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                                                                 EXHIBIT 10.5(c)


                    INTELLECTUAL PROPERTY SECURITY AGREEMENT

         This Intellectual Property Security Agreement is entered into as of
June 11, 2001 by and between SILICON VALLEY BANK ("Bank") and PARAGON HEALTH
CARE CORPORATION ("Grantor").

                                    RECITALS

         A. Bank has agreed to make certain advances of money and to extend
certain financial accommodation to Grantor (the "Loans") in the amounts and
manner set forth in that certain Loan and Security Agreement by and between Bank
and Grantor dated June 11, 2001 (as the same may be amended, modified or
supplemented from time to time, the "Loan Agreement"; capitalized terms used
herein are used as defined in the Loan Agreement). Bank is willing to make the
Loans to Grantor, but only upon the condition, among others, that Grantor shall
grant to Bank a security interest in certain Copyrights, Trademarks, Patents,
and Mask Works to secure the obligations of Grantor under the Loan Agreement.

         B. Pursuant to the terms of the Loan Agreement, Grantor has granted to
Bank a security interest in all of Grantor's right, title and interest, whether
presently existing or hereafter acquired, in, to and under all of the
Collateral.

         NOW, THEREFORE, for good and valuable consideration, receipt of which
is hereby acknowledged, and intending to be legally bound, as collateral
security for the prompt and complete payment when due of its obligations under
the Loan Agreement, Grantor hereby represents, warrants, covenants and agrees as
follows:

                                    AGREEMENT

         To secure its obligations under the Loan Agreement, Grantor grants and
pledges to Bank a security interest in all of Grantor's right, title and
interest in, to and under its Intellectual Property Collateral (including
without limitation those Copyrights, Patents, Trademarks and Mask Works listed
on Schedules A, B, C, and D hereto), and including without limitation all
proceeds thereof (such as, by way of example but not by way of limitation,
license royalties and proceeds of infringement suits), the right to sue for
past, present and future infringements, all rights corresponding thereto
throughout the world and all re-issues, divisions, continuations, renewals,
extensions and continuations-in-part thereof.

         This security interest is granted in conjunction with the security
interest granted to Bank under the Loan Agreement. The rights and remedies of
Bank with respect to the security interest granted hereby are in addition to
those set forth in the Loan Agreement and the other Loan Documents, and those
which are now or hereafter available to Bank as a matter of law or equity. Each
right, power and remedy of Bank provided for herein or in the Loan Agreement or
any of the Loan Documents, or now or hereafter existing at law or in equity
shall be cumulative and concurrent and shall be in addition to every right,
power or remedy provided for herein and the exercise by Bank of any one or more
of the rights, powers or remedies provided for in this Intellectual Property
Security Agreement, the Loan Agreement or any of the other Loan

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Documents, or now or hereafter existing at law or in equity, shall not preclude
the simultaneous or later exercise by any person, including Bank, of any or all
other rights, powers or remedies.

         IN WITNESS WHEREOF, the parties have cause this Intellectual Property
Security Agreement to be duly executed by its officers thereunto duly authorized
as of the first date written above.

                                                            GRANTOR:

Address of Grantor:                           Paragon Health Care Corporation

10809 Executive Center Drive, Suite 110
Little Rock, Arkansas  72211
                                              By: ____________________________
Attn:  ______________________
                                              Title: _________________________


                                              BANK:

Address of Bank:                              SILICON VALLEY BANK

3003 Tasman Drive
Santa Clara, CA 95054-1191

                                              By: ____________________________
Attn: ______________________
                                              Title: _________________________


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                                    EXHIBIT A

                                   Copyrights

Description                      Registration/                    Registration/
                                 Application                      Application
                                 Number                           Date

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                                    EXHIBIT B

                                     Patents

Description                      Registration/                    Registration/
                                 Application                      Application
                                 Number                           Date

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                                    EXHIBIT C

                                   Trademarks

Description                      Registration/                    Registration/
                                 Application                      Application
                                 Number                           Date

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                                    EXHIBIT D

                                   Mask Works

Description                      Registration/                    Registration/
                                 Application                      Application
                                 Number                           Date