAGES OTHER THAN, OR IN
ADDITION TO, ACTUAL DAMAGES.


 



 







 






 

8.17           
Electronic Signatures and
Electronic Records. Each party to this Agreement consents to
the use of electronic and/or digital signatures by one or more
parties on this Agreement and each other Security Instrument. This
Agreement and any other Security Instruments may be signed
electronically or digitally in a manner specified solely by Bank.
Delivery of an executed counterpart of a signature page of this
Agreement and any other Security Instrument(s) by electronic means
shall be effective as delivery of a manually executed counterpart
of this Agreement or such Security Instrument(s). The parties agree
not to deny the legal effect or enforceability of any Security
Instrument solely because (a) the Security Instrument is entirely
in electronic or digital form, including any use of electronically
or digitally generated signatures or (b) an electronic or digital
record was used in the formation of the Security Instrument or the
Security Instrument was subsequently converted to an electronic or
digital record by one or more parties. The parties agree not to
object to the admissibility of any Security Instrument in the form
of an electronic or digital record, or a paper copy of an
electronic or digital document, or a paper copy of a document
bearing an electronic or digital signature, on the grounds that the
record or signature is not in its original form or is not the
original of the Security Instrument or the Security Instrument does
not comply with Chapter 26 of the Texas Business and Commerce Code.
Each Obligor represents and warrants that such Obligor has executed
each Security Instrument to which it is a party manually in person,
and that such Obligor will deliver to Bank a manually signed
original “wet signature” counterpart of each such
Security Instrument upon Bank’s request and/or as soon as
reasonably possible.


 

8.18           
Counterparts. This
Agreement may be executed in any number of counterparts, each of
which shall be an original, and all of which together shall
constitute one and the same instrument.


 

8.19           
USA Patriot Act
Notification. The following notification is provided to
Borrower pursuant to Section 326 of the USA Patriot Act of 2001, 31
U.S.C. Section 5318:


 


IMPORTANT
INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT. To help the
government fight the funding of terrorism and money laundering
activities, Federal law requires all financial institutions to
obtain, verify, and record information that identifies each person
or entity that opens an account, including any deposit account,
treasury management account, loan, other extension of credit, or
other financial services product. What this means for a Borrower:
When a Borrower opens an account, if such Borrower is an
individual, Bank will ask for such Borrower’s name, taxpayer
identification number, residential address, date of birth, and
other information that will allow Bank to identify such Borrower,
and, if such Borrower is not an individual, Bank will ask for such
Borrower’s name, taxpayer identification number, business
address, and other information that will allow Bank to identify
such Borrower. Bank may also ask, if such Borrower is an
individual, to see such Borrower’s driver’s license or
other identifying documents, and, if such Borrower is not an
individual, to see such Borrower’s legal organizational
documents or other identifying documents.


 


8.20           Statute
of Frauds; No Oral Agreements. THIS AGREEMENT AND ALL DOCUMENTS AND
INSTRUMENTS REFERENCED HEREIN, ATTACHED HERETO OR EXECUTED IN
CONNECTION HEREWITH CONSTITUTE THE FINAL AGREEMENT BETWEEN OR AMONG
OBLIGORS AND BANK, AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BETWEEN OR
AMONG OBLIGORS AND BANK. THERE ARE NO UNWRITTEN ORAL AGREEMENTS
BETWEEN OR AMONG OBLIGORS AND BANK.


 



[Signature Page Follows]




-[Insert
Page Number]-


 








 






IN
WITNESS WHEREOF, this Loan Agreement is executed effective as of
the date first set forth above.


 


	
 

	

BORROWER:


	
 

	
 


	
 

	
SANARA
MEDTECH INC.


	
 

	
By: /s/ Michael D.
McNeil


	
__________________________

	
Michael McNeil,
Chief Financial Officer


	
 

	
 


	
 

	

BANK:


	
 

	
 


	
 

	
CADENCE BANK, N.A.


	
 

	
By: /s/ Emily Loomis


	
_________________________ 



	
Emily Loomis,
Senior Vice President


	
 

	
  


	
 

	
GUARANTORS:


	
 

	
  


	
 

	
CELLERATE,
LLC


	
 

	
By: /s/ Michael D.
McNeil


	
_________________________ 



	
Michael McNeil,
Chief Financial Officer


	
 

	
  


	
 

	
UNITED
WOUND AND SKIN SOLUTIONS, LLC


	
 

	
By:
/s/ Michael D.
McNeil


	
_________________________ 



	
Michael
McNeil, Vice President







 


 


	
Schedule
5.8

	
Transactions
with Affiliates


	
Schedule
6.9:

	
Subsidiaries
and Investments


	
Schedule
6.13:

	
Collateral
Locations


	
Exhibit
A:

	
Form
of Compliance Certificate