Debtor’s Motion to Use Cash Collateral and to Approve DIP Financing Page 1 of 28 

Jeff P. Prostok 

State Bar No. 16352500 

Lynda L. Lankford 

State Bar No. 11935020 

Dylan T.F. Ross 

State Bar No. 24104435 

FORSHEY & PROSTOK LLP 

777 Main St., Suite 1550 

Fort Worth, TX 76102 

Telephone: 817-877-8855 

Facsimile: 817-877-4151 

jprostok@forsheyprostok.com

llankford@forsheyprostok.com 

dross@forsheyprostok.com 

 

PROPOSED ATTORNEYS FOR DEBTOR 

AND DEBTOR IN POSSESSION

IN THE UNITED STATES BANKRUPTCY COURT 

FOR THE NORTHERN DISTRICT OF TEXAS 

FORT WORTH DIVISION 

In re: ) Chapter 11 Case 

 )

LION STAR NACOGDOCHES HOSPITAL, 

LLC d/b/a NACOGDOCHES MEMORIAL 

HOSPITAL 

) 

) 

)

 Case No. 23-43535-MXM-11 

)

 Debtor. ) Emergency Hearing Requested 

DEBTOR’S EMERGENCY MOTION FOR INTERIM AND FINAL ORDERS 

(I) AUTHORIZING THE DEBTOR TO OBTAIN POSTPETITION FINANCING ON 

A SECURED, SUPERPRIORITY BASIS; (II) AUTHORIZING THE DEBTOR TO USE 

CASH COLLATERAL; (III) SCHEDULING A FINAL HEARING; (IV) MODIFYING 

THE AUTOMATIC STAY, AND (V) GRANTING RELATED RELIEF 

Emergency relief has been requested. Relief is requested not later than 

November 21, 2023. 

If you object to the relief requested or you believe that emergency 

consideration is not warranted, you must appear at the hearing if one is set, 

or file a written response prior to the date that relief is requested in the 

preceding paragraph. Otherwise, the Court may treat the pleading as 

unopposed and grant the relief requested. 

A hearing will be conducted on this matter on November 21, 2023 at 2:00 

p.m. in Courtroom 128, United States Courthouse, 501 West 10th Street, Fort 

Worth, Texas 76102. 

Audio communication will be by use of the Court’s dial-in facility. You 

may access the facility at Dial-In: 650.479.3207, Meeting ID: 474 603 746. 

Video communication will be by use of the Cisco WebEx platform.

Connect via the Cisco WebEx application or click the link on Judge 

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Mullin’s home page. Click the settings icon in the upper right corner and 

enter your name under the personal information setting. 

Hearing appearances must be made electronically in advance of 

electronic hearings. To make your appearance, click the “Electronic 

Appearance” link on Judge Mullin’s home page. Select the case name, 

complete the required fields and click “Submit” to complete your 

appearance.

TO THE HONORABLE MARK X. MULLIN: 

COMES NOW Lion Star Nacogdoches Hospital LLC d/b/a Nacogdoches Memorial 

Hospital (the “Debtor”), as debtor in possession, and pursuant to Sections 105, 362, 363, 364, 

503(b), and 507 of Title 11 of the United States Code (the “Bankruptcy Code”) and Rules 2002, 

4001, 6004, and 9014 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”) for 

entry of interim order, substantially in the form attached hereto as Exhibit “A” (the “Interim 

Order”) and a final order (the “Final Order,” and together, the “DIP Orders”) to be submitted to 

the Court for approval in connection with the final hearing on the Motion (the “Final Hearing”), (i) 

authorizing the Debtor to obtain postpetition financing on a secured, superpriority basis; (ii) 

authorizing the Debtor to use Cash Collateral; (iii) scheduling a final hearing; (iv) modifying the 

automatic stay, and (v) granting related relief. In support of the Motion, the Debtor respectfully 

represents as follows: 

JURISDICTION AND VENUE

1. This Court has jurisdiction to consider this Motion pursuant to 28 U.S.C. sections 

157 and 1334. This is a core proceeding pursuant to 28 U.S.C. section 157(b). Venue is proper 

before this Court pursuant to 28 U.S.C. sections 1408 and 1409.

2. The basis for the relief requested herein are Sections 105, 361, 362, 363(c), 

363(e), 364(c), 364(e), 503(b), and 507 of the Bankruptcy Code and Bankruptcy Rules 2002, 

4001, 6004, and 9014. 

BACKGROUND 

3. On November 17, 2023, (the “Petition Date”), the Debtor commenced this case 

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by filing a voluntary petition for relief under Chapter 11 of the Bankruptcy Code. The Debtor 

continues to manage and operate its business as a debtor in possession pursuant to sections 

1107 and 1108 of the Bankruptcy Code. No trustee, examiner, or committee has been 

appointed in this case. 

4. The Debtor is a Texas limited liability company that owns and operates the 

Nacogdoches Memorial Hospital located at 1204 N. Mound Street, Nacogdoches, Texas (the 

“Hospital”). The Hospital is a 231-patient room facility that provides, among other services, 

emergency care, general surgery, cardiac care, geriatric care and maternity care. The Hospital 

serves the East Texas communities in and around Nacogdoches County and employs more 

than 600 health care providers and support staff. 

5. Additional information regarding the Debtor and this chapter 11 case, including 

the Debtor’s business operations, capital structure, financial condition, and the reasons for and 

objective of this chapter 11 case is set forth in the First Day Declaration of Ed King filed herein 

(the “Declaration”). 

RELIEF REQUESTED 

6. By this Motion, the Debtor seeks entry of the Interim Order substantially in the 

form attached hereto as Exhibit “A”, and after the Final Hearing, entry of a Final Order: 

(a) authorizing the Debtor to obtain postpetition financing on a secured, superpriority 

basis pursuant to the Superpriority Debtor-In-Possession Credit and Security 

Agreement substantially in the form attached hereto as Exhibit “B” (the “DIP 

Credit Agreement”) between the Debtor, as Borrower, and eCapital Healthcare 

Corp. (the “DIP Lender”), as Lender providing for: 

(i) a revolving credit facility in the principal amount of up to $10,000,000 (the “DIP 

Facility”); and 

(ii) the roll-up of the Pre-Petition Obligations (as defined below), such that, 

effective immediately upon the making of an advance under the DIP Credit 

Agreement, the Pre-Petition Obligations shall be automatically deemed to 

constitute loans under the DIP Credit Agreement (on a dollar-for-dollar basis) 

which shall be due and payable in accordance with the terms and conditions 

set forth in the DIP Credit Agreement as if originally funded thereunder (such 

aggregate amount advance, the “Roll-Up Amount”); 

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(b) authorizing the Debtor to execute, deliver and perform under the DIP Credit 

Agreement and any security agreements, control agreements and other Loan 

Documents (as defined in the DIP Credit Agreement) related to the DIP Facility 

(collectively, the “DIP Facility Documents”); 

(c) authorizing the Debtor, pursuant to the Interim Order, to borrow up to the interim 

amount of $1,300,000 plus the Roll-Up Amount pursuant to the DIP Credit 

Agreement and Interim Order; 

(d) granting to the DIP Lender on account of the DIP Facility and all obligations of the 

Debtor incurred under the DIP Facility Documents and DIP Orders (collectively, 

the “DIP Obligations”), an allowed superpriority administrative expense claim, 

subject to the Carve Out (as provided in the DIP Orders); 

(e) granting to the DIP Lender automatically perfected security interests in and lien on 

all of the DIP Collateral (as defined below), including all property constituting “cash 

collateral” as defined in section 363(a) of the Bankruptcy Code (“Cash Collateral”); 

(f) authorizing the Debtor to pay the principal, interest, fees, expenses and other 

amounts due and owing under the DIP Facility as provided in the DIP Orders; 

(g) authorizing the Debtor to use Cash Collateral in accordance with the terms of the 

DIP Documents, the DIP Orders and the applicable Budget; 

(h) approving the forms of adequate protection to be provided to the Pre-Petition 

Lender (as defined below) to protect the Pre-Petition Lender’s interest in 

Prepetition Collateral as provided in the DIP Orders; 

(i) approving certain stipulations, waivers and releases as provided in the DIP Credit 

Agreement and DIP Orders; 

(j) authorizing the Debtor, subject to entry of the Final DIP Order and the Carve Out, 

to waive any right to surcharge the DIP Collateral pursuant to section 506(c) of the 

Bankruptcy Code; 

(k) providing that, subject to entry of the Final DIP Order, the DIP Lender shall be 

entitled to all the rights and benefits of the “equities of the case” exception under 

section 552(b) of the Bankruptcy Code; 

(l) modifying the automatic stay imposed by section 362 of the Bankruptcy Code to 

the extent necessary to implement the provisions of the DIP Facility Documents, 

subject to the terms of the DIP Orders; 

(m) scheduling the Final Hearing to consider entry of the Final DIP Order authorizing 

and approving, on a final basis, the relief requested herein and approving the form 

and manner of the notice thereof; and 

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(n) waiving any applicable stay (including under Bankruptcy Rule 6004) to provide for 

the immediate effectiveness of the DIP Orders. 

MATERIAL TERMS OF THE DIP FACILITY1

7. Pursuant to Bankruptcy Rule 4001 and local rules of procedure, the Debtor 

submits the following summary of material terms of the DIP Facility, as set forth in the DIP 

Orders and the DIP Facility Documents: 

Summary of Material Term

DIP Credit 

Agreement Parties 

DIP Credit 

Agreement Preamble 

Borrower: Lion Star Nacogdoches Hospital, LLC 

Lender: eCapital Healthcare Corp. 

DIP Facility

DIP Credit 

Agreement §2.1 

Interim Order ¶2(a), 

DIP Credit 

Agreement §2.1(e)

Secured superpriority debtor-in-possession revolving credit facility in the 

aggregate principal amount of up to $10,000,000, including a Roll-Up of PrePetition Credit Obligations. 

The Debtor may borrow up to $1,300,000 plus the Roll Up Amount on an interim 

basis and up to a total of $10,000,000 on a final basis, which may be increased 

as provided in section 2.1(e) of the DIP Credit Agreement. 

Roll-Up 

DIP Credit 

Agreement §2.1(b) 

Interim Order ¶J(i) 

Roll-Up. Effective immediately upon the making of an Advance under this 

Agreement (such date, the “Roll-Up Date”), and without any further action by any 

party to this Agreement or the other Loan Document, the Bankruptcy Court or 

any other Person, (i) the Pre-Petition Obligations shall be automatically deemed 

to constitute Loans under this Agreement (on a dollar-for-dollar basis) (such 

Loans, the “Rolled-Up Loans”) which shall be due and payable in accordance 

with the terms and conditions set forth in this Agreement as if originally funded 

hereunder on the date of such Advance (such aggregate amount advance, the 

“Roll-Up Amount”) and (ii) from and after the Roll-Up Date, Pre-Petition 

Obligations shall be automatically and irrevocably reduced by the Roll-Up 

Amount. 

As of the date of filing of this Chapter 11 Case (the “Petition Date”), the aggregate 

principal amount outstanding under the Pre-Petition Credit Facility was not less 

than $4,664,661.94 (collectively, together with accrued and unpaid interest, 

outstanding letters of credit and bankers’ acceptances, any reimbursement 

obligations (contingent or otherwise) in respect of letters of credit and bankers’ 

acceptances, any fees, expenses and disbursements (including, without 

limitation, attorneys’ fees, accountants’ fees, auditor fees, appraisers’ fees and 

financial advisors’ fees, and related expenses and disbursements), treasury, 

cash management, bank product and derivative obligations, indemnification 

obligations, guarantee obligations, and other charges, amounts and costs of 

whatever nature owing, whether or not contingent, whenever arising, accrued, 

accruing, due, owing, or chargeable in respect of any of the Debtor’s obligations 

pursuant to, or secured by, the Pre-Petition Credit Documents, including all 

interest, fees (including amendment fees), prepayment premiums, costs and 

other charges allowable under section 506(b) of the Bankruptcy Code, the “Pre1 This concise statement is qualified in its entirety by reference to the applicable provisions of the DIP 

Facility Documents or Interim Order, as applicable. 

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Petition Credit Obligations”). 

Borrowing Limits 

and Conditions 

DIP Credit 

Agreement, §§ 1.2, 

2.1(a), 4.1 

Advances. Subject to the provisions of this Agreement, Lender shall make 

Advances to Borrower under the Revolving Facility from time to time during the 

Term, and not more than once per each week unless agreed to by Lender and 

subject to the processing fees set forth in Section 2.4; provided that, 

notwithstanding any other provision of this Agreement (but subject to the 

provisions of this Section 2.1(a)), the principal amount at any one time 

outstanding under the Revolving Facility shall not exceed the Revolving Loan 

Limit. The Revolving Facility is a revolving credit facility, which may be drawn, 

repaid, and redrawn from time to time as permitted under this Agreement. Any 

determination as to whether there is availability within the Borrowing Base for 

Advances shall be made by Lender in its discretion and is final and binding upon 

Borrower. Unless otherwise permitted by Lender, each Advance requested by 

Borrower shall be in an amount of at least $25,000. Subject to the provisions of 

this Agreement, Borrower may request Advances under the Revolving Facility 

up to and including the Availability. Lender may, in Lender’s sole discretion, 

withhold from Advances made to Borrower such amounts as may be necessary 

to pay interest on the Revolving Facility and other Obligations hereunder. In 

addition, Advances under the Revolving Facility automatically may, in the 

discretion of Lender, be made for the payment of interest on the Revolving 

Facility and other Obligations on the date when due to the extent of Availability 

and as provided for herein. 

“Availability” shall mean the Revolving Loan Limit less all Revolving Loans 

outstanding less cash on hand, minus any reserves against Availability imposed 

by the Lender in its discretion. 

“Borrowing Base” shall mean, as of any date of determination: (a) the Net 

Collectible Value of Eligible Receivables of the Borrower, as such Net Collectible 

Value is determined by the Lender with reference to the most recent Borrowing 

Certificate, other factors deemed relevant by the Lender and otherwise in 

accordance with the Agreement; provided, however, that if as of such date of 

determination the most recent Borrowing Certificate is of a date more than four 

(4) Business Days before such date, the Borrowing Base shall be determined by 

Lender; minus (b) the amount of any Carve-Outs, reserves, or adjustments 

against the Borrowing Base provided for in this Agreement or determined by the 

Lender from time to time. 

The obligations of the DIP Lender to consummate the transactions contemplated 

by the DIP Credit Agreement and to make Advances thereunder are subject to 

the satisfaction of further standard conditions as outlined in section 4.1 (a-q) of 

the DIP Credit Agreement.

Use of DIP Facility 

and Cash 

Collateral, Budget, 

Variance, Budget 

Covenant 

Interim Order ¶¶ 3, 

5, 6 

DIP Credit 

Agreement §1.2 

Use of Cash Collateral. Subject to the terms and conditions of this Interim Order, 

the DIP Facility, and the DIP Documents and in accordance with the Budget 

(subject to such variances as permitted in the DIP Documents), the Debtor is 

authorized to use Cash Collateral until the Termination Date (as defined herein). 

Budget Maintenance. The use of borrowings under the DIP Facility and Cash 

Collateral shall be in accordance with the Budget depicting on a weekly basis, 

cash revenues, receipts, expenses and disbursements, net cash flows, inventory 

receipts and other items set forth therein, for the first thirteen (13) week period 

following the Effective Date (as defined in the DIP Documents) which shall be in 

form and substance satisfactory to, and approved by the DIP Lender in its sole 

discretion prior to the Effective Date. The Budget shall be updated by the Debtor 

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(with the consent and/or at the reasonable request of the DIP Lender) from time 

to time in accordance with the DIP Documents. No such updated, modified, or 

supplemented budget shall be effective until so approved (which approval shall 

be deemed given unless the DIP Lender objects in writing (for which email shall 

suffice) to Debtor’s counsel within five (5) business days following actual receipt 

thereof), and once approved, shall thereafter be deemed the “Budget”; provided, 

however, that in the event that the DIP Lender and the Debtor cannot agree as 

to an updated, modified or supplemented budget, the prior approved Budget 

shall continue in effect for this Chapter 11 Case, and such disagreement shall 

give rise to an Event of Default under the DIP Credit Agreement and this Interim 

Order once the period covered by the prior approved Budget has terminated. 

A copy of any Budget (or updated Budget) shall be delivered to counsel for a 

Committee (if appointed) and the U.S. Trustee after (or if) it has been approved 

by the DIP Lender. 

Budget Compliance. The Debtor shall at all times comply with the Budget, 

subject to the variances set forth in the DIP Credit Agreement. The Debtor shall 

provide all reports and other information as required in the DIP Credit Agreement 

(subject to the applicable grace periods provided therein). The Debtor’s failure 

to comply with the Budget (including the variances set forth in the DIP Credit 

Agreement and in this Interim Order) or to provide the reports and other 

information required in the DIP Credit Agreement and this Interim Order shall 

constitute an Event of Default (as defined herein) following the expiration of any 

applicable cure period set forth in the DIP Credit Agreement or in this Interim 

Order. 

(i) By no later than 5:00 p.m. (prevailing Eastern Time) on November 30, 2023 

and every second Thursday thereafter, the Debtors shall deliver to the DIP 

Lender a variance report (in substantially the same format as the Budget) 

showing actual cash receipts, disbursements and other applicable information 

for the immediately preceding calendar week (ending on the immediately 

preceding Friday) noting therein all variances and including explanations for all 

such variances, on a line-item basis, from values set forth for such period(s) in 

the Budget or the most current Budget, as applicable (each, a “Variance 

Report”), provided, that each Variance Report delivered on a Testing Date (as 

defined herein) shall include a cumulative variance report (in substantially the 

same format as the Initial Approved Budget) showing actual cash receipts, 

disbursements and other applicable information for the immediately preceding 

week period (ending on the immediately preceding Friday) (the “Budget Period;” 

provided, that for the first four weeks following the Petition Date, the Budget 

Period shall begin on the Petition Date and end on the Testing Date), noting 

therein all variances and including explanations for all such variances, on a lineitem and aggregate basis, from values set forth for such period(s) in the most 

current approved Budget. 

(ii) Budget Covenants. The permitted variances listed below (collectively, the 

“Permitted Variances”) shall be tested on a rolling four-week basis, which shall 

first be reported on November 30, 2023, and on the Thursday of every second 

week thereafter (with respect to the immediately preceding Budget Period) (each 

such date, a “Testing Date”). The budget-related covenants under this Section 

6(d) are collectively referred to herein as the “Budget Covenants”. 

“Permitted Variance” shall mean a variance of no more than twelve and one half 

percent (12.5%) between the projected Net Operating Cash Flow as set forth 

and the actual Net Operating Cash Flow. 

Fees Facility Fee. On the Closing Date, and as a condition of Closing, the Borrower 

shall pay to the Lender one percent (1.0%) of the Facility Cap as a nonrefundable 

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DIP Credit 

Agreement §§ 3.1-

3.5, 3.8 

fee (such fee and the fee payable pursuant to Section 2.1(e) are referred to here 

in as the “Facility Fee”). 

Unused Line Fee. The Borrower shall pay to the Lender monthly an unused line 

fee (the “Unused Line Fee”) in an amount equal to eight and one third basis 

points (i.e., 0.0833%) per month of the difference derived by subtracting (i) the 

average daily balance under the Revolving Facility outstanding during the 

preceding month, from (ii) the Facility Cap. The Unused Line Fee shall be 

payable monthly in arrears but in no event later than the first day of each 

successive calendar month (starting with the first full calendar month following 

the Closing Date). The final payment shall be pro-rated to the date of payment 

in full and shall be paid on that date as part of the Obligations. 

 

Collateral Management Fee. The Borrower shall pay the Lender as additional 

interest a monthly collateral management fee (the “Collateral Management Fee”) 

for monitoring and servicing the Revolving Facility, equal to one fourth of one 

percent (i.e., 0.25%) per month, calculated on the basis of the average daily 

balance under the Revolving Facility outstanding during the preceding month. 

The Collateral Management Fee shall be payable monthly in arrears but in no 

event later than the first calendar day of each successive calendar month 

(starting with the first full calendar month following the Closing Date). The final 

payment shall be pro-rated to the date of payment in full and shall be paid on 

that date as part of the Obligations. 

Termination Fee. Upon a termination of the Revolving Facility for any reason, 

Borrower shall pay Lender (in addition to the then outstanding principal, accrued 

interest and other Obligations (other than indemnity obligations with respect to 

which no claim has been made) relating to the Revolving Facility pursuant to the 

terms of this Agreement and any other Loan Documents), as yield maintenance 

for the loss of bargain and not as a penalty, an amount equal to the Termination 

Fee. Notwithstanding any other provision of any Loan Document, no Termination 

Fee as described above shall be due and payable if (i) Borrower refinances the 

Obligations (in whole or in part) with Lender (which, for purposes of this Section 

3.4, shall include Lender and any of its parents, subsidiaries or Affiliates), (ii) this 

Agreement terminates in accordance with its terms at the end of its Term, or (iii) 

Borrower terminates this Agreement within ten (10) days after Borrower provides 

written notice to Lender of a default by Lender hereunder, and such default by 

Lender remains uncured as of the date of such termination. 

Software Interface Fee. Upon the first occurrence of an Event of Default, 

Borrower shall pay to Lender a nonrefundable fee of $5,000 for the setup and 

implementation of the software interface used by Lender to calculate the 

Borrowing Base. Payment of the setup fee shall be made, at the discretion of 

Lender: (i) by application of available funds in the Concentration Account 

pursuant to Section 2.5, (ii) by application of Advances under the Revolving 

Facility pursuant to Section 2.1, or (iii) upon two Business Days’ notice, directly 

by Borrower. Commencing with the first calendar month in which an Event of 

Default occurs, Borrower shall pay Lender a monthly software interface fee (the 

“Software Interface Fee”) for maintaining and servicing the software interface 

used by Lender to calculate the Borrowing Base, equal to $1,000 per month. The 

Software Interface Fee shall be payable monthly in arrears but in no event later 

than the first day of each successive calendar month. 

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Interim Order ¶ 8 

tenths of one percent (1.2%) of the Facility Cap as a nonrefundable structuring 

fee, which shall be deemed fully earned and paid upon Closing. 

DIP Lender’s Fees and Expenses. Without duplication of amounts required to 

be paid pursuant to the DIP Facility Documents, upon entry of this Interim Order, 

the Debtor shall pay in cash all fees, expenses, and disbursements payable to 

the DIP Lender. The post-petition payment of the fees, expenses, and 

disbursements set forth in the foregoing sentence shall be made within ten (10) 

days (which time period may be extended by the applicable professional in its 

sole discretion) upon the receipt by the Debtor, the creditors’ committee (if any) 

and the U.S. Trustee (the “Review Period”) of invoices therefor (the “Invoiced 

Fees”) and without the necessity of filing formal fee applications, including such 

amounts arising before or after the Petition Date. The invoices for such Invoiced 

Fees shall include (i) a summary of the work performed during the relevant 

compensation period; (ii) the name of, hourly rate (if applicable) of, and number 

of hours worked by each professional and paraprofessional who worked on the 

matter during the relevant compensation period; and (iii) the total fee amount 

being requested. The Debtor, the Committee (if any), and the U.S. Trustee may 

object to any portion of the Invoiced Fees within the Review Period by written 

notice to the applicable professional or by filing with the Court a motion or other 

pleading, on at least ten (10) days prior written notice to the applicable DIP 

Lender and the applicable professional of any hearing on such motion or other 

pleading, setting forth the specific objections to the disputed Invoiced Fees in 

reasonable narrative detail and the bases for such objections; provided, that 

payment of any undisputed portion of Invoiced Fees shall be paid within the time 

frame set forth above and shall not be delayed based on any objections thereto; 

provided, further, that the applicable parties shall endeavor in good faith to 

consensually resolve any dispute prior to the filing of any such motion or 

pleading.

DIP Collateral

(including claims 

arising under chapter 

5 of the Bankruptcy 

Code) 

Interim Order ¶10(b) 

Subject to the Carve-Out, “DIP Collateral” shall mean the Debtor’s right, title, and 

interest in and to the following, whether now owned or hereafter created, 

acquired or arising, and wherever located: 

(i) all Accounts (including healthcare insurance receivables) and related 

property; 

(ii) all of the Debtor’s deposit accounts; 

(iii) all books and records, whether or not related to any Collateral; 

(iv) all other personal property and fixtures of Debtor, including all goods, 

inventory, Equipment, furniture, fixtures, General Intangibles (including, 

without limitation, payment intangibles and software), chattel paper 

(whether tangible or electronic), supporting obligations, investment 

property, financial assets, documents, instruments (including any 

promissory notes), securities, securities accounts, contract rights or rights 

to payment of money, leases, permits, license agreements, franchise 

agreements, commercial tort claims, stock in direct and indirect 

subsidiaries, machinery, cash, letter-of-credit rights (whether or not the 

letter of credit is evidenced by a writing), Intellectual Property, copyrights, 

trademarks, patents, and tradestyles, and 

(v) any and all claims, rights, and interests in any of the above and all 

substitutions for, additions, attachments, accessories, accessions, and 

improvements to Superpriority Debtor-in-Possession Credit and Security

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Agreement, and replacements, products, proceeds, and insurance 

proceeds of any or all of the foregoing.

Liens and Priorities 

Interim Order 

¶¶ 9 and 10(a) 

DIP Superpriority Claims. Subject and subordinate to the Carve-Out as set forth 

in this Interim Order, upon entry of this Interim Order, the DIP Lender is hereby 

granted, pursuant to Section 364(c)(1) of the Bankruptcy Code, allowed 

superpriority administrative expense claims in the Chapter 11 Case and any 

successor cases (collectively, the “DIP Superpriority Claims”) for all DIP 

Obligations. Except as set forth herein, the DIP Superpriority Claims shall have 

priority over any and all other obligations, liabilities, and indebtedness of each 

Debtor other than the Carve-Out, including without limitation any and all 

administrative expense claims and unsecured claims against the Debtor or its 

estate in the Chapter 11 Case and any successor cases, at any time existing or 

arising, of any kind or nature whatsoever, including, without limitation, 

administrative expenses of the kinds specified in or ordered pursuant to Sections 

105, 326, 328, 330, 331, 364, 503(a), 503(b), 507(a), 507(b), 546(c) (subject to 

entry of a Final Order), 546(d), 726, 1113 and 1114 of the Bankruptcy Code, and 

any other provision of the Bankruptcy Code, as provided under Section 364(c)(1) 

of the Bankruptcy Code. No lien or interest avoided and preserved for the benefit 

of the estate pursuant to Section 551 of the Bankruptcy Code shall be pari passu 

with or senior to the DIP Superpriority Claims. 

DIP Liens. (a) As security for the full and timely payment of the DIP Facility, 

subject to the Carve-Out, the DIP Lender is hereby granted, pursuant to Sections 

364(c)(2), (c)(3), and (d)(1) of the Bankruptcy Code, a first priority, senior, 

perfected priming lien upon the DIP Collateral (defined below), which liens shall 

constitute valid, enforceable, non-avoidable, fully perfected, and first-priority 

security interests in and liens upon all DIP Collateral (the “DIP Liens”). The DIP 

Liens securing the DIP Obligations are valid, automatically perfected, nonavoidable, senior in priority, and superior to any security, mortgage, collateral 

interest, lien, or claim to any of the DIP Collateral, except that the DIP Liens shall 

be subject to the Carve-Out as set forth in this Interim Order and shall otherwise 

be junior only to Permitted Prior Liens. Other than as set forth herein or in the 

DIP Documents, the DIP Liens shall not be made subject to or pari passu with 

any lien or security interest heretofore or hereinafter granted in the Chapter 11 

Case or any successor cases and shall be valid and enforceable against any 

trustee appointed in the Chapter 11 Case or any successor cases, upon the 

conversion of any of the Chapter 11 Case to a case under Chapter 7 of the 

Bankruptcy Code (or in any other successor case), and/or upon the dismissal of 

any of the Chapter 11 Case or successor cases. The DIP Liens shall not be 

subject to Sections 510, 549, or 550 of the Bankruptcy Code. No lien or interest 

avoided and preserved for the benefit of the estate pursuant to Section 551 of 

the Bankruptcy Code shall be pari passu with or senior to the DIP Liens. 

Carve Out

Interim Order ¶12 

Carve Out. Notwithstanding anything in this Interim Order, the DIP Facility 

Documents, or any other order of this Court to the contrary, all claims and liens 

granted hereunder to or for the benefit of the DIP Lender, including the DIP 

Superpriority Claims and the DIP Liens, shall be subject to payment of the CarveOut. As used in this Interim Order and the DIP Credit Agreement, the term 

“Carve-Out” means the (i) amounts payable pursuant to 28 U.S.C. § 1930(a)(6) 

and any fees payable to the Clerk of the Bankruptcy Court, plus interest thereon; 

(ii) the amounts payable to Forshey & Prostok, LLP (“Forshey Prostok”) as 

Debtor’s bankruptcy counsel pursuant to Sections 327, 328 and 503(b), in an 

amount not to exceed $800,000 (plus any amount held by Forshey Prostok as a 

prepetition retainer); and (iii) the amounts payable to professionals other than 

Forshey Prostok employed at the expense of the Debtor’s estate of this Chapter 

11 Case pursuant to Sections 327, 328, 503(b), or 1103 of the Bankruptcy Code, 

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in an amount not to exceed $200,000 (which amount has been fully funded as a 

prepetition retainer), or as otherwise provided in an approved Budget. 

Adequate 

Protection for 

Prepetition Lender 

Interim Order 

¶ 3(a-e),

(a) Adequate Protection Liens. Pursuant to Sections 361, 363(e), and 364(d) 

of the Bankruptcy Code, as adequate protection of the interests of the PrePetition Lender against any Diminution in Value, the Debtor hereby grants to the 

Pre-Petition Lender a continuing, valid, binding, enforceable, and perfected 

postpetition security interests in and liens on all DIP Collateral (the “Adequate 

Protection Liens”). 

(b) Priority of Adequate Protection Liens. The Adequate Protection Liens shall 

be subject to the Carve-Out and shall otherwise be junior (in order of priority) 

only to the DIP Liens. The Adequate Protection Liens shall otherwise be senior 

to all other security interests in or liens on any of the Debtor’s assets. 

(c) Except as provided herein, the Adequate Protection Liens shall not be made 

subject to or pari passu with any lien or security interest heretofore or hereinafter 

in the Chapter 11 Case or any successor cases and shall be valid and 

enforceable against any trustee appointed in any of the Chapter 11 Case or any 

successor cases, or upon the dismissal of any of the Chapter 11 Case or 

successor cases. The Adequate Protection Liens shall not be subject to 

Sections 510, 549, or 550 of the Bankruptcy Code. No lien or interest avoided 

and preserved for the benefit of the estate pursuant to Section 551 of the 

Bankruptcy Code shall be pari passu with or senior to the Pre-Petition Liens or 

the Adequate Protection Liens. 

(d) Adequate Protection Superpriority Claim. Subject and subordinate to the 

Carve- Out as set forth in this Interim Order, as further adequate protection of 

the interests of the Pre-Petition Lender in the Prepetition Collateral against any 

Diminution in Value, the Pre-Petition Lender is hereby granted as and to the 

extent provided by Section 507(b) of the Bankruptcy Code an allowed 

superpriority administrative expense claim in each of the Chapter 11 Case and 

any successor cases (the “Adequate Protection Superpriority Claim”). 

(e) Priority of the Adequate Protection Superpriority Claim. Except as set forth 

herein, the Adequate Protection Superpriority Claim shall have priority over all 

administrative expense claims and unsecured claims against the Debtor or its 

estate, now existing or hereafter arising, of any kind or nature whatsoever, 

including, without limitation, administrative expenses of the kinds specified in or 

ordered pursuant to Sections 105, 326, 328, 330, 331, 503(a), 503(b), 507(a), 

506(c) (subject to entry of the Final Order), 507(b), 546(c), 546(d), 726, 1113 

and 1114 of the Bankruptcy Code; provided, however, that the Adequate 

Protection Superpriority Claim shall be subject to the Carve-Out as set forth in 

this Interim Order and junior to the DIP Claim, and subject the lien priorities set 

forth herein. 

Interest Rate 

DIP Credit 

Agreement §§ 1.2, 

2.3 and 3.7 

Interest accrues daily on the principal amount outstanding at a rate per annum 

equal to the Prime Rate plus the Applicable Margin. 

“Prime Rate” means the rate of interest announced, from time to time, within 

Wells Fargo Bank at its principal office in San Francisco as its “prime rate.” 

“Applicable Margin” means two percent (2%). 

Upon the occurrence and during the continuation of an Event of Default, the 

Applicable Rate of interest in effect at such time with respect to the Obligations 

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shall be increased by three percent (3%) per annum (the “Default Rate”). 

Events of Default

DIP Credit 

Agreement § 8.1 

The occurrence of any one or more of the following shall constitute an “Event of 

Default:”

(a) Borrower shall fail to pay any amount on the Obligations or provided for in 

any Loan Document when due and such failure shall not be cured within five 

(5) calendar days of when due (whether on any payment date, at maturity, by 

reason or acceleration, by notice of intention to prepay, by required 

prepayment or otherwise); 

(b) Any representation, statement or warranty made or deemed made by the 

Borrower in any Loan Document or in any other certificate, document, report 

or opinion delivered in conjunction with any Loan Document to which it is a 

party, (i) shall not be true and correct in all material respects, or (ii) shall have 

been false or misleading in any material respect on the date when made or 

deemed to have been made (except to the extent already qualified by 

materiality, in which case it shall be true and correct in all respects and shall 

not be false or misleading in any respect); 

(c) Borrower or any other party thereto other than the Lender shall be in violation, 

breach or default of, or shall fail to perform, observe or comply with any 

covenant, obligation or agreement set forth in any Loan Document and such 

violation, breach, default or failure shall not be cured within the applicable 

period set forth in the applicable Loan Documents; provided that, with respect 

to the affirmative covenants set forth in Article VI (other than Sections 6.2, 

6.9, 6.11, 6.16 and 6.17 for which there shall be no cure period, unless 

otherwise set forth herein), there shall be a fifteen (15) calendar day cure 

period commencing from the earlier of (i) receipt by such Person of written 

notice of such breach, default, violation or failure, and (ii) the time at which 

such Person or any officer thereof knew or became aware, or should have 

known or been aware, of such failure, violation, breach or default; 

(d) Any of the Loan Documents ceases to be in full force and effect, or any Lien 

created thereunder ceases to constitute a valid perfected first priority Lien on 

the Collateral, or the Lender ceases to have a valid perfected first priority 

security interest in any material portion of the Collateral; 

(e) The Lender’s administrative expense claim in the Bankruptcy Case becomes 

subject (or subordinate) to another administrative expense claim; 

(f) One or more judgments or decrees is rendered against Borrower in an 

amount in excess of $10,000 individually or $25,000 in the aggregate at one 

time outstanding, which is/are not satisfied, stayed, bonded, vacated or 

discharged of record within thirty (30) calendar days of being rendered; 

(g) (i) Any Change of Control occurs or any agreement or commitment to cause 

or that may result in any such Change of Control is entered into without the 

written consent of the Lender; (ii) any Material Adverse Effect or Material 

Adverse Change occurs; (iii) any Liability Event occurs, or (iv) Borrower 

ceases any material portion of its business operations as currently 

conducted; 

(h) Any Indebtedness of Borrower is declared to be due and payable or is 

required to be prepaid (other than by a regularly scheduled payment) prior to 

the stated maturity thereof; 

(i) The Lender receives any indication or evidence that Borrower may have 

directly or indirectly been engaged in any type of activity which, in the 

Lender’s judgment, might result in forfeiture of any property to a 

Governmental Authority which shall have continued unremedied for a period 

of five (5) business days after written notice from the Lender;

(j) Borrower or any of its respective members or senior officers is criminally

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indicted or convicted under any law that could lead to a forfeiture of any 

portion of its respective assets; 

(k) The Bankruptcy Case shall be converted to a case under Chapter 7 of the 

Bankruptcy Code or be dismissed or a motion requesting such relief shall 

have been filed by the Borrower; 

(l) The Borrower files or supports, or the Bankruptcy Court enters an order 

confirming a proposed plan of reorganization or liquidation or sale of 

substantially all of the Borrower’s assets that does not provide for the 

indefeasible payment in full and in cash of the Obligations, unless otherwise 

agreed in writing by the Lender in its sole discretion; 

(m)Any attempt by the Borrower to obtain, or if any other party in interest obtains, 

an order of the Bankruptcy Court or other judgment, and the effect of such 

order or judgment is to, (i) invalidate, reduce or otherwise impair the Lender’s 

claims, or (ii) amend, supplement, stay, vacate or otherwise modify the 

Revolving Facility or the Financing Orders without consent of the Lender; 

(n) The Borrower requests approval of any post-petition financing, other than 

pursuant to the Revolving Facility, that would not immediately repay all 

Obligations, in full, in cash, on the date of the closing of such post-petition 

financing, unless otherwise agreed by the Lender; 

(o) The entry of an order granting liens or claims that are senior or pari passu to 

the Liens granted in favor of the Lender under the Loan Documents; 

(p) The Borrower supports or files a motion in support of any order granting liens 

or claims that are senior or pari passu to the Liens granted in favor of the 

Lender under the Loan Documents; 

(q) The Borrower shall assert that any of the Liens securing the Obligations are 

invalid, or any such Liens granted to the Lender shall be determined to be 

invalid; 

(r) Any report is filed by a patient care ombudsman or state long-term care 

ombudsman in the Bankruptcy Case indicating that patient care has 

significantly declined or has been materially compromised; 

(s) Any creditor or party in interest shall be granted relief from the automatic stay 

with respect to any assets used in operation of the Borrower’s business; 

(t) The Borrower shall default in the due performance or observance by it of any 

term, covenant or agreement contained in the Interim Financing Order or the 

Final Financing Order; 

(u) From and after the date of entry thereof, the Interim Financing Order or the 

Final Financing Order approving this Agreement and the Revolving Facility 

shall cease to be in full force and effect; 

(v) A Final Financing Order approving this Agreement and the Revolving Facility 

has not been entered by the Bankruptcy Court within forty-five (45) days of 

the Petition Date, unless otherwise agreed to by the Lender; 

(w) The Borrower applies for an order substituting any assets for all or any portion 

of the Collateral, or 

(x) The Lease is determined to be terminated or otherwise invalid by a court of 

competent jurisdiction.

Termination 

DIP Credit 

Agreement §§1.2, 

11.1

Termination by the Lender. Subject to the Lender’s right to terminate and cease 

making Advances upon the occurrence and during the continuance of an Event 

of Default, this Agreement shall continue in full force and effect until the full 

performance and indefeasible payment in cash of all Obligations (other than 

indemnity obligations with respect to which no claim has been made), unless 

terminated sooner as provided in this Section 11.1. 

Termination by Borrower. Borrower may terminate this Agreement at any time 

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upon not less than thirty (30) calendar days’ prior written notice to the Lender 

and upon full performance and indefeasible payment in full in cash of all 

Obligations (other than indemnity obligations with respect to which no claim has 

been made) on or prior to such 30th calendar day after receipt by the Lender of 

such written notice. Borrower may elect to terminate this Agreement in its 

entirety only. No section of this Agreement or type of Loan available hereunder 

may be terminated singly. 

All of the Obligations (other than indemnity obligations with respect to which no 

claim has been made) shall be immediately due and payable upon the 

Termination Date. 

“Termination Date” shall mean the earlier to occur of (a) the end of the Term, (b) 

any date on which the Lender accelerates the maturity of the Loans pursuant to 

Article VIII, or (c) the termination date stated in any notice of termination of this 

Agreement provided by Borrower in accordance with Section 11.1. 

“Term” shall mean the period commencing on the date set forth on the first page 

hereof and ending on the earlier to occur of (i) the effective date of a plan of 

reorganization of the Borrower confirmed by the Bankruptcy Court; (ii) 

consummation of a sale or other disposition of a material portion of the 

Borrower’s assets pursuant to 11 U.S.C. 363 or otherwise; (iii) the Borrower’s 

filing of a motion or other pleading seeking, or consenting to, conversion to a 

proceeding under Chapter 7 of the Bankruptcy Code; (iv) conversion to a 

proceeding under Chapter 7 of the Bankruptcy Code; (v) a dismissal by the 

Bankruptcy Court of the Borrower’s Bankruptcy Case; (vi) the Borrower’s filing 

of a motion or other pleading seeking the dismissal of the Bankruptcy Case under 

Section 1112 of the Bankruptcy Code or otherwise; (vii) twelve (12) months from 

Closing, or (viii) any date on which the Loans are accelerated during the 

continuance of an Event of Default.

Modification of 

Automatic Stay

Interim Order ¶ 7 

Modification of the Automatic Stay. The automatic stay provisions of Section 362 

of the Bankruptcy Code and any other restriction imposed by order of the Court 

or applicable law are hereby modified without further notice, application, or order 

of the Court, but only to the extent necessary to permit the DIP Lender, subject 

in all respects to the DIP Facility Documents and this Interim Order, to perform 

any act authorized or permitted under or by virtue of this Interim Order: (i) to 

implement the DIP Facility authorized by this Interim Order and pursuant to the 

terms of the DIP Facility Documents; (ii) to take any act reasonably necessary to 

create, validate, evidence, attach, or perfect any DIP Lien, security interest, right, 

or claim in the DIP Collateral, and (iii) authorize the Debtor to pay, and the DIP 

Lender to retain and apply, payments made in accordance with the terms of this 

Interim Order. For the avoidance of doubt, upon the occurrence of an Event of 

Default and in the event the automatic stay has not otherwise terminated as it 

relates to the DIP Lender, the DIP Lender shall seek relief from the Court, which 

shall be heard on an emergency basis (which basis is agreed upon in advance 

by the Debtor) prior to taking any act otherwise prohibited by the automatic stay 

pursuant to section 362(a) of the Bankruptcy Code. 

Certain 

Stipulations, 

Releases and 

Waivers; 

Interim Order 

Validity, Perfection, and Priority of Pre-Petition Liens and Pre-Petition 

Obligations. The Debtor acknowledges and agrees that as of the Petition Date

(i) the Pre-Petition Liens on the Pre-Petition Collateral were valid, binding, 

enforceable, non-avoidable, and properly perfected and were granted to, or for 

the benefit of, the Pre-Petition Lender for fair consideration and reasonably 

equivalent value; (ii) the Pre-Petition Liens were senior in priority over any and 

all other liens on the Pre-Petition Collateral, subject only to liens senior by

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¶ J operation of law or permitted by the Pre-Petition Credit Documents (solely to the 

extent any such liens were valid, properly perfected, non-avoidable, and senior 

in priority to the Pre-Petition Liens as of the Petition Date, the “Permitted Liens”); 

(iii) the Pre-Petition Obligations constitute legal, valid, binding, and nonavoidable obligations of the Debtor enforceable in accordance with the terms of 

the applicable Pre-Petition Credit Documents; (iv) no offsets, recoupments, 

challenges, objections, defenses, claims, or counterclaims of any kind or nature 

to any of the Pre-Petition Liens or Pre-Petition Obligations exist, and no portion 

of the Pre-Petition Liens or Pre-Petition Obligations is subject to any challenge 

or defense including, without limitation, avoidance, disallowance, disgorgement, 

recharacterization, or subordination (equitable or otherwise) pursuant to the 

Bankruptcy Code or applicable non-bankruptcy law; (v) the Debtor and its estate 

have no claims, objections, challenges, causes of action, and/or choses in 

action, including, without limitation, avoidance claims under Chapter 5 of the 

Bankruptcy Code or applicable state law equivalents or actions for recovery or 

disgorgement, against the Pre-Petition Lender or any of its respective affiliates, 

agents, attorneys, advisors, professionals, officers, directors, and employees 

arising out of, based upon or related to the Pre-Petition Credit Facility; (vi) the 

Debtor waives, discharges, and releases any right to challenge any of the PrePetition Obligations, the priority of the Debtor’s obligations thereunder, and the 

validity, extent, and priority of the liens securing the Pre-Petition Obligations, and 

(vii) the aggregate value of the Pre-Petition Collateral exceeds the amount of the 

Pre-Petition Obligations and the claims of the Pre-Petition Lender arising under, 

or secured by, the Pre-Petition Credit Documents constitute allowed, secured 

claims within the meaning of Sections 502 and 506 of the Bankruptcy Code. 

Challenge 

Deadlines 

Interim Order ¶ 19(a) 

The admissions, stipulations, agreements, releases, and waivers set forth in 

Paragraph J of this Interim Order (collectively, the “Pre-Petition Stipulations”) are 

and shall be binding on the Debtor, any subsequent trustee, responsible person, 

examiner with expanded powers, any other estate representative, and all 

creditors and parties-in-interest and all of its successors in interest and assigns, 

including, without limitation, a Committee (if appointed), unless, and solely to the 

extent that, a party-in-interest with standing (other than the Debtor, as to which 

any Challenge (as defined herein) is irrevocably waived and relinquished) (i) has 

timely filed the pleadings, and timely commenced the proceeding required under 

the Bankruptcy Code, Bankruptcy Rules and Local Bankruptcy Rules 

challenging the Pre-Petition Stipulations (each such proceeding or pleading 

commencing a proceeding or other contested matter, a “Challenge”) by no later 

than (A) for a Committee, (if appointed), sixty (60) days from the date of formation 

of a Committee (if appointed), or (B) seventy-five (75) days following the entry of 

the Interim Order for any other party in interest with derivative standing (the 

earlier to occur of (A) and (B), the “Challenge Deadline”), as such applicable date 

may be extended in writing from time to time in the sole discretion of the PrePetition Lender (with respect to the Pre-Petition Credit Documents), or by this 

Court for good cause shown pursuant to an application filed by a party-in-interest 

prior to the expiration of the Challenge Deadline, and (ii) this Court enters 

judgment in favor of the plaintiff or movant in any such timely commenced 

Challenge proceeding and any such judgment has become a final judgment that 

is not subject to any further review or appeal. Notwithstanding the foregoing, if 

a chapter 11 trustee is appointed or the Chapter 11 Case is converted to chapter 

7 prior to the expiration of the Challenge Deadline, (i) the chapter 11 trustee or 

chapter 7 trustee, as applicable, shall have until the later of the Challenge 

Deadline or the tenth (10th) day after the appointment of the chapter 11 trustee 

or the conversion of the Chapter 11 Case to chapter 7, as applicable, to 

commence a Challenge, subject to any further extension by order of the Court 

for cause, and (ii) if the Committee has asserted a Challenge prior to the 

Challenge Deadline, the chapter 11 trustee or chapter 7 trustee will stand in the 

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shoes of the Committee in such Challenge.

Surcharge/Equities 

of the Case 

Interim Order 

¶¶ 28-29 

Section 506(c) Claims. Subject to entry of a Final Financing Order, no costs or 

expenses of administration which have been or may be incurred in the Chapter 

11 Case at any time shall be charged against the DIP Lender or the Pre-Petition 

Lender, or any of their respective claims, the DIP Collateral, or the Pre-Petition 

Collateral pursuant to Sections 105 or 506(c) of the Bankruptcy Code, or 

otherwise, without the prior written consent of the DIP Lender, or the Pre-Petition 

Lender, as applicable, and no such consent shall be implied from any other 

action, inaction, or acquiescence by any such agents or lenders. 

Section 552(b). Subject to entry of a Final Financing Order, the Pre-Petition 

Lender shall be entitled to all of the rights and benefits of Section 552(b) of the 

Bankruptcy Code, and the “equities of the case” exception under Section 552(b) 

of the Bankruptcy Code shall not apply to the Prepetition Lender, with respect to 

proceeds, product, offspring or profits of any of the Pre-Petition Collateral.

Indemnification

DIP Credit 

Agreement §13.4 

Interim Order ¶ 25 

[T]he Pre-Petition Lender and the DIP Lender, and, solely in their capacities as 

such, each of their respective successors, assigns, affiliates parents, 

subsidiaries, partners, controlling persons, representatives, agents, attorneys, 

advisors, financial advisors, consultants, professionals, officers, directors, 

members, managers, heirs, predecessors, successors, and assigns, shall be 

and hereby are indemnified and held harmless by the Debtor in respect of any 

claim or liability incurred in respect thereof or in any way related thereto, provided 

that no such parties will be indemnified for any cost, expense, or liability to the 

extent determined in a final, non-appealable judgment of a court of competent 

jurisdiction to have resulted primarily from such parties’ gross negligence or 

willful misconduct. Except as provided herein, no exception or defense exists in 

contract, law, or equity as to any obligation set forth, as the case may be, in this 

Paragraph 25, in the Pre-Petition Credit Documents, or in the DIP Loan 

Documents, to the Debtor’s obligation to indemnify and/or hold harmless the PrePetition Lender, or the DIP Lender, as the case may be. 

THE PREPETITION CREDIT FACILITY 

8. The Debtor, as borrower, and eCapital Healthcare Corp. (f/k/a CNH Finance 

Fund I, L.P., “eCapital”), as lender (in such capacity, the “Pre-Petition Lender”), are parties to 

that certain Credit and Security Agreement, dated as of July 16, 2021 (as amended, restated, 

supplemented, or otherwise modified, the “Pre-Petition Credit Agreement,” and collectively with 

the Loan Documents (as defined in the Pre-Petition Credit Agreement) and other related 

agreements and documents, the “Pre-Petition Credit Documents”).

9. Pursuant to the Pre-Petition Credit Agreement, the Pre-Petition Lender provided 

revolving credit and other financial accommodations to the Debtor pursuant to the Pre-Petition 

Loan Documents (the “Pre-Petition Credit Facility”). 

10. The Pre-Petition Credit Facility provided the Debtor with Revolving Loan 

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Commitments (as defined in the Pre-Petition Credit Agreement) subject to, among other things, 

a Facility Cap of $10,000,000. As of the Petition Date, the aggregate principal amount 

outstanding under the Pre-Petition Credit Facility was not less than $4,664,661.94 (collectively, 

with all other outstanding obligations allowable under the Pre-Petition Credit Facility, the “PrePetition Credit Obligations”). 

11. As more fully set forth in the Pre-Petition Credit Documents, prior to the Petition 

Date, the Debtor granted to the Pre-Petition Lender a first priority security interest in and 

continuing lien on (the “Pre-Petition Liens”) the Pre-Petition Collateral, which includes the 

Debtor’s interest in all accounts and other personal property, subject only to the Permitted Liens 

(as such terms are defined in the Pre-Petition Credit Agreement). All of the Debtor’s cash, 

including any cash in deposit accounts of the Debtor, wherever located, constitutes Cash 

Collateral of the Pre-Petition Lender. 

OTHER SECURED CREDITORS 

12. Several regional taxing authorities under the umbrella of the Nacogdoches 

Appraisal District hold ad valorem tax liens on the Debtor’s personal property. In addition, the 

Debtor is party to various security agreements and capital leases secured by specific 

equipment, including the following: 

Secured Creditor Collateral 

GE Government Finance, Inc Optima CT 660, Optima MR450, and 

Mobile Optima 220 X-Ray 

Intuitive Surgical, Inc.; da Vinci Xi Surgical System Robot 

Med One Capital Funding, LLC; TabloXT, Alpinion X-Cube 90, Alaris 

System Model 8015 Point of Care 

Units, 8100 LVP Alaris System 

Model 8100 LVP Pumping Modules, 

Alaris System Model 8110 Syringe 

Modules and 914-0170 IV Strands 

Ortho-Clinical Diagnostics, Inc 2 Vitros 5600 Integrated Systems 

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ARGUMENT

A. Entering into the DIP Facility is an Exercise of the Debtor’s Sound Business 

Judgment 

13. The Court should authorize the Debtor to enter the DIP Facility Documents 

and obtain access to the DIP Facility as an exercise of the Debtor’s sound business judgment 

and in the interest of patient care and safety. 

14. Section 364 of the Bankruptcy Code authorizes a debtor to obtain secured or 

superpriority financing under certain circumstances, as described in greater detail below. 

Provided that an agreement to obtain secured credit does not run afoul of the provisions of 

and policies underlying the Bankruptcy Code, courts routinely grant debtors considerable 

deference in acting in accordance with their sound business judgment in obtaining such credit. 

See In re Estrada, 16-80003-G3-11, 2016 WL 745536, at *3 (Bankr. S.D. Tex. Feb. 24, 2016) 

(“In determining whether to approve a motion to obtain credit, courts generally permit debtors in 

possession to exercise their basic business judgment consistent with their fiduciary duties.”); In 

re Barbara K. Enters., Inc., Case No. 08-11474, 2008 WL 2439649, at *14 (Bankr. S.D.N.Y. 

June 16, 2008) (explaining that courts defer to a debtor’s business judgment “so long as a 

request for financing does not ‘leverage the bankruptcy process’ and unfairly cede control of the 

reorganization to one party in interest.”); In re Ames Dep’t Stores, Inc., 115 B.R. 34, 40 (Bankr. 

S.D.N.Y. 1990) (“Cases consistently reflect that the court’s discretion under section 364 [of the 

Bankruptcy Code] is to be utilized on grounds that permit [a debtor’s] reasonable business 

judgment to be exercised so long as the financing agreement does not contain terms that 

leverage the bankruptcy process and powers or its purpose is not so much to benefit the estate 

as it is to benefit a party- in-interest”). 

15. Moreover, the Court may appropriately take into consideration non-economic 

benefits to the Debtor offered by a proposed postpetition facility. For example, in In re ION Media 

Networks, Inc., the Bankruptcy Court for the Southern District of New York held that: 

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Although all parties, including the Debtors and the Committee, are naturally 

motivated to obtain financing on the best possible terms, a business decision 

to obtain credit from a particular lender is almost never based purely on 

economic terms. Relevant features of the financing must be evaluated, 

including noneconomic elements such as the timing and certainty of closing, 

the impact on creditor constituencies, and the likelihood of a successful 

reorganization. This is particularly true in a bankruptcy setting where 

cooperation and established allegiances with creditor groups can be a vital part 

of building support for a restructuring that ultimately may lead to a confirmable 

reorganization plan. That which helps foster consensus may be preferable to a 

notionally better transaction that carries the risk of promoting unwanted conflict. 

Case No. 09-13125, 2009 WL 2902568, at *4 (Bankr. S.D.N.Y. July 6, 2009). 

16. The Debtor’s execution of the DIP Facility Documents is an exercise of its 

sound business judgment that warrants approval by the Court. The Debtor has determined that it 

will very likely return a higher value to stakeholders by continuing its business operations. 

However, to maintain adequate working capital for operations and for general corporate 

purposes, it requires immediate access to reasonably priced financing. The DIP Lender is willing 

to provide such financing. As provided in the Declaration, the DIP Facility offered by the DIP 

Lender provided the most favorable credit facility the Debtor was able to find. The Debtor has 

also determined that it is advantageous to enter into a DIP facility with a lender that already has a 

working relationship with the Debtor and on credit terms that are substantially similar to the 

prepetition credit facility. Accordingly, the Debtor negotiated the DIP Facility with the DIP Lender 

in good faith, at arm’s length, and with the assistance of outside counsel to obtain the required 

postpetition financing on terms favorable to the Debtor. 

17. The Debtor believes that the Court’s consideration of non-economic factors, as 

permitted by ION Media, is especially appropriate here. The Debtor is a community hospital and 

has continuing care obligations to current and future patients. If the Debtor’s access to DIP 

funding is denied, the Debtor will be forced to cease operations essentially immediately and with 

little warning. Such an event would lead to the layoff of hundreds of employees and place any 

overnight patients (the Debtor has 231 patient rooms) at unnecessary risk until their care can be 

transferred, which is not assured. Moreover, patients with already-scheduled procedures will be 

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unduly harmed by needing to reschedule their care with other providers. Such a cessation of 

operations and care will almost certainly eliminate any possibility of reorganizing and of 

providing any distribution to creditors above the value of its assets that secured creditors 

might receive in liquidation. 

18. Moreover, it is unlikely another lender would be in a position to provide as 

favorable a financing arrangement as currently available under the DIP Facility because (a) 

the DIP Lender (as the Pre-Petition Lender) currently holds a first priority perfected lien on 

substantially all of Debtor’s assets and (b) the DIP Facility provides favorable terms to the 

Debtor which no other lender would be able to match under the circumstances. The Debtor 

submits that these factors provide additional and ample reason to approve the DIP Facility. 

19. Accordingly, the Debtor determined in its sound business judgment that the 

DIP Facility provides a greater amount of financing on more favorable terms than any other 

reasonably available alternative. Thus, the Debtor submits that entering into the DIP Facility 

Documents constitutes an exercise of its sound business judgment that should be approved 

by the Court. 

B. The Roll-Up of the Prepetition Obligations is an Appropriate Exercise of the 

Debtor’s Business Judgment and Should be Approved 

20. The proposed DIP Facility proposes a Roll-Up of the Pre-Petition Obligations 

as set forth in more detail in the DIP Credit Agreement. 

21. In the instant case, the proposed Roll-Up is a sound exercise of the 

Debtor’s business judgment for the following reasons: 

(a) The negotiation and subsequent granting of the Roll-Up is required as a 

condition for the DIP Lender to provide the liquidity necessary to continue the 

Debtor’s operations; 

(b) The prepetition debt facility is a revolving line of credit that relies on generated 

accounts receivables as the basis for providing continued funding. If the RollUp is denied but the post-petition financing is otherwise approved, on a 

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petition generated accounts receivables to access funding. Even a brief 

reduction of accounts receivables generation would jeopardize the Debtor’s 

ability to pay post-petition obligations as it would restrict the Debtor’s ability to 

draw on the line of credit. On the other hand, if the DIP Lender is entitled to rollup its prepetition obligations, the DIP Lender can look to all Eligible Receivables 

(as defined in the DIP Credit Agreement) from which to make its lending 

decision, whether those receivables were generated pre- or postpetition; 

(c) The DIP Lender already holds the senior lien on the DIP Collateral and, 

therefore, the positions of other creditors, both secured and unsecured will be 

unharmed; 

(d) The DIP Lender’s prepetition liens appear to be properly secured and perfected. 

The DIP Lender does not appear to be using a Roll-Up for the purpose of 

correcting any prepetition perfection concerns; 

(e) The DIP Lender has required a Roll-Up as a condition to extending postpetition 

financing. If the Court were to deny the Roll-Up and the DIP Lender 

subsequently terminated the DIP Agreement, the Debtor would not have access 

to needed working capital funds, which possibly could cause the immediate 

cessation of the Debtor’s operations and jeopardize patient care; 

(f) The Roll-Up is intended to continue postpetition the relationship the DIP 

Lender and Debtor have had prepetition. The Roll-Up thus offers advantages 

for the Debtor in accounting and practical efficiencies; and 

(g) Other creditors will be adequately protected because they will be entitled 

postpetition to the same priority vis-à-vis the DIP Collateral as they were 

prepetition. 

22. The terms of the Roll-Up in the DIP Facility are reasonable and necessary 

components of the DIP Facility. The DIP Facility—including the Roll-Up—represents the best 

financing option available to address the Debtor’s liquidity needs under these circumstances. 

The terms and conditions of the DIP Facility are reasonable, appropriate, and reflective of the 

current market for debtor-in possession financing under these circumstances. 

23. Finally, similar debtor-in-possession financing facilities have been approved in 

a variety of cases in this and other districts, which included features similar to the proposed 

Roll-Up in the DIP Orders. In re A’Gaci, LLC, No. 19-51919 (RBK) (Bankr. W.D. Tex. Sep. 

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9, 2019) (Docket No. 144); In re Fresh Acquisitions, LLC, No. 21-30721 (HDH) (Bankr. N.D. 

Tex. Apr. 20, 2021) (authorizing the roll-up of approximately $500,000 prepetition debt and 

approximately $3 million of new money); In re CiCis Holdings, Inc., No. 21-30146 (SGJ) (Bankr. 

N.D. Tex. Feb. 18, 2021) (authorizing roll-up of approximately $6 million of prepetition debt 

and approximately $3 million of new money); In re Gulfport Energy Corp., No. 20-35562 (DRJ) 

(Bankr. S.D. Tex. Dec. 18, 2020) (authorizing roll-up of approximately $158 million of 

prepetition debt and approximately $105 million of new money); In re Studio Movie Grill 

Holdings, LLC, No. 20-32633 (SGJ) (Bankr. N.D. Tex. Dec. 1, 2020) (authorizing roll-up of 

approximately $48 million of prepetition debt and approximately $23.5 million of new money); 

In re Lilis Energy Inc., No. 20-33274 (MI) (Bankr. S.D. Tex. Aug. 21, 2020) (authorizing roll-up 

of approximately $15 million of prepetition debt and approximately $15 million of new money); 

In re Trivascular Sales LLC, No. 20-31840 (SGJ) (Bankr. N.D. Tex. Aug. 20, 2020) (authorizing 

roll-up of approximately $100 million of prepetition debt and $30 million of new money); In re 

Tuesday Morning Corp., Case No. 20-31476 (HDH) (Bankr. N.D. Tex. Jun. 26, 2020) 

(authorizing roll-up of approximately $48 million of prepetition debt and approximately $52 

million of new money); In re Unit Corp., No. 20-32740 (DRJ) (Bankr. S.D. Tex. Jun. 19, 2020) 

(authorizing roll-up of approximately $88 million of prepetition debt and approximately $36 

million of new money); In re Am. Comm. Lines, Inc., No. 20-30981 (MI) (Bankr. S.D. Tex. Feb. 

7, 2020) (authorizing roll-up of approximately $536 million of prepetition debt and 

approximately $6.4 million new money); In re McDermott Int’l, Inc., No. 20-30336 (DRJ) (Bankr. 

S.D. Tex. Jan. 21, 2020) (authorizing roll-up of approximately $500 million of prepetition debt). 

C. The Debtor Should be Authorized to Obtain Postpetition Financing on a Secured 

and Superpriority Basis 

24. Section 364 of the Bankruptcy Code authorizes a debtor to obtain, in certain 

circumstances, postpetition financing on a secured or superpriority basis, or both. Specifically, 

section 364(c) of the Bankruptcy Code provides, in pertinent part, that the Court, after notice 

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and a hearing, may authorize a debtor that is unable to obtain credit allowable as an 

administrative expense under section 503(b)(1) of the Bankruptcy Code to obtain credit or incur 

debt: 

(1) with priority over any or all administrative expenses of the kind specified in 

section 503(b) or 507(b) of [the Bankruptcy Code]; 

(2) secured by a lien on property of the estate that is not otherwise subject to a 

lien, or 

(3) secured by a junior lien on property of the estate that is subject to a lien. 

11 U.S.C. § 364(c). 

25. To satisfy the requirements of section 364(c) of the Bankruptcy Code, a debtor 

need only demonstrate “by a good faith effort that credit was not available” to the debtor on an 

unsecured or administrative expense basis. Bray v. Shenandoah Fed. Savs. & Loan Ass’n (In 

re Snowshoe Co.), 789 F.2d 1085, 1088 (4th Cir. 1986). “The statute imposes no duty to seek 

credit from every possible lender before concluding that such credit is unavailable.” Id.; see 

also Pearl-Phil GMT (Far East) Ltd. v. Caldor Corp., 266 B.R. 575, 584 (S.D.N.Y. 2001) 

(superpriority administrative expenses authorized where the debtor could not obtain credit as 

an administrative expense). When few lenders are likely to be able and willing to extend the 

necessary credit to a debtor, “it would be unrealistic and unnecessary to require [the debtor] 

to conduct such an exhaustive search for financing.” In re Sky Valley, Inc., 100 B.R. 107, 113 

(Bankr. N.D. Ga. 1988), aff’d sub nom., Anchor Savs. Bank FSB v. Sky Valley, Inc., 99 B.R. 

117, 120 n. 4 (N.D. Ga. 1989); see also Ames Dep’t Stores, 115 B.R. at 40 (approving financing 

facility and holding that the debtor made reasonable efforts to satisfy the standards of section 

364(c) where it approached four lending institutions, was rejected by two, and selected the 

more favorable of the two offers it received). 

26. Section 364(d)(1) provides: 

The court, after notice and a hearing, may authorize the obtaining of credit or the 

incurring of debt secured by a senior or equal lien on property of the estate that 

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is subject to a lien only if — 

(A) the trustee is unable to obtain such credit otherwise, and 

(B) there is adequate protection of the interest of the holder of the lien on 

the property of the estate on which such senior or equal lien is 

proposed to be granted. 

11 U.S.C. § 364(d)(1). 

27. As of the date of the filing of the instant Motion, the Debtor has been unable 

to obtain sufficient postpetition financing in the form of unsecured credit, solely as an 

administrative expense, or secured by a junior or equal lien. General industry practice, 

especially in light of rising interest rates, which has reduced financing availability generally, 

precludes the Debtor from obtaining postpetition financing in the amount required on terms 

other than on a first priority, secured, and superpriority basis except as described above and 

in the DIP Agreement. 

28. Second, the Debtor needs the funds to be provided under the DIP Facility 

to preserve the value of its estate for the benefit of all creditors and other parties in interest. 

Absent the DIP Facility, the Debtor will be unable to operate its business or prosecute the 

Chapter 11 Case, which will threaten the Debtor’s going concern value. Providing the Debtor 

with the liquidity necessary to preserve its going concern value through the pendency of the 

Chapter 11 Case is in the best interest of all stakeholders. 

29. Third, the terms of the DIP Facility Documents are reasonable and adequate 

to ensure the Debtor’s ongoing ability to operate in Chapter 11. Indeed, the DIP Facility will 

provide the Debtor with sufficient and necessary liquidity to allow the Debtor to maintain its 

operations and relationships with key constituents during the Chapter 11 Case. Accordingly, 

the terms of the DIP Facility are reasonable and the DIP Facility is sufficient to support the 

Debtor’s operations and restructuring activities through the pendency of the Chapter 11 Case. 

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30. Fourth, the Debtor and the DIP Lender negotiated the DIP Facility in good 

faith and at arm’s-length, and the Debtor’s entry into the DIP Facility Documents is an exercise 

of its sound business judgment and is in the best interests of its estate, creditors, and other 

parties in interest. 

31. The Court should therefore (a) authorize the Debtor to provide the DIP Lender 

liens on the DIP Collateral as provided in section 364(c)(2), (3), and 364(d); and (b) grant 

the DIP Obligations superpriority administrative expense status as provided for in section 

364(c)(1) of the Bankruptcy Code. 

D. The DIP Lender Should be Deemed a Good Faith Lender under Section 364(e) 

of the Bankruptcy Code. 

32. Section 364(e) of the Bankruptcy Code protects a good faith lender’s right to 

collect on loans extended to a debtor, and its right in any lien securing those loans, even if the 

authority of the debtor to obtain such loans or grant such liens is later reversed or modified on 

appeal. Specifically, section 364(e) provides that: 

The reversal or modification on appeal of an authorization under this section [364 

of the Bankruptcy Code] to obtain credit or incur debt, or of a grant under this 

section of a priority or a lien, does not affect the validity of any debt so incurred, 

or any priority or lien so granted, to an entity that extended such credit in good 

faith, whether or not such entity knew of the pendency of the appeal, unless 

such authorization and the incurring of such debt, or the granting of such priority 

or lien, were stayed pending appeal. 

11 U.S.C. § 364(e). 

33. As explained herein, the DIP Facility is the result of the Debtor’s reasonable 

and informed determination that the DIP Lender offered the most favorable terms on which to 

obtain needed postpetition financing, and of extended arm’s-length, good faith negotiations 

between the Debtor and the DIP Lender. The terms and conditions of the DIP Facility are fair 

and reasonable, and the proceeds under the DIP Facility will be used only for purposes that 

are permissible under the Bankruptcy Code. Further, no consideration is being provided to any 

party to the DIP Facility other than as described herein. Accordingly, the Court should find that 

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the DIP Lender is a “good faith” lender within the meaning of section 364(e) of the Bankruptcy 

Code and is entitled to all of the protections afforded by that section. 

E. The Debtor Requires Immediate Access to the DIP Facility

34. The Court may grant interim relief in respect of a motion filed pursuant to 

section 363(c) or 364 of the Bankruptcy Code where, as here, interim relief is “necessary 

to avoid immediate and irreparable harm to the estate pending a final hearing.” FED. 

R. BANKR. P. 4001(b)(2) and (c)(2).

35. The Debtor and its estate will suffer immediate and irreparable harm if the 

interim relief requested herein is not granted promptly. An extended delay in obtaining the DIP 

Facility would jeopardize the Debtor’s ability to satisfy its postpetition obligations and provide 

safe patient care and would threaten the Debtor’s viability; thus, causing significant harm to the 

Debtor’s estates and creditors. Accordingly, the Debtor has an immediate need for access to 

the DIP Facility to, among other things, permit the orderly continuation of the operation of its 

business, to make payroll, and to satisfy other working capital and operational needs, all of 

which are required to preserve and maintain the Debtor’s going concern value for the benefit 

of all parties in interest. 

F. The Debtor Should be Authorized to Use Cash Collateral. 

36. Section 363(c)(2)(A) of the Bankruptcy Code permits a debtor in possession to 

use cash collateral with the consent of the secured party. Here, the DIP Lender consents to 

the use of Cash Collateral, both in its capacity as the DIP Lender and as the Pre-Petition 

Lender, subject to the terms and limitations set forth in the Interim Order. As described above 

and in the Declaration, access to Cash Collateral on an interim basis is essential to the 

continued operation of the Debtor’s business. Thus, the use of Cash Collateral is in the best 

interests of the Debtor’s estate and its stakeholders, including the Prepetition Lender and the 

DIP Lender and should be approved. 

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REQUEST FOR FINAL HEARING 

37. Pursuant to Bankruptcy Rules 4001(b)(2) and 4001(c)(2), the Debtor requests 

that the Court set a date for the Final Hearing and set a deadline for filing objections to the 

Motion prior to the Final Hearing. 

LIMITED NOTICE 

38. Notice of this Motion has been provided to (a) the office of the United States 

Trustee for the Northern District of Texas; (b) the holders of the twenty (20) largest unsecured 

claims against the Debtor; (c) counsel for the PrePetition and DIP Lender; (d) parties that have 

filed a UCC Financing Statement with respect to the Debtor’s assets; (e) counsel for the 

Nacogdoches Hospital District; and (f) all parties that have filed a Notice of Appearance herein 

as set forth in the Certificate of Service below. The Debtor submits that no other or further 

notice need be provided. 

CONCLUSION 

39. Accordingly, for all of the reasons set forth above, prompt entry of the Interim 

Order is necessary to avoid immediate and irreparable harm to the Debtor’s estate and is 

consistent with, and warranted under, Bankruptcy Rule 4001(b)(2) and (c)(2). In addition, to 

implement the terms of the DIP Facility, the Debtor requests a waiver of the notice 

requirements under Bankruptcy Rule 6004(a) and any stay of an order granting the relief 

requested herein pursuant to Bankruptcy Rule 6004(h) or otherwise so that the Interim Order 

may be immediately effective and enforceable upon its entry. 

WHEREFORE, the Debtor respectfully requests entry of an order granting (a) the relief 

requested herein and (b) such other and further relief as is just and proper. 

Dated: November 19, 2023. Respectfully submitted, 

/s/ Lynda L. Lankford 

Jeff P. Prostok 

State Bar No. 16352500 

Lynda L. Lankford 

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State Bar No. 11935020 

Dylan T.F. Ross 

State Bar No. 24104435 

FORSHEY & PROSTOK LLP 

777 Main St., Suite 1550 

Fort Worth, TX 76102 

Telephone: 817-877-8855 

Facsimile: 817-877-4151 

jprostok@forsheyprostok.com

llankford@forsheyprostok.com 

dross@forsheyprostok.com

PROPOSED ATTORNEYS FOR DEBTOR 

AND DEBTOR IN POSSESSION 

CERTIFICATE OF SERVICE

I hereby certify that a true and correct copy of the foregoing document was served upon 

the parties listed on the attached service list via United States Mail, first class postage prepaid, 

or via ECF electronic Notice, if available, on November 19, 2023. I further certify that a true and 

correct copy of the foregoing document was additionally served via email upon the parties listed 

below on November 19, 2023: 

Erin Schmidt, Trial Attorney 

United States Trustee 

erin.schmidt2@usdoj.gov 

Elizabeth A. Young, Trial Attorney 

United States Trustee 

elizabeth.a.young@usdoj.gov 

Ed Green, Esq. 

Jake Gordon, Esq. 

Foley & Lardner LLP 

egreen@foley.com

jake.gordon@foley.com

 /s/ Lynda L. Lankford 

 Lynda L. Lankford 

L:\JPROSTOK\Lion Star Nacogdoches Hospital, LLC #6429\Pleadings\Motion - DIP and Cash Collateral 11.19.23.docx

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EXHIBIT “A” 

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Page 1 of 31

4872-2005-4929.8 

IN THE UNITED STATES BANKRUPTCY COURT 

FOR THE NORTHERN DISTRICT OF TEXAS 

FORT WORTH DIVISION 

In re: )

 )

LION STAR NACOGDOCHES HOSPITAL, 

LLC d/b/a NACOGDOCHES MEMORIAL 

HOSPITAL, 

) 

) 

)

 Case No. 23- 

Chapter 11 Case

)

 Debtor. )

______________________________________________________________________________ 

INTERIM ORDER (I) AUTHORIZING THE DEBTOR TO OBTAIN POSTPETITION

FINANCING ON A SECURED, SUPERPRIORITY BASIS; (II) AUTHORIZING THE 

DEBTOR TO USE CASH COLLATERAL; (III) SCHEDULING A FINAL HEARING; 

(IV) MODIFYING THE AUTOMATIC STAY, AND (V) GRANTING RELATED 

RELIEF1

______________________________________________________________________________ 

CAME ON FOR CONSIDERATION Lion Star Nacogdoches Hospital, LLC (the 

“Debtor”) or (“Lion Star”) with its Motion for Entry of Interim and Final Orders (I) Authorizing 

the Debtor to Obtain Postpetition Financing on a Secured, Superpriority Basis; (II) Authorizing 

1

 Capitalized terms not defined herein shall have the meaning ascribed to them in the Superpriority Debtor-InPossession Credit and Security Agreement. 

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Page 2 of 31

4872-2005-4929.8 

the Debtor to Use Cash Collateral; (III) Scheduling a Final Hearing; (IV) Modifying the 

Automatic Stay, and (V) Granting Related Relief (the “Motion”), filed in the above-captioned case, 

seeking, among other things, entry of an interim order (this “Interim Order”), under Sections 105, 

361, 362, 363(c)(2), 364(c)(1), 364(c)(2), 364(c)(3), 364(d)(1), and 364(e) of Title 11 of the United 

States Code (the “Bankruptcy Code”), Rules 2002, 4001, and 6003 of the Federal Rules of 

Bankruptcy Procedure (the “Bankruptcy Rules”), and Local Court Rules of the United States 

Bankruptcy Court for the Northern District of Texas (the “Local Bankruptcy Rules”): (i) 

authorizing the Debtor to obtain postpetition financing on a secured superpriority basis; (ii) 

authorizing the Debtor to use Cash Collateral; (iii) scheduling a final hearing pursuant to 

Bankruptcy Rules 4001(b) and 4001(c), (iv) modifying the automatic stay, and (v) granting related 

relief. The Bankruptcy Court conducted an interim hearing on [_____], 2023 (the “Interim 

Hearing”). 

The Court, having considered the Motion and the evidence submitted at the Interim 

Hearing and in accordance with Bankruptcy Rules 2002, 4001(b), (c), and (d), and Local 

Bankruptcy Rule 9014, due and proper notice of the Motion and the Interim Hearing having been 

given; and it appearing that approval of the interim relief requested in the Motion is necessary to 

avoid immediate and irreparable harm to the Debtor and its bankruptcy estate pending the Final 

Hearing, and all objections, if any, to the entry of this Interim Order having been withdrawn, 

resolved or overruled by the Court; and after due deliberation and consideration, and for good and 

sufficient cause appearing therefor: 

IN ADDITION TO ANY FINDINGS AND CONCLUSIONS ANNOUNCED ON 

THE RECORD AT THE INTERIM HEARING, WHICH ARE INCORPORATED 

HEREIN BY REFERENCE, THE COURT MAKES THE FOLLOWING FINDINGS OF 

FACT AND CONCLUSIONS OF LAW: 

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4872-2005-4929.8 

A. Jurisdiction and Venue. The Court has jurisdiction over this proceeding pursuant to 

28 U.S.C. § 1334. Consideration of the Motion constitutes a core proceeding under 28 U.S.C. § 

157(b)(2). Venue for the above-captioned chapter 11 case (the “Chapter 11 Case”) and the 

proceeding on the Motion is proper in this district pursuant to 28 U.S.C. §§ 1408 and 1409.

B. Committee Formation/Trustee. An official committee of unsecured creditors (the 

“Committee”) has not been appointed. No request for the appointment of a trustee or examiner has 

been made.

C. Notice. The Debtor has provided sufficient notice of the Interim Hearing and the 

relief requested in the Motion to all necessary creditors and parties in interest. 

D. No Control. By virtue of any of the actions taken with respect to, in connection 

with, related to, or arising from the Pre-Petition Credit Documents, the DIP Lender does not control 

the Debtor or its properties or operations, have authority to determine the manner in which any 

Debtor’s operations are conducted, or are control persons or insiders of the Debtor. 

E. No Credit Available on More Favorable Terms. The Debtor has been unable to 

obtain more favorable terms and conditions than those provided in this Interim Order: (a) adequate 

unsecured credit allowable under Section 503(b)(1) of the Bankruptcy Code as an administrative 

expense; (b) credit for money borrowed with priority over any or all administrative expenses of 

the kind specified in Sections 503(b) or 507(b) of the Bankruptcy Code, or (c) credit for money 

borrowed secured by a lien on property of the estate that is not otherwise subject to a lien. The 

Debtor is unable to obtain credit for borrowed money without granting the DIP Liens and the DIP 

Superpriority Claims (each defined below) to (or for the benefit of) the DIP Lender. 

F. Extension of Financing. The DIP Lender is willing and able to provide financing to 

the Debtor in accordance with the Superpriority Debtor-In-Possession Credit and Security 

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4872-2005-4929.8 

Agreement and all other related documents attached hereto as Exhibit A (collectively, the “DIP 

Facility Documents”) and subject to (i) the entry of this Interim Order and (ii) findings by this 

Court that such financing is essential to the Debtor’s estate (and the continued operations of the 

Debtor), that the DIP Lender is a good faith financier, and that the DIP Lender’s claims, 

superpriority claims, security interests and liens and other protections granted pursuant to and in 

connection with this Interim Order will not be affected by any subsequent reversal, modification, 

vacatur, stay or amendment of, as the case may be, this Interim Order as provided in Section 364(e) 

of the Bankruptcy Code. 

G. Business Judgment and Good Faith Pursuant to Section 364(e). The terms and 

conditions of this Interim Order and the DIP Facility Documents are fair, reasonable, and the best 

available under the circumstances, reflect the Debtor’s exercise of prudent business judgment, and 

are supported by reasonably equivalent value and consideration; all obligations incurred under this 

Interim Order and the DIP Facility Documents (collectively, the “DIP Obligations”), payments 

made, and transfers or grants of security set forth in this Interim Order and the DIP Facility 

Documents by the DIP Lender are granted to or for the benefit of the DIP Lender for fair 

consideration and reasonably equivalent value, and are granted contemporaneously with the 

making of the loans and/or commitments and other financial accommodations secured thereby; the 

terms of the DIP Facility Documents and all other related agreements and documents (collectively, 

the “DIP Facility”) were negotiated in good faith and at arm’s length among the DIP Lender and 

the Debtor, and the use of the proceeds to be extended under the DIP Facility will be so extended 

in good faith and for valid business purposes and uses, as a consequence of which the DIP Lender 

is entitled to the protection and benefits of Section 364(e) of the Bankruptcy Code. 

H. Relief Essential; Best Interest of Bankruptcy Estate. The relief provided in this 

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4872-2005-4929.8 

Interim Order is necessary, essential, and appropriate for the continued operation of the Debtor’s 

business and the management and preservation of its assets and property. It is in the best interest 

of the Debtor’s bankruptcy estate that the Debtor be allowed to enter into the DIP Facility 

Documents, incur the DIP Facility, grant the liens and claims contemplated herein and under the 

DIP Facility Documents to the DIP Lender, subject to the terms of this Interim Order. 

I. Roll-Up. The DIP Roll-Up under the DIP Facility Documents reflects the Debtor’s 

exercise of prudent business judgment consistent with its fiduciary duties. Without the DIP 

Roll-Up, the DIP Lender would not have provided the DIP Facility or extended credit to the 

Debtor. Further, the DIP Roll-Up (i) creates greater availability under the DIP Facility and (ii) 

benefits the Debtor and its estate because it enables the Debtor to obtain financing critical to 

administering this Chapter 11 Case and funding the Debtor’s operations. 

J. Debtor’s Stipulations. After consultation with its attorneys and financial advisors, 

the Debtor, on its behalf and on behalf of its estate, admits, stipulates, acknowledges, and agrees 

as follows (paragraphs J(i) through J(xii) below are referred to herein, collectively, as the “Debtor’s 

Stipulations”): 

i) Pre-Petition Credit Facility. Pursuant to that certain Credit and Security 

Agreement, dated as of July 16, 2021 (as amended, restated, supplemented, 

or otherwise modified from time to time, the “Pre-Petition Credit 

Agreement,” and collectively with the Loan Documents (as defined in the 

Pre-Petition Credit Agreement) and any other agreements and documents 

executed or delivered in connection therewith, each as may be amended, 

restated, supplemented, waived or otherwise modified from time to time, 

the “Pre-Petition Credit Documents”), among (i) the Debtor and (ii) 

eCapital (in such capacity, the “Pre-Petition Lender”), the Pre-Petition 

Lender provided revolving credit and other financial accommodations to the 

Debtor pursuant to the Pre-Petition Loan Documents (the “Pre-Petition 

Credit Facility”). 

ii) Pre-Petition Obligations. The Pre-Petition Credit Facility provided the 

Debtor with, among other things, the Revolving Loan Commitments (as 

defined in the Pre-Petition Credit Agreement). As of the date of filing of 

this Chapter 11 Case (the “Petition Date”), the aggregate principal amount 

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outstanding under the Pre-Petition Credit Facility was not less than 

$4,664,661.94 (collectively, together with accrued and unpaid interest, 

outstanding letters of credit and bankers’ acceptances, any reimbursement 

obligations (contingent or otherwise) in respect of letters of credit and 

bankers’ acceptances, any fees, expenses and disbursements (including, 

without limitation, attorneys’ fees, accountants’ fees, auditor fees, 

appraisers’ fees and financial advisors’ fees, and related expenses and 

disbursements), treasury, cash management, bank product and derivative 

obligations, indemnification obligations, guarantee obligations, and other 

charges, amounts and costs of whatever nature owing, whether or not 

contingent, whenever arising, accrued, accruing, due, owing, or chargeable 

in respect of any of the Debtor’s obligations pursuant to, or secured by, the 

Pre-Petition Credit Documents, including all interest, fees (including 

amendment fees), prepayment premiums, costs and other charges allowable 

under section 506(b) of the Bankruptcy Code, the “Pre-Petition Credit 

Obligations”). 

iii) Pre-Petition Liens and Pre-Petition Collateral. As more fully set forth in 

the Pre-Petition Credit Documents, prior to the Petition Date, the Debtor 

granted to the Pre-Petition Lender, for the benefit of itself, a first priority 

security interest in and continuing lien on (the “Pre-Petition Liens”) the PrePetition Collateral, subject only to the Permitted Liens (as defined in the 

Pre-Petition Credit Agreement). 

iv) Validity, Perfection, and Priority of Pre-Petition Liens and Pre-Petition 

Obligations. The Debtor acknowledges and agrees that as of the Petition 

Date (i) the Pre-Petition Liens on the Pre-Petition Collateral were valid, 

binding, enforceable, non-avoidable, and properly perfected and were 

granted to, or for the benefit of, the Pre-Petition Lender for fair 

consideration and reasonably equivalent value; (ii) the Pre-Petition Liens 

were senior in priority over any and all other liens on the Pre-Petition 

Collateral, subject only to liens senior by operation of law or permitted by 

the Pre-Petition Credit Documents (solely to the extent any such liens were 

valid, properly perfected, non-avoidable, and senior in priority to the PrePetition Liens as of the Petition Date, the “Permitted Liens”); (iii) the PrePetition Obligations constitute legal, valid, binding, and non-avoidable 

obligations of the Debtor enforceable in accordance with the terms of the 

applicable Pre-Petition Credit Documents; (iv) no offsets, recoupments, 

challenges, objections, defenses, claims, or counterclaims of any kind or 

nature to any of the Pre-Petition Liens or Pre-Petition Obligations exist, and 

no portion of the Pre-Petition Liens or Pre-Petition Obligations is subject to 

any challenge or defense including, without limitation, avoidance, 

disallowance, disgorgement, recharacterization, or subordination (equitable 

or otherwise) pursuant to the Bankruptcy Code or applicable nonbankruptcy law; (v) the Debtor and its estate have no claims, objections, 

challenges, causes of action, and/or choses in action, including, without 

limitation, avoidance claims under Chapter 5 of the Bankruptcy Code or 

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applicable state law equivalents or actions for recovery or disgorgement, 

against the Pre-Petition Lender or any of its respective affiliates, agents, 

attorneys, advisors, professionals, officers, directors, and employees arising 

out of, based upon or related to the Pre-Petition Credit Facility; (vi) the 

Debtor waives, discharges, and releases any right to challenge any of the 

Pre-Petition Obligations, the priority of the Debtor’s obligations thereunder, 

and the validity, extent, and priority of the liens securing the Pre-Petition 

Obligations, and (vii) the aggregate value of the Pre-Petition Collateral 

exceeds the amount of the Pre-Petition Obligations and the claims of the 

Pre-Petition Lender arising under, or secured by, the Pre-Petition Credit 

Documents constitute allowed, secured claims within the meaning of 

Sections 502 and 506 of the Bankruptcy Code. 

v) Cash Collateral. All of the Debtor’s cash, including any cash in deposit 

accounts of the Debtor, wherever located, constitutes Cash Collateral of the 

Pre-Petition Lender. 

vi) Default by the Debtor. The Debtor acknowledges and stipulates that it is in 

default of its obligations under the Pre-Petition Credit Documents as a result 

of the commencement of this Chapter 11 Case, and that an Event of Default 

has occurred under the Pre-Petition Credit Documents; provided, the DIP 

Lender rights related to declaring an Event of Default under other provisions 

of the Pre-Petition Credit Documents are fully reserved. 

K. Findings regarding postpetition financing: 

i) Request for Postpetition Financing. The Debtor seeks authority to (i) use 

Cash Collateral on the terms described herein, and (ii) enter into the DIP 

Credit Agreement on the terms described herein and in the DIP Facility 

Documents, to administer its Chapter 11 Case, and to fund the Debtor’s 

operations. At the Final Hearing, the Debtor will seek final approval of the 

DIP Facility and use of Cash Collateral pursuant to a proposed final order 

(the “Final Order”), which shall be in form and substance acceptable to the 

DIP Lender. Notice of the Final Hearing and Final Order will be provided 

in accordance with this Interim Order. 

ii) Need for Postpetition Financing and Use of Cash Collateral. The Debtor 

has an immediate and critical need to use Cash Collateral on an interim basis 

and to obtain credit on an interim basis pursuant to the DIP Facility in order 

to, among other things, enable the orderly continuation of its operations and 

administer and preserve the value of its estate. The ability of the Debtor to 

maintain business relationships with its vendors, suppliers, and customers, 

to pay its employees, and otherwise finance its operations requires the 

availability of working capital from the DIP Facility and the use of Cash 

Collateral, the absence of either of which would immediately and 

irreparably harm the Debtor, its estate, and parties-in-interest. The Debtor 

does not have sufficient available sources of working capital and financing 

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to operate its businesses or maintain its properties in the ordinary course of 

business without the DIP Facility and use of Cash Collateral. 

iii) No Credit Available on More Favorable Terms. The DIP Facility is the best 

source of debtor-in-possession financing available to the Debtor. Given its 

current financial condition, financing arrangements, and capital structure, 

the Debtor has been and continues to be unable to obtain financing from 

sources other than the DIP Lender on terms more favorable than the DIP 

Facility. The Debtor is unable to obtain unsecured credit allowable under 

Section 503(b)(1) of the Bankruptcy Code as an administrative expense. 

The Debtor has also been unable to obtain: (i) unsecured credit solely 

having priority over that of administrative expenses of the kind specified in 

Sections 503(b), 507(a) and 507(b) of the Bankruptcy Code; (ii) credit 

secured solely by a lien on property of the Debtor and its estate that is not 

otherwise subject to a lien, or (iii) credit secured solely by a junior lien on 

property of the Debtor and its estate that is subject to a lien. 

iv) Use of Proceeds of the DIP Facility. As a condition to entry into the DIP 

Credit Agreement, the extension of credit under the DIP Facility and the 

authorization to use Cash Collateral, the Pre-Petition Lender requires, and 

the Debtor has agreed, that proceeds of the DIP Facility shall be used, in 

each case in a manner consistent with the terms and conditions of this 

Interim Order and the DIP Facility Documents and in accordance with the 

Budget (as the same may be modified from time to time consistent with the 

terms of the DIP Facility Documents) and subject to such variances as 

permitted in the DIP Credit Agreement. 

v) Application of Proceeds of Collateral. As a condition to entry into the DIP 

Credit Agreement, the extension of credit under the DIP Facility and 

authorization to use Cash Collateral, the Debtor and the DIP Lender have 

agreed that as of and commencing on the date of the Interim Hearing, the 

Debtor shall apply the proceeds of DIP Collateral in accordance with this 

Interim Order and the Budget. 

vi) Roll-up of Pre-Petition Obligations into Obligations. The DIP Lender 

would not otherwise consent to the use of its Cash Collateral or the 

subordination of its liens to the DIP Liens, and the DIP Lender would not 

be willing to provide the DIP Facility or extend credit to the Debtor 

thereunder without the inclusion of the DIP Roll-Up in the DIP Obligations. 

Moreover, the reduction of the Pre-Petition Obligations upon entry of this 

Interim Order and, upon entry of the Final Order, the roll-up of all 

outstanding Pre-Petition Obligations into DIP Obligations will enable the 

Debtor to obtain urgently needed financing that they need to administer this 

Chapter 11 Case and fund its operations. 

vii) Certain Conditions to DIP Facility. The DIP Lender’s willingness to make 

the DIP Loan is conditioned upon, among other things: (i) the Debtor 

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obtaining Court approval to enter into the DIP Loan Documents and to incur 

all of the respective obligations thereunder, and to confer upon the DIP 

Lender all applicable rights, powers, and remedies thereunder in each case 

as modified by this Interim Order; (ii) the provision of adequate protection 

of the Pre-Petition Lender’s interests in the Pre-Petition Collateral pursuant 

to Sections 361, 363, and 364 of the Bankruptcy Code, and (iii) the granting 

of continuing, valid, binding, enforceable, non-avoidable, and automatically 

and properly perfected postpetition security interests in the DIP Collateral 

(as defined below) to the DIP Lender, as security for the prompt payment 

of the DIP Facility and all other obligations of the Debtor under the DIP 

Loan Documents. 

L. Sections 506(c) and 552(b). In light of: (i) the DIP Lender’s agreement that its 

liens and superpriority claims shall be subject to the Carve-Out, (a) subject to the entry of a Final 

Order, the DIP Lender is entitled to a waiver of any “equities of the case” exception under Section 

552(b) of the Bankruptcy Code, and (ii) subject to the entry of a Final Financing Order, the DIP 

Lender is entitled to a waiver of the provisions of Section 506(c) of the Bankruptcy Code. 

NOW, THEREFORE, upon the Motion and the record before this Court with respect to 

the Motion, including the record made during the Interim Hearing, and good and sufficient cause 

appearing therefor, IT IS ORDERED, ADJUDGED, AND DECREED that: 

Motion Granted. The Motion is granted on an interim basis in accordance with the 

terms and conditions set forth in this Interim Order. Any objections to the Motion with respect to 

the entry of this Interim Order to the extent not withdrawn, waived, or otherwise resolved, and all 

reservation of rights included therein, are hereby denied and overruled. 

DIP Facility. 

(a) The Debtor is expressly and immediately authorized to enter into the DIP Facility 

Documents and to incur the obligations thereunder and to perform in accordance with the DIP 

Facility in accordance with and subject to this Interim Order, the Interim DIP Budget, and the DIP 

Facility Documents, to enter into, execute and/or deliver all DIP Facility Documents and all other 

instruments, certificates, agreements and documents, and to take all actions, which may be 

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reasonably required or otherwise necessary for the performance by the Debtor under the DIP 

Facility Documents, including the creation and perfection of the DIP Liens described and provided 

for herein. The Debtor is hereby immediately authorized to borrow up to the interim amount of 

$1,300,000 plus the Roll Up Amount (as defined in the DIP Credit Agreement) of the total 

available $10,000,000 under the DIP Facility, which funds shall be used solely as expressly 

provided in this Interim Order and the Interim DIP Budget attached hereto as Exhibit “B.” The 

DIP Facility shall (i) be evidenced by the books and records of the DIP Lender, this Interim Order, 

and the DIP Facility Documents; (ii) bear interest and incur fees at the rates set forth in the DIP 

Facility Documents; (iii) be secured in the manner specified below and under the applicable DIP 

Facility Documents; (iv) be payable in accordance with the applicable DIP Facility Documents; 

and (v) otherwise be governed by the terms set forth in this Interim Order and the DIP Facility 

Documents. 

(b) The Debtor shall pay to the DIP Lender principal and interest as such payments 

come due as provided in the DIP Facility Documents and in accordance with the procedures set 

forth therein. In consideration of the financial accommodations made by the DIP Lender under this 

Order and the DIP Facility Documents, in accordance with Paragraph 3 of this Order and the 

Interim DIP Budget, the Debtor is hereby authorized, without further order of this Court and as set 

forth in the DIP Facility Documents, to pay to the DIP Lender all reasonable fees and charges 

provided for in the DIP Facility Documents. 

(c) Except as otherwise set forth in the DIP Facility Documents, the DIP Lender shall 

not have any obligation to make any loan or advance under the DIP Facility Documents, unless all 

of the conditions precedent to the making of such extensions of credit under the applicable DIP 

Facility Documents and this Interim Order have been satisfied in full or waived by the DIP Lender 

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in its respective sole discretion. 

(d) The DIP Facility Documents may from time to time be amended, modified, or 

supplemented by the parties thereto without notice or a hearing if: (a) the amendment, 

modification, or supplement is: (i) in accordance with the DIP Facility Documents; (ii) beneficial 

to the Debtor; (iii) not prejudicial in any material respect to the rights of third parties, and (iv) does 

not increase the amount of the DIP Facility or extend the “Termination Date” (as defined in the 

DIP Facility Documents); (b) the amendment, modification or supplement is filed with the Court, 

and (c) a copy (which may be provided through electronic mail or facsimile) of the substantially 

final amendment, modification or supplement is provided to the U.S. Trustee at least three (3) days 

(or such shorter period agreed to by the U.S. Trustee) prior to the effective date of such amendment, 

modification or supplement. Except as otherwise provided in this paragraph, no waiver, 

modification, or amendment of any of the provisions of any DIP Facility Documents shall be 

effective unless set forth in writing, signed on behalf of the Debtor, and with the necessary consents 

required under and executed in accordance with the DIP Facility Documents, and approved by the 

Court on notice. 

(e) To the extent that the terms of this Order, or a final order, conflict with the terms 

of the DIP Facility Documents, the terms of this Order or a final order will control. 

Use of Cash Collateral. Subject to the terms and conditions of this Interim Order, 

the DIP Facility, and the DIP Facility Documents and in accordance with the Budget (subject to 

such variances as permitted in the DIP Facility Documents), the Debtor is authorized to use Cash 

Collateral until the Termination Date (as defined herein). Nothing in this Interim Order shall 

authorize the disposition of any assets of the Debtor or its estates outside the ordinary course of 

business or the Debtor’s use of any Cash Collateral or other proceeds resulting therefrom, except 

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as permitted in this Interim Order (subject to the Carve-Out), the DIP Facility, the DIP Facility 

Documents, and in accordance with the Budget (subject to such variances as permitted in the DIP 

Facility Documents). 

(a) Adequate Protection Liens. Pursuant to Sections 361, 363(e), and 364(d) of the 

Bankruptcy Code, as adequate protection of the interests of the Pre-Petition Lender against any 

Diminution in Value, the Debtor hereby grants to the Pre-Petition Lender a continuing, valid, 

binding, enforceable, and perfected postpetition security interests in and liens on all DIP Collateral 

(the “Adequate Protection Liens”). 

(b) Priority of Adequate Protection Liens. The Adequate Protection Liens shall be 

subject to the Carve-Out and shall otherwise be junior (in order of priority) only to the DIP Liens. 

The Adequate Protection Liens shall otherwise be senior to all other security interests in or liens 

on any of the Debtor’s assets. 

(c) Except as provided herein, the Adequate Protection Liens shall not be made subject 

to or pari passu with any lien or security interest heretofore or hereinafter in the Chapter 11 Case 

or any successor cases and shall be valid and enforceable against any trustee appointed in any of 

the Chapter 11 Case or any successor cases, or upon the dismissal of any of the Chapter 11 Case 

or successor cases. The Adequate Protection Liens shall not be subject to Sections 510, 549, or 

550 of the Bankruptcy Code. No lien or interest avoided and preserved for the benefit of the estate 

pursuant to Section 551 of the Bankruptcy Code shall be pari passu with or senior to the PrePetition Liens or the Adequate Protection Liens. 

(d) Adequate Protection Superpriority Claim. Subject and subordinate to the CarveOut as set forth in this Interim Order, as further adequate protection of the interests of the PrePetition Lender in the Prepetition Collateral against any Diminution in Value, the Pre-Petition 

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Lender is hereby granted as and to the extent provided by Section 507(b) of the Bankruptcy Code 

an allowed superpriority administrative expense claim in each of the Chapter 11 Case and any 

successor cases (the “Adequate Protection Superpriority Claim”). 

(e) Priority of the Adequate Protection Superpriority Claim. Except as set forth herein, 

the Adequate Protection Superpriority Claim shall have priority over all administrative expense 

claims and unsecured claims against the Debtor or its estate, now existing or hereafter arising, of 

any kind or nature whatsoever, including, without limitation, administrative expenses of the kinds 

specified in or ordered pursuant to Sections 105, 326, 328, 330, 331, 503(a), 503(b), 507(a), 506(c) 

(subject to entry of the Final Order), 507(b), 546(c), 546(d), 726, 1113 and 1114 of the Bankruptcy 

Code; provided, however, that the Adequate Protection Superpriority Claim shall be subject to the 

Carve-Out as set forth in this Interim Order and junior to the DIP Claim, and subject the lien 

priorities set forth herein. 

Adequate Protection Reservation. Subject to the Carve-Out as set forth in this 

Interim Order, nothing herein shall impair or modify the application of Section 507(b) of the 

Bankruptcy Code in the event that the adequate protection provided hereunder to the Prepetition 

Lender is insufficient to compensate for any diminution in value of its interest in the Pre-Petition 

Collateral. The receipt by the Pre-Petition Lender of the adequate protection provided herein shall 

not be deemed an admission that the interests of the Pre-Petition Lender are adequately protected. 

Further, this Interim Order shall not prejudice or limit the rights of the Pre-Petition Lender to seek 

additional relief with respect to the use of Cash Collateral or for additional adequate protection in 

a manner consistent with the Pre-Petition Credit Documents, and all parties-in-interests’ rights are 

reserved with respect thereto. 

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Budget Maintenance. The use of borrowings under the DIP Facility and Cash 

Collateral shall be in accordance with the Budget depicting on a weekly basis, cash revenues, 

receipts, expenses and disbursements, net cash flows, inventory receipts and other items set forth 

therein, for the first thirteen (13) week period following the Effective Date (as defined in the DIP 

Facility Documents) which shall be in form and substance satisfactory to, and approved by the 

DIP Lender in its sole discretion prior to the Effective Date. The Budget shall be updated by the 

Debtor (with the consent and/or at the reasonable request of the DIP Lender) from time to time in 

accordance with the DIP Facility Documents. No such updated, modified, or supplemented budget 

shall be effective until so approved (which approval shall be deemed given unless the DIP Lender 

objects in writing (for which email shall suffice) to Debtor’s counsel within five (5) business days 

following actual receipt thereof), and once approved, shall thereafter be deemed the “Budget”; 

provided, however, that in the event that the DIP Lender and the Debtor cannot agree as to an 

updated, modified or supplemented budget, the prior approved Budget shall continue in effect for 

this Chapter 11 Case, and such disagreement shall give rise to an Event of Default under the DIP 

Credit Agreement and this Interim Order once the period covered by the prior approved Budget 

has terminated. A copy of any Budget (or updated Budget) shall be delivered to counsel for a 

Committee (if appointed) and the U.S. Trustee after (or if) it has been approved by the DIP Lender. 

Budget Compliance. The Debtor shall at all times comply with the Budget, subject 

to the variances set forth in the DIP Credit Agreement. The Debtor shall provide all reports and 

other information as required in the DIP Credit Agreement (subject to the applicable grace periods 

provided therein). The Debtor’s failure to comply with the Budget (including the variances set 

forth in the DIP Credit Agreement and in this Interim Order) or to provide the reports and other 

information required in the DIP Credit Agreement and this Interim Order shall constitute an Event 

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of Default (as defined herein) following the expiration of any applicable cure period set forth in 

the DIP Credit Agreement or in this Interim Order. 

(i) By no later than 5:00 p.m. (prevailing Eastern Time) on November 30, 2023 

and every second Thursday thereafter, the Debtors shall deliver to the DIP Lender a variance report 

(in substantially the same format as the Budget) showing actual cash receipts, disbursements and 

other applicable information for the immediately preceding calendar week (ending on the 

immediately preceding Friday) noting therein all variances and including explanations for all such 

variances, on a line-item basis, from values set forth for such period(s) in the Budget or the most 

current Budget, as applicable (each, a “Variance Report”), provided, that each Variance Report 

delivered on a Testing Date (as defined herein) shall include a cumulative variance report (in 

substantially the same format as the Initial Approved Budget) showing actual cash receipts, 

disbursements and other applicable information for the immediately preceding week period 

(ending on the immediately preceding Friday) (the “Budget Period;” provided, that for the first 

four weeks following the Petition Date, the Budget Period shall begin on the Petition Date and end 

on the Testing Date), noting therein all variances and including explanations for all such variances, 

on a line-item and aggregate basis, from values set forth for such period(s) in the most current 

approved Budget.

(ii) Budget Covenants. The permitted variances listed below (collectively, the 

“Permitted Variances”) shall be tested on a rolling four-week basis, which shall first be reported 

on November 30, 2023, and on the Thursday of every second week thereafter (with respect to the 

immediately preceding Budget Period) (each such date, a “Testing Date”). The budget-related 

covenants under this Section 6(d) are collectively referred to herein as the “Budget Covenants”.

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Modification of the Automatic Stay. The automatic stay provisions of Section 362 

of the Bankruptcy Code and any other restriction imposed by order of the Court or applicable law 

are hereby modified without further notice, application, or order of the Court, but only to the extent 

necessary to permit the DIP Lender, subject in all respects to the DIP Facility Documents and this 

Interim Order, to perform any act authorized or permitted under or by virtue of this Interim Order: 

(i) to implement the DIP Facility authorized by this Interim Order and pursuant to the terms of the 

DIP Facility Documents; (ii) to take any act reasonably necessary to create, validate, evidence, 

attach, or perfect any DIP Lien, security interest, right, or claim in the DIP Collateral, and (iii) 

authorize the Debtor to pay, and the DIP Lender to retain and apply, payments made in accordance 

with the terms of this Interim Order. For the avoidance of doubt, upon the occurrence of an Event 

of Default and in the event the automatic stay has not otherwise terminated as it relates to the DIP 

Lender, the DIP Lender shall seek relief from the Court, which shall be heard on an emergency 

basis (which basis is agreed upon in advance by the Debtor) prior to taking any act otherwise 

prohibited by the automatic stay pursuant to section 362(a) of the Bankruptcy Code. 

DIP Lender’s Fees and Expenses. Without duplication of amounts required to be 

paid pursuant to the DIP Facility Documents, upon entry of this Interim Order, the Debtor shall 

pay in cash all fees, expenses, and disbursements payable to the DIP Lender. The post-petition 

payment of the fees, expenses, and disbursements set forth in the foregoing sentence shall be made 

within ten (10) days (which time period may be extended by the applicable professional in its sole 

discretion) upon the receipt by the Debtor, the creditors’ committee (if any) and the U.S. Trustee 

(the “Review Period”) of invoices therefor (the “Invoiced Fees”) and without the necessity of filing 

formal fee applications, including such amounts arising before or after the Petition Date. The 

invoices for such Invoiced Fees shall include (i) a summary of the work performed during the 

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relevant compensation period; (ii) the name of, hourly rate (if applicable) of, and number of hours 

worked by each professional and paraprofessional who worked on the matter during the relevant 

compensaton period; and (iii) the total fee amount being requested. The Debtor, the Committee 

(if any), and the U.S. Trustee may object to any portion of the Invoiced Fees within the Review 

Period by written notice to the applicable professional or by filing with the Court a motion or other 

pleading, on at least ten (10) days prior written notice to the applicable DIP Lender and the 

applicable professional of any hearing on such motion or other pleading, setting forth the specific 

objections to the disputed Invoiced Fees in reasonable narrative detail and the bases for such 

objections; provided, that payment of any undisputed portion of Invoiced Fees shall be paid within 

the time frame set forth above and shall not be delayed based on any objections thereto; provided,

further, that the applicable parties shall endeavor in good faith to consensually resolve any dispute 

prior to the filing of any such motion or pleading. 

DIP Superpriority Claims. Subject and subordinate to the Carve-Out as set forth in 

this Interim Order, upon entry of this Interim Order, the DIP Lender is hereby granted, pursuant to 

Section 364(c)(1) of the Bankruptcy Code, allowed superpriority administrative expense claims in 

the Chapter 11 Case and any successor cases (collectively, the “DIP Superpriority Claims”) for all 

DIP Obligations. Except as set forth herein, the DIP Superpriority Claims shall have priority over 

any and all other obligations, liabilities, and indebtedness of each Debtor other than the CarveOut, including without limitation any and all administrative expense claims and unsecured claims 

against the Debtor or its estate in the Chapter 11 Case and any successor cases, at any time existing 

or arising, of any kind or nature whatsoever, including, without limitation, administrative expenses 

of the kinds specified in or ordered pursuant to Sections 105, 326, 328, 330, 331, 364, 503(a), 

503(b), 507(a), 507(b), 546(c) (subject to entry of a Final Order), 546(d), 726, 1113 and 1114 of 

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the Bankruptcy Code, and any other provision of the Bankruptcy Code, as provided under Section 

364(c)(1) of the Bankruptcy Code. No lien or interest avoided and preserved for the benefit of the 

estate pursuant to Section 551 of the Bankruptcy Code shall be pari passu with or senior to the 

DIP Superpriority Claims. 

DIP Liens. 

(a) As security for the full and timely payment of the DIP Facility, subject to the CarveOut, the DIP Lender is hereby granted, pursuant to Sections 364(c)(2), (c)(3), and (d)(1) of the 

Bankruptcy Code, a first priority, senior, perfected priming lien upon the DIP Collateral (defined 

below), which liens shall constitute valid, enforceable, non-avoidable, fully perfected, and firstpriority security interests in and liens upon all DIP Collateral (the “DIP Liens”). The DIP Liens 

securing the DIP Obligations are valid, automatically perfected, non-avoidable, senior in priority, 

and superior to any security, mortgage, collateral interest, lien, or claim to any of the DIP 

Collateral, except that the DIP Liens shall be subject to the Carve-Out as set forth in this Interim 

Order and shall otherwise be junior only to Permitted Prior Liens. Other than as set forth herein or 

in the DIP Facility Documents, the DIP Liens shall not be made subject to or pari passu with any 

lien or security interest heretofore or hereinafter granted in the Chapter 11 Case or any successor 

cases and shall be valid and enforceable against any trustee appointed in the Chapter 11 Case or 

any successor cases, upon the conversion of any of the Chapter 11 Case to a case under Chapter 7 

of the Bankruptcy Code (or in any other successor case), and/or upon the dismissal of any of the 

Chapter 11 Case or successor cases. The DIP Liens shall not be subject to Sections 510, 549, or 

550 of the Bankruptcy Code. No lien or interest avoided and preserved for the benefit of the estate 

pursuant to Section 551 of the Bankruptcy Code shall be pari passu with or senior to the DIP 

Liens. 

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(b) Subject to the Carve-Out, “DIP Collateral” shall mean the Debtor’s right, title, and 

interest in and to the following, whether now owned or hereafter created, acquired or arising, and 

wherever located: 

(i) all Accounts (including healthcare insurance receivables) and related 

property; 

(ii) all of the Debtor’s deposit accounts; 

(iii) all books and records, whether or not related to any Collateral; 

(iv) all other personal property and fixtures of Debtor, including all goods, 

inventory, Equipment, furniture, fixtures, General Intangibles (including, 

without limitation, payment intangibles and software), chattel paper 

(whether tangible or electronic), supporting obligations, investment 

property, financial assets, documents, instruments (including any 

promissory notes), securities, securities accounts, contract rights or rights 

to payment of money, leases, permits, license agreements, franchise 

agreements, commercial tort claims, stock in direct and indirect 

subsidiaries, machinery, cash, letter-of-credit rights (whether or not the 

letter of credit is evidenced by a writing), Intellectual Property, copyrights, 

trademarks, patents, and tradestyles, and 

(v) any and all claims, rights, and interests in any of the above and all 

substitutions for, additions, attachments, accessories, accessions, and 

improvements to Superpriority Debtor-in-Possession Credit and Security 

Agreement, and replacements, products, proceeds, and insurance proceeds 

of any or all of the foregoing. 

(c) Except as expressly permitted in the respective DIP Facility Documents or this 

Interim Order, and absent full payment and satisfaction of all obligations of the Debtor under the 

DIP Facility, the Debtor shall not (i) grant or impose any liens on the DIP Collateral or (ii) except 

as permitted in the respective DIP Facility Documents, prime or seek to prime the DIP Liens and 

shall not offer any other parties any lien on the DIP Collateral. In addition, the Debtor shall not 

incur, create, assume, become, or be liable in any manner with respect to, or permit to exist, any 

secured indebtedness, except as expressly permitted under the DIP Facility Documents and the 

Budget, and this Interim Order. 

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(d) Subject to the Carve-Out, the DIP Liens shall not be subject to Sections 510, 549, 

or 550 of the Bankruptcy Code. No lien or interest avoided and preserved for the benefit of any 

estate pursuant to Section 551 of the Bankruptcy Code shall be made pari passu with or senior to 

the DIP Liens. 

Collateral Covenants. The Debtor shall not sell, transfer, lease, encumber, or 

otherwise dispose of any portion of the DIP Collateral except in the ordinary course of business 

and other than as permitted in the DIP Facility Documents without the prior written order of the 

Bankruptcy Court and no such consent shall be implied from any other action, inaction or 

acquiescence by the DIP Lender or an order of this Court. 

Carve Out. Notwithstanding anything in this Interim Order, the DIP Facility 

Documents, or any other order of this Court to the contrary, all claims and liens granted hereunder 

to or for the benefit of the DIP Lender, including the DIP Superpriority Claims and the DIP Liens, 

shall be subject to payment of the Carve-Out. As used in this Interim Order and the DIP Credit 

Agreement, the term “Carve-Out” means the (i) amounts payable pursuant to 28 U.S.C. 

§ 1930(a)(6) and any fees payable to the Clerk of the Bankruptcy Court, plus interest thereon; (ii) 

the amounts payable to Forshey & Prostok, LLP (“Forshey Prostok”) as Debtor’s bankruptcy 

counsel pursuant to Sections 327, 328 and 503(b), in an amount not to exceed $800,000 (plus any 

amount held by Forshey Prostok as a prepetition retainer); and (iii) the amounts payable to 

professionals other than Forshey Prostok employed at the expense of the Debtor’s estate of this 

Chapter 11 Case pursuant to Sections 327, 328, 503(b), or 1103 of the Bankruptcy Code, in an 

amount not to exceed $200,000 (which amount has been fully funded as a prepetition retainer), or 

as otherwise provided in an approved Budget. 

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Termination of DIP Financing. The Debtor’s authorization to use the DIP Facility 

shall immediately terminate upon the occurrence of a “Termination Event”, which shall mean the 

earliest to occur of (i) 30 days after the entry of this Interim Order (unless a Final Order approved 

by the DIP Lender has been entered as of such date); (ii) the expiration of five (5) business days 

(the “Default Notice Period”) following the provision of written notice to the Debtor (with a copy 

of such notice provided to counsel for the Debtor and the U.S. Trustee) upon the occurrence of an 

Event of Default (as defined in the DIP Facility Documents) and such Event of Default remains 

uncured at the expiration of such Default Notice Period unless the Bankruptcy Court determines 

no such Event of Default has occurred following the filing of a motion or proceeding during such 

Default Notice Period requesting such a determination; (iii) the occurrence of a Maturity Date as 

that term is defined in the DIP Facility Documents, and (d) the date on which neither this Interim 

Order nor the Final Order is in full force and effect. The DIP Lender shall have no further 

obligation to fund hereunder if a Chapter 11 trustee is appointed or an examiner with enlarged 

powers is appointed. 

Perfection of Liens. This Interim Order shall be sufficient and conclusive evidence 

of the creation, validity, perfection, and priority of the DIP Liens without the necessity of 

executing, filing, or recording any mortgage, security agreement, pledge agreement, financing 

statement, or other instrument or document, or the taking of any other act that otherwise may be 

required under state or federal law, rule, or regulation of any jurisdiction to validate or perfect the 

DIP Liens or to entitle the DIP Lender to the priorities granted herein. The Debtor may execute, 

and the DIP Lender is hereby authorized to execute, file, and/or record mortgages, security 

agreements, pledge agreements, financing statements, and/or other instruments or documents to 

evidence the DIP Liens, and the Debtor is hereby authorized, promptly upon a demand by the DIP 

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Lender made in accordance with the terms of the DIP Facility Documents, to execute, file, and/or 

record any such mortgages, security agreements, pledge agreements, financing statements, or other 

instruments or documents as the DIP Lender may request; provided, however, that no such 

execution, filing, or recordation shall be necessary or required in order to create or perfect the DIP 

Liens, and further, if the DIP Lender, in its sole discretion, shall choose to execute, file, and/or 

record such mortgages, security agreements, pledge agreements, financing statements, or other 

instruments or documents, or otherwise confirm perfection of such DIP Liens, all such instruments 

and documents shall be deemed to have been filed or recorded as of the Petition Date. A copy of 

this Interim Order may, at the discretion of the DIP Lender, be filed with or recorded in any filing 

or recording office in addition to or in lieu of such mortgages, security agreements, pledge 

agreements, financing statements, or other instruments or documents, and each and every federal, 

state, and local governmental agency, department, or office is hereby directed to accept a copy of 

this Interim Order and any and all documents and instruments necessary and appropriate to 

consummate the transactions contemplated by this Interim Order and the DIP Facility Documents, 

for filing and recording, and to deem this Interim Order to be in proper form for filing and 

recording. Notwithstanding the foregoing, pursuant to any applicable law, the DIP Lender is 

hereby authorized (but not required) to file or record financing statements and other filing or 

recording documents or instruments with respect to the DIP Collateral and DIP Liens as applicable, 

without the Debtor’s signature in such form and in such offices as the DIP Lender determines 

appropriate to perfect the security interests of the DIP Lender under the DIP Facility Documents 

and this Interim Order, and the DIP Lender is authorized to use collateral descriptions such as “all 

personal property” or “all assets,” in each case “whether now owned or hereafter acquired,” words 

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4872-2005-4929.8 

of similar import or any other description the DIP Lender so choose in any such financing 

statements. 

Limitation of Liability. In determining to extend credit under the DIP Facility, or 

in exercising any rights or remedies pursuant to this Interim Order and the DIP Facility Documents, 

the DIP Lender shall not be deemed to be in control of the Debtor’s operations or to be acting as a 

“responsible person” or “owner or operator” with respect to the operation or management of the 

Debtor (as such terms, or any similar terms, are used in the United States Comprehensive 

Environmental Response, Compensation and Liability Act, 29 U.S.C. §§ 9601, et seq., as 

amended, or any similar federal or state statute). 

Collateral Rights. Except as expressly permitted in this Interim Order and the DIP 

Facility Documents, in the event that any person or entity that holds a lien or security interest in 

DIP Collateral that is junior or subordinate to the DIP Liens in such DIP Collateral receives or is 

paid the proceeds of such DIP Collateral, or receives any other payment with respect thereto from 

any other source, prior to payment in full and in cash and the complete satisfaction of the DIP 

Facility, such junior or subordinate lienholder shall be deemed to have received, and shall hold, 

the proceeds of any such DIP Collateral in trust for the DIP Lender, and shall immediately turnover 

such proceeds to the DIP Lender for application in accordance with this Interim Order and the DIP 

Facility Documents. 

Credit Bidding. In connection with any sale process authorized by the Court, (i) 

the DIP Lender and (ii) subject to entry of a Final Order, the DIP Lender or any assignee or 

designee of any of the foregoing, shall be authorized to credit bid, consistent with the applicable 

DIP Facility Documents and/or Pre-Petition Credit Documents, some or all of its claims for its 

respective priority collateral (each a “Credit Bid”) pursuant to Section 363(k) of the Bankruptcy 

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4872-2005-4929.8 

Code. Subject to entry of a Final Order, the DIP Lender and the Pre-Petition Lender shall be 

deemed a “Qualified Bidder” with respect to its rights to acquire all or any of the assets by Credit 

Bid 

Survival of Interim Order. The provisions of this Interim Order and any actions 

taken pursuant hereto (a) shall survive the entry of any order: (i) confirming any chapter 11 plan 

in this Chapter 11 Case; (ii) converting the Chapter 11 Case to a successor case, or (iii) dismissing 

the Chapter 11 Case, and (b) shall continue in full force and effect notwithstanding the entry of 

any such order, and the claims, liens, and security interests granted pursuant to this Interim Order 

shall maintain its priority as provided by this Interim Order until all of the DIP Facility approved 

hereunder are indefeasibly paid in full and discharged in accordance with this Interim Order and 

the DIP Facility Documents. 

Effect of Stipulations on Third Parties. 

Generally. The admissions, stipulations, agreements, releases, and 

waivers set forth in Paragraph J of this Interim Order (collectively, the “Pre-Petition Stipulations”) 

are and shall be binding on the Debtor, any subsequent trustee, responsible person, examiner with 

expanded powers, any other estate representative, and all creditors and parties-in-interest and all 

of its successors in interest and assigns, including, without limitation, a Committee (if appointed), 

unless, and solely to the extent that, a party-in-interest with standing (other than the Debtor, as to 

which any Challenge (as defined herein) is irrevocably waived and relinquished) (i) has timely 

filed the pleadings, and timely commenced the proceeding required under the Bankruptcy Code, 

Bankruptcy Rules and Local Bankruptcy Rules challenging the Pre-Petition Stipulations (each 

such proceeding or pleading commencing a proceeding or other contested matter, a “Challenge”) 

by no later than (A) for a Committee, (if appointed), sixty (60) days from the date of formation of 

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4872-2005-4929.8 

a Committee (if appointed), or (B) seventy-five (75) days following the entry of the Interim Order 

for any other party in interest with derivative standing (the earlier to occur of (A) and (B), the 

“Challenge Deadline”), as such applicable date may be extended in writing from time to time in 

the sole discretion of the Pre-Petition Lender (with respect to the Pre-Petition Credit Documents), 

or by this Court for good cause shown pursuant to an application filed by a party-in-interest prior 

to the expiration of the Challenge Deadline, and (ii) this Court enters judgment in favor of the 

plaintiff or movant in any such timely commenced Challenge proceeding and any such judgment 

has become a final judgment that is not subject to any further review or appeal. Notwithstanding 

the foregoing, if a chapter 11 trustee is appointed or the Chapter 11 Case is converted to chapter 7 

prior to the expiration of the Challenge Deadline, (i) the chapter 11 trustee or chapter 7 trustee, as 

applicable, shall have until the later of the Challenge Deadline or the tenth (10th) day after the 

appointment of the chapter 11 trustee or the conversion of the Chapter 11 Case to chapter 7, as 

applicable, to commence a Challenge, subject to any further extension by order of the Court for 

cause, and (ii) if the Committee has asserted a Challenge prior to the Challenge Deadline, the 

chapter 11 trustee or chapter 7 trustee will stand in the shoes of the Committee in such Challenge. 

Binding Effect. To the extent no Challenge is timely commenced by 

the Challenge Deadline, or to the extent such proceeding does not result in a final and nonappealable judgment or order of this Court that is inconsistent with the Pre-Petition Stipulations, 

then, without further notice, motion, or application to, order of, or hearing before, this Court and 

without the need or requirement to file any proof of claim, the Pre-Petition Stipulations shall, 

pursuant to this Interim Order, become binding, conclusive, and final on any person, entity, or 

party in interest in the Chapter 11 Case, and its successors and assigns, and in any successor case 

for all purposes and shall not be subject to challenge or objection by any party-in-interest, 

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4872-2005-4929.8 

including, without limitation, a trustee, responsible individual, examiner with expanded powers, 

or other representative of the Debtor’s estate. Notwithstanding anything to the contrary herein, if 

any such proceeding is timely commenced, the Pre-Petition Stipulations shall nonetheless remain 

binding on all other parties-in-interest and preclusive as provided in subparagraph (a) above except 

to the extent that any Pre-Petition Stipulations are expressly the subject of a timely filed Challenge, 

which Challenge is successful as set forth in a final judgment as provided in subparagraph (a) 

above. To the extent any such Challenge proceeding is timely commenced, the Pre-Petition Lender 

shall be entitled to payment of the reasonable and documented related costs and expenses, 

including, but not limited to, reasonable and documented attorneys’ fees, incurred under the PrePetition Credit Documents in defending themselves in any such proceeding as adequate protection. 

Upon a successful Challenge brought pursuant to this paragraph, the Court may fashion any 

appropriate remedy. If, as a result of any successful Challenge, the Pre-Petition Lender is required 

to disgorge, turn over, or otherwise pay to the estate of the Debtor any amount with the effect that 

the claim of such Pre-Petition Lender is reinstated as a Pre-Petition Obligation, such amount so 

paid to the Debtor shall be immediately paid to the DIP Lender for application and payment of the 

DIP Obligations. 

Cash Collection. From and after the date of the entry of this Interim Order, all 

collections and proceeds of any DIP Collateral or services provided by Debtor and all Cash 

Collateral that shall at any time come into the possession, custody, or control of Debtor, or to 

which Debtor is now or shall become entitled at any time, shall be promptly deposited in the same 

lock-box and/or deposit accounts into which the collections and proceeds of the Pre-Petition 

Collateral were deposited under the Pre-Petition Credit Documents (or in such other accounts as 

are designated by the DIP Lender from time to time) (collectively, the “Cash Collection 

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4872-2005-4929.8 

Accounts”), which accounts (except as otherwise set forth in the DIP Credit Agreement) shall be 

subject to the sole dominion and control of the DIP Lender. All proceeds and other amounts in the 

Cash Collection Accounts shall be remitted to the DIP Lender for application in accordance with 

the DIP Facility Documents and this Interim Order. Unless otherwise agreed to in writing by the 

DIP Lender, or otherwise provided for herein, the Debtor shall maintain no accounts except those 

identified in any cash management order entered by the Court (a “Cash Management Order”). The 

Debtor and the financial institutions where the Debtor’s Cash Collection Accounts are maintained 

(including those accounts identified in any Cash Management Order) are authorized and directed 

to remit, without offset or deduction, funds in such Cash Collection Accounts upon receipt of any 

direction to that effect from the DIP Lender. 

No Third-Party Rights. Except as explicitly provided for herein, this Interim Order 

does not create any rights for the benefit of any third party, creditor, equity holder, or any direct, 

indirect, or incidental beneficiary. 

Subsequent Reversal or Modification. This Interim Order is entered pursuant to, 

inter alia, Section 364 of the Bankruptcy Code and Bankruptcy Rules 4001(b) and (c), granting 

the DIP Lender all protections afforded by Section 364(e) of the Bankruptcy Code. If any or all of 

the provisions of this Interim Order are hereafter reversed, modified, vacated, or stayed, that action 

will not affect (i) the validity of any obligation, indebtedness, or liability incurred hereunder by 

the Debtor to the DIP Lender, or (ii) the validity and enforceability of any lien, claim, obligation, 

or priority authorized or created under this Interim Order or pursuant to the DIP Facility 

Documents as of such date. Notwithstanding any such reversal, stay, modification, or vacatur, any 

postpetition indebtedness, obligation, or liability incurred by the Debtor to the DIP Lender, prior 

to written notice being delivered to the DIP Lender, of the effective date of such action, shall be 

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4872-2005-4929.8 

governed in all respects by the original provisions of this Interim Order, and the DIP Lender shall 

be entitled to all the rights, remedies, privileges, and benefits granted herein and in the DIP Facility 

Documents with respect to all such indebtedness, obligations, or liability. 

No Waiver. This Interim Order shall not be construed in any way as a waiver or 

relinquishment of any rights that the DIP Lender may have to bring or be heard on any matter 

brought before this Court. 

Binding Effect; Successors and Assigns. Except as otherwise provided in the DIP 

Facility Documents, the provisions of this Interim Order shall be binding upon and inure to the 

benefit of the DIP Lender, the Debtor, and their respective successors and assigns (including any 

trustee or fiduciary hereafter appointed or elected as a legal representative of the Debtor, its estate, 

or with respect to the property of its estate) whether in this Chapter 11 Case, in any successor case, 

or upon dismissal of any this Chapter 11 Case or successor case; provided, however, that the DIP 

Lender shall have no obligation to extend any financing to, or permit the use of cash collateral or 

DIP Collateral by, any chapter 7 or chapter 11 trustee or similar representative person appointed 

for the Debtor’s estate. 

Indemnification. 

a) The DIP Lender has acted in good faith, and without negligence or violation of 

public policy or law, in respect of all actions taken by them in connection with or related in any 

way to negotiating, implementing, documenting, or obtaining the requisite approvals of the DIP 

Facility, including in respect of the granting of the DIP Liens and the Adequate Protection Liens, 

any challenges or objections to the DIP Facility, and all documents related to any and all 

transactions contemplated by the foregoing. Accordingly, the Pre-Petition Lender and the DIP 

Lender, and, solely in their capacities as such, each of their respective successors, assigns, affiliates 

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4872-2005-4929.8 

parents, subsidiaries, partners, controlling persons, representatives, agents, attorneys, advisors, 

financial advisors, consultants, professionals, officers, directors, members, managers, heirs, 

predecessors, successors, and assigns, shall be and hereby are indemnified and held harmless by 

the Debtor in respect of any claim or liability incurred in respect thereof or in any way related 

thereto, provided that no such parties will be indemnified for any cost, expense, or liability to the 

extent determined in a final, non-appealable judgment of a court of competent jurisdiction to have 

resulted primarily from such parties’ gross negligence or willful misconduct. Except as provided 

herein, no exception or defense exists in contract, law, or equity as to any obligation set forth, as 

the case may be, in this Paragraph 25, in the Pre-Petition Credit Documents, or in the DIP Loan 

Documents, to the Debtor’s obligation to indemnify and/or hold harmless the Pre-Petition Lender, 

or the DIP Lender, as the case may be. 

No Proof of Claim. The DIP Lender shall not be required to file proofs of claim in 

this Chapter 11 Case or any successor case in order to maintain its respective claims with respect 

to the DIP Facility, all of which shall be due and payable in accordance with this Interim Order, 

and the DIP Facility Documents, without the necessity of filing any such proof of claim; the 

statements of claim in respect of the respective DIP Facility set forth in this Interim Order, together 

with the evidence accompanying the Motion, and presented at the Interim Hearing, are deemed 

sufficient to and do constitute proofs of claim in respect of such obligations and such secured 

status. 

Monitoring of Collateral. The DIP Lender and its consultants and advisors shall be 

given reasonable access to the Debtor’s books, records, assets, and properties. 

Section 506(c) Claims. Subject to entry of a Final Financing Order, no costs or 

expenses of administration which have been or may be incurred in the Chapter 11 Case at any time 

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4872-2005-4929.8 

shall be charged against the DIP Lender or the Pre-Petition Lender, or any of their respective 

claims, the DIP Collateral, or the Pre-Petition Collateral pursuant to Sections 105 or 506(c) of the 

Bankruptcy Code, or otherwise, without the prior written consent of the DIP Lender, or the PrePetition Lender, as applicable, and no such consent shall be implied from any other action, 

inaction, or acquiescence by any such agents or lenders. 

Section 552(b). Subject to entry of a Final Financing Order, the Pre-Petition Lender 

shall be entitled to all of the rights and benefits of Section 552(b) of the Bankruptcy Code, and the 

“equities of the case” exception under Section 552(b) of the Bankruptcy Code shall not apply to 

the Prepetition Lender, with respect to proceeds, product, offspring or profits of any of the PrePetition Collateral. 

Order Effective Immediately. Notwithstanding Bankruptcy Rules 4001(a)(3), 

6004(h), 6006(d), 7062, 9024, or any other Bankruptcy Rule, or Rule 62(a) of the Federal Rules 

of Civil Procedure, this Interim Order shall be immediately effective and enforceable upon its 

entry, and there shall be no stay of execution or effectiveness of this Interim Order. 

Final Hearing. The Debtor will file a proposed final order and Budget by ___, 2023. 

Pursuant to Bankruptcy Rule 4001(d)(2), any objection to the entry of a Final Order on the Motion 

must be filed on or before ___, 2023 (the “Objection Deadline”). Objections shall be in writing 

and shall be filed with the Clerk of the Bankruptcy Court so that any such objections are received 

on or before the Objection Deadline. The Final Hearing to consider entry of the Final Order and 

final approval of the DIP Facility is scheduled for _____, 2023, at __:__ __ __m at room [__], U.S. 

Courthouse, 501 W. Tenth Street, Fort Worth, Texas 76102 and through the Court’s Cisco WebEx 

Meeting application at [__]. 

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Service of this Interim Order. Within five (5) business days upon entry of this 

Interim Order, the Debtor shall serve, by United States mail, first-class postage prepaid, notice of 

the entry of this Interim Order and of the Final Hearing (the “Final Hearing Notice”), together with 

copies of this Interim Order and the Motion, on all creditors and parties in interest included on the 

Creditor Matrix filed in this Chapter 11 Case. 

Retention of Jurisdiction. The Bankruptcy Court has and will retain jurisdiction to 

interpret and enforce this Interim Order according to its terms. 

### END OF ORDER ### 

Order Submitted By: 

[__] 

L:\JPROSTOK\Lion Star Nacogdoches Hospital, LLC #6429\Pleadings\Proposed Interim Order FP 11.19.23 3 pm.docx 

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Exhibit A to Interim Order 

DIP CREDIT AGREEMENT 

See Exhibit B 

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EXHIBIT “B” 

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Nacogdoches Memorial Hospital

13 Week Cash Flow ProjectionSunday, November 19, 2023

Week Ending 11/24/23 12/01/23 12/08/23 12/15/23 12/22/23 12/29/23 01/05/24 01/12/24 01/19/24 01/26/24 

Beginning Cash ‐ $                  ‐ $                  1,80 $             11,80 0 $          61,80 0 $          39,80 0 $          109,80 0 $        1,60 0 $             21,60 0 $          88,60 0 $          

0 

Draws 1,825,00 $      1,250,00 0 $      2,425,00 0 $      800,00 0 $        1,750,00 0 $     1,000,00 0 $     1,855,00 0 $     800,00 0 $         1,700,00 0 $     1,000,00 0 $     

0 

Total Cash Inflow 1,825,00 $      1,250,00 0 $      2,425,00 0 $      800,00 0 $        1,750,00 0 $     1,000,00 0 $     1,855,00 0 $     800,00 0 $         1,700,00 0 $     1,000,00 0 $     

0 

Salaries & Wages 1,150,00 $      1,150,00 0 $      1,150,00 0 $     1,050,00 0 $     1,050,00 0 $     

0 

Benefits 155,00 $         155,00 0 $         155,00 0 $        155,00 0 $        155,00 0 $        155,00 0 $        155,00 0 $        155,00 0 $         155,00 0 $        155,00 0 $        

0 

Insurance 42,00 $           35,00 0 $          42,00 0 $          35,00 0 $          42,00 0 $          

0 

Contract Labor 25,00 $           25,00 0 $           25,00 0 $          25,00 0 $          25,00 0 $          25,00 0 $          25,00 0 $          25,00 0 $           25,00 0 $          25,00 0 $          

0 

Physician Payroll 350,00 $         170,00 0 $        350,00 0 $        170,00 0 $         350,00 0 $        

0 

Supplies 140,00 $         140,00 0 $         140,00 0 $        140,00 0 $        140,00 0 $        140,00 0 $        130,00 0 $        130,00 0 $         130,00 0 $        130,00 0 $        

0 

Physician Fees 60,00 $           60,00 0 $           60,00 0 $          60,00 0 $          60,00 0 $          60,00 0 $          60,00 0 $          60,00 0 $           60,00 0 $          60,00 0 $          

0 

Purchased Services 50,00 $           50,00 0 $           50,00 0 $          50,00 0 $          50,00 0 $          50,00 0 $          45,00 0 $          45,00 0 $           45,00 0 $          45,00 0 $          

0 

Equipment Rent 50,00 $          50,00 0               

0 

Building Rent 64,20 $           64,20 0 $          

0 

Repairs & Maintenance 50,00 $           50,00 0 $           50,00 0 $          50,00 0 $          50,00 0 $          50,00 0 $          50,00 0 $          50,00 0 $           50,00 0 $          50,00 0 $          

0 

MarketingUtilities 40,00 $           40,00 0 $           40,00 0 $          40,00 0 $          40,00 0 $          40,00 0 $          40,00 0 $          40,00 0 $           40,00 0 $          40,00 0 $          

0 

Other Operating  40,00 $           40,00 0 $           40,00 0 $          40,00 0 $          40,00 0 $          40,00 0 $          35,00 0 $          35,00 0 $           35,00 0 $          35,00 0 $          

0 

Property Taxes Interest Payments 20,00 $           20,00 0 $           20,00 0 $          20,00 0 $          20,00 0 $          20,00 0 $          20,00 0 $          20,00 0 $           20,00 0 $          20,00 0 $          

0 

ER 254,00 $         254,00 0 $        

0 

UC/Chirp Fees/LPPF 600,00 $        0

Patient Refunds 10,00 $           10,00 0 $           10,00 0 $          10,00 0 $          10,00 0 $          10,00 0 $          10,00 0 $          10,00 0 $           10,00 0 $          10,00 0 $          

0 

Fixed AssetsTravel Expenses 13,00 $           13,00 0 $          13,00 0 $          

0 

Deposits $       100,00 (100,000) $        0

DIP Fees 30,00 $           50,00 0 $           50,00 0 $          50,00 0 $          25,00 0 $          25,00 0 $          25,00 0 $          25,00 0 $           25,00 0 $          25,00 0 $          

0 

Trustee Fees $       144,000

Legal/Professional $        

200,000 

Total Cash Outlays 1,825,00 $      1,248,20 0 $      2,415,00 0 $      750,00 0 $        1,772,00 0 $     930,00 0 $        1,963,20 0 $     780,00 0 $         1,633,00 0 $     962,00 0 $        

0 

Net Change in Cash ‐ $                  1,80 $              10,00 0 $          50,00 0 $          (22,000) 0 $         70,00 $          (108,200) 0 $       20,00 $           67,00 0 $          38,00 0 $          

0 

Ending Cash ‐ $                  1,80 $              11,80 0 $          61,80 0 $          39,80 0 $          109,80 0 $        1,60 0 $             21,60 0 $           88,60 0 $          126,60 0 $        

0 

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EXHIBIT “B” 

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SUPERPRIORITY DEBTOR-IN-POSSESSION 

CREDIT AND SECURITY AGREEMENT 

between 

LION STAR NACOGDOCHES HOSPITAL, LLC 

as the Borrower 

and 

eCAPITAL HEALTHCARE CORP. 

as the Lender 

Dated as of 

 [ ], 2023 

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4874-6257-0384.6 

SUPERPRIORITY DEBTOR-IN-POSSESSION 

CREDIT AND SECURITY AGREEMENT 

Table of Contents 

Page 

I. DEFINITIONS .................................................................................................................... 2

1.1 General Terms ....................................................................................................... 2

1.2 Specific Terms ....................................................................................................... 2

1.3 Other Definitional and Interpretative Provisions ................................................ 23

1.4 Time is of the Essence ......................................................................................... 23

II. ADVANCES, PAYMENT AND INTEREST .................................................................. 23

2.1 Advances; Full-Roll of Pre-Petition Obligations ................................................ 23

2.2 Evidence of Obligations; Maturity ...................................................................... 25

2.3 Interest ................................................................................................................. 26

2.4 Revolving Facility Disbursements; Requirement to Deliver Borrowing 

Certificate .................................................................................................. 26

2.5 Revolving Facility Collections; Repayment; Borrowing Availability and 

Lockbox .................................................................................................... 27

2.6 Promise to Pay; Manner of Payment ................................................................... 29

2.7 Repayment of Excess Advances .......................................................................... 29

2.8 Payments by the Lender ...................................................................................... 30

2.9 Grant of Security Interest; Collateral .................................................................. 30

2.10 Collateral Administration .................................................................................... 31

2.11 Power of Attorney ............................................................................................... 34

2.12 Setoff Rights ........................................................................................................ 34

III. FEES AND OTHER CHARGES...................................................................................... 35

3.1 Facility Fee .......................................................................................................... 35

3.2 Unused Line Fee .................................................................................................. 35

3.3 Collateral Management Fee ................................................................................. 35

3.4 Termination Fee .................................................................................................. 35

3.5 Computation of Fees; Lawful Limits .................................................................. 36

3.6 Default Rate of Interest ....................................................................................... 36

IV. CONDITIONS PRECEDENT .......................................................................................... 37

4.1 Conditions to Closing and Advances .................................................................. 37

4.2 Waivers of Conditions to Advances .................................................................... 38

V. REPRESENTATIONS AND WARRANTIES ................................................................. 39

5.1 Organization and Authority ................................................................................. 39

5.2 Loan Documents .................................................................................................. 39

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4874-6257-0384.6 

5.3 Subsidiaries, Capitalization and Ownership Interests ......................................... 39

5.4 Properties ............................................................................................................. 40

5.5 Other Agreements ................................................................................................ 40

5.6 Litigation ............................................................................................................. 40

5.7 Labor Matters ...................................................................................................... 40

5.8 Tax Returns, Governmental Reports ................................................................... 41

5.9 Financial Statements and Reports ....................................................................... 41

5.10 Compliance with Law ......................................................................................... 41

5.11 Intellectual Property ............................................................................................ 41

5.12 Licenses and Permits ........................................................................................... 42

5.13 Disclosure ............................................................................................................ 42

5.14 Existing Indebtedness; Investments, Guarantees and Certain Contracts............. 42

5.15 Agreements with Affiliates ................................................................................. 43

5.16 Insurance ............................................................................................................. 43

5.17 Names, Location of Offices, Records and Collateral .......................................... 43

5.18 Non-Subordination .............................................................................................. 43

5.19 Accounts .............................................................................................................. 44

5.20 Healthcare Law Compliance Representations ..................................................... 44

5.21 Reliance on Representations; Survival ................................................................ 47

5.22 Compliance with Environmental Requirements; No Hazardous Substances ...... 47

5.23 Material Contracts ............................................................................................... 48

5.24 Third-Party Payor Billing Numbers ................................................................ 48

5.25 Financing Orders ............................................................................................... 49

5.26 DIP Order Notices ............................................................................................. 49

5.27 Superpriority Administrative Expense Claims .............................................. 49

5.28 DIP Liens ............................................................................................................ 49

5.29 Use of Proceeds. .................................................................................................. 49

VI. AFFIRMATIVE COVENANTS ...................................................................................... 49

6.1 Financial Statements, Reports and Other Information ........................................ 49

6.2 Late Fee. .............................................................................................................. 53

6.3 Payment of Obligation ......................................................................................... 53

6.4 Conduct of Business and Maintenance of Existence and Assets ........................ 53

6.5 Compliance with Legal, Tax and Other Obligations ........................................... 54

6.6 Insurance ............................................................................................................. 54

6.7 True Books .......................................................................................................... 55

6.8 Inspection; Period Audits .................................................................................... 55

6.9 Further Assurances; Post Closing ........................................................................ 56

6.10 Payment of Indebtedness ..................................................................................... 56

6.11 Lien Terminations ............................................................................................... 56

6.12 Use of Proceeds ................................................................................................... 56

6.13 Collateral Documents; Security Interest in Collateral ......................................... 56

6.14 Taxes and Other Charges .................................................................................... 57

6.15 Hazardous Substances ......................................................................................... 58

6.16 Licensed Facilities ............................................................................................... 58

6.17 Healthcare Operations ......................................................................................... 58

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6.18 Bankruptcy Matters ............................................................................................. 60

VII. NEGATIVE COVENANTS ............................................................................................. 60

7.1 Financial Covenants ............................................................................................ 60

7.2 No Indebtedness Other Than Permitted Indebtedness ........................................ 60

7.3 No Liens Other Than Permitted Liens ................................................................ 60

7.4 Investments, New Facilities or Collateral; Subsidiaries ...................................... 61

7.5 Prohibited Payments ............................................................................................ 61

7.6 Transactions with Affiliates ................................................................................ 61

7.7 Organizational Documents; Fiscal Year; Dissolution; Use of Proceeds ............. 62

7.8 Asset Sales ........................................................................................................... 63

7.9 Management ........................................................................................................ 63

7.10 Restrictive Agreements ....................................................................................... 63

7.11 Modifications of Certain Agreements ................................................................. 63

7.12 Deposit Accounts ................................................................................................ 64

7.13 Truth of Statements ............................................................................................. 64

7.14 IRS Form 8821 .................................................................................................... 64

7.15 Third Party Payor Programs ................................................................................ 64

7.16 Filing of Motions and Applications ..................................................................... 64

7.17 Interim and Final Financing Orders .................................................................... 65

7.18 Bankruptcy Actions ............................................................................................. 65

VIII. EVENTS OF DEFAULT .................................................................................................. 65

8.1 Events of Default ................................................................................................. 65

8.2 Acceleration and Suspension or Termination of Commitments ......................... 68

IX. RIGHTS AND REMEDIES AFTER DEFAULT ............................................................. 68

9.1 Rights and Remedies ........................................................................................... 68

9.2 Application of Proceeds ...................................................................................... 69

9.3 Application of Payments Following Default ....................................................... 70

9.4 Rights and Remedies not Exclusive .................................................................... 70

X. WAIVERS AND JUDICIAL PROCEEDINGS ............................................................... 70

10.1 Waivers ................................................................................................................ 70

10.2 Delay; No Waiver or Defaults ............................................................................. 71

10.3 Jury Waiver ......................................................................................................... 71

10.4 Cooperation in Discovery and Litigation ............................................................ 71

XI. EFFECTIVE DATE AND TERMINATION ................................................................... 72

11.1 Effectiveness and Termination ............................................................................ 72

11.2 Survival ............................................................................................................... 73

XII. ASSIGNMENTS AND PARTICIPATIONS ................................................................... 73

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12.1 Assignments ........................................................................................................ 73

XIII. MISCELLANEOUS ......................................................................................................... 73

13.1 Governing Law; Jurisdiction; Service of Process; Venue ................................... 73

13.2 Binding Effect of Loan Documents ..................................................................... 73

13.3 Revival of Obligations ......................................................................................... 74

13.4 Indemnity ............................................................................................................. 74

13.5 Notice .................................................................................................................. 75

13.6 Severability; Captions; Counterparts; Facsimile Signatures ............................... 75

13.7 Expenses .............................................................................................................. 76

13.8 Entire Agreement ................................................................................................ 76

13.9 The Lender Approvals ......................................................................................... 77

13.10 USA Patriot Act ................................................................................................... 77

 

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4874-6257-0384.6 

ANNEX I 

Financial and Loan Covenants 

EXHIBITS 

Exhibit A - Borrowing Certificate

Exhibit B - Compliance Certificate 

Exhibit C - Budget 

SCHEDULES 

Schedule 2.4 - Borrower’s Account for Funding Wires

Schedule 2.5 - Borrower’s Deposit Accounts 

Schedule 5.3 - Organizational Information 

Schedule 5.4 - Real Property Owned or Leased

Schedule 5.6 - Litigation 

Schedule 5.16 - Insurance

Schedule 5.17A - Corporate Names

Schedule 5.17B - Business and Collateral Locations 

Schedule 5.20 - Exceptions to Healthcare Law Compliance Representations

Schedule 5.23 - Material Contracts 

Schedule 5.24 - Third-Party Payor Billing Numbers

Schedule 7.3 - Liens

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SUPERPRIORITY DEBTOR-IN-POSSESSION 

CREDIT AND SECURITY AGREEMENT 

 THIS SUPERPRIORITY DEBTOR-IN-POSSESSION CREDIT AND SECURITY 

AGREEMENT (this “Agreement”) dated as of [ ], 2023, is entered into by and between LION 

STAR NACOGDOCHES HOSPITAL, LLC, a Texas limited liability company (together, the 

“Borrower”), as Borrower, being debtor and debtor-in-possession in a case pending under Chapter 

11 of the Bankruptcy Code (the “Bankruptcy Case”), and eCAPITAL HEALTHCARE CORP., 

a Delaware corporation, f/k/a CNH FINANCE FUND I, L.P., a Delaware limited partnership (the 

“Lender”). 

RECITALS 

 WHEREAS, on [__], 2023 (the “Petition Date”), the Borrower filed a voluntary 

petition with the Bankruptcy Court for the [__] district of Texas. The Borrower has continued to 

be in possession of its assets and in the management of its business pursuant to Sections 1107(a) 

and 1108 of the Bankruptcy Code; 

 WHEREAS, the Borrower has requested and the Lender has agreed to make 

available to the Borrower a secured debtor-in-possession revolving credit facility in the maximum 

principal amount of $10,000,000.00 (the “Revolving Facility”) to provide the Borrower with the 

funds necessary for it to meet its working capital needs, professional fees and expenses, and other 

expenses set forth in the Budget upon the terms and conditions set forth herein and subject to the 

approval of the Bankruptcy Court; 

 WHEREAS, prior to the Petition Date, the Lender provided financing to the 

Borrower pursuant to the Pre-Petition Credit Agreement (as defined herein); 

WHEREAS, as of the close of business on [__], 2023, the Lender under the 

Pre-Petition Credit Agreement was owed $[__] in the outstanding principal with respect to Loans 

(as such term is defined in the Pre-Petition Credit Agreement) plus interest, fees, costs and 

expenses and all other Pre-Petition Obligations under the Pre-Petition Credit Agreement; 

WHEREAS, the Pre-Petition Obligations, under and as defined in the Pre-Petition 

Credit Agreement, are secured by a security interest in certain existing and after-acquired assets 

of the Borrower as more fully set forth in the Pre-Petition Credit Agreement and such security 

interest is perfected and, with certain exceptions, as described in the Pre-Petition Credit Agreement 

has priority over other security interests; 

WHEREAS, the Lender’s willingness to extend financial accommodations to the 

Borrower as more fully set forth in this Agreement and the other Loan Documents, is done solely 

as an accommodation to the Borrower and at the Borrower’s request and in furtherance of the 

Borrower enterprise; 

 WHEREAS, to secure the Borrower’s obligations hereunder, the Borrower will 

grant to the Lender, valid, perfected and enforceable superpriority Liens, senior to all other security 

interests in the Collateral, approved pursuant to Sections 364(c)(1) and (d)(1) of the Bankruptcy 

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4874-6257-0384.6 

Code, which Liens are a material and necessary condition of the Lender’s willingness to provide 

the credit contemplated herein; and 

WHEREAS the Lender is willing to make the Revolving Facility available to the 

Borrower upon the terms and subject to the conditions set forth herein. 

AGREEMENT 

 NOW THEREFORE, in consideration of the foregoing and for other good and valuable 

consideration, the receipt and adequacy of which hereby are acknowledged, the Borrower and the 

Lender hereby agree as follows: 

I. DEFINITIONS 

1.1 General Terms 

For purposes of this Agreement, in addition to the definitions above and elsewhere in this 

Agreement, the terms listed below shall have the meanings set forth. All capitalized terms used 

which are not specifically defined shall have meanings provided in Article 9 of the UCC to the 

extent the same are used or defined therein. Unless otherwise specified herein, any agreement or 

contract referred to herein shall mean such agreement as modified, amended or supplemented from 

time to time. Unless otherwise specified, as used in the Loan Documents or in any certificate, 

report, instrument or other document made or delivered pursuant to any of the Loan Documents, 

all accounting terms not defined elsewhere in this Agreement shall have the meanings given to 

such terms in and shall be interpreted in accordance with GAAP applied on a basis consistent with 

the most recent audited consolidated financial statements of the Borrower delivered to the Lender 

on or prior to the Closing Date. 

1.2 Specific Terms 

“Account Debtor” shall mean “account debtor,” as defined in Article 9 of the UCC, and 

any other obligor in respect of an Account. 

“Accounts” shall mean all of Borrower’s (i) accounts (as that term is defined in the UCC), 

(ii) Payment Intangibles, and (iii) all other rights of payment, collection or reimbursement (whether 

owed directly to Borrower or assigned to Borrower by a patient or other third party), whenever 

due, that arose out of, or will arise out of, the rendering of services, the provision of room, board 

or other daily living assistance, or the sale, assignment, lease or license of Equipment, prosthetics, 

pharmaceutical or other Goods, whether before or after the date of this Agreement and including, 

all of Borrower’s rights of payment, collection or reimbursement with respect to such services 

from any insurer, federal or state government agency or other third party; whether billed on a 

fee for service, monthly per patient capitation charge or any other basis, whether or not the 

accounts, payment intangibles, or rights of payment, collection or reimbursement have been 

invoiced or billed, written off, partially paid, currently assigned to collection agencies or other 

third party service vendors. Without limiting the foregoing, Accounts shall also include all 

monies due or to become due to Borrower and obligations to Borrower in any form (whether 

arising in connection with contracts, contract rights, Instruments, or Chattel Paper), in each case 

whether or not earned by performance, now or hereafter in existence, and all documents of title 

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or other documents representing any of the foregoing, and all collateral security and guarantees 

of any kind, now or hereafter in existence, given by any Person with respect to any of the 

foregoing. 

“Accrediting Organization” shall mean any Person from which Borrower has received 

an accreditation as of the Closing Date or thereafter. 

“ACH” shall mean automated clearing house.

“Advance” shall mean a borrowing under the Revolving Facility. Any amounts paid by 

the Lender on behalf of the Borrower or any Guarantor under any Loan Document shall also be an 

Advance for purposes of this Agreement. Each Advance shall increase the principal amount 

outstanding hereunder. 

“Affiliate” shall mean, as to any Person, any other Person (a) that, directly or indirectly 

through one or more intermediaries, controls, is controlled by, or is under common control with, 

such Person, (b) who is a director or officer (i) of such Person, (ii) of any Subsidiary of such 

Person, or (iii) of any Person described in clause (a) above with respect to such Person, and (c) 

which, directly or indirectly through one or more intermediaries, is the beneficial or record owner 

(as defined in Rule 13d-3 of the Securities Exchange Act of 1934, as amended, as the same is in 

effect on the date hereof) of ten percent (10%) or more of any class of the outstanding voting stock, 

securities or other equity or ownership interests of such Person. For purposes of this definition, 

the term “control” (and the correlative terms “controlled by” and “under common control with”) 

shall mean the possession, directly or indirectly, of the power to direct or cause the direction of 

the administrative management or policies (even without the power to direct or cause the direction 

of the clinical/medical management or policies), whether through ownership of securities or other 

interests, by contract or otherwise. 

“Applicable Margin” shall mean two and percent (2.00 %). 

“Applicable Rate” shall mean the sum of (i) the Applicable Margin, (ii) the Prime Rate, 

and (iii) if applicable, the Default Rate, expressed as a percentage. 

“Availability” shall mean the Revolving Loan Limit less all Revolving Loans outstanding 

less cash on hand, minus any reserves against Availability imposed by the Lender in its discretion. 

“Bankruptcy Case” shall have the meaning assigned to that term in the preamble of this 

Agreement. 

“Bankruptcy Code” shall mean Title 11 of the United States Code entitled “Bankruptcy,” 

as the same may be amended, modified or supplemented from time to time, and any successor 

statute thereto. 

“Bankruptcy Court” means the United States Bankruptcy Court for the [__] District of 

Texas or any other bankruptcy court having jurisdiction over the bankruptcy case from time to 

time. 

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“Books and Records” shall mean the Borrower’s books and records specifically relating 

to Accounts, including, but not limited to, ledgers, records indicating, summarizing, or evidencing 

the Borrower’s Accounts and all computer programs, disc or tape files, printouts, runs, and other 

computer prepared information with respect to the foregoing and any software necessary to operate 

the same. 

“Borrower” shall mean the entity described in the first paragraph of this Agreement and 

each of its successors and permitted assigns.

“Borrowing Base” shall mean, as of any date of determination: 

(a) the Net Collectible Value of Eligible Receivables of the Borrower, as such Net 

Collectible Value is determined by the Lender with reference to the most recent Borrowing 

Certificate, other factors deemed relevant by the Lender and otherwise in accordance with the 

Agreement; provided, however, that if as of such date of determination the most recent Borrowing 

Certificate is of a date more than four (4) Business Days before such date, the Borrowing Base 

shall be determined by Lender; minus 

(b) the amount of any Carve-Outs, reserves, or adjustments against the Borrowing Base 

provided for in this Agreement or determined by the Lender from time to time. 

“Borrowing Certificate” shall mean a Borrowing Certificate substantially in the form of 

Exhibit A. 

“Borrowing Date” shall have the meaning assigned to that term in Section 2.4. 

“Budget” shall mean the Budget attached hereto as Exhibit C to this Agreement, in form 

and substance satisfactory to the Lender and approved by the Bankruptcy Court. It is understood 

that the Budget attached hereto as Exhibit C will be updated in accordance with Section 6.1(d)(vi). 

Any amended or restated Budget shall be in form and substance satisfactory to Lender; however, 

for purposes of calculating compliance with the Budget and providing a Budget-to-actual 

presentation, the initial expenses and revenues for the relevant time periods as set forth in the 

earliest Budget shall be used and not the expenses and revenues for such time period as may be set 

forth in any subsequently amended or restated Budget. 

“Business Day” shall mean any day other than a Saturday, Sunday, Good Friday, or other 

day on which the Federal Reserve or the Lender is closed. 

“Capital Lease” shall mean, as to any Person, a lease or any interest in any kind of 

property or asset by that Person as lessee, that is, should be or should have been recorded as a 

“capital lease” of such person in accordance with GAAP. 

“Capitalized Lease Obligations” shall mean all obligations of any Person under Capital 

Leases, in each case, taken at the amount thereof accounted for as a liability in accordance with 

GAAP. 

“CARES Escrow Agreement” shall have the meaning assigned to that term in the 

Hospital Asset Purchase Agreement. 

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“CARES Escrow Funds” shall mean the funds deposited in escrow with Commercial 

Bank of Texas, N.A. or other agent mutually agreeable to Borrower and Old Operator in the initial 

amount of $6,000,000 pursuant to the CARES Escrow Agreement (as defined in the Hospital Asset 

Purchase Agreement).

“Carve-Outs” has the meaning set forth in the Financing Orders, including monthly 

payment of Professional Fees pursuant to an interim order. 

“Cash Advance Loan” means any loan, debt, advance, merchant cash advance, business 

cash advance, ACH business loan, or other indebtedness or financing arrangement (whether such 

financing is on or off-balance sheet, secured or unsecured) incurred by Borrower based on or to be 

repaid by Account proceeds or Borrower’s other revenue, or by ACH pull or withholding from any 

of Borrower’s Controlled Deposit Accounts, other than the Operating Accounts. 

“CERCLA” shall mean the Comprehensive Environmental Response, Compensation and 

Liability Act of 1980, 42 U.S.C.A. § 9601 et seq., as the same may be amended from time to time. 

“Change of Control” shall mean any of the following: (a) the occurrence of a merger, 

consolidation, reorganization, recapitalization or share or interest exchange, sale or transfer or any 

other transaction or series of transactions as a result of which the owners, directly or indirectly, of 

a majority of Borrower’s voting stock or voting power as of the date hereof cease to be entitled to 

control the Borrower, or (b) the resignation, termination, replacement, death, disability or any other 

event the result of which is the failure of the existing senior management of Borrower to function 

in its current capacities, unless, (i) in the case of a replacement, the replacement is reasonably 

acceptable to the Lender, or (ii) in all other cases a replacement reasonably satisfactory to the 

Lender is identified and engaged within 30 days following such event, or (c) the sale, assignment, 

transfer, lease, conveyance or other disposition of all or substantially all of Borrower’s assets to, 

or a consolidation or merger with or into, any other Person, other than any such transaction where 

immediately thereafter the surviving Person is a direct or indirect subsidiary of Borrower. 

“Closing” shall mean the date of the initial Advance under the Revolving Facility. 

“Closing Date” shall mean the date the Closing occurs. 

“Collateral” shall mean, collectively and each individually, all collateral or security 

identified in Section 2.9, together with any additional collateral or security now or hereafter 

granted to Lender by Borrower pursuant to a Loan Document. 

“Collateral Management Fee” shall have the meaning assigned to the term in Section 

3.3. 

“Collection Bank” shall mean a depository bank identified on the United States trustee’s 

list of authorized depositories, and otherwise acceptable to the Lender in its discretion. 

“Commercial Deposit Account” shall mean a deposit account established and maintained 

in Borrower’s name, which is used solely to collect payments with respect to Borrower’s Accounts 

and other Collateral, other than payments with respect to Governmental Receivables.

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“Compliance Certificate” shall have the meaning assigned to the term in Section 6.1(a). 

“Concentration Account” shall have the meaning assigned to the term in Section 2.5. 

“Contingent Obligation” shall mean, with respect to any Person, any direct or indirect

liability of such Person: (a) with respect to any Indebtedness of another Person (a “Third Party 

Obligation”) if the purpose or intent of such Person incurring such liability, or the effect thereof, 

is to provide assurance to the obligee of such Third Party Obligation that such Third Party 

Obligation will be paid or discharged, or that any agreement relating thereto will be complied with, 

or that any holder of such Third Party Obligation will be protected, in whole or in part, against loss 

with respect thereto; (b) with respect to any undrawn portion of any letter of credit issued for the 

account of such Person or as to which such Person is otherwise liable for the reimbursement of 

any drawing; or (c) for any obligations of another Person pursuant to any guaranty (other than a 

guaranty of the Obligations or any part thereof) or pursuant to any agreement to purchase, 

repurchase or otherwise acquire any obligation or any property constituting security therefor, to 

provide funds for the payment or discharge of such obligation or to preserve the solvency, financial 

condition or level of income of another Person. The amount of any Contingent Obligation shall 

be equal to the amount of the obligation so guaranteed or otherwise supported or, if not a fixed and 

determinable amount, the maximum amount so guaranteed or otherwise supported. 

“Control Agreements” shall mean each deposit account control agreement, deposit 

account instructions, and service agreement or similar agreements on each Deposit Account, 

Operating Account, and, if applicable, the master collections account established by Borrower in 

accordance with Section 2.5(b). 

“Controlled Deposit Accounts” shall mean each Commerical Deposit Account, 

Governmental Deposit Account, Operating Account, and if applicable, the master collections 

account established by Borrower in accordance with Section 2.5(b). 

“Current Ratio” shall mean Borrower’s ratio of current assets (determined in accordance 

with GAAP), to current liabilities (also determined in accordance with GAAP). For this purpose, 

the outstanding balance of the Revolving Facility shall be deemed to be a current liability 

“Date of Service” of an Account shall mean the earliest date the healthcare service for 

which the Account is payable was rendered, the healthcare-related Equipment, prosthetics, 

pharmaceuticals, or other goods for which the Account is payable were delivered, or the room, 

board or other daily living assistance for which the Account payable was provided. 

“Debtor Relief Law” shall mean, collectively, the Bankruptcy Code and all other 

applicable liquidation, conservatorship, bankruptcy, moratorium, rearrangement, receivership, 

insolvency, reorganization, or similar debtor relief laws from time to time in effect affecting the 

rights of creditors generally, as amended from time to time. 

“Default Rate” shall have the meaning assigned to the term in Section 3.7. 

“Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition 

(including any sale and leaseback transaction or dispositions effected by any corporate division), 

whether in one transaction or in a series of transactions, of any property (including, without 

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limitation, any equity interests) by any Person (or the granting of any option or other right to do 

any of the foregoing), including any sale, assignment, transfer or other disposal, with or without 

recourse, of any notes or accounts receivable or any rights and claims associated therewith.

“Distribution” shall mean (a) any dividend or other distribution (whether in cash, 

securities or other property) on any equity interest in the Borrower (except those payable solely in 

its equity interests of the same class), (b) any payment by the Borrower on account of (i) the 

purchase, redemption, retirement, defeasance, surrender, cancellation, termination or acquisition 

of any equity interests in the Borrower or any claim respecting the purchase or sale of any equity 

interest in the Borrower, or (ii) any option, warrant or other right to acquire any equity interests in 

the Borrower, (iii) amounts owed by Borrower to any Affiliate of the Borrower, and (c) any loan 

or advance to an Affiliate of Borrower. 

“Dollars” or “$” shall mean the lawful and freely transferrable currency of the United 

States of America. 

“Eligible Billed Receivables” shall mean each Account (other than Eligible Unbilled 

Receivables) arising in the ordinary course of the Borrower’s business, which meets the following 

criteria: 

a. it is subject to a valid perfected first priority security interest in favor of the Lender, 

subject to no other Lien (other than Permitted Liens); 

b. it is evidenced by an invoice, statement, electronic submission or other 

documentary evidence satisfactory to the Lender, which has been submitted to the Account Debtor 

for payment in accordance with applicable Law; 

c. it is in substantial compliance and conformance with any requisite procedures, 

requirements and regulations governing payment by such Account Debtor with respect to such 

Account, and, if due from a Medicaid/Medicare Account Debtor, is properly payable directly to 

Borrower; 

d. any portion thereof that is payable by a beneficiary, recipient or subscriber 

individually and not directly by a third-party obligor acceptable to the Lender shall not be included 

as an Eligible Billed Receivable; 

e. it does not arise out of services rendered to, room, board or other daily living 

assistance provided to, a sale made to, or out of any other transactions between Borrower or any 

of its Subsidiaries and, one or more Affiliates of Borrower or any of its Subsidiaries; 

f. it is outstanding for no more than 150 days after the Date of Service with respect to 

such Account; provided that if more than fifty percent (50%) in Net Collectible Value of the 

Accounts payable by any one Third-Party Payor are outstanding for more than 150 days after such 

Accounts’ Date of Service, no Accounts payable by such Third-Party Payor shall be Eligible Billed 

Receivables; 

g. no covenant, agreement, representation or warranty with respect to such Accounts 

contained in any Loan Documents has been breached and remains uncured; 

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h. to the extent the Account Debtor for such Account is solvent and has a claimspaying ability rating by A.M. Best Company, such rating shall be “A” or better; or to the extent 

the Account Debtor for such Account does not have a claims-paying ability rating 

i. by A.M. Best Company or its claims-paying ability is not rated “A” or better, such 

Account Debtor is otherwise creditworthy as determined by Lender in its sole discretion, and there 

are no proceedings or actions which are threatened or pending against any Account Debtor 

thereunder which might result in any Material Adverse Change in such Account Debtor’s financial 

condition or the collectability of Accounts with respect to such Account Debtor; 

j. arises out of a completed, bona fide sale, assignment, lease, license and related 

delivery of Goods, provision of room, board or other daily living assistance, or rendering of 

services by Borrower in the ordinary course of business, in accordance with applicable Law, and 

in accordance with the terms and conditions of all purchase orders, contracts, certifications, 

participations, certificates of need and other agreements and documents relating thereto or forming 

a part of the contract between Borrower and the Account Debtor;

k. it does not represent the sale of Goods or rendering of services to an Account Debtor 

with respect to which the obligation of payment by the Account Debtor is or may be conditional 

for any reason whatsoever, including, accounts arising with respect to Goods that were (i) not sold 

on an absolute basis, (ii) sold on a bill-and-hold sale basis, (iii) sold on a consignment sale basis, 

(iv) sold on a guaranteed sale basis, (v) sold on a sale or return basis, or (vi) sold on the basis of 

any other similar understanding, and is not evidenced by Chattel Paper or an Instrument of any 

kind and has not been reduced to judgment; 

l. it does not represent amounts payable to the Borrower for the use (whether through 

leasing or otherwise) of the Borrower’s employees by third parties; 

m. it is not payable under worker’s compensation laws or insurance, automobile 

insurance whether a no-fault law or otherwise, does not represent a census capitation payment or 

a claim for a personal injury and is not a Self-Pay Account; 

n. the applicable Account Debtor for such Account is not a Governmental Authority, 

unless all applicable statutes, ordinances or regulations respecting the assignment of such Account 

have been complied with; provided, however, neither Borrower nor Lender will be required to 

comply with any filing or notice requirements under the Assignment of Claims Act (31 U.S.C. 

§ 3727); 

o. any portion of an Account that is subject to any offset, credit (including any 

resource or other income credit or offset), lien, deduction, defense, discount, chargeback, freight 

claim, allowance, adjustment, dispute or counterclaim is not for a liquidated amount or is 

contingent in any respect or for any reason (except to the extent that the same is taken into 

consideration in determining Net Collectible Value) shall not be included as an Eligible Billed 

Receivable; 

p. except for deductions taken into consideration in determining Net Collectible 

Value, there is no agreement with an Account Debtor for any deduction from such Accounts, 

except for discounts or allowances made in the ordinary course of business for prompt payment, 

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all of which discounts or allowances are reflected in the calculation of the face value of each 

invoice related thereto, such that only the discounted amount of such Accounts after giving effect 

to such discounts and allowances shall be considered an Eligible Billed Receivable; 

q. no return, rejection or repossession of Goods or services related to it has occurred; 

r. the Account Debtor with respect thereto has its principal place of business or chief 

executive offices within the continental United States and the Account is payable to Borrower in 

US dollars; 

s. Borrower has not agreed to accept and has not accepted any non-cash payment for 

such Account; 

t. if the Account Debtor is the Medicaid Program, the Account is not in a “Medicaid 

Pending” status, and 

u. such Account meets such specifications and requirements other than as set forth 

above, which may from time to time be established by Lender, in Lender’s sole discretion, by 

written notice to the Borrower. 

“Eligible Receivables” shall mean Eligible Billed Receivables and Eligible Unbilled 

Receivables and shall include such additional Accounts as may be permitted from time to time by 

the Lender at the request of Borrower. 

“Eligible Unbilled Receivables” shall mean each Account meeting all of the criteria of 

Eligible Billed Receivable (and otherwise acceptable to Lender in Lender’s sole discretion), 

except: 

a. clause (b) of the definition of “Eligible Billed Receivables” shall be restated as 

follows: “it does not remain unbilled for longer than the thirtieth (30th) day of the month following 

the month in which the Date of Service occurred;” 

b. clause (f) of the definition of “Eligible Billed Receivables” shall be restated as 

follows: “it is outstanding for no more than 150 days after the Date of Service with respect to such 

Account; provided that if more than fifty percent (50%) in Net Collectible Value of the Accounts 

payable by any one Third-Party Payor are outstanding for more than 150 days after such Accounts’ 

Date of Service, no Accounts payable by such Third-Party Payor shall be Eligible Unbilled 

Receivables;” and 

c. the eligible unbilled portion of any such Accounts shall include amounts earned on 

each day prior to issuance of any invoice in an amount equal to the rate per patient per day 

established under the applicable Government Contract; provided that (i) the Lender in its discretion 

may from time to time determine the liquidity factors and reserves applicable to Advances made 

on any such Accounts, and (ii) the aggregate amount of Eligible Unbilled Receivables included in 

the Borrowing Base shall be adjusted monthly based on the amounts actually billed with respect 

to such Accounts. 

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“Environmental Laws” shall mean all federal, state, local, and foreign laws now or 

hereafter in effect relating to pollution or protection of the environment, including laws relating to 

emissions, discharges, releases, or threatened releases of pollutants, contaminants, chemicals, or 

industrial, toxic, or hazardous substances or wastes or otherwise relating to the manufacture, 

processing, distribution, use, treatment, storage, disposal, removal, transport, or handling of 

pollutants, contaminants, chemicals, or industrial, toxic, or hazardous substances or wastes, and 

any and all regulations, notices, or demand letters issued, entered, promulgated, or approved 

thereunder. 

“Equipment” shall mean “equipment” as defined in Article 9 of the UCC. 

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as the same 

may be amended, modified or supplemented from time to time, and any successor statute thereto, 

and any and all rules or regulations promulgated from time to time thereunder. 

“Event of Default” shall mean the occurrence of any event set forth in Article VIII. 

“Facility Cap” mean the maximum principal amount that may be outstanding hereunder 

which amount shall initially be Ten Million Dollars ($10,000,000), subject to such increases as 

may be made pursuant to Section 2.1(c). 

“Facility Fee” shall have the meaning set forth in Section 3.1. 

“Final Financing Order” shall mean an order that is entered by the Bankruptcy Court in 

the Bankruptcy Case pursuant to Sections 364(c) and (d) of the Bankruptcy Code and Bankruptcy 

Rule 4001(c), in form and substance that are satisfactory to the Lender, approving the Loan 

Documents, and which order shall, among other things (i) have been entered on such prior notice 

as is required by applicable Law and any applicable orders of the Bankruptcy Court, (ii) authorize 

the extensions of credit in respect of the Revolving Facility in the amounts and on the terms and 

conditions set forth herein, (iii) grant the Superpriority Claim and other Liens on Collateral referred 

to herein and in the other Loan Documents (subject to the Carve-Outs), and (iv) approve the 

payment by the Borrower of the Obligations.

“Financing Orders” shall mean the Interim Financing Order, the Final Financing Order, 

and any amendments or modifications thereto entered by the Bankruptcy Court in the Bankruptcy 

Case. 

“GAAP” shall mean generally accepted accounting principles in the United States of 

America in effect from time to time as applied by nationally recognized accounting firms. 

“General Intangible” shall mean “general intangible” as defined in Article 9 of the UCC.

“Government Contract” shall mean all contracts (including all amendments thereto) 

relating to the payment of Government Receivables (a) with the United States government or with 

any agency or instrumentality thereof, or (b) with any State or Territory of the United States or the 

District of Columbia or with any agency or instrumentality thereof. 

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“Governmental Authority” shall mean any federal, state, municipal, national, local or 

other governmental department, court, commission, board, bureau, agency or instrumentality or 

political subdivision thereof, or any entity or officer exercising executive, legislative or judicial, 

regulatory or administrative functions of or pertaining to any government or any court, in each 

case, whether of the United States or a state, territory or possession thereof, a foreign sovereign 

entity or country or jurisdiction or the District of Columbia. 

“Governmental Deposit Account” shall mean a deposit account established and 

maintained in Borrower’s name, which is used to collect payments with respect to Borrower’s 

Governmental Receivables

“Governmental Receivable” shall mean any Account that is the obligation of the United 

States of America, or any State or Territory of the United States of America, and the District of 

Columbia, or any of their respective agencies, whether under the Medicaid or Medicare program 

established pursuant to the Social Security Act or any other federal healthcare program, including, 

without limitation, TRICARE (formerly known as CHAMPUS) and CHAMPVA and whether or 

not the Account is the primary obligation of such government or agency. 

“Guarantor” shall mean any guarantor of the Obligations or any part thereof, including 

any guarantor of the accuracy of any one or more representations or warranties of Borrower 

contained in this Agreement. As of the Closing Date there is no Guarantor. 

“Guaranty” shall mean any obligation, contingent or otherwise, of such Person directly 

or indirectly guaranteeing any Indebtedness or other obligation of any other Person and, without 

limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, 

of such Person (a) to purchase or pay (or advance or supply funds for the purchase or payment of) 

such Indebtedness or other obligation (whether arising by virtue of partnership arrangements, by 

agreement to keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to 

maintain financial statement conditions or otherwise), or (b) entered into for the purpose of 

assuring in any other manner the obligee of such Indebtedness or other obligation of the payment 

thereof or to protect such obligee against loss in respect thereof (in whole or in part), provided, 

however, that the term Guaranty shall not include endorsements for collection or deposit in the 

ordinary course of business. The term “Guaranty” used as a verb has a corresponding meaning. 

The term “Guaranties” shall mean the plural of Guaranty. 

“Hazardous Substances” shall mean petroleum and petroleum products and compounds 

containing them, including gasoline, diesel fuel and oil; explosives, flammable materials; 

radioactive materials; polychlorinated biphenyls and compounds containing them; lead and leadbased paint; asbestos or asbestos-containing materials; underground or above-ground storage 

tanks, whether empty or containing any substance; any substance the presence of which is 

prohibited by any Environmental Laws; any contaminant, pollutant, waste or substance that is 

likely to cause immediately or at some future time harm or degradation to the surrounding 

environment or risk to human health; toxic mold, any substance that requires special handling; and 

any other material or substance now or in the future defined, classified or listed as a “hazardous 

substance,” “hazardous material,” “hazardous waste,” “toxic substance,” “toxic pollutant,” 

“contaminant,” “pollutant”, “radioactive”, “dangerous” or other words of similar import within the 

meaning of any Environmental Law, including: (a) any “hazardous substance” defined as such in 

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(or for purposes of) CERCLA, or any so-called “superfund” or “superlien” Law, including the 

judicial interpretation thereof; (b) any “pollutant or contaminant” as defined in 42 U.S.C.A. 

§ 9601(33); (c) any material now defined as “hazardous waste” pursuant to 40 C.F.R. Part 260; 

(d) any petroleum or petroleum by-products, including crude oil or any fraction thereof; (e) natural 

gas, natural gas liquids, liquefied natural gas, or synthetic gas usable for fuel; (f) any “hazardous 

chemical” as defined pursuant to 29 C.F.R. Part 1910; (g) any toxic or harmful substances, wastes, 

materials, pollutants or contaminants (including, without limitation, asbestos, polychlorinated 

biphenyls, flammable explosives, radioactive materials, infectious substances, materials 

containing lead-based paint or raw materials which include hazardous constituents), and (h) any 

other toxic substance or contaminant that is subject to any Environmental Laws or other past or 

present requirement of any Governmental Authority. Notwithstanding the foregoing, Hazardous 

Substances shall not include substances in kinds and amounts commonly used in the operation of 

businesses of similar kind and nature to the business engaged in by Borrower in accordance with 

all applicable Laws (including, but not limited to, Environmental Laws) and prudent business 

management practices and in a manner that does not result in any contamination of all or any 

portion of properties utilized by such Borrower. 

“Hazardous Substances Contamination” shall mean contamination (whether now 

existing or hereafter occurring) of the improvements, buildings, facilities, personalty, soil, 

groundwater, air or other elements on or of the relevant property by Hazardous Substances, or any 

derivatives thereof, or on or of any other property as a result of Hazardous Substances, or any 

derivatives thereof, generated on, emanating from or disposed of in connection with the relevant 

property. 

“Healthcare Laws” shall mean all applicable Laws relating to the possession, control, 

warehousing, marketing, sale and distribution of pharmaceuticals, the operation of medical or 

senior housing facilities (such as, but not limited to, nursing homes, skilled nursing facilities, 

rehabilitation hospitals, intermediate care facilities and adult care facilities), patient healthcare, 

patient healthcare information, patient abuse, the quality and adequacy of medical care, rate 

setting, Equipment, personnel, operating policies, fee splitting, including, without limitation, 

(a) all federal and state fraud and abuse laws, including, without limitation, the federal AntiKickback Statute (42 U.S.C. §1320a-7b(6)), the Stark Law (42 U.S.C. §1395nn), the civil False 

Claims Act (31 U.S.C. §3729 et seq.), (b) TRICARE; (c) HIPAA; (d) Medicare; (e) Medicaid; 

(f) the Patient Protection and Affordable Care Act (P.L. 111-1468); (g) The Health Care and 

Education Reconciliation Act of 2010 (P.L. 111-152); (h) quality, safety and accreditation 

standards and requirements of all applicable state laws or regulatory bodies; (i) all laws, policies, 

procedures, requirements and regulations pursuant to which Healthcare Permits are issued, and (j) 

any and all other applicable health care laws, regulations, manual provisions, policies and 

administrative guidance, each of (a) through (j) as may be amended from time to time. 

“Healthcare Permit” shall mean a Permit (a) issued or required under Healthcare Laws 

applicable to the business of Borrower or any of its Subsidiaries or necessary in the possession, 

ownership, warehousing, marketing, promoting, sale, labeling, furnishing, distribution or delivery 

of goods or services under Healthcare Laws applicable to the business of Borrower or any of its 

Subsidiaries; (b) issued by any Person from which Borrower has, as of the Closing Date, received 

an accreditation, and/or (c) issued or required under Healthcare Laws applicable to the ownership 

or operation of any business location of Borrower. 

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“HIPAA” shall mean the Health Insurance Portability and Accountability Act of 1996, as 

the same may be amended, modified or supplemented from time to time, and any successor statute 

thereto, and any and all rules or regulations promulgated from time to time thereunder. 

“HIPAA Compliant” shall mean that the applicable Person is in compliance with each of 

the applicable requirements of the so-called “Administrative Simplification” provisions of 

HIPAA, and is not and could not reasonably be expected to become the subject of any civil or 

criminal penalty, process, claim, action or proceeding, or any administrative or other regulatory 

review, survey, process or proceeding (other than routine surveys or reviews conducted by any 

government health plan or other accreditation entity) that could result in any of the foregoing or 

that could reasonably be expected to adversely affect such Person’s business, operations, assets, 

properties or condition (financial or otherwise), in connection with any actual or potential violation 

by such Person of the provisions of HIPAA. 

“Hospital” shall mean any healthcare facility (including any assisted living facility, skilled 

nursing facility or short- or long-term rehabilitation facility) operated or owned or leased by 

Borrower or any of its Subsidiaries, including, without limitation, the Nacogdoches Memorial 

Hospital Building (1024 N. Mound St., Nacogdoches, Texas), the Nacogdoches Diagnostic Center 

(1023 N. Mound St., Suites A, B and H, Nacogdoches, Texas), the Cecil Bomar Rehabilitation 

Center (707 Woods St., Nacogdoches, Texas), the Care First Clinic - Garrison (49 South Hwy. 59, 

Nacogdoches, Texas), and the Accounting/IS Building (914 Raguet St., Nacogdoches, Texas).

“Hospital Asset Purchase Agreement” shall mean the document by that name by and 

between Borrower and Old Operator dated as of July 14, 2021 as the same may be amended, 

restated, supplemented or otherwise modified from time to time.

“Indebtedness” of a Person shall mean at any date, without duplication, (a) all obligations 

of such Person for borrowed money; (b) all obligations of such Person evidenced by bonds, 

debentures, notes or other similar instruments,; (c) all obligations of such Person to pay the 

deferred purchase price of property or services, except trade accounts payable arising and paid on 

a timely basis and in the ordinary course of business; (d) all Capital Leases of such Person; (e) all 

non-Contingent Obligations of such Person to reimburse any bank or other Person in respect of 

amounts paid under a letter of credit, banker’s acceptance or similar instrument; (f) all equity 

securities of such Person subject to repurchase or redemption other than at the sole option of such 

Person; (g) all obligations secured by a Lien on any asset of such Person, whether or not such 

obligation is otherwise an obligation of such Person; (h) “earnouts,” purchase price adjustments, 

profit sharing arrangements, deferred purchase money amounts and similar payment obligations 

or continuing obligations of any nature of such Person arising out of purchase and sale contracts; 

(i) all Indebtedness of others guaranteed by such Person; (j) off-balance sheet liabilities and/or 

Pension Plan or Multiemployer Plan liabilities of such Person, and (k) obligations arising under 

non-compete agreements. 

“Indemnified Persons” shall have the meaning assigned to the term in Section 13.4. 

“Intellectual Property” shall mean, with respect to any Person, all patents, patent 

applications and like protections, including improvements divisions, continuation, renewals, 

reissues, extensions and continuations in part of the same, trademarks, trade names, trade styles, 

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trade dress, service marks, logos and other business identifiers and, to the extent permitted under 

applicable Law, any applications therefor, whether registered or not, and the goodwill of the 

business of such Person connected with and symbolized thereby, copyright rights, copyright 

applications, copyright registrations and like protections in each work of authorship and derivative 

works, whether published or unpublished, technology, know-how and processes, operating 

manuals, trade secrets, computer hardware and software, rights to unpatented inventions and all 

applications and licenses therefor, used in or necessary for the conduct of business by such Person 

and all claims for damages by way of any past, present or future infringement of any of the 

foregoing. 

“Interim Financing Order” shall mean the interim order by the Bankruptcy Court in the 

Bankruptcy Case under Sections 364(c) and (d) of the Bankruptcy Code and Bankruptcy Rule 

4001(c), in form and substance satisfactory in all respects to the Lender: (i) authorizing the 

Borrower to enter into this Agreement and the transactions contemplated hereunder; (ii) approving 

the terms and conditions of this Agreement; (iii) granting to the Lender super-priority over any 

and all administrative expenses, secured claims, and unsecured claims, now existing or hereafter 

arising, including administrative expenses of the kind specified in or ordered pursuant to 11 U.S.C. 

§§ 105, 326, 327, 328, 330, 331, 361, 362, 363, 364, 365, 503, 506, 507(a), 507(b), 546, 552, 726, 

1113, 1114 or any other provision of the Bankruptcy Code or otherwise (the “Superpriority 

Claim”); (iv) granting to the Lender a first priority lien and security interest in all assets of the 

Borrower; (v) including a prohibition applicable to any governmental authority or other party from 

exercising rights of set-off or recoupment against any account that arises from and after the filing 

of the bankruptcy petition; (vi) including a prohibition against using the proceeds of the loan to 

initiate or prosecute any claims, causes of action, adversary proceedings or other litigation against 

the Lender or any of its officers, directors, equity holders, employees or affiliates; (vii) including 

a prohibition against using the proceeds of the loan to object, contest, or raise in any proceeding 

any defense to the validity, perfection, priority, extent or enforceability of this Agreement or the 

liens contemplated thereby or taking any action that would be injurious to the Lender’s interests; 

(viii) ordering that all government payments owing to the Borrower be paid to a Controlled 

Account; (ix) granting relief from the automatic stay to permit the Lender to take any action 

permitted under this Agreement; (x) ordering that the Borrower pay the Lender at the initial 

Closing all of the Lender’s due diligence and legal counsel fees related to the financing and all 

fees required by this Agreement; (x) determining that the “equities of the case” exception in 

Section 552(b) of the Bankruptcy Code will not apply to or limit the Lender’s security interest in 

the proceeds, product, offspring or profits of the Collateral, and (x) including such other provisions 

as to the Lender or the Lender’s counsel may require or approve. 

“Landlord Waiver and Consent” shall mean a waiver/consent in form and substance 

reasonably satisfactory to Lender from the owner/lessor of the Hospital and any other premises 

not owned by Borrower at which billing operations are conducted or Books and Records are 

maintained or, at the request of Lender, any of the Collateral is now or hereafter located, for the 

purpose of providing Lender access to such Collateral, in each case as such may be modified, 

amended or supplemented from time to time and subordinating in favor of Lender any claims that 

the owner/lessor may have against Borrower or against any of the Collateral.

“Laws” shall mean any and all federal, state, provincial, territorial, municipal, local and 

foreign statutes, laws, judicial decisions, regulations, ordinances, rules, judgments, orders, decrees, 

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codes, injunctions, permits, governmental agreements and governmental restrictions, whether now 

or hereafter in effect, which are applicable to the Borrower in any particular circumstance. “Laws” 

includes, without limitation, Environmental Laws. 

“Lease” shall have the meaning assigned to the term in Section 6.1.

“Liability Event” shall mean any event, fact, condition or, circumstance or series thereof 

(i) in or for which such the Borrower becomes liable or otherwise responsible for any amount owed 

or owing to any Medicaid or Medicare program by a provider under common ownership with 

Borrower or any provider owned by such Borrower pursuant to any applicable Law after the failure 

of any such provider to pay any such amount when owed or owing; (ii) in which Medicaid or 

Medicare payments to Borrower are lawfully set-off against payments to such or any other 

Borrower to satisfy any liability of or for any amounts owed or owing to any Medicaid or Medicare 

program by the Borrower, a provider under common ownership with Borrower, or any provider 

owned by such Borrower pursuant to any applicable Law, or (iii) any of the foregoing under 

clauses (i) or (ii) in each case pursuant to statutory or regulatory provisions that are similar to any 

applicable Law. Notwithstanding the foregoing, a “Liability Event” shall not exist unless it could 

reasonably be expected to have a Material Adverse Effect. 

“Lien” shall mean any mortgage, pledge, security interest, encumbrance, restriction, lien, 

or charge of any kind (including any agreement to give any of the foregoing, any conditional sale 

or other title retention agreement or any lease in the nature thereof), or any other arrangement 

pursuant to which title to the property is retained by or vested in some other Person for security 

purposes. For the purposes of this Agreement and the other Loan Documents, Borrower or any 

Subsidiary shall be deemed to own subject to a Lien any asset which it has acquired or holds 

subject to the interest of a vendor or lessor under any conditional sale agreement, Capital Lease or 

other title retention agreement relating to such asset. 

“Loan” or “Loans” shall mean, individually and collectively, all Advances under the 

Revolving Facility. 

“Loan Documents” shall mean, collectively and each individually, this Agreement, any 

documents that provide, as security for all or any portion of the Obligations, a Lien on any assets 

in favor of Lender, the Controlled Deposit Agreements, the Uniform Commercial Code Financing 

Statements and all other documents or instruments necessary to create or perfect the Liens in the 

Collateral, the Borrowing Certificates, the Compliance Certificates, the Financing Orders, and all 

other agreements, documents, instruments and certificates heretofore or hereafter executed or 

delivered to Lender in connection with any of the foregoing or the Loans, as the same may be 

amended, modified or supplemented from time to time; all of which shall be in form and substance 

acceptable to Lender in its sole discretion. 

“Material Adverse Effect” or “Material Adverse Change” shall mean any event, act, 

condition or occurrence of whatever nature (including any adverse determination in any litigation, 

arbitration, or governmental investigation or proceeding), whether singly or in conjunction with 

any other event or events, act or acts, condition or conditions, occurrence or occurrences, whether 

or not related, which results, directly or indirectly in (a) a material adverse change in, or a material 

adverse effect upon, any of (i) the Borrower’s condition (financial or otherwise), operations, 

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business, properties or prospects; (ii) the rights and remedies of Lender under any Loan Document, 

or the ability of Borrower to perform any of its obligations under any Loan Document to which it 

is a party; (iii) the legality, validity or enforceability of any Loan Document; (iv) the existence, 

perfection or priority of any security interest granted in any Loan Document; (v) the value of any 

material Collateral, or (vi) the use or scope of any Healthcare Permits; (b) a material impairment 

to the likelihood that Eligible Receivables in general will be collected and paid in the ordinary 

course of business of Borrower and upon the same schedule and with the same frequency as 

Borrower’s recent collections history, or (c) the imposition of a fine against or the creation of any 

liability of Borrower to any Governmental Authority that is not subject to a Permitted Contest. 

“Material Contracts” shall have the meaning set forth in Section 5.23. 

“Medicaid” shall mean that certain program of medical assistance, funded jointly by the 

federal government and the states, for impoverished individuals who are aged, blind and/or 

disabled, and/or members of families with dependent children, which program is more fully 

described in Title XIX of the Social Security Act (42 U.S.C. §§ 1396 et seq.) and the regulations 

promulgated thereunder, or any successor program. 

“Medicaid Pending” shall mean that an application for Medicaid payment on behalf of a 

patient has not yet been approved by Medicaid. 

“Medicaid Program” shall mean a medical assistance program administered by a state

agency and approved by the Federal Centers for Medicare and Medicaid Services (formerly the 

federal Health Care Financing Administration) pursuant to the terms of Title XIX of the Social 

Security Act, codified at 42 U.S.C. 1396 et seq. 

“Medicaid/Medicare Account Debtor” shall mean any Account Debtor which is (i) the 

United States of America acting under the Medicaid or Medicare program established pursuant to 

the Social Security Act or any other federal healthcare program, including, without limitation, 

TRICARE and CHAMPVA; (ii) any state or the District of Columbia acting pursuant to a health 

plan adopted pursuant to Title XIX of the Social Security Act or any other state healthcare 

program, or (iii) any agent, carrier, administrator or intermediary for any of the foregoing. 

“Medicare” shall mean that certain federal program providing health insurance for eligible 

elderly and other individuals, under which physicians, hospitals, skilled nursing homes, home 

health care and other providers are paid for certain covered services they provide to the 

beneficiaries of such program, which program is more fully described in Title XVIII of the Social 

Security Act (42 U.S.C. §§ 1395 et seq.) and the regulations promulgated thereunder, or any 

successor program. 

“Net Collectible Value” shall mean the amount that Lender reasonably expects from time

to time to be collected with respect to Eligible Receivables from third-party payors within 150 

days of the Date of Service taking into account historical and recent collection rates for each payor 

class (e.g., Medicare, Medicaid, commercial, etc.), entitled to reimbursement pursuant to any 

contract or arrangement between Borrower and the applicable Account Debtor(s), offsets, 

historical returns, rebates, discounts, credits and allowances, and other factors that affect the 

collectability of Eligible Receivables. 

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“Net Operating Cash Flow” shall mean the difference between (a) cash received in the 

Borrower’s Commercial Deposit Accounts and Governmental Deposit Account; and (b) cash 

disbursements, except for (i) Interest, Fees, and other payments to Lender in cash; (ii) deposits 

paid to public utility companies as ordered by the Bankruptcy Court; (iii) fees paid to the United 

States Trustee; and (iv) fees and expenses paid to all restructuring-related professionals, including 

attorneys and restructuring advisors, for the Borrower, the Lender, and the committee for 

unsecured creditors (if one is appointed). 

“Net Proceeds” means, with respect to any event, (a) the cash proceeds received in respect 

of such event including (i) any cash received in respect of any non-cash proceeds (including any 

cash payments received by way of deferred payment of principal pursuant to a note or installment 

receivable or purchase price adjustment receivable or otherwise, but excluding any interest 

payments), but only as and when received; (ii) in the case of a casualty, insurance proceeds, and 

(iii) in the case of a condemnation or similar event, condemnation awards and similar payments, 

minus; (b) the sum of (i) all reasonable fees and out-of-pocket expenses paid to third parties (other 

than Affiliates) in connection with such event; (ii) in the case of a sale, transfer or other disposition 

of an asset (including pursuant to a sale and leaseback transaction or a casualty or a condemnation 

or similar proceeding), the amount of all payments required to be made as a result of such event to 

repay Indebtedness (other than Loans) secured by such asset or otherwise subject to mandatory 

prepayment as a result of such event, and (iii) the amount of all taxes paid (or reasonably estimated 

to be payable) and the amount of any reserves established to fund contingent liabilities reasonably 

estimated to be payable, in each case during the year that such event occurred or the next 

succeeding year and that are directly attributable to such event (as determined reasonably and in 

good faith by a Financial Officer of the applicable Borrower). 

“Notice Period” shall have the meaning set forth in Section 9.1.

“Obligations” shall mean all present and future obligations, Indebtedness and liabilities of 

the Borrower to the Lender at any time and from time to time of every kind, nature and description, 

direct or indirect, secured or unsecured, joint and several, absolute and contingent, due or to 

become due, matured or unmatured, now existing or hereafter arising, contractual or tortious, 

liquidated or unliquidated, under any of the Loan Documents or under applicable Law including, 

without limitation, all applicable fees, charges and expenses and/or all amounts paid or advanced 

by the Lender on behalf of or for the benefit of the Borrower for any reason at any time, including 

obligations that accrue after the commencement of the Bankruptcy Case. 

“Old Operator” shall mean Nacogdoches County Hospital District d/b/a Nacogdoches 

Memorial Hospital. 

“Operating Account” shall mean a deposit account established and maintained in the 

Borrower’s name, which is used to receive Advances or for Borrower’s operating disbursements. 

“Organizational Documents” shall mean, with respect to any Person other than a natural 

person, the documents by which such Person was organized (such as a certificate of incorporation, 

certificate of limited partnership or articles of organization, and including, without limitation, any 

certificates of designation for preferred stock or other forms of preferred equity) and which relate 

to the internal governance of such Person (such as by-laws, a partnership agreement or an 

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operating, limited liability company or members agreement), including any and all shareholder 

agreements or voting agreements relating to the capital stock or other equity interests of such 

Person. 

“Payroll Account” shall mean a deposit account established and maintained in Borrower’s 

name, which is used solely to hold any and all amounts to be used by such Borrower for payroll, 

payroll taxes and other employee wage and benefit payments, and which does not contain monies 

allocated for any other purpose. 

“Permit” shall mean all Borrower’s governmental licenses, authorizations, provider 

numbers, supplier numbers, registrations, permits, drug or device authorizations and approvals, 

certificates, franchises, qualifications, accreditations, consents and approvals required under 

applicable Law and required for such Borrower to carry on its business as now conducted, 

including, without limitation, Healthcare Permits. 

“Permitted Contest” shall mean, with respect to any tax obligation or other obligation 

allegedly or potentially owing from Borrower or its Subsidiary to any governmental tax authority 

or other third party, a contest maintained in good faith by appropriate proceedings promptly 

instituted and diligently conducted and with respect to which such reserve or other appropriate 

provision, if any, as shall be required in conformity with GAAP shall have been made on 

Borrower’s books and records and financial statements; provided, however, that (a) compliance 

with the obligation that is the subject of such contest is effectively stayed during such challenge; 

(b) the Borrower and its Subsidiaries’ title to, and its right to use, the Collateral is not adversely 

affected thereby and the Lender’s Lien and priority on the Collateral are not adversely affected, 

altered or impaired thereby; (c) the Borrower has given prior written notice to Lender of 

Borrower’s or its Subsidiary’s intent to so contest the obligation; (d) the Collateral or any part 

thereof or any interest therein shall not be in any danger of being sold, forfeited or lost by reason 

of such contest by Borrower or its Subsidiaries; (e) Borrower has given Lender notice of the 

commencement of such contest and upon request by Lender, from time to time, notice of the status 

of such contest by such Borrower and/or confirmation of the continuing satisfaction of this 

definition; (f) a final determination of such contest could not result in Lender’s Lien and its priority 

on the Collateral being adversely affected, altered or impaired, and (g) upon a final determination 

of such contest, the Borrower and its Subsidiaries shall promptly comply with the requirements 

thereof. 

“Permitted Indebtedness” shall mean: (i) Indebtedness under the Loan Documents; (ii) 

any Indebtedness existing on the Petition Date; (iii) Capitalized Lease Obligations incurred after 

the Closing Date and secured only by the Equipment being leased pursuant to such Capitalized 

Lease Obligations; (iv) a purchase-money obligation, as defined in Section 9-103(a) of the UCC, 

provided that the aggregate amount thereof outstanding at any time shall not exceed $10,000; (v) 

Indebtedness in connection with advances made by an equity holder in order to cure any Event of 

Default of the financial and loan covenants set forth on Annex I; provided, however, that such 

Indebtedness shall be on an unsecured basis, subordinated in right of repayment and remedies to 

all of the Obligations and to all of the Lender’s rights and in form and substance satisfactory to 

Lender; (vi) accounts payable to trade creditors and current operating expenses incurred in the 

ordinary course of business and paid on a timely basis; (vii) borrowings incurred in the ordinary 

course of business and not exceeding $10,000 individually or in the aggregate outstanding at any 

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one time; provided, however, that such Indebtedness shall be on an unsecured basis, subordinated 

in right of repayment and remedies to all of the Obligations and to all of the Lender’s rights and in 

form and substance satisfactory to the Lender; (viii) Indebtedness in the form of insurance 

premiums financed through the applicable insurance company, and (ix) any other Indebtedness to 

which the Lender may expressly consent in writing prior to its incurrence, which consent shall be 

in the sole discretion of Lender. 

“Permitted Liens” shall mean: (a) deposits or pledges of cash to secure obligations under 

worker’s compensation, social security or similar Laws, or under unemployment insurance (but 

excluding Liens arising under ERISA, or, with respect to any Pension Plan or Multiemployer Plan, 

the Code) pertaining to the Borrower’s or its Subsidiary’s employees, if any; (b) deposits or 

pledges of cash to secure bids, tenders, contracts (other than contracts for the payment of money 

or the deferred purchase price of property or services), leases, statutory obligations, surety and 

appeal bonds and other obligations of like nature arising in the ordinary course of business; 

(c) carrier’s, warehousemen’s, mechanic’s, workmen’s, materialmen’s or other like Liens on 

Collateral, other than any Collateral which is part of the Borrowing Base, arising in the ordinary 

course of business with respect to obligations which are not due, or which are being contested 

pursuant to a Permitted Contest; (d) Liens on Collateral, other than Accounts, for taxes or other 

governmental charges not at the time delinquent or thereafter payable without penalty or the 

subject of a Permitted Contest; (e) attachments, appeal bonds, judgments and other similar Liens 

on Collateral other than Accounts, for sums not exceeding $25,000 in the aggregate arising in 

connection with court proceedings; provided, however, that the execution or other enforcement of 

such Liens is effectively stayed and the claims secured thereby are the subject of a Permitted 

Contest; (f) Liens and encumbrances in favor of Lender under the Loan Documents; (g) Liens on 

Collateral, other than Collateral which is part of the Borrowing Base, existing on the date hereof 

and set forth on Schedule 7.3; (h) any Lien on any Equipment securing Indebtedness permitted 

under subpart (iii) of the definition of Permitted Indebtedness, provided, however, that such Lien 

attaches concurrently with or within twenty (20) days after the acquisition thereof; (i) any Liens 

that are expressly subordinated to Lender under a Financing Order and are subject to the 

Bankruptcy Case’s automatic stay, and (j) any other Liens to which Lender may expressly consent 

in writing, which consent shall be in the sole discretion of Lender. 

“Permitted Modifications” shall mean (a) such amendments or other modifications to 

Borrower’s or Subsidiary’s Organizational Documents as are required under this Agreement or by 

applicable Law and fully disclosed to the Lender within ten (10) days after such amendments or 

modifications have become effective, and (b) such amendments or modifications to Borrower’s or 

Subsidiary’s Organizational Documents (other than those involving a change in the name of 

Borrower or Subsidiary or involving a reorganization of Borrower or Subsidiary under the laws of 

a different jurisdiction) that would not adversely affect the rights and interests of the Lender and 

fully disclosed to Lender within ten (10) days after such amendments or modifications have 

become effective. 

“Permitted Variance” shall mean a variance of no more than twelve and one half percent 

(12.5%) between the projected Net Operating Cash Flow as set forth and the actual Net Operating 

Cash Flow. 

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“Person” shall mean any natural person, corporation, limited liability company, 

professional association, limited partnership, general partnership, joint stock company, joint 

venture, association, company, trust, bank, trust company, land trust, business trust or other 

organization, whether or not a legal entity, and any Governmental Authority or any other entity of 

whatever nature. 

“Petition Date” shall have the meaning assigned to that term in the Recitals. 

“Pre-Petition Aggregate Exposure” shall mean the aggregate sum of the Loans made 

pursuant to the Pre-Petition Credit Agreement plus interest, fees, costs and expenses arising 

thereunder. 

“Pre-Petition Credit Agreement” shall mean, as amended, modified or supplemented 

from time to time, that certain Credit and Security Agreement between Lion Star Nacogdoches 

Hospital, LLC as the Borrower, and eCapital Healthcare Corp., f/k/a CNH Finance Fund I, L.P. as 

the Lender, dated as of July 16, 2021. “Pre-Petition Loans” means the “Loans” as defined in the 

Pre-Petition Credit Agreement. 

“Pre-Petition Obligations” shall mean, collectively, the “Obligations” (as defined in the

Pre-Petition Credit Agreement) arising under the Pre-Petition Credit Agreement. 

“Prepayment Event” means: 

(a) any Disposition (including pursuant to a sale and leaseback transaction) of any assets 

of Borrower; 

(b) any casualty or other insured damage to, or any taking under power of eminent domain 

or by condemnation or similar proceeding of, any assets of Borrower or any Subsidiary, or 

(c) the incurrence by Borrower of any Indebtedness (other than Permitted Indebtedness) 

for borrowed money. 

“Prime Rate” shall mean a fluctuating interest rate per annum equal at all times to the rate 

of interest announced, from time to time, within Wells Fargo Bank at its principal office in San 

Francisco as its “prime rate,” with the understanding that the “prime rate” is one of Wells Fargo 

Bank’s base rates (not necessarily the lowest of such rates) and serves as the basis upon which 

effective rates of interest are calculated for those loans making reference thereto and is evidenced 

by the recording thereof after its announcement in such internal publications as Wells Fargo Bank 

may designate; provided that Lender may, upon prior written notice to the Borrower, choose a 

reasonably comparable index or source to use as the basis for the Prime Rate, and further provided, 

that in no event shall the Prime Rate be lower than the Prime Rate on the Closing Date, and further 

provided, that each change in the fluctuating interest rate shall take effect simultaneously with the 

corresponding change in the Prime Rate. 

“Related Property” shall mean, with respect to each Account, the following: (i) all records 

of any nature evidencing or related to the Account, including contracts, invoices, charges slips, 

credit memoranda, notes and other instruments and other documents, books, records and other 

information (including computer data) (ii) all security interests or liens and property subject thereto 

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from time to time purporting to secure payment of such Account, whether pursuant to the contract 

related to such Account or otherwise, including all rights of stoppage in transit, replevin, 

reclamation, Supporting Obligations and Letter of Credit Rights, and all claims of lien filed or held 

by Borrower on personal property; (iii) all rights to any Goods whose sale gave rise to such 

Account, including returned or repossessed Goods; (iv) all Instruments, Documents, Chattel Paper 

and General Intangibles arising from, related to or evidencing such Account; (v) all UCC financing 

statements covering any collateral securing payment of such Account; (vi) all guaranties and other 

agreements or arrangements of whatever character from time to time supporting or securing 

payment of such Account whether pursuant to the contract related to such Account or otherwise; 

and (vii) all proceeds and amounts received or receivable arising from any of the foregoing.. 

“Revolving Facility” shall have the meaning assigned to such term in the recitals. 

“Revolving Loan” shall mean the aggregate of the loans made pursuant to Section 2.1(a). 

“Revolving Loan Limit” shall mean, at any time, the lesser of (a) the Facility Cap and (b) 

eighty-five percent (85%) of the Borrowing Base. 

“Self-Pay Account” shall mean an Account payable by the individual receiving medical 

goods or services or by an individual (as opposed to a third-party insurance company, Medicare, 

Medicaid, or similar entity) responsible for such payment on behalf of the individual receiving 

medical goods or services. Self-pay accounts shall also include any co-pays and deductibles 

payable by such individuals. 

“Software Interface Fee” shall have the meaning assigned to the term in Section 3.5. 

“Subordinated Debt” shall mean any Indebtedness of Borrower incurred pursuant to the 

terms of the Subordinated Debt Documents and with the prior written consent of Lender, all of 

which documents must be in form and substance acceptable to Lender in its sole discretion.

“Subordinated Debt Documents” shall mean any documents evidencing or securing 

Indebtedness governed by a Subordination Agreement, all of which documents must be in form 

and substance acceptable to Lender in its sole discretion. 

“Subordination Agreement” shall mean each agreement between Lender and another 

creditor of Borrower, as the same may be amended, supplemented, restated, or otherwise modified 

from time to time in accordance with the terms thereof, pursuant to which Indebtedness or other 

obligations owing from Borrower or the Liens securing such Indebtedness granted by Borrower to 

such creditor are subordinated in any way to the Obligations and the Liens created under the Loan 

Documents, the terms and provisions of such Subordination Agreements to have been agreed to 

by and be acceptable to Lender in the exercise of its sole discretion, which may include 

requirements that the Subordinated Debt (i) not mature prior to the end of the Term, and (ii) not 

require any payment other than interest during the Term, and (iii) will receive no payments 

following an Event of Default.

“Subsidiary” shall mean (i) as to Borrower, any Person in which more than fifty percent 

(50%) of all equity, membership, partnership or other ownership interests is owned directly or 

indirectly by Borrower through one or more of its Subsidiaries, and (ii) as to any other Person, any 

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Person in which more than fifty percent (50%) of all equity, membership, partnership or other 

ownership interests is owned directly or indirectly by such Person through one or more of such 

Person’s Subsidiaries. Unless the context otherwise requires, each reference to a Subsidiary shall 

be a reference to a Subsidiary of the Borrower. 

“Term” shall mean the period commencing on the date set forth on the first page hereof 

and ending on the earlier to occur of (i) the effective date of a plan of reorganization of the 

Borrower confirmed by the Bankruptcy Court; (ii) consummation of a sale or other disposition of 

a material portion of the Borrower’s assets pursuant to 11 U.S.C. 363 or otherwise; (iii) the 

Borrower’s filing of a motion or other pleading seeking, or consenting to, conversion to a 

proceeding under Chapter 7 of the Bankruptcy Code; (iv) conversion to a proceeding under 

Chapter 7 of the Bankruptcy Code; (v) a dismissal by the Bankruptcy Court of the Borrower’s 

Bankruptcy Case; (vi) the Borrower’s filing of a motion or other pleading seeking the dismissal of 

the Bankruptcy Case under Section 1112 of the Bankruptcy Code or otherwise; (vii) twelve (12) 

months from Closing, or (viii) any date on which the Loans are accelerated during the continuance 

of an Event of Default. 

“Termination Date” shall mean the earlier to occur of (a) the end of the Term, (b) any 

date on which the Lender accelerates the maturity of the Loans pursuant to Article VIII, or (c) the 

termination date stated in any notice of termination of this Agreement provided by Borrower in 

accordance with Section 11.1. 

“Termination Fee” shall mean the amount equal to two percent (2.0%) of the Facility 

Cap. The Termination Fee is an “Obligation,” as that term is defined herein. 

“Test Period” shall have the meaning assigned to that term in Annex I.

“Third Party Payor” shall mean Medicare, Medicaid, TRICARE, and other state or 

federal health care programs, Blue Cross and/or Blue Shield, private insurers, managed care plans, 

and any other Person or entity which presently or in the future maintains Third Party Payor 

Programs. 

“Third-Party Payor Programs” shall mean all payment and reimbursement programs, 

sponsored by a Third-Party Payor, in which the Borrower participates. 

“TRICARE” shall mean the program administered pursuant to 10 U.S.C. Section 1071 et. 

seq., Sections 1320a-7 and 1320a-7a of Title 42 of the United States Code and the regulations 

promulgated pursuant to such statutes. 

“UCC” and “Uniform Commercial Code” shall mean the Uniform Commercial Code of 

the State of Texas or of any other state the laws of which are required to be applied in connection 

with the perfection of security interests in any Collateral. 

“United States” and “U.S.” shall mean the United States of America. 

“Unused Line Fee” shall have the meaning assigned to the term in Section 3.2. 

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1.3 Other Definitional and Interpretative Provisions 

References in this Agreement to “Articles”, “Sections”, “Annexes”, “Exhibits”, or 

“Schedules” shall be to Articles, Sections, Annexes, Exhibits or Schedules of or to this Agreement 

unless otherwise specifically provided. Any term defined herein may be used in the singular or 

plural. “Include,” “includes,” and “including” shall be deemed to be followed by “without 

limitation.” Except as otherwise specified or limited herein, references to any Person include the 

successors and assigns of such Person. References “from” or “through” any date mean, unless 

otherwise specified, “from and including” or “through and including,” respectively. Unless 

otherwise specified herein, the settlement of all payments and fundings hereunder between or 

among the parties hereto shall be made in lawful money of the United States and in immediately 

available funds. Unless otherwise specified herein, all amounts (including, for the avoidance of 

doubt, for purposes of calculating the Borrowing Base) shall be calculated in Dollars. References 

to any statute or act shall include all related current regulations and all amendments and any 

successor statutes, acts, and regulations. All amounts used for purposes of financial calculations 

required to be made herein shall be without duplication. References to any statute or act, without 

additional reference, shall be deemed to refer to federal statutes and acts of the United States. 

References to any agreement, instrument, or document shall include all schedules, exhibits, 

annexes, and other attachments thereto. As used in this Agreement, the meaning of the term 

“material” or the phrase “in all material respects” is intended to refer to an act, omission, violation, 

or condition which reflects or could reasonably be expected to result in a Material Adverse Effect. 

References to capitalized terms that are not defined herein but are defined in the UCC shall have 

the meanings given them in the UCC. All references herein to times of day shall be references to 

daylight or standard time, as applicable, in New York City. 

1.4 Time is of the Essence 

Time is of the essence in Borrower’s performance under this Agreement and all other Loan 

Documents. 

II. ADVANCES, PAYMENT AND INTEREST 

2.1 Advances; Roll Up of Pre-Petition Obligations 

(a) Advances. Subject to the provisions of this Agreement, Lender shall make 

Advances to Borrower under the Revolving Facility from time to time during the 

Term, and not more than once per each week unless agreed to by Lender and subject 

to the processing fees set forth in Section 2.4; provided that, notwithstanding any 

other provision of this Agreement (but subject to the provisions of this Section 

2.1(a)), the principal amount at any one time outstanding under the Revolving 

Facility shall not exceed the Revolving Loan Limit. The Revolving Facility is a 

revolving credit facility, which may be drawn, repaid, and redrawn from time to 

time as permitted under this Agreement. Any determination as to whether there is 

availability within the Borrowing Base for Advances shall be made by Lender in 

its discretion and is final and binding upon Borrower. Unless otherwise permitted 

by Lender, each Advance requested by Borrower shall be in an amount of at least 

$25,000. Subject to the provisions of this Agreement, Borrower may request 

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Advances under the Revolving Facility up to and including the Availability. Lender 

may, in Lender’s sole discretion, withhold from Advances made to Borrower such 

amounts as may be necessary to pay interest on the Revolving Facility and other 

Obligations hereunder. In addition, Advances under the Revolving Facility 

automatically may, in the discretion of Lender, be made for the payment of interest 

on the Revolving Facility and other Obligations on the date when due to the extent 

of Availability and as provided for herein. 

(b) Roll-Up. Effective immediately upon the making of an Advance under this 

Agreement (such date, the “Roll-Up Date”), and without any further action by any 

party to this Agreement or the other Loan Document, the Bankruptcy Court or any 

other Person, (i) the Pre-Petition Obligations shall be automatically deemed to 

constitute Loans under this Agreement (on a dollar-for-dollar basis) (such Loans, 

the “Rolled-Up Loans”) which shall be due and payable in accordance with the 

terms and conditions set forth in this Agreement as if originally funded hereunder 

on the date of such Advance (such aggregate amount advance, the “Roll-Up 

Amount”) and (ii) from and after the Roll-Up Date, Pre-Petition Obligations shall 

be automatically and irrevocably reduced by the Roll-Up Amount.

(c) The Lender shall have the right to establish and readjust from time to time, 

in its sole discretion, reserves (without duplication of other reserves) against the 

Borrowing Base, which reserves shall have the effect of reducing the amounts 

otherwise eligible to be disbursed to Borrower under the Revolving Facility 

pursuant to this Agreement. 

(d) The Borrower may, from time to time, repay all or part of the outstanding 

Advances under the Revolving Facility in accordance with the terms of this 

Agreement, with such repaid amounts eligible to be redrawn under the terms of the 

Agreement. 

(e) The Facility Cap may, at Borrower’s request and with the consent of Lender, which 

consent shall be in the Lender’s sole discretion, be increased. In the event that the Facility Cap is 

increased, Borrower shall pay to Lender a Facility Fee in an amount equal to one percent (1.0%) of 

the amount by which the Facility Cap is increased. 

(f) Lender may in its sole discretion make one or more Advances in excess of 

Availability. The making of any Advance(s) in excess of Availability shall not be deemed an 

acknowledgement that any additional such Advance(s) will be made or may be required to be made; 

nor shall any such Advance(s) be deemed to establish any course of conduct, waiver, or estoppel that 

would obligate Lender to make any further such Advance or prevent Lender from treating 

Borrower’s failure to repay such Advance(s) as a Default or an Event of Default. Each time an 

Advance causes the principal balance under the Revolving Facility to exceed the Availability 

(whether because of an intentional Advance in excess of Availability or a reduction in the Borrowing 

Base or otherwise), Lender may charge an over-advance fee of ten percent (10%) of the amount by 

which the principal balance exceeds the Availability as a result of such Advance. Such over-advance 

fee shall be in addition to any other fees, charges or other provisions that may increase the Applicable 

Rate of interest hereunder and the assessment or collection of such over-advance fee shall not, unless 

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Lender specifically agrees in writing to the contrary, prevent Lender from considering any such 

over-advance arising from a reduction in the Borrowing Base, or the circumstances giving rise to 

any over advance, from being a Default or an Event of Default. The over-advance fee shall be paid 

on the first Business Day of each week if the amount outstanding hereunder is in excess of the 

Availability at any time during the immediately preceding week.

(g) Borrower may request from time to time certain otherwise non-Eligible 

Receivables to be included as Eligible Receivables for purposes of calculating Availability. If after 

underwriting such non-Eligible Receivables, Lender determines in its sole discretion to include 

them as Eligible Receivables, Borrower shall pay to Lender an additional underwriting fee in an 

amount equal to two percent (2%) of the Borrowing Base attributable to such non-Eligible 

Receivables at such time as such Accounts are included in the Borrowing Base. In addition, Lender 

may, in its sole discretion require an amendment to this Agreement including additional 

representations, warranties or covenants, as a condition for including such non-Eligible 

Receivables as Eligible Receivables. 

2.2 Evidence of Obligations; Maturity 

(a) The Lender shall maintain, in accordance with its usual practice, electronic 

or written records evidencing the outstanding Obligations to the Lender, including, 

without limitation, the amounts of principal, interest, fees and other amounts 

payable and paid to the Lender from time to time under this Agreement. 

(b) The entries made in the electronic or written records maintained pursuant to 

subsection (a) above shall be prima facie evidence of the existence and amounts of 

the Obligations therein recorded absent manifest and demonstrable error; provided, 

however, that the failure of the Lender to maintain such records or any error therein 

shall not in any manner affect the obligations of the Borrower to repay the 

Obligations in accordance with their terms. Subject to the foregoing, Advances 

under the Revolving Facility may also be evidenced by a promissory note, payable 

to the order of the Lender, duly executed and delivered by Borrower and dated as 

of the date hereof, evidencing the aggregate indebtedness of the Borrower to the 

Lender resulting from Advances under the Revolving Facility, from time to time. 

The Lender hereby is authorized, but is not obligated, to enter the amount of each 

Advance under the Revolving Facility and the amount of each payment or 

prepayment principal or interest thereon in the appropriate spaces on the reverse of 

or on an attachment to the promissory note. The Lender may account to Borrower 

from time to time with a statement of Advances under the Revolving Facility, the 

amounts outstanding hereunder, and charges and payments made pursuant to this 

Agreement, and in the absence of manifest and demonstrable error, such accounting 

rendered by the Lender shall be deemed final, binding and conclusive unless the 

Lender is notified by the Borrower in writing to the contrary within thirty (30) days 

of receipt of each accounting, which notice shall be deemed an objection only to 

items specifically objected to therein.

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(c) All amounts outstanding hereunder, and other Obligations shall be due and 

payable in full, if not earlier in accordance with this Agreement or the Financing 

Orders, on the Termination Date.

2.3 Interest 

Interest shall accrue daily on the principal amount outstanding from time to time 

hereunder at a rate per annum equal to the Prime Rate plus the Applicable Margin calculated on 

the basis of a 360-day year and adjusted for the actual number of days elapsed in each interest 

calculation period. Interest shall be payable by Borrower monthly in arrears but in no event later 

than the first day of each calendar month following the Closing Date. Interest payments shall, at 

the discretion of the Lender, be made (i) by application of funds in the Concentration Account as 

set forth in Section 2.5, (ii) by an Advance on the Revolving Facility, as set forth in Section 2.1, 

without any further action by Borrower, or (iii) upon two Business Days’ notice, directly by 

Borrower. Interest shall continue to accrue on the principal amount outstanding from time to time 

until the irrevocable payment in full in cash of the Obligations and termination of this Agreement. 

Any accrued but unpaid interest shall be added to the Obligations and increase the principal amount 

outstanding hereunder on the first Business Day of each month. 

2.4 Revolving Facility Disbursements; Requirement to Deliver Borrowing 

Certificate 

So long as no Event of Default shall have occurred and be continuing, the Borrower 

may give the Lender written notice requesting an Advance under the Revolving Facility by 

delivering to Lender not later than 9:30 a.m. (New York City time) on the same Business Day but 

not more than three (3) Business Days before the proposed borrowing date of such requested 

Advance (the “Borrowing Date”), a completed Borrowing Certificate and relevant supporting 

documentation satisfactory to the Lender in its discretion, which shall (i) specify the proposed 

Borrowing Date of such Advance which shall be a Business Day; (ii) specify the principal amount 

of such requested Advance; (iii) certify the matters specified therein; and (iv) specify the amount 

of any Medicare or Medicaid recoupments and/or recoupments of any third-party being sought, 

requested or claimed, or, to the Borrower’s knowledge, threatened against Borrower or the 

Borrower’s Affiliates. In the event that the Borrower do not request an Advance during any two 

(2) consecutive calendar weeks, the Borrower shall, on the last Business Day of the second such 

week (and more frequently if the Lender shall so request) until the Obligations are indefeasibly 

paid in cash in full and this Agreement is terminated, deliver to the Lender a completed Borrowing 

Certificate. On each Borrowing Date, the Borrower authorizes the Lender to disburse the proceeds 

of the requested Advance to the appropriate Borrower’s account(s) as set forth on Schedule 2.4 (or 

to such other account as to which the appropriate Borrower shall expressly instruct the Lender in 

writing), in all cases for credit by the recipient of such proceeds to the Borrower, via Federal funds 

wire transfer no later than 4:00 p.m. (New York City time); provided, however, if any amounts are 

then due to the Lender on account of any interest, fees or expense reimbursements pursuant to the 

Loan Documents at the time such Advance is requested, the Lender is authorized (but not required) 

to reduce the proceeds to Borrower with respect to such Advance by the amount of such interest, 

fees or expense reimbursements and to retain such amounts as payment of such interest, fees or 

expense reimbursements. It is understood and agreed that Lender shall have no responsibility for 

the application of proceeds disbursed pursuant to Schedule 2.4. Lender shall charge a processing 

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fee of $150.00 for the first Advance of each calendar week and $450.00 for each additional 

Advance during such calendar week.

2.5 Revolving Facility Collections; Repayment; Borrowing Availability 

and Lockbox 

(a) The Borrower shall establish and maintain at a Collection Bank and at 

Borrower’s expense: 

(i) a Governmental Deposit Account, which shall be subject to a deposit 

account instructions agreement or similar agreement between Borrower, Lender and a 

Collection Bank; 

(ii) a Commercial Deposit Account, which shall be subject to a blocked deposit 

account control agreement between Borrower, Lender and a Collection Bank; 

(iii) an Operating Account, which shall be subject to a springing deposit account 

control agreement between Borrower, Lender and a Collection Bank; and

(iv) a Payroll Account, which shall not be subject to a deposit account control 

agreement. 

(b) The Control Agreements on the Governmental Deposit Account and Commercial 

Deposit Account shall instruct the Collection Bank to transfer, on each Business Day, all funds on 

deposit therein to (i) a deposit account established and maintained by Lender or an Affiliate of 

Lender at such bank as Lender may communicate to the Collection Bank from time to time (the 

“Concentration Account”), or (ii) a master collections account established and maintained in the 

name of Borrower, which is subject to a blocked deposit account control agreement between 

Borrower, Lender and a Collection Bank, which causes all funds on deposit in such master 

collections account to be transferred to the Concentration Account on each Business Day. 

(c) Borrower hereby agrees to (i) identify its Governmental Deposit Account as the 

“pay to” address on all invoices sent to each payor of Borrower’s Governmental Receivables, and 

(ii) identify its Commercial Deposit Account as the “pay to” address on all invoices sent to each 

payor of Borrower’s other Accounts and Collateral not constituting Governmental Receivables. 

Borrower further agrees not to (A) change such directives to payors without the prior written 

consent of Lender, (B) terminate any Controlled Deposit Account or Control Agreement, or (C) 

terminate or modify, or attempt to terminate or modify, the standing transfer order in any 

Controlled Deposit Agreement. 

(d) Borrower hereby acknowledges and agrees that any violation of this Section 2.5 

would be an Event of Default hereunder, would cause irreparable harm to the Lender for which 

there would be no adequate remedy at law, and agrees and consents to entry of an order by a court 

of competent jurisdiction granting the Lender specific performance of the terms and provisions of 

this Agreement as to Borrower. At the request of Lender, Borrower shall also enter into a lockbox 

agreement with the Collection Bank providing for the receipt of deposits at an address specified in 

such lockbox agreement and the deposit of funds received at such address to the applicable 

Controlled Deposit Account. 

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(e) To the extent that any Account collections or any other cash payments received by 

Borrower or an Affiliate of Borrower are not sent directly to the appropriate Controlled Deposit 

Account, such collections and proceeds shall be held in trust for the benefit of the Lender and 

immediately remitted (and in any event within one (1) Business Day), in the form received (or, 

with respect to cash, by check or wire transfer), to the appropriate Controlled Deposit Account for 

immediate transfer to the Concentration Account. Borrower acknowledges and agrees that 

compliance with the terms of this Section 2.5 is an essential term of this Agreement, and that, in 

addition to and notwithstanding any other rights Lender may have hereunder under any other Loan 

Document, under applicable Law or equity, upon each and every failure by Borrower or any 

Affiliates of Borrower to cause collections with respect to Accounts or any other cash payments 

to Borrower to be deposited into the appropriate Controlled Deposit Account as set forth in this 

Section 2.5, Lender shall be entitled, subject to the last sentence of this subsection (e), to assess 

Borrower with a non-compliance fee in an amount equal to ten percent (10%) of the amount of 

such collections or other cash payments; provided that such non-compliance fee shall be in 

addition to any other fees, charges or other provisions that may increase the Applicable Rate of 

interest hereunder and the assessment or collection of such non-compliance fee shall not, unless 

Lender specifically agrees in writing to the contrary, prevent Lender from considering any such 

non-compliance to be a Default or an Event of Default. Notwithstanding the foregoing, prior to 

the assessment of any such non-compliance fee Lender shall give Borrower notice of the of failure 

to deposit Account collections or any other cash payments received by Borrower or an Affiliate of 

Borrower in the appropriate Controlled Deposit Account and Borrower shall have one (1) Business 

Day following such notice to make the required deposit; provided, however, if Lender gives 

Borrower notice of failure to deposit Account collections or any other cash payments received by 

Borrower or an Affiliate of Borrower in the appropriate Controlled Deposit Account more than 

five (5) times in any 12-month period, no further notices will need to be sent to Borrower by 

Lender before Lender may assess such non-compliance fee. 

(f) For purposes of calculating interest, all funds transferred to the Lender’s 

Concentration Account shall be subject to a four (4) Business Day clearance period and all interest 

accruing on such funds during such clearance period shall accrue for the benefit of Lender. All 

funds transferred to the Concentration Account shall be applied to reduce the Obligations 

hereunder in the following order of priority: (i) payment of any fees and expense reimbursements 

due to Lender under the Loan Documents, (ii) any of Borrower’s Obligations not included in items 

(iii) and (iv) below, (iii) to any interest then due and owing hereunder, and (iv) to the principal 

amount outstanding hereunder. For purposes of determining Availability, all funds transferred to 

the Concentration Account in accordance with this Section shall be applied in accordance with the 

foregoing sentence as of the date of the transfer. 

(g) If there is a positive balance in favor of Borrower in the Concentration Account, 

such positive balance shall not accrue interest in favor of Borrower, but shall be available to 

Borrower in accordance with the terms of this Agreement. 

(h) At all times, Borrower and its Affiliates shall direct all collections or proceeds it 

receives on Accounts or from other Collateral to either the Government Deposit Account (with 

respect to collections on Governmental Receivables) or the Commercial Deposit Account (with 

respect to all other collections and proceeds), or such other account(s) as may be specified by 

Lender from time to time and in the manner specified by Lender so long as any amounts are 

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outstanding under the Revolving Facility. In addition, Borrower and its Affiliates shall deposit in 

the Commercial Deposit Account any payments received by Borrower or its Affiliates from Old 

Operator pursuant to Section 1.09 of the Hospital Asset Purchase Agreement, or from the CARES 

Escrow Funds. 

(i) Borrower shall provide Lender with all information (including user identifications 

and passwords) necessary for Lender to have online view-only access to all information regarding 

Borrower’s deposit accounts. 

(j) Schedule 2.5 identifies each of Borrower’s deposit accounts, the depository bank 

at which such accounts are maintained, the type of Control Agreements on such accounts (if any), 

and the second lien secured party to such Control Agreements (if any). 

2.6 Promise to Pay; Manner of Payment 

The Borrower promises to pay principal, interest, and all other amounts payable 

hereunder, or under any other Loan Document, without any right of rescission and without any 

deduction whatsoever, including any deduction for any setoff, counterclaim, or recoupments, and 

notwithstanding any damage, to, defects in or destruction of the Collateral or any other event, 

including obsolescence of any property or improvements. All payments in respect of interest, 

principal, fees, or other Obligations shall be made by Borrower, at Lender’s sole discretion: (i) by 

application of available funds in the Concentration Account pursuant to Section 2.5; (ii) by 

application of Advances under the Revolving Facility pursuant to Section 2.1, or (iii) upon two 

Business Days’ notice, directly by Borrower. If the Lender requests payment in accordance with 

clause (iii) of the immediately preceding sentence, the Borrower shall make such payment by wire 

transfer on the date when due, without offset or deduction for the counterclaim, in U.S. Dollars, in 

immediately available funds to such account as may be indicated in writing by the Lender to the 

Borrower. Any payment received after 4:00 p.m. on the date when due shall be deemed received 

on the following Business Day. Whenever any payment hereunder shall be stated to be due or 

shall become due and payable on a day other than a Business Day, the due date thereof shall be 

extended to, and such payment shall be made on, the next succeeding Business Day, and such 

extension of time in such case shall be included in the computation of payment of any interest (at 

the interest rate then in effect during such extension) and/or fees, as the case may be.

2.7 Repayment of Excess Advances 

Subject to the following sentence, any balance of Advances under the Revolving 

Facility outstanding at any time in excess of the Revolving Loan Limit shall be immediately due 

and payable by the Borrower upon reasonable demand (or, if such over-advance was created as a 

result of the Lender’s adjustment of the advance rates for Availability or eligibility criteria, then 

within five (5) Business Days, unless such adjustment by the Lender was the result of any 

misrepresentation or fraud of Borrower, in which case there shall be no grace period and any such 

over-advance shall be immediately due and payable), whether or not an Event of Default has 

occurred or is continuing and shall be paid in the manner specified in Section 2.6. Notwithstanding 

the foregoing, if the Lender intentionally makes an Advance that is in excess of Availability, such 

Advance shall be repaid within five (5) Business Days of a demand for repayment or when it is 

otherwise required to be repaid pursuant to other Sections of this Agreement.

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2.8 Payments by the Lender 

Should any amount, interest, or other Obligation required to be paid under any Loan 

Document remain unpaid after it is due and payable and after the expiration of any cure period, if 

applicable, such amount may be paid by the Lender, which payment shall be deemed a request for 

an Advance under the Revolving Facility as of the date such payment is due, and the Borrower 

irrevocably authorize disbursements of any such funds to the Lender by way of direct payment of 

the relevant amount, interest or other Obligations. No payment or prepayment of any amount by 

the Lender or any other Person shall entitle any Person to be subrogated to the rights of the Lender 

under any Loan Document unless and until the Obligations have been fully performed and paid 

irrevocably in cash and this Agreement has been terminated. Any sums expended by the Lender 

as a result of Borrower’s or any Guarantor’s failure to pay, perform, or comply with any Loan 

Document or any of the Obligations may be charged to the Borrower’s account as an Advance 

under the Revolving Facility and added to the Obligations and thereby increase the principal 

amount outstanding hereunder.

2.9 Grant of Security Interest; Collateral 

(a) To secure the payment and performance of the Obligations, and without 

limiting any grant of any Lien and security interest in any other Loan Document, 

the Borrower, upon entry of the Interim Financing Order or the Final Financing 

Order, as applicable, hereby grant to the Lender a continuing security interest in 

and Lien upon, and pledge to the Lender, all of its right, title and interest in and to 

the following, whether now owned or hereafter created, acquired or arising, 

wherever located, and subject to Section 2.9(b), whether acquired before or after 

the date hereof (collectively and each individually, the “Collateral”):

(i) All Accounts (including healthcare insurance 

receivables) and Related Property; 

(ii) All CARES Escrow Funds and the CARES Escrow 

Agreement 

(iii) The Hospital Asset Purchase Agreement 

(iv) all of the Borrower’s deposit accounts and cash; 

(v) all Books and Records, whether or not related to any 

Collateral; 

(vi) all of Borrower’s other personal property and fixtures, 

including all Goods, Inventory, Equipment, furniture, General Intangibles (including 

Payment Intangibles and Software), Chattel Paper (whether tangible or electronic), 

Supporting Obligations, Investment Property, Financial Assets, Documents, Instruments 

(including any Promissory Notes), Securities, Securities Accounts, contract rights or rights 

to payment of money, leases, Permits, license agreements, franchise agreements, 

Commercial Tort Claims, stock in direct and indirect subsidiaries, machinery, cash, LetterCase 23-43535-mxm11 Doc 12 Filed 11/19/23 Entered 11/19/23 17:15:05 Desc Main

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of-Credit Rights (whether or not the letter of credit is evidenced by a writing), Intellectual 

Property, copyrights, trademarks, patents, and tradestyles; and

(vii) any and all claims, rights, and interests in any of the 

above and all substitutions for, additions, attachments, accessories, accessions, and 

improvements to and replacements, products, proceeds, and insurance proceeds of any or 

all of the foregoing. 

(b) The Liens and security interests granted to the Lender above or under the 

Financing Orders shall be valid, binding, continuing, enforceable, non-avoidable, 

and automatically and properly perfected first-priority security interests and Liens. 

Under Section 364(c)(2) of the Bankruptcy Code, the Lender has been granted a 

first-priority Lien on all Collateral not encumbered as of the Petition Date. Under 

Section 364(d) of the Bankruptcy Code, the Lender has been granted a first-priority 

priming Lien on all Collateral encumbered as of the Petition Date. Borrower 

authorizes the Lender to file or record financing statements and other filing or 

recording documents or instruments with respect to the Collateral in such form and 

in such offices as the Lender determines appropriate to perfect the security interests 

of the Lender under this Agreement. Borrower authorizes the Lender to use 

collateral descriptions such as “all personal property” or “all assets” in each case 

“whether now owned or hereafter acquired”, or using words of similar import. 

(c) Pursuant to the Financing Orders, the Liens granted in favor of the Lender 

in all of the Collateral shall be perfected without the recordation of any UCC 

financing statements, notices of Liens or other instruments of assignment. 

Notwithstanding the foregoing, the Borrower further agree that the Lender is 

authorized to file or record financing statements with respect to the Collateral 

without the signatures of Borrower in such form and in such offices as the Lender 

reasonably determines appropriate to further evidence the perfection of the security 

interests of the Lender under this Agreement and to use the collateral description 

“all assets of the Debtor” in any such financing statements. 

(d) The Liens, lien priority, administrative priorities and other rights and 

remedies granted to the Lender in the Financing Orders and the other Loan 

Documents shall not be modified, altered or impaired in any manner by any other 

financing or extension of credit or incurrence of debt by the Borrower (pursuant to 

Section 364 of the Bankruptcy Code or otherwise), or by any other act or omission 

whatsoever until the full performance and irrevocable payment in full in cash of the 

Obligations and termination of this Agreement. 

2.10 Collateral Administration 

(a) All Collateral (except funds required to be deposited in the Controlled 

Deposit Accounts) will at all times be kept by the Borrower at the locations set forth 

on Schedule 5.17B and shall not, without concurrent written notice to the Lender, 

be moved therefrom and in any case shall not be located (as that term is used in 

Section 9-301(2) of the UCC) outside the continental United States.

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(b) The Borrower shall keep accurate and complete records of its Accounts and 

all payments and collections thereon and shall submit such records to the Lender 

on such periodic basis as the Lender may request. After the occurrence and during 

the continuance of an Event of Default, and upon the Lender’s request, the 

Borrower shall execute and deliver to the Lender formal written assignments of all 

of its Accounts weekly or daily as the Lender may request, including all Accounts 

created since the date of the last assignment, together with copies of claims, 

invoices and/or other information related thereto. To the extent that collections 

from such assigned Accounts exceed the amount of the Obligations, such excess 

amount shall not accrue interest in favor of the Borrower, but shall be available to 

the Borrower upon the Borrower’s written request.

(c) The Lender shall have the right at all times after the occurrence and during 

the continuance of an Event of Default after expiration of all applicable cure periods 

to notify (i) Account Debtors owing Accounts to the Borrower other than 

Medicaid/Medicare Account Debtors that its Accounts have been assigned to the 

Lender and to collect such Accounts directly in its own name and to charge 

collection costs and expenses, including reasonable attorneys’ fees, to Borrower, 

and (ii) Medicaid/Medicare Account Debtors that the Borrower has waived any and 

all defenses and counterclaims it may have or could interpose in any action or 

procedure brought by the Lender to obtain a court order recognizing the collateral 

assignment or security interest and lien of the Lender in and to any Account or other 

Collateral and that the Lender is seeking or may seek to obtain a court order 

recognizing the collateral assignment or security interest and lien of the Lender in 

and to any Account or Collateral and that the Lender is seeking or may seek to 

obtain a court order recognizing the collateral assignment or security interest and 

lien of the Lender in and to all Accounts and other Collateral payable by 

Medicaid/Medicare Account Debtors.

(d) As and when determined by the Lender in its distrection, the Lender shall 

have the right to perform the searches described in clauses (i) and (ii) below against 

the Borrower and the Guarantors (the results of which are to be consistent with the 

Borrower’s representations and warranties under this Agreement), at the 

Borrower’s reasonable expense: (i) UCC searches with the Secretary of State and 

local filing offices of each jurisdiction where Borrower maintains its respective 

executive offices, a place of business or assets or in which it is organized, and (ii) 

bankruptcy, judgment, federal, state and local tax lien and litigation searches, in 

each jurisdiction in which such actions, or Liens may be recorded.

(e) Borrower (i) shall provide prompt written notice to its current bank to 

transfer all items, collections and remittances to the Concentration Account, (ii) 

shall direct each Account Debtor to make payments to the appropriate Controlled 

Deposit Account as set forth in Section 2.5, and Borrower hereby authorizes 

Lender, upon any failure to send such notices and directions within ten (10) days 

after the date of this Agreement (or ten (10) days after the Person becomes an 

Account Debtor), to send any and all similar notices and directions to such Account 

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Debtors, and (iii) shall do anything further that may be lawfully required by Lender 

to secure Lender and effectuate the intentions of the Loan Documents. 

(f) As of the Closing Date, Borrower has no ownership interest in any Chattel 

Paper (as defined in Article 9 of the UCC), letter of credit rights, commercial tort 

claims, Instruments, documents, or Investment Property (other than equity interests 

in any Subsidiaries of Borrower disclosed on Schedule 5.3) and Borrower shall give 

notice to Lender promptly (but in any event not later than the delivery by Borrower 

of the next Borrowing Certificate required pursuant to Section 2.4 above) upon the 

acquisition by Borrower of any such Chattel Paper, letter of credit rights, 

commercial tort claims, Instruments, documents, Investment Property. No Person 

other than any Lender has “control” (as defined in Article 9 of the UCC) over any 

deposit account, Investment Property (including Securities Accounts and 

Commodities Accounts), Letter of Credit Rights or electronic Chattel Paper in 

which Borrower has any interest (except for such control arising by operation of 

law in favor of any bank or securities intermediary or commodities intermediary 

with whom any deposit account, Securities Account or Commodities Account of 

Borrower is maintained). 

(g) Borrower shall deliver to Lender all tangible Chattel Paper and all 

Instruments and Documents owned by Borrower and constituting part of the 

Collateral duly endorsed and accompanied by duly executed instruments of transfer 

or assignment, all in form and substance satisfactory to Lender. Borrower shall 

provide Lender with “control” (as defined in Article 9 of the UCC) of all electronic 

Chattel Paper owned by Borrower and constituting part of the Collateral by having 

Lender identified as the assignee on the records pertaining to the single 

authoritative copy thereof and otherwise complying with the applicable elements 

of control set forth in the UCC. Borrower also shall deliver to Lender all security 

agreements securing any such Chattel Paper and securing any such Instruments. 

Borrower will mark conspicuously all such Chattel Paper and all such Instruments 

and Documents with a legend, in form and substance satisfactory to Lender, 

indicating that such Chattel Paper and such Instruments and Documents are subject 

to the security interests and Liens in favor of Lender created pursuant to this 

Agreement and the Loan Documents. 

(h) The Borrower shall deliver to the Lender all letters of credit on which 

Borrower is the beneficiary and which give rise to letter of credit rights owned by 

Borrower which constitute part of the Collateral in each case duly endorsed and 

accompanied by duly executed instruments of transfer or assignment, all in form 

and substance satisfactory to the Lender. Borrower shall take any and all actions 

as may be necessary or desirable, or that the Lender may reasonably request, from 

time to time, to cause the Lender to obtain exclusive “control” (as defined in 

Article 9 of the UCC) of any such letter of credit rights in a manner acceptable to 

the Lender. 

(i) The Borrower shall promptly advise the Lender upon Borrower becoming 

aware that it has any interests in any commercial tort claim that constitutes part of 

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the Collateral, which such notice shall include descriptions of the events and 

circumstances giving rise to such commercial tort claim and the dates such events 

and circumstances occurred, the potential defendants with respect such commercial 

tort claim and any court proceedings that have been instituted with respect to such 

commercial tort claims, and the Borrower shall, with respect to any such 

commercial tort claim, execute and deliver to the Lender such documents as the 

Lender shall request to perfect, preserve or protect the Liens, rights and remedies 

of the Lender with respect to any such commercial tort claim. 

(j) After the occurrence and during the continuance of an Event of Default, 

after all applicable cure periods and compliance with the Notice Period and related 

procedures set forth in the Interim Financing Order, (a) the Lender may elect to 

exercise any and all of the rights and remedies of Borrower under the Permits, 

without any interference from Borrower, and Borrower shall cooperate in causing 

the Governmental Authorities, contractors, or purchasers and lessees to comply 

with all the terms and conditions of the Licenses, and, (b) if and to the extent 

permitted by law and the terms of the Permits, the Lender may, at its option, take 

over and enjoy the benefits of the Permits, exercise Borrower’s rights under the 

Permits, and perform all acts in the same manner and to the same extent as Borrower 

might do. 

(k) The Borrower shall furnish to the Lender from time to time any statements 

and schedules further identifying or describing the Collateral and any other 

information, reports or evidence concerning the Collateral as the Lender may 

reasonably request from time to time. 

2.11 Power of Attorney 

Borrower hereby appoints the Lender as its attorney, with power (a) to endorse the 

name of such Borrower on any checks, notes, acceptances, money orders, drafts, or other forms of 

payment or security that may come into Lender’s possession; (b) to sign the name of such 

Borrower on any invoice or bill of lading relating to any Accounts, inventory, or other Collateral; 

(c) to perfect Lender’s security interest or lien in any Collateral, including filing financing 

statements, without such Borrower’s signature, covering part or all of the Collateral in such 

jurisdictions as Lender shall determine to be advisable; (d) verify the validity, amount or any other 

matter relating to the Collateral by mail, telephone, telecopy or otherwise, and (e) do such other 

and further acts and deeds in the name of such Borrower that the Lender may reasonably deem 

necessary or desirable to enforce its right with respect to any Collateral. The appointment of 

Lender as attorney-in-fact for Borrower is coupled with an interest and is irrevocable prior to full 

payment in cash of all Obligations. 

2.12 Setoff Rights 

During the continuance of any Event of Default, the Lender is hereby authorized 

by the Borrower at any time or from time to time, with reasonably prompt subsequent notice to the 

Borrower (any prior or contemporaneous notice being hereby expressly waived) to set off, 

appropriate and to apply, any and all (a) balances held by the Lender or any of the Lender’s 

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Affiliates for the account of the Borrower or any of its Subsidiaries (regardless of whether such 

balances are then due to the Borrower or its Subsidiaries), and (b) other property at any time held 

or owing by Lender to or for the credit or for the account of Borrower or any of its Subsidiaries, 

against and on account of any of the Obligations. 

III.FEES AND OTHER CHARGES 

3.1 Facility Fee 

On the Closing Date, and as a condition of Closing, the Borrower shall pay to the 

Lender one percent (1.0%) of the Facility Cap as a nonrefundable fee (such fee and the fee payable 

pursuant to Section 2.1(e) are referred to here in as the “Facility Fee”). 

3.2 Unused Line Fee 

The Borrower shall pay to the Lender monthly an unused line fee (the “Unused 

Line Fee”) in an amount equal to eight and one third basis points (i.e., 0.0833%) per month of the 

difference derived by subtracting (i) the average daily balance under the Revolving Facility 

outstanding during the preceding month, from (ii) the Facility Cap. The Unused Line Fee shall be 

payable monthly in arrears but in no event later than the first day of each successive calendar 

month (starting with the first full calendar month following the Closing Date). The final payment 

shall be pro-rated to the date of payment in full and shall be paid on that date as part of the 

Obligations. 

3.3 Collateral Management Fee 

The Borrower shall pay the Lender as additional interest a monthly collateral 

management fee (the “Collateral Management Fee”) for monitoring and servicing the Revolving 

Facility, equal to one fourth of one percent (i.e., 0.25%) per month, calculated on the basis of the 

average daily balance under the Revolving Facility outstanding during the preceding month. The 

Collateral Management Fee shall be payable monthly in arrears but in no event later than the first 

calendar day of each successive calendar month (starting with the first full calendar month 

following the Closing Date). The final payment shall be pro-rated to the date of payment in full 

and shall be paid on that date as part of the Obligations.

3.4 Termination Fee 

Upon a termination of the Revolving Facility for any reason, Borrower shall pay 

Lender (in addition to the then outstanding principal, accrued interest and other Obligations (other 

than indemnity obligations with respect to which no claim has been made) relating to the 

Revolving Facility pursuant to the terms of this Agreement and any other Loan Documents), as 

yield maintenance for the loss of bargain and not as a penalty, an amount equal to the Termination 

Fee. Notwithstanding any other provision of any Loan Document, no Termination Fee as described 

above shall be due and payable if (i) Borrower refinances the Obligations (in whole or in part) with 

Lender (which, for purposes of this Section 3.4, shall include Lender and any of its parents, 

subsidiaries or Affiliates), (ii) this Agreement terminates in accordance with its terms at the end of 

its Term, or (iii) Borrower terminates this Agreement within ten (10) days after Borrower provides 

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written notice to Lender of a default by Lender hereunder, and such default by Lender remains 

uncured as of the date of such termination. 

3.5 Software Interface Fee 

Upon the first occurrence of an Event of Default, Borrower shall pay to Lender a 

nonrefundable fee of $5,000 for the setup and implementation of the software interface used by 

Lender to calculate the Borrowing Base. Payment of the setup fee shall be made, at the discretion 

of Lender: (i) by application of available funds in the Concentration Account pursuant to Section 

2.5, (ii) by application of Advances under the Revolving Facility pursuant to Section 2.1, or (iii) 

upon two Business Days’ notice, directly by Borrower. 

Commencing with the first calendar month in which an Event of Default occurs, 

Borrower shall pay Lender a monthly software interface fee (the “Software Interface Fee”) for 

maintaining and servicing the software interface used by Lender to calculate the Borrowing Base, 

equal to $1,000 per month. The Software Interface Fee shall be payable monthly in arrears but in 

no event later than the first day of each successive calendar month. Payment of the Software 

3.6 Computation of Fees; Lawful Limits 

All fees hereunder shall be computed on the basis of a year of 360 days and for the 

actual number of days elapsed in each calculation period, as applicable. In no contingency or event 

whatsoever, whether by reason of acceleration or otherwise, shall the interest and other charges 

paid or agreed to be paid to the Lender for the use, forbearance, or detention of money hereunder 

exceed the maximum rate permissible under applicable Law which a court of competent 

jurisdiction shall, in a final determination, deem applicable hereto. If, due to any circumstance 

whatsoever, fulfillment of any provision hereof, at the time performance of such provision shall 

be due, shall exceed any such limit, then the obligation to be so fulfilled shall be reduced to such 

lawful limit, and, if the Lender has received interest or any other charges of any kind which might 

be deemed to be interest under applicable Law in excess of the maximum lawful rate, then such 

excess shall be applied first to any unpaid fees and charges hereunder, then to unpaid principal 

balance owed by the Borrower hereunder, and if the then remaining excess interest is greater than 

the previously unpaid principal balance, the Lender shall promptly refund such excess amount to 

the Borrower and the provisions hereof shall be deemed amended to provide for such permissible 

rate. The terms and provisions of this Section 3.6 shall control to the extent any other provision 

of any Loan Document is inconsistent herewith.

3.7 Default Rate of Interest 

Upon the occurrence and during the continuation of an Event of Default, the 

Applicable Rate of interest in effect at such time with respect to the Obligations shall be increased 

by three percent (3%) per annum (the “Default Rate”). Such increase shall be in addition to any 

other specific charges provided for herein for noncompliance with specific provisions of this 

Agreement. 

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3.8 Structuring Fee 

On the Closing Date, Borrower shall pay Lender one and two-tenths of one percent 

(1.2%) of the Facility Cap as a nonrefundable structuring fee, which shall be deemed fully earned 

and paid upon Closing. 

IV.CONDITIONS PRECEDENT 

4.1 Conditions to Closing and Advances 

The obligations of the Lender to consummate the transactions contemplated herein and to 

make any Advance under the Revolving Facility are subject to the satisfaction, in the discretion of 

the Lender, of the following:

(a) The Bankruptcy Court shall have entered the Interim Financing Order in the 

Bankruptcy Case, and such order shall be in full force and effect and shall not have 

been vacated, reversed, modified, or stayed in any respect (and, if such order is the 

subject of a pending appeal, motion for reconsideration, rehearing, etc., no further 

performance of any obligation of any party shall have been stayed pending appeal 

or motion);

(b) The Lender shall have received, reviewed and approved the Budget and any 

amendments and restatements thereof; 

(c) The Borrower and the Lender shall have executed and delivered this 

Agreement;

(d) The Lender shall have received, in form and substance reasonably 

satisfactory to Lender, validity and support agreements from each person 

authorized to sign Borrowing Certificates and, if different, the chief financial 

officer of the Borrower; 

(e) The Borrower shall have established Controlled Deposit Accounts and 

Lender shall have received fully executed Control Agreements in accordance with 

Section 2.5 prior to entry of the Final Financing Order; 

(f) Borrower shall have established Controlled Deposit Accounts and Lender 

shall have received fully executed Control Agreements, all in accordance with 

Section 2.5; 

(g) Borrower shall have delivered to Lender, in form and substance acceptable 

to Lender in Lender’s sole discretion collateral assignment of the CARES Escrow 

Agreement; 

(h) The Borrower shall have executed and delivered to the Lender an IRS Form 

8821 in form acceptable to Lender naming Tax Guard as appointee;

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(i) The Lender shall have received (i) copies of all insurance policies required 

by Section 6.6; (ii) a copy of the declarations page for such insurance policies, and 

(iii) certificates of insurance confirming that the Lender has been named as sole 

beneficiary, loss payee or additional insured, as appropriate, in each case prior to 

entry of the Final Financing Order;

(j) The Borrower shall have delivered to the Lender a Borrowing Certificate in 

the form of Exhibit A executed by an authorized officer of Borrower;

(k) No Event of Default shall have occurred and be continuing, or no Event of 

Default would exist after the Lender’s disbursement of the Advance; 

(l) Each of the representations and warranties made by the Borrower under this 

Agreement shall be accurate in all material respects on and as of the date the 

Advance is requested as if made on and as of such date, before and after giving 

effect to such Advance; 

(m) Other than the filing of the Bankruptcy Case, no event shall have occurred 

which has had or could reasonably be expected to have a Material Adverse Effect;

(n) Immediately after giving effect to the requested Advance, the aggregate 

outstanding principal amount of Advances under the Revolving Facility shall not 

exceed the Revolving Loan Limit; 

(o) All payments required under any management agreement with any entity 

that is not a Borrower shall be subordinated to the Obligations of Borrowers 

hereunder;

(p) The Lender shall have received such other documents, certificates, 

information as the Lender may reasonably request, all in form and substance 

reasonably satisfactory to the Lender, and 

(q) The Lender shall have received all fees, charges and expenses payable to 

Lender on or prior to the date of the Advance pursuant to the Loan Documents and 

the Interim Financing Order, except for the Facility Fee as provided above, which 

will be accrued.

4.2 Waivers of Conditions to Advances 

No waiver of any of the foregoing conditions to an Advance or the making of an 

Advance by the Lender, notwithstanding the failure of any of the foregoing conditions to be met 

as of the date of such Advance, shall not be deemed to constitute a waiver by the Lender of any 

such conditions with respect to any future requested Advance. 

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V. REPRESENTATIONS AND WARRANTIES 

In order to induce the Lender to enter into this Agreement and to advance funds to 

Borrower, Borrower represents and warrants as of the date hereof, the Closing Date, and each 

Borrowing Date as follows: 

5.1 Organization and Authority 

Borrower is a limited liability company, is duly organized, validly existing and in 

good standing under the laws of Texas and no other jurisdiction, and Borrower (i) has all requisite 

corporate or other organizational power and authority to own its properties and assets and to carry 

on its business as now being conducted and as contemplated in the Loan Documents; (ii) is duly 

qualified to do business in every jurisdiction in which failure so to qualify could reasonably be 

expected to have a Material Adverse Effect, and (iii) has requisite power and authority, subject to 

entry of the Financing Orders, (A) to execute, deliver and perform the Loan Documents to which 

it is a party and all amendments thereto; (B) to borrow hereunder; (C) to consummate the 

transactions contemplated under the Loan Documents, and (D) to grant the Liens with regard to 

the Collateral pursuant to the Loan Documents to which it is a party subject to the Bankruptcy 

Court approval. 

5.2 Loan Documents 

The execution, delivery and performance by the Borrower of the Loan Documents 

to which it is a party, and the consummation of the transactions contemplated thereby, including 

the grants of Liens and security interests in the Collateral, subject to entry of the Financing Orders, 

(i) have been duly authorized by all requisite action of the Bankruptcy Court or the Borrower and 

have been duly executed and delivered by or on behalf of Borrower, and (ii) do not violate any 

provisions of (A) applicable Law, (B) any order of any Governmental Authority binding on the 

Borrower or any of the Borrower’s properties the effect of which could reasonably be expected to 

have a Material Adverse Effect, or (C) the certificate of incorporation or bylaws (or any other 

equivalent governing agreement or document) of the Borrower, or any agreement between the 

Borrower and its shareholders, members, partners or equity owners or among any such 

shareholders, members, partners or equity owners. When executed and delivered, each of the Loan 

Documents to which each the Borrower is a party will constitute the legal, valid and binding 

obligation of such Borrower, enforceable against such Borrower in accordance with its terms.

5.3 Subsidiaries, Capitalization and Ownership Interests 

The Borrower has no Subsidiaries. Schedule 5.3 also states the authorized and 

issued capitalization of the Borrower, the number and class of equity securities and/or ownership, 

voting or partnership interests issued and outstanding of Borrower and the record and beneficial 

owners thereof (including options, warrants and other rights to acquire any of the foregoing). The 

outstanding equity securities and/or ownership, voting or partnership interests of Borrower have 

been duly authorized and validly issued and are fully paid and nonassessable, and each Person 

listed on Schedule 5.3 owns beneficially and of record all of the equity securities and/or ownership, 

voting or membership interests it is listed as owning free and clear of any Liens other than 

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Permitted Liens. Except as listed on Schedule 5.3, the Borrower do not own an interest in or 

participates or engages in any joint venture, partnership or similar arrangements with any Persons. 

5.4 Properties 

Borrower (i) is the sole owner and has good, valid and marketable title to, or a valid 

leasehold interest in, all of its material properties and assets, including the Collateral, whether 

personal or real, subject to no transfer restrictions or Liens of any kind except for Permitted Liens, 

and (ii) is in compliance in all material respects with each lease to which it is a party or otherwise 

bound except for such noncompliance as would not reasonably be expected to have a Material 

Adverse Effect. Schedule 5.4 lists all real properties (and their locations) owned or leased by or 

to the Borrower. The Borrower enjoys peaceful and undisturbed possession under all such leases, 

and such leases are all the leases necessary for the operation of such properties and assets, are valid 

and subsisting, and are in full force and effect.

5.5 Other Agreements 

Other than with respect to the Bankruptcy Case and claims stayed thereunder, no 

Borrower is (i) a party to any judgment, order or decree or any agreement, document or instrument, 

or subject to any restriction, which would materially adversely affect its ability to execute and 

deliver, or perform under, any Loan Document or to pay the Obligations, or (ii) in default in the 

performance, observance or fulfillment of any obligation, covenant or condition contained in any 

agreement, document or instrument to which it is a party or to which any of its properties or assets 

are subject, which default, if not remedied within any applicable grace or cure period could 

reasonably be expected to have a Material Adverse Effect, nor is there any event, fact, condition 

or circumstance which, with notice or passage of time or both; would constitute or result in a 

conflict, breach, default or event of default under, any of the foregoing which, if not remedied 

within any applicable grace or cure period could reasonably be expected to have a Material 

Adverse Effect.

5.6 Litigation 

There is no action, suit, proceeding or investigation pending or, to Borrower’s 

knowledge, threatened against Borrower that (i) could reasonably be expected to affect the validity 

of any of the Loan Documents or the right of Borrower to enter into any Loan Document or to 

consummate the transactions contemplated thereby or (ii) could reasonably be expected to be or 

have, either individually or in the aggregate, any Material Adverse Change or Material Adverse 

Effect. Borrower is not a party or subject to any order, writ, injunction, judgment or decree of any 

Governmental Authority that could reasonably be expected to have a Material Adverse Effect 

except as so identified in Schedule 5.6. 

5.7 Labor Matters 

There are no strikes, slowdowns, work stoppages, lockouts, grievances, other 

collective bargaining or labor related disputes pending or, to Borrower’s knowledge, threatened 

against Borrower. All payments due from Borrower, or for which any claim may be made against 

any of them, on account of wages and employee and retiree health and welfare insurance and other 

benefits have been paid or accrued as a liability on its books, as the case may be. The provisions 

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of any collective agreement are consistent with applicable industry standards respecting wage 

rates, benefits and working rules. No Borrower is in breach of any provision of any collective 

agreement to which it is a party. The consummation of the transactions contemplated by the Loan 

Documents will not give rise to a right of termination or right of renegotiation on the part of any 

union under any collective bargaining agreement to which it is a party or by which it is bound.

5.8 Tax Returns, Governmental Reports 

The Borrower (i) has filed all material federal, state, foreign (if applicable) and 

local tax returns and other reports which are required by law to be filed by such Borrower, and (ii) 

has paid all taxes, assessments, fees and other governmental charges, including, without limitation, 

payroll and other employment-related taxes, in each case that is due and payable.

5.9 Financial Statements and Reports 

All financial information and statements relating to Borrower that have been or may 

hereafter be delivered to the Lender by Borrower are accurate and complete in all material respects 

consistently applied with prior periods. No Borrower has any material obligations or liabilities of 

any kind not disclosed in such financial information or statements or the Bankruptcy Case, and 

since the date of the most recent financial statements submitted to Lender, there has not occurred 

any Material Adverse Change, Material Adverse Effect, Liability Event or, to the Borrower’s 

knowledge, any other event or condition that could reasonably be expected to have a Material 

Adverse Effect or Liability Event, excluding the Bankruptcy Case.

5.10 Compliance with Law 

Borrower (i) is in substantial compliance with all Laws applicable to the Borrower 

or Borrower’s business, assets, or operations, and (ii) is not in violation of any order of any 

Governmental Authority or other board or tribunal, except where noncompliance or violation 

would not reasonably be expected to have a Material Adverse Effect. There is no event, fact, 

condition, or circumstance which, with notice or passage of time, or both, would constitute or 

result in any noncompliance with, or any violation of, any of the foregoing, in each case except 

where noncompliance or violation would not reasonably be expected to have a Material Adverse 

Effect. No Borrower has received any notice that Borrower is not in compliance in any respect 

with any of the requirements of any of the foregoing. 

5.11 Intellectual Property 

Borrower owns, is licensed to use, or otherwise has the right to use all Intellectual 

Property that is material to the condition (financial or other), business, or operations of Borrower, 

except as would not reasonably be expected to have a Material Adverse Effect. Except as would 

not reasonably be expected to have a Material Adverse Effect, Borrower is the sole and exclusive 

owner of the entire and unencumbered right, title and interest in and to each such registered 

Intellectual Property (or application therefor) purported to be owned by such Borrower, free and 

clear of any Liens (except for Permitted Liens) or licenses in favor of third parties or agreements 

or covenants not to sue such third parties for infringement. All registered Intellectual Property of 

Borrower is duly and properly registered, filed or issued in the appropriate office and jurisdictions 

for such registrations, filings or issuances, except where the failure to do so would not reasonably 

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be expected to have a Material Adverse Effect. To Borrower’s knowledge, it conducts its business 

without infringement or claim of infringement of any Intellectual Property rights of others and 

there is no infringement or claim of infringement by others of any Intellectual Property rights of 

such Borrower, which infringement or claim of infringement could reasonably be expected to have 

a Material Adverse Effect.

5.12 Licenses and Permits 

Without limitation of anything contained in Section 5.20, Borrower is in substantial 

compliance with and has all Permits necessary or required by applicable Law or Governmental 

Authority for the operation of its businesses except where the failure to be in compliance would 

not reasonably be expected to have a Material Adverse Effect. All of the foregoing are in full force 

and effect and not in known conflict with the rights of others except where the failure to be in 

compliance would not reasonably be expected to have a Material Adverse Effect. No Borrower is 

(i) in breach of or default under the provisions of any of the foregoing, nor is there any event, fact, 

condition or circumstance which, with notice or passage of time or both, would constitute or result 

in a conflict, breach, Default or Event of Default under, any of the foregoing which, if not remedied 

within any applicable grace or cure period could reasonably be expected to have a Material 

Adverse Effect, or (ii) a party to or subject to any agreement, instrument or restriction that is so 

unusual or burdensome that it might have a Material Adverse Effect.

5.13 Disclosure 

No Loan Document nor any other agreement, document, certificate, or statement 

furnished to the Lender by or on behalf of Borrower in connection with the transactions 

contemplated by the Loan Documents, when taken as a whole contains any untrue statement of 

material fact or omits to state any fact necessary to make the statements therein not materially 

misleading in light of current circumstances. All financial projections delivered to the Lender by 

the Borrower has been prepared on the basis of the assumptions stated therein. Such projections 

represent Borrower’s best estimate of such Borrower’s future financial performance, and such 

assumptions are believed by Borrower to be fair and reasonable in light of current business 

conditions.

5.14 Existing Indebtedness: Investments, Guarantees, and Certain Contracts 

Except as permitted by the Loan Documents, the Borrower (i) has no outstanding 

Indebtedness other than Permitted Indebtedness; (ii) is not subject or party to any mortgage, note, 

indenture, indemnity or guarantee of, with respect to or evidencing any Indebtedness of any other 

Person other than in connection with a Permitted Lien, or (iii) does not own or hold any equity or 

long-term debt investments in, and do not have any outstanding advances to or any outstanding 

guarantees for the obligations of, or any outstanding borrowings from, any Person. Borrower has 

performed all material obligations required to be performed by Borrower pursuant to or in 

connection with its outstanding Indebtedness and the items permitted by the Loan Documents, and 

there has occurred no breach, default, or event of default under any document evidencing any such 

items or any fact, circumstance, condition or event which, with the giving of notice or passage of 

time or both, would constitute or result in a breach, default or event of default thereunder. Borrower 

has not agreed to pay any other Indebtedness in priority to the Obligations.

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5.15 Agreements with Affiliates 

Except for transactions permitted under Section 7.6, there are no existing or 

proposed material agreements, arrangements, understandings, or transactions between Borrower 

and any of its officers, members, managers, directors, stockholders, partners, other interest holders, 

employees or Affiliates, or any members of its respective immediate families.

5.16 Insurance 

Borrower has in full force and effect such insurance policies as are customary in its 

industry and as may be required pursuant to Section 6.5. All such insurance policies as in force 

on the date of this Agreement are listed and described on Schedule 5.16.

5.17 Names, Location of Offices, Records and Collateral 

During the preceding five years, the Borrower has not conducted business under or 

used any name (whether corporate, partnership, or assumed), other than as shown on Schedule 

5.17A. The Borrower are the sole owners of all of its names listed on Schedule 5.17A, and any 

and all business done, and invoices issued in such names are Borrower’s sales, business and 

invoices. Borrower maintains its places of business and chief executive offices only at the locations 

set forth on Schedule 5.17B. Schedule 5.17B also identifies all of the addresses (including 

warehouses) at which any of the Collateral is located or Books and Records of Borrower regarding 

any Collateral are kept and identifying which Collateral and which Books and Records are kept at 

each location, the nature of such location (e.g., leased business location operated by the Borrower, 

third party warehouse, consignment location, processor location, etc.) and the name and address 

of the third party owning and/or operating such location. No Collateral and no Books and Records 

in connection therewith or in any way relating thereto or that evidence the Collateral are located 

at any other location except for what may be stored in offsite, remotely accessible computer 

storage. All of the Collateral is and shall remain located (as that term is used in Section 9-301(2) 

of the UCC) only in the continental United States.

5.18 Non-Subordination 

(a) The Obligations are not subordinated in any way to any other obligations of 

Borrower or to the rights of any other Person. 

(b) Upon the entry of each Financing Order by the Bankruptcy Court, the 

Obligations of the Borrower will constitute allowed Superpriority Claims (subject 

only to the Carve-Out), having priority in payment over all other administrative 

expenses and unsecured claims against the Borrower now existing or hereafter 

arising, of any kind or nature whatsoever, including without limitation, all 

administrative expenses of the kind specified in, or arising or ordered under, 

Sections 105, 326, 328, 503(b), 506(c), 507(a), 507(b), 546(c), 726 and 1114 of the 

Bankruptcy Code. 

(c) The security interests granted in this Agreement will, upon the entry of each 

Financing Order by the Bankruptcy Court, be prior to all other interests and Liens 

with respect to the Collateral. 

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5.19 Accounts 

In determining which Accounts are Eligible Receivables, the Lender may rely on 

all statements and representations made by the Borrower with respect to any Account. Unless 

otherwise indicated in writing to the Lender, each Account of Borrower that is included on a 

Borrowing Certificate as an Eligible Receivable (i) is genuine and in all respects what it purports 

to be and is not evidenced by a judgment; (ii) meets the criteria for an Eligible Receivable as set 

forth in the definition of that term; (iii) there are no facts, events or occurrences which in any way 

impair the validity or enforceability thereof or materially reduce the amount payable thereunder 

from the face amount of the claim or invoice and statements delivered to Lender with respect 

thereto, except to the extent the same is reflected in the calculation of Net Collectible Value, and 

(iv) Borrower has disclosed to Lender on each Borrowing Certificate the amount of all Accounts 

of Borrower for which Medicare is the Account Debtor and for which payment has been denied 

and subsequently appealed, and Borrower are properly pursuing all available appeals in respects 

of such Accounts.

5.20 Healthcare Law Compliance Representations 

To induce the Lender to enter into this Agreement and to make credit accommodations 

contemplated hereby, the Borrower hereby represent and warrant that all of the information 

regarding the Borrower and the Hospital set forth in Schedule 5.20 is true, complete and correct, 

and that, except as disclosed in Schedule 5.20, the following statements are true, complete and 

correct:

(a) Healthcare Permits. Borrower has (i) each Healthcare Permit and other 

rights from, and has made all declarations and filings with, all applicable 

Governmental Authorities, all self-regulatory authorities and all courts and other 

tribunals necessary to engage in the ownership, management and operation of the 

Hospital or the assets of Borrower, and (ii) no knowledge that any Governmental 

Authority is considering limiting, suspending or revoking any such Healthcare 

Permit. All such Healthcare Permits are valid and in full force and effect and 

Borrower is in compliance with the terms and conditions of all such Healthcare 

Permits.

(b) Specific Licensing. The Hospital is duly licensed under the applicable Laws 

of the state where the facility is located. The licensed bed or unit capacity of each 

such facility is shown on Schedule 5.19. Borrower has not granted to any third party 

the right to reduce the number of licensed beds, persons served or units in any of the 

health care facilities operated by Borrower or the right to apply for approval to move 

any and all of the licensed beds, persons served or units in the Hospital to any other 

location and there are no proceedings or contemplated to reduce the currently active 

number of licensed beds, persons served or units in the Hospital.

(c) Accreditation. Borrower has received and maintains accreditation in good 

standing and without impairment by all applicable Accrediting Organizations, to 

the extent required by law (including any equivalent regulation) or the terms of any 

Lease pertaining to the Hospital. Borrower has not received any notice or 

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communication from any Accrediting Organization that the Hospital is (i) subject 

to or is required to file a plan of correction with respect to any accreditation survey, 

or (ii) in danger of losing its accreditation due to a failure to comply with a plan of 

correction

(c) Leases. The Lease has been approved by all necessary Governmental Authorities, if 

any. Under applicable Healthcare Laws in the state in which the Hospital is located, the 

reimbursement rate of the Borrower under applicable Third-Party Payor participation agreements is 

not affected by the rental rates under the Lease. The rentals provided for under the Lease comply 

with all applicable Healthcare Laws and do not exceed the sums permitted to be paid under 

applicable Healthcare Laws.

(d) Participation Agreements/Provider Status/Cost Reports. There is no 

investigation, audit, claim review, or other action pending or, to the knowledge of 

Borrower, threatened which could result in a revocation, suspension, termination, 

probation, restriction, limitation, or non-renewal of any Third-Party Payor 

participation agreement or provider number or other Healthcare Permit or result in 

Borrower’s exclusion from any Third-Party Payor Program, nor has Borrower or 

any Third Party Payor Program made any decision not to renew any participation 

agreement or provider agreement or other Healthcare Permit related to the Hospital, 

nor is there any action pending or threatened to impose material intermediate or 

alternative sanctions with respect to the Hospital. Borrower, and, to Borrower’s 

knowledge, its contractors, have properly and legally billed all intermediaries and 

Third-Party Payors for services rendered with respect to the Hospital and have 

maintained its records to reflect such billing practices. Except with respect to funds 

escrowed pursuant to the Hospital Asset Purchase Agreement, no funds relating to 

Borrower are now, or, to Borrower’s knowledge will be, withheld by any ThirdParty Payor. Borrower has or has the right to use the requisite participation 

agreement or provider number or other Healthcare Permit to bill the Medicare 

program and the respective Medicaid programs in the state or states in which 

Borrower operates and all other Third-Party Payor Programs (including Medicare) 

which have historically accounted for any portion of the revenues of the Hospital. 

All Medicare, Medicaid, and private insurance cost reports and financial reports 

submitted by Borrower are and will be materially accurate and complete and have 

not been and will not be misleading in any material respects and have been and will 

be submitted on a timely basis. No cost reports for the Hospital remain “open” or 

unsettled for longer than historically indicated periods and there are no Medicare, 

Medicaid or other Third-Party Payor Program reimbursement audits or appeals 

pending with respect to the Hospital or Borrower..

(e) No Violation of Healthcare Laws. Neither the Hospital or Borrower are in 

violation of any applicable Laws, except where any such violation would not have 

a Material Adverse Effect. Borrower is HIPAA Compliant. The Hospital has not 

received a statement of deficiencies or survey violation of a “Level A” (or 

equivalent) or worse (with respect to assisted living facilities), or a tag level of “G” 

or higher with respect to any skilled nursing facility, within the past three years for 

which a plan of correction has not been filed with the applicable state authority. 

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The Hospital is not currently subject to any plan of correction that has not been 

accepted by or is currently the subject of a review by the applicable state authority. 

Borrower has not received notice of any charges of patient abuse..

(f) Proceedings. Neither Borrower nor the Hospital is subject to any 

proceeding, suit or, to Borrower’s knowledge, investigation by any federal, state or 

local government or quasi-governmental body, agency, board or authority or any 

other administrative or investigative body (including the Office of the Inspector 

General of the United States Department of Health and Human Services): (i) which 

may result in the imposition of a fine, alternative, interim or final sanction, a lower 

reimbursement rate for services rendered to eligible patients which has not been 

provided for on its financial statements, or which would have a Material Adverse 

Effect on Borrower or the operation of the Hospital; (ii) which could result in the 

revocation, transfer, surrender, suspension or other impairment of the operating 

certificate, provider agreement or Healthcare Permits of the Hospital; (iii) which 

pertains to or requests any voluntary disclosure pertaining to a potential 

overpayment matter involving the submission of claims to such payor by Borrower; 

or (iv) which pertains to any state or federal Medicare or Medicaid cost reports or 

claims filed by Borrower (including any reimbursement audits), or any 

disallowance by any commission, board or agency in connection with any audit of 

such cost reports..

(g) Hill Burton. Except for Governmental Receivables, Borrower is not or will 

be a participant in any federal program whereby any federal, state or local 

government or quasi-governmental body, agency, board or other authority may 

have the right to recover funds by reason of the advance of federal funds, including 

those authorized under the Hill-Burton Act (42 U.S.C. 291, et seq.)

(h) Fraud and Abuse. 

(i) Borrower has not, or to its knowledge has been 

alleged to have, and no owner, officer, manager, employee or Person with a “direct or indirect 

ownership interest” (as that phrase is defined in 42 C.F.R. §420.201) in Borrower has, engaged in 

any of the following: (1) knowingly and willfully making or causing to be made a false statement 

or representation of a material fact in any application for any benefit or payment under any 

Healthcare Laws; (2) knowingly and willfully making or causing to be made any false statement 

or representation of a material fact for use in determining rights to any benefit or payment under 

any Healthcare Laws; (3) failing to disclose knowledge by a claimant of the occurrence of any 

event affecting the initial or continued right to any benefit or payment under any Healthcare Laws 

on its own behalf or on behalf of another, with intent to secure such benefit or payment 

fraudulently; (4) knowingly and willfully soliciting or receiving any remuneration (including any 

kickback, bribe or rebate), directly or indirectly, overtly or covertly, in cash or in kind or offering 

to pay such remuneration (I) in return for referring an individual to a Person for the furnishing or 

arranging for the furnishing of any item or service for which payment may be made in whole or in 

part by any Healthcare Laws, or (II) in return for purchasing, leasing or ordering or arranging for 

or recommending the purchasing, leasing or ordering of any good, facility, service, or item for 

which payment may be made in whole or in part by any Healthcare Laws; (5) presenting or causing 

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to be presented a claim for reimbursement for services that is for an item or services that was 

known or should have been known to be (I) not provided as claimed, or (II) false or fraudulent; or 

(6) knowingly and willfully making or causing to be made or inducing or seeking to induce the 

making of any false statement or representation (or omitting to state a fact required to be stated 

therein or necessary to make the statements contained therein not misleading) of a material fact 

with respect to (I) the Hospital in order that the Hospital may qualify for Governmental Authority 

certification, or (II) information required to be provided under 42 U.S.C. § 1320a-3. All contractual 

arrangements to which Borrower is a party are in compliance with all Healthcare Laws. 

(ii) Borrower has not, or to its knowledge has been alleged to have, and 

no owner, officer, manager, employee or Person with a “direct or indirect ownership interest” (as 

that phrase is defined in 42 C.F.R. §420.201) in Borrower has: (1) had a civil monetary penalty 

assessed against him or her pursuant to 42 U.S.C. §1320a-7a or is the subject of a proceeding 

seeking to assess such penalty; (2) been excluded from participation in a Federal Health Care 

Program (as that term is defined in 42 U.S.C. §1320a-7b) or is the subject of a proceeding seeking 

to assess such penalty, or has been “suspended” or “debarred” from selling products to the U.S. 

government or its agencies pursuant to the Federal Acquisition Regulation, relating to debarment 

and suspension applicable to federal government agencies generally (48 C.F.R. Subpart 9.4), or 

other applicable Laws; (3) been convicted (as that term is defined in 42 C.F.R. §1001.2) of any of 

those offenses described in 42 U.S.C. §1320a-7b or 18 U.S.C. §§669, 1035, 1347, 1518 or is the 

subject of a proceeding seeking to assess such penalty; (4) been involved or named in a U.S. 

Attorney complaint made or any other action taken pursuant to the False Claims Act under 31 

U.S.C. §§3729-3731 or qui tam action brought pursuant to 31 U.S.C. §3729 et seq.; (5) been made 

a party to any other action by any governmental authority that may prohibit it from selling products 

to any governmental or other purchaser pursuant to any applicable Law; or (6) become subject to 

any federal, state, local governmental or private payor civil or criminal investigations or inquiries, 

proceedings, validation review, program integrity review or statement of charges involving or 

related to its compliance with Healthcare Laws or involving or threatening its participation in 

Medicare, Medicaid or other Third-Party Payor Programs or its billing practices with respect 

thereto. 

5.21 Reliance on Representations; Survival 

Borrower makes the representations and warranties contained herein with the 

knowledge and intention that the Lender is relying and will rely thereon. All such representations 

and warranties will survive the execution and delivery of this Agreement and the making of the 

Advances under the Revolving Facility. No investigation or inquiry made by or on behalf of the 

Lender nor knowledge by Lender which is in any fashion inconsistent with the representations and 

warranties contained herein, shall in any way (i) affect or lessen the representations and warranties 

made and entered into by the Borrower hereunder, or (ii) reduce or in any way affect the Lender’s 

rights with respect to a breach of such representations and warranties. 

5.22 Compliance with Environmental Requirements; No Hazardous Substances 

(a) The Borrower has no knowledge of (i) the presence of any Hazardous 

Substance on any of the real property where the Borrower conduct operations or 

have personal property; (ii) any on site spills, releases, discharges, disposal or 

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storage of Hazardous Substances that have occurred or are presently occurring on 

any of such real property or where any Collateral is located, or (iii) any spills, 

releases, discharges or disposal of Hazardous Substances that have occurred or are 

presently occurring on any other real property as a result of the conduct, action or 

activities of the Borrower. 

(b) No property now owned or leased by the Borrower is on the National 

Priorities List promulgated pursuant to CERCLA, or CERCLIS (as defined in 

CERCLA) or any similar state list or is the subject of federal, state or local 

enforcement actions or, to the knowledge of such Borrower, other investigations 

which may lead to claims against Borrower for clean-up costs, remedial work, 

damage to natural resources or personal injury claims, including, without 

limitation, claims under CERCLA. 

For purposes of this Section 5.22, the Borrower shall be deemed to include any business or 

business entity (including a corporation) that is, in whole or in part, a predecessor of the Borrower. 

5.23 Material Contracts 

Except for the Organizational Documents and the other agreements set forth on 

Schedule 5.23 (collectively with the Organizational Documents, the “Material Contracts”), there 

are no (a) employment agreements covering the management of the Borrower; (b) collective 

bargaining agreements or other similar labor agreements covering any employees of Borrower; 

(c) agreements for managerial, consulting or similar services to which the Borrower is a party or 

by which it is bound; (d) agreements regarding the Borrower, its assets or operations or any 

investment therein to which any of its equity holders is a party or by which it is bound; (e) real 

estate leases, Intellectual Property licenses or other lease or license agreements to which the 

Borrower is a party, either as lessor or lessee, or as licensor or licensee (other than licenses arising 

from the purchase of “off the shelf” products); (f) customer, distribution, marketing or supply 

agreements to which the Borrower is a party, in each case with respect to the preceding clauses (a) 

through (f) requiring payment of more than [$25,000] in any year; (g) partnership agreements to 

which the Borrower is a general partner or joint venture agreements to which Borrower is a party, 

or (h) any other agreements or instruments to which the Borrower is a party, and the breach, 

nonperformance or cancellation of which, or the failure of which to renew, could reasonably be 

expected to have a Material Adverse Effect. Schedule 5.23 sets forth, with respect to each real 

estate lease agreement to which the Borrower is a party (as a lessee), the address of the subject 

property and the annual rental (or, where applicable, a general description of the method of 

computing the annual rental). The consummation of the transactions contemplated by the Loan 

Documents will not give rise to a right of termination in favor of any party to any Material Contract 

(other than Borrower), except for such Material Contracts the noncompliance with which would 

not reasonably be expected to have a Material Adverse Effect. 

5.24 Third-Party Payor Billing Numbers 

The numbers under which the Borrower bills Third-Party Payors are listed on 

Schedule 5.24 and all such billing numbers have been issued to Borrower and not to any Affiliate 

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of the Borrower and not to any unaffiliated third party; and the Borrower has not allowed any 

Person that is not a borrower hereunder to use such billing numbers for any purpose. 

5.25 Financing Orders 

The Financing Orders are in full force and effect and are not subject to a pending 

appeal, motion for leave to appeal, or other proceeding to set aside such orders, and such Financing 

Orders have not been reversed, modified, stayed or vacated absent the Lender’s written consent. 

5.26 DIP Order Notices 

The Bankruptcy Case was commenced on the Petition Date in accordance with 

applicable law and proper and all legally required notice thereof and the proper notice for (i) the 

motion seeking approval of the Loan Documents and the Interim Financing Order and Final 

Financing Order; (ii) the hearing for the approval of the Interim Financing Order, and (iii) the 

hearing for the approval of the Final Financing Order, have been or will be timely given. 

5.27 Superpriority Administrative Expense Claims 

After the entry of the Interim Financing Order, and pursuant to and to the extent 

permitted in the Interim Financing Order and the Final Financing Order, the Obligations will 

constitute allowed Superpriority Claims. 

5.28 DIP Liens 

After the entry of the Interim Financing Order and pursuant to and to the extent 

provided in the Final Financing Order, the Obligations will be secured by a valid and perfected 

superpriority Lien on all of the Collateral, subject only to the Liens and priorities of other claims 

(if any) as provided by the Financing Orders. 

5.29 Use of Proceeds. 

 The Proceeds of the Loans have been used in and will be used, whether directly or 

indirectly in compliance with Section 6.12. 

VI. AFFIRMATIVE COVENANTS 

Borrower covenants and agrees that, until full performance and satisfaction, and 

payment in full in cash, of all the Obligations (other than indemnity obligations with respect to 

which no claim has been made) and termination of this Agreement::

6.1 Financial Statements, Reports and Other Information 

(a) Financial Reports. Borrower shall furnish to Lender (i) as soon as available 

and in any event within one hundred twenty (120) days after the end of each fiscal 

year of Borrower, Borrower’s annual financial statements, including the notes 

thereto, consisting of a balance sheet at the end of such completed fiscal year and 

the related income statements, retained earnings, cash flows and owners’ equity for 

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such completed fiscal year, reviewed and approved without qualification by an 

independent certified public accounting firm satisfactory to Lender and 

accompanied by related management letters, if available, and (ii) within thirty (30) 

days after the end of each calendar month, Borrower’s unaudited financial 

statements consisting of a balance sheet and income statements, retained earnings, 

cash flows and owners’ equity as of the end of such calendar month. All such 

financial statements shall be prepared in accordance with GAAP consistently 

applied with prior periods. With each such financial statement, Borrower shall also 

deliver a compliance certificate of its chief executive officer or chief financial 

officer in the form set forth in Exhibit B (a “Compliance Certificate”) showing 

compliance with all financial and loan covenants set forth in Annex I. In addition 

to the above financial reports, Borrower shall furnish to Lender as soon as available 

and in any event within ten (10) days after the end of each calendar month, 

statements from Borrower’s bank showing all account activity for the preceding 

calendar month. 

(b) Accounts Receivable Aging Schedules. Borrower shall furnish to Lender 

as soon as available, and in any event within ten (10) days after the end of each 

calendar month, detailed accounts receivable and accounts payable aging schedules 

as of the end of such month, in a form satisfactory to Lender.

(c) Forms 941. Within thirty (30) days following the end of each calendar 

quarter, Borrower shall furnish Lender with a copy of all IRS Forms 941 required 

to be filed by Borrower with respect to the quarter then ended.

(d) Other Materials. Borrower shall furnish to the Lender as soon as available, 

and in any event within fifteen (15) calendar days after the preparation or issuance 

thereof or at such other time as set forth below: 

(i) Communications with Equity Owners. Any reports, 

returns, information, notices and other materials that Borrower shall send or be required to 

send to all of its stockholders, members, partners or other equity owners at any time;

(ii) Cost Reports. All Medicare and Medicaid cost reports 

and other document and materials filed by or on behalf of Borrower and any other reports, 

materials or other information regarding or otherwise relating to Medicaid or Medicare 

prepared by, for or on behalf of Borrower;

(iii) Medicare/Medicaid Documents. Any other reports, 

materials or other information regarding or otherwise relating to Medicaid or Medicare 

prepared by, for, or on behalf of, Borrower or any of its Subsidiaries, including (A) copies 

of licenses and permits required by any applicable federal, state, foreign or local law, 

statute ordinance or regulation or Governmental Authority for the operation of its business, 

(B) Medicaid or Medicare provider numbers and agreements, (C) state surveys pertaining 

to the Hospital, (D) participating agreements relating to medical plans and (E) copies of all 

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Medicare or Medicaid surveys, or other surveys or reviews conducted by any government 

health plan or other accreditation entity;

(iv) Monthly Reports. Within ten (10) calendar days after 

the end of each calendar month for such month, (A) a report of the status of all payments, 

denials and appeals of all Medicaid and/or Medicare Accounts; (B) a sales and collection 

report (including credits issued) in a form satisfactory to the Lender and such reports shall 

show a reconciliation to the amounts reported in the monthly financial statements, and (C) 

a report of census and occupancy percentage;

(v) Insurance Renewals. Prior to the expiration date of 

each of the insurance policies required to be maintained pursuant to Section 6.6, proof of 

the renewal of each such insurance policy together with copies of the declarations page for 

each such renewed policy; 

(vi) Accountants Communications. Promptly upon receipt 

thereof, copies of any reports submitted to the Borrower by its independent accountants in 

connection with any interim audit of the books of Borrower and copies of each 

management control letter provided by such independent accountants; 

(vii) Budget. On or before 12:00 pm EST on the fourth 

Business Day of each week, commencing with the first week following the Petition Date, 

the Borrower shall deliver to the Lender (i) a report comparing, on a line-item basis, actual 

cash receipts and disbursements against cash receipts and disbursements set forth in the 

previously delivered Budget, and (ii) an updated Budget for the proceeding thirteen-week 

period. Such updated Budget(s), in each case in form and substance satisfactory to the 

Lender, once approved by the Lender, shall become the Budget for all purposes going 

forward hereunder until a subsequent Budget is submitted and approved by the Lender.

(viii) Documents Requested by the Lender. Such additional 

information, documents, statements, reports and other materials as the Lender may 

reasonably request from a credit or security perspective or otherwise from time to time, 

including, but not limited to, periodic receivable and payable aging reports, payroll tax 

information, dilution analyses, origination reports and default/charge off reports.

(e) Notices. The Borrower shall promptly notify the Lender in writing of (i) 

any pending litigation, suit, investigation, arbitration, formal dispute resolution 

proceeding or administrative proceeding brought against or initiated by Borrower 

or otherwise affecting or involving or relating to Borrower or any of its property or 

assets; (ii) any Event of Default, which notice shall specify the nature and status 

thereof, the period of existence thereof and what action is proposed to be taken with 

respect thereto; (iii) any other development, event, fact, circumstance or condition 

that could reasonably be expected to have a Material Adverse Effect, in each case 

describing the nature and status thereof and the action proposed to be taken with 

respect thereto; (iv) any matter(s) affecting the value, enforceability or 

collectability of any of the Collateral, including without limitation, post-petition 

claims or disputes in the amount of $25,000 or more, singly or in the aggregate, in 

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existence at any one time; (v) receipt of any notice or request from any 

Governmental Authority or governmental payor regarding any liability or claim of 

liability outside the ordinary course of business, or (vi) termination of any executive 

manager of any facility owned, operated or leased by Borrower.

(f) Consents. Borrower shall obtain and deliver from time to time all required 

consents, approvals and agreements from such third parties as the Lender shall 

determine are necessary or desirable in its discretion (as communicated to Borrower 

by written notice) for the protection of its Collateral and that are reasonably 

satisfactory to the Lender with respect to the Loan Documents and the transactions 

contemplated thereby or any of the Collateral, including, without limitation, 

landlord waivers with respect to leases entered into after the Closing Date.

(g) Operating Budget. Borrower shall furnish to the Lender prior to the Closing 

Date a Budget setting forth the Borrower’s projected cash receipts and 

disbursements and the Loans projected to be outstanding on a weekly basis for a 

period of thirteen-weeks, commencing with the week Closing occurs. On the fourth 

Business Day of each calendar week, the Borrower will provide the Lender with (i) 

a report comparing, on a line-item basis, actual cash receipts and disbursements 

against cash receipts and disbursements set forth in the previously delivered 

Budget, and (ii) an updated Budget for the proceeding thirteen-week period. At the 

request of the Lender, the Borrower shall furnish to the Lender month by month 

projected operating budgets, annual projections, balance sheets and cash flow 

reports of and for Borrower for any requested period (including an income 

statement for each month). All reports and Budgets delivered under this Section 

6.1(g) shall be prepared in accordance with GAAP and consistently applied with 

prior periods.

(h) Healthcare Notices. Borrower shall notify the Lender within three (3) 

Business Days (but in any event prior to Borrower submitting any requests for 

advances of reserves or escrows or fundings of credit facility proceeds under this 

Agreement) following the occurrence of any facts, events or circumstances known 

to Borrower, whether threatened, existing or pending, that would make any of the 

representations and warranties contained in Section 5.20 untrue, incomplete or 

incorrect (together with such supporting data and information as shall be necessary 

to fully explain to the Lender the scope and nature of the fact, event or 

circumstance), and shall provide to Lender within 2 Business Days of Lender’s 

request, such additional information as the Lender shall request regarding such 

disclosure.

(i) Notices with Respect to Lease. In connection with Hospital Facility Lease 

Agreement between Old Operator and Borrower to be effective as of the “Effective 

Time” on the “Closing Date” as such terms are defined in the Hospital Asset 

Purchase Agreement (the “Lease”), Borrower shall:

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(i) notify Lender within one (1) Business Day of any default, event of default, or 

alleged default or event of default in connection with the Lease;

(ii) notify Lender within one (1) Business Day of any termination of the Lease; and 

(iii) at Lender’s request, provide Lender with evidence satisfactory to Lender of 

Borrower’s payment of all rent due under the Lease on a monthly basis within one 

(1) Business Day of such payment. 

6.2 Late Fee 

Notwithstanding any other provision of this Agreement, in the event any of the financial 

statements or other reports or documents due by Borrower under this Section 6.2 are not timely 

delivered to the Lender, Borrower shall pay the Lender a late fee equal to $150 per day until such 

statements or reports are delivered to the Lender. Such late fee shall be in addition to any other 

fees, charges or other provisions that may increase the Applicable Rate of interest hereunder and 

the assessment or collection of such late fee shall not, unless the Lender specifically agrees in 

writing to the contrary, prevent the Lender from considering any such non-timely delivery to be 

an Event of Default. 

6.3 Payment of Obligation 

Borrower (a) will pay and discharge, on a timely basis as and when due, all of its 

postpetition obligations and liabilities, except for such obligations and/or liabilities (i) that may be 

the subject of a Permitted Contest, and (ii) the nonpayment or nondischarge of which could not 

reasonably be expected to have a Material Adverse Effect or result in a Lien against any Collateral, 

except for Permitted Liens, (b) without limiting anything contained in the foregoing clause (a), 

pay all postpetition amounts due and owing in respect of taxes (including without limitation, 

payroll and withholdings tax liabilities) on a timely basis as and when due, and in any case prior 

to the date on which any fine, penalty, interest, late charge or loss may be added thereto for 

nonpayment thereof, (c) will maintain, and cause each Subsidiary to maintain, in accordance with 

GAAP, appropriate reserves for the accrual of all of its respective obligations and liabilities, and 

(d) will not breach or permit any Subsidiary to breach, or permit to exist any default under, 

postpetition the terms of any lease, commitment, contract, instrument or obligation to which it is 

a party, or by which its properties or assets are bound in any material respect. Notwithstanding 

the foregoing, Borrower shall make full and timely payment in cash of the principal of and interest 

on the Loans, Advances and all other Obligations when due and payable.

6.4 Conduct of Business and Maintenance of Existence and Assets 

Borrower shall (i) engage principally in the same or similar lines of business 

substantially as heretofore conducted, (ii) collect its Accounts in the ordinary course of business, 

(iii) maintain all of its material properties, assets and Equipment used or useful in its business in 

good repair, working order and condition (normal wear and tear excepted and except as may be 

disposed of in the ordinary course of business and in accordance with the terms of the Loan 

Documents and otherwise as determined by Borrower using commercially reasonable business 

judgment), and shall promptly make or cause to be made all repairs, replacements and other 

improvements in connection therewith that are necessary or desirable to such end, (iv) from time 

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to time make all necessary or desirable repairs, renewals and replacements thereof, as determined 

by Borrower using commercially reasonable business judgment, (v) maintain and keep in full force 

and effect its existence, (vi) maintain and keep in full force and effect, in good standing, and free 

from restrictions, probations, conditions or known conflicts which would materially impair 

Borrower’s business, all qualifications to do business in each jurisdiction in which the ownership 

or lease of property or the nature of its business makes such qualification necessary, and (vii) 

maintain and keep in full force and effect all Healthcare Permits necessary under Healthcare Laws 

to continue to receive reimbursement under all Third-Party Payor Programs in which Borrower 

participates as of the date of this Agreement.

6.5 Compliance with Legal, Tax and Other Obligations 

Borrower shall (i) substantially comply with all Laws applicable to it or its 

business, assets or operations, (ii) file its tax returns (including any informational returns) and 

pay all taxes (including bed taxes), assessments, fees, governmental charges, claims for labor, 

supplies, rent and all other obligations or liabilities of any kind, as and when due and payable, 

except liabilities being contested in a Permitted Contest; however, all payroll taxes payable in 

connection with each payroll shall be paid or funds shall set aside in a reserve in an amount 

adequate to pay all such payroll taxes contemporaneously with the payment of such payroll, and 

(iii) perform in accordance with its terms each contract, agreement or other arrangement to which 

it is a party or by which it or any of the Collateral is bound, in each case, except where the failure 

to comply with any of the foregoing provisions of this Section 6.5 could reasonably be expected 

not to have a Material Adverse Effect 

6.6 Insurance 

(a) The Borrower shall (i) keep all of its insurable properties and assets 

adequately insured in all material respects against losses, damages and hazards as 

are customarily insured against by businesses engaging in similar activities or 

owning similar assets or properties and at least the minimum amount required by 

applicable Law, including, without limitation, medical malpractice and 

professional liability insurance, as applicable; (ii) maintain business interruption 

insurance, (iii) maintain general public liability insurance at all times against 

liability on account of damage to persons and property having such limits, 

deductibles, exclusions and co-insurance and other provisions as are customary for 

a business engaged in activities similar to those of Borrower, and (iv) maintain 

insurance under all applicable workers’ compensation laws. All of the insurance 

policies referenced above shall be (x) satisfactory in form and substance to the 

Lender in its discretion and (y) placed with insurers having an A.M. Best 

policyholder rating acceptable to the Lender in its discretion. Borrower agrees that 

they shall not alter, amend, modify or cancel its insurance policies without thirty 

(30) Business Days prior written notice to the Lender unless such alteration, 

amendment, modification or cancellation, shall be in compliance with the 

requirements set forth above. The insurance policies referenced in clauses (i) and 

(ii) shall name the Lender as a loss payee thereunder. The insurance policies 

referenced in clause (iii) shall name the Lender as an additional insured thereunder.

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(b) In the event Borrower fails to provide the Lender with evidence of the 

insurance coverage required by this Agreement, the Lender may purchase insurance 

at Borrower’s expense to protect the Lender’s interests in the Collateral. This 

insurance may, but need not, protect the Borrower’s interests. The coverage 

purchased by the Lender may not pay any claim made by the Borrower or any claim 

that is made against the Borrower in connection with the Collateral. The Borrower 

may later cancel any insurance purchased by the Lender, but only after providing 

the Lender with evidence that the Borrower has obtained insurance as required by 

this Agreement. If the Lender purchases insurance for the Collateral in accordance 

with this Section 6.6(b), the Borrower will be responsible for the costs of that 

insurance to the fullest extent provided by law, including interest and other charges 

imposed by the Lender in connection with the placement of the insurance, until the 

effective date of the cancellation or expiration of the insurance. The costs of the 

insurance may be added to the Obligations. The costs of the insurance may be more 

than the cost of insurance such Borrower is able to obtain on its own. 

6.7 True Books 

Borrower shall (i) keep true, complete and accurate books of record and accounts 

in accordance with commercially reasonable business practices in which true and correct entries 

are made of all of its dealings and transactions in all material respects; (ii) set up and maintain on 

its books such reserves with respect to doubtful accounts and all taxes, assessments, charges, levies 

and claims and with respect to its business, and include such reserves in its quarterly as well as 

year-end financial statements; and (iii) maintain its Books and Records separate from the books 

and records of its members, managers, shareholders, Affiliates and any other Person..

6.8 Inspection; Period Audits 

Borrower shall permit the representatives of Lender, from time to time during 

normal business hours, upon reasonable notice but not more than once in any twelve-month period, 

to (i) visit and inspect any of its offices or properties or any other place where Collateral is located 

to inspect the Collateral and/or to examine or audit all of Borrower’s books of account, records, 

reports and other papers; (ii) make copies and extracts therefrom, and (iii) discuss the Borrower’s 

business, operations, prospects, properties, assets, liabilities, condition and/or Accounts with the 

Borrower’s officers, managers, and independent public accountants (the performance of the 

foregoing activities is referred to herein as a “site audit”). In addition, the Lender may conduct 

“desk audits” of the Borrower at the Lender’s offices no more frequently than monthly by (i) 

reviewing and inspecting such books and records of Borrower as Lender may require the Borrower 

to transmit to Lender, and (ii) discussing the Borrower’s business, operations, prospects, 

properties, assets, liabilities, condition and/or Accounts with the Borrower’s officers, managers 

and independent public accountants. Each of the Borrower’s officers, managers and accountants 

are authorized to discuss any matter relating to the foregoing with Lender at any time. At the 

completion of each site audit, Borrower shall pay Lender an audit fee of $1,200.00 per auditor per 

day (provided, however, the Lender shall utilize the services of only one auditor per day for its site 

audits) and the Borrower shall reimburse the Lender for all reasonable site audit-related out-ofpocket expenses. At the completion of each desk audit, the Borrower shall pay the Lender an audit 

fee of $2,000.00 and the Borrower shall reimburse the Lender for all reasonable desk audit-related 

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out-of-pocket expenses. Notwithstanding the foregoing, upon the occurrence and during the 

continuance of an Event of Default, there shall be no restrictions on the number of auditors that 

the Lender may use or number of times that the Lender may perform the activities described in 

this Section 6.8 nor shall the Lender be required to give prior notice to the Borrower of any visit 

to inspect the Borrower’s books and records or to discuss any matter with the Borrower’s officers, 

managers or independent public accountants, provided that such visit shall not materially impair 

with the Borrower’s ability to operate its business.

6.9 Further Assurances; Post Closing 

At Borrower’s cost and expense, the Borrower shall (i) within five (5) Business 

Days after the Lender’s reasonable request, take such further actions, and duly execute and deliver 

such further agreements, assignments, instructions or documents and do such further acts and 

things as may be necessary or proper in the reasonable opinion of the Lender to carry out more 

effectively the provisions and purposes of this Agreement and the Loan Documents, and (ii) upon 

the exercise by the Lender or any of its Affiliates of any power, right, privilege or remedy pursuant 

to any Loan Documents or under applicable Law or at equity which requires any consent, approval, 

registration, qualification or authorization of any Person, including without limitation a 

Governmental Authority, execute and deliver, or cause the execution and delivery of, all 

applications, certificates, instruments and other documents that the Lender or its Affiliate may be 

required to obtain for such consent, approval, registration, qualification or authorization. 

6.10 Payment of Indebtedness 

Except as otherwise prescribed in the Loan Documents, the Borrower shall pay, 

discharge or otherwise satisfy at or before maturity (subject to applicable grace periods and, in the 

case of trade payables, to ordinary course payment practices) all of its material postpetition 

Indebtedness, except when the amount or validity thereof is being contested in a Permitted Contest.

6.11 Lien Terminations 

If Liens other than Permitted Liens exist, Borrower immediately shall take, execute 

and deliver all actions, documents and instruments necessary to release and terminate such Liens.

6.12 Use of Proceeds 

Borrower shall use the proceeds of the Loans solely for (a) transaction fees incurred 

in connection with the Loan Documents; and (b) for working capital needs of the Borrower through 

the Bankruptcy Case in accordance with the Approved Budget. No portion of the proceeds of the 

Loans will be used for family, personal, agricultural or household use, or for any purpose 

prohibited by the Financing Orders or the Bankruptcy Code or any other order of the Bankruptcy 

Court.

6.13 Collateral Documents; Security Interest in Collateral 

Borrower hereby acknowledges that subject to Bankruptcy Court approval Lender 

is authorized to file UCC-1 Financing Statements with respect to the Collateral, and any 

amendments or continuations relating thereto, without the signatures of the Borrower in such 

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jurisdictions as the Lender, from time to time determines appropriate. Borrower hereby ratifies, 

confirms and consents to any such filings made by Lender prior to the date hereof. Borrower 

hereby agrees to take any actions reasonably requested by the Lender that are necessary to evidence 

Lender’s security interest in the Collateral, including, without limitation, executing additional 

documents or financing statements. Borrower shall not allow any financing statement (other than 

that filed by or on behalf of Lender and other than Permitted Liens) to be on file in any public 

office covering any Collateral or the proceeds thereof. At the request of the Lender, Borrower shall 

defend the Collateral and the Lender’s perfected first priority Lien thereon against all claims and 

demands of all Persons at any time claiming the same or any interest therein adverse to the Lender, 

and pay all reasonable costs and expenses (including, without limitation, reasonable in-house 

documentation and diligence fees and reasonable legal expenses and reasonable attorneys’ fees 

and expenses) in connection with such defense, which may at the Lender’s discretion be added to 

the Obligations and increase the principal amount outstanding hereunder.

6.14 Taxes and Other Charges 

All payments and reimbursements to the Lender made under any Loan Document 

shall be free and clear of and without deduction for all taxes, levies, imposts, deductions, 

assessments, charges or withholdings, and all liabilities with respect thereto of any nature 

whatsoever, excluding taxes to the extent imposed on the Lender’s net income. If Borrower shall 

be required by law to deduct any such amounts from or in respect of any sum payable under any 

Loan Document to the Lender, then the sum payable to the Lender shall be increased as may be 

necessary so that, after making all required deductions, the Lender receives an amount equal to the 

sum it would have received had no such deductions been made. Notwithstanding any other 

provision of any Loan Document, if at any time after the Closing (i) any change in any existing 

law, regulation, treaty or directive or in the interpretation or application thereof; (ii) any new law, 

regulation, treaty or directive (whether or not having the force of law) from any Governmental 

Authority (A) subjects Lender to any tax, levy, impost, deduction, assessment, charge or 

withholding of any kind whatsoever with respect to any Loan Document, or changes the basis of 

taxation of payments to Lender of any amount payable thereunder (except for net income taxes, or 

franchise taxes imposed in lieu of net income taxes, imposed generally by federal, state or local 

taxing authorities with respect to interest or facility fees or other fees payable hereunder or changes 

in the rate of tax on the overall net income of Lender), or (B) imposes on Lender any other 

condition or increased cost in connection with the transactions contemplated thereby or 

participations therein; and the result of any of the foregoing is to increase the cost to Lender of 

making or continuing any Loan hereunder or to reduce any amount receivable hereunder, then, in 

any such case, the Borrower shall promptly pay to Lender any additional amounts necessary to 

compensate Lender, on an after-tax basis, for such additional cost or reduced amount as determined 

by the Lender. If the Lender becomes entitled to claim any additional amounts pursuant to this 

Section 6.14 it shall promptly notify Borrower of the event by reason of which Lender has become 

so entitled, and each such notice of additional amounts payable pursuant to this Section 6.14 

submitted by the Lender to Borrower shall, absent manifest error, be final, conclusive and binding 

for all purposes. For purposes of this Section, (i) the Dodd-Frank Wall Street Reform and 

Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in 

connection therewith and (ii) all requests, rules, guidelines or directives promulgated by the Bank 

for International Settlements, the Basel Committee on Banking Supervision (or any successor or 

similar authority) or the United States or foreign regulatory authorities, in each case pursuant to 

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Basel III, shall in each case be deemed to be a “change in any applicable Law”, regardless of the 

date enacted, adopted or issued. 

6.15 Hazardous Substances 

(a) If any release or disposal of Hazardous Substances shall occur or shall have 

occurred on any real property or any other assets of Borrower, Borrower will cause 

the prompt containment and removal of such Hazardous Substances and the 

remediation of such real property or other assets as is necessary to comply with all 

Environmental Laws and to preserve the value of such real property or other assets. 

(b) Borrower will provide the Lender within thirty (30) days after written 

demand therefor with a bond, letter of credit or similar financial assurance 

evidencing to the reasonable satisfaction of the Lender that sufficient funds are 

available to pay the cost of removing, treating and disposing of any Hazardous 

Substances or Hazardous Substances Contamination and discharging any 

assessment which may be established on any property as a result thereof, such 

demand to be made, if at all, upon the Lender’s reasonable business determination 

that the failure to remove, treat or dispose of any Hazardous Substances or 

Hazardous Substances Contamination, or the failure to discharge any such 

assessment could reasonably be expected to have a Material Adverse Effect. 

6.16 Licensed Facilities 

(a) If required under applicable Healthcare Laws, Borrower has and shall maintain in 

full force and effect a valid CON for no less than the number of beds and units in the Hospital as 

of the date of this Agreement. Borrower shall maintain any applicable CON free from restrictions 

or known conflicts which would materially impair the use or operation of the Hospital for its 

current use, and shall not permit any CON to become provisional, probationary or restricted in any 

way. Borrower that is the owner of the fee simple real estate for the Hospital shall be the owner of 

the CON, if any, relating to the Hospital. 

(b) Borrower shall not do (or suffer to be done by Borrower or any Affiliate of 

Borrower) any of the following without Lender’s prior written consent, which consent shall not be 

unreasonably withheld, conditioned or delayed: (1) replace or transfer all or any part of the 

Hospital’s units or beds to another site or location; (2) transfer or demise any CON or other 

Healthcare Permit or rights thereunder to any Person (other than Lender) or to any location other 

than the Hospital to which such CON or Healthcare Permit pertains; or (3) pledge or hypothecate 

any CON or other Healthcare Permit as collateral security for any indebtedness other than 

indebtedness to Lender. 

6.17 Healthcare Operations 

(a) Borrower will: 

(i) timely file or cause to be timely filed (after giving 

effect to any extension duly obtained), all notifications, reports, submissions, Permit 

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renewals and reports (other than cost reports as provided in Section 6.17(a)(ii) below) of 

every kind whatsoever required by Healthcare Laws (which reports will be materially 

accurate and complete in all respects and not misleading in any respect and shall not remain 

open or unsettled); and 

(ii) timely file or cause to be timely filed (after giving 

effect to any extension duly obtained), all cost reports required by Healthcare Laws, which 

reports shall be materially accurate and complete in all respects and not misleading in any 

material respect and which shall not remain open or unsettled, except in accordance with 

applicable settlement appeals procedures that are timely and diligently pursued and except 

for any processing delays of any Governmental Authority. 

(b) Borrower will maintain in full force and effect, and free from restrictions, 

probations, conditions or known conflicts which would materially impair the use or 

operation of the Hospital for its current use, all Healthcare Permits necessary under 

Healthcare Laws to carry on the business of Borrower as it is conducted on the 

Closing Date. 

(c) Borrower will not suffer or permit to occur any of the following: 

(i) any transfer of a Healthcare Permit or rights 

thereunder to any Person (other than the Borrower or the Lender) or to any location other 

than a location approved by Lender in advance in writing; 

(ii) any pledge or hypothecation of any Healthcare Permit 

as collateral security for any indebtedness other than indebtedness to the Lender; 

(iii) any rescission, withdrawal, revocation, amendment or 

modification of or other alteration to the nature, tenor or scope of any Healthcare Permit 

without the Lender’s prior written consent, including, without limitation, (A) any change 

to the authorized units/beds and persons served capacity of the Hospital and/or the number 

of units/beds and persons served approved by the applicable Governmental Authority, and 

(B) any transfer all or any part of the Hospital’s authorized units or beds to another site or 

location; 

(iv) any voluntary transfer of any resident of the Hospital 

to any other facility, unless such transfer is at the request of the resident (without economic 

incentives being given to the resident by an Affiliate of Borrower) or its payor or is for 

reasons relating to non-payment or the health, required level of medical care or safety of 

the resident to be transferred; or 

(v) any fact, event or circumstance for which notice to the 

Lender is required under Sections 5.20 and 6.1(h). 

(d) Borrower will maintain a corporate health care regulatory compliance 

program. 

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(e) Borrower will at all times be, and cause all Managers to be, HIPAA 

Compliant. 

(f) If the Hospital is currently accredited by an Accrediting Organization, the 

Borrower will (i) maintain such accreditation in good standing and without 

limitation or impairment; (ii) promptly submit to the Accrediting Organization a 

plan of correction for any deficiencies listed on any accreditation survey report, and 

(iii) cure all such deficiencies within such time frame as is necessary to preserve 

and maintain in good standing and without limitation or impairment such 

accreditation. 

6.18 Bankruptcy Matters 

Borrower will promptly, following the receipt thereof, deliver to the Lender copies 

of all letters of intent, expressions of interest, offers to purchase or draft purchase agreements 

(together with subsequent drafts with material substantive changes) with respect to any sale under 

Section 363 of the Bankruptcy Code. 

VII. NEGATIVE COVENANTS 

Borrower covenants and agrees that, until full performance and satisfaction, and 

payment in full in cash, of all the Obligations (other than indemnity obligations with respect to 

which no claim has been made) and termination of this Agreement:

7.1 Financial Covenants 

Borrower shall not violate the financial and loan covenants set forth on Annex I to 

this Agreement, which is incorporated herein and made a part hereof. Borrower shall comply with 

the Approved Budget, subject to the Permitted Variance and as set forth in the Financing Orders.

7.2 No Indebtedness Other Than Permitted Indebtedness 

Borrower will not, and will not permit any Subsidiary to, directly or indirectly, 

create, incur, assume, guarantee or otherwise become or remain directly or indirectly liable with 

respect to, any Indebtedness, except for Permitted Indebtedness. Borrower will not permit any 

Subsidiary to, directly or indirectly, create, assume, incur or suffer to exist any Contingent 

Obligations.

7.3 No Liens Other Than Permitted Liens 

Borrower shall not create, incur, assume or suffer to exist any Lien upon, in or 

against, or pledge of, any of the Collateral or any of its properties or assets or any of its shares, 

securities or other equity or ownership or partnership interests, whether now owned or hereafter 

acquired, except Permitted Liens.

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7.4 Investments, New Facilities or Collateral; Subsidiaries 

Borrower, directly or indirectly, shall not (i) purchase, own, hold, invest in or 

otherwise acquire obligations or stock or securities of, or any other interest in, or all or substantially 

all of the assets of, any Person or any joint venture whether by merger, consolidation, outright 

purchase or otherwise, (ii) make or permit to exist any loans, advances or guarantees to or for the 

benefit of any Person or assume, guarantee, endorse, contingently agree to purchase or otherwise 

become liable for or upon or incur any obligation of any Person (other than those created by the Loan 

Documents and Permitted Indebtedness and other than (A) trade credit extended in the ordinary 

course of business, (B) advances for business travel and similar temporary advances made in the 

ordinary course of business to officers, directors and employees, (C) deposits to landlords and (D) 

the endorsement of negotiable instruments for deposit or collection or similar transactions in the 

ordinary course of business), (iii) purchase, own, operate, hold, invest in or otherwise acquire any 

facility, property or assets or any Collateral that is not located at the locations set forth on Schedule 

5.17B unless Borrower shall provide to Lender at least thirty (30) Business Days prior written notice, 

or (iv) acquire or own any material assets other than the Hospital. Borrower shall have no 

Subsidiaries other than such Subsidiaries existing at Closing.

7.5 Prohibited Payments 

(a) So long as Borrower is in Default or an Event of Default exists under this 

Agreement, Borrower shall not make any (i) Distribution or (ii) payment of 

management fees or Subordinated Debt in violation of the applicable Subordination 

Agreement. 

(b) [Borrower shall not pay any Distribution, management fees, or 

Subordinated Debt payments described in subsection (a) above, if such payment 

would cause an Event of Default. For purposes of this Section 7.5, a Distribution, 

payment of a management fee or payment of Subordinated Debt described in 

subsection (a) above will be deemed to cause an Event of Default only if such 

payment, if included in the most recently completed calculation of (A) the Fixed 

Charge Coverage Ratio (as defined in Annex I), would have caused such Fixed 

Charge Coverage Ratio to be less than 1.00 to 1.00, or (B) the Current Ratio (as 

defined in Annex I), would have caused such Current Ratio to be less than 1.00 to 

1.00.] 

7.6 Transactions with Affiliates 

Borrower shall not enter into or consummate any transactions of any kind with any 

of its Affiliates other than: (i) salary, bonus, employee stock option and other compensation to and 

employment arrangements with directors, officers or employees in the ordinary course of business, 

provided, that no payment of any bonus shall be permitted if an Event of Default has occurred and 

is continuing or would be caused by or result from such payment, (ii) payments permitted pursuant 

to Section 7.5, (iii) transactions that Lender or its Affiliates are a party to, (iv) payments (other than 

those referenced in cause (i) above) permitted under and pursuant to written agreements entered 

into by and between Borrower and one or more of its Affiliates that (A) both reflect and constitute 

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length transaction between unrelated parties of equal bargaining power, (B) do not grant a security 

interest in the Collateral to any Affiliate of Borrower, (C) contain payment obligations, if any, that 

are subordinate to the Obligations, and (D) do not involve a loan to any Affiliate of any Borrower, 

(v) transactions that create Accounts that are payable to Borrower by any Affiliate of Borrower, 

which do not exceed $50,000 in the aggregate, and (vi) loans or instruments payable by Borrower 

to any Affiliate of Borrower, which are classified as short-term debt and do not exceed $50,000 in 

the aggregate, provided, that notwithstanding the foregoing Borrower shall not enter into, 

consummate, or perform with respect to any transactions or agreement pursuant to which it becomes 

a party to any mortgage, note, indenture or guarantee evidencing any Indebtedness of any of its 

Affiliates or otherwise to become responsible or liable, as a guarantor, surety or otherwise, pursuant 

to an agreement for any Indebtedness of any such Affiliate other than Permitted Indebtedness. 

Borrower shall not comingle its funds or other assets with any funds or assets of any of its Affiliates, 

or any other Person, in such a manner that it will be costly or difficult to segregate, ascertain or 

identify Borrower’s individual assets from those of any of its members, shareholders, or partners 

(as applicable), its Affiliates, the Affiliates of any of its members, shareholders, or partners (as 

applicable), or any other Person. For avoidance of doubt, the limitations set forth in this Section 

shall not apply with respect to payments of salary, bonus, employee stock option and other 

compensation to and employment arrangements with directors, officers (including any executive 

officer) or employees in the ordinary course of business, provided, that no payment of any bonus 

shall be permitted if an Event of Default has occurred and is continuing or would be caused by or 

result from such payment, but payments of regular salary, reimbursements of expenses, reasonable 

expense allowances and other normal forms of compensation shall be allowed even if an Event of 

Default has occurred and is continuing or would be caused by or result from such payment, subject, 

however to Section 7.9.

7.7 Organizational Documents; Fiscal Year; Dissolution; Use of Proceeds 

Borrower shall not (i) change its name, state of formation, or amend, modify, restate 

or change its certificate of incorporation or formation or bylaws or similar charter documents in a 

manner that would be materially adverse to Lender and, in any event, without the prior consent of 

Lender, (ii) change its fiscal year, unless Borrower demonstrates to Lender’s satisfaction compliance 

with the covenants contained herein for both the fiscal year in effect prior to any change and the new 

fiscal year period by delivery to Lender of appropriate interim and annual pro forma, historical and 

current compliance certificates for such periods and such other information as Lender may reasonably 

request, (iii) amend, alter or suspend or terminate or make provisional in any material way, any Permit 

without the prior written consent of Lender, which consent shallnot be unreasonably withheld, (iv) 

wind up, liquidate or dissolve (voluntarily or involuntarily) or commence or suffer any proceedings 

seeking to wind up, liquidate or dissolve or that would result in any of the foregoing, (v) use any 

proceeds of any Advance for “purchasing” or “carrying” “margin stock” as defined in Regulations 

U, T or X of the Board of Governors of the Federal Reserve System, or (vi) fail either to hold itself 

out to the public as a legal entity separate and distinct from any other Person or to conduct its 

business in its own name or its registered trade name, in order not (a) to mislead others as to the 

identity with which such other party is transacting business, or (b) suggest that it is responsible for 

the debts of any third party (including any of its members, managers, partners and shareholders or 

Affiliates, or any general partner, principal or Affiliate thereof. 

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7.8 Asset Sales 

Borrower shall not, without the prior written approval of Lender, directly or indirectly 

sell, convey, transfer, assign, license, lease (that has the effect of a disposition) or otherwise dispose 

of (including any merger or consolidation or upon any condemnation, eminent domain or similar 

proceedings) to any Person, in one transaction or a series of related transactions, any permitted 

contracts with Third-Party Payors, Books and Records (except for the removal of patient records at 

the request of such patient), or any assets of Borrower with a value greater than $100,000 or which 

constitute all or substantially all of an operating unit of Borrower or any other assets (including 

intellectual property) of Borrower outside of the ordinary course of business. Borrower shall not, 

directly or indirectly, transfer or assign any contract, patient relationship, or other business 

relationship, or right to provide services, Goods, room or board to any Affiliate of Borrower. 

Borrower shall not let any contract, patient relationship, or other business relationship be terminated 

or expire if at any time following such termination or expiration, such contract, patient relationship 

or other business relationship is reinstated with any Affiliate of Borrower. 

7.9 Management 

Borrower shall not pay any compensation or other amounts to senior management 

of Borrower in excess of such amounts as are usual and customary for companies in similar 

businesses and of a similar size.. 

7.10 Restrictive Agreements 

Borrower will not, and will not permit any Subsidiary to, directly or indirectly (a) 

enter into or assume any agreement (other than the Loan Documents and any agreements for 

purchase money debt permitted under clause (iii) of the definition of Permitted Indebtedness) 

prohibiting the creation or assumption of any Lien upon its properties or assets, whether now 

owned or hereafter acquired, or (b) create or otherwise cause or suffer to exist or become effective 

any consensual encumbrance or restriction of any kind (except as provided by the Loan 

Documents) on the ability of any Subsidiary to: (i) pay or make Distributions to Borrower or any 

Subsidiary; (ii) pay any Indebtedness owed to Borrower or any Subsidiary; (iii) make loans or 

advances to Borrower or any Subsidiary; or (iv) transfer any of its property or assets to Borrower 

or any Subsidiary; provided, that, any agreements for purchase money debt shall not prohibit (x) 

the creation or assumption of any Lien upon any assets or properties to secure the Obligations or 

(y) the repayment of the Obligations. 

7.11 Modifications of Certain Agreements 

Other than with respect to Permitted Modifications, Borrower will not, and will not 

permit any Subsidiary to, directly or indirectly, amend, terminate or otherwise modify any Material 

Contract or the Lease, without Lender’s prior written consent (which Lender may give or withhold 

in Lender’s sole discretion), which amendment, termination or modification in any case: (a) is 

contrary to the terms of this Agreement or any other Loan Document; (b) could reasonably be 

expected to be adverse to the rights, interests or privileges of the Lender or its ability to enforce the 

same; (c) results in the imposition or expansion in any material respect of any obligation of or 

restriction or burden on Borrower or any Subsidiary; or (d) reduces in any material respect any 

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rights or benefits of Borrower or any Subsidiaries (it being understood and agreed that any such 

determination shall be in the discretion of the Lender). Borrower shall, prior to entering into any 

amendment, termination or other modification of any of the foregoing documents, deliver to Lender 

reasonably in advance of the execution thereof, any final or execution copy of amendments, 

terminations or other modifications to such documents, and Borrower agrees not to take, nor permit 

any of its Subsidiaries to take, any such action with respect to any such documents without obtaining 

such approval from Lender. 

7.12 Deposit Accounts 

Borrower shall not make any changes to its deposit accounts, Controlled Deposit 

Accounts or establish new deposit accounts or change the passwords or user identification 

information with respect thereto in such a fashion as would result in the Lender not having on-line 

access to view all information regarding all of the Borrower’s deposit accounts and Controlled 

Deposit Accounts or having control of all of the Borrower’s deposit accounts through deposit 

account control agreements. 

7.13 Truth of Statements 

Borrower shall not furnish to the Lender any certificate or other document that 

contains any untrue statement of a material fact or that omits to state a material fact necessary to 

make it not misleading in light of the circumstances under which it was furnished. 

7.14 IRS Form 8821 

Borrower shall not materially alter, amend, restate, or otherwise modify, or 

withdraw, terminate or re-file any IRS Form 8821 required to be delivered pursuant to the 

Conditions Precedent in Section 4.1. 

7.15 Third Party Payor Programs 

Neither the Hospital, nor Borrower, shall, other than in the ordinary course of the 

Borrower’s business, change the terms of any Third-Party Payor Programs or its normal billing 

payment and reimbursement policies and procedures with respect thereto (including, without 

limitation, the amount and timing of finance charges, fees and write-offs) without prior written 

notice of such change to the Lender. Borrower shall provide to the Lender, upon request, an 

accurate, complete and current list of all participation agreements with Third Party Payors with 

respect to the business of Borrower. Borrower shall not fail to comply with all requirements, 

contracts, conditions and stipulations applicable to Borrower in order to maintain in good standing 

and without default or limitation all such participation agreements. 

7.16 Filing of Motions and Applications 

Borrower shall not, without the prior written consent of the Lender, apply to the 

Bankruptcy Court for authority to (i) take any action that is prohibited by the terms of any of the 

Loan Documents, or (ii) refrain from taking any action that is required to be taken by the terms of 

any of the Loan Documents or the Financing Orders. 

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7.17 Interim and Final Financing Orders 

Borrower shall not: 

(a) seek or consent to exist at any time any modification, stay, vacation or 

amendment of the Interim Financing Order (until such time as the Final Financing 

Order is entered) and the Final Financing Order, except for modifications and 

amendments joined in or agreed to in writing by the Lender; or

(b) seek the use of “Cash Collateral” (as defined in the Financing Orders) in a 

manner inconsistent with the terms of the Financing Orders without the prior 

written consent of the Lender; or 

(c) seek or consent to exist at any time a priority for any administrative expense 

or unsecured claim against Borrower (now existing or hereafter arising of any kind 

or nature whatsoever, including, without limitation, any administrative expenses of 

the kind specified in Sections 105, 326, 328, 503(b), 506(c), 507(a), 507(b), 546(c), 

552(b), 726 and 1114 of the Bankruptcy Code) or any superpriority claim which is 

equal or superior to the priority of the Lender in respect of the Obligations, except 

as expressly permitted by the Financing Orders; or 

(d) prior to the date on which the Obligations have been paid in full, pay any 

administrative expenses, except administrative expenses incurred in accordance 

with the Carve-Out, the Budget or the Financing Orders. 

7.18 Bankruptcy Actions 

The Borrower shall not seek, consent to, or permit to exist, without the prior written consent 

of the Lender, any order granting authority (a) to take any action (i) that is prohibited by the terms of this 

Agreement or the Financing Orders, or (ii) that proposes to sell, use, dispose of, transfer, or in any way 

negatively impact the value of the Collateral, or (b) to refrain from taking any action that is required to be 

taken by such documents. 

VIII. EVENTS OF DEFAULT 

8.1 Events of Default 

The occurrence of any one or more of the following shall constitute an “Event of 

Default:”

(a) Borrower shall fail to pay any amount on the Obligations or provided for in 

any Loan Document when due and such failure shall not be cured within five (5) 

calendar days of when due (whether on any payment date, at maturity, by reason or 

acceleration, by notice of intention to prepay, by required prepayment or 

otherwise);

(b) Any representation, statement or warranty made or deemed made by the 

Borrower in any Loan Document or in any other certificate, document, report or 

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opinion delivered in conjunction with any Loan Document to which it is a party, (i) 

shall not be true and correct in all material respects, or (ii) shall have been false or 

misleading in any material respect on the date when made or deemed to have been 

made (except to the extent already qualified by materiality, in which case it shall 

be true and correct in all respects and shall not be false or misleading in any 

respect);

(c) Borrower or any other party thereto other than the Lender shall be in 

violation, breach or default of, or shall fail to perform, observe or comply with any 

covenant, obligation or agreement set forth in any Loan Document and such 

violation, breach, default or failure shall not be cured within the applicable period 

set forth in the applicable Loan Documents; provided that, with respect to the 

affirmative covenants set forth in Article VI (other than Sections 6.2, 6.9, 6.11, 6.16 

and 6.17 for which there shall be no cure period, unless otherwise set forth herein), 

there shall be a fifteen (15) calendar day cure period commencing from the earlier 

of (i) receipt by such Person of written notice of such breach, default, violation or 

failure, and (ii) the time at which such Person or any officer thereof knew or became 

aware, or should have known or been aware, of such failure, violation, breach or 

default; 

(d) Any of the Loan Documents ceases to be in full force and effect, or any Lien 

created thereunder ceases to constitute a valid perfected first priority Lien on the 

Collateral, or the Lender ceases to have a valid perfected first priority security 

interest in any material portion of the Collateral;

(e) The Lender’s administrative expense claim in the Bankruptcy Case 

becomes subject (or subordinate) to another administrative expense claim;

(f) One or more judgments or decrees is rendered against Borrower in an 

amount in excess of $10,000 individually or $25,000 in the aggregate at one time 

outstanding, which is/are not satisfied, stayed, bonded, vacated or discharged of 

record within thirty (30) calendar days of being rendered;

(g) (i) Any Change of Control occurs or any agreement or commitment to cause 

or that may result in any such Change of Control is entered into without the written 

consent of the Lender; (ii) any Material Adverse Effect or Material Adverse Change 

occurs; (iii) any Liability Event occurs, or (iv) Borrower ceases any material portion 

of its business operations as currently conducted;

(h) Any Indebtedness of Borrower is declared to be due and payable or is 

required to be prepaid (other than by a regularly scheduled payment) prior to the 

stated maturity thereof;

(i) The Lender receives any indication or evidence that Borrower may have 

directly or indirectly been engaged in any type of activity which, in the Lender’s 

judgment, might result in forfeiture of any property to a Governmental Authority 

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which shall have continued unremedied for a period of five (5) business days after 

written notice from the Lender;

(j) Borrower or any of its respective members or senior officers is criminally 

indicted or convicted under any law that could lead to a forfeiture of any portion of 

its respective assets; 

(k) The Bankruptcy Case shall be converted to a case under Chapter 7 of the 

Bankruptcy Code or be dismissed or a motion requesting such relief shall have been 

filed by the Borrower; 

(l) The Borrower files or supports, or the Bankruptcy Court enters an order 

confirming a proposed plan of reorganization or liquidation or sale of substantially 

all of the Borrower’s assets that does not provide for the indefeasible payment in 

full and in cash of the Obligations, unless otherwise agreed in writing by the Lender 

in its sole discretion; 

(m) Any attempt by the Borrower to obtain, or if any other party in interest 

obtains, an order of the Bankruptcy Court or other judgment, and the effect of such 

order or judgment is to, (i) invalidate, reduce or otherwise impair the Lender’s 

claims, or (ii) amend, supplement, stay, vacate or otherwise modify the Revolving 

Facility or the Financing Orders without consent of the Lender;

(n) The Borrower requests approval of any post-petition financing, other than 

pursuant to the Revolving Facility, that would not immediately repay all 

Obligations, in full, in cash, on the date of the closing of such post-petition 

financing, unless otherwise agreed by the Lender; 

(o) The entry of an order granting liens or claims that are senior or pari passu

to the Liens granted in favor of the Lender under the Loan Documents; 

(p) The Borrower supports or files a motion in support of any order granting 

liens or claims that are senior or pari passu to the Liens granted in favor of the 

Lender under the Loan Documents; 

(q) The Borrower shall assert that any of the Liens securing the Obligations are 

invalid, or any such Liens granted to the Lender shall be determined to be invalid; 

(r) Any report is filed by a patient care ombudsman or state long-term care 

ombudsman in the Bankruptcy Case indicating that patient care has significantly 

declined or has been materially compromised;

(s) Any creditor or party in interest shall be granted relief from the automatic 

stay with respect to any assets used in operation of the Borrower’s business;

(t) The Borrower shall default in the due performance or observance by it of 

any term, covenant or agreement contained in the Interim Financing Order or the 

Final Financing Order;

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(u) From and after the date of entry thereof, the Interim Financing Order or the 

Final Financing Order approving this Agreement and the Revolving Facility shall 

cease to be in full force and effect; 

(v) A Final Financing Order approving this Agreement and the Revolving 

Facility has not been entered by the Bankruptcy Court within forty-five (45) days 

of the Petition Date, unless otherwise agreed to by the Lender;

(w) The Borrower applies for an order substituting any assets for all or any 

portion of the Collateral, or

(x) The Lease is determined to be terminated or otherwise invalid by a court of 

competent jurisdiction.

8.2 Acceleration and Suspension or Termination of Commitments 

Upon the occurrence and during the continuance of an Event of Default, 

notwithstanding any other provision of any Loan Documents, the Lender may by notice to the 

Borrower (i) terminate the Lender’s obligations under this Agreement and/or (ii) by notice to the 

Borrower declare all or any portion of the Obligations to be due and payable immediately (except 

in the case of an Event of Default under Section 8.1(g), in which event all of the foregoing shall 

automatically and without further act by the Lender be due and payable). If the Revolving Facility 

is accelerated for any reason, the Lender may, at its sole discretion, elect to exclude all or a portion 

of the Eligible Unbilled Receivables from the definition of Eligible Receivables. If the Lender so 

elects, such Eligible Unbilled Receivables shall not be included in the calculation of the Borrowing 

Base. 

IX.RIGHTS AND REMEDIES AFTER DEFAULT 

9.1 Rights and Remedies 

(a) In addition to the acceleration provisions set forth in Article VIII above, 

upon the occurrence and continuation of an Event of Default, following the giving 

of not less than five (5) business days’ advance written notice by the Lender to such 

parties and in the manner set forth in the Interim Financing Order (the “Default

Notice Period”) and subject to the procedures set forth in such Interim Financing 

Order (and after any applicable cure period set forth herein, which shall be 

coterminous with and not incremental to the Notice Period), the Lender shall have 

the right to exercise any and all rights, options and remedies provided for in any 

Loan Document, under the UCC or at law or in equity, including, without 

limitation, the right to (i) apply any property of Borrower received or held by the 

Lender to reduce the Obligations in such manner as the Lender may deem 

advisable; (ii) foreclose the Liens created under the Loan Documents; (iii) realize 

upon, take possession of and/or sell any Collateral or securities pledged with or 

without judicial process; (iv) exercise all rights and powers with respect to the 

Collateral as Borrower might exercise (other than with respect to Collateral 

consisting of Accounts owed or owing by Medicaid/Medicare Account Debtors 

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absent a court order or compliance with applicable Law); (v) collect and send 

notices regarding the Collateral with or without judicial process; (vi) at the 

Borrower’s expense, require that all or any part of the Collateral be assembled and 

made available to the Lender at any reasonable place designated by the Lender; 

(vii) reduce or otherwise change the Facility Cap; (viii) engage, on behalf of the 

Borrower, a third-party to service and collect the Borrower’s receivables, including 

billing and rebilling Third-Party Payors as well as the patients to the extent of their 

obligations thereunder, and/or (ix) relinquish or abandon any Collateral or 

securities pledged or any Lien thereon. Notwithstanding any provision of any Loan 

Document, the Lender shall have the right, at any time that Borrower fail to do so, 

and from time to time, without prior notice, to: (i) obtain insurance covering any of 

the Collateral to the extent required hereunder; (ii) pay for the performance of any 

Obligations; (iii) discharge taxes or liens on any of the Collateral that are in 

violation of any Loan Document unless such taxes or liens are the subject of a 

Permitted Contest, and (iv) pay for the maintenance and preservation of the 

Collateral. Such expenses and advances shall be added to the Obligations and 

increase the principal amount outstanding hereunder, until reimbursed to the 

Lender and shall be secured by the Collateral, and such payments by the Lender 

shall not be construed as a waiver by the Lender of any Event of Default or any 

other rights or remedies of the Lender.

(b) Borrower agrees that notice received by it at least ten (10) calendar days 

before the time of any intended public sale, or the time after which any private sale 

or other disposition of Collateral is to be made, shall be deemed to be reasonable 

notice of such sale or other disposition. If permitted by applicable Law, any 

perishable Collateral which threatens to speedily decline in value or which is sold 

on a recognized market may be sold immediately by the Lender without prior notice 

to Borrower. At any sale or disposition of Collateral or securities pledged, the 

Lender may (to the extent permitted by applicable Law) purchase all or any part 

thereof free from any right of redemption by Borrower which right is hereby waived 

and released. Borrower covenants and agrees not to, and not to permit or cause any 

of its Subsidiaries to, interfere with or impose any obstacle to the Lender’s exercise 

of its rights and remedies with respect to the Collateral. The Lender, in dealing 

with or disposing of the Collateral or any part thereof, shall not be required to give 

priority or preference to any item of Collateral or otherwise to marshal assets or to 

take possession or sell any Collateral with judicial process.

9.2 Application of Proceeds 

In addition to any other rights, options and remedies the Lender has under the Loan 

Documents, the UCC, at law or in equity, all dividends, interest, rents, issues, profits, fees, 

revenues, income and other proceeds collected or received from collecting, holding, managing, 

renting, selling, or otherwise disposing of all or any part of the Collateral or any proceeds thereof 

upon exercise of its remedies hereunder shall be applied in the following order of priority, after 

payment of the Carve-Outs then due: (i) first, to the payment of all reasonable out-of-pocket costs 

and expenses of such collection, storage, lease, holding, operation, management, sale, disposition 

or delivery and of conducting Borrower’s business and of maintenance, repairs, replacements, 

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alterations, additions and improvements of or to the Collateral, and to the payment of all sums 

which the Lender may be required or may elect to pay, if any, for taxes, assessments, insurance 

and other charges upon the Collateral or part thereof, and all other payments that the Lender may 

be required or authorized to make under any provision of this Agreement (including, without 

limitation, in each such case, reasonable in-house documentation and diligence fees and legal 

expenses, search, audit, recording, professional and filing fees and expenses and reasonable 

attorneys’ fees and all expenses, reasonable expert witness fees, liabilities and advances made or 

incurred in connection therewith, whether litigation is commenced or not); (ii) second, to the 

payment of all Obligations as provided herein, (iii) third, to the satisfaction of Indebtedness 

secured by any subordinate security interest of record in the Collateral if written notification of 

demand therefor is received before distribution of the proceeds is completed, provided, that, if 

requested by the Lender, the holder of a subordinate security interest shall furnish reasonable proof 

of its interest, and unless it does so, the Lender need not address its claims; and (iv) fourth, to the 

payment of any surplus then remaining to Borrower, unless otherwise provided by law or directed 

by a court of competent jurisdiction, provided that Borrower shall be liable for any deficiency if 

such proceeds are insufficient to satisfy the Obligations or any of the other items referred to in this 

Section.

9.3 Application of Payments Following Default 

Following the occurrence and continuance of an Event of Default, the Lender may, 

notwithstanding Section 9.2, apply any and all payments received by the Lender in respect of the 

Obligations, and any and all proceeds of Collateral received by the Lender, in such order as the 

Lender may from time to time elect, subject to the Carve-Outs. 

9.4 Rights and Remedies not Exclusive 

The Lender shall have the right in accordance with the terms hereof, in its discretion 

to determine which rights, Liens and/or remedies Lender may at any time pursue, relinquish, 

subordinate or modify, and such determination will not in any way modify or affect any of the 

Lender’s rights, Liens or remedies under any Loan Document, applicable Law or equity. The 

enumeration of any rights and remedies in any Loan Document is not intended to be exhaustive, 

and all rights and remedies of the Lender described in any Loan Document are cumulative and are 

not alternative to or exclusive of any other rights or remedies which the Lender otherwise may 

have. The partial or complete exercise of any right or remedy shall not preclude any other further 

exercise of such or any other right or remedy.

X. WAIVERS AND JUDICIAL PROCEEDINGS 

10.1 Waivers 

Except as expressly provided for herein, the Borrower hereby waives setoff, 

counterclaim, demand, presentment, protest, all defenses with respect to any and all instruments 

and all notices and demands of any description, and the pleading of any statute of limitations as a 

defense to any demand under any Loan Document. The Borrower hereby waive any and all 

defenses and counterclaims it may have or could interpose in any action or procedure brought by 

the Lender to obtain an order of court recognizing the assignment of, or Lien of the Lender in and 

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to, any Collateral, whether or not payable by a Medicaid/Medicare Account Debtor. With respect 

to any action hereunder, the Lender conclusively may rely upon, and shall incur no liability to 

Borrower in acting upon, any request or other communication that the Lender reasonably believes 

to have been given or made by a person authorized on the Borrower’s behalf, whether or not such 

person is listed on the incumbency certificate delivered pursuant to Section 4.1. In each such case, 

Borrower hereby waive the right to dispute the Lender’s action based upon such request or other 

communication, absent manifest error.

10.2 Delay; No Waiver or Defaults 

No course of action or dealing, renewal, release or extension of any provisions of 

any Loan Document, or single or partial exercise of any such provision, or delay, failure or 

omission on the Lender’s part in enforcing any such provision shall affect the liability of the 

Borrower or operate as a waiver of such provision or affect the liability of the Borrower or preclude 

any other or further exercise of such provision. No waiver by any party to any Loan Document of 

any one or more defaults by any other party in the performance of any of the provisions of any 

Loan Document shall operate or be construed as a waiver of any future default, whether of a like 

or different nature, and each such waiver shall be limited solely to the express terms and provisions 

of such waiver. Notwithstanding any other provision of any Loan Document, by completing the 

Closing under this Agreement and/or by making Advances, the Lender does not waive any breach 

of any representation or warranty of under any Loan Document, and all of the Lender’s claims and 

rights resulting from any such breach or misrepresentation are specifically reserved.

10.3 Jury Waiver 

EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY 

RIGHT TO TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION ARISING UNDER 

THE LOAN DOCUMENTS OR IN ANY WAY CONNECTED WITH OR INCIDENTAL TO 

THE DEALINGS OF THE PARTIES WITH RESPECT TO THE LOAN DOCUMENTS OR THE 

TRANSACTIONS CONTEMPLATED THEREBY, WHETHER NOW EXISTING OR 

HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR 

OTHERWISE. EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH

CLAIM OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A 

JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL

COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN

EVIDENCE OF THE CONSENTS OF THE PARTIES TO THE WAIVER OF THEIR 

RESPECTIVE RIGHTS TO TRIAL BY JURY.

10.4 Cooperation in Discovery and Litigation 

In any litigation, arbitration or other dispute resolution proceeding relating to any 

Loan Document, the Borrower waives any and all defenses, objections and counterclaims they 

may have or could interpose with respect to (i) any of its directors, officers, employees or agents 

being deemed to be employees or managing agents of Borrower for purposes of all applicable Law 

or court rules regarding the production of witnesses by notice for testimony (whether in a 

deposition, at trial or otherwise); (ii) the Lender’s counsel examining any such individuals as if 

under cross-examination and using any discovery deposition of any of them as if it were an 

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evidence deposition, and/or (iii) using all commercially reasonable efforts to produce in any such 

dispute resolution proceeding, at the time and in the manner requested by the Lender, all Persons, 

documents (whether in tangible, electronic or other form) and/or other things under its control and 

relating to the dispute.

XI.EFFECTIVE DATE AND TERMINATION 

11.1 Effectiveness and Termination 

(a) Termination by the Lender. Subject to the Lender’s right to terminate and 

cease making Advances upon the occurrence and during the continuance of an 

Event of Default, this Agreement shall continue in full force and effect until the full 

performance and indefeasible payment in cash of all Obligations (other than 

indemnity obligations with respect to which no claim has been made), unless 

terminated sooner as provided in this Section 11.1. 

(b) Termination by Borrower. Borrower may terminate this Agreement at any 

time upon not less than thirty (30) calendar days’ prior written notice to the Lender 

and upon full performance and indefeasible payment in full in cash of all 

Obligations (other than indemnity obligations with respect to which no claim has 

been made) on or prior to such 30th calendar day after receipt by the Lender of such 

written notice. Borrower may elect to terminate this Agreement in its entirety only. 

No section of this Agreement or type of Loan available hereunder may be 

terminated singly. 

(c) Effectiveness of Termination. All of the Obligations (other than indemnity 

obligations with respect to which no claim has been made) shall be immediately 

due and payable upon the Termination Date. All undertakings, agreements, 

covenants, warranties and representations of Borrower contained in the Loan 

Documents shall survive any such termination and the Lender shall retain its Liens 

in the Collateral and the Lender shall retain all of its rights and remedies under the 

Loan Documents notwithstanding such termination until all Obligations have been 

irrevocably discharged or paid, in full, in immediately available funds, including, 

without limitation, all Obligations under Section 3.4 and the terms of any fee letter 

resulting from such termination. Notwithstanding the foregoing or the payment in 

full of the Obligations, the Lender shall not be required to terminate its Liens in the 

Collateral unless, with respect to any loss or damage the Lender may incur as a 

result of dishonored checks or other items of payment received by the Lender from 

Borrower or any Account Debtor and applied to the Obligations, the Lender shall, 

at its option, (i) have received a written agreement satisfactory to the Lender, 

executed by the Borrower and, if the Borrower’s financial condition at that time is 

weaker than it is as of the date hereof, by any Person whose loans or other advances 

to Borrower are used in whole or in part to satisfy the Obligations, indemnifying 

Lender from any such loss or damage, or (ii) have retained cash Collateral or other 

Collateral for such period of time as the Lender, in its discretion, may deem 

necessary to protect the Lender from any such loss or damage. 

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11.2 Survival 

All obligations, covenants, agreements, representations, warranties, waivers and 

indemnities made by Borrower in any Loan Document shall survive the execution and delivery of 

the Loan Documents, the Closing, the making of the Advances and any termination of this 

Agreement until all Obligations (other than indemnity obligations with respect to which no claim 

has been made) are fully performed and indefeasibly paid in full in cash. Notwithstanding the 

foregoing sentence of this Section 11.2, the obligations and provisions of Sections 3.6, 10.1, 10.4, 

13.1, 13.3, 13.4, 13.7 and 13.10 shall survive termination of the Loan Documents and any payment, 

in full or in part, of the then-outstanding Obligations.

XII. ASSIGNMENTS AND PARTICIPATIONS 

12.1 Assignments 

The Lender may at any time assign its rights and obligations hereunder and under 

all other Loan Documents to an assignee approved by the Bankruptcy Court. 

XIII. MISCELLANEOUS 

13.1 Governing Law; Jurisdiction; Service of Process; Venue 

The Loan Documents shall be governed by and construed in accordance with the 

internal substantive laws of the State of Texas without giving effect to its choice of law provisions. 

So long as the Bankruptcy Case is pending, any judicial proceeding against Borrower with respect 

to the Obligations, any Loan Documents or any related agreement shall be brought in the 

Bankruptcy Court, and thereafter, any judicial proceeding shall be brought in any federal or state 

court of competent jurisdiction located in the State of Texas. By execution and delivery of each 

Loan Document to which it is a party, Borrower and the Lender (i) accepts the non-exclusive 

jurisdiction of the aforesaid courts and irrevocably agrees to be bound by any judgment rendered 

thereby; (ii) waives personal service of process; (iii) agrees that service of process upon it may be 

made by certified or registered mail, return receipt requested, pursuant to Section 13.5; (iv) waives 

any objection to jurisdiction and venue of any action instituted hereunder and agrees not to assert 

any defense based on lack of jurisdiction, venue or convenience, and (v) agrees that this loan was 

made in Texas, that the Lender has accepted in Texas the Loan Documents executed by the 

Borrower and has disbursed Advances under the Loan Documents in Texas. Nothing shall affect 

the right of the Lender to serve process in any manner permitted by law. All parties acknowledge 

that they participated in the negotiation and drafting of this Agreement and that, accordingly, no 

party shall move or petition a court construing this Agreement to construe it more stringently 

against one party than against any other.

13.2 Binding Effect of Loan Documents 

The Loan Documents shall inure to the benefit of the Lender, its assignees, 

Participants and all future holders of the Obligations and/or any of the Collateral, and each of its 

respective successors and assigns. Each Loan Document shall be binding upon the Persons other 

than the Lender that are parties thereto and their respective successors and assigns, and no such 

Person may assign, delegate or transfer any Loan Document or any of its rights or obligations 

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thereunder without the prior written consent of the Lender. No rights are intended to be created 

under any Loan Document for the benefit of any Person who is not a party to such Loan Document. 

Nothing contained in any Loan Document shall be construed as a delegation to the Lender of any 

other Person’s duty of performance. BORROWER ACKNOWLEDGES AND AGREES THAT 

THE LENDER AT ANY TIME AND FROM TIME TO TIME MAY (I) DIVIDE AND

RESTATE ANY NOTE, AND/OR (II) SELL, ASSIGN OR GRANT PARTICIPATING 

INTERESTS IN OR TRANSFER ALL OR ANY PART OF ITS RIGHTS OR OBLIGATIONS 

UNDER ANY LOAN DOCUMENT, THE OBLIGATIONS AND/OR THE COLLATERAL TO 

OTHER PERSONS (EACH SUCH TRANSFEREE, ASSIGNEE OR PURCHASER, A 

“TRANSFEREE”), subject to Bankruptcy Court approval, if applicable. 

13.3 Revival of Obligations 

To the extent that any payment made or received with respect to the Obligations is 

subsequently invalidated, determined to be fraudulent or preferential, set aside or required to be 

repaid to a trustee, debtor in possession, receiver, custodian or any other Person under any Debtor 

Relief Law, common law or equitable cause or any other law, then the Obligations intended to be 

satisfied by such payment (whether or not previously terminated) shall be revived and shall 

continue as if such payment had not been received by the Lender. Any payments received with 

respect to such revived Obligations shall be credited and applied in such manner and order, as the 

Lender shall decide in its discretion.

13.4 Indemnity 

The Borrower shall indemnify the Lender, its Affiliates and its respective managers, 

members, officers, employee, Affiliates, agents, representatives, successors, assigns, accountants 

and attorneys (collectively, the “Indemnified Persons”) from and against any and all liability, 

obligations, losses, damages, penalties, actions, judgments, suits, reasonable out-of-pocket costs, 

expenses and disbursements of any kind of nature whatsoever (including, without limitation, 

reasonable fees and disbursements of counsel, expert witness fees, and reasonable in-house 

documentation and diligence fees and reasonable legal expenses) which may be imposed on, 

incurred by or asserted against any Indemnified Person with respect to or arising out of, or in any 

way relating to any litigation, proceeding or investigation instituted or conducted by any Person 

with respect to any aspect of, or any transaction contemplated by or referred to in, or any matter 

related to, any Loan Document or any agreement, document or transaction contemplated thereby, 

whether or not such Indemnified Person is a party thereto, except to the extent that any of the 

foregoing (i) arises out of the gross negligence or willful misconduct of any Indemnified Person 

or (ii) arises out of a dispute between or among any Indemnified Persons. No Indemnified Person 

shall have any liability (whether direct or indirect, in contract, tort or otherwise) to the Borrower 

or any of its affiliates, subsidiaries or any shareholders or creditors of the foregoing for or in 

connection with the transactions contemplated hereby, except to the extent such liability is found 

in a final non-appealable judgment by a court of competent jurisdiction to have resulted solely 

from such Indemnified Person’s gross negligence or willful misconduct. In no event, however, 

shall any Indemnified Person be liable on any theory of liability for any special, indirect, 

consequential or punitive damages. If any Indemnified Person uses in-house counsel for any 

purpose for which the Borrower is responsible to pay or indemnify, the Borrower expressly agrees 

that its indemnification obligations include reasonable charges for such work commensurate with 

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the fees that would otherwise be charged by outside legal counsel selected by Indemnified Person 

in its discretion for the work performed. The Lender agrees to give the Borrower reasonable notice 

of any event of which the Lender becomes aware for which indemnification may be required under 

this Section 13.4, and the Lender may elect (but is not obligated) to direct the defense thereof, 

provided that the selection of counsel shall be subject to Borrower’s consent which consent shall 

not be unreasonably withheld or delayed. Any Indemnified Person may in its reasonable 

discretion, take such actions, as it deems necessary and appropriate to investigate, defend or settle 

any event or take other remedial or corrective actions with respect thereto as may be necessary for 

the protection of such Indemnified Person or the Collateral. Notwithstanding the foregoing, if any 

insurer agrees to undertake the defense of an event (an “Insured Event”), the Lender agrees not 

to exercise its right to select counsel to defend the event if that would cause Borrower’s insurer to 

deny coverage; provided, however, that the Lender reserves the right to retain counsel to represent 

any Indemnified Person with respect to an Insured Event at its sole cost and expense. To the extent 

that the Lender obtains recovery from a third party other than an Indemnified Person of any of the 

amounts that Borrower has paid to the Lender pursuant to the indemnity set forth in this 

Section 13.4, then Lender shall promptly pay to such Borrower the amount of such recovery.

13.5 Notice 

Any notice or request under any Loan Document shall be given to any party to this 

Agreement at such party’s address set forth beneath its signature on the signature page to this 

Agreement, or at such other address as such party may hereafter specify in a notice given in the 

manner required under this Section 13.5. Any notice or request hereunder shall be given only by, 

and shall be deemed to have been received upon: (i) registered or certified mail, return receipt 

requested, on the date on which such received as indicated in such return receipt, (ii) delivery by 

a nationally recognized overnight courier, one (1) Business Day after deposit with such courier, or 

(iii) pdf or other electronic transmission, in each case upon telephone or further electronic 

communication from the recipient acknowledging receipt (whether automatic or manual from 

recipient), as applicable. Any notice or request under any Loan Document or otherwise pursuant 

to any applicable law which is given to one Borrower will be deemed to be notice (or, if applicable, 

a request) to Borrower. 

13.6 Severability; Captions; Counterparts; Facsimile Signatures 

If any provision of any Loan Document is adjudicated to be invalid under applicable 

Laws, such provision shall be inapplicable to the extent of such invalidity without affecting the 

validity or enforceability of the remainder of the Loan Documents which shall be given effect so 

far as possible. The captions in the Loan Documents are intended for convenience and reference 

only and shall not affect the meaning or interpretation of the Loan Documents. The Loan 

Documents may be executed in one or more counterparts (which taken together, as applicable, 

shall constitute one and the same instrument) and by facsimile, pdf or other transmission, and such 

facsimile signatures shall be considered original executed counterparts. Each party to this 

Agreement agrees that it will be bound by its own electronic signature and that it accepts the 

electronic signature of each other party.

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13.7 Expenses 

The Borrower shall pay, whether or not the Closing occurs, all reasonable usual and 

customary costs and expenses incurred by the Lender and/or its Affiliates, including, without 

limitation reasonable, documentation and diligence fees and expenses, all search, audit, appraisal, 

recording reasonable professional and filing fees and expenses and all other actual out-of-pocket 

charges and expenses (including, without limitation, UCC and judgment and tax lien searches and 

UCC filings and fees for post-Closing UCC and judgment and tax lien searches and audit 

expenses), and reasonable attorneys’ fees and expenses, incurred (i) in any effort to enforce, protect 

or collect payment of any Obligation or to enforce any Loan Document or any related agreement, 

document or instruments; (ii) in connection with entering into, negotiating, preparing, reviewing 

and executing the Loan Documents and/or any related agreements, documents or instruments; (iii) 

arising in any way out of administration of the Obligations; (iv) in connection with instituting, 

maintaining, preserving, enforcing and/or foreclosing on the Lender’s Liens in any of the 

Collateral or securities pledged under the Loan Documents, whether through judicial proceedings 

or otherwise; (v) in defending or prosecuting any actions, claims or proceedings arising out of or 

relating to the Lender’s transactions with the Borrower; (vi) in seeking, obtaining or receiving any 

advice with respect to its rights and obligations under any Loan Document and any related 

agreement, document or instrument; (vii) in connection with any modification, restatement, 

supplement, amendment, waiver or extension of any Loan Document and/or any related 

agreement, document or instrument, and/or (viii) in connection with all actions, visits, audits and 

inspections undertaken by the Lender or its Affiliates pursuant to the Loan Documents, subject to 

the provisions of Section 6.7. In addition, the Borrower shall pay the Lender a wire fee of $25.00 

with respect to each domestic wire transfer of funds by the Lender to or for the benefit of Borrower. 

All of the foregoing shall be charged to Borrower’s account and shall be part of the Obligations. 

If the Lender or any of its Affiliates uses in-house counsel for any purpose under any Loan 

Document for which Borrower are responsible to pay or indemnify, Borrower expressly agree that 

its Obligations include reasonable charges for such work commensurate with the fees that would 

otherwise be charged by outside legal counsel selected by the Lender or such Affiliate in its 

discretion for the work performed. Without limiting the foregoing, Borrower shall pay all taxes 

(other than taxes based upon or measured by the Lender’s income or revenues or any personal 

property tax), if any, in connection with the transactions contemplated by this Agreement and the 

Loan Documents and the filing and/or recording of any documents and/or financing statements. 

13.8 Entire Agreement 

This Agreement and the other Loan Documents to which Borrower are a party 

constitute the entire agreement between the Borrower and the Lender with respect to the subject 

matter hereof and thereof, and supersede all prior agreements and understandings, if any, relating 

to the subject matter hereof or thereof. Any promises, representations, warranties or guarantees 

not herein contained and hereafter made shall have no force and effect unless in writing signed by 

the Borrower and the Lender, provided, however, additional covenants, representations, warranties 

and guarantees will be enforceable if executed by the party against whom enforcement is sought. 

No provision of this Agreement may be changed, modified, amended, restated, waived, 

supplemented, discharged, canceled or terminated orally or by any course of dealing or in any 

other manner other than by an agreement in writing signed by the Lender and Borrower. Each 

party hereto acknowledges that it has been advised by counsel in connection with the negotiation 

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and execution of this Agreement and is not relying upon oral representations or statements 

inconsistent with the terms and provisions hereof. Any schedule may be amended from time to 

time by the Borrower with the consent of the Lender, which consent shall not be unreasonably 

withheld if the revised schedule does not evidence any violation of the covenants in Articles VI or 

VII.

13.9 The Lender Approvals 

Any approval, consent, waiver or satisfaction of the Lender with respect to any 

matter that is subject of any Loan Document (i) shall not be effective unless it is in writing and (ii) 

unless expressly provided herein to the contrary, may be granted or withheld by the Lender in its 

sole discretion. 

13.10 Sale of Ineligible Receivables. 

Notwithstanding anything to the contrary in this Agreement, with respect to 

Ineligible Receivables, the Lender hereby consents and authorizes the Borrower to sell such 

receivables free and clear of any lien(s) or claim(s) by the Lender (each such sale, an “Ineligible 

Receivables Sale”), provided that such sale must be on terms and conditions reasonably acceptable 

to Lender and that such sale must result in Net Proceeds in an aggregate amount equal to or 

exceeding One Million Five Hundred Thousand Dollars ($1,500,000). Promptly upon receipt of 

an offer to purchase Ineligible Receivables, Borrower shall send such offer to Lender. Prior to the 

entry into any agreements relating to an Ineligible Receivables Sale, Borrower must obtain written 

consent from Lender (for which email shall suffice) which consent shall not be unreasonably 

withheld and, to the extent required by the Bankruptcy Code, approval by the Bankruptcy Court. 

In the event, and on each occasion that, any Net Proceeds are received by or on 

behalf of Borrower in respect of any Ineligible Receivables Sale, twenty percent (20%) of such 

Net Proceeds shall be promptly distributed to the Lender and the remaining eighty percent (80%) 

of such Net Proceeds shall become unencumbered working capital of the Borrowers. Any Net 

Proceeds received by Lender as a result of an Ineligible Receivables Sale shall be used to pay down 

the Pre-Petition Obligations until such time as the Pre-Petition Obligations have been paid in full 

at which point such Net Proceeds shall be used to pay down the Obligations.

13.11 USA Patriot Act 

The Borrower shall not (a) 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 list) that prohibits or limits the Lender from making any advance or extension of credit to 

Borrower or from otherwise conducting business with the Borrower, or (b) fail to provide 

documentary and other evidence of Borrower’s or its corporate officers’ identities as may be 

requested by the Lender at any time to enable the Lender to verify the Borrower’s identity or to 

comply with any applicable Laws, including, without limitation, Section 326 of the USA Patriot 

Act of 2001, 31 U.S.C. § 5318. The Lender hereby notifies Borrower that pursuant to the 

requirements of the USA Patriot Act, it is required to obtain, verify and record certain information 

and documentation that identifies the Borrower, which information includes the name and address 

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of Borrower and such other information that will allow the Lender to identify Borrower in 

accordance with the USA Patriot Act. 

[SIGNATURES APPEAR ON THE FOLLOWING PAGES] 

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4874-6257-0384.6 

IN WITNESS WHEREOF, each of the parties has duly executed this Superpriority 

Debtor-in-Possession Credit and Security Agreement as of the date first written above.

LION STAR NACOGDOCHES HOSPITAL, LLC, 

a Texas limited liabilitiy company 

By: 

Name: S. Sean Fowler 

Title: CEO 

Address for Notice:

Lion Star Nacogdoches Hospital, LLC 

1204 North Mound Street 

Nacogdoches, TX 75961 

Attention: Sean Fowler, Chief Executive Officer 

Telephone: (949) 235-5914

Email: ssfowler2019@outlook.com

With copy to (which shall not constitute notice): 

Address for Notice:

Lion Star Group, LLC 

5351 N. Eagle View Drive 

Lehi, UT 84043 

Attention: Sean Fowler, Chief Executive Officer 

Reed, Claymon, Meeker & Hargett, PLLC 

5608 Parkcrest Drive, Suite 200 

Austin, TX 78731 

Attention: Kevin Reed, Esq 

Telephone: (512) 660-5962

Email: kreed@rcmhlaw.com

 

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4874-6257-0384.6 

LENDER: 

eCAPITAL HEALTHCARE CORP., 

a Delaware corporation, 

f/k/a CNH FINANCE FUND I, L.P. 

a Delaware Limited Partnership 

By: 

Name: Timothy Peters

Title: Authorized Signatory

Address for Notice:

eCapital Healthcare Corp. 

20807 Biscayne Blvd, Suite 203 

Aventura, FL 33180 

Attention: Legal Department 

Telephone: (203) 266-3210 

Email: EHCLegal@ecapital.com 

With copy to (which shall not constitute notice): 

Kincaid, Frame & Associates Co., LPA 

6151 Wilson Mills Road, Suite 310 

Highland Heights, OH 44143 

Attention: Alexander Frame 

Telephone: (440) 352-1000 

Email: aframe@kincaidframe.com 

And 

Foley & Lardner LLP 

500 Woodward Avenue, Suite 2700 

Detroit, Michigan, 48226 

Attention: Jake Gordon 

Telephone: (248) 943-6484 

Email: jake.gordon@foley.com 

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4874-6257-0384.6 

ANNEX I 

Financial and Loan Covenants 

EXHIBITS 

Exhibit A - Borrowing Certificate

Exhibit B - Compliance Certificate 

Exhibit C - Budget 

SCHEDULES 

Schedule 2.4 - Borrower’s Account for Funding Wires

Schedule 2.5 - Borrower’s Deposit Accounts 

Schedule 5.3 - Organizational Information

Schedule 5.4 - Real Property Owned or Leased

Schedule 5.6 - Litigation 

Schedule 5.16 - Insurance

Schedule 5.17A - Corporate Names

Schedule 5.17B - Business and Collateral Locations

Schedule 5.20 - Exceptions to Healthcare Law Compliance Representations

Schedule 5.23 - Material Contracts 

Schedule 5.24 - Third-Party Payor Billing Numbers

Schedule 7.3 - Liens

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Annex I, Page 1 

4874-6257-0384.6 

ANNEX I 

FINANCIAL AND LOAN COVENANTS 

1. Current Ratio 

At the end of each month commencing with December 2023, Borrower’s Current Ratio 

shall not be less than 1.00 to 1.00. 

“Current Ratio” shall mean Borrower’s ratio of current assets (determined in accordance 

with GAAP), to current liabilities (also determined in accordance with GAAP). For this purpose, 

the outstanding balance of the Revolving Facility shall be deemed to be a current liability. 

2. Budget Covenant 

The Budget Covenant as defined in the Interim Financing Order. 

3. Loan Turnover Rate 

At the end of each calendar month commencing with December 2023, the amount 

calculated by dividing (a) the average outstanding principal balance of the Revolving Facility for 

the applicable Test Period1

 by (b) the result achieved by dividing (i) the sum of all collections 

received in the Controlled Deposit Account during the applicable Test Period with respect to all 

of Borrower’s Accounts by (ii) the number of days in such Test Period, shall not be greater than 

50. 

For purposes of the covenants set forth in this Annex I, capitalized terms shall have the 

following meanings set forth below, or if not set forth below, the meanings set forth in Article I. 

.

1

 “Test Period” shall mean, on any date, the most recently ended three consecutive calendar months. 

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Exhibit A (Borrowing Certificate), Page 1 

4874-6257-0384.6 

EXHIBIT A 

BORROWING CERTIFICATE 

Dated as of _______________, 2023 

The undersigned hereby certifies to eCapital Healthcare Corp., a Delaware corporation, f/k/a CNH 

Finance Fund I, L.P. (the “Lender”) that: 

1. I am certifying the following facts and making and delivering this Borrowing Base 

Certificate pursuant to that certain Superpriority Debtor-in-Possession Credit and Security 

Agreement, dated as of [ ], 2023 (as the same may be, amended, restated, 

supplemented, or otherwise modified from time to time, the “Credit Agreement”) between LION 

STAR NACOGDOCHES HOSPITAL, LLC, a Texas limited liability company (collectively, the 

“Borrower”) and the Lender. Capitalized terms used in this certificate have the same meaning as 

set forth in the Credit Agreement. 

2. All information contained in this Borrowing Base Certificate is true, correct, and 

complete as of the date hereof. All representations and warranties made by the Borrower in the 

Credit Agreement are true and correct on and as of the date hereof as if such representations and 

warranties had been made as of the date hereof. 

3. No Event of Default has occurred and is continuing or will exist after giving effect 

to the Advance requested hereby. 

4. The Borrower has performed and complied with all agreements and conditions 

required under Article IV of the Credit Agreement to be performed or complied with by it on or 

prior to the funding of the Advance requested hereby. 

5. There have been no modifications to reimbursement rates or other contractual 

arrangements that would adversely affect the valuation or collectability of the Accounts. There 

are no offsets, setoffs, counterclaims, disputes or defenses of any kind from any Account Debtor 

against any Account classified as an Eligible Receivable. All Accounts classified as Eligible 

Receivables and Ineligible Receivables in this Borrowing Base Certificate are properly so 

classified. 

6. The Borrower has directed all Account Debtors to deliver all payments on the 

Accounts to the proper Controlled Deposit Account (including any Lockbox Account) as specified 

in the Credit Agreement and has identified such Controlled Deposit Account as the account to 

which all payments are to be sent on all invoices for Accounts with Dates of Service after the date 

of the Credit Agreement. All Accounts reflected in the Borrower's most recently submitted 

Accounts Receivable Aging Report are the subject of properly and validly billed invoices for 

services provided and goods sold by the Borrower in the ordinary course of business. The aging 

buckets in this Borrowing Base Certificate reflect the number of days the Accounts have been 

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Exhibit A (Borrowing Certificate), Page 2 

4874-6257-0384.6 

outstanding subsequent to its respective Dates of Service. All collections on Accounts have been 

applied to the proper invoices resulting in accurate aging totals for each aging bucket. There are 

no known duplicate or fictitious claims or invoices included in the Accounts. The Borrower has 

not diverted or permitted to be diverted any such payments on Accounts to a deposit account other 

than the proper Controlled Deposit Account as required by Section 2.5 of the Credit Agreement. 

No collections on Accounts have been received that have not been applied to reduce the Accounts. 

7. All Accounts are owned by the undersigned, free and clear of all liens, security 

interests, claims, charges, or trusts, legal or equitable, now existing or which might arise with the 

passage of time, other than Permitted Liens. 

8. The Borrower has deposited all state and federal payroll withholding taxes required 

with respect to each payroll period through the most recent payroll period. 

9. After the Lender makes the Advance requested hereby, the aggregate amount of the 

Loan will not exceed the Revolving Loan Limit. 

BORROWER: 

[__] 

 By: _________________________

 Name: 

 Title: 

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Exhibit B (Compliance Certificate), Page 1 

4874-6257-0384.6 

EXHIBIT B 

COMPLIANCE CERTIFICATE 

Dated as of _______________, 2023 

This Compliance Certificate is delivered by LION STAR NACOGDOCHES HOSPITAL, 

LLC, a Texas limited liability company (the “Borrower”), in accordance with the Superpriority 

Debtor-in-Possession Credit and Security Agreement dated as of [ ], 2023, between the 

Borrower and eCapital Healthcare Corp., a Delaware corporation, f/k/a CNH Finance Fund I, L.P. 

(the “Lender”) (as amended, supplemented or modified from time to time, the “Credit 

Agreement”). All capitalized terms not defined herein have the meanings given them in the Credit 

Agreement and other Loan Documents. 

The undersigned hereby certifies that: 

(a) The financial statements delivered with this certificate in accordance with 

Section 6.1 of the Credit Agreement fairly present in all material respects the results of operations 

and financial condition of Borrower as of the dates and the accounting periods covered by such 

financial statements; 

(b) I have reviewed the terms of the Credit Agreement and have made, or caused to be 

made under my supervision, a review in reasonable detail of the transactions and financial 

condition of Borrower during the accounting period covered by such financial statements; 

(c) Such review has not disclosed the existence during or at the end of such accounting 

period, and I have no knowledge of the existence as of the date hereof, of any condition or event 

that constitutes an Event of Default, except as set forth in Schedule 1 attached hereto, which 

includes a description of the nature and period of existence of such Event of Default and what 

action Borrower has taken, is undertaking and proposes to take with respect thereto; 

(e) Except as noted on Schedule 2 attached hereto, the undersigned has no knowledge 

of any federal or state tax liens having been filed against Borrower or any Collateral; 

(f) Except as noted on Schedule 3 attached hereto, the undersigned has no knowledge 

of any failure of Borrower to make required payments of withholding or other tax obligations 

during the accounting period to which the attached statements pertain or any subsequent period. 

(g) Except as described in the Credit Agreement or the schedules thereto, or on 

Schedule 4 attached hereto, and the Bankruptcy Case and the disputed matters concerning the 

Lease as disclosed in the Bankruptcy Case, the undersigned has no knowledge of any current, 

pending or threatened: 

(i) litigation against Borrower; 

(ii) inquiries, investigations or proceedings concerning the business affairs, 

practices, licensing or reimbursement entitlements of Borrower, and 

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Exhibit B (Compliance Certificate), Page 2 

4874-6257-0384.6 

(iii) default by Borrower under any material contract to which it is a party, 

including, without limitation, any leases. 

(h) The Borrower is in compliance with the financial and loan covenants contained in 

Annex I of the Credit Agreement, as demonstrated by the calculation of such covenants below, 

except as set forth below; in determining such compliance, the following calculations have been 

made: [See attached worksheets]. Such calculations and the certifications contained therein are 

true, correct and complete. 

BORROWER: 

LION STAR NACOGDOCHES HOSPITAL, LLC, a Texas limited liability company 

 By: _________________________

 Name: 

 Title: 

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Exhibit B (Compliance Certificate), Page 3 

4874-6257-0384.6 

Schedules to Compliance Certificate 

Schedule 1 – Non-Compliance with Covenants 

Schedule 2 – Federal or State Tax Liens 

Schedule 3 – Unpaid Tax or Withholding Obligations 

Schedule 4 –Pending Litigation, Inquiries or Investigations; Defaults under Material Contracts 

Worksheet(s) for Financial or Other Covenant Calculations 

 

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Exhibit B (Compliance Certificate), Page 4 

4874-6257-0384.6 

Current Ratio Worksheet (Attachment to Compliance Certificate) 

1. Current Assets as of the end of the most recent month: $___________

2. Current Liabilities as of the end of the most recent month: $___________

3. Ratio of Line 1 to Line 2: ____________

4. Minimum Current Ratio: 1.0 to 1.0

5. In compliance: YES - NO 

[To Be Supplemented Prior To Execution] 

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Exhibit B (Compliance Certificate), Page 1 

4874-6257-0384.6 

EXHIBIT C 

Budget 

[To Be Supplemented Prior To Execution] 

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SCHEDULE 2.4 

Borrower’s Account for Funding Wires 

[To Be Supplemented Prior To Execution] 

 

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SCHEDULE 2.5 

Borrower’s Deposit Accounts 

[To Be Supplemented Prior To Execution] 

 

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SCHEDULE 5.3 

Organizational Information 

LION STAR NACOGDOCHES HOSPITAL, LLC, a limited liability company organized under 

the laws of the State of Texas. 

The Borrower has no subsidiaries. 

The number and class of equity securities issued and outstanding of Borrower and the record and 

beneficial owners thereof (including options, warrants and other rights to acquire any of the 

foregoing) are as follows: 

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SCHEDULE 5.4 

Real Property Owned or Leased 

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SCHEDULE 5.6 

Litigation 

JUDGMENTS 

[To Be Supplemented Prior To Execution] 

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SCHEDULE 5.16 

Insurance 

[To Be Supplemented Prior To Execution] 

 

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SCHEDULE 5.17A 

Corporate Names 

[TO COME 

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SCHEDULE 5.17B 

Business and Collateral Locations 

[__] 

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SCHEDULE 5.20 

Exceptions to Healthcare Law Compliance Representations 

[To Be Supplemented Prior To Execution] 

 

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SCHEDULE 5.23 

Material Contracts 

[TO COME] 

[To Be Supplemented Prior To Execution] 

 

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SCHEDULE 5.24 

Third-Party Payor Billing Numbers 

[To Be Supplemented Prior To Execution] 

 

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SCHEDULE 7.3 

Liens

[To Be Supplemented Prior To Execution] 

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Lion Star Nacogdoches Hospital, 

LLC 

First Day Service List 

Client # 6429

Lion Star Nacogdoches Hospital, LLC 

Attn: S. Sean Fowler, CEO 

5608 Parkcrest Dr., Suite 200 

Austin, TX 78731 

Office of The United States Trustee 

Earle Cabell Federal Building 

1100 Commerce Street, Room 976 

Dallas, TX 75242 

SCG Capital Corp. (GE Finance) 

74 West Park Place 

Stamford, CT 06901 

Internal Revenue Service 

Centralized Insolvency Operations 

PO Box 21126 

Philadelphia, PA 19114-0326 

Internal Revenue Service 

Special Procedures Staff 

Mail Code 5020-DAL 

1100 Commerce St., Room 9B8 

Dallas, TX 75242

GE Capital 

PO Box 641419 

Pittsburgh, PA 15264 

Med One Capital Funding, LLC 

10712 S 1300 East 

Sandy, UT 84094 

Intuitive Surgical, Inc. 

1020 Kifer Rd. 

Sunnyvale, CA 94086 

Hill-Rom Company, Inc. 

1020 West County Road F 

St. Paul, MN 55126 

US Med Equip 

PO Box 4339 

Houston, TX 77210 

Werfen USA LLC 

PO Box 6214 

Pittsburgh, PA 15251 

Abio Med, Inc. 

PO Box 6214 

Boston, MA 02212 

Nacogdoches Tax Assessor-Collector 

Attn: Kim Morton 

Nacogdoches County Court House 

101 W Main St., Suite 100 

Nacogdoches, TX 75961 

Kenneth Jurist 

AT&T 

Attn: Abdi Abdulahi 

PO Box 105414 

Atlanta, GA 30348 

Banner State Emergency Phy PA 

Attn: Mark McGrew 

5000 Ambassador Caffery Pkwy 

Bldg. 15, Suite A 

Lafayette, LA 70508

Beckman Coulter, Inc. 

Attn: Kevin Thomas 

Dept. CH 10164 

Palatine, IL 60055 

Biomerieux, Inc. - St. Louis 

Attn: Kate Kohlschein 

PO Box 500308 

St. Louis, MO 63150

Biotronik, Inc. 

Attn: Angela Stanfield 

PO Box 205421 

Dallas, TX 75320 

Cerner Health Services, Inc. 

Attn: Robert Gonzales 

PO Box 959156 

St. Louis, MO 63195 

EDF, Inc. 

Attn: LaKendra Davis 

PO Box 74007029 

Chicago, IL 60674 

Garlic Media Management LLC 

Attn: Will Feldman 

1195 S Lipan St., Unit A 

Denver, CO 80223 

Gjerset & Lorez, LLP 

Attn: Tammy Sullivan 

2801 Via Fortuna 

Austin, TX 78746 

Gordon Food 

Attn: Chris Pitcher 

PO Box 88029 

Chicago, IL 60680 

Matheson Tri-Gas 

Attn: Rayanne Hayes 

Dept. 3028 

PO Box 123028 

Dallas, TX 75312 

Medline Industries, Inc. 

Attn: Tina Ridley 

Dept. 1080 

PO Box 121080 

Dallas, TX 75312 

Medtronic Xomed 

Attn: Mike Maday 

PO Box 848086 

Dallas, TX 75284 

Medygate, Inc. 

Attn: Dariush Yaghoubi 

447 S. Robertson Blvd., #204 

Beverly Hills, CA 90211 

SCC Soft Computer 

Attn: Tarrah Veilleux 

5400 Tech Data Dr. 

Clearwater, FL 33760 

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SCI Solutions 

Attn: Bernie Gay 

PO Box 735381 

Dallas, TX 75373 

Stericycle, Inc. 

Attn: Rodney Dickens 

PO Box 6575 

Carol Stream, IL 60197 

TRS Managed Services, LLC 

Attn: Caleb English, CFO 

5001 Founders Way, Suite L10 

Rogers, AR 72758 

Wipfli, LLP 

Attn: David M. Hersch 

PO Box 3160 

Milwaukee, WI 53201 

Young's Professional Svc 

Attn: Brian Young 

200 Greenleaves Blvd., Suite 5 

Mandeville, LA 70448 

Nacogdoches County Hospital Dist. 

1018 N Mound St, Suite 105 

Nacogdoches, TX 75965 

Nacogdoches County Hospital Dist. 

c/o Deborah Williamson/P. Huffstickler 

112 E Pecan St., Suite 1800 

San Antonio, TX 78205

Nacogdoches Shopping Center, LLC 

136 S Broadway 

White Plains, NY 10605 

Patton Brothers 

Attn: Florence Patton 

412 Bostwick St. 

Nacogdoches, TX 75965 

 Healthcare Property Solutions, LLC 

33870 Crown Colony Dr. 

Avon, OH 44011 

Cavitch, Familo & Durkin Co. LPA 

Attn: Harold O. Maxfield, Jr. 

1300 E Ninth St., 20th Floor 

Cleveland, OH 44114 

Brenda Bowman Motes 

105 Grandview Blvd. 

Montgomery, TX 77356 

 Nacogdoches County Aging 

Committee, Inc. 

1601 W Austin St. 

Nacogdoches, TX 75964 

Ortho-Clinical Diagnostics, Inc. 

1001 US Highway 202 

Raritan, NJ 08869 

Nacogdoches County Hospital Dist. 

c/o Alexandria R. Rahn 

Dykema Gossett PLLC 

1717 Main Street, Suite 4200 

Dallas, TX 75201

 eCapital Healthcare Corp. 

c/o Foley & Lardner LLP 

500 Woodward Avenue, Suite 2700, 

Detroit, MI 48226-3489 

eCapital Healthcare Corp. 

20807 Biscayne Blvd 

Suite 203 

Aventura, FL 33180 

Texas Comptroller 

PO Box 13528 

Austin, TX 78711 

 Nacogdoches Central Appraisal District 

216 W Hospital St, 

Nacogdoches, TX 75961 

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